HCL Tech Jul-24

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Questions and Answers

What is one of the risks associated with managing growth in the IT services sector?

Employee retention strategies

Fluctuations in earnings (correct)

Increased demand for technology

Improvements in technology infrastructure

Which factor may negatively impact the cost advantage of a company in IT services?

Government incentives for technology companies

Strengthened client relationships

Wage increases in India (correct)

Expansion into international markets

What is a potential risk associated with client concentration for a company?

Strengthened market position

Greater diversification of services

Increased customer satisfaction

Vulnerability to losing key clients (correct)

Which of the following represents a risk related to the integration of acquired assets?

Time and cost overruns on contracts Signup and view all the answers

What type of instability can affect a company's ability to operate internationally?

Political instability Signup and view all the answers

Which segment reported the highest EBIT margin as of 30-Jun-23?

HCLSoftware Signup and view all the answers

What was the YoY basis points change for HCLSoftware from 30-Jun-23 to 30-Jun-24?

-239 Signup and view all the answers

Which segment saw an increase in its EBIT margin from 30-Mar-24 to 30-Jun-24?

Services Signup and view all the answers

As of April 1, 2024, which segments began managing services related to certain software products previously under HCLSoftware?

Both IT and Business Services, and Engineering and R&D Services Signup and view all the answers

What was the total EBIT margin as of 30-Jun-24?

17.1% Signup and view all the answers

Which segment recorded a decrease in EBIT margin from 31-Mar-24 to 30-Jun-24?

Engineering and R&D Services Signup and view all the answers

What is the impact of the change in revenue reporting on the segments?

Immaterial impact Signup and view all the answers

Which segment had the lowest EBIT margin reported as of 30-Jun-23?

Services Signup and view all the answers

What method is used to allocate common assets and liabilities between businesses?

In ratio of last twelve months revenues Signup and view all the answers

Which segment is now responsible for managing certain software products previously under HCL Software as of April 1, 2024?

Engineering and R&D Services Signup and view all the answers

What was the total revenue reported for HCL Software for the quarter ended 30-Jun-23?

$325.4 million Signup and view all the answers

What types of revenue are included in Subscription & Support revenue?

Term subscription revenues and support revenues Signup and view all the answers

How has the average invested capital been computed?

Using the average of last 5 quarters Signup and view all the answers

Which component of revenue saw a value of $47.6 million for the quarter ending 31-Dec-23?

Perpetual License Upfront & Others Signup and view all the answers

What was the HCL Software revenue for Professional Services in the quarter ended 30-Sep-23?

$16.0 million Signup and view all the answers

What was the total revenue reported for the quarter ended 30-Mar-24?

$334.4 million Signup and view all the answers

What technology capabilities is HCLTech leveraging to enhance user experience for its partners?

GenAI, XR/VR, and IoT Signup and view all the answers

Which company has selected HCLTech to transform its ecommerce platform?

A leading US-based beverage company Signup and view all the answers

What service does HCLTech provide to the Europe-based financial services company for customer experience transformation?

Future-ready private cloud and zero-trust framework Signup and view all the answers

What is the main goal of the digital marketing program automation for State Bank of India?

Transform customer interaction framework Signup and view all the answers

Which platform will Banco do Brasil implement with HCLTech?

Salesforce’s Slack integrated with WhatsApp Signup and view all the answers

What business growth strategy is Ahold Delhaize USA focusing on with HCLTech?

Driving business growth via online channels Signup and view all the answers

What is the purpose of HCL Software’s BigFix platform for the US-based financial services company?

To optimize core infrastructure strategy for servers and workstations Signup and view all the answers

What type of customer experiences is HCLTech aiming to deliver through its services?

Hyper-personalized and connected experiences Signup and view all the answers

What was the NOPAT for HCLSoftware in the quarter ending 31-Dec-23?

108.3 Signup and view all the answers

Which quarter saw the highest revenues for HCLSoftware?

31-Dec-23 Signup and view all the answers

What was the average Estimated Invested Capital for HCLSoftware over the given quarters?

1,628 Signup and view all the answers

Which quarter recorded the lowest LTM ROIC for HCLSoftware?

30-Jun-23 Signup and view all the answers

What was the cash and treasury balance reported for HCLSoftware at the end of the quarter on 30-Sep-23?

2,558 Signup and view all the answers

Which of the following periods showed the highest NOPAT for HCLTech Services?

31-Mar-24 Signup and view all the answers

What was HCLTech's LTM ROIC at the end of the period for 30-Jun-24?

