HCLTech Q1 FY25 Investor Release PDF

July 12, 2024 The General Manager The Manager BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers...

July 12, 2024 The General Manager The Manager BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza Dalal Street 5th Floor, Plot No. C-1, Block-G Mumbai- 400 001 Bandra-Kurla Complex, Bandra(E) Mumbai-400 051 BSE Scrip Code: 532281 NSE Scrip Code: HCLTECH Sub.: Investor Release Q1 FY 2025 Dear Sir, Enclosed please find an Investor Release dated July 12, 2024 on the financial results of the Company for the quarter ended June 30, 2024. Thanking you, For HCL Technologies Limited Manish Digitally signed by Manish Anand Anand 17:38:01 +05'30' Date: 2024.07.12 Manish Anand Company Secretary Encl: a/a HCL Technologies Ltd. Technology Hub, Special Economic Zone Corporate Identity Number: L74140DL1991PLC046369 Plot No. 3A, Sector 126, NOIDA– 201304, UP, India Registered Office: t: +91 120 4306000 f: +91 120 4680330 806 Siddharth, 96, Nehru Place, New Delhi -110009, India Q1 FY25 Investor Release July 12, 2024 Noida, India Safe Harbor Statement Certain statements in this release are forward-looking statements, which involve a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those in such forward-looking statements. All statements, other than statements of historical fact are statements that could be deemed forward looking statements, including but not limited to the statements containing the words 'planned', 'expects', 'believes', 'strategy', 'opportunity', 'anticipates', 'hopes' or other similar words. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding impact of pending regulatory proceedings, fluctuations in earnings, our ability to manage growth, intense competition in IT services, Business Process Outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, customer acceptances of our services, products and fee structures, our ability to attract and retain highly skilled professionals, our ability to integrate acquired assets in a cost effective and timely manner, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, the success of our brand development efforts, liability for damages on our service contracts, the success of the companies / entities in which we have made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property, other risks, uncertainties and general economic conditions affecting our industry. There can be no assurance that the forward-looking statements made herein will prove to be accurate, and issuance of such forward looking statements should not be regarded as a representation by the Company or any other person that the objective and plans of the Company will be achieved. All forward-looking statements made herein are based on information presently available to the management of the Company and the Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company. Q1 FY 2025 Highlights 1 Revenue INR Revenue of ₹28,057 Crores, down 1.6% QoQ & up 6.7% YoY Constant Currency (CC) Revenue down 1.6% QoQ & up 5.6% YoY 4 People Total People Count at 219,401; Net addition: (8,080) Reduction in headcount due to divestiture (7,398) USD Revenue of $3,364M, down 1.9% QoQ & up 5.1% YoY Added 1,078 freshers HCLTech Services Revenue down 1.9% QoQ & up 5.8% YoY CC LTM Attrition at 12.8%*, (down from 16.3% in Q1 of last year) Digital Revenue up 6.0% YoY CC; contributes 37.4% of Services 5 HCLSoftware Revenue up 3.5% YoY CC ESG - Awards and Recognitions HCLSoftware ARR at $1.01B+, down 0.3% YoY CC HCLTech secured the #3 spot in Brand Finance's Sustainability Perception Index in India. 2 HCLTech wins SAP Pinnacle Award in Social Impact category Profitability & Return Metrics for HCLTech AquaSphere that aids enterprises achieve their EBIT at ₹4,795 Crores (17.1% of revenue), down 4.4% QoQ & up 7.5% YoY water conservation goals. Net Income at ₹4,257 Crores (15.2% of revenue), up 6.8% QoQ & up 20.4% YoY Norfolk Southern awards HCLTech with Environmental Stewardship Award for 2023 ROIC (on LTM basis) – Company at 34.6%, up 350 bps YoY; Services at 42.8%, up 476 bps YoY 6 OCF at $2,722M and FCF at $2,604M (on LTM basis) FY25 Guidance FCF/NI at 133% (on LTM basis) Company Revenue growth expected to be between 3.0% - 5.0% YoY in CC Dividend of ₹12/- per share, 86th consecutive quarter of dividend pay-out Services Revenue growth expected to be between 3 3.0% - 5.0% YoY in CC Bookings EBIT margin to be between 18.0% – 19.0% TCV (New Deal wins) at $1,960M *Note: Attrition excludes involuntary attrition and digital process operations.  