HCL Technologies on Friday reported first-quarter profit jumped 32% from a year earlier to ₹2,925 crore, and forecast that revenue would grow 1.5-2.5% quarter-on-quarter in constant currency terms over the rest of the fiscal year.
The IT services company also said that Shiv Nadar had stepped down as the chairman, with his daughter Roshni Nadar Malhotra assuming office as chairperson with immediate effect. Mr. Nadar would continue as the MD while holding the designation of chief strategy officer.
The firm ruled out any salary increments this year.
Revenue rose 8.6% in the April-June quarter to ₹17,841 crore. The company had clockedregistered a net profit of ₹2,220 crore in the April-June 2019 quarter (as per U.S. GAAP).However, on a sequential basis, profit fell 7.3% from ₹3,154 crore in the January-March period, while revenue declined 4% from ₹18,590 crore.
“The adverse conditions during this quarter had an anticipated negative impact on our revenue,” said President and CEO C. Vijayakumar.
“We believe the worst is behind us. We will see an upward trend from here. Unless, of course, if there is a major impact of the second wave of pandemic,” he added.
“Given the bookings so far, and the confidence in our pipeline, the strength of our propositions, and the client relationships, we expect our revenue to increase quarter-on-quarter by an average of 1.5-2.5% in constant currency for the next three quarters. All of this is organic growth,” the CEO said.
‘Minimal impact’
HCL Tech signed 11 net new deals in the quarter with the total contract value being higher compared with the same quarter last year. Renewals were also robust, Mr. Vijayakumar said.
On the U.S. suspension of H-1B visas, the CEO said the move, though “unfortunate”, would have a minimal impact in the short term.
“If you look at HCL we started investing in centres in the U.S. 10 years back... we were one of the first to increase localisation. We see a very minimal impact due to the current change in policy, at least in the near term. If it were to continue for the long term, then we may have to relook at how we can address the demand,” Mr. Vijayakumar added.
Observing that close to 67% of its employees in the U.S. were locals, the CEO said the firm currently had adequate people in the U.S. on visas to fulfill demand.
The Americas region accounts for about 64% of HCL Tech’s revenue, followed by Europe (28%). HCL Tech employs more than 1.5 lakh people.
The firm also announced a dividend of ₹2 per share. HCL Tech slid 0.7% on the BSE to close at ₹623.45.
