Indicating that the Indian IT sector might be entering the slow lane, HCL Tech said on Thursday that it expects its constant currency revenue to grow between 6-8% in FY24. This was after Infosys said that it expects to grow at 4-7% in FY24 after missing its revenue guidance for FY23.
Unlike Infosys, the Noida-based IT company met its FY23 revenue forecasts. Its revenues grew 13.7% in FY23 in constant currency terms and it had guided it to be anywhere between 13.5-14%.
In dollar terms, HCL Tech’s Q4 revenue stood at $3.24 billion, down 0.3% sequentially. In constant currency terms, its revenue registered a fall of 1.2% sequentially, in line with analyst expectations.
In rupee terms, HCL Tech’s revenue in Q4 came in at ₹26,606 crore, down 0.4% sequentially and up 17.7% on a year-on-year basis. Its net profit for the quarter stood at ₹3,983 crore, down 2.8% sequentially, and up 10.8% YoY.
“We have delivered a stellar performance in FY23, crossing ₹1 lakh crore of revenue powered by industry-leading services growth of 15.8% in constant currency,” said C Vijayakumar, CEO and MD, HCL Tech.
Its operating margin fell sharply in Q4 to 18.1% in Q4 from 19.6% in Q3. For the last two quarters, it rose consecutively. Its net margin was down for both Q4 as well as the full FY23.
The company declared an interim dividend of ₹18 per share, making it the 81st consecutive quarter of dividend payout. The record date is set as April 28 and the payment date May 9.
Despite bagging 13 large deals during the quarter, HCL Tech witnessed a decline in the total contract value (TCV) on both YoY as well as sequential basis. At $2.07 billion, its large deal TCV was down 8% YoY and 12% sequentially.
Despite this, the company’s CEO Vijayakumar maintained optimism, saying, “Our pipeline is near an all-time high, which reflects our differentiated business mix and strong client demand for our offerings.”
Most of the deal wins were in the over $5 million and $10 million categories, but HCL Tech also managed to bag two over $100 million deals during the quarter.
Geographically, Americas continued on a growth path in terms of their contribution to HCL Tech’s topline. Europe, on the other hand, registered a decline during Q4.
Segment-wise, financial services and life sciences continued to shine for HCL Tech, while manufacturing and technology services registered a sequential decline.
In line with an industry-wide cool down in attrition rates, HCL Tech reported that its attrition levels at the end of Q4 stood at 19.5%, down from 21.7% in Q3.
