HCL Technologies (HCLTECH) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue reached $3,445 million (₹28,862 crore), up 1.6% QoQ and 6.2% YoY in constant currency, with EBIT margin improving to 18.6%.

• Strong sequential and year-on-year growth driven by AI and GenAI offerings, strategic partnerships with AWS, Google Cloud, Microsoft, and robust pipeline in SAP and engineering services.

• Digital revenue grew 7.8% YoY CC, now 38.5% of services; HCLSoftware revenue up 9.4% YoY CC.

• TCV of new deal wins at $2.2 billion, with 20 deals won in Q2 and strong pipeline in Data & AI, Digital Engineering, SAP migration, and GenAI.

• Interim dividend of ₹12/share declared, marking 87 consecutive quarters of payout.

Financial highlights

• Total Q2 revenue: $3,445 million (₹28,862 crore), up 1.6% QoQ and 6.2% YoY in constant currency.

• EBIT: $640 million (₹5,362 crore, 18.6% margin), up 149 bps QoQ and 8 bps YoY; Net income: $506 million (₹4,237 crore, 14.7% margin).

• Free cash flow (LTM): $2.39 billion; OCF/Net income conversion: 126%; FCF/NI at 119%.

• DSO improved to 57 days, best in recent years.

• Basic EPS for Q2 FY25 was ₹15.62, up from ₹14.15 in Q2 FY24; LTM EPS at ₹62.02.

Outlook and guidance

• FY25 revenue growth guidance revised to 3.5%-5% YoY in constant currency.

• EBIT margin guidance maintained at 18%-19%.

• Q3 and Q4 ask rate for growth is 0%-2%, with guidance factoring in macroeconomic caution and client-specific impacts.

• No contribution from the HPE CTG acquisition assumed in guidance; any impact will be incremental.