HCL Tech’s Q1 Report : HCL Tech, the third-largest provider of IT services in India, recently released its June quarter report for fiscal year 2024. The report revealed several significant results that provide insights into the company’s financial performance, segment effectiveness, dividend distribution, and attrition rate. In this article, we will delve into the key findings of HCL Tech’s Q1 Report scorecard, shedding light on the company’s performance and future outlook.
Table of Contents
- Consolidated Net Profit
- Revenue and Employee Strength
- Segment Effectiveness
- Dividend Announcement
- FY24 Forecast
- Attrition Rate
HCL Tech’s Q1 Report: Reported a 7.6% increase in consolidated net profit for the first quarter of fiscal 2024, ending on June 30, 2023. Despite the challenging global macro climate, the company remains a preferred partner for global enterprises and is well-positioned to capitalize on emerging areas such as AI and allied technologies.
2. Consolidated Net Profit of HCL Tech’s Q1 Report
In comparison to the prior fiscal year’s first quarter (Q1FY23), HCL Tech experienced a 7.6% year-over-year increase in net profit. However, the profit after tax (PAT) for HCL Tech’s Q1 Report 2024 decreased by 11.27% from the previous quarter’s profit of 3,983 crore.
3. Revenue and Employee Strength
HCL Tech’s Q1 Report witnessed a decline in revenue and employee strength in the June quarter, reflecting the prevailing demand situation. The company’s rupee revenue for the quarter was 26.296 billion rupees, down from 26.606 billion rupees in the March quarter. The dollar sales also declined from $3,235 million to $3,200 million.
4. Segment Effectiveness
HCL Tech’s IT and business services revenue in Q1FY24 reached 19,642 crore, representing a 15.06% year-on-year growth. HCL Software sales increased by 4.7% YoY, while engineering and R&D services revenue grew by 3.66% YoY to 4,047 crore. The EBIT margin for engineering and R&D services was 16.8% in Q1FY24, slightly lower than the previous quarter.
5. Dividend Announcement
HCL Tech’s board of directors declared an interim dividend of $10 per share with a face value of $2 each for fiscal year FY24. The record date for determining eligible shareholders for dividend benefits is July 20, 2023, and the payment date is scheduled for August 1, 2023. This dividend follows the first interim dividend of 18 per share distributed in April, totaling 2,400% or 48 per share for FY23.
6. FY24 Forecast
HCL Tech maintains its projection of 6–8% constant currency sales growth and 18–19% operating profit or EBIT margin for fiscal year FY24. The company expects constant currency services revenue growth to range from 6.5% to 8.5% in FY24.
7. Attrition Rate
HCL Tech experienced a significant drop in its attrition rate, declining from 19.5% in the previous quarter to 16.3% in Q1FY24. The company had a total of 223,438 employees as of June 2023, reflecting a decrease of 2,506 compared to the previous month. Freshmen additions to the company also decreased from 4,480 in the March quarter to 1,597 in HCL Tech’s Q1 Report.
The June quarter report of HCL Tech highlights various important results. Despite a decrease in profit after tax, the company achieved a year-over-year increase in net profit. Revenue and employee strength experienced a slight decline, reflecting the demand situation. However, segment effectiveness showcased positive growth, especially in IT and business services. The dividend announcement and attrition rate also provide insights into the company’s commitment to shareholders and employee retention. HCL Tech’s FY24 forecast indicates a positive outlook for constant currency sales growth and operating profit.
- Q: What was the growth rate in HCL Tech’s consolidated net profit for Q1FY24? A: HCL Tech reported a 7.6% year-over-year increase in consolidated net profit for Q1FY24.
- Q: How did HCL Tech’s revenue and employee strength change in the June quarter? A: The company witnessed a decline in both revenue and employee strength during the June quarter.
- Q: Which segments showed effectiveness in HCL Tech’s Q1FY24 performance? A: IT and business services revenue experienced significant growth, while engineering and R&D services had a marginal increase.
- Q: What dividend did HCL Tech announce for FY24? A: HCL Tech’s board of directors declared an interim dividend of $10 per share for FY24.
- Q: How did HCL Tech’s attrition rate change in Q1FY24? A: The attrition rate dropped from 19.5% in the previous quarter to 16.3% in Q1FY24.