HCL Technologies Limited is engaged in providing a range of software development services, business process outsourcing services, and information technology (IT) infrastructure services. The Company's segments include software services, infrastructure management services, and business process outsourcing services. The software services segment provides application development and maintenance, enterprise application, software as a service (SAAS) application services and engineering, and research and development (R&D) services to global customers. The infrastructure management services segment involves managing customers' IT assets.
The business process outsourcing services segment includes contact center and helps desk services.
The Company delivers its solutions across select verticals, including financial services, manufacturing, retail and consumer products, media, publishing and entertainment, public services, energy and utility, healthcare, and travel, transport, and logistics.
The share price of HCL Technologies fell by 1.35% intraday to Rs. 512.10 on 7th May 2020. The results were declared before the market hours.
HCL Technologies reported an increase in net profit in the March quarter at a time when coronavirus pandemic is causing serious trouble to the economies worldwide.
The Profit After Tax (PAT) for the company stood at Rs 3,154 crores up by 24% as compared to Rs 2,550 crores in the previous quarter ended in March 2019.
The board has also proposed a final dividend of Rs 2 per share on double the number of shares post 1:1 bonus issue. This is the 69th consecutive quarter of dividend payout.
Key Highlights (YoY):
- Revenue increased by 16% to Rs 18,590 crores as compared to Rs 15,990 crores
- EBITDA increased by 30% to Rs 4,720 crores as compared to Rs 3,630 crores
- EBITDA margin and PAT margin expanded to 25.3% and 16.9% respectively
- Attrition rate improved from 17.7% to 16.3%
- Top 5 clients stood at 15.1% as compared to 17%
- Earnings per Share (EPS) stood at Rs 46.5 as compared to Rs 37.9
The management said that FY20 has been a landmark year, where HCL Technologies witnessed its highest growth in recent years and industry-leading performance for the fourth consecutive year. The investments in HCL Software have started bearing the desired fruit in the last 2 quarters and the strategy is contributing handsomely to the profitability as well as the cash generation capacity of the company.
Segment-Wise Performance (QoQ):
- America business contributed 63.4% to revenue as compared to 62.8%
- Europe business contributed 28.7% to revenue as compared to 29.2%
- Rest of World business contributed 7.8% to revenue as compared to 8%
- The company's IT and Business Services division contributed 70.6% to revenue as compared to 70.2%
- The company's Engineering and R&D Services division contributed 16.3% to revenue as compared to 16.7%
- The company's Product & Platforms business contributed 13.1% in both the quarters
Industry-Wise Performance (QoQ):
- Revenue from Financial Services vertical stood at 21.1% as compared to 21.6%
- Revenue from Manufacturing vertical stood at 20.7% as compared to 20.9%
- Revenue from Technology & Services vertical stood at 16.2% as compared to 15.1%
- Revenue from Retail & CPG vertical stood at 10.2% as compared to 10.3%
- Revenue from Telecommunications, Media, Publishing & Entertainment vertical stood at 8.3% as compared to 9%
- Revenue from Lifesciences & Healthcare vertical stood at 12.5% as compared to 12.2%
- Revenue from Public Services vertical contributed 11.1% as compared to 10.9%
The company also signed 14 transformational deals during the quarter, led by key industry verticals- telecom, Hi-Tech, retail & CPG, manufacturing, and financial services.
HCL Technologies' result in the March quarter doesn’t show much impact of the coronavirus pandemic as compared to its large peers such as Infosys and TCS, who have reported a decline in their bottom line numbers as business operations came to a halt. The company had earlier indicated that its fourth-quarter financials will get affected by the outbreak.
C Vijayakumar, President & CEO, HCL Technologies said, “I am very thankful to my fellow HCLites, who relentlessly worked with our clients over the last 3 months, to keep our client businesses running at this time of unprecedented crisis. We also transitioned over 3.5 million end-users to a fluid workplace model for our clients, many of whom are critical service providers, including several healthcare providers on the frontlines.”
FY20 has been a fantastic year where the company has grown at 16.7% in constant currency and by far is the fastest growing IT company. This includes industry-leading 10.7% organic growth and 6% via acquisitions. Looking ahead, the management seems confident that their capabilities, balanced portfolio, strong client relationships and financial strength will help to navigate this crisis and emerge to be stronger.
During the year, the cash conversion ratio stood at 112% and Cash EPS was at Rs 52.8, a growth of 26.3% on a YoY basis.
For more insights and picks like these, please visit https://tejimandi.app.link/freepress