HCL Tech outpaces peers with 23 per cent growth

The IT major has however not provided any guidance for FY21 due to uncertainty arising out of the pandemic situation.
HCL Technologies image used for representation (File Photo | Reuters)
HCL Technologies image used for representation (File Photo | Reuters)

BENGALURU: Noida-headquartered HCL Technologies has outperformed the top IT/ITes firms by posting a strong 23 per cent growth in net profit at Rs 3,154 crore in the January-March quarter (Q4) of financial year 2019-20, beating its revenue estimates and meeting the upper-end of margins guidance.

Industry analysts observed that a strong growth rate of EBITDA over last consecutive years at 15.1 per cent has positioned HCL Tech strongly, compared to the other tier-1 IT companies.

HCL Tech also posted a flat revenue growth (QoQ) in dollar terms in Q4 compared to industry peers, who reported a drop in dollar revenue in the same quarter. According to HCL Tech CEO C Vijayakumar, the kicking-starting of business continuity plan during the early stage, when the coronavirus cases were reported in China, helped the IT firm mitigate the impact of the virus.

The IT major has however not provided any guidance for FY21 due to uncertainty arising out of the pandemic situation. Going forward, it said, the deal signings may slow down due to demand drop among various verticals. In fact, the deal signings were maximum in Q4FY20, when the world was reeling under the pandemic.

HCL Tech said 96 per cent of its employee base (1,50,000) are now working from home and only 2.5 per cent have been allowed to work from HCL centre facilities. The country’s third largest ITes firm said it has introduced a new digital product, fluid workspaces model, for its clients that helped nearly 3.5 million people seamlessly work in the tough Covid-19 times.

“FY20 has been a landmark year, where we witnessed our highest growth in recent years and an industry-leading performance for the fourth consecutive year. Our focused Mode 1-2-3 strategy helped deliver an all-round growth across service lines, verticals and geographies; enabled us to deliver at the top-end of our revenue guidance, and exceed the top-end of our margin guidance for the year,” Vijayakumar said.
The virus impact may be seen in short-term, but businesses would rebound by Q3FY21 as the infections taper off, he said.

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