HCL Technologies Rewards Shareholders with ₹12 Dividend as Q3 Profit Rises

HCL Technologies Rewards Shareholders with ₹12 Dividend as Q3 Profit Rises

HCL Technologies, the Indian IT major, cheered investors with a strong third-quarter performance and a generous interim dividend of ₹12 per share. The company reported a 13.5% quarter-on-quarter (QoQ) surge in net profit to ₹4,350 crore, beating market expectations and demonstrating resilience amid global economic uncertainties.

Updates on HCL Tech’s Q3 results

“For the Financial Year 2023–2024, the Board of Directors has declared an Interim Dividend of Rs. 12/-per equity share of Rs. 2/-each of the Company.” The Board of Directors has confirmed that the record date of January 20, 2024, has been set for the payment of the previously mentioned interim dividend. The business stated in its stock filing that the interim dividend would be paid on January 31, 2024.

Comparing ₹4,350 crore in Q3 FY24 to ₹3,832 crore in Q2FY24, the third-largest IT services company in India posted a significant 13.5% growth in its consolidated net profit attributable to shareholders. In addition, the company’s quarterly sales showed a strong 6.65% QoQ rise, surpassing market estimates to reach ₹28,446 crore.

HCL Tech’s profit after tax (PAT) for the October–December quarter of the current fiscal year exceeded expectations, coming in at a healthy ₹4,350 crore, above the projected 11% increase. Consolidated revenue from operations increased 6.5% YoY to ₹26,700 crore in Q3FY23, while the company’s consolidated net profit increased 6.2% YoY from ₹4,096 crore in the same time the previous year.

HCL Tech’s sales increased by 4.3% annually and 6% sequentially in Constant Currency (CC) terms to $3,415 million. The operating margin increased by 140 basis points on a QoQ basis, to ₹5,615 crore, a significant 19.8% increase. Additionally, net income increased significantly, rising 7.4% YoY and 13.8% QoQ to ₹4,350 crore.

Profit Soars, Revenue Grows Steadily:

The Q3 performance was driven by sustained demand for the company’s digital transformation and cloud computing services. Consolidated revenue from operations climbed 6.65% QoQ to ₹28,446 crore, reflecting healthy business momentum. Key verticals like engineering and R&D services, products and platforms, and financial services witnessed robust growth.

Dividend Bonanza for Shareholders:

The board of directors announced a hefty interim dividend of ₹12 per share, marking a significant increase from the previous quarter’s payout. This translates to a dividend yield of nearly 8%, making HCL Tech one of the most attractive dividend-paying stocks in the IT sector. The move underscores the company’s strong financial position and its commitment to rewarding shareholders.

Growth Guidance Raised:

Confident about its future prospects, HCL Tech revised its revenue growth guidance for the full financial year FY24 upwards. The company now expects revenue to grow in the range of 13.5% to 14.5%, compared to the earlier guidance of 12% to 14%. This upward revision reflects optimism about the ongoing demand for its services and the potential for additional market share gains.

Outlook Remains Positive:

Analysts praise HCL Tech’s Q3 performance and remain optimistic about the company’s future prospects. The strong focus on digital transformation, cloud migration, and automation positions HCL Tech well to capitalize on the rapidly evolving IT landscape. Additionally, the company’s global delivery model and diverse client base provide it with a competitive edge.

Challenges Remain:

However, certain headwinds need to be monitored. Ongoing geopolitical tensions and potential macroeconomic slowdowns could dampen IT spending in certain sectors. Additionally, rising talent costs and wage pressures could impact margins.

Overall, HCL Tech’s Q3 performance and dividend announcement provide positive signals for investors. The company’s strong fundamentals, robust growth outlook, and attractive dividend yield make it a compelling investment proposition in the Indian IT sector.

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