earnings | IST

HCL Tech plans to hire 20,000 plus freshers in FY22; confident of delivering margins

Mini

HCL Technologies Ltd reported its Q3 earnings last week. To get a better sense of the company’s Q3 numbers and its outlook going ahead, CNBC-TV18 spoke to C Vijayakumar, MD & CEO, and Prateek Aggarwal, CFO.

HCL Technologies Ltd reported its Q3 earnings last week. The company posted a net profit of Rs 3,442 crore for the December 2021 quarter. The company’s net profit grew 5.4 percent on a quarter-on-quarter (QoQ) basis, while revenue came in at Rs 22,331 crore, up 8.1 percent QoQ.
Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the latest quarter grew 8.3 percent QoQ to Rs 5,242 crore, while its earnings before interest and taxes (EBIT) stood at Rs 4.251 crore, a QoQ increase of 8.5 percent.
Also Read:
To get a better sense of the company’s Q3 numbers and its outlook going ahead, CNBC-TV18 spoke to C Vijayakumar, MD & CEO, and Prateek Aggarwal, CFO.
First up, Vijayakumar mentioned that all verticals and geographies of the company fired on all cylinders. He added that the order pipeline  for the company is robust and deal wins in Q3 were up 64 percent on a year-on-year (YoY) basis. According to him, application modernisation and cloud is what is driving growth.
"We've had a record growth, all the verticals, all the horizontals, all the geographies, fired on all cylinders. Our bookings were very good, 64 percent higher than what it was in the same quarter last year, and our pipeline is very robust. A lot of demand for application modernization, cloud transformation, digital engineering, this is what led to this growth," he said.
Vijayakumar is confident of a good Q4. He believes that even if the company has a flattish Q4, the company will still end up with 12.6-12.7 percent growth for FY22.
Meanwhile, Aggarwal listed out the reasons for a slight dip in margin. Aggarwal said that IT services margin came in weaker due to the costs associated with it. Additionally, he mentioned that wage hikes and attrition levels impacted margins as well. Aggarwal is confident that margin will get back to normal levels of around 20 percent in the next 2-3 quarters.
He said, "Our margins this quarter were five basis points (bps) higher than the previous quarter but when you drill down a little bit, you see that services is the one, which came in a little weaker on the margin."
"It saw a huge growth of 5 percent plus quarter on quarter (QoQ) for the last two quarters running, but margin got a little affected- one, because growth itself has a cost coming with it. Secondly, this quarter was also a quarter where there was wage increments to be given to the senior people of the company. There are a number of levers that we have to improve the margins going forward," he explained.
On hiring of freshers, he said the plan is to hire 20,000-22,000 freshers in FY22.
On the company’s recent acquisition of Hungary-based data engineering services provider Starschema Ltd for $ 42.5 million, Vijayakumar expects it to aid scaling of Eastern European presence, especially Hungary.
"This is a data engineering consulting firm, which provides front-end consulting and that can be a good trigger for the lot of downstream work. The other aspect is Eastern European presence - they have a pretty good mindshare in Hungary for the top talent. So it's going to help us to scale the Eastern European presence a little faster, especially in Hungary," he mentioned.
Watch the video for the full interview.
next story

Market Movers

Currency

CompanyPriceChng%Chng