HCL Technologies has announced its fiscal fourth quarter results for the year ending March 31, 2025, showcasing a solid performance despite some challenges in the market. The company reported a net profit of Rs 4,307 crore, reflecting an 8.1% increase compared to the same period last year but a decline of 6.2% from the previous quarter. This profit marks a continuation of the company's trend of consistent earnings growth, although the quarterly drop raises questions about future performance.
Revenue from operations for the fourth quarter reached Rs 30,246 crore, which is a 1.2% growth from the previous quarter and a 6.1% increase year-on-year. In dollar terms, the revenue stood at $3,498 million, slightly lower than the previous quarter but up 2% year-on-year. The company’s constant currency (CC) revenue fell by 0.8% quarter-on-quarter but grew by 2.9% year-on-year, indicating resilience in its core operations.
HCL Technologies also reported an EBIT (Earnings Before Interest and Taxes) of Rs 5,442 crore, which constitutes 18% of the company's revenue for the quarter. The company has maintained a strong EBIT margin of 18.3% for the fiscal year. Additionally, HCL announced an interim dividend of Rs 18 per share, marking the 89th consecutive quarter of dividend payments. The record date for this dividend is set for April 28, 2025, with payment scheduled for May 6, 2025.
For the entire financial year 2025, HCL Technologies reported total revenue of Rs 117,055 crore, up 6.5% from the previous year. Net income for the year rose to Rs 17,390 crore, an increase of 10.8%, translating to diluted earnings per share (EPS) of Rs 64.09. The company’s strong financial performance has been attributed to its diverse service offerings and a robust digital business that grew by 12.6% year-on-year, contributing 40.7% to the overall services revenue.
Shiv Walia, Chief Financial Officer of HCLTech, commented on the performance, stating, "HCLTech delivered 6.5% INR revenue growth in FY25, yet another year of best-in-class performance. Our revenue came in at Rs 117,055 crore, up 6.5% and EBIT at Rs 21,420 crore, up 7.0%. Our Net Income (NI) for the year came in at Rs 17,390 crore, up 10.8%, translating to an EPS of Rs 64.09. Our cash generation remains robust with OCF/NI at 129% and FCF/NI at 123%."
C Vijayakumar, CEO & Managing Director of HCLTech, highlighted the company’s growth trajectory, noting, "HCLTech grew the fastest among our peers for the second year in a row as we witnessed yet another year of disciplined execution. We delivered on our FY25 guidance with revenue growth of 4.7% in constant currency and an EBIT margin of 18.3%. HCL Software growth continues to accelerate as it grew 3.5% CC this year. During this quarter, our services business delivered healthy growth of 0.7% QoQ CC amidst volatile market conditions. We saw very strong new bookings of $3B this quarter catalyzed by our AI propositions and integrated GTM organization that was set up at the start of the fiscal year."
Despite the positive overall results, the company did face challenges, particularly in its attrition rates, which rose to 13% from 12.4% in the same quarter last year. The total employee count at the end of FY25 stood at 223,420, with a net addition of 4,061 employees. This included 2,665 new hires in the fourth quarter, among which were 1,805 fresh graduates. However, the company also experienced a reduction of 7,398 employees due to divestitures.
Looking ahead, HCL Technologies has provided guidance for the upcoming financial year (FY26), projecting revenue growth between 2% and 5% in constant currency terms. Services revenue is expected to grow within the same range, while the EBIT margin is anticipated to remain between 18% and 19%. This cautious outlook is reflective of the current market uncertainties and the evolving landscape of the IT sector.
Analysts have noted that the demand environment remains challenging, with concerns around macroeconomic factors impacting client decision-making. Reports from ICICI Securities indicated that the recent policy changes by the US government regarding tariffs could dampen recovery in discretionary spending, particularly affecting sectors like manufacturing and retail.
InCred Equities highlighted that despite the uncertainties, deal flows are likely to remain strong, particularly in cost takeout deals, with expectations of a pickup in discretionary deal-wins in the BFSI sector. However, they also cautioned that the competitive landscape could intensify, potentially impacting EBIT margins.
As HCL Technologies navigates these challenges, the company remains committed to leveraging its strengths in technology and innovation to deliver value to its stakeholders. The upcoming fiscal year will be critical as it seeks to maintain its growth trajectory amidst a backdrop of evolving market dynamics.
In conclusion, HCL Technologies has demonstrated resilience in its latest quarterly results, showcasing a solid performance amid market uncertainties. With a focus on maintaining growth and navigating challenges, the company is poised to continue its trajectory in the evolving IT landscape.
