Noida-headquartered HCLTech meanwhile raised the lower end of its FY25 revenue growth guidance to 4.5-5.0% in constant currency (CC) terms from 3.5-5% earlier.
“Looking ahead, in 2025, we believe clients are looking at increasing their IT investments,” said C Vijayakumar, chief executive and managing director at HCLTech. “We do see an improvement in the demand environment, with discretionary spending witnessing some uptick. They’re investing to drive innovation and efficiency, and in these initiatives, GenAI and data are at the centre.”
ETtechHe added that while HCLTech remains “confident on the pace of medium-term recovery, bear in mind the Q4 outlook accounts for certain planned contractual reductions.”
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Last week, IT bellwether Tata Consultancy Services (TCS) posted a 5.5% YoY and 3.9% sequential increase in net profit at Rs 12,380 crore on a revenue of Rs 63,973 crore, which grew 5.59% YoY but declined by 0.44% on a QoQ basis. TCS also cut its headcount by 5,370 employees in the December quarter.
For HCLTech, after cutting its workforce by 780 people in the September quarter, the company added 2,134 employees in the October-December period ending calendar 2024 with a total headcount of 220,755. It also added 2,014 freshers in the same period, lower from September quarter’s 2,932 freshers.
Fresher hiring and deal wins
Billionaire Shiv Nadar-promoted HCLTech also trimmed fresher hiring plans for FY25 from 10,000 at the start of the year to about 7,000, of which 6,000 have already been hired in the first nine months of the fiscal.
“Lower attrition, improved productivity results in moderating the fresher numbers for the year…As far as the fresher planning for next year is concerned, we expect to significantly increase the numbers next year,” said Ramachandran Sundararajan, chief people officer. He did not elaborate further.
The company said it does not have much insight into the incoming Donald Trump government’s decisions that can impact the spending environment and client priorities. Vijayakumar, however, added he does not expect any impact on immigration to the US given its lesser reliance on H1-B visas which ranges at 500-1000 per year for HCLTech.
HCLTech scored 12 deal wins in the third quarter with total contract value (TCV) at $2.10 billion, a marginal drop from Q2’s $2.22 billion but higher than $1.93 billion a year earlier. Annual contract value (ACV) improved 9% QoQ and 23% YoY reflecting higher increase despite smaller deals.
Most of the new deals were signed in the key markets of Americas and Europe where the deal pipeline is at a near all-time high, the management highlighted.
Operating margin edged down to 19.5% in the December quarter from 19.8% a year ago. Sequentially, margin improved from 18.6% in the September quarter supported by a stronger dollar against the rupee.
Analysts expect HCLTech to continue deepening focus on small and mid-sized enterprise clients for sustained revenue growth led by North America and Europe. “Although demand in late 2024 was mixed due to cost-saving priorities, longer sales cycles, and reduced discretionary spending, the 2025 outlook is brighter with key growth drivers—a 10-12% increase in IT spending in India, global IT growth of 6-8%, and GenAI projects moving to production, creating new revenue opportunities,” said Biswajit Maity, senior principal analyst, Gartner.
The company announced a total dividend of Rs 18 for the quarter including a special dividend of Rs 6 to celebrate 25 years of public listing. This will lead to Rs 60 dividend for shareholders for the entire year with a record date set as January 17.
Shares of HCLTech closed 0.52% lower at Rs 1,985.25 apiece on the BSE, compared to a 1.36% decline in the benchmark Sensex. The results were announced after market hours.
