HCL Technologies Q1 Results Highlights: Net profit rises 20.45% for FY2025; Interim Dividend of ₹12 Share

Synopsis

On Friday, July 12, HCL Technologies announced a 20.45% rise in net profit, reaching ₹4,257 crore, up from ₹3,534 crore in the corresponding quarter of the previous year. Additionally, revenue from operations increased by 6.69%, totaling ₹28,057 crore in Q1FY2025, compared to ₹26,296 crore in Q1FY2024. 

HCL Tech Q1 Results Highlights

HCL Technologies, India’s third-largest IT services firm, has upheld its FY25 revenue growth forecast of 3% to 5%. The Noida-based company reported a net profit of ₹4,257 crore for the first quarter of FY25, marking a 20.4% year-on-year (Y-o-Y) increase and a 6.8% sequential growth.

Quarterly revenue saw a 6.7% Y-o-Y increase, reaching ₹28,057 crore, with a sequential rise of 1.6%. HCLTech's Q1 results slightly surpassed Bloomberg's estimates, which had projected revenues at ₹28,024 crore and net profits at ₹3,845 crore.

The total contract value (TCV) for Q1 stood at $1.96 billion, a 14% decrease compared to $2.29 billion in Q4 FY24.

Geographically, the company’s growth was driven by North America and Europe. HCLTech reported an 8% Y-o-Y growth in the US, despite some of its larger competitors facing a decline in the region. Europe saw a 3% growth, whereas the rest of the world experienced a 3.6% decline.

Contrary to its larger peers, HCL Tech recorded a reduction in headcount, with a decline of over 8,000 employees in Q1. This follows Q4 FY24, where the firm was an exception by adding 2,725 net employees. The attrition rate rose to 12.8% from the previous quarter's 12.4%.

The company attributed the headcount decline to the divestiture of its business with State Street, resulting in a net drop of 7,398 employees. Nonetheless, HCLTech added 1,078 new employees and plans to recruit 10,000 freshers this fiscal year.

The company has announced its plans to distribute an interim dividend of ₹12 per share, with each share valued at ₹2, for the fiscal year 2025. The dividend will be issued to shareholders on July 23. In a filing with the exchange, the company stated, "The board of directors has declared an interim dividend of ₹12 per equity share of ₹2 each for the Financial Year 2024-25." 

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HCL Tech Management Commentary

C Vijayakumar, chief executive officer and managing director, said, “We are pleased to report another quarter of industry-leading performance with 5.6% Y-o-Y revenue growth on a constant currency basis. Our Q1 revenue and EBIT performance was slightly better than our expectations. We clocked in $2 billion TCV of new business bookings. We are confident of decent growth in the coming quarters, positioning us well to deliver our revenue guidance for the year as clients continue to spend on GenAI and other emerging technologies.” 

Roshni Nadar Malhotra, chairperson, HCLTech, said: “With our future-ready portfolio, we are well-placed to tap emerging opportunities led by GenAI. We remain committed to doing business sustainably and responsibly as we continue to supercharge progress for our clients.”