HCLTech posts strong Q2 growth, highlights AI successes

HCLTech has reported strong financial results for the second quarter, highlighting a significant growth in its software business.

For the quarter ending 30 September 2024, HCLSoftware reported a year-over-year growth of 9.4% and a 6.4% increase in the first half of the fiscal year 2025, measured in constant currency. This performance underscores the growing importance of their products within the digital economy.

C Vijayakumar, CEO and Managing Director of HCLTech, stated, "We delivered a strong quarter with revenue growing 1.6% QoQ in constant currency and EBIT coming in at 18.6%. This growth was well distributed across verticals, geographies and offerings. HCLSoftware has delivered a stellar performance of 9.4% YoY this quarter and 6.4% growth in H1 FY25 in constant currency, demonstrating the increasing relevance of our products for the digital economy. Our pipeline is very strong, including Data & AI, Digital Engineering, SAP migration and efficiency-led programs. Our GenAI offerings like AI Force and AI Foundry are resonating very well with our clients and should be drivers of efficiency, growth and innovation over the medium term."

HCLTech's GenAI solutions such as AI Force and AI Foundry have proven successful across various industry sectors, contributing to a Total Contract Value of USD $2.2 billion in new deals. This includes applying AI-driven solutions to enhance efficiency and productivity in sectors spanning biopharma, software, automotive, and energy.

The revenue in constant currency grew by 6.2% year-over-year. HCLTech reported dollar revenue at USD $3.4 billion, marking a 6.8% increase year-over-year. Service revenue saw a year-over-year rise of 5.9% while digital revenue experienced a 7.8% growth in constant currency. Additionally, the Engineering and R&D Services business grew 4.3% year-over-year.

The geographic distribution of growth in revenue was led by the Americas with a 7.5% increase, followed by Europe at 4.2%, both measured in constant currency. The highest growth among industry verticals was seen in Telecommunications, Media, Publishing & Entertainment with a 61.2% surge, followed by Manufacturing and Retail & CPG.

Shiv Walia, Chief Financial Officer of HCLTech, commented, "HCLTech has delivered robust financial results with constant currency (CC) revenue growth at an industry leading 6.2% YoY. INR revenue reached ₹28,862 crores, marking a sequential growth of 2.9% and a YoY growth of 8.2%. This revenue growth has come with an improved profitability. Our EBIT margins in Q2 rose to 18.6%, up 149 bps sequentially."

HCLTech onboarded 2,932 fresh graduates during the second quarter of the fiscal year while the attrition rate over the last twelve months stood at 12.9%. The company continues to advance its technological offerings in AI and cloud computing.

The company's partnerships in the quarter include a Fortune 200 biopharma firm and a US-based software enterprise, demonstrating HCLTech's strategic role in leveraging AI for operational improvements and cost efficiencies.

In recognition of individual achievements, Roshni Nadar Malhotra, Chairperson of HCLTech, was awarded the Chevalier de la Légion d'Honneur, France's highest civilian honour, highlighting her exemplary contributions.

HCLTech was also ranked as the number one India-headquartered company in TIME magazine's list of the World's Best Companies 2024, reflecting its esteemed standing in the global market.