HCL Tech Q2 revenue up 6.7%; eyes 17% topline growth for FY20

Buoyed by impressive earnings numbers in the September quarter, HCL Technologies has raised its FY20 revenue growth guidance to 15-17% in constant currency terms from 14-16% earlier while retaining its operating margin expectations at 18.5-19.5%.

The Delhi-based company posted 6.7% sequential consolidated revenue growth during the quarter ended September 30 to Rs 17,528 crore led by order wins by the newly launched business unit HCL Software.

The company’s consolidated net profit increased by 21.6% to Rs 2,711 crore. Higher revenues also aided HCL Technologies’ operating margin, which improved to 23.4% from 20.7%. 

Launched in the July-September quarter, HCL Software has already onboarded 1,300 partners, completing over 1,500 sales transactions from renewals and new licenses in more than 50 countries, an official statement said. 

“I am confident that this momentum, combined with our diversified portfolio of services and software, will deliver great value to our clients, our shareholders and most importantly, our employees,” said C Vijayakumar, president and chief executive officer of HCL Technologies.   

In dollar terms, the company reported a topline growth of 5% on quarter to $2.5 billion and saw constant currency growth of 6%.

The contribution of financial services to the topline improved to 22.4% from 20.3%, retail vertical contribution rose to 10% from 9.5% while telecom vertical contributed 8.4% as against 8.0%.

In the September quarter, the company retained 95.4% clients as against 96.9% a quarter ago while adding one client in the $100 million and $50 million category each. 

HCL Technologies saw a decline in its attrition rate to 16.9% as of September 30 from 17.3% a quarter ago with a net addition of 3,223 employees.

The board has approved issuing one bonus share for every share held and has declared a dividend of Rs 2 per share.