HCL Technologies Ltd reported a 4 percent year-on-year (YoY) jump in consolidated net profit at Rs 3,259 crore for the second quarter ended September 30, 2021. In the corresponding quarter last year, the Noida-headquartered company posted a net profit of Rs 3,142 crore. Its consolidated revenue from operations jumped 44 percent to Rs 20,655 crore during the reported quarter from Rs 18,594 crore in the corresponding quarter of 2020-21. In dollar terms, revenue for the quarter came in at $2.8 billion, a growth of 3 percent over the previous quarter. In an interview with CNBC-TV18, C Vijayakumar, Chief Executive Officer, and Prateek Aggarwal, Chief Financial Officer at HCL Technologies, shared the company's business outlook.

Read Here:

HCL Tech dips post Q2 results; mixed brokerage commentary weighs

On revenue loss due to deal difference, Vijayakumar said, “In products and platform (P&P) business, we had a slippage of about $20 million, which moved from the September quarter to the December quarter.”

He added, “There are certain dynamics about the product business, which I wanted to share- first, there is a certain amount of revenue which gets converted in the same quarter, and some of these can slip in the last minute and it can go into the next quarter. 1or 2 percent drop is $20-25 million on our $11billion run rate, I think it is insignificant. Overall, we will continue to maintain our double-digit growth.”

On overall earnings, Vijayakumar added, “I think the highlight of the last quarter is that our services growth has been fabulous at 5.2 percent in constant currency, and 13.1 percent year-on-year. Our deal wins have been very impressive, $2.3 billion at total contract value (TCV), 14 large transformational deals. The client additions have been fantastic, our $50 million clients went up from 29 to 41, and we added 11,135 people, which is the highest ever addition. To top it all, we have announced a formal payout policy. So, all round I think it is a good performance. Our production platform, there has been a slippage which I do believe will get covered in the coming quarter.”

Also Read : HCL Tech to include restricted stock units in compensation mix to retain high performers

On margin guidance, Aggarwal said, “There are several moving parts in the math. Actually, we did do our first tranche of salary increments this September quarter, and the second tranche will come in this quarter. It is half-done already. Also, the decline in revenue that we saw in the products business pretty much flew down, that is the nature of the new licenses revenue that gets booked or does not get booked. So both those - the first tranche of the increments and P&P revenue drop hit the margins and therefore, on a full year basis, we remain confident of meeting our guidance of 19 to 21 percent.”

On deal wins, Vijayakumar said, “Last quarter, we had a fabulous win rate, pretty much everything that we wanted to win, we won. That is really the great outcome that we had. Our pipeline, last quarter, I said it was really at the highest level ever, it slightly moderated because we have closed a lot of deals. It is a good mix of mid-size and large deals and there is also a lot of momentum in existing accounts, where customers are ramping up on a number of digital initiatives. So, if you see our client additions, for example, $50 million clients have gone up from 29 to 41on a year-on-year basis, it is a sharp increase. So a lot of our large clients are continuing to invest and scale up. So all of that is, is what the overall demand environment is like.”

For full management commentary, watch the video.

Catch LIVE stock market updates here.

(Edited by : Dipikka Ghosh)

First Published:Oct 18, 2021 12:48 PM IST