India’s third-largest IT services provider, HCL Tech reported a 32% increase in the net profit for Q1, FY21 quarter  at Rs 2,925 crore on the back of 11 deal wins, healthy cash reserves and a strong clients pipeline. HCL, CEO, C. Vijayakumar said that the 11 transformational deals that the company signed during the turbulent quarter when the world is reeling under COVID pandemic helped it sail through the crisis.

Noida headquartered tech firm has also provided revenue guidance for FY21 in the range of 1.5-2.5% revenue growth ( QoQ) basis and Operating Margin for FY21 in the range of 19.5-20.5%. The revenue for the quarter declined by 4%, at Rs 17,841crore  on a QoQ basis, in line with the street estimates. 96% of the employees of the company still continue to work from home.

Meanwhile, the Chairman, HCL Tech, Shiv Nadar has stepped down from his position and will continue to work as the Managing Director of the company with the designation of Chief Strategy Officer, Vijayakumar said. He added that Nadar will be replaced by his daughter, Roshni Nadar Malhotra as the Chairperson of the Board of Directors and the company from June 17, 2020 onwards.

Vijayakumar said that despite the pandemic, the deals pipeline by the end of June quarter was 40% stronger than a quarter ago. “. I am happy to report that the resilience of our operating model helped us deliver stellar operating margins and cashflows. We had healthy bookings enabled by 11 new transformational deal wins. We also renewed several large deals during the quarter,” he added.

The company’s net cash reserves stood at $1.33 billion excluding the $812 million payout for acquisitions. Q1, FY21 accounted for more than half ($757 million) of the total cash flow ($1.48 billion). The company has also announced a dividend share of Rs 2 per share, this being the 70th consecutive quarter of dividend pay-out.The company said that its IT services attrition declined by 270 basis points to 11.7% in Q1, FY21.

“Our proactive efforts ensured that EBIT margins came in at 20.5%, exceeding the last 3 quarters average and was 340 bps higher YoY. EBITDA margin, the closest surrogate to cash generation, came in at a very healthy 25.6%. We generated Operating Cash Flow (OCF) of $819 mn and Free Cash Flow (FCF) of $757 million, being 212% and 196% respectively of Net Income; FCF came in more than double the quarterly average last financial year. Consequently, we closed the quarter with Gross Cash of $1.95 bn and Net Cash of $1.33 billion.”, Prateek Aggarwal, CFO, HCL Technologies Ltd said.