HCL Tech Q1 results: Consolidated PAT increases by 8.5% to Rs. 3,214 crores

By Angel Broking | Published on 20th July 2021 | 22

HCL Technologies posted an 8.5% sequential rise in consolidated PAT (Profit after Tax) to Rs. 3214 crores in the first quarter of June 2021.

The IT services major reported a 2.2% on-quarter rise in consolidated revenue to Rs. 20068 crores, a number slightly below most market analysts’ expectations. On a full yearly basis, HCL Tech’s consolidated net profits rose to 9.9%, while revenue from their operations surged past 12.5% in the 1st quarter of June 2021 over the 1st quarter of June last year.

In constant currency terms, HCL revenue grew only by 0.7% sequentially Q-o-Q (Quarter on Quarter) while the Y-o-Y (Year on Year) revenue stood at 11.7%.

A brief overview of the financial results

The EBITDA for HCL Tech stood at Rs. 4908 crores in 1st quarter June 2020, falling 3.7% over Q4 FY21 and rising 7.5% in Q1 FY21. The EBITDA margin stayed at 24.5%, while the EBIT margin stood at 19.6%.

Their revenue was at $2720 million in terms of dollars, an increase of 0.9% Q-o-Q and 11.7% Y-o-Y. In constant currency terms, the revenue rose 0.7% Q-o-Q and 11.7% Y-o-Y. Additionally, the TCV (Total Contract Value) of new deals of HCL Technologies stood at $1664 million, a growth of 37% Y-o-Y, due to its 8 large service deal wins and 4 significant product wins.

In line with profits, HCL Tech has generated OCF (Operating Cash Flow) of $447 million and FCF (Free Cash Flow) of $403 million, which are 102% and 93% of the PAT, respectively.

Comparing results of the last quarter

Comparing Q-o-Q performance for FY 2020-21 and FY 2021-22.

  • HCL Tech declared a total income of Rs. 20323 crores during the financial period that ended in June, as compared to Rs. 19885 crores on 31 March 2021. This means there’s a 2.2% change in total income as per quarter on quarter comparison.
  • Their net profit/loss has had an improvement of around 191% compared to the period that ended on 31 March 2021.
  • HCL Tech reported an EPS is Rs. 11.81 for Q1 FY2021-22, an increase of around 191% over Rs. 4.06 in Q4 FY2020-21.

Comparing the Y-o-Y performance between FY2020-21 and FY2021-22.

  • HCL Tech reported a total income of Rs. 20323 crores in Q1 FY2021-22 against Rs. 18127 crores in Q1 FY2020-21, a change of 12.05%.
  • Their net profit for Q1 FY2021-22 is Rs. 3205 crores, while for Q1 FY2020-21,  it’s Rs. 2931 crores, an improvement of 9.35%
  • For Q1 FY2021-22, their reported EPS is Rs. 11.81 compared to Rs.10.80 for the last quarter, an increase of 9.35%.

Bottom line

Despite the second wave of Covid-19, HCL Technologies has delivered 8.5% growth in line with analysts’ expectations and a Net Income margin of 16%. With over 7500+ new employees and 37% Y-o-Y growth in bookings, HCL Tech is likely to have good Q-o-Q growth this year.

However, the shares of HCL Technologies have declined 2.27% to Rs. 977.45 on BSE recently. You can check out the live share price of HCL Technologies Ltd.

 

Frequently Asked Questions

  1. What is meant by consolidated PAT?

Consolidated PAT (profit after tax) represents the entire standalone parent company’s PAT and PAT of subsidiaries, JVs, etc., in proportion to the shares held by the parent company in these entities.  

  1. What do Q-o-Q (Quarter on Quarter) profits signify?

Q-o-Q compares denotes a change in a company’s performance between two fiscal years.

  1. Why do companies use Y-o-Y (Year on Year) metric?

Businesses having peak earnings or fluctuations at certain times use the Y-o-Y metric or seasonal adjustments to reflect a clearer picture of their performance.