HCLTech smashes expectations in Q1 FY25 with billion-dollar deals and explosive growth

HCL Technologies (HCLTech), a premier global technology firm, has disclosed its financial outcomes for the quarter concluding on June 30, 2024, demonstrating significant growth and strategic advances across its operations. The company announced new contracts amounting to $1.96 billion, underlining its expansive reach across various sectors and global markets. This quarter, HCLTech’s constant currency (CC) revenue ascended by 5.6% year-over-year (YoY), with dollar revenue achieving a commendable $3.36 billion, marking a 5.1% increase YoY.

In particular, HCLTech’s Services and Digital sectors showed remarkable growth, with Services revenue rising by 5.8% YoY (CC) and Digital revenue by 6% YoY (CC). The Engineering and R&D Services business (ERS) experienced an 8.4% growth YoY (CC), while HCLSoftware maintained strong growth momentum, increasing by 3.5% YoY (CC).

Net Income for the period stood at ₹4,257 crores, reflecting a substantial 20.4% increase YoY. HCLTech continues to maintain a robust financial guidance, projecting a revenue growth of 3-5% (CC) and maintaining an EBIT margin outlook of 18-19% for the fiscal year 2025.

C Vijayakumar, CEO & Managing Director of HCLTech, expressed satisfaction with the company’s performance, noting, “Our Q1 revenue and EBIT performance was slightly better than our expectations. We clocked in $2B TCV of new business bookings. We are confident of decent growth in the coming quarters, positioning us well to deliver our revenue guidance for the year as clients continue to spend on GenAI and other emerging technologies.”

The Americas led geographic revenue growth with an impressive 8% increase YoY (CC), followed by Europe at 3% YoY (CC). The Telecommunications, Media, Publishing, and Entertainment sectors led industry vertical growth, recording an astounding 69.2% growth YoY in CC, followed by the Retail and CPG sectors, which saw a 9.7% increase YoY in CC.

Prateek Aggarwal, Chief Financial Officer at HCLTech, highlighted the company’s stable financial position, stating, “HCLTech delivered an INR revenue growth of 6.7% YoY, healthy given the global environment. EBIT margins came in at 17.1%, steady on a YoY basis. We delivered a PAT of ₹4,257 crores for the quarter, translating to YoY growth of 20.4%. Our cash flow generation remains robust with LTM FCF at ₹21,637 crores, 133% of PAT and 88% of EBITDA.”

Attrition rates at HCLTech were among the lowest in the industry at 12.8%. The company also added 1,078 freshers to its workforce during the quarter, boosting its talent pool. Notably, HCLTech continues to leverage cutting-edge technologies like GenAI and cloud computing to bolster its clients’ business resilience.

Among notable GenAI deals, HCLTech has partnered with a Europe-based financial services major to develop and manage its next-gen low latency electronic trading and compliance analytics platforms. Additionally, a US-based hi-tech major engaged HCLTech to create and maintain a GenAI-as-a-service (GaaS) platform, highlighting the company’s innovative capabilities in transformative technologies.

In recognition of its strong quarterly performance, HCLTech declared a dividend of ₹12 per share for the quarter.

HCLTech’s consistent performance and strategic advancements underscore its role as a leader in the global technology landscape, poised for sustained growth and innovation.