HCL Tech Q4 net up 14%, aspires for $10bn revenue in FY20

IT services major HCL Technologies Thursday posted a 14.3 per cent rise in its consolidated net profit at Rs 2,550 crore for the March 2019 quarter and set an "aspirational" annual revenue target of more than USD 10-billion (about Rs 70,258 crore) in FY2019-20.

The company reported 21.3 per cent growth in revenue to Rs 15,990 crore in the January-March quarter compared to Rs 13,178 crore in the January-March 2018 quarter, as per Ind-AS accounting norms.

For the full year, net profit rose by 16 per cent to Rs 10,120 crore, while revenue grew 19.4 per cent to Rs 60,427 crore (about USD 8.6 billion) from 2017-18.

In dollar terms, the net profit rose 5.9 per cent to USD 364.3 million for the March 2019 quarter, while revenue was higher by 11.8 per cent to USD 2.2 billion as compared to the year-ago period as per the US Generally Accepted Accounting Principles (GAAP). The revenue for the full fiscal was up 10.1 per cent.

HCL Technologies President and CEO C Vijayakumar termed the company's performance as "blockbuster" and said the revenue growth of 11.8 per cent in constant currency terms was higher than its guided range of 9.5-11.5 per cent for FY2018-19.

The Noida-based company has forecast its revenue to grow between 14-16 per cent on constant currency basis this fiscal. This translates into a topline in the range of about USD 9.83-10.01 billion.

Speaking to reporters, Vijayakumar said the aspiration is to cross the USD 10-billion revenue mark during the ongoing fiscal.

He explained that of the guided range of 14-16 per cent revenue growth, about 7-9 per cent would be organic and the remaining would come from acquisitions made last year, including its USD 1.8 billion deal for IBM products.

Vijayakumar said HCL continued its strong deal win momentum in the March 2019 quarter, signing 17 transformational deals and a total of 78 transformational deals in FY2018-19.

"I believe FY'20 will be a good year for us. It is going to be a good year for the industry as well. The demand for technology services and products is definitely very high. It's very clear that every industry is getting re-imagined with a lot of tech solutions to deliver or re-imagine their businesses. So that is going to create a tailwind for the technology services as we go into FY'20," he added.

HCL Technologies' larger rivals - Tata Consultancy Services (TCS) and Infosys - have also posted strong growth in the March quarter and exuded confidence keeping the momentum going in the current fiscal as well. For FY2018-19, TCS' revenue was at USD 20.9 billion, while that of Infosys was at USD 11.7 billion. Wipro's revenues from IT services segment were at USD 8.12 billion.

Vijayakumar said the company would continue to scout for acquisitions in technology areas like digital services, cloud, Internet of Things and cybersecurity. Its Mode 2 and Mode 3 services - which includes digital and IP-led businesses - accounted for 28.3 per cent of the revenue.

He added that Mode 2 and Mode 3 services contribution to revenues is expected to touch 35 per cent by the end of 2019-20.

HCL Technologies board has declared an interim dividend of Rs 2 per share for 2018-19.

The company added 14,249 people (gross) during the quarter to take its total head count to 1,37,965 at the end of the March 2019 quarter. Attrition in the IT services business on the past 12-month basis was 17.7 per cent. HCL Technologies, which follows July-June cycle for appraisals, is working out the details and will provide wage hikes that are at par with industry peers, it said.

The results were announced after trading hours. Shares of the company closed almost flat at Rs 1,132.10 apiece.