HCL Tech Q4 results: Profit rises 10.8% to Rs 3,983 crore, Rs 18 dividend announced; key takeaways

HCL Technologies (HCL Tech) on Thursday reported a 10.80 per cent year-on-year (YoY) rise in net profit at Rs 3,983 crore for the March quarter compared with Rs 3,593 crore in the same quarter last year. The C Vijayakumar-led company clocked 17.70 per cent YoY rise in net sales at Rs 26,060 crore for the quarter. This is against Rs 22,597 crore sales it reported in the corresponding quarter last year. 

CC, dollar revenue growth

Dollar revenues for the Noida-based IT major came in at $3,235 million, down 0.3 per cent sequentially (up 8.1 per cent YoY). Revenue in constant currency (CC) terms de-grew 1.2 per cent QoQ (up 10.5 per cent YoY). Ebit margin for the quarter stood at 18.1 per cent against 19.6 per cent in December and 17.9 per cent in the year-ago quarter.

Order wins

For the quarter, HCL Tech won 13 large deals. Total contract value (new deal wins) for the quarter, however, fell 8 per cent YoY to $2,074 million.  "Our pipeline is near an all-time high, which reflects our differentiated business mix and strong client demand for our offerings," CEO Vijayakymar said.

The company added 3,674 new headcount during the quarter. Total headcount at the end of the quarter stood at 2,25,944. Attrition for the quarter came in at 19.5 per cent.

FY24 guidance

The Noida-based software & consulting firm has guided for a revenue growth of 6-8 per cent for FY24 with operating margin in 18-19 per cent range. Analysts were expecting HCL Tech to have an annual revenue growth guidance of 5-7 per cent in CC terms for FY24E. On the margin front, they were expecting EBIT margin in the 18-19 per cent range for FY24E.

Dividend

The IT major announced a dividend of Rs 18 per share, its 81th consecutive quarter of dividend payout. The record date for the same is fixed as April 28 and payment date of said interim dividend would be May 9, HCL Tech said.  With this, total dividend announced by HCL Tech for FY23 stood at Rs 48 per share, which was equal to 87.50 per cent of its earnings per share. 

HCL Tech said its services revenue for the quarter were up 10.6 per cent CC (0.6 per cent QoQ). HCLSoftware revenue rose 8.2 per cent YoY. Digital revenues, it said, accounted for 37.5 percent of HCL Tech Services revenues. HCL Tech said its operating cash flow stood at $924 million while its free cash flow stood at $886 million. 

Revenue break-up: Geographies, verticals

Ahead of its quarterly results, the average price target for HCL Technologies at Rs 1,177, as per Trendlyne, suggested a 13 per cent potential upside ahead. The scrip ended Thursday's session at Rs 1,037.55, down 0.04 per cent.