HCL Tech Q1 results: Company reports better than expected results, revenue jumps 6.7% YoY

IT giant HCL Tech declared its Q1FY25 results today. The company's revenue for the quarter stood at Rs 28,057 crore, registering a 1.6% quarter-on-quarter (QoQ) decline and a year-on-year (YoY) growth of 6.7%. The company's EBIT (earnings before interest and tax) was Rs 4,795 crore, down 4.4% QoQ but up 7.5% YoY.
The company also declared an interim dividend of Rs 12 per share, making April–June 2024 the 86th consecutive quarter where the company paid out dividends.

The company's net income also jumped from Rs 3,534 crore in June 2023 to Rs 4,257 crore in June, 2024.

The company's new deals secured during the quarter, or total contract value (TCV), were around $1,960 million. Its employee workforce as of June 30th, 2024, stood at 2,19,401. The company let go of 8,080 employees during the quarter. However, its attrition rate came down to 12.8% during the quarter, down from 16.3% in Q1 FY24. At the close of trade today, HCL Tech's stock was trading at Rs 1,561.75, up by 3.30%.

The company's operating cash flows (OCF) for the quarter stood at $2,722 million, while its free cash flows (FCF) were around $2,604 million. Revenues at HCLTech Services saw a dip of 1.9% on a QoQ basis but rose by 5.8% on a YoY basis, in constant currency terms.

Looking ahead

In FY25, the company expects its revenue growth to be in the range of 3-5% on a year-over-year basis, in constant currency terms. Its revenue from services is also set to grow within the same estimates. The company also anticipates its EBIT margins to be between 18 and 19% in FY25.

Per its reports, the company's top 20 clients contributed 30.1% of its total revenue. Service revenue from the Americas saw the maximum jump of 8% on a year-on-year basis, in constant currency terms. As of June 30, 2023, the revenue mix from the Americas was at 64.5%, which grew to 66% this quarter. Opposed to this, the rest of the world's share of the revenue mix dipped by 6.8% as of June 30th, 2023, to 6.1% as of June 30th, 2024.

Amidst the company's verticals, the telecommunications, media, publishing & entertainment vertical registered the maximum YoY growth of 69.2%, jumping to 12.2% last quarter from 7.6% as of June 30th, 2023.

During the quarter, the company lost 4 clients worth over $20 million and gained 9 clients worth over $5 million. On a year-on-year basis, the company added 14 clients worth $5 million to its base.