HCL Tech Q2 Results FY25 showed an 8.2% YoY increase in revenue and the HCL Tech Q2 results 2024 date was October 14. HCL Tech share price closed at ₹1,870.10 on October 15, 2024 from the previous day’s close of ₹1,855.90. India’s third-largest software services exporting company also announced an interim dividend of ₹12 per share. Let’s find out all the key details of this Noida-based company’s Q2 earnings in the financial year 2024-25.
Key Highlights of the HCL Tech Q2 Results FY25
1. Revenue at ₹28,862 crores, up 8.2% YoY
HCL Technologies has declared consolidated revenue of ₹28,862 crores for Q2 FY25 which is 8.2% higher than Q2 FY24 of ₹26,672 crores. At the same time, it is 2.9% higher than the previous quarter of Q1 FY25 at ₹28,057 crores.
2. EBIT at ₹5,362 crores, up 8.7% YoY
The consolidated EBIT (Earnings Before Interest and Taxes) for the HCL Tech Q2 results FY25 is ₹5,362 crores, 8.7% higher than the Q2 FY24 of ₹4,934 crores. Also, it has marked a rise of 11.8% from the previous corresponding quarter which is Q1 FY25.
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Return on Invested Capital (ROIC for the last twelve months) was 35.7% at the company level and 43.5% at Services in Q2 FY25, a rise of 353 bps YoY and 403 bps YoY respectively.
3. Net Income at ₹4,235 crores, up 10.5% YoY
The consolidated net income or profit for HCL Tech in Q2 FY25 is ₹4,235 crores which is 10.5% higher than the Q2 FY24 profit of ₹3,832 crores. In Q1 FY25, the company made a net income of ₹4,257 crores, which means it has grown by 0.5% QoQ in Q2 FY25.
In the HCL Tech Q2 results disclosing segmental revenue, the IT and business services segment has the largest share in the revenue mix. Its YoY CC (Constant Currency) revenue growth in Q2 FY25 was 6.2%. Overall, HCL Tech Service segment revenue grew by 5.9% YoY in CC terms in Q2 FY25.
The highest growth in revenue was registered in the HCL Software segment at 9.4% YoY in Q2 FY25 highlighting the strong performance of their in-house products and software. HCL Software ARR (Annual Recurring Revenue) was at $1.05 billion, up 0.6% YoY CC in Q2 FY25.
| Segment | Sep 30, 2023 | Jun 30, 2024 | Sep 30, 2024 | YoY CC Growth | QoQ CC Growth |
|---|---|---|---|---|---|
| IT and Business Services | 74.6% | 74.5% | 74.6% | 6.2% | 1.8% |
| Engineering and R&D Services | 16.1% | 15.9% | 15.8% | 4.3% | 1.1% |
| HCLSoftware | 9.7% | 9.9% | 9.9% | 9.4% | 1.4% |
| Inter-segment | -0.4% | -0.3% | -0.3% | – | – |
In the service segment revenue of the HCL Tech Q2 results, the American regions have the highest share at 65.1% as of September 30, 2024. The American region’s revenue CC growth was also 7.5% YoY in Q2 FY25.
| Key Regions | Sep 30, 2023 | Jun 30, 2024 | Sep 30, 2024 | YoY CC Growth |
|---|---|---|---|---|
| Americas | 64.5% | 66.0% | 65.1% | 7.5% |
| Europe | 28.5% | 27.9% | 28.4% | 4.2% |
HCL Tech Q2 Service Revenue: Verticals Performance
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In the HCL Tech Q2 service revenue, the highest share was held by the financial services sector at 20.5% on the September 2024 end. However, this sector’s revenue experienced a downfall of 4.5% YoY in revenue in Q2. Telecom and Media verticals have experienced the largest growth in YoY revenue at 61.2%.
| Verticals | Sep 30, 2023 | Jun 30, 2024 | Sep 30, 2024 | YoY CC Growth |
|---|---|---|---|---|
| Financial Services | 22.6% | 21.0% | 20.5% | -4.5% |
| Manufacturing | 19.3% | 19.4% | 19.5% | 7.1% |
| Lifesciences & Healthcare | 17.5% | 15.9% | 16.0% | -2.8% |
| Technology and Services | 13.1% | 13.0% | 13.1% | 5.6% |
| Telecommunications, Media, Publishing & Entertainment | 8.0% | 12.2% | 12.1% | 61.2% |
| Retail & CPG | 9.6% | 9.4% | 9.6% | 6.2% |
| Public Services | 9.9% | 9.1% | 9.2% | -2.0% |
HCL Tech Q2 Results: Headcount Metrics
The reduction in headcount metrics of 780 people in Q2 of FY25 channelizes the revenue growth of the company because of the decrease in underlying costs.
- Total People Count at the end of September 2024: 2,18,621
- Fresher Added in Q2 FY25: 2,932 freshers
- Last Twelve Months’ Attrition Rate (Q2 FY25): 12.9%, up from 12.8% in Q1 FY25
HCL Tech Q2 Interim Dividend
HCL Tech has declared an interim dividend of ₹12 per share on an equity share of ₹2 each. The record date for the eligibility of the shareholders is set at October 22, 2024, while the payment date will be October 30, 2024. For the last 87th quarters, the company has been paying dividends. In the last 12 months, it has declared a total dividend of ₹54 per share.
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HCL Tech Q2 Results: FY25 Guidance
HCL Tech has set the FY25 revenue growth guidance at 3.5% – 5% YoY CC in Q2, with the increase in the lower band from the 3% – 5% guidance set in Q1 of FY25. The EBIT margin guidance is the same at 18% – 19%. The service revenue growth guidance for FY25 is set at 3.5% – 5% YoY in CC terms.
HCL Tech Q2 Results: Key Deals of the Quarter
HCL Tech’s net new deal wins for Q2 was $2.21 billion, up from $1.96 billion in Q1 of FY25.
- HCL Tech has partnered with a Fortune 200 global technology solutions company to streamline its business processes through the GenAI platform “AI Force.”
- A leading US financial services company has partnered with HCL Tech to improve its cloud migration process and manage risk through GenAI technology.
- A European global semiconductor company has collaborated with HCL Tech to start the client’s chip development program. From chip designing to verification and quality checks, HCL Tech will do it all.
- A European marketing communication group has continued its partnership with “HCLSoftware” to provide services to ad management platforms.
- An Indian energy company has teamed up with HCLSoftware BigFix for compliance and betterment of the employee experience through automation.
- In the AI and Gen AI deals, a US-based software company has partnered with HCLTech AI Force to develop a quick search to find duplicate bugs and to improve tester efficiency.
- An American media and entertainment company partnered with HCL Tech to deploy a Gen AI solution for improving operational efficiency and SKU approval processes.
Conclusion
HCL Tech Q2 quarterly results showed good growth in revenue and profit with a reduction in cost and an increase in margins. The company has a strong order book with deals across AI and GenAI segments. But it is advisable to do your analysis before betting on this stock. Keep exploring stocks and open demat account with SMC Global Securities. Stay tuned for all the Nifty 50 companies’ quarterly results.
References
https://www.hcltech.com/sites/default/files/document/open/quarter-results/2024-10/hcl-tech-q2-fy25-investor-release.pdf
https://www.livemint.com/companies/company-results/hcl-tech-q2-results-net-profit-up-11-yoy-with-hike-in-revenue-guidance-dividend-declared-5-key-highlights-11728909475421.html
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