NEW DELHI, July 17: IT firm HCL Technologies on Friday posted 31.7 per cent rise in consolidated net profit in June 2020 quarter at Rs 2,925 crore, and said it expects to see a positive growth trajectory in the coming quarters on the back of strong deal pipeline.
The Noida-based company also announced that its founder, Shiv Nadar has stepped down from the Chairman’s position, and his daughter, Roshni Nadar Malhotra will succeed him as the Chairperson of the Board.
Shiv Nadar would continue to be MD of the company with designation as Chief Strategy Officer, HCL Technologies said.
HCL Technologies, which had posted a net profit of Rs 2,220 crore in the April-June 2019 quarter (as per US GAAP), will not offer any salary increments to its staff this fiscal.
The company’s revenue grew 8.6 per cent to Rs 17,841 crore in the quarter under review from Rs 16,425 crore in the corresponding quarter last year. On a sequential basis, the topline was lower by 4 per cent from Rs 18,590 crore in March 2020.
In constant currency terms, HCL Tech’s revenue in June 2020 quarter grew 1 per cent year-on-year.
“We started the year in the middle of a global health crisis and I had said we expect Q1 to be soft and it played out as anticipated… Not all of this dip is attributed to COVID-19, some of this reduction was due to offshoring of large deals envisioned in the previous year. HCL has executed the last quarter on almost all dimensions,” HCL Technologies President and CEO C Vijayakumar said.
The company signed 11 net new transformational deals with new bookings total contract value being higher compared to the same quarter last year, and renewals were also robust during the quarter, he added.
HCL Technologies expects its revenue to increase quarter-on-quarter by an average of 1.5-2.5 per cent in constant currency for the next three quarters.
“If you look at the pipeline, it’s 40 per cent higher than what it was at the end of March… There are good opportunities in financial services around vendor consolidation….Many of the deals that we concluded will also drive the growth momentum in coming quarters,” he said.
Vijayakumar added that he believes that the “worst is behind” and that “there is a positive growth trajectory from now on”.
“And that’s what has given us confidence to provide a guidance of 1.5 to 2.5 per cent average quarterly growth on a constant currency basis,” he said.
Vijayakumar said life sciences and the tech sector are two areas, where the company continues to see growth.
“The next set of sectors will be financial services, and some amount of telecom segment would be the next set and then manufacturing and consumer packaged goods (CPG) retail will be the third. I think the demand recovery will be in that sequence,” he said.
Asked about the suspension of H1-B visas by the US, Vijayakumar said the move was “unfortunate” but will have minimal impact on the IT services major in the short term as it has been investing in ramping up local hiring in that country.
He explained that the company started investing in setting up delivery centres in the US about 10 years ago and now has 15 scaled delivery centres in that country. Also, about 67 per cent of its employees in the US are locals.
“The rules, I would say, is unfortunate but given that we’ve always been prepared and enhancing our local footprint… We see very minimal impact due to the current change in policy at least in the near term. If it were to continue for long term, then we may have to relook at how we address the demand,” he added.
HCL Technologies has announced a dividend of Rs 2 per share.
At the end of June 2020 quarter, HCL had 150,287 employees with a gross addition of 7,005 people. Its attrition for IT services (on last 12 month basis) was at 14.6 per cent.
HCL Technologies Chief Human Resources Officer Varre Appa Rao said the company onboarded 1,000 freshers during the quarter and has honoured all the offers rolled out till now. Also, 2,000 laterals have been hired.
However, the company is not planning to give any increments for FY’21, he added.
Currently, about 96 per cent of its staff is working from home, and the remaining are working from HCL or client premises, Rao said.
(PTI)
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