HCL Tech Q4 net up 24.3% to Rs 3,154 cr, sees short-term impact of COVID-19


New Delhi: IT providers main HCL Technologies on Thursday posted 24.Three per cent soar in March quarter consolidated net revenue at Rs 3,154 crore, and mentioned there may very well be sure short-term challenges like shoppers deferring new tasks and volume-based billing impact on account of COVID-19 pandemic.

HCL Technologies, which had registered a consolidated net revenue of Rs 2,550 crore within the January-March 2019 quarter as per Indian accounting norms (Ind-AS), shunned providing a income progress outlook for FY’21 however expressed confidence of a robust efficiency within the close to and long run.

IT corporations like Wipro and Infosys have additionally suspended their follow of providing income progress forecast, whereas Cognizant had retracted its annual outlook for 2020.

HCL Tech’s income grew 16.Three per cent to Rs 18,587 crore within the March 2020 quarter, from Rs 15,990 crore within the year-ago interval.

“… There is some volume-based billing impact, there is some deferral of discretionary spend, some new project decision making is slowing down and some price discounts and maybe payment term extensions. These are the type of issues we are seeing on the demand side,” HCL Technologies President and CEO C Vijayakumar informed reporters.

He added that industries which have seen larger impact of the COVID-19 pandemic embody cars, aviation, leisure, and non-grocery retail.

“But there are several verticals where we see the impact is very low – financial services, telecom, and professional services. Also our portfolio has certain insulated industry segments like life sciences and technology services that are fairly insulated and we are seeing some robust demand there,” he mentioned.

Vijayakumar mentioned the corporate is seeing each type of impacts – “pockets of good demand in weak verticals” and “weak demand in strong verticals” given HCL Tech’s blended portfolio combine.

“… We do not see this pandemic influencing our multi-year engagements beyond the short term, our efforts of building strong relationship with our clients, most of them are fortune 500 or global 2000 brands, with very strong and sustainable business model gives us that confidence that in the long term they’re intact but in the short term there could be some challenges,” he defined.

Shares of the corporate had been buying and selling at Rs 517.80, marginally decrease than the earlier shut on BSE.

“HCL Tech reported in-revenue growth, while EBIT margin and net profit have beaten our estimates. Constant currency revenue grew 0.8 per cent q-o-q/13.5 per cent y-o-y, in-line with our estimates, led by strong growth in technology and services vertical,” Sanjeev Hota, Head of Research at Sharekhan by BNP Paribas, mentioned.

Vijayakumar mentioned the corporate has frozen hiring on the whole however continues to rent for area of interest areas together with digital, cloud cybersecurity and Internet of Things. It may even rent the 15,000 freshers to whom supply letters had been rolled out. However, no determination has been taken on wage hikes as the corporate follows the July cycle.

The COVID-19 pandemic has disrupted companies globally with many governments imposing lockdown to comprise the unfold of the coronavirus.

This compelled most firms, together with IT providers corporations, to ask workers to earn a living from home. In India, sure relaxations have been allowed to carry a piece of individuals again at work whereas following strict security and well being protocols.

“We believe this return needs to be very well-calibrated. We do not foresee more than 10 per cent of our employees coming into offices by the end of this quarter, and we will keep evaluating it and see how to react to the situation. And we are seeing significant increase in productivity in the work-from-home operating model,” he mentioned.

Vijayakumar added that the corporate would re-evaluate to see if this association will work out in a non-lockdown state of affairs, and if prospects will agree to it.

“How will the privacy and security aspects play out is something we have to see. So I think it’s going to take some time to really determine what the long-term operating model will be, but directionally, I see in 12 to 18 months, 50 per cent of employees would work from home and 50 per cent will work from offices and this will be in some kind of rotation model,” he mentioned.

For FY’20, HCL Tech’s net revenue elevated 9.Three per cent to Rs 11,057 crore, whereas income grew about 17 per cent to Rs 70,676 crore from the earlier monetary 12 months. Its income progress in fixed forex was at 16.7 per cent – in step with its outlook for 16.5-17 per cent progress.

In US GAAP phrases, HCL Tech’s consolidated net revenue in March quarter grew 22.eight per cent to Rs 3,154 crore, whereas income rose 16.Three per cent to Rs 18,590 crore from the year-ago interval.

For FY’20, HCL Tech’s consolidated net revenue elevated 9.Three per cent to Rs 11,062 crore, whereas income grew 17 per cent to Rs 70,678 crore from the earlier monetary 12 months.

“FY’20 has been a landmark 12 months, the place we witnessed our highest progress in recent times and an trade main efficiency for the fourth consecutive 12 months.

“Our focused ‘Mode 1-2-3 strategy’ helped deliver an all-round growth across service lines, verticals and geographies and 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 mentioned.

During the fiscal, HCL Tech signed 53 transformational offers.

At the top of March 2020 quarter, HCL had 1,50,423 workers with the addition of 1,250 individuals within the fourth quarter. Its attrition (on final 12 month foundation) was at 16.Three per cent.

HCL Tech mentioned of its complete world worker base, presently 96 per cent are working from house and one other 2.5 per cent are working from workplaces.

The Board has proposed a closing dividend of Rs 2 per share on double the quantity of shares put up 1:1 bonus challenge.

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