In the first quarter of the year, HCL Technologies net profit has risen 2.4% but the operating margins came under high pressure because costs, mainly manpower-related, went up significantly. For the ongoing fiscal year, India's third-largest software company kept revenue growth of 12-14 % and an operating margin of 18-20%. The management of the company warned about the impact of the recession in the United States.
Revenue increased 3.8%, while net profit decreased 8.6% sequentially due to a higher base from a one-time gain in the quarter ended March 31, 2022. The company's operating margin for the April through June quarter dropped 90 basis points sequentially to 17% as a result of higher travel and labour expenditures and record-high employee churn in the services sector. As a result of the ongoing talent shortage in the IT industry, attrition for the quarter increased to a record 23.8% of the total workforce. A Rs 10 interim dividend was declared by the company's board.
"In some verticals, there will be project completions and some one-time work which will complete, so that it will have some impact on the revenue numbers and growth numbers. we expect to see a good positive trajectory moving forward." C Vijayakumar, managing director of HCL Technologies, said in a statement.
Tata Consultancy Services (TCS) Financial Report
Tata Consultancy Services, the largest IT services provider in India by revenue, underperformed street expectations for the first quarter. On Friday, TCS reported a net profit of Rs 9,478 crore and revenue of Rs 52,758 crore. Its attrition rate increased to 19.7% while operating margins decreased to 23.1% from 25% in the prior quarter due to increased employee costs. On Monday, the performance decreased the price of TCS shares by over 5% and the IT index by 3%. HCL's Vijayakumar also issued a warning about the effects of the US slowdown in remarks to reporters on Tuesday following the announcement of the results.
