HCL Tech misses estimates in Q1; dividend declared

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HCL Tech

IT major HCL Tech has reported lacklustre earnings in the Apr-Jun 22 period, hurt by lower IT spends in the sector. The company also saw higher attrition and narrowing margins during the period. Here are the major highlights from the earnings report.

HCL Tech Results: Highlights

HCL Q1 net profit below estimates: HCL Tech has reported a 2.4% on-year increase in its net profit to Rs 3,283 crore, missing street estimates. Analysts had earlier estimated a profit of about Rs 3,300 crore. Compared to the previous quarter, it fell by 8.6%. 

HCL Q1 revenue growth in-line with estimates: HCL Tech’s revenue grew 16.9% on-year to Rs 23,464 crore, largely in-line with estimates. Dollar revenue rose 11.2% on-year to $3,025 million. On a quarterly basis, revenue grew by 3.8%. 

HCL Tech Q1 results: Margin narrowed-  HCL Tech’s EBIT margin narrowed to 17%, a fall of 1.8% from last quarter. Analysts had earlier anticipated a margin of 17.5%. EBITDA margin stood at 21.2% which was lower by 1.5% as compared to the previous quarter. This was due to a slowdown in the IT services business. 

HCL Tech Q1FY23 results: Guidance retained- The company has kept its revenue and margin outlook unchanged for the current financial year. In constant currency terms, the company expects revenue to grow in the 12-14% range. The forecasted EBIT margin is between 18% and 20%.

HCL Tech results review: new Contract and large deals - The company won new contracts worth $2,054 million in the quarter ending June registering 23.4% on-year growth. The number of large deals bagged by the company was 16. 

HCL Tech Q1 results: Dividend declared: HCL has also declared an interim dividend of Rs 10 per share of Rs 2 each of the company for the financial year 2022-23. The Record date has been fixed as July 20, 2022. The dividend will be paid on August 2, 2022.

HCL Tech Q1 earnings: Attrition jumps- The company’s attrition rate stood at a whopping 23.8% at the end of the first quarter. In the previous quarter, the attrition had been 21.9%. On a year-on-year basis, the company’s attrition rate saw a big jump from the 11.8% reported in the June 2021 quarter. 

HCL Tech Q1: Management commentary -  “We have started FY23 on a strong note with an overall growth of 2.7 per cent quarter-on-quarter and 15.6 per cent YoY in constant currency. Our services business continues to have robust growth momentum, growing at 2.3 per cent q-o-q and 19.0 per cent y-o-y in constant currency, driven by our digital engineering and digital application services with cloud adoption being a horizontal theme across all services and verticals," HCL Tech CEO C Vijayakumar said. 

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