HCL Technologies announces Q1 FY 2015 Results
New Delhi, India, October 17, 2014: HCL Technologies is a leading global IT services company working with clients in the areas that impact and redefine the core of their businesses. Since its emergence on global landscape after its IPO in 1999, HCL has focused on ‘transformational outsourcing’, underlined by innovation and value creation, offering an integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and Business services. Today, HCL Technologies has announced Q1 FY 2015 Results.
Revenue at ` 8,735 crores; up 3.7% QoQ & 10% YoY
Net Income at ` 1,873 crores; up 2.1% QoQ & 32% YoY
Revenue growth (excluding India) in Constant Currency at 3.7% & 14.3% YoY
Revenue growth in Constant Currency at 3.2% QoQ & 13% YoY
Revenue at US$ 1,433 mn; up 1.9% QoQ & 13% YoY
Net Income at US$ 307 mn; up 0.6% QoQ & 36% YoY
Highlights for the Quarter ended 30th Sep, 2014
Global Infrastructure Services Revenue grows at:
• 5.2% QoQ in Constant Currency & 19.6% YoY
• 3.5% QoQ in Reported US$ & 16.9% YoY
• Americas cross US$ 3 billion in revenue milestone on LTM basis
• Announces dividend of `6 per share, 47th consecutive quarter of dividend payout
• Total Headcount at 95,522. Gross & Net addition of 35,957 & 8,326 for LTM Sep’14 and 11,631 & 3,831 for Q1’15
“HCL has emerged as one of the strongest millennial companies in the technology industry today driven by its sector-leading growth and superior corporate governance credentials. We continued on this journey of excellence by adding new citations this quarter from prestigious industry bodies like All India Management Association and Institute of Company Secretaries of India”, said Shiv Nadar, Chairman and Chief Strategy Officer, HCL Technologies.
“We have posted another healthy quarter of broad-based growth led by a revenue increase of 3.2% QoQ in constant currency. Our customer acquisition momentum continues with yet another billion dollar quarter driven by strong growth in Global Infrastructure Services at 16.9% YoY & Engineering and R&D Services at 14.1% YoY. We have also added 15 Fortune 500/Global 2000 clients this quarter,” said Anant Gupta, CEO of HCL Technologies.
“Going forward our investments will continue in the three strategic markets of ITO, Engineering Services Outsourcing and the emerging Digitalization space which will enable a continued balanced business portfolio performance for the company”, he added.
“Our broad based growth has enabled us to deliver industry-leading Net Income performance of 36.1% YoY. We remain focused on working capital management and free cash flow generation with ~70% of EBITDA converted into free cash flows in the last 12 months”, said Anil Chanana, CFO of HCL Technologies.
Key catalysts for growth
QoQ REVENUE GROWTH IN CONSTANT CURRENCY
• Revenue grew by 3.2%
• Americas and Europe grew by 5.7% and 2.7% respectively.
• Growth witnessed across key Service Offerings led by Engineering and R&D Services at 8.1%,
Enterprise Service Integration at 5.1% and Global Infrastructure Services Revenue at 5.2% QoQ
• Broad based growth across verticals led by Retail & CPG at 15.8%, Manufacturing at 5.3% and
Financial Services at 3.0%.
Transformational and blue chip customer acquisition
HCL has signed 15 Transformational engagements with more than US$ 1bn of Total Contract Value in this quarter. We recorded broad-based bookings led by Global Infrastructure Services, Engineering and R&D Services, Application Services and the Digitalization suite across Software Product and Platform Engineering. Manufacturing and Consumer Services led the wins in verticals and US in geographies.
• Shiv Nadar, Founder & Chairman, HCL and Shiv Nadar Foundation has been awarded the ‘AIMA Managing India Corporate Citizen Award 2014’ by the All India Management Association.
• Shiv Nadar, Founder & Chairman, HCL and Shiv Nadar Foundation has been honored with the prestigious ‘ICSI Lifetime Achievement Award 2013’ for Excellence in Corporate Governance by Institute of Company Secretaries of India.