Leadership Comments Roshni Nadar Malhotra C Vijayakumar Prateek Aggarwal Chairperson CEO & Managing Director Chief Financial Officer HCLTech HCLTech HCLTech “With our future-ready portfolio, we “We are pleased to report another quarter of industry- “HCLTech delivered an INR revenue growth of 6.7% are well placed to tap emerging leading performance with 5.6 % YoY revenue growth on YoY, healthy given the global environment. EBIT opportunities led by GenAI. We constant currency basis. Our Q1 Revenue and EBIT margins came in at 17.1%, steady on YoY basis. We remain committed to doing business performance was slightly better than our expectations. delivered PAT of ₹4,257 Crores for the quarter, sustainably and responsibly as we We clocked in $2B TCV of new business Bookings. We which translates to YoY growth of 20.4%. Our continue to supercharge progress are confident of decent growth in the coming quarters, cashflow generation remains robust with LTM FCF for our clients.” positioning us well to deliver our revenue guidance for at ₹21,637 Crores, 133% of PAT and 88% of EBITDA. the year as clients continue to spend on GenAI and We remain committed to improving our capital other emerging technologies.” efficiency and are pleased to report Last Twelve Month (LTM) ROIC for the company is up 350 bps YoY at 34.6% and for Services business is up 476 bps YoY at 42.8%.” Quarterly Performance Trends – $ HCLTech Consolidated Revenues EBIT Net Income In $M In $M In $M 3,415 3,430 3,364 3,200 3,225 675 597 603 522 575 496 543 480 464 430 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Revenue Growth YoY CC Services YoY CC EBIT Margin Net Income Margin 7.1% 6.7% 5.8% 4.2% 19.8% 3.3% 6.3% 18.5% 17.6% 15.3% 14.7% 6.0% 5.6% 17.0% 17.1% 14.0% 4.3% 14.4% 3.4% 13.4% Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Quarterly Performance Trends – ₹ HCLTech Consolidated Revenues EBIT Net Income In ₹ Crores In ₹ Crores In ₹ Crores 28,446 28,499 28,057 26,672 5,615 26,296 4,350 4,257 4,934 5,018 4,795 3,986 3,832 4,460 3,534 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Revenue Growth YoY CC Services YoY CC EBIT Margin Net Income Margin 7.1% 6.7% 5.8% 4.2% 19.8% 3.3% 6.3% 18.5% 17.6% 15.3% 15.2% 6.0% 5.6% 17.0% 17.1% 14.0% 4.3% 14.4% 3.4% 13.4% Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 Jun'23 Sep'23 Dec'23 Mar'24 Jun'24 LTM Performance Trends HCLTech Consolidated EPS (Diluted) Client Category In ₹ Number of Clients 22 60.52 20 55.70 50.06 17 43.33 42.08 15 14 48 48 42 37 Jun'20 Jun'21 Jun'22 Jun'23 Jun'24 256 29 237 218 183 FCF/NI NI FCF 173 In $M 404 5-Year Average: ~125% FCF/NI: 133% 390 353 2,604 326 320 2,330 2,178 2,057 1,962 947 951 1,796 1,762 1,843 1,619 1,554 848 880 817 Jun’20 Jun’21 Jun’22 Jun’23 Jun’24 Jun'20 Jun'21 Jun'22 Jun'23 Jun'24 $100+M $50+M $10+M $5+M $1+M Segment-wise Highlights for the Quarter ended 30-Jun-24 HCLTech Consolidated Revenue Mix and Growth Details 30-Jun-23 31-Mar-24 30-Jun-24 YoY CC Growth QoQ CC Growth IT and Business Services (A) 74.7% 74.4% 74.5% 5.3% (1.5%) Engineering and R&D Services (B) 15.5% 16.2% 15.9% 8.4% (3.5%) Services (A + B) 90.2% 90.6% 90.4% 5.8% (1.9%) HCLSoftware1 (C) 10.2% 9.8% 9.9% 3.5% 0.4% Inter-segment2 (D) (0.4%) (0.4%) (0.3%) Total (A + B + C + D) 100.0% 100.0% 100.0% 5.6% (1.6%) 1. In view of certain internal reorganization, revenue relating to certain software products internally developed and earlier managed by IT and Business Services, are being reported in HCLSoftware segment since Quarter ended 30-Jun-22. 2. Inter-segment revenue is related to products and services of HCLSoftware used by Services business in rendering services to their customers. EBIT Margin Details 30-Jun-23 31-Mar-24 30-Jun-24 YoY BPS change QoQ BPS change IT and Business Services 16.1% 16.6% 16.6% 54 7 Engineering and R&D Services 16.8% 19.8% 16.7% (10) (314) Services 16.2% 17.2% 16.7% 43 (51) HCLSoftware 22.9% 20.9% 20.5% (239) (34) Total 17.0% 17.6% 17.1% 13 (50) Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. Return on Invested Capital (ROIC) (Amount in $M) HCLSoftware P&L (Quarter ended) 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 Revenues 325.4 311.4 411.3 334.5 334.4 EBITDA 114.9 108.8 196.1 120.3 116.4 EBIT 74.6 60.0 135.4 69.8 68.6 NOPAT 58.4 46.2 108.3 55.5 52.0 Estimated Invested Capital 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 Average (Quarter ended) HCLTech Services 3,739 3,721 3,755 3,539 3,565 3,664 HCLSoftware 1,718 1,629 1,741 1,538 1,515 1,628 Invested Capital 5,457 5,349 5,496 5,076 5,080 5,292 Cash & Treasury Balance 2,395 2,558 2,617 3,110 2,985 Total 7,852 7,907 8,114 8,186 8,065 LTM ROIC 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 HCLTech Services 38.0% 39.5% 40.2% 41.7% 42.8% HCLSoftware 15.7% 15.9% 16.4% 16.2% 16.1% HCLTech 31.1% 32.2% 32.8% 33.8% 34.6% Estimated effective tax rate for HCLSoftware segment has been arrived at by applying the tax on Specific units/entities from where HCLSoftware business operates. Residual tax has been allocated to Services business. Common assets and liabilities have been allocated between the businesses in ratio of last twelve months revenues. Average invested capital has been computed using average of last 5 quarters. Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. HCLSoftware Metrics Quarter Ended HCLSoftware Revenue 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 Perpetual License Upfront & Others 36.0 30.6 47.6 31.6 36.4 Subscription & Support 274.6 264.8 346.6 286.1 281.7 Professional Services 14.8 16.0 17.0 16.7 16.4 Total Revenue* 325.4 311.4 411.3 334.5 334.4 Perpetual License upfront and others revenue includes upfront revenue recognized from perpetual licenses and compliance revenues. Subscription and Support revenue includes all term subscription revenues, support revenues (including those attributable to perpetual licenses) and Software-as-a-Service (SaaS) revenues. Revenue share from IP Partnerships is included in respective lines above based on the information provided by the partners. Quarter Ended HCLSoftware ARR 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 ARR* 1028.2 1024.5 1,052.8 1,016.1 1014.4 ARR Growth YoY CC 4.5% 3.9% 2.7% 0.7% (0.3%) Annual Recurring Revenue (ARR) is the annualized value of all term subscription licenses, support obligations (including those attributable to perpetual licenses) and Software-as-a-Service (SaaS) contracts that are active on the last day of the quarter. In respect of IP Partnerships, ARR is computed based on annualized value of HCL’s revenue share of the revenue reported by the partners for support services and new license sales in the current quarter. ARR excludes upfront revenue recognized on sale of perpetual licenses, professional services and any other non-recurring revenue. ARR is an operating metric, which should be viewed independently of revenue and is not a forecast of future revenues. Growth in ARR may not always be reflected in Revenue growth. Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. Services Revenue Mix and Growth for Quarter ended 30-Jun-24 Services Revenue down 1.9% QoQ & up 5.8% YoY in Constant Currency By Geographies Details 30-Jun-23 31-Mar-24 30-Jun-24 YoY CC Growth Americas 64.5% 65.2% 66.0% 8.0% Europe 28.7% 28.9% 27.9% 3.0% ROW 6.8% 5.9% 6.1% (3.6%) By Verticals Details 30-Jun-23 31-Mar-24 30-Jun-24 YoY CC Growth Financial Services 22.6% 21.6% 21.0% (1.3%) Manufacturing 19.9% 20.4% 19.4% 3.5% Lifesciences & Healthcare 17.5% 16.3% 15.9% (4.1%) Technology and Services 13.4% 12.3% 13.0% 2.7% Telecommunications, Media, Publishing & Entertainment 7.6% 11.5% 12.2% 69.2% Retail & CPG 9.1% 9.1% 9.4% 9.7% Public Services# 10.0% 8.8% 9.1% (3.7%) # Public Services include Energy & Utilities, Travel - Transport - Logistics and Government. Client Metrics YoY QoQ Number of $M Clients (LTM) 30-Jun-23 31-Mar-24 30-Jun-24 Change Change $100M+ 20 22 22 2 - $50M+ 48 46 48 - 2 $20M+ 127 137 133 6 (4) $10M+ 237 254 256 19 2 $5M+ 390 395 404 14 9 $1M+ 947 951 951 4 - Client Contribution to Revenue (LTM) 30-Jun-23 31-Mar-24 30-Jun-24 Top 5 Clients 9.8% 10.4% 11.4% Top 10 Clients 17.2% 18.8% 19.6% Top 20 Clients 27.2% 29.0% 30.1% Days Sales Outstanding 30-Jun-23 31-Mar-24 30-Jun-24 Days Sales Outstanding* 64 61 60 *Excluding unbilled receivables Key Deal Wins A leading US-based insurance provider selected HCLTech to design and implement a A Fortune 100 technology company selected HCLTech as its strategic partner to set up comprehensive digital transformation program. This is a full-stack deal comprising Technical Assistance Centers (TAC) in Asia. HCLTech will also help the client transform infrastructure, applications and business operations. HCLTech will leverage synergies from its current operations in these locations with an automation and outcome-centric solution integrated delivery and transformation initiatives, including automation and GenAI, to drive that will enhance customer experience and optimize operational efficiency. operational efficiencies, optimize cost and improve service quality for the client. A leading US-based energy infrastructure company selected HCLTech to enhance user A leading US-based beverage company selected HCLTech as its digital partner to transform experience and enable faster time-to-market. The outcome-based engagement model will its ecommerce platform. Leveraging its capabilities in GenAI, XR/VR and IoT technologies, leveraging HCLTech’s IT and engineering capabilities as well global delivery network. HCLTech will enable hyper-personalization, mobility and connected IoT to deliver seamless omnichannel customer experiences and drive business growth via online channels. Banco do Brasil, a leading bank in Brazil, which is also one of the largest financial institutions in Latin America, selected HCLTech to implement Salesforce’s Slack A Europe-based financial services company selected HCLTech to accelerate its digital integrated with WhatsApp as part of their ongoing customer experience transformation transformation. HCLTech’s solutions will include setting up of a future-ready private cloud, AI- journey. led automation and modernized network and security architecture based on a zero-trust framework. HCLTech