HCL Tech Q3FY21 profit jumps nearly 26.7% to Rs 3,982 crore

HCL Technologies Limited, India's third-largest software services provider, on Friday reported a 26.7 per cent quarter-on-quarter (QoQ) rise in the consolidated profit at Rs 3,982 crore for the period ended December 31, 2020. The company has posted a net profit of Rs 3,142 crore in the previous quarter ended September 30, 2020. On a year-on-year basis, the profit rose 31.1 per cent as the company has posted a consolidated profit of Rs 3,037 crore posted in the corresponding quarter of the previous financial year, i.e. Q3FY20.

HCL Technologies consolidated revenue grew 3.8 per cent to Rs 19,302 crore for the reported quarter compared to Rs 18,594 crore posted in the September quarter. On a year-on-year basis, the revenue grew by 6.4 per cent as the company had posted a net profit of Rs 18,135 crore posted in Q3FY20. Dollar revenue during Q3FY21 stood at $2,617 million, up from $2,507 million posted in Q2FY21.

EBIT grew 10% to Rs 4,416 crore compared to Rs 4,016 crore reported in the previous quarter and 20.3 per cent compared to Rs 3,670 crore reported in the corresponding quarter last year. Gross margins advanced to 42 per cent in Q3FY21 against 41.2 per cent reported in Q2FY21. The gross margin stood at 38.4 per cent in Q3FY20. The EBIT margin stood at 22.9 per cent against 21.6% reported in Q2FY21 and 20.2 per cent reported in Q3FY20.

Shiv Nadar, Chief Strategy Officer, HCL Technologies Ltd. said, "The technology sector is in the midst of a massive digitization wave, with more global enterprises embracing digital transformation to address the disruption of these unprecedented times. Technology has been a key enabler during the pandemic, and as we stand at the cusp of the next phase of technological innovation, we must draw inspiration from each other's strengths and offer back our own to create a positive impact. From delivering cutting edge, agile solutions to our partners, to creating people-first initiatives, to building a sustainable and resilient ecosystem, we at HCL are committed to become a catalyst of positive change and the creation of relationships beyond the contract."

HCL Technologies in a statement said that it signed 13 new transformational deals across industry verticals, including life sciences and healthcare, technology and financial services in Q3FY21.

HCL Revenue crosses US$ 10 billion milestones in CY20 (CY means Calendar Year), delivering 3.6 per cent YoY growth in constant currency. – CY20 delivered EBITDA at 26.5 per cent and EBIT at 21.5 per cent.

C Vijayakumar, President & CEO, HCL Technologies Ltd. said, "We posted a strong financial performance in Q3FY21 with a constant currency revenue growth of 3.5 per cent sequentially and 1.1 per cent YoY and an EBIT of 22.9 per cent. This solid performance was driven by robust momentum in our Mode 2 and Mode 3 businesses led by Digital, Cloud and Products & Platform segments. Our results reflect the success of the strategic investments we have made over the years including unique ecosystem constructs with all Cloud Hyperscalers, organic and inorganic investments in a broad-based IP and Platforms portfolio and an enterprise digital transformation value proposition that is truly integrated and differentiated."

FY2021 guidance

The company has said that its revenue is expected to grow QoQ between 2 per cent to 3 per cent in constant currency for Q4FY21, including DWS contribution. EBIT is expected to be between 21.0 per cent and 21.5 per cent for FY21.

Key Business Updates

Businesses across industries stand at an inflection point today, as they undergo a transformation catalyzed by digital, analytics, cloud, IoT and automation. HCL's Mode 1-2-3 strategy provides a structured growth blueprint for companies to navigate swiftly in the digital age. Mode 1 leverages the current business and IT landscape to enable an HCL enterprise client to consolidate its existing core and enhance that core with new technologies. Mode 2 provides scaled digital transformation frameworks that help clients build robust new-age capabilities and pivot to new business models. In Mode 3, HCL helps clients take advantage of specific next-generation opportunities to make them future-ready.

Interim Dividend

Besides, the Board of Directors of the company has declared an Interim Dividend of Rs 4 per equity share of Rs 2 each of the Company for the Financial Year 2020-21. The Record date of January 23, 2021, fixed for the payment of the aforesaid interim dividend has been confirmed by the Board of Directors. The Payment date of the said interim dividend shall be February 8, 2021.