• Anant Gupta, CEO, HCL Technologies, has been appointed as the Chair of World Economic Forum’s Steering Committee on Industrial Internet of Things.
• Roshni Nadar Malhotra, Director on the Board of HCL Technologies, has received the ‘World’s Most Innovative People Award in Philanthropic Innovation’ by World Summit on Innovation and Entrepreneurship for her efforts in building Vidya Gyan, a path-breaking in itiative in rural leadership development by the Shiv Nadar Foundation.
• HCL has announced creation of more than 1200 jobs over the next five years in the Wake County of Cary, North Carolina, USA. This announcement was made by the North Carolina Governor, Pat McCrory. HCL also announced creation of a 125,000 sq. ft. facility in the city.
• HCL has won the European Outsourcing Association ‘IT Outsourcing Project of the Year Award’ for its successful IT Transformation project for a leading multinational pharmaceutical firm.
• HCL has won the coveted ‘Technology Innovation Accelerated Award’ at Intel Developer Forum 2014, in the “Consumer Solution” category for its Intel Galileo-based Building Automation System (BAS).
• HCL Foundation has won National HRD Network’s ‘National CSR Case Contest’ for its Education project, HCL Gurukul. The Foundation also joined hands with the Central Reserve Police Force (CRPF) to inaugurate two vocational training centers focused on digital literacy and employability training to soldiers disabled in action and ten new HCL Gurukuls (community youth centers) in partnership with the NGO, Pratham.
IT Outsourcing (ITO)
We continue to see the Re-bid market driving non-linearity and proactive obsolescence in the ITO segment. HCL continues to lead this market through our EoF, ALT ASMTM and MyCloudTM propositions.
• HCL signed a multi-year deal with one of North America’s largest electric utilities to provide comprehensive IT infrastructure support Datacenter, network, IT security and end user support across multiple regions.
• HCL has been awarded an IT Infrastructure Transformation contract by one of the world’s leading diamond manufacturing companies. As part of this engagement, HCL will deliver end-to-end IT infrastructure services and transform the company’s IT landscape across the globe.
• HCL has signed an integrated Infrastructure and Application Services deal with a leading Fortune 200 Global Retailer. The multi-tower contract encompasses application propositions like ALT ASMTM, Business Analytics, Omni-Channel, Testing, Development, and Collaboration as well as end-to-end IT Infrastructure Services including Global Service Desk, Datacenter Operations, Network Operations, Retail store support, Security and Database support.
• HCL has signed an IT Infrastructure management contract with a leading US based Healthcare Payer organization.
• HCL has signed an IT Infrastructure contract with one of America’s largest financial advisors for providing end-to-end IT Infrastructure services.
• HCL has signed a multi-million IT Infrastructure Services deal with a leading US based food and beverage company. The engagement covers Datacenter consolidation, Workplace services and management of Voice and Data Networks.
• HCL has won an IT Infrastructure Transformation engagement from a leading steel manufacturing company in Europe.
• HCL has been chosen by a leading auto component manufacturing company to build and deploy best-of-breed SAP solution for the customer in nine countries.
• HCL has signed an engagement with a leading European Universal Postal Service Provider for its ALT ASMTM Services in the areas of Central Functions and Customer Facing Applications.
• HCL has renewed a platform based Business Operations deal with a leading life and pension consolidator in the UK and Western Europe for a period of 11 years.
• HCL has been selected by an Australian Train Operator as a strategic partner to provide bespoke systems support services encompassing application development, support and maintenance services.
Engineering and R&D Services (ERS)
We continue to lead the Engineering Services Outsourcing space and are witnessing the market move from project-led engagements to a more structured full spectrum outsourcing.
• A leading global Telecom OEM has selected HCL as their strategic partner for long term engineering ownership of some of their flagship technology products in wireless domain. The engagement also involves HCL’s concurrent participation in the development of new generation technologies for the company.
