HCL Technologies Releases Q3FY21 Investor Statement

HCL Technologies has released its investor statement for the Financial Year Q2.

Key Highlights (for the quarter ending December 2020) - 

1. HCL Revenue crosses US$ 10 billion milestone in CY 20, delivering 3.6% YoY growth in constant currency.

– CY 20 delivered EBITDA at 26.5% and EBIT at 21.5%.

2. HCL won 13 transformational deals across industry verticals, including Life Sciences and Healthcare, Technology and Financial Services.

3. Broad based growth driven by Mode 2 and Products and Platforms.

– Mode 2 has been the prime driver of growth, up 25.0% YoY and 10.9% QoQ in constant currency, led by good traction witnessed in cloud native and digital programs.

– Products and Platforms business has clocked healthy 9.3% YoY growth in constant currency on back of strong new license sales and robust renewals.

4. This quarter, margin expansion has been robust on both YoY and QoQ basis.

– EBITDA at 28.2% expanded 355 bps and 157 bps on YoY and QoQ basis respectively.

– EBIT at 22.9% expanded by 265 bps and 129 bps on YoY and QoQ basis respectively.

– It is noteworthy that EBITDA on Ind AS basis, delivered a strong 29.1%.

5. Cash Generation and conversion continues to be very strong during CY 20 and for the quarter.

– During CY 20, we generated Operating Cash Flow of US $ 2667 mn and Free Cash Flow of US $ 2407 mn, up 63.5% and 82.8% respectively on full year YoY basis.

– Gross Cash stands at US $ 2620 mn and Net Cash at US $ 2,202 mn at the end of December 31st, 2020.

6. Cash EPS at ` 62.2 and EPS at ` 48.7 grew at healthy clip of 27.9% and 26.0% respectively during CY 20.

7. Declared Dividend of ` 4 /- per share, being 72nd consecutive quarter of dividend pay-out.

8. IT Services Attrition (LTM) at 10.2%, down 667 bps on YoY basis. Net Additions at 6,597 during the quarter.

“The technology sector is in the midst of a massive digitisation wave, with more global enterprises embracing digital transformation to address the disruption of these unprecedented times. Technology has been a key enabler during the pandemic, and as we stand at the cusp of the next phase of technological innovation, it is vital that we draw inspiration from each other’s strengths and offer back our own to create a positive impact. From delivering cutting-edge, agile solutions to our partners, to creating people-first initiatives, to building a sustainable and resilient ecosystem, we at HCL are committed to become a catalyst of positive change and the creation of relationships beyond the contract.”

--Shiv Nadar, Chief Strategy Officer, HCL Technologies.

“We posted a strong financial performance in Q3 FY’21 with a constant currency revenue growth of 3.5% sequentially and 1.1% YoY and an EBIT of 22.9%. This solid performance was driven by a robust momentum in our Mode 2 and Mode 3 businesses led by Digital, Cloud and Products & Platform segments. Our results reflect the success of the strategic investments we have made over the years including unique ecosystem constructs with all Cloud Hyperscalers, organic and inorganic investments in a broad-based IP and Platforms portfolio and an enterprise digital transformation value proposition that is truly integrated and differentiated.”

--C Vijayakumar, President & CEO, HCL Technologies

“It feels good to have crossed the US$ 10 Billion Revenue milestone LTM. In CY20, we have delivered 3.6% growth YoY, both in US$ terms and in constant currency. For CY 20, we delivered EBITDA (as per Ind AS) at 27.4% and Net Income Margin at 17.8% ( ` 13 202 Cr) ; For the quarter Q3’FY21, it is noteworthy that our EBITDA (on Ind AS basis) stood at 29.1% and Net Income Margin at 20.6% ( ` ~3982 Cr) . Cash generation continues to be very robust. During CY 20, our Operating Cash generation was US$ 2,667 mn and Free Cash Flow was US$ 2407 mn, having increased 63.5% and 82.8% respectively on YoY basis. LTM EPS now stands at ` 48.7 and “Cash EPS” at Rs 62.2.”

--Prateek Aggarwal, CFO, HCL Technologies

Partner Ecosystem

HCL won the ‘Proactive Customer Service 2020 Microsoft Partner of the Year’ Award. HCL was honored among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of client solutions based on Microsoft technology. The award recognizes Microsoft partners that have developed and delivered exceptional Microsoft-based solutions during the past year.

• HCL was recognized by Dell Technologies as the ‘Global Alliances Americas Partner of the Year’ and also achieved the ‘Dell Technologies President's Circle’ award for FY20. HCL Technologies was recognized as having delivered outstanding results throughout this past year. This is the third year in a row that HCL has been designated as a recipient of the ‘Dell Technologies President’s Circle’ award.

• HCL announced a partnership with IBM to help clients accelerate their digital transformation by migrating enterprise mission-critical workloads to the IBM public cloud. The IBM Ecosystem Unit (IEU) at HCL will assist clients, including those enterprises in regulated industries such as financial services, telecommunications, life sciences and healthcare, and energy and utilities, to develop digital and cloud-native solutions that will help advance their cloud journeys.

• HCL and IBM signed a definitive Cloud Framework Agreement that will serve as the foundation to jointly build IBM’s cloud business worldwide. As part of this agreement, HCL will build a dedicated IBM cloud practice to develop and sell IBM cloud solutions as well as drive adoption of IBM cloud technologies in its existing client base. HCL and IBM Cloud Partnership announced the launch of SAP Partner Managed Cloud on IBM Cloud, focused on power systems workloads.

• HCL and Intel entered into a strategic partnership to drive SAP Vertical Edge Solutions on SAP Business Technology Platform.

CSR

HCL Foundation (HCLF), the CSR arm of HCL Technologies, works towards the positive transformation in the lives of vulnerable communities in India and around the world. Through its flagship programs and special initiatives, HCLF continues to make progress by adopting a sustainable and scalable approach to address social issues. HCLF continued support to over 1.8 million people from most vulnerable rural and urban communities across 21 States and 3 UTs. Over 52,000 acres of land have been greened and brought under sustainable community management, 67 water bodies have been rejuvenated and 5,000 animals have been ensured protection and treatment.