HCL Technologies reports quarterly results for the FY quarter ending on September 30, 2020
REVENUE 2,486 million USD – up 18.4% YoT
REVENUE GROWTH (CONSTANT CURRENCY) up 20.5% YoY
EARNINGS BEFORE INTEREST & TAX (EBIT) 496 million - up 18.8% YoY
NET INCOME 376 million – up 5.5% YoY
Key Highlights
− HCL’s strong growth at 20.5% YoY in constant currency, led by double digit growth across Segments. IT and Business Services 17.4%, Products & Platforms 57.9%, Engineering and R&D Services 15.0% (on YoY Constant Currency basis).
− HCL Software, a new business unit of HCL Products & Platforms, became operational in Q2, enhancing the revenue contribution from Financial Services 22.4% (up from 20.3% in Q1), Retail & CPG 10% (up from 9.5% in Q1) and Telecommunications, Media, Publishing & Entertainment 8.4% (up from 8.0% in Q1). The unit got off to a fast start in its first quarter of operations – engaging with thousands of new customers through multiple channels, onboarding more than 1300 partners, and completing over 1500 total sales transactions comprising both renewals and new licenses, in more than 50 countries. The HCL Software business also announced its first major new product release of HCL Digital Experience 9.5, incorporating several core HCL Software architectural priorities around containerization, micro-services, and UI/UX improvements.
− Engineering and R&D Services has posted a robust double digit 15.0% YoY growth in constant currency on back of 13.3% YoY growth in constant currency during Q1, driven by Large deals and all round traction for engineering services in major industries that we operate while leveraging investments in leading technologies like 5G and I4.0.
− HCL acquired Sankalp Semiconductor (Sankalp), an advanced technology design services provider offering comprehensive digital and mixed signal System-on-a-Chip (SoC) services and solutions from concept to prototype, in the semiconductor space. Sankalp’s capabilities, combined with HCL’s existing strengths, will help HCL sustain its leadership position in the semiconductor space within the Engineering and R&D Services industry. This strategic acquisition will enable HCL to further expand into newer market-domains, especially in analogue and mixed signal design.
− Creating a sustainable balance in gender diversity has always been a focus of HCL. As of Sep 30, 2019, women represent 26.17% of the global workforce.
− HCL prides itself in employing people from different geographies and nationalities, creating a unique fabric of values and traditions. As of Sep 30, 2019, HCL employed people from more than 140 nationalities spread across 44 countries.
− Operating Cash Flow / Net Income conversion at 85% (on LTM basis).
− The Board at its meeting held on October 23, 2019 has considered, approved and recommended a Bonus issue of Shares of one equity shares for every one equity shares held by the equity shareholders of the Company. The bonus issue of equity shares is subject to the approval of the shareholders and any other applicable statutory and regulatory approvals. − Dividend of `2 per share, 67th consecutive quarter of dividend pay out has been announced.
FY’20 Guidance
− Revenue: FY'20 Revenues are expected to grow between 15.0% to 17.0% in Constant Currency Revenue Guidance is based on FY’19 (April to March) average exchange rates. The above constant currency guidance translates to 13.2% to 15.2% in US$ terms based on September 30, 2019 rates.
− Operating Margin (EBIT): FY’20 expected Operating Margin (EBIT) range is from 18.5% to 19.5%.
“HCLites have delivered yet another outstanding quarter with a 20.5% YoY growth, translating to a more than 14% industry leading organic growth. Our sharp focus on pricing and cost levers over the last 6 months have helped deliver a solid EBIT of 20%. I am also very excited about the progress we have made in our newly formed, HCL Software business. I am confident that this momentum combined with our diversified portfolio of services and software will deliver great value to our clients, our shareholders and most importantly, our employees.” said C Vijayakumar, President & CEO, HCL Technologies.
About HCL Technologies
HCL Technologies (HCL) empowers global enterprises with technology for the next decade today. HCL’s Mode 1- 2-3 strategy through its deep-domain industry expertise, customer-centricity and entrepreneurial culture of ideapreneurship™ enables businesses transform into next-gen enterprises. HCL offers its services and products through three business units - IT and Business Services (ITBS), Engineering and R&D Services (ERS) and Products & Platforms (P&P). ITBS enables global enterprises to transform their businesses through offerings in areas of Applications, Infrastructure, Digital Process Operations and next generational digital transformation solutions. ERS offers engineering services and solutions in all aspects of product development and platform engineering while under P&P, HCL provides modernized software products to global clients for their technology and industry specific requirements. Through its cutting-edge co-innovation labs, global delivery capabilities and broad global network, HCL delivers holistic services in various industry verticals, categorized under Financial Services, Manufacturing, Technology & Services, Telecom & Media, Retail & CPG, Life Sciences & Healthcare and Public Services. As a leading global technology company, HCL takes pride in its diversity, social responsibility, sustainability and education initiatives. As of 12 months ended September 30, 2019, HCL has a consolidated revenue of US$ 9.3 billion and its 147,123 ideapreneurs operate out of 44 countries. For more information, visit www.hcltech.com
Safe Harbour Statement
Certain statements in this release are forward-looking statements, which involve a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those in such forward-looking statements. All statements, other than statements of historical fact are statements that could be deemed forward looking statements, including but not limited to the statements containing the words 'planned', 'expects', 'believes', 'strategy', 'opportunity', 'anticipates', 'hopes' or other similar words. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding impact of pending regulatory proceedings, fluctuations in earnings, our ability to manage growth, intense competition in IT services, Business Process Outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, customer acceptances of our services, products and fee structures, our ability to attract and retain highly skilled professionals, our ability to integrate acquired assets in a cost effective and timely manner, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, the success of our brand development efforts, liability for damages on our service contracts, the success of the companies / entities in which we have made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property, other risks, uncertainties and general economic conditions affecting our industry. There can be no assurance that the forward looking statements made herein will prove to be accurate, and issuance of such forward looking statements should not be regarded as a representation by the Company, or any other person, that the objective and plans of the Company will be achieved. All forward looking statements made herein are based on information presently available to the management of the Company and the Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.