HCL Tech records 5.4% QoQ growth in Q3 PAT

HCL Technologies reported 5.4% rise in consolidated net profit to Rs 3,442 crore and revenue increased by 8.1% to Rs 22,331 crore in Q3 FY22 over Q2 FY22.

Sequentially, EBIT improved by 8.5% to Rs 4,251 crore in the third quarter. EBIT margin at the end of the December 2021 quarter was 19%.

As compared with Q3 last year, net profit fell 13.6% but topline rose 15.7% in the last quarter.

In dollar terms, the company's net profit was $458 million (up 3.8% QoQ) and its revenue was $2,977 million (up 6.7% QoQ) in Q3 FY22.

Total Contract Value (TCV) of new deal wins in Q3 FY22 was at $2,135 million, up 64% YoY.

In constant currency terms (cc), the company's revenue growth was 7.6% QoQ, highest in the last 12 years.

The company's Products & Platforms segment led the growth with 24.5% QoQ cc, followed by Engineering and R&D Services with 8.3% QoQ cc and IT and Business Services with 4.7% QoQ cc.

Hiring continued at a brisk pace with net addition of 10,143 during the quarter. Total headcount was at 197,777. Attrition (on the last 12-month basis) was at 19.8% in Q3 FY22 as against 10.2% in Q3 FY21 and 15.7% in Q2 FY22.

Gross Cash stands at US$ 2,666 mn and Net Cash at US$ 2,140 mn at the end of 31 December 2021.

HCL Tech expects revenue to grow in double digits in constant currency, while EBIT margin is projected to be between 19% and 21% for FY22.

C Vijayakumar, Chief Executive Officer & Managing Director, HCL Technologies, said: We have delivered all round stellar performance this quarter with a revenue growth of 7.6% in constant currency QoQ, the highest recorded in the last 46 quarters. Our future looks bright as we had a very strong net new booking of $2.1 billion, a 64% YoY increase.

The company has declared a dividend of Rs 10 per share for Q3 FY22.

Separately, HCL Technologies said that it has signed a definitive agreement for the acquisition of Starschema, a provider of data engineering services, based in Budapest, Hungary. The acquisition has been done for a cash consideration of $42.5 million.

Starschema provides consulting, technology and managed services in data engineering to Global 2000 companies in the U.S. and Europe. It had revenues of $13.6 million for the year ended 31 December 2020.

The strategic acquisition will bolster HCL's capability in digital engineering -- driven by data engineering -- and increase its presence in Central and Eastern Europe.

The acquisition combines Starschema's high-value capabilities and data-focused expertise with HCL's existing presence in industry segments undergoing data-driven transformation. In addition, HCL will strengthen its position in data engineering, which is an integral part of the company's digital engineering capabilities and next-generation offerings.

The transaction is subject to regulatory clearance from the Hungarian Ministry of Innovation and Technology and is expected to close in March 2022.

HCL offers its services and products through three business units: IT and Business Services (ITBS), Engineering and R&D Services (ERS) and Products & Platforms (P&P).

The scrip closed 0.32% lower at Rs 1337.55 on the BSE on Friday.

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