HCL Technologies Ltd. has reported impressive financial results for the second quarter of FY25, with a net profit of ₹4,235 crore, marking an 11% increase year-on-year. This performance not only beats market expectations but also reflects the company’s strong operational capabilities in a competitive landscape.
Financial Highlights
For the July-September 2024 quarter, HCLTech’s revenue from operations rose to ₹28,862 crore, representing an 8.2% increase compared to the same period last year. Although there was a slight sequential decline of 0.5% in net profit and a 3% increase in revenue from the previous quarter, the company’s EBIT margin improved to 18.6%, up by 149 basis points sequentially.According to a Moneycontrol poll, analysts had forecasted a revenue of ₹28,517 crore and a profit after tax (PAT) of ₹4,024 crore for Q2 FY25. HCLTech surpassed these estimates across all metrics, showcasing its robust growth trajectory.
Dividend Announcement
In addition to its strong financial performance, HCLTech declared an interim dividend of ₹12 per share for the fiscal year 2024-25. This brings the total interim dividend for the year to ₹42 per share, following previous dividends of ₹18 in May and ₹12 in July. The record date for this dividend is set for October 22, 2024, with payment scheduled for October 30, 2024.
Revised Revenue Guidance
For the full fiscal year FY25, HCLTech has raised its revenue growth guidance in constant currency terms by 50 basis points at the lower end. The new guidance now stands at 3.5% to 5%. The company has retained its EBIT margin guidance at 18-19% for the year.C Vijayakumar, CEO and MD of HCLTech, expressed confidence in the company’s performance, stating that revenue growth was well-distributed across various verticals and geographies. He highlighted that HCL Software achieved a remarkable growth rate of 9.4% year-on-year this quarter.
Investment Considerations
Given HCLTech’s robust financial results and consistent dividend payouts, potential investors may wonder whether now is a good time to invest in the company. Here are some factors to consider:
Strong Financial Performance: The company has demonstrated strong year-on-year growth in both profit and revenue.
Consistent Dividends: With a solid track record of dividend payments, HCLTech may appeal to income-focused investors.
Market Position: As one of India’s leading IT services companies, HCLTech is well-positioned to capitalize on trends like digital transformation and AI.
However, investors should also be cautious:
→ Market Volatility: The IT sector can be subject to fluctuations based on global economic conditions.
→ Valuation Metrics: It’s essential to evaluate whether the current stock price reflects fair value based on earnings growth prospects.
Conclusion
HCLTech’s Q2 results indicate a strong operational performance and commitment to returning value to shareholders through dividends. While the company’s growth trajectory appears promising, potential investors should conduct thorough research and consider market conditions before making investment decisions. Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.*
