HCL Technologies, India’s third-largest IT services firm, has reported a strong performance in the third quarter of the fiscal year 2024, with a net profit of Rs 4,351 crore, marking a 6.23 percent year-on-year (YoY) growth. The sequential net profit also saw an impressive uptick of 13.51 percent, driven by a $50-million incremental revenue from the Verizon deal and additional income from Germany’s ASAP post-acquisition.
Despite facing challenges such as higher-than-expected furloughs, particularly in the BFSI (Banking, Financial Services, and Insurance) and hi-tech sectors, HCL Tech managed to surpass expectations. The consolidated revenue for the quarter reached Rs 28,446 crore, reflecting a robust 6.54 percent YoY growth, surpassing Moneycontrol’s estimates of Rs 26,026 crore.
The company, however, revised its revenue growth guidance for the full fiscal year 2024, reducing it from the previous 5-6% YoY in constant currency terms to 5-5.5%. This adjustment includes the impact of the ASAP acquisition. Notably, in Q1, HCL Tech had initially provided a more optimistic revenue growth guidance of 6-8%.
Despite the revised revenue growth guidance, HCL Tech retained its full-year margin guidance of 18-19% for FY24. The operating margin for the quarter came in at an impressive 19.8%, surpassing the company’s guidance range.
In the last month alone, HCL Tech’s shares have witnessed an increase of over 8%, contributing to a remarkable surge of more than 40% over the past year. The positive market sentiment is backed by strong quarterly results and expectations of continued robust revenue growth.
As a testament to its financial strength, HCL Technologies’ Board of Directors declared an interim dividend of Rs 12 per equity share. The record date for the dividend has been fixed as January 20, 2024.
Analysts and investors will be closely watching HCL Tech’s strategic moves and management initiatives, especially in addressing challenges in the BFSI and hi-tech sectors, as the company continues to navigate the dynamic landscape of the IT services industry.