No Covid-19 impact on topline this quarter, says HCL Technologies

Noida-based information technology (IT) services company HCL Technologies said Covid-19 will not have an impact on its revenue for the current financial year, as most of its large deals were closed in January.

Its investments in risk management systems and processes over the past several years also helped it minimise the short-term impact and prepare for the medium term if the situation worsens, the company said in a statement.

“While the impact on this quarter’s numbers is yet to be quantified, we don’t expect it to be significant. Our exposure to more impacted verticals is not significant. Booking during this quarter has largely been on track as a significant part of closures happened in January. Our business model is a healthy mix of recurring product revenues, managed services and discretionary spend-led professional services,” the company said.  

Its verticals, such as oil and gas, travel and hospitality, and high-end retail, will bear the brunt of the crisis, the company said. However, its exposure to these segments was only in single digits, it added.

Last week, brokerage house Kotak Institutional Equities said that it expected a 1-5% revenue decline during the first half of the financial year 2021. Its estimates were based on the assumption that the pandemic would lead to a short-lived recession, with economic activity picking up in the second half of the financial year, the company said.

Typically, IT firms see the first half of the fiscal as their strongest quarters. During the quarter ending June 2019 in the last financial year, the Indian IT sector reported 1.6% revenue growth quarter-on-quarter and 8.5% growth year-on-year, with digital revenues increasing 6% sequentially.

HCL said that it had invoked its business continuity plan (BCP) and risk management framework early in January to minimise the impact of Covid-19 on its employees and clients. The economic impact of the pandemic were varied in the countries it operates in, it added.

The IT major said it has enabled 76% of its India-based employees and 92% of employees in other geographies to work from home.

“In certain geographies, a limited set of our employees are working from our offices, wherever it is permissible by the government and local authorities... We have not witnessed any outages or major disruption in operations with this newer format of work from home delivery,” HCL said.