HCL Technologies fourth-quarter profit up 14.24%, revenue up 20.16%

Indian IT services provider HCL Technologies on Thursday reported that its profit surged 14.24% for the fourth quarter and its total income increased 20.16%.

The company reported a profit of Rs 2,550 crore for the quarter ended March 2019 compared with Rs 2,230 crore for the same period last year. The IT services firm had reported a profit of Rs 2,605 crore for the quarter ended December 2018. 

Full-year profit surged 16.02% to Rs 10,120 crore from Rs 8,722 crore.

HCL Technologies reported a jump of 20.16% in total income to Rs 16,190 crore from Rs 13,480 crore for the same period last year. In the third quarter, the company had reported a total income of Rs 15,833 crore. 

Annual revenue jumped 18.50% to Rs 61,370 crore from Rs 51,786 crore.

Software services and IT infrastructure services led revenue growth with Rs 9,044 crore and Rs 6,219 crore, respectively. BPO services contributed Rs 727 crore to total revenue. 

HCL Technologies divides its services in terms of Mode 1, Mode 2 and Mode 3 in order to include new services such as digital transformation.

Via Mode 1, the company delivers core services in the areas of applications, infrastructure, BPO, engineering and R&D, leveraging DRYiCE autonomics and orchestration to transform clients’ business and IT.

Mode 2 deals with the delivery of experience-centric and outcome-oriented integrated offerings of digital and analytics, IoT, cloud-native services and cybersecurity services. 

Mode 3, which is more products and platform-driven, explores the areas where it can enter into innovative IP-based partnerships, targeting specific next-generation opportunities. It includes the external IP partnership with IBM extending now to half a dozen products.

For the fourth quarter, Mode 1 contributed $1,606 million, making up more than 70% of the revenue. Mode 2 and 3 contributed $430 million and $242 million, respectively.

For the full year, Mode 1 contributed $6,185 million, Mode 2 clocked $1,465 million and Mode 3 accounted $982 million.

During the quarter, HCL acquired Strong-Bridge Envision (SBE), a digital transformation consulting firm which will become part of HCL’s digital and analytics business.  

The company also said that client addition remained strong during the quarter with 19 customers being added in the $5 million-plus category. In the $10 million-plus category, the company added six clients and in the $20 million-plus category, it added eight customers. 

On a yearly basis, the company added one $50 million-plus customer and two $100 million-plus customers.

HCL Technolgoies CEO C Vijaykumar said that the company had signed 78 transformational deals during the year and expected the momentum to continue in the next financial year. 

He added that HCL was looking at growth from hybrid cloud, digital workplace and industries such as manufacturing who were looking to adopt new technologies based on the deployment of 5G.

Vijaykumar also said that he expected Mode 2 and Mode 3 to contribute at least 35% of the revenue by the end of next year and said that the company was planning to touch $10 billion in total revenue. 

"The company will continue to invest in Mode 2 technologies," he said. 

The company said that it had hired a total of 51,000 people during FY19 and had trained around 84,900 people in digital skills in the last quarter up from 30,000 people. 

It further said that it had automated the entire hiring process from candidate selection to offer rollout. The attrition rate of the company also was down this quarter and it said that it had increased gender diversity in the company by 120 basis points to reach 24.9%. 

The company also said that it was planning to continue its localisation strategy in the 42 different countries that it operates in and added that it was not dependent on visa regulation changes.