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HCL Tech Q4FY21 Results Analysis | Yadnya Investment Academy

HCL Tech Q4FY21 Results Analysis | Yadnya Investment Academy

Published on 26 April 2021 Views 120 Comments 0

IT Firm HCL Technologies have announced their quarterly results for Q4FY21 on 23rd April 2021. How did the company perform in this quarter? Is HCL Tech is the Dark Horse of the IT Sector? To know more about the Quarterly Results, go through this blog.

Introduction:

IT Services Major HCL Technologies has released its Q4FY21 Results on Friday 23rd April 2021. The company has reported a fall in its Net Profit of 24.3% YoY. Whereas the company has recorded decent growth in its Revenue in Quarterly as well as Yearly basis. So, What are the reasons behind this massive fall in the Net Profit of HCL Tech? Let’s find it out.

Q4FY21 Results:

  • Revenue of HCL Technology has increased by 1.8% QoQ from Rs. 19,302 Cr. in Q3FY21 to Rs. 19,642 Cr. in Q4FY21, while there is YoY growth of 5.7% from Rs. 18,590 Cr. in Q4FY20.
  • The company has recorded negative growth in EBITDA by 6.4% quarterly from Rs. 5,443 Cr. in December Quarter of FY21 to Rs. 5,097 Cr. in March Quarter of the same financial year. While the same has grown by 8% YoY from Rs. 4,720 Cr. in the Q4FY20.
  • Likewise, the EBITDA margin of the company has gone down to 26.1% in the quarter ended 31st March 2021 from 28.2% in Q3FY21. But, there is YoY growth in EBITDA, it was 25.4% in Q4FY20.
  • And, now we will come to the most talked-about figure of the quarterly result of the company i.e., its Net Profit which is down by massive 24.3% YoY from Rs. 3,154 Cr. in Q4FY20 to Rs. 2,387 Cr. in Q4FY21. Quarter-on-Quarter, this number has fallen by 40.1% from Rs. 3,982 Cr. in Q3FY21.
  • The major reason behind this huge fall in the net profit of the company in this quarter is due to the provision of milestone rewards to the employees by the company on account of achieving a mark of generating revenue of $10 billion in a single financial year. Hence, to celebrate this milestone, the company has given a bonus to employees worth around Rs. 728 Cr. in Q4FY21.
  • Though, there are also reasons which led to fall in net profit of the company.
  • The net Income Margin of the company has also come down from 17% in Q4FY20 to 12.3% in Q4FY21. The same was 20.6% in the December Quarter of FY21.
  • Employee Attrition Rate of the company has come down to 9.9% in Q4FY21, from 16.3% and 10.2% in Q4FY20 and Q3FY21 respectively.
  • HCL Technologies has won New Deal in Total Contract Value (TCV) of $3.1 Billion in Q4FY21 and reported growth of 49% YoY. Whereas, in FY21, the total won deal amounts to Rs. $7.3 billion, where the deal won in Q4FY21 contributes the most.
  • The company has declared an interim dividend of Rs. 6 per share. Earlier, Company has awarded Rs. 10 per share when it touched the milestone of crossing revenue of $10 billion. Hence, the Total Dividend paid for the FY21 amounts to Rs. 26 per share

FY22 Outlook:

  • The company is expected growth in its revenue in double-digits in constant currency terms in FY22.
  • EBIT margin is expected to be between 19% and 21% in FY22.

Conclusion:

Since the Year-on-Year growth of the HCL technologies in its Quarterly result is not so impressive, but the revenue generated and deal wons may fruity the business in the coming period. Also, the management commentary looks positive. As of now, the company gives the vibes of the Dark Horse of the IT Sector. But one needs to study and research on their side, before investing in this stock.

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