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Robust growth in HCL Technology’s European business and in some of its important verticals such as public services helped it post a 2 per cent growth in revenue to ₹15,990 crore in the March 2019 quarter as compared with the December 2018 quarter.
Though the revenue growth in constant currency terms was 3.3 per cent, that did not translate into an increase in the quarter’s profit that fell 1.7 per cent sequentially to ₹2,568 crore. Increase in employee-related expenses and outsourcing costs ate into the company’s operating profit that shrank 1.5 per cent to ₹3,039 crore in the sequential quarters.
For the financial year 2018-19, the company’s revenue rose by 19.5 per cent to ₹60,427 crore while net profit rose by 15.3 per cent to ₹10,123 crore. The company’s revenue growth in constant currency terms was 11.8 per cent in FY19, beating the top end of its guidance.
Revenue growth
Operating margin for the year at 19.5 per cent was within the guided range. In FY20, the management expects a 14-16 per cent revenue growth on a constant currency basis, and operating margin between 18.5 per cent and 19.5 per cent.
During the March 2019 quarter, while revenue from the European business grew 8.4 per cent sequentially, growth in the Americas business was nearly flat at 1.1 per cent; the rest of the world grew about 4 per cent.
Among verticals, public services was the best performer with nearly 18 per cent revenue growth, financial services posted near-flat growth, while telecom, media, publishing and entertainment disappointed with a 4 per cent decline.
Client additions during the quarter remained healthy. The company added 26 clients in the over-$1-million category, seven in over-$5-million category and two in over-$10-million category.
The employee utilisation rate slipped to 85.4 per cent compared to 86.6 per cent in the prior quarter. Attrition remained high at 17.7 per cent; there was gross addition of 14,249 employees during the quarter.
In March, the company acquired a US-based consulting firm Strong-Bridge Envision that is expected to add to its digital and analytics business.
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