HCLTech reports strong annual growth amidst increased demand for digital services and AI

HCLTech, a global leader in technology services, announced its financial results for the fourth quarter and the entire fiscal year ending March 31, 2024. The company reported a robust annual revenue of $13.3 billion, marking a 5.4% increase year-over-year (YoY). This growth is notably driven by a 5.3% rise in Digital Services revenue, which now constitutes 37.3% of its total IT Services revenue. HCLTech’s Annual Recurring Revenue from its software segment reached $1.02 billion.

Quarter and Annual Deal Wins Fuel Growth

During the fiscal year 2024, HCLTech secured 73 large deals, split almost evenly between Services (36) and Software (37), translating into a Total Contract Value (TCV) of $9.76 billion, a 10% increase from the previous year. For the fourth quarter alone, the company won 21 large deals with a TCV of $2.29 billion.

Geographical and Vertical Expansion

The Americas emerged as the fastest-growing region for HCLTech, with a 6.8% growth YoY, closely followed by Europe at 5.5%. Industry verticals such as Financial Services and Telecommunications, Media, Publishing & Entertainment led the growth, with Financial Services expanding by 12.1% YoY and the Telecommunications vertical experiencing a staggering 39.2% growth during the quarter.

Dividends and Human Resources Development

Reflecting its financial health, HCLTech announced a quarterly dividend of ₹18 per share, bringing the annual total to ₹52 per share for FY24. The company’s workforce stood at 227,481 at the quarter’s end, having added 12,141 freshers throughout the year. Notably, the long-term attrition rate has moderated to 12.4% from the previous 19.5%.

Executive Insights and Future Outlook

C Vijayakumar, CEO & Managing Director of HCLTech, commented on the results: “HCLTech continues to lead the industry in FY24 with good USD revenue growth of 5.4% YoY during challenging times through our strong commitment to our clients and our people. More importantly, we have translated this growth into even higher value creation for our shareholders with our OCF (operating cash flow) coming at $2,711 million, up 21.6% YoY and FCF (free cash flow) at $2,584 million, up 27.7% YoY.”

Looking ahead to FY25, HCLTech anticipates a revenue growth of 3%-5% YoY and an EBIT margin of 18%-19%. Prateek Aggarwal, Chief Financial Officer, added, “Our FY24 performance underlines the resilience of our business model with revenue growing 8.3% and EBIT up 8.4%. Net Income for the year came in at ₹15,702 crore, up 5.7%, translating to an EPS of ₹57.86.”

Innovation and Strategic Developments

Innovation remains at the core of HCLTech’s strategy. The company recently launched HCLTech AI Force, a cutting-edge GenAI platform designed to transform software development and engineering lifecycles by enhancing productivity, quality, and release timelines. The platform has already begun to demonstrate its value in strategic GenAI deals with major clients in biopharmaceuticals and financial services, leveraging AI for enhanced data extraction and service delivery.