34.6% Signup and view all the answers

Which quarter reflected the lowest estimated invested capital for HCLTech Services?

30-Jun-24 Signup and view all the answers

What was the trend in HCLSoftware's Revenue from the quarter ending 30-Jun-23 to 31-Mar-24?

Increasing then decreasing Signup and view all the answers

In which quarter was the EBITDA for HCLSoftware the lowest?

30-Sep-23 Signup and view all the answers

What initiative did HCLTech Americas announce in April?

Grant for Climate Action Signup and view all the answers

Which organization won top honors in the recent HCLTech-sponsored event?

Argilando Signup and view all the answers

For the quarter ending on June 30, 2023, what was the reported revenue of HCLTech?

$3,200.0 million Signup and view all the answers

What was the QoQ growth percentage for HCLTech revenue for the quarter ending September 30, 2023?

1.0% Signup and view all the answers

As of June 30, 2024, what is the projected revenue for HCLTech Services?

$3,040.5 million Signup and view all the answers

What has been the trend in the YoY growth percentage for HCLTech Services from the quarter ending June 30, 2023, to the quarter ending June 30, 2024?

Fluctuated but ended higher Signup and view all the answers

What is the effective date for the transition of certain software products to new service segments?

April 1, 2024 Signup and view all the answers

What was the reported revenue for HCLTech as of September 30, 2023?

$3,224.7 million Signup and view all the answers

Which currency has the lowest average rate reported for the quarter ending September 30, 2023?

AUD - USD Signup and view all the answers

What was the YoY growth percentage for the quarter ending March 31, 2024, for HCLTech revenue?

6.0% Signup and view all the answers

Study Notes

HCLTech Q1 FY25 Investor Release

Date: July 12, 2024
Financial Results: Investor release for the quarter ended June 30, 2024
BSE Scrip Code: 532281
NSE Scrip Code: HCLTECH
Company Secretary: Manish Anand
Financial Highlights:
- INR Revenue: ₹28,057 Crores (down 1.6% QoQ, up 6.7% YoY)
- USD Revenue: $3,364M (down 1.9% QoQ, up 5.1% YoY)
- HCLTech Services Revenue: down 1.9% QoQ, up 5.8% YoY
- Digital Revenue: up 6.0% YoY
- HCLSoftware Revenue: up 3.5% YoY
- HCLSoftware ARR: $1.01B+ (down 0.3% YoY)
- EBIT: ₹4,795 Crores
- Net Income: ₹4,257 Crores (up 6.8% QoQ, 20.4% YoY)

Forward-Looking Statements

Statements are forward-looking
Risks and uncertainties may impact actual results
Factors include regulatory proceedings, fluctuations in earnings, competitive pressure, wage increases, immigration, market factors and use of technology
Management does not update forward-looking statements

Additional Information

People Metrics:
- Total People Count: 219,401
- Net addition: (8,080). Reduction in headcount due to divestiture.
- LTM Attrition: 12.8%
ESG and Awards:
- HCLTech ranked #3 in Brand Finance's Sustainability Perception Index (India)
- HCLTech wins SAP Pinnacle Award (Social Impact)
- HCLTech received a Environmental Stewardship Award
FY25 Guidance:
- Company Revenue growth: 3.0%–5.0% YoY CC
- Services Revenue growth: 3.0%–5.0% YoY CC
- EBIT margin between 18.0%–19.0%
Segment-wise Highlights: details of revenue mix and growth by IT and business services, engineering, and R&D services, HCLSoftware, and inter-segment
Return on Invested Capital (ROIC):
- Details of ROIC for HCLTech Services and HCLSoftware
- LTM ROIC for HCLTech Services: 38.0%-42.8%
- LTM ROIC for HCLSoftware: 15.7%-16.1%
Other Metrics: detailed information on quarterly performance trends, quarterly performance trends in INR and LTM performance trends, client metrics, key deal wins
Client comments: Quotes about HCL's performance from key executives at partner companies
Awards and Recognitions: List of awards and recognitions received by HCLTech
Analyst recognitions: details of analyst recognitions received by HCL
HCLSoftware Metrics: details of revenues for different segments
Global initiatives overview of HCL's societal contribution through activities such as education, healthcare, and environmental sustainability.
Annexure: Details of Constant Currency Reporting.

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Description

Test your knowledge on the various risks and challenges faced by companies in the IT services sector. This quiz covers aspects such as client concentration, cost advantages, and the integration of acquired assets. Additionally, evaluate the performance metrics and changes in EBIT margins across different segments.