Report Outline:

HCLTech has announced its Q4 and full-year FY23 results, the period ending March 31, 2023:

Q4 FY23:

• Revenues were $3,235m, up 8.1% y/y, up 10.5% in CC
• EBIT was $584m, a margin of 18.1%, up 0.2 pts.

Full-year FY23:

• Revenues were $12,586, up 9.6%, and up 13.7% in CC
• EBIT was $2,288m, a margin of 18.2%, down 0.7 pts y/y.

Q4 FY23 share of revenues (and estimated NH revenues and CC growth) by service line was:

• IT and Business Services: 73.8% ($2,387m, +11.4%)
• ER&D Services: 16.1% ($521m, +7.3%)
• Total services: 89.9% ($2,908m, +10.6%)
  - Q4 Digital accounted for 37.5% of service revenues, up 16.9% y/y in CC
• HCLSoftware: 10.6%  ($342m,+8.2%, excluding divestments)

Q4 FY23 EBIT margin by service line (and in Q4 FY22) was:

• IT and Business Services: 17.1% (17.3%)
• ER&D Services: 18.8% (19.1%)
• Total services: 17.4% (17.6%)
• HCLSoftware: 23.0% ( 19.4%).

Q4 FY 23 services revenue mix breakdown by geography (with NH estimated revenues and CC revenue growth) was:

• Americas: 63.8% ($1,855m, +10.0%)
• Europe: 28.9% ($840m, +14.6%)
• RoW: 7.3% ($212m, +1.4%).

Q4 FY23 services revenue mix breakdown by vertical (with NH estimated revenues and CC revenue growth) was:

• Financial Services: 21.2% ($617m, +9.6%)
• Manufacturing: 19.0% ($553m, +11.8%)
• Life science & Healthcare: 17.5% ($509m, +17.9%)
• Technology & Services: 14.4% ($419m, +11.8%)
• Public Services: 10.2% ($297m, +8.9%)
• Retail & CPG: 9.0% ($262m, +1.6%)
• Telecom, Media, Publishing & Entertainment: 8.8% ($256m, +7.6%).

HCLSoftware revenue breakdown by service line

• Perpetual license upfront and others: $50m
• Subscriptions & support: $270m
• Professional services: $22m.

In FY23, HCLTech won 32 large service deals (wit TCV over $25m) and 25 large software deals (with deals over $2.5m). New business TCV was $8,853m, up 6.6%.

Headcount at the end of FY23 was 225,944, up 8.2% y/y. HCLTech added 17,067 employees during the year. LTM attrition was 19.5%. The company added 3,674 employees during the quarter.

HCLTech’s guidance for FY24 is:

• Revenue growth in the range of 6.0-8.0% in CC, including 6.5-8.5% for services (i.e., IT services and BPS and ER&D )
• An EBIT margin in the range of 18.0-19.0%.