HCLTech Delivers a Quarter of Strong Execution and Record Deal Bookings

October 12, 2023 at 14:41 PM EDT

Q2 FY24 bookings at all-time high of $4 billion

Revenue at $3.2 billion, up 4.6% YoY; Ebit margin expands to 18.5%

Attrition (LTM) moderates further to 14.2%; Dividend of ₹12 per share

HCLTech, a leading global technology company, today announced its financial results for the quarter ended September 30, 2023.

The company reported record deal bookings of $4 billion for the quarter. This represented a growth of 159% QoQ and 67% YoY. 16 large deals (including one mega deal) — 10 in services and six in software — contributed to this milestone.

During Q2 FY24, revenue was at $3.2 billion, up 4.6% YoY. Revenue in constant currency (CC) grew by 3.4% YoY and 1 % QoQ. Services revenue grew by 3.4% YoY in CC. EBIT margin for the quarter increased to 18.5% from 17% QoQ. HCLSoftware’s annual recurring revenue (ARR) came in at $1.03 billion, up 3.9% YoY (CC).

Revenues from both the Americas and Europe grew at 3.9% YoY (CC). Industry vertical growth was led by Financial Services at 12.5% YoY (CC) and Lifesciences & Healthcare at 9.8% YoY (CC).

The company announced a dividend of ₹12 per equity share.

“Our revenue growth of 1% QoQ and 3.4% YoY on a constant currency basis, with a 154 bps QoQ improvement in operating margin and improving cashflows, reflect our ability to execute well in an evolving business environment and our commitment to operational efficiency. Our new bookings of $4 billion this quarter is at an all-time high, driven by a standout mega deal. This achievement underscores our ability to seize exceptional opportunities in the market and gives us optimism for our medium-term growth prospects," said C Vijayakumar, CEO & Managing Director, HCLTech.

HCLTech expects FY24 organic revenue to grow at 4-5% YoY in CC. The company’s revenue growth (including ASAP acquisition) is expected to be at 5-6% YoY in CC. The company retained its EBIT margin guidance for FY24 at 18-19%.

“Q2 FY24 growth at 8% YoY (in INR) is accompanied with sharp uptick in margins and deal wins as well as great cash generation. EBIT margins increased to 18.5%, an increase of 50 bps YoY, 154 bps QoQ. Profit after tax (PAT) came in at 14.4%, an increase of 30 bps YoY. EBIT was up 11.5% YoY and PAT was up 9.8% YoY. Last twelve months (LTM) ROIC for the company stood at 32.2% (up 350 bps YoY) and 39.4% (up 320 bps YoY) for Services business. Cash generation accelerated with LTM OCF $ 2,820 million (151% of PAT) and FCF at $2,662 million (142% of PAT)," said Prateek Aggarwal, Chief Financial Officer, HCLTech.

Attrition (LTM) rate for the quarter moderated further to 14.2% from 23.8% in Q2 FY23.

HCLTech is leveraging cutting-edge technologies, from GenAI to cloud computing, to help clients future-proof their businesses. Among the deals that HCLTech won in emerging areas:

A Europe-based global financial services provider selected HCLTech strengthen its global compliance framework leveraging GenAI.
One of the largest global technology companies selected HCLTech as a preferred partner for their product developer support lifecycle optimization using AI and machine learning.
The US subsidiary of a leading pharmaceutical company selected HCLTech to set up a GenAI lab to prioritize use cases.

CSR and ESG Performance:

EcoVardis has rated HCLTech in the “Gold” segment for its advanced sustainability performance.
During the quarter, HCLTech took its highly successful HCLTech Grant program to the Americas. The company has committed $5 million over five years to provide grants to non-governmental organizations (NGOs) combating climate change and restoring ecosystems and biodiversity across the Americas.
HCLTech won Gold for “Best Advance in Leadership Development for Women” and won Silver for “Best Learning Program for Unconscious Bias Awareness” at the 2023 Brandon Hall Group HCM Excellence Awards™.

About HCLTech

HCLTech is a global technology company, home to more than 221,000 people across 60 countries, delivering industry-leading capabilities centered around digital, engineering, cloud and AI, powered by a broad portfolio of technology services and products. We work with clients across all major verticals, providing industry solutions for Financial Services, Manufacturing, Life Sciences and Healthcare, Technology and Services, Telecom and Media, Retail and CPG, and Public Services. Consolidated revenues as of 12 months ending September 2023 totaled $12.9 billion. To learn how we can supercharge progress for you, visit hcltech.com.