(PTI) HCL Technologies on Wednesday posted a 7 per cent rise in its consolidated net profit for September quarter at ₹3,489 crore, topping street expectations, and raised the full year revenue guidance citing strong demand and deal pipeline despite macro concerns.
Amid widespread fears of global recession, HCL Tech said it clinched a "stellar quarter on all fronts", delivering strong performance in top line. The IT services firm exuded confidence about its near term and the medium term growth, as it upped revenue guidance to 13.5-14.5 per cent for the full year, against the 12-14 per cent growth band projected earlier.
"We remain very positive of near term growth and medium term growth. This confidence is coming from the booking that we had in the first half of this year and also the quality of pipeline that we have for the remainder of the year," HCL Tech CEO C Vijayakumar told reporters at a briefing.
The confidence is in line with the spending patterns and trends that the company sees in the market, Vijayakumar said, adding that typically during difficult economic environment, technology is seen as an "enabler" and mission critical and transformation deals that reduce costs are prioritised.
"Even the concerns around recession is actually enabling a lot more transformation deals from our clients. A lot of our customers who are preparing for some kind of slowdown are accelerating some of the things they want to do, so they are prepared for it. So we find that the pipeline is at the highest," the HCL Tech top honcho said.
The revenue for the three months ended September 30, 2022 came in at ₹24,686 crore, 19.5 per cent higher than the same period previous year and 5.2 per cent higher sequentially.
In dollar terms, the revenue of USD 3,082 million was 1.9 per cent higher quarter- on-quarter and 10.4 per cent year-on-year. The services revenue rose 5.3 per cent sequentially and 18.9 per cent year-on-year in constant currency.
The company won 11 large deals -- eight in services and three in products.
Among other headline metrics, the total contract value bookings (new deal wins) at USD 2,384 million was up 16 per cent over June quarter and 6 per cent higher than the year-ago period.
"We won a mega deal this quarter. There will be minimal impact of this deal in FY23. We expect this deal to give us an average ACV of USD 125 million per year from FY24," HCL said in a statement but did not divulge details about the client.
The board has declared an interim dividend of ₹10 per equity share for the financial rear 2022-23.
HCL Tech, which competes in the IT services market with larger rivals Tata Consultancy Services and Infosys, expects its services revenue to grow 16–17 per cent in constant currency for the full fiscal (FY23).
The EBIT margin guidance has, however, been revised to 18–19 per cent against 18-20 per cent earlier.
On the employee front, the net addition came in at 8,359 during the quarter, with closing headcount at 2,19,325.
HCL Tech added 10,339 freshers in the just-ended quarter, against 6,023 fresher hires in June quarter. The company said it plans to get in 30,000 freshers this year.
"We have continued to onboard freshers, there have been no delays at all. Everybody is getting onboarded as per plan," Vijayakumar said.
On moonlighting issue, the company said it strongly disapproves of dual employment practice, and expects its employees to fully honour their contractual obligations. That said, moonlighting is not a particularly big problem within the company, and there have been only 1-2 stray instances, it clarified.
To a question on getting employees back to workplace, the company said it is operating on hybrid model, but now encouraging staff to come in three days in a week, though the same is not mandatory.
The company also reported some senior level realignment.
HCL Tech said that Rahul Singh, who was serving as President - Financial Services and Digital Process Operations, has been appointed as COO – Corporate Functions.
Ramachandran Sundararajan, who was Head – HR for North America and Global Head – Sales HR, has been appointed as Chief People Officer of the company.
Appa Rao V V, who served as the Chief Human Resources Officer (CHRO) since 2017, has been appointed as Chief Delivery Officer (Near Shore).
Meanwhile, IT services major Wipro Ltd reported a 9.3 per cent drop in its September quarter net profit, weighed down by rising staff expenses and lower non-US earnings.
Profit attributable to equity shareholders of the company at ₹2,659 crore in July-September was 9.27 per cent lower than ₹2,930 crore in the year-ago period, the company said in a statement.
The Bengaluru-based company's revenue from operations stood at ₹22,539.7 crore, up 14.60 per cent from ₹19,667.4 crore in the previous year.