HCL Technologies announces Q2’15 Results
New Delhi, India, January 30, 2015: 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. HCL leverages its extensive global offshore infrastructure and network of offices in 31 countries to provide holistic, multi-service delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare & Life sciences. Today, HCL Technologies has announced Q2’15 Results.
Q2 Fy’15 RESUL TS
Revenue at 9,283 crores; up 6.3%QoQ & 13%YoY
Net Income at 1,915 crores; up 2.3%QoQ & 28%YoY
Board recommends issue of Bonus shares in the ratio of 1:1
Headcount exceeds 100,000
Infrastructure Services crosses US$ 500 mnin revenue this quarter
Revenue at US$ 1,491 mn; up 4.0%QoQ & 13%YoY
Revenue in constant currency up 6.2%QoQ & 16%YoY
Net Income at US$ 308 mn; up 7.0%*QoQ & 27%YoY
Highlights for the Quarter ended 31st DEC, 2014
Business highlights
- Broad based business growth witnessed across Geographies, Verticals and Horizontals.
- Constant currency growth at 6.2% QoQ being the highest in the last 16 quarters.
- Strong client addition in the quarter: 50 Million dollar + clients up by 1, 40 Million dollar + clients up by 2, 20 Million dollar + clients up by 2, 5 Million dollar + clients up by 12, 1 Million dollar + clients up by 22.
- Total Headcount at 100,240. Gross & Net addition of 11,734 & 4,718 respectively during the quarter.
Investor Metrics
- Board recommends issue of Bonus shares in the ratio of 1:1. This is with the objective to encourage participation of small investors, increasing the liquidity of the equity shares and expand the retail shareholder base.
- Announces dividend of Rupee 8 per share, 48th consecutive quarter of dividend payout.
- Return on equity (ROE) for Calendar 2014 robust at 38% up from 35% in Calendar 2013.
“The Global IT Industry is undergoing a seismic change as the scope of IT buying expands to capture adjacencies beyond IT. This is not only changing the contours of the traditional buyer as we know it but also bringing technology to the very center stage of organizational competitiveness. In such a scenario the balanced portfolio, integrated IT services and engineering capabilities of HCL have ensured that we remain service providers of choice for companies looking for business model transformation”, said Shiv Nadar, Chairman & Chief Strategy Officer, HCL Technologies
Anant Gupta, President & CEO, HCL Technologies, said, “We have posted yet another strong quarter with constant currency revenue growth of 6.2% QoQ and 16.2% YoY. Our continued focus in developing next generation propositions around Digitalization, Engineering Platform Services and Target Operating Model for Enterprise IT have allowed us to stay ahead of the innovation curve and gain significant market share in the Global IT services market. This quarter we also crossed the 100,000 employee milestone. Our Ideapreneurs are creating unique value for our clients by delivering ‘Relationships beyond the contract’ and continue to be our most critical differentiators.”
“The outstanding revenue growth this quarter has been accompanied by growth in net income (before extra-ordinary gains last quarter) of 7% QoQ and 27% YoY. We continue to do well in managing our working capital and delivered superior return on equity at 38% for Calendar year 2014. In order to expand the retail base, the Board has recommended issuance of bonus shares in the ratio of 1 share for every 1 share held”, said Anil Chanana, CFO, HCL Technologies.
Key Catalysts For Growth
QoQ Revenue Growth In Constant Currency
- Revenue grew by 6.2%.
- Broad based growth across all revenue segments:
1. Americas, Europe and ROW grew by 6.0%, 7.2% and 4.3% respectively.
2. Driven by Engineering and R&D Services at 12.6%, Infrastructure Services at 6.2%, Business Services at 4.5% and Application Services at 3.8%.
3. Across verticals led by Lifesciences & Healthcare at 19.3%, Retail & CPG at 8.6%, Public Services at 7.9%, Manufacturing at 7.3%, Telecommunications, Media, Publishing & Entertainment at 2.0% and Financial Services at 1.6%.
Transformational And Blue Chip Customer Acquisition
HCL has signed 15 Transformational engagements during this quarter with more than US$ 1bn of Total Contract Value representing broad-based growth across service lines and verticals. These deals were fuelled by increased adoption of our Digitalization, ITO and Engineering Service value propositions across geographies.
Corporate Excellence
- Shiv Nadar, Founder & Chairman, HCL and Shiv Nadar Foundation has been conferred with the prestigious Golden Peacock Award for ‘Social Leadership’ by The Institute of Directors, India for his leadership and philanthropic achievements.
- Shiv Nadar, Founder & Chairman, HCL and Shiv Nadar Foundation has been named India’s ‘Outstanding Philanthropist of the Year’ by Forbes India Magazine.
- HCL has won the National Outsourcing Association award for ‘Outsourcing Service Provider of the Year 2014’ in recognition of its ability “to deliver both initial and ongoing business value to clients, incorporating best practices, continuous service innovation and also demonstrable commitment to the development and future of the industry”.
- HCL has won Frost & Sullivan’s 2015 CIO Impact Awards in the categories Enterprise Social Networking, Mobility and Cloud Computing.
- HCL has won the ‘TISS LeapVault CLO Gold Award 2014’ under the Blended Learning Program category for its Project Management Structured Effectiveness Program (PMStEP).