• HCL has been selected as an Engineering Services Partner for a leading US based medical devices organization. As part of this engagement HCL will support and provide services in the areas of new product development, product sustenance, end of life management and compliance to regulations. This will enable the client to increase overall R&D throughput in its various divisions.
• HCL has been chosen as a strategic Engineering and Technology Partner by a leading Aerospace company. As part of this engagement, HCL will take up the turnkey engineering responsibility for several flight critical systems and subsystems of the company. HCL will also set up Centers Of Excellence for Embedded Firmware, Software and Test Engineering which will help the client strengthen its existing and future aircraft programs.
• HCL has launched ‘CTO Straight Talk’, a first of its kind interactive magazine and application created especially for Product Engineering professionals. The inaugural issue of the magazine featured the theme of Enterprise Digitalization with a special focus on ‘Internet of Experiences’.
HCL’s unique position in Engineering Services and Enterprise Applications has provided a natural segue to the Digitalization proposition that we are taking to the market today which offers software product and platform engineering to companies looking for business model transformation.
• HCL has signed an engagement with a large US based multi-state gas utility for an application modernization program on its legacy mainframe billing software with SAP’s Customer Relationship & Billing solution, ClickSoftware’s Workforce Optimization and SAP’s Mobile Work Manager. This digital transformation initiative will focus on improving the customer experience across multiple channels.
• HCL will implement a B2B Digital Platform for one of the world’s leading global hygiene and forest products company. The platform will be rolled out in 50 countries.
• HCL has won a deal to design and implement an intelligent platform to study customer behavior for one of Japan’s largest software companies.
• HCL has extended its partnership with SAP to include a wide scope of services around core business analytics, including Big Data, the SAP 360 Customer solution, customer analytics and digital services.
• HCL announced a strategic partnership with AppDynamics to help enterprises transform application operations as part of its Digitalization offering.
• HCL has developed a Population Health Management Solution (PHM) platform which will support patient data analysis to help improve efficiencies in patient health management.
• HCL has been positioned as a ‘Leader’ in Gartner Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, North America, 31 July 2014 by William Maurer, David Edward, Bryan Britz.
• HCL has been positioned as a ‘Leader’ in Gartner Magic Quadrant for End-User Outsourcing Services, North America, 26 Aug 2014 by David Edward Ackerman, William Maurer, Bryan Britz.
• HCL has been positioned as a ‘Leader’ in IDC MarketScape for Worldwide Cloud Professional Services 2014 Vendor Assessment, doc #250238, August 2014. According to the report “HCL offers an enterprise-class cloud services delivery platform that covers the entire range of customer requirements from dedicated infrastructure stack to hybrid cloud environment”.
• HCL has been ranked as a ‘Leader’ in Global R&D Services by leading analyst firm Zinnov in its ‘Global Service Providers Ratings, 2014’.
• HCL has been recognized as a Life Sciences IT outsourcing ‘Leader’ and a ‘Star Performer’ by the leading advisory and research firm Everest Group in its PEAK Matrix Assessment 2014 report on “IT Outsourcing in Life Sciences Industry.”
• Ovum has published an exclusive case study on HCL’s engagement with Bekaert titled “HCL-Bekaert: Transitioning service providers and fine-tuning the global services approach”, Aug -14, 2014. “The contract between Bekaert and HCL is a good example of the evolution of sourcing strategies and the maturation of client sourcing organizations”, the report said.
• HCL and Frost & Sullivan have jointly announced the Engineering Excellence Awards 2014, which were won by Brocade Communications Systems Inc. for ‘Excellence in New Product Launch’, The Boeing Company for ‘Excellence in Technology Innovation’ and Ericsson for ‘Excellence in Engineering Operations’. Engineering Excellence Awards is a joint initiative of Frost & Sullivan and HCL Technologies to recognize the ‘Excellence in Engineering Partnerships’ that have helped address some of the most challenging engineering problems by the customers of HCL Technologies.