HCL Technologies Ltd has announced impressive financial results for its fiscal second quarter, showcasing an 11% year-on-year increase in net profit, which reached ₹4,235 crore. This figure not only surpasses analysts' expectations but also highlights the company's resilience in a competitive market. Revenue from operations for the July-September 2025 period rose to ₹28,862 crore, marking an 8.2% increase compared to the same period last year.
Quarter-on-Quarter Analysis
Despite the robust annual growth, HCLTech experienced a slight decline in net profit of 0.5% when compared to the previous quarter. However, revenue saw a more favorable 3% increase sequentially. The earnings before interest and taxes (EBIT) margin also improved, coming in at 18.6%, a rise of 149 basis points from the previous quarter.
Comparison with Analysts' Forecasts
According to a Moneycontrol poll, analysts had predicted a modest revenue growth of 1.6% quarter-on-quarter to ₹28,517 crore, alongside a forecasted 5.5% decline in profit after tax (PAT) to ₹4,024 crore. The actual results exceeded these estimates across the board, demonstrating the company's strong performance.
Full-Year Revenue Growth Guidance
For the fiscal year 2025, HCLTech has revised its revenue growth guidance upwards in constant currency terms, increasing the lower end by 50 basis points. The new guidance now ranges from 3.5% to 5%. The company has maintained its EBIT margin guidance at 18% to 19% for the full year.
CEO's Insights on Performance
C Vijayakumar, CEO and Managing Director of HCLTech, expressed satisfaction with the company's performance, emphasizing that revenue growth of 1.6% QoQ in constant currency and an EBIT of 18.6% reflect a strong operational foundation. He noted that the growth was well-distributed across various sectors, geographies, and offerings, underscoring HCL Software's impressive 9.4% year-on-year growth.
Future Outlook and Innovations
Looking ahead, Vijayakumar highlighted a strong pipeline in areas such as Data & AI, Digital Engineering, and SAP migration. He mentioned that the company's generative AI offerings, including AI Force and AI Foundry, are resonating with clients and are expected to drive efficiency, growth, and innovation in the medium term.
New Deal Wins and Dividends Declared
In Q2, HCLTech reported net new deal wins totaling $2.21 billion, up from $1.96 billion in the previous quarter. Additionally, the company declared an interim dividend of ₹12 per share, bringing the total interim dividend for the fiscal year so far to ₹42 per share. This includes previous interim dividends of ₹18 per share in May and ₹12 per share in July.
Conclusion
HCLTech's strong Q2 performance not only surpasses market expectations but also reflects its strategic focus on innovation and operational efficiency. The company's upward revision of revenue guidance and commitment to maintaining robust EBIT margins further solidify its position as a leading player in the IT sector. With a solid pipeline and strong financial health, HCLTech appears well-equipped to navigate the challenges and opportunities ahead in the digital economy.
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