HCL Tech Q4 highlights: HCL Tech Q4 results takeaways: Firm refrains from giving guidance, expects earnings recovery in H2 of FY21

HCL Technologies on Thursday posted better-than-expected financial results for the quarter ended March 2020. The IT firm reported a 22.80 per cent year-on-year (YoY) and a 3.80 per cent quarter-on-quarter (QoQ) growth in net profit at Rs 3,154 crore. Analysts in an ET NOW poll had projected the profit figure at Rs 3,025 crore.

Revenue of the company increased 16.30 per cent YoY and 2.50 per cent QoQ to Rs 18,590 in Q4FY20.

Here are the key takeaways from HCL Tech’s Q4 results:

Dividend

The company proposed a final dividend of Rs 2 per share on double the number of shares post 1:1 bonus issue.

Topline in dollar terms

Revenue in dollar terms increased 11.7 per cent YoY at $2,543 million. However, it remained unchanged on QoQ basis.

FY20 performance

Net income and revenue increased 9.3 per cent YoY and 17 per cent YoY to Rs 11,062 crore and Rs 70,678 crore, respectively, in FY20.

C Vijayakumar, President & CEO, HCL Technologies said, “FY20 has been a landmark year, where we witnessed our highest growth in recent years and an industry leading performance for the fourth consecutive year. Our focused Mode 1-2-3 strategy helped deliver an all-round growth across service lines, verticals and geographies and enabled us to deliver at the top end of our revenue guidance and exceed the top-end of our margin guidance for the year.”

“Looking ahead we are confident that our capabilities, our balanced portfolio, strong client relationships and our financial strength will help us navigate this crisis and emerge stronger,” he added.

Guidance

Like its peers, Infosys and Wipro, HCL Technologies too refrained from giving any revenue guidance amid uncertainties on account of Covid-19 pandemic. However, the firm in an interaction with ET NOW said it sees the maximum impact on earnings from Covid-19 in the current quarter. It expects H2 of current financial year to be better with earnings recovery likley in October-March.

89 new clients in Q4

HCL’s total clients stood at 1,411 at the end of March quarter. The company added 91 new clients – 79 in the $1 million-plus club, six in $5 million-plus, four in $10 million-plus and two in $20 million-plus. However, it lost two clients in the $50 million-plus bracket.

The company also signed 14 transformational deals during the quarter, led by key industry verticals telecom, Hi-Tech, retail and CPG, manufacturing and financial services.

Dependence of clients

Top five clients contribute around 15.1 per cent in HCL’s revenue, while the contribution of top 10 and top 20 clients stood at 22 per cent and 32.10 per cent, respectively, at the end of March 31.

Headcounts

HCL added 1,250 employees in Q4, taking its overall full-time employees count to 150,423. As of March 31, women represented 26.8 per cent of HCL’s global employees.

EBITDA margin

The figure increased to 25.40 per cent over 22.60 per cent on YoY basis. EBITDA margin stood at 24.70 per cent in the sequential quarter ended December 2019.