will also transform workplace experience for the client. State Bank of India selected HCLSoftware to automate its digital marketing program. Ahold Delhaize USA, the parent company of five US omnichannel grocery brands, which The bank will deploy HCL Unica martech platform to transform its customer interaction together comprise the largest grocery retail group on the East Coast, has further framework and deliver hyper-personalized customer experiences while ensuring data strengthened its partnership with HCLTech to modernize, support and transform technology privacy. for its network, including over 2,000 retail stores. HCLTech’s Managed Network Services, Retail IT Operations and Mainframe Services will enable the grocery retail group to drive A US-based financial services company selected HCL Software’s BigFix platform as part of transformation, improve operations resiliency and enhance automation, AI-led efficiency and its core infrastructure strategy for servers and workstations. The client will also leverage user experience. HCL MyCloud to optimize cost and operational efficiency. A leading Europe-based real estate company selected HCLTech to elevate their productivity and customer experience. HCLTech’s full suite of Digital Foundation and Digital Business A leading US-based financial services company selected HCLSoftware to deploy Actian's services and next-generation platforms and integrated solutions powered by GenAI will help DataConnect data integration platform to reduce vulnerabilities, increase speed of data the client automate and streamline services, systems and processes. movement, reduce workload remediation time and boost operational efficiency. A leading US-based financial services provider expanded its digital transformation partnership with HCLTech to manage and transform IT infrastructure operations and workplace A leading Europe-based food company selected HCLSoftware’s BigFix platform to experience. HCLTech will provide managed services to significantly enhance the experience enhance security posture and reduce vulnerabilities, while boosting operational efficiency. for the client’s members worldwide. GenAI Deal Wins A global technology major selected HCLTech to implement a GenAI-based solution for A global technology major has selected HCLTech to deploy GenAI to transform its gaming review analysis that automated data collection and sentiment analysis, resulting in content life cycle management and processes. HCLTech will help the client to automate workload reduction and a 119% increase in game reviews. its content processing with intelligent features such as persona filters. A Europe-based telecom OEM has partnered with HCLTech to kickstart its GenAI journey An APAC-based financial services major selected HCLTech to help accelerate its by deploying LLMs to design, build and integrate technology solutions. enterprise-wide data and AI transformation. HCLTech will create a new framework that enables the bank to treat data as a product and reduce the time needed to extract insights by half. A Europe-based financial services major has partnered with HCLTech to develop and manage its next-gen low latency electronic trading platform and compliance analytics platform by leveraging GenAI. A leading Indian educational institution is leveraging HCLTech’s GenAI capabilities to accelerate primary and adult education in rural India. HCLTech will help the client in creating online education content and animation along with Android App for TV and A leading US-based financial services company selected HCLTech to build a GenAI tablet through a multi-modal GenAI-based platform. platform with robust AI governance and LLM Ops. A global mining major selected HCLTech to build an AI-assisted cataloging solution with A US-based hi-tech major has engaged HCLTech to create and maintain a GenAI-as-a- Azure IoT implementation. This will enable the client to tag different devices in the field, service (GaaS) platform. This includes the implementation of a GenAI operations platform understand the type of data, origin etc. for further model training and development. The aimed at streamlining AI processes and enhancing operational efficiency. client will achieve appx. 50% improvement in edge devices support and appx. 60% improvement in reducing operational cost of managing edge devices. A US-based insurance provider selected HCLTech to transform its contact center and back office operations for claims management through GenAI. HCLTech AI ForceTM An US-based automotive major has collaborated with HCLTech to develop AI models and DigitalCOLLEAGUE suite of products will help the client to optimize the workflows, boost actionable insights for customer segmentation and dynamic price optimization using operational flexibility and enhance efficiency, accuracy and overall service quality in GenAI. managing healthcare claims. Client Comments “At apoBank, we