HCL profits up 18.5%, co signed 15 transformational deals in Q2

Information technology (IT) services firm HCL Technologies on Friday reported an 18.5% growth in quarterly profits, in a period when it signed 15 new transformational deals.

The Noida-headquartered company said its net profit rose to Rs 3,142 crore in the second quarter ended September 2020, from Rs 2,651 crore, a year earlier. Sequentially, it grew 7.4%.

“This growth momentum was driven by our continued leadership in digital transformation and cloud businesses and strong stability in the products and platforms segment, all of which continue to open diverse growth avenues for us,” president and CEO C Vijayakumar said in  statement.

Read: In first AGM as HCL Tech chairperson, Roshni Nadar Malhotra bets on digital transformation

Revenues in the quarter grew 6.1% to Rs 18,594 crore. 

“All engines of growth are firing, and our margins have increased significantly with EBITDA at 26.6% and EBIT at 21.6%, expanding by 320 bps and 160 bps respectively on YoY basis,” CFO Prateek Aggarwal said.

The IT services exporter said it signed 15 digital transformation deals, up about 36% sequentially. The reported period’s deals book was led by key industry verticals including life sciences and healthcare, public services that house energy and utilities, and manufacturing, the company said. 

On a sectoral analysis of the year-over-year revenue growth for the quarter, in constant currency terms, technology and services grew most at 12.8%, followed by life sciences and healthcare at 9.2%, and retail and consumer packaged goods at 3.3%.

On a segment-wise analysis of the year-over-year revenue growth for the quarter, in constant currency terms, the company’s IT and business services declined by 1.6%, engineering and research and development services declined by 6.8%, while products and platforms services grew by 16.2%.

The company, which offers its services and products through three business units -- IT and business services (ITBS), engineering and research and development services (ERS) and products and platforms (P&P) -- had been on a graded expansion mode prior to Covid-19 lockdowns, in terms of launching new centres.

Last month, it set up its first global development centre in Colombo, Sri Lanka. In August, it opened a European Cybersecurity Fusion Center (CSFC) in Gothenburg, Sweden.

During the quarter, it had also announced a deal to acquire Australian IT solutions firm DWS for Rs 847 crore, to strengthen its market position while also driving its digital strategies in Australia and New Zealand.

The company also announced it is bringing its Actian portfolio, starting with Actian Avalanche, to Google Cloud. Actian Avalanche is a hybrid cloud data warehouse.