HCL Tech Q1 Takeaways: Second wave dents India performance, margins shrink

MUMBAI: reported muted earnings for the quarter ended June compared with its peers with the company’s topline growing merely 0.7 per cent in constant currency terms.

While the company’s consolidated net profit met Street estimates, the topline fell little short. “As we look ahead with optimism, I believe the experiences of the pandemic will foster greater adaptability and a spirit of innovation,” said Chief Strategy Officer Shiv Nadar.

Here are the major takeaways from the company June quarter earnings:

India, Europe ops dent revenues

Much like TCS, HCL Technologies also suffered from the onset of the second wave of Covid-19 infections during the reported quarter. Revenues from public services which include government contracts slumped 3.4 per cent sequentially reflecting the impact of the lockdowns. Further, a 3.9 per cent sequential decline in revenues from Europe also affected the topline show in the quarter.

Guidance remains robust

Despite the slow start, HCL Technologies said its revenues will grow in double digits in the current financial years aided by a strong order book. “We remain very confident of a good QoQ growth for the rest of this year,” said Chief Executive Officer C Vijaykumar. That optimism stems from the strong deal wins of $1.6 billion by the company during the quarter despite losing one client in the $100 million plus category.

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