HCL Tech announces Q2 results!
Last updated: 16 Oct, 2020 | 10:35 am
- Profit beats estimates: HCL tech reported a 7.4% on-quarter rise in consolidated net profit to ₹3,142 crore in Q2FY21, beating analyst estimates. Analysts had earlier estimated a profit of about ₹3,033 crore.
- Broad-based Revenue Growth: Revenue for the quarter stood at ₹18,594 crore compared with ₹17,528 crore in the same period a year ago. On a quarter to quarter basis revenue was up by 4.2%. In Q2, All the Geographies/Segments/Verticals returned to positive sequential growth. The table below shows HCL’s revenue growth across geographies, segments and verticals.
- Margin expansion: Margins increased both on YOY and QOQ basis, with EBITDA margin at 26.6% and EBIT margin at 21.6%, expanding by 3.2% and 1.6% respectively on a YoY basis.
- Strong Guidance: The management guided Revenue to grow by an average of 1.5% to 2.5% in constant currency for Q3 and Q4, on a quarter to quarter basis The company also expects to maintain strong margin ratios with EBIT margin between 20.0% and 21.0% for FY’21.
- Dividend: HCL also declared a Dividend of ₹4 /- per share, being the 71st consecutive quarter of dividend pay-out.
- Robust cash generation: The standout performance for the quarter has been the cash generation and conversion ratios. Operating Cash Flow (OCF) & Free Cash Flow (FCF) stand at handsome US$ 2,692 mn and US$ 2,444 mn respectively on Last Twelve Month basis, with OCF/NI and FCF/NI conversion at an impressive 161% and 146%.
HCL Technologies has reported a steady set of numbers for Q2, driven by continued leadership in Digital Transformation, Cloud businesses and strong stability in the Products & Platforms segment. HCL’s investments over the last few years in next-gen technologies have held them in good stead and positioned them strongly to leverage the emerging market opportunities.
The Covid-19 pandemic has forced a tectonic shift in businesses processes to move towards greater digitization. This has helped the IT sector to bounce back faster than other industries.
In Q2, HCL signed 15 transformational deals, led by key industry verticals including life sciences and healthcare, public services (energy & utilities) and manufacturing. The management also expects to maintain the strong growth trajectory.