HCL signed 13 transformational deals in Q3, profit up 35%

Information technology (IT) services firm HCL Technologies on Friday reported a 34.8% growth in profit in the third quarter ended December 2020, a period when the company signed 13 new transformational deals.

HCL said its profit attributable to shareholders rose to Rs 3,969 crore, or Rs 14.63 per share in the reported quarter, from Rs 2,944 crore, or Rs 10.85 per share, a year earlier.

Revenue from operations rose 6.4% to Rs 19,302 crore.

HCL expects revenue to grow between 2% and 3% sequentially on a constant currency basis, in the fourth quarter ending March 2021, a period that will include the revenue contribution from its recent acquisition of Australian IT solutions firm DWS.

The quarter’s performance, CEO C Vijayakumar said, was driven by a robust momentum in the company’s Mode 2 and Mode 3 businesses led by digital, cloud and products and platform segments.

“Our results reflect the success of the strategic investments we have made over the years including unique ecosystem constructs with all cloud hyperscalers, organic and inorganic investments in a broad-based IP and platforms portfolio and an enterprise digital transformation value proposition that is truly integrated and differentiated,” Vijayakumar added.

The Noida based IT services exporter said it signed 13 digital transformation deals in the quarter.

Year over year revenue growth on constant currency in the quarter was led by technology and services at 20.2%, followed by life sciences and healthcare at 13.3%, and retail and consumer packaged goods at 3.0%.

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 climbed up 1.1%, engineering and research and development services declined by 5.1%, while products and platforms services grew by 9.3%.

While engineering and research and development services grew 2.5% sequentially, it is yet to arrive at pre-Covid levels.

The segment comprises revenues from two broad segments -- asset light businesses such as technology and communications, and asset heavy businesses such as aerospace, automobiles, industrial manufacturing, and office manufacturing.

“Some of these industries are a little bit slow to pick up as they kind of remodel their businesses and demand and supply patterns, post the pandemic. I think it's going to take another quarter or two before some of these industries come back to the pre-pandemic levels… The current pipeline is very promising,” Vijayakumar said at the Q3 press conference.

Last month, the company announced its foray into Vietnam to expand its presence in the Southeast Asian region, with a new global delivery centre.