welcome the expansion of our partnership with “It is with great pleasure and excitement that we announce this HCLTech. In addition to world-class capabilities in IT infrastructure agreement with HCLTech, with whom we share a decade-long and Cloud managed services, HCLTech has extensive Avaloq partnership in core Engineering and R&D services. I am confident expertise and deep understanding of apoBank. This makes that our collaboration will enhance Olympus’ engineering HCLTech the ideal partner for apoBank.” capabilities and unlock new innovations that enable quality healthcare through technology.” - Thomas Runge, COO and Member of Executive Board, apoBank - Andre Roggan, Chief Technology Officer, Olympus “In a rapidly evolving digital landscape, HCLTech has emerged as a “Being in the QSR industry, Papa Johns’ focus is heavily on unit valuable ally for us. Their vast expertise facilitated an efficient economics, so per store profitability is crucial and that compels our transition and a quick ramp-up to steady-state reliability. Since technology team to come up with cost-efficient solutions that can then, our partnership has accelerated digital innovation, notably scale across the brand’s footprint. Papa Johns and HCLTech are enhancing our digital services and support. HCLTech stands as a proud of our Commerce platform transformation program which pivotal partner, propelling us toward redefining digital excellence.” supports our aggregators and digital call center integrations.” - Carl Brisco, SVP & Chief Technology Officer, - Sarika Attal, VP - Enterprise Architecture and Technology The ODP Corporation Services, Papa Johns People Metrics Details (Quarter ended) 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 Total People Count 223,438 221,139 224,756 227,481 219,401 Technical 209,066 206,745 210,417 213,059 205,197 Sales and Support 14,372 14,394 14,339 14,422 14,204 Net Addition (2,506) (2,299) 3,617 2,725 (8,080) Freshers Added 1,597 3,630 3,818 3,096 1,078 Attrition (LTM)* 16.3% 14.2% 12.8% 12.4% 12.8% Women Employees (%) 29.0% 29.1% 29.1% 29.1% 28.7% *Note: Attrition excludes involuntary attrition and Digital process operations. HCLTech announced the opening of new offices in East Brunswick, New Jersey and Santa Clara, California, further strengthening its footprint in North America. Both offices will feature Customer Experience Centers (CECs) showcasing the best of HCLTech’s innovations and capabilities, including its AI and Cloud Native Labs. HCLTech’s Value Creation Portal is a unique grassroots innovation platform that enables employees to contribute ideas and create value for HCLTech and its clients. 8,600+ unique employees leveraged Value Creation Portal in Q1, FY25, generating, reviewing and approving 2,470+ ideas and implementing 1,040+ ideas that delivered customer signed-off value worth $150M+. In line with its tradition of ideapreneurship and a culture of innovation, a total of 20 patents were filed and granted (Nine filings, 11 grants) in Q1 FY25. Awards and Recognitions HCLTech was the most decorated India-headquartered IT services company in the Institutional Investor Research Annual Asia Executive Team survey with #1 ranks in 21 categories in the Technology IT Services & Software sector: o HCLTech was named as one of four ‘Most Honored Company’ from India in Asia ex-Japan track. o HCLTech was ranked #3 in the Company Board of Directors category (overall segment) in the Rest of Asia track. o C Vijayakumar, CEO & Managing Director, HCLTech was ranked #1 in the Best CEO category (overall and sell-side segments) in both tracks. o Prateek Aggarwal, CFO, HCLTech was ranked #1 in the Best CFO category (overall and sell-side segments) in Rest of Asia track. o HCLTech Investor Relations team was ranked #1 in the Best IR Team category across multiple tracks. o Nitin Mohta, Head of Investor Relations, HCLTech was ranked #1 in the Best IR Professionals category (overall, buy-side and sell-side segments) in Rest of Asia track. o HCLTech was ranked #1 in the Overall ESG category (sell-side segment) in both tracks. Named Microsoft Dynamics 365 Services Partner of the Year at the 2024 Microsoft Partner of the Year Awards. Ranked # 7 in BW Businessworld India’s Most Respected Companies 2024 list. Included in LinkedIn Top Companies 2024 List. Won Intel’s 2024 EPIC Outstanding Supplier Award. HCLTech’s IoT-led prescriptive and predictive maintenance, Real-time Manufacturing Insights (RMI) won the 2024 AI Breakthrough Award for the “Best Predictive Analytics Solution” category. Won Pega Financial Services Award for business excellence. Analyst Recognitions HCLTech has received 75+ leadership positions in analyst recognitions for the quarter which we believe further strengthens our credentials to be a partner of choice for large enterprises in their cloud and digital transformation journey. Digital Business HCLTech positioned as a Leader