Market Leadership
Digitalization
HCL continues to make significant strides in the Enterprise Digitalization space enabling global enterprises to significantly transform their business models:
• HCL has won a first of its kind multi-service delivery engagement with a top financial services leader to build and support its digital IT platform and transform the company to be a true digital enterprise. HCL will deliver these services globally from multiple locations.
• HCL has won a digital marketing transformation deal from one of the largest fast food giants in the world.
• HCL has won a deal to support the Supply Chain IT organization of a global ICT leader. HCL will bring in its expertise in integrating Digital Systems using diverse technology platforms to differentiate and create next gen systems for the company.
• HCL has won a multi-year deal from a leading marketing services agency. HCL will be taking over the technology support and data operations for its key marketing solution that supports data driven marketing decisions for multiple global brands.
Engineering and R&D Services (ERS)
HCL continues to lead the Engineering Services market through its structured outsourcing portfolio:
• HCL has signed a large deal with an enterprise software company to provide complete end-to-end Product Development Life Cycle services.
• HCL has renewed a deal with a global medical device company to provide product engineering and sustenance services globally.
• HCL has signed a multi-year engineering deal with one of the world’s leading manufacturers of commercial foodservice equipment. As part of this engagement, HCL will provide end-to-end Engineering services including new product development, sustenance, localization and after-market support services.
• HCL has signed a deal to provide engineering services to a global leader of commercial vehicles manufacturer. HCL will be a partner in the client’s R&D transformation journey, by providing product development and sustenance engineering to help the client in customizing existing products or launching new products for these markets.
IT Outsourcing (ITO)
HCL has demonstrated significant growth momentum in the IT Outsourcing (ITO) space driven by integrated deals and large renewal opportunities.
• HCL has signed a multi-year IT infrastructure deal with a US based cable & communications services provider. HCL’s global delivery center at Raleigh, North Carolina will be leveraged to deliver these services.
• HCL has won an IT Infrastructure contract from one of the world’s leading manufacturing company for managing their IT Infrastructure. The scope of the engagement includes new technology roll-out and service provisioning from HCL service delivery centers in Poland, India and China.
• HCL has won a multi-year deal for application maintenance and development for a leading global media & entertainment company. As part of the engagement, HCL will be supporting applications for some of the critical business processes of the customer.
• HCL has signed a multi-year deal with one of the world’s leading diagnostic testing companies to provide application development & testing services across multiple enterprise functions.
• HCL has been selected by a leading fixed-line and mobile telecom services provider in Europe to deliver transformation & re-engineering of business processes to deliver end-to-end customer lifecycle process management.
• HCL has signed a multi-year deal to manage and support IT Infrastructure and end user services of a leading global provider of Industrial Automation and Information solutions.
• HCL has signed a multi-year deal with one of Europe’s largest Forestry, Paper & Packaging companies to provide IT end user support across multiple regions, including multi-lingual service desk, device management and onsite support.
• A leading European bank has further strengthened its strategic partnership with HCL by renewing its application support engagement for 10 years. Under this deal HCL will apply its next generation transformational solutions to drive further agility into the customer’s application operations.
• HCL has signed an engagement with a top Australian University for IT portfolio assessment and optimization and IT Infrastructure and Cloud readiness assessment.
• HCL has been selected by a leading Australian Bank to implement a new Enterprise Payments Portal to improve payment processes.
Thought Leadership
HCL received significant citations from influencer and analyst community in this quarter:
• HCL has been positioned as ‘Leaders’ in Gartner Magic Quadrant for Communications Outsourcing and Professional Services, 4 November 2014 by Christine Tenneson, Eric Goodness, Bjarne Munch.
• HCL has been named a ‘Leader’ in IDC MarketScape: Worldwide Datacenter Transformation Consulting and Implementation Services 2014 Vendor Assessment, December 2014, (IDC #252910).
• HCL has been named a ‘Leader’ in IDC MarketScape: Worldwide Mobile Application Development and Testing Services 2014 Vendor Assessment, December 2014, (IDC #252565).
• HCL has been rated as a ‘Leader’ in The Forrester Wave for Global Infrastructure Outsourcing, Q1 2015William Martorelli and Wolfgang Benkel, January 13, 2015, Forrester Research Inc. According to the report, “HCL enjoys a solid reputation for flexibility, cost-effectiveness, and technological capability, which gives it an extremely strong value proposition.”
• IDC has written an exclusive case study titled “The HCL and Microsoft Mobile Oy story: IT operations for the third platform”, October 2014 (IDC #QL57W). The reports stated, “The most important success factor for this project was cost reduction, which was achieved with HCL lowering the overall IT spend figure by over 50%. Additionally, HCL completed the complex transition and transformation exercise within the six-month target.”
• HCL has been rated as a ‘Star Performer’ in Everest Group PEAK Matrix for Banking AO in Europe, 2014, Insurance AO 2014 and Infrastructure Services ITO, 2014.
• HCL has been recognized as ‘Star Performer’ in Capital Markets BPO in Everest’s report “Capital Markets BPO Service Provider Landscape with PEAK Matrix Assessment 2014” published by Rajesh Ranjan – Partner, Anupam Jain – Practice Director, Manu Aggarwal – Senior Analyst, Amardeep Modi – Analyst, Everest Group, November 2014.
