HCL Q3 net dips, but sees strong demand

New Delhi (PTI): IT firm HCL Technologies on Friday reported a 13.6 per cent fall in net profit to Rs 3,442 crore for the December 2021 quarter and said it expects to see a strong deal pipeline on the back of a robust demand environment.

The company had logged a net profit of Rs 3,982 crore in the October-December 2020 quarter (as per US GAAP). Its revenue grew 15.7 per cent to Rs 22,331 crore in December 2021 quarter from Rs 19,302 crore in the year-ago period.

The company explained that the profit after tax (PAT) in the third quarter of FY21 was higher by USD 59.4 million (Rs 438 crore) due to the reversal of a prior year’s tax provision due to a change in the method of calculating a tax deduction, basis evaluation of judicial rulings.

HCL Technologies Chief Financial Officer Prateek Aggarwal said that excluding this, PAT was lower by 2.9 per cent in December 2021 quarter year-on-year in rupee terms. “It’s basically three things - one is the seasonality, the leaves taken by people during this quarter because of the festive season. Second is the increments we gave out this quarter...third is the cost of attrition and backfilling people at a higher cost, targeted retention costs, higher recruitment costs and others,” he told reporters.

On a sequential basis, HCL Technologies’ net profit was 5.4 per cent higher, while topline (revenue) grew 8.1 per cent from the September 2021 quarter. HCL Technologies has maintained its revenue guidance of double-digit growth in constant currency for FY22. It has also declared a dividend of Rs 10 per share for the third quarter.

Talking about the company’s performance, HCL Technologies CEO and MD C Vijayakumar said the third quarter had been “spectacular” with strong revenue growth, sustained margin performance and continued momentum in booking and pipeline, reflecting the company’s all-round strength in the market.

The company’s products and platforms segment led the growth with 24.5 per cent, followed by engineering and R&D services with 8.3 per cent.

Acquires Hungarian firm

HCL Technologies on Friday said it will acquire Hungarian firm Starschema for $42.5 million (about Rs 315 crore). HCL Technologies has signed a definitive pact for the acquisition of Budapest-based Starschema, which provides data engineering services, according to a regulatory filing. The strategic acquisition will bolster HCL Technologies’ capability in digital engineering -- driven by data engineering -- and increase its presence in Central and Eastern Europe, it added.