in: HFS Horizons: High-Tech Services, 2024 HFS Horizons: Healthcare Provider (HCP) Service Providers, 2024 Avasant’s Manufacturing Digital Services 2024 RadarView HCLTech positioned as a Leader in ISG Provider Lens : Chemical Industry Services and Solutions - Digital IT/OT Services, Supply Chain and Logistics, Sustainability and Innovation - North America & Europe 2024 Salesforce Ecosystem Partners - Multicloud Implementation and Integration Services for Large Enterprises, Managed Application Services for Large Enterprises – U.S., Germany, U.K. 2024 Salesforce Ecosystem Partners - Implementation Services for Industry Clouds - U.S., Germany 2024 SAP Ecosystem - Managed Cloud Services for SAP ERP, SAP Application Managed Services, SAP S/4HANA System Transformation - U.K., Nordics 2024 SAP Ecosystem - Cloud Economics and FinOps Services for SAP, RISE with SAP Implementation Partners, SAP Business AI and Business Technology Platform (BTP) Services - Global 2024 Microsoft Cloud Ecosystem - Managed Services for Azure, Microsoft 365 Services, Power Platform Services, SAP on Azure Services - U.S., U.K., Australia 2024 Microsoft Cloud Ecosystem - Generative AI Services for the Microsoft Clouds- U.K. 2024 Mainframes – Services and Solutions - Application Modernization Services – Europe, US, APAC, U.S. Public Sector 2024 Digital Operations HCLTech positioned as a Leader in: Avasant’s Banking Process Transformation 2024 RadarView ISG Provider Lens Procurement Services - Procurement Operations Modernization Services, Strategic Sourcing and Category Management Services, Direct Procurement Enablement and Modernization Services - Global 2024 Analyst Recognitions Digital Foundation HCLTech positioned as a Leader and Star Performer in Everest Group’s Capital Markets IT Services PEAK Matrix® Assessment 2024 HCLTech positioned as a Leader in: IDC MarketScape: Worldwide Cloud Professional Services 2024 Vendor Assessment (doc # US51406224, June 2024) IDC MarketScape: Worldwide Network Consulting Services 2024 Vendor Assessment (doc # US52056924, May 2024) HFS Horizons: Industry Cloud Service Providers, 2024 Everest Group’s Healthcare Industry Cloud Services PEAK Matrix® Assessment 2024 Everest Group’s Mainframe Services PEAK Matrix® Assessment 2024 Avasant’s Applied AI Services 2024 RadarView Avasant’s Cybersecurity Services 2024 RadarView HCLTech positioned as a Leader in ISG Provider Lens : ServiceNow Ecosystem Partners - ServiceNow Implementation and Integration Services – Europe, U.S., Australia 2024 Mainframes – Services and Solutions - Mainframe Optimization Services - Europe 2024 Mainframes – Services and Solutions - Mainframe as a Service (MFaaS), Mainframe Optimization Services - APAC 2024 Engineering and R&D Services HCLTech positioned as a Leader in: Everest Group’s Connected Product Engineering Services PEAK Matrix® Assessment 2024 ISG Provider Lens Digital Engineering Services - Design and Development (Products, Services and Experiences), Integrated Customer/User Engagement, Intelligent Operations, Platform and Applications Services - U.S., Europe 2024 Analyst Recognitions HCLSoftware HCLSoftware positioned as a Leader in the IDC MarketScape: Worldwide Unified Endpoint Management Software 2024 Vendor Assessment (Doc Document number:# US51234224, April 2024) HCLSoftware positioned as a Major Player in the IDC MarketScape: Worldwide Unified Endpoint Management Software for Small and Medium-Sized Businesses 2024 Vendor Assessment (Doc Document number:# US51779424, April 2024) HCLSoftware positioned as a Leader in the IDC MarketScape: Worldwide Client Endpoint Management Software for Windows Devices 2024 Vendor Assessment (Doc Document number:# US51234324, April 2024) HCLSoftware positioned as a Leader in MarketScape: Worldwide Unified Endpoint Management Software for Frontline/IoT Devices 2024 Vendor Assessment (Doc Document number:# US51779324, April 2024) HCLSoftware positioned as a Leader in MarketScape: Worldwide Unified Endpoint Management Software for Apple Devices 2024 Vendor Assessment (Doc Document number:# US51779224, April 2024) Client Recognition HCLTech recognized as a Customer’ Choice in the 2024 Gartner® Peer Insights Voice of the Customer for Outsourced Digital Workplace Services Report* HCLTech (HCLSoftware) for its BigFix recognized as a Customer’s Choice in 2024 Gartner Peer Insights ‘Voice of the Customer’ for Unified Endpoint Management Tools** HCLTech (HCLSoftware) for its BigFix recognized as a Midsize Enterprise Customer’s Choice in 2024 Gartner Peer Insights ‘Voice of the Customer’ Company Size Segment for Unified Endpoint Management Tools** HCLTech (HCLSoftware) for its BigFix recognized as a North America Customer’s Choice in 2024 Gartner Peer Insights ‘Voice of the Customer’ Region Segment for Unified Endpoint Management Tools** *Gartner, Voice of the Customer for Outsourced Digital Workplace Services, By Peer Contributors, 23 April 2024 ** Gartner, Voice of the Customer for Unified Endpoint Management Tools By Peer Contributors,7 May 2024 GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and PEER INSIGHTS is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved. Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences, and should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates. Gartner does not endorse any vendor, product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or completeness, including any warranties of merchantability or fitness for a particular purpose. The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this Earnings Call script and hypothetical Q&A / Earnings Call Press Release), and the opinions expressed in the Gartner Content are subject to change without notice. Supercharging progress for our communities and the planet India-focused initiatives through HCLFoundation Power of One 23,000+ traditional crop 3,000 people sensitized 1,800+ kg of coastal 6,000+ government 3,900+ employee farmers supported with on sustainable waste and marine debris school students supported volunteering hours paddy and maize seeds management practices retrieved with by HCLFoundation clocked under the Food Security engagements from recorded pass percentage Program 22,500+ kgs of waste community members, of 82% for class 10 and 88% 1,990 units of blood managed forest department, for class12 donated by HCLTechies 16,800+ consultations coast guard and NGO across 8 cities partners 700+ PWDs provided with provided through Mobile various services, including Health Clinics financial support, health and assistive devices Global Initiatives HCLTech’s Brazil CSR Council members supported people Winners of the first edition of the affected in massive floods in the Rio Grande do Sul state. HCLTech Americas Grant for Climate Action were announced in April. Brazil- HCLTech volunteers took part in shoreline cleanup activity based Argilando won top honors, while in Mississauga/Toronto. Canada-based No. 9 Contemporary Art and the Environment and US-based The HCLTech France, in partnership with Apprentis d'Auteuil, are supporting upskilling of French youth with coding Longleaf Alliance were the runners-up. programs. Annexure Constant Currency Reporting (Quarter ended) (Amount in $M) HCLTech Revenue 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 Reported Revenue ($M) 3,200.0 3,224.7 3,415.0 3,429.9 3,363.8 Growth % (CC) QoQ (1.3%) 1.0% 6.0% 0.3% (1.6%) YoY 6.3% 3.4% 4.3% 6.0% 5.6% HCLTech Services Revenue Reported Revenue ($M) 2,885.9 2,925.1 3,015.0 3,107.8 3,040.5 Growth % (CC) QoQ (1.0%) 1.6% 3.1% 3.0% (1.9%) YoY 7.1% 3.3% 4.2% 6.7% 5.8% Average Rates for the Quarter USD - INR 82.17 82.72 83.28 83.10 83.40 GBP - USD 1.25 1.26 1.25 1.27 1.26 EUR - USD 1.09 1.08 1.08 1.08 1.08 USD - SEK 10.60 10.81 10.51 10.43 10.68 AUD - USD 0.67 0.65 0.66 0.66 0.66 Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. Financials in ₹ for the Quarter ended 30-Jun-24 (Ind AS) Consolidated Income Statement (Amount in ₹ Crores) Quarter Ended % of Revenue Income Statement 30-Jun-23 31-Mar-24 30-Jun-24 30-Jun-23 31-Mar-24 30-Jun-24 Revenues 26,296 28,499 28,057 100.0% 100.0% 100.0% Direct Costs 16,936 18,527 18,364 64.4% 65.0% 65.5% Gross Profits 9,360 9,972 9,692 35.6% 35.0% 34.5% Research & Development 394 435 407 1.5% 1.5% 1.5% SG & A 3,579 3,426 3,492 13.6% 12.0% 12.4% EBITDA 5,387 6,111 5,793 20.5% 21.4% 20.6% Depreciation & Amortization 927 1,093 998 3.5% 3.8% 3.6% EBIT 4,460 5,018 4,795 17.0% 17.6% 17.1% Foreign Exchange Gains/(Loss) (22) 6 81 (0.1%) 0.0% 0.3% Other Income, net 258 245 831 1.0% 0.9% 3.0% Provision for Tax 1,165 1,274 1,448 4.4% 4.5% 5.2% Non-controlling interest (3) 9 2 0.0% 0.0% 0.0% Net Income 3,534 3,986 4,257 13.4% 14.0% 15.2% EPS (LTM in ₹) Basic 55.78 57.99 60.63 Diluted 55.70 57.86 60.52 Cost Breakup in ₹ for Quarter Ended 30-Jun-2024 (Amount in ₹ Crores) Quarter Ended % of Revenue Particulars 30-Jun-23 31-Mar-24 30-Jun-24 30-Jun-23 31-Mar-24 30-Jun-24 Employee benefits expense 15,014 16,351 16,410 57.1% 57.4% 58.5% Outsourcing costs 3,628 3,710 3,541 13.8% 13.0% 12.6% (Subcontractors + Outsourced Work) Cost of hardware and software sold 535 510 429 2.0% 1.8% 1.5% Travel and conveyance 383 348 378 1.5% 1.2% 1.3% Software license fee 231 268 306 0.9% 0.9% 1.1% Facility Cost* 293 319 296 1.1% 1.1% 1.1% Recruitment, training and development 94 77 90 0.4% 0.3% 0.3% Legal and professional charges 157 182 168 0.6% 0.6% 0.6% Communication costs 134 155 133 0.5% 0.5% 0.5% CSR Expense 74 71 60 0.3% 0.2% 0.2% Doubtful debts 10 30 30 0.0% 0.1% 0.1% Other expenses 356 367 423 1.3% 1.3% 1.5% Depreciation & Amortization 927 1,093 998 3.5% 3.8% 3.6% Total Costs 21,836 23,482 23,262 83.0% 82.4% 82.9% EBIT 4,460 5,018 4,795 17.0% 17.6% 17.1% Note: *Facility cost includes Repairs and Maintenance, Power and Fuel, and Rent Financials in $ for the Quarter ended 