HCLTech Q3 profit rises 5.5% to Rs 4,591 Cr
HCLTech's revenue from operations for the quarter under review came in at Rs 29,890 crore, 5.07% higher than Rs 28,446 crore in Q3 FY24.
IT company HCLTech on Monday reported a 5.5% uptick in consolidated net profit to Rs 4,591 crore for the December quarter as the CEO expressed optimism for improvement in the demand environment and discretionary spending and raised the revenue growth guidance.
The Noida-headquartered firm had reported a profit of Rs 4,350 crore in the year-ago period, according to a regulatory filing.
The company raised the lower end of its growth guidance to 4.5-5%, from 3.5-5% earlier.
Revenue from operations for the quarter under review came in at Rs 29,890 crore, 5.07% higher than Rs 28,446 crore in the third quarter of the current fiscal year.
Sequentially, profit and revenue rose 8.4% and 3.56%, respectively.
HCLTech CEO and MD C Vijayakumar said the growth was powered by broad-based performance across business lines as the company's clients across verticals and geographies "reaffirm their confidence in our digital and AI offerings".
"We are positioning ourselves for a future that is transformative, with AI empowering businesses and employees. We continue to see growing demand for our AI-led propositions across services and software offerings," he said.
New deal bookings during the third quarter of FY25 stood at $2.1 billion, including seven deals from services and five from HCLSoftware.
"Some of the largest deals we signed this quarter are enabled by AI-led transformation. Our pipeline continues to grow and remain strong. It's broad-based, and it is backed on several deals led by digital application business, engineering and R&D services, and digital process operations," Vijayakumar said.
The company's IT and business segment registered the highest contribution to revenue at 71.8%, followed by engineering and R&D service.
HCLSoftware business grew 18.7% quarter-on-quarter in constant currency but declined 2.1% on a year-on-year basis.
"Both Americas and Europe have seen a healthy growth in pipeline. This pipeline is near all time high... we have a number of big deals across verticals and geographies and service lines—a really very robust and well diversified pipeline," the CEO said.
He further noted that a sizeable number of deals are influenced by AI and GenAI.
"Some of our largest deals that we signed this quarter are enabled by AI-led transformation. Generative AI is getting more and more real," he said, adding that the cost of using an LLM or conversational model has dropped more than 85% since early 2023, making more use cases viable.
HCLTech has deployed two Gen-AI-based solutions in-house to power operations, he added.
AI and GenAI are highly intertwined with every aspect of the company's business, Vijayakumar said.
"Looking ahead in 2025, we believe clients are looking at increasing their IT investments. We do see an improvement in the demand environment, and discretionary spending, witnessing some uptick. They're investing to drive innovation and efficiency.
"...Our updated guidance for FY25 is revenue growth of 4.5-5%, including the revenue from the acquisition of HPE CTG assets, which closed in the beginning of December," he said.
There was some pickup in demand in financial services and some green shoots in the tech vertical during the last quarter which played out for the company, Vijayakumar said.
On whether the new US leadership to be sworn in this month will affect business, he said it will hardly have any impact on the company because it is "very less dependent on H1B visas".
"About 80% of our people in the US are all locals, so our dependence on the H1B is one of the least in the industry. And it is not just now, if I look back over the last 4-odd years, we have been pretty locally self sufficient. And that reflects in the number of H1Bs that we go through every year. It ranges between 500 and 1000 in a year max... so it is minimal dependence," Ramachandran Sundararajan, Chief People Officer, HCLTech, said.
HCLTech added 2,134 employees during the quarter, bringing the total count to 2,20,755. An additional 1,000 staffers will be added during the March quarter, Sundararajan said.
On the hiring front, he did not share definite numbers but said the company expects to hire more in FY26 than in FY25, adding that the focus will be on specialisation rather than numbers.
To celebrate 25 years of HCLTech's public listing, the firm declared a dividend of Rs 18 per share including a special dividend of Rs 6 per share.
The HCLTech scrip settled at Rs 1,985.25 apiece on the BSE on Monday, 0.52% lower than the previous close.
Edited by Jyoti Narayan