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Tag: HCL Technologies

StoxBox: Research on HCL Technologies

 D. K. Mudaraddi, Research Analyst, StoxBox on HCL Technologies Ltd. Q4 FY24.

HCL Tech’s Q4FY24 revenue was impacted heavily by the seasonal weakness in the software products business despite the reversal of furloughs and incremental revenues from telecom and entertainment segment contracts. Wage hikes and normalization of products and platforms segment margin led to a significant decline in margin underperforming its peers. Leakage in discretionary business has bottomed out for HCL Tech, but there are no signs of a pickup in discretionary spending. There have been no major large deal announcements by HCL Tech in Q4FY24 which is concerning considering that its peers were able to sign mega deal MOUs during the current weak demand environment. Commentary on ER&D, Tech and Telecom vertical performance, demand scenario going forward, and ramp-up of deal wins will be key monitorable going ahead.

HCL Technologies Ltd. Q4FY24 Result First Cut – A miss on all fronts; Revenue guidance trimmed

Reported revenue grew to Rs. 28,499 crores (up 0.2% QoQ / up 7.1% YoY) in rupee terms, marginally missing market estimates of Rs. 28,557 crores.
EBIT dropped 11% QoQ / up 3.9% YoY to Rs. 5,024 crores, missing market expectations of Rs. 6,364 crores. The EBIT margin contracted to 17.6% (down 221 bps QoQ / down 55 bps YoY).
Net income grew to Rs. 3,995 crores (down 8.2% QoQ / up 0.4% YoY), missing market estimates of Rs. 4,123 crores. The PAT margin contracted to 14% (down 128 bps QoQ / down 94 bps YoY).
LTM attrition continuing recent trends declined 40bps QoQ to 12.4% in Q4FY24.
Order book recorded for Q4FY24 stood at USD 2.29 billion.
The board of directors recommended a dividend of Rs. 18 per equity share.
HCL Tech reported a headcount of 227,481 employees as on March 31, 2024, with a net addition of 2,725 employees in Q4FY24.
For FY25, HCL Tech reduced revenue guidance to 3%-5% in CC terms from 5-5.5% projected earlier, while EBIT margin guidance was retained at 18-19%.

Disclaimer/Disclaimer: This press release serves for informational purposes only and does not constitute professional advice. Any reliance on the information provided is at the reader’s discretion.

 

Ms. Nidhi Pundhir

Year ender statement on behalf of Ms. Nidhi Pundhir, Director, HCL Foundation, the CSR arm of HCL Technologies

India faced unprecedented challenges during the second wave of the pandemic. During this testing time, corporate philanthropy assumed more significance than ever and played a critical part in helping individuals and communities get through difficult times. HCL, through all its entities, significantly ramped up its efforts to mitigate the humanitarian crisis. HCL proactively collaborated with the national and local governments and communities to meet the needs on the ground.

This year, as HCL Foundation (HCLF), celebrated 10 years of stewardship and impact, HCL Technologies also revised its Corporate Social Responsibility Policy document to further reaffirm its commitment to the Global Sustainable Development Goals as well as the National Missions. While HCL, as a group, coordinated efforts to fight the pandemic, HCLF also remained committed to the CSR mandate of ensuring holistic integrated development of communities and meeting the highest standards of environmental sustainability. HCLF continued to impact 2.14 million lives, brought 52,000+ acres of land under community governance, and rejuvenated 82 water bodies with footprints across 21 States, 3 Union Territories and 122 Districts from rural and urban geographies of India.

Standing firmly against the exploitation of natural resources, HCLF recognized the growing need to invest in environmental action and ecosystem conservation. Consequently, HCL Harit – the green initiative, was launched as a distinct flagship programme to ramp up efforts towards the creation of a greener and more sustainable future. After successfully demonstrating models of rural transformation across 3 blocks in the Hardoi district of Uttar Pradesh, HCL Samuday scaled its reach to 11 blocks. While the HCL Grant partners continued working across remote rural geographies to seed sustainable transformative models and solutions in environment, health and education, HCL Grant also announced the roll-out of its seventh edition.

With innovation at its core, HCL Uday’s strategy started taking root and creating models of urban transformation across thematic areas. HCLF in partnership with various stakeholders and NGO partners inaugurated various key initiatives and programmes across the 11 HCL Uday cities. HCL Foundation was also felicitated by Smt. Anandiben Patel, Governor of Uttar Pradesh, in recognition of its effort towards transforming 76 Anganwadi centres across Gautam Buddha Nagar into ‘vibrant centres’. In addition, Clean NOIDA’s efforts to revolutionize the Solid Waste Management System and make NOIDA visibly cleaner, helped the city become the cleanest medium city of India, as per the Swachh Survekshan 2021.

Sports for Change, HCL Foundation’s special initiative to promote grassroots sports also saw various achievements this year as many of our athletes’ won laurels at the National and International Games. Under Power of One, HCLites continued by contributing digitally as well as engaging with communities on-ground for various community development and environment conservation-related activities. With virtual learning taking prominence, HCL Foundation Academy played a significant role in keeping the sector connected and facilitating the exchange of knowledge. HCLF also launched a new special initiative, ‘My E-Haat’, to strengthen the value chain of the Arts & Crafts sector and create a level-playing field for artisans.

The onset of COVID-19 magnified the inequalities existing in our society highlighting the need for CSR programmes to bring value to the business as well as the society. In the current situation, corporates must identify the areas that require immediate attention and devise strategies that will be beneficial to larger sections of society. The entities should align their strategies basis their research and knowledge of a specific issue which can be a win for community partners and the corporate. One should also carefully assess the ROIs of the CSR efforts to understand the bottom-line experience of beneficiaries. By aligning corporate citizenship efforts with revenue-generating activities, we can ensure that our CSR programmes are strategic and sustainable.

Regards,