As India Inc’s earnings season is going on with two IT companies TCS and Infosys already declared the results, another IT major HCL Tech will announce its March 2022 quarter financial performance. The company will also provide commentary on its product and platform business, and give a margin and revenue outlook. Here’re important parameters the investors need to see in the results:
Profit After Tax/ Net Profit
The company is expected to report a profit after tax (PAT) of Rs 3,482.6 crore for the March 2022 quarter, a jump of 17.6 per cent as compared with the year-ago period, according to a report by Yes Securities.
Revenue Growth
HCL Tech is likely to post a 16.9 per cent year-on-year (y-o-y) growth in revenues to Rs 22,965.7 crore in the quarter ended March 2022, as per Yes Securities. Analysts at Sharekhan said, “We expect CC (constant currency) revenue growth of 0.8 per cent QoQ (quarter-on-quarter) and cross-currency headwinds of 40 bps.”
FY23 Revenue and Margin Outlook
During the December 2021 quarter, HCL Technologies has maintained its revenue guidance of double-digits. Investors need to know this while watching results, as it will give an idea of the company’s growth prospects going forward. It will also give its commentary on the product and platform business.
Large Deal Wins
The company’s total contract value (TCV) for the quarter stood at USD 2.13 billion. TCV for the quarter was softer compared to the second quarter, which was USD 2.24 billion. But, the TCV was up 64 per cent year-on-year. The company signed eight new large services deals and eight significant deals in the product business.
Attrition Rate
At the end of the December 2021 quarter, HCL had 1,97,777 employees with a net addition of 10,143 people, while attrition for IT services (on the last 12-month basis) was at 19.8 per cent. Attrition excludes involuntary attrition and digital process operations.
The report by Yes Securities said that it expects growth in HCL Tech’s product business to be muted, while IT services would be able to maintain growth momentum.
In the December 2021 quarter, IT firm HCL Technologies posted a 13.6 per cent decline in its net profit to Rs 3,442 crore but said it had seen all-round “stellar performance” across verticals and geographies. The net profit had stood at Rs 3,982 crore in the October-December 2020 quarter (as per US GAAP).
Its revenue growth stood at 15.7 per cent to Rs 22,331 crore in the quarter under review. In the year-ago period, the same stood at Rs 19,302 crore, HCL Technologies said in a regulatory filing. The PAT for the third quarter ended December 2021 was higher by USD 59.4 million (Rs 438 crore) on account of the reversal of prior years’ tax provision due to change in the method of calculating a tax deduction, basis evaluation of judicial rulings, the filing said.
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