HCL Tech net profit rises to Rs 3,593 cr in Q4, sets 12-14% revenue growth outlook for FY23

New Delhi: IT services company HCL Technologies on Thursday reported over a three-fold jump in its consolidated net profit for the fourth quarter ended March 2022 at Rs 3,593 crore as it struck an optimistic note about the "buoyant" market environment and "strong momentum across verticals and service lines" to guide for 12-14 per cent revenue growth for FY23.

The net profit revved up from Rs 1,102 crore in the corresponding period of the previous year (Q4 FY21).

The company, however, pointed out that there had been an impact of one-time payout in March 2021 quarter, which had depressed the bottomline numbers for that period. HCL Tech explained that seen on a comparative basis, the Q4 FY22 net profit is up about 24 per cent year-on-year.

"For comparison purposes, net income of Q4 FY'21 and full year FY'21 excludes the impact of onetime milestone bonus paid to employees (USD 78.8 million, Rs 575 crore net of tax) and the DTL on Goodwill impact in the tax expense (USD 165.1 million, Rs 1,222 crore) in Q4 FY'21," the company statement said.

HCL Tech expects revenue to grow between 12-14 per cent in constant currency, for the fiscal 2023, as the demand environment is "robust".

During the earnings conference, HCL Technologies Chief Executive Officer and Managing Director C Vijayakumar said that market environment is "buoyant" and there is "strong momentum across verticals and service lines". The company witnessed a "stellar quarter" across service lines, although `products and platform' business continues to be volatile.

"We believe, we have a very balanced portfolio which will benefit a lot from the discretionary spend... And which will also benefit significantly when the environment is a little tougher because we have some of the strongest propositions in the industry. So overall we feel confident of the demand environment and that's also enabling us to provide you with this guidance for the coming year," Vijayakumar told reporters.

Asked about the impact of Russia-Ukraine war on business, Vijayakumar said that the impact is "very nominal".

"...On Ukraine and Russia situation, very, very nominal impact. That too on our product business, we had a little bit of impact, because there are a few clients who are consuming our products in some of these geographies, but it's very small," he said.

To a question on the Sri Lanka crisis, the company said it had not seen "any miss on deliverables", and is extending all possible support to its local office and staff.

"...We are providing all the support and we are even ready in case there is any emergency we are ready to airlift our people to Indian locations. But right now it is business as usual," Apparao V V, Chief Human Resources Officer, HCL Technologies said.

The company has 2,000 employees in Sri Lanka, and has not seen any slowdown in recruitment although it is closely monitoring the situation. HCL Technologies' revenue from operations for just ended March quarter came in at Rs 22,597 crore, 15 per cent higher than a year ago. The March quarter net profit at Rs 3,593 crore, was 4.4 per cent higher when seen quarter on quarter.

For the fiscal ended March 31, 2022, the net income stood at Rs 13,499 crore against Rs 11,145 crore in the previous fiscal.

The revenue from operations for the entire fiscal up to March 31, 2022, was Rs 85,651 crore, up from Rs 75,379 crore in FY21.

“We have delivered yet another stellar quarter in our services business, where the revenue is up 5 per cent quarter on quarter, up 17.5 per cent year on year in constant currency," Vijayakumar said.

The company said it witnessed all round growth across verticals and geographies (year-on-year) in constant currency for the quarter.

The growth momentum was led by Telecom, Media, Publishing and Entertainment (20.2 per cent), Lifesciences and Healthcare (18.5 per cent), Manufacturing (16.6 per cent), Technology & Services (14.3 per cent), and Financial Services (10.2 per cent). The geography growth was powered by Europe (13.6 per cent), Americas (13 per cent) and the rest of the world (15 per cent).

"The total growth for Q4 was 1.1 per cent in constant currency with the services growing 5 per cent but it is offset to some extent by the seasonally weak quarter in the products and platform business which continues to be volatile and came in lower than what we expected," Vijayakumar said.

On return to the office, the footfalls are increasing and the company sees a hybrid work environment for a little while or permanently. The company continues to closely monitor the situation.

The company's total headcount stood at 208,877 with a net addition of 39,900 during the year, up by 23.6 per cent year-on-year. Net additions during the quarter were at 11,100, up 5.6 per cent sequentially.

HCLT board has declared an interim dividend of Rs 18 per equity share of Rs 2 each for the financial year 2022-23.

The company's scrip closed at Rs 1099 apiece on BSE, 0.92 per cent higher than the previous close. The results were declared after market hours.