HCL Tech Q2 net income rises 4.4% to Rs 2,651 crore, EBIT up 17.9%

HCL Technologies, the country’s third-largest information technology services firm, reported a 4.4 per cent annual rise in net income in the September-ended quarter (Q2) at Rs 2,651 crore. 

It raised its full year revenue forecast to a growth of 15-17 per cent in constant currency, from a 14-16 per cent range earlier, because of its strong deal pipeline.

The earnings before interest and tax (EBIT) rose 17.9 per cent to Rs 3,497 crore during the quarter.

On Wednesday, the Noida-based firm reported a 20.5 per cent rise in annual revenue in constant currency to Rs 17,528 crore. On a sequential basis, revenue in the quarter ended September 30, rose 6.7 per cent while net income rose 19.4 per cent. 

The commentary is similar to that of closest rival Infosys, which expects its revenue to grow at 9-10 per cent in FY20. 

“We started the year with 14-16 per cent growth (target) where 7-9 per cent was organic growth. Last quarter, we said organic is increasing from 7-9 per cent to 8-10 per cent. Now, it is going to be 10-11 per cent. 

So, there is a significant uptick in the organic growth guidance compared to what we said last quarter,” said HCL Technologies CEO C Vijayakumar.

As part of its ongoing focus on products and platforms, HCL Tech bought some IBM products for $1.8 billion last year. The acquisition closed in June this year and now contributes to HCL’s revenue.

The company also named Shikhar Malhotra non-executive non-independent director of the company from October 22. Malhotra is the son-in-law of HCL founder and chairman Shiv Nadar. Malhotra is currently the executive director and board member of HCL Corporation.

The operating margin during the quarter was 20 per cent, and HCL Technologies expects to end FY20 with an operating margin of between 18.5 and 19.5 per cent.