HCLTech reports 5.5 per cent profit growth in Q3 FY25, declares special dividend

The company's revenue from operations stood at Rs 29,890 crore for the quarter, reflecting a 5.1 per cent year-on-year growth compared to Rs 28,446 crore in the same quarter last year.
HCLTech met Street expectations with a 5.5% increase in its consolidated net profit, reaching Rs 4,591 crore for the quarter ended December 2024.
HCLTech met Street expectations with a 5.5% increase in its consolidated net profit, reaching Rs 4,591 crore for the quarter ended December 2024.
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BENGALURU: IT services giant HCLTech met Street expectations with a 5.5 per cent increase in its consolidated net profit, reaching Rs 4,591 crore for the quarter ended December 2024, compared to Rs 4,350 crore in the same period last year. The growth was primarily driven by a broad-based performance across business verticals.

The company's revenue from operations stood at Rs 29,890 crore for the quarter, reflecting a 5.1 per cent year-on-year growth compared to Rs 28,446 crore in the same quarter last year. Its Q3 EBIT margins came in at 19.5 per cent.

HCLTech has declared a fourth interim dividend of Rs 18 per equity share for FY25, which includes a special dividend of Rs 6 per share to mark the 25th anniversary of the company's public listing.

The company expects a revenue growth of 4.5 per cent to 5.0 per cent year-on-year for FY25, with EBIT margins forecasted to be between 18 per cent and 19 per cent.

During the post-earnings press conference, C Vijayakumar, CEO and MD of HCLTech, mentioned that the average duration of signed deals is getting shorter, meaning the tenure of deals is declining.

"The shift towards shorter tenure deals naturally leads to a moderated TCV (total contract value), but the more important metric is ACV (annual contract value), which is good," he said.

The company reported a TCV of USD 2.1 billion for the quarter. Vijayakumar further added that some of the largest deals signed this quarter are enabled by AI-led transformation.

Looking ahead to 2025, he said clients are increasing their IT investments, and the company sees improvements in the demand environment with an uptick in discretionary spending.

Ramachandran Sundararajan, Chief People Officer at HCLTech, stated that during the quarter, the company added over 2,000 freshers and planned to add another 1,000 in Q4.

"We expect to significantly increase the number next year," he said. The company's attrition rate stood at 13.2 per cent, up from 12.8 per cent in Q3 of the previous year. Regarding wage hikes, Sundararajan confirmed that mid- and senior management will see wage increases in the March quarter.

Sundararajan also noted that the company’s dependence on H1-B visas is minimal, adding, "About 80 per cent of our people in the US are locals."

Shiv Walia, Chief Financial Officer at HCLTech, discussed the impact of dollar appreciation on the company’s financials. "We will have some impact because we do have large costs based out of India, but it's a bit unpredictable how it's going to move. We did see some benefit in the last quarter also. I think it's very difficult to predict currency at this stage," he said.

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