30-Jun-24 (IFRS) Consolidated Income Statement (Amount in $M) Quarter Ended % of Revenue Income Statement 30-Jun-23 31-Mar-24 30-Jun-24 30-Jun-23 31-Mar-24 30-Jun-24 Revenues 3,200.0 3,429.9 3,363.8 100.0% 100.0% 100.0% Direct Costs 2,061.0 2,230.5 2,201.7 64.4% 65.0% 65.5% Gross Profits 1,139.0 1,199.5 1,162.1 35.6% 35.0% 34.5% Research & Development 47.9 52.6 48.8 1.5% 1.5% 1.5% SG & A 435.6 412.4 418.7 13.6% 12.0% 12.4% EBITDA 655.5 734.5 694.6 20.5% 21.4% 20.6% Depreciation & Amortization 112.8 131.2 119.6 3.5% 3.8% 3.6% EBIT 542.7 603.3 575.0 17.0% 17.6% 17.1% Foreign Exchange Gains/(Loss) (2.6) 0.7 (4.9) (0.1%) 0.0% (0.1%) Other Income, net 31.4 29.8 99.6 1.0% 0.9% 3.0% Provision for Tax 141.8 153.1 173.7 4.4% 4.5% 5.2% Non-controlling interest (0.3) 1.0 0.2 0.0% 0.0% 0.0% Net Income 430.0 479.7 495.8 13.4% 14.0% 14.7% Cost Breakup in $ for Quarter Ended 30-Jun-2024 (Amount in $M) Quarter Ended % of Revenue Particulars 30-Jun-23 31-Mar-24 30-Jun-24 30-Jun-23 31-Mar-24 30-Jun-24 Employee benefits expense 1,827.1 1,968.4 1,967.5 57.1% 57.4% 58.5% Outsourcing costs 441.5 446.7 424.6 13.8% 13.0% 12.6% (Subcontractors + Outsourced Work) Cost of hardware and software sold 65.1 61.4 51.5 2.0% 1.8% 1.5% Travel and conveyance 46.6 41.9 45.3 1.5% 1.2% 1.3% Software license fee 28.2 32.3 36.6 0.9% 0.9% 1.1% Facility Cost* 35.7 38.4 35.5 1.1% 1.1% 1.1% Recruitment, training and development 11.4 9.3 10.8 0.4% 0.3% 0.3% Legal and professional charges 19.1 21.9 20.1 0.6% 0.6% 0.6% Communication costs 16.4 18.7 16.0 0.5% 0.5% 0.5% CSR Expense 9.1 8.6 7.2 0.3% 0.2% 0.2% Doubtful debts 1.2 3.6 3.6 0.0% 0.1% 0.1% Other expenses 43.1 44.2 50.6 1.3% 1.3% 1.5% Depreciation & Amortization 112.8 131.2 119.6 3.5% 3.8% 3.6% Total Costs 2,657.3 2,826.6 2,788.9 83.0% 82.4% 82.9% EBIT 542.7 603.3 575.0 17.0% 17.6% 17.1% Note: *Facility cost includes Repairs and Maintenance, Power and Fuel, and Rent Consolidated Balance Sheet (₹ and $) In ₹ Crores In $M Particulars As on 31-Mar-24 As on 30-Jun-24 As on 31-Mar-24 As on 30-Jun-24 Assets Cash and Cash Equivalents 9,456 9,335 1,134 1,120 Accounts Receivables, net 19,483 18,800 2,337 2,254 Unbilled Receivables 6,038 5,865 724 703 Treasury Investments 18,532 17,747 2,222 2,128 Other Current Assets 5,822 5,824 698 699 Total Current Assets 59,331 57,571 7,115 6,904 Property and Equipment, net 4,999 4,781 600 573 Right-of-use assets 2,910 2,620 349 314 Intangible Assets, net 27,262 26,837 3,271 3,218 Treasury Investments 287 111 34 13 Deferred Tax Assets 1,031 951 124 114 Other Investments 94 98 11 12 Other Assets 3,863 3,978 463 477 Total Assets 99,777 96,947 11,967 11,625 Liabilities & Stockholders Equity Other Current Liabilities 21,532 19,798 2,583 2,373 Borrowings 2,327 2,302 280 276 Lease Liabilities 3,429 3,193 411 383 Other Non-Current Liabilities 4,218 4,401 507 528 Total Liabilities 31,506 29,694 3,781 3,560 Non-Controlling Interests 8 10 1 1 Total Stockholders Equity 68,263 67,243 8,185 8,064 Total Equity 68,271 67,253 8,186 8,065 Total Liabilities and Equity 99,777 96,947 11,967 11,625 Consolidated Cash Flow Summary & Cash Position In ₹ Crores In $M Particulars For Year Ended For Quarter Ended For Year Ended For Quarter Ended March 2024 June 2024 March 2024 June 2024 Profit Before Tax 20,967 5,707 2,531 670 Adjustments for: Depreciation, Amortization and Impairment 4,173 998 503 120 Others (785) (899) (94) (92) Changes in Assets and Liabilities, net: Accounts Receivable and Unbilled Receivable 248 804 30 96 Other Assets and Liabilities 2,057 (1,784) 250 (215) Income Taxes paid (Net of refunds) (4,212) (692) (509) (83) Net Operating Cash Flow 22,448 4,134 2,711 495 Purchase of PP&E and Intangibles (1,048) (209) (127) (25) Free Cash Flow 21,400 3,925 2,584 470 Payments for Acquisitions (2,048) (50) (248) (6) Dividend paid (14,073) (4,873) (1,699) (585) Gross Cash & Net Cash Cash & Cash Equivalents 9,456 9,335 1,134 1,120 Fixed Deposits including Deposits under lien 11,774 12,597 1,411 1,510 Investment Securities 7,043 5,261 845 631 Gross Cash 28,273 27,193 3,390 3,261 Less: Borrowings 2,327 2,302 280 276 Net Cash 25,946 24,891 3,110 2,985 About HCLTech HCLTech is a global technology company, home to more than 219,000 people across 60 countries, delivering industry-leading capabilities centered around digital, engineering, cloud and AI, powered by a broad portfolio of technology services and products. We work with clients across all major verticals, providing industry solutions for Financial Services, Manufacturing, Life Sciences and Healthcare, Technology and Services, Telecom and Media, Retail and CPG, and Public Services. Consolidated revenues as of 12 months ending June 2024 totaled $13.4B. To learn how we can supercharge progress for you, visit hcltech.com. Contact Details Investor Relations Corporate Communications Nitin Mohta Ashutosh Sharma [email protected] [email protected] +91-120-6126000 +91-120-6126000