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HCL Tech posts 1.1% growth in FY21, clocks record deal wins in Q4

With $3.1 billion in TCV for the quarter, an optimistic HCL has guided for a double-digit growth for fiscal year 2021-22

Rukmini Rao | April 23, 2021 | Updated 22:39 IST
HCL Tech posts 1.1% growth in FY21, clocks record deal wins in Q4
For fiscal year 2020-21, HCL added an incremental revenue of $239 million

Despite registering an all-time high total contract value (TCV) of deals at $3.1 billion in January-March quarter, HCL Technologies reported revenue of $2.7 billion during the quarter, below the street estimates.

The company's revenues rose 2.5 per cent sequentially in constant currency terms, while EBIT margin stood at 20.4 per cent. Net income for the quarter was at $410 million.

For fiscal year 2020-21, HCL added an incremental revenue of $239 million. Revenue stood at $10.1 billion for FY21, registering a 1.1 per cent growth in constant currency.

"Our FY'21 revenue stands at $10.175 billion, a growth of 2.4 per cent YoY and a net income growth of 13.2 per cent YoY (ex-milestone bonus). We also registered the highest ever new deal booking this quarter of $3.1 billion with an all-time high exit pipeline," the company's president and CEO C Vijayakumar said.

The company said it won 19 new large deals in Q4 across industry verticals, including financial services, life sciences and healthcare. For FY21, HCL's Mode-2 and Mode-3 (digital services) registered 18.8 per cent and 11.8 per cent growth, respectively, while the core services (Mode-1) saw a decline of revenue by over 6 per cent.

"The best part of the year was the strong operating cash flow generation at $2,602 million, up 49 per cent YoY and free cash flow generation at $2,340 million, up 58 per cent YoY. Our board has declared a special interim dividend of Rs 10 per share as a milestone to mark the company crossing the $10 billion milestone, apart from the usual quarter dividend," HCL Technologies CFO Prateek Aggarwal said.

For FY22, the company has guided for a double-digit growth, with a margin guidance in the range of 19-21 per cent.

In a note, Reliance securities said the quarterly numbers are largely subdued versus the expectations. "We expect strong new deal TCV to propel double digit revenue growth in FY22. Additionally, we expect company to provide specific numerical FY22 revenue growth guidance range in 1Q-2QFY22," the note said.Also Read: Wipro overtakes HCL Tech to become third most-valued Indian IT firmAlso Read: Wipro plans integration with Capco -- its biggest buy!

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