HCLTech on Monday reported strong financial results for the second quarter of FY2025, with revenue reaching Rs 28,862 crore, a increase of 2.9 per cent quarter-on-quarter (QoQ) and 8.2 per cent year-on-year (YoY), which is above analyst estimates. Net income for the quarter stood at Rs 4,235 crore, a 10.5 per cent increase compared to the same period last year, although it saw a marginal decline of 0.5 per cent compared to the previous quarter.
In constant currency terms, the company saw a 1.6 per cent rise in revenue from the previous quarter and a 6.2 per cent annual growth. The firm’s services segment performed well, registering a 5.9 per cent rise in constant currency revenue YoY, while its digital services expanded 7.8 per cent during the same period, contributing 38.5 per cent of total services revenue.
HCLTech's software arm, HCLSoftware, also posted solid results, with a 9.4 per cent growth in constant currency revenue, and its annual recurring revenue (ARR) reached USD 1.05 billion.
The company secured new deals totaling USD 2.218 billion in total contract value (TCV), pointing to a sustained demand for its offerings.
“We delivered a strong quarter with revenue growing 1.6 per cent QoQ in constant currency and EBIT coming in at 18.6 per cent. This growth was well distributed across verticals, geographies, and offerings. HCL Software has delivered a stellar performance of 9.4 per cent YoY this quarter and 6.4 per cent growth in H1 FY25 in constant currency, demonstrating the increasing relevance of our products for the digital economy”
- C Vijayakumar, CEO & Managing Director, HCLTech
HCLTech’s operating profitability saw an uptick, with EBIT reaching Rs 5,362 crore, 18.6 per cent of total revenue, an improvement of 11.8 per cent QoQ and 8.7 per cent YoY.
“Our pipeline is very strong, including Data & AI, Digital Engineering, SAP migration and efficiency led programs. Our GenAI offerings like AI Force and AI Foundry are resonating very well with our clients and should be drivers of efficiency, growth, and innovation over the medium term,” added CEO Vijayakumar.
HCLTech also delivered strong return metrics, with return on invested capital (ROIC) reaching 35.7 per cent, an increase of 353 basis points year-on-year, and 43.5 per cent for its services business, which was up 403 basis points. Cash flow remained decent, with operating cash flow for the last 12 months amounting to USD 2.52 billion and free cash flow at USD 2.39 billion.
Dividend
The company announced a dividend of Rs 12 per share.
Headcount Sees Decline Despite Onboarding Freshers
Despite strong financial performance, the company’s total workforce declined by 780 employees during the quarter, bringing the headcount to 2,18,621. However, it added 2,932 freshers, indicating a focus on expanding its entry-level talent pool.
Guidance
Looking ahead, HCLTech provided revenue growth guidance for FY 2025 in the range of 3.5 per cent to 5.0 per cent YoY in constant currency terms, slightly below some analyst expectations. The company expects its EBIT margin to range between 18.0 per cent and 19.0 per cent, aligning with street estimates.
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