InvestorQ : How did you find the HCL Tech results for the Dec-21 quarter?
Niti Shenoi made post

How did you find the HCL Tech results for the Dec-21 quarter?

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ishika Banerjee answered.
4 months ago
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Like most of the other IT companies, HCL Tech saw better top line revenues but profits came under the scanner with negative growth. HCL Technologies reported 15.69% growth in sales revenues for Dec-21 quarter at Rs.22,331 crore and even on sequential basis, the revenues were up by 8.11%. IT and business services accounted for 71% of revenues, engineering and R&D accounted for 15.9% while products and platforms made up the balance 13.5%.

HCL Technologies

Rs in Crore

Dec-21

Dec-20

YOY

Sep-21

QOQ

Total Income (Rs cr)

₹ 22,331

₹ 19,302

15.69%

₹ 20,655

8.11%

Operating Profit (Rs cr)

₹ 4,257

₹ 4,437

-4.06%

₹ 3,944

7.94%

Net Profit (Rs cr)

₹ 3,442

₹ 3,969

-13.28%

₹ 3,259

5.62%

Diluted EPS (Rs)

₹ 12.69

₹ 14.63

₹ 12.01

OPM

19.06%

22.99%

19.09%

Net Margins

15.41%

20.56%

15.78%

Problems were visible in the profit growth at an operating level and the bottom line level. For Dec-21 quarter, earnings before interest tax, depreciation and amortization (EBITDA) was down -5.4% yoy basis while EBIT was down -5.5%. However, the situation was not so bad when looked at on sequential basis. Both the EBITDA and the EBIT were 6.8% to 7% higher on sequential basis.

Now, EBITDA at Rs.698 crore implies EBITDA margin of 23.4% while EBIT at Rs.566 crore implies EBIT margin of 19%. Operating margins may have been flat on a sequential basis but down nearly 393 bps on a yoy basis with the company struggling to match up to the margin levels of the Dec-20 levels. This was largely on account of higher manpower costs as well as sharply higher outsourcing costs.

Profit after tax (PAT) for Dec-21 quarter was down -13.28% yoy at Rs,3,442 crore as the higher operating costs pertaining to manpower and outsourcing charges got effectively transmitted to the bottom line. PAT margins narrowed by 515 bps from 20.56% in the Dec-20 quarter to 15.41% in the Dec-21 quarter. Margin guidance stands at 19-21% range for the financial year FY22.

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