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HCL Tech Q3 Profit Falls 11% to Rs 4,082 Crore on One-Time Labour Cost

HCL Technologies reported an 11.1% year-on-year decline in its Q3 net profit, which stood at Rs 4,082 crore. The drop was primarily attributed to a one-time cost of Rs 956 crore related to new labour code provisions. However, the company's revenue showed strong growth, increasing by 13.3% year-on-year to Rs 33,872 crore. A key highlight was the nearly 20% quarter-on-quarter surge in revenue from its Advanced AI services.

Key Points: HCL Tech Q3 Net Profit Drops 11.1% to Rs 4,082 Crore

  • Net profit fell 11.1% YoY to Rs 4,082 crore
  • Revenue grew 13.3% YoY to Rs 33,872 crore
  • One-time labour code provision cost Rs 956 crore
  • Advanced AI revenue surged nearly 20% QoQ
  • Operating margin expanded to 18.6%
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HCL Tech clocks 11.1 drop in Q3 net profit to Rs 4,082 crore

HCL Technologies reports an 11.1% YoY decline in Q3 net profit to Rs 4,082 crore, impacted by a one-time labour cost, while revenue grows 13.3%.

"We are well positioned to address evolving AI demand of our clients across industries and service lines - C Vijayakumar"

Mumbai, Jan 12

HCL Technologies, the country's third-largest IT services company, on Monday reported 11.14 per cent decline year-on-year decline in its financial results for the quarter ended December after-market hours.

According to the stock exchange filing, the net profit for the 3rd quarter stood at Rs 4,082 crore, down from Rs 4,594 crore in the same quarter previous financial year (Q3 FY25).

The drop was mainly due to a one-time cost of Rs 956 crore linked to new labour code provisions that came into effect during the quarter.

The company's revenue for the December quarter rose to Rs 33,872 crore -- marking a 6 per cent increase compared to the previous quarter and a 13.3 per cent rise from a year ago.

In constant currency terms, revenue grew 4.2 per cent quarter-on-quarter and 4.8 per cent year-on-year.

Total income of the company in Q3 was Rs 34,257 crore, up by 12.8 per cent from Rs 30,367 crore in year-ago period, the IT firm said in its filing.

Service revenue also showed steady growth, increasing 1.8 per cent sequentially and 5 per cent annually in constant currency terms.

A key highlight of the quarter was strong growth in advanced technologies. Revenue from Advanced AI jumped nearly 20 per cent quarter-on-quarter in constant currency terms to $146 million.

On the operational side, the company reported earnings before interest and tax (EBIT) of Rs 6,285 crore, which was 8 per cent higher compared to the same period last financial year.

Operating margins also improved, with EBIT margin expanding to 18.6 per cent from 17.2 per cent in the September quarter.

"We are well positioned to address evolving AI demand of our clients across industries and service lines," C Vijayakumar, CEO & Managing Director, HCLTech stated.

- IANS

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Reader Comments

P
Priya S
As an employee, the new labour code provisions causing this "one-time cost" are actually a positive step for workers. Better benefits and security. The company can absorb this hit, and it's good to see margins improving otherwise. Focus should be on the steady service revenue growth.
R
Rohit P
Mixed bag. Profit down is never good news for shareholders, one-time cost or not. But the AI growth is impressive and shows they're on the right track. Hope the management's confidence translates to better quarters ahead without such exceptional charges.
S
Sarah B
The constant currency growth numbers (4.8% YoY) tell a more stable story than the rupee figures. Global IT demand is soft, so maintaining growth and expanding operating margins to 18.6% is a solid operational performance. The market might overreact to the profit headline.
V
Vikram M
This is why you need to read beyond the headlines! Revenue up 13%, margins improved, AI vertical booming. The profit dip is a technicality. HCLTech remains a strong pillar of Indian IT. Jai Ho!
K
Karthik V
Respectfully, while the AI growth is a highlight, we must ask if such one-time provisions could have been anticipated and managed better to avoid a double-digit profit decline. Transparency is good, but strategic financial planning is key for a company of this size.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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