C Vijayakumar, CEO & Managing Director, HCLTech: Our GenAI offerings like AI Force and AI Foundry are resonating very well with our clients and should be drivers of efficiency, growth and innovation over the medium term
FinTech BizNews Service
Mumbai, 14 October, 2024: HCLTech, a leading global technology company, reported a stellar performance for the quarter ended September 30, 2024, with HCLSoftware delivering a strong revenue growth.
During the quarter, HCLTech won new deals across industry verticals with Total Contract Value worth $2.2 billion. The company revised the lower end of its revenue growth guidance for FY25 to 3.5%-5% (CC) and maintained EBIT margin guidance at 18%-19% for the period. The company declared a dividend of Rs12 per share.
“We delivered a strong quarter with revenue growing 1.6% QoQ in constant currency and EBIT coming in at 18.6%. This growth was well distributed across verticals, geographies and offerings. HCLSoftware has delivered a stellar performance of 9.4% YoY this quarter and 6.4% growth in H1 FY25 in constant currency, demonstrating the increasing relevance of our products for the digital economy. Our pipeline is very strong, including Data & AI, Digital Engineering, SAP migration and efficiency-led programs. Our GenAI offerings like AI Force and AI Foundry are resonating very well with our clients and should be drivers of efficiency, growth and innovation over the medium term,” said C Vijayakumar, CEO & Managing Director, HCLTech.
Revenue in constant currency (CC) grew 6.2% YoY, while dollar revenue came in at $3.4 billion, up 6.8% YoY. Services revenue for the quarter was up 5.9% YoY (CC) while Digital revenue was up 7.8% YoY (CC). Engineering and R&D Services business (ERS) grew by 4.3% YoY (CC).
Geographically, Americas recorded the highest revenue growth of 7.5% YoY (CC), followed by Europe at 4.2% YoY (CC). Industry vertical growth was led by Telecommunications, Media, Publishing & Entertainment (61.2% YoY in CC), followed by Manufacturing (7.1% YoY in CC) and Retail & CPG (6.2% YoY in CC).
“HCLTech has delivered robust financial results with constant currency (CC) revenue growth at an industry leading 6.2% YoY. INR revenue reached Rs28,862 crores, marking a sequential growth of 2.9% and a YoY growth of 8.2%. This revenue growth has come with an improved profitability. Our EBIT margins in Q2 rose to 18.6%, up 149 bps sequentially,” said Shiv Walia, Chief Financial Officer, HCLTech.
The company hired 2,932 freshers during Q2 FY25 while attrition (last twelve months) was at 12.9%.
HCLTech continues to leverage technologies from GenAI to cloud computing to help its clients future-proof their businesses.
Among the select AI, GenAI and Software deals that HCLTech won in the quarter are:
Other Achievements:
Ishan Anand, Principal Analyst, Gartner, explains: “HCLTech experienced a positive momentum of 6.8% in YoY growth. It has kept a strong focus on verticals like manufacturing, healthcare, financial services and technology to help clients achieve their transformational goals. Some clients have expressed dissatisfaction about lack of innovation despite evidence of the company's reasonable automation capabilities. But still, if we take a broader perspective, the future looks positive as the company keeps focus on cutting-edge workplace solutions along with partnerships in the digital workplace to advance its innovation investments. The company has focussed on GenAI product capabilities while partnering with hyperscalers as well to boost its offerings. Based on company's pipeline of deals and looking at Gartner's raise in global IT spending forecast (an increase of 1.3% from 7.6% to 8.9%), we expect positive momentum to continue in the future quarters as well given there are no major setbacks.”
