HCL Technologies’ net profit rose 9.8% year-on-year to ₹3,832 crore for the quarter ended September compared to ₹3,489 crore in the same quarter last fiscal.

The Noida-headquartered IT company’s consolidated revenue grew 8% year-on-year to ₹26,672 crore as against ₹24,686 crore in the year-ago period.

EBIT margins increased to 18.5% in the second quarter, an increase of 50 basis points year over year and 154 basis points quarter over quarter. The software company expects an operating margin within the stated forecast of 18-19% for the current financial year.

“One of the big highlights of the quarter is our operating margins. We recorded an operating margin of 18.5%. This margin improvement is primarily due to improving the efficiency of our managed services engagement through automation and AI capabilities,” said C Vijayakumar, Managing Director and CEO, HCLTech at the company’s earnings call.

For FY24, HCLTech has given a forecast of 5-6% on a constant currency basis. This includes income from the recent acquisition of the German automotive engineering service provider ASAP. “The environment is quite volatile. So it is quite difficult to take a decision from a long-term perspective,” says Vijayakumar.

The total contract value of new contract wins was $4 billion, up 154% quarter-over-quarter and 67% year-over-year.

“The first half of fiscal 2024 was weak. We expect a very strong second half. Discretionary spending is still very weak “It will convert into revenue. Following a large acquisition, we will deliver solid growth in the third and fourth quarters,” says Vijayakumar. In August, HCLTech signed a $2.1 billion deal with Verizon Business to provide managed network services to its global enterprise customers.

The IT company significantly reduced its dependence on subcontractors. “We also controlled some of the discretionary spend on travel during the quarter, which resulted in exceptional margin performance,” says Vijayakumar.

The attrition rate continues to decline to 14.2% in the second quarter of fiscal 2024, compared to 23.8% in the same quarter last year. The company’s workforce stood at 2,21,139, a decline of 2,299 employees. “Each quarter we adjust our headcount based on a number of factors. Demand is one part of it and attrition is another important part of it,” says Ramachandran Sundararajan, chief people officer, HCLTech.

On the salary revision, Sundararajan said 90% of the employees will get a salary hike this year. “Last quarter we made two decisions. We have said that our middle and senior managers will skip the salary revision cycle this year. The second decision we made is that we will review it for the rest of our colleagues this quarter. We will leave.” “We pushed forward wage reform for 90% of our employees,” he says.

The company has declared an interim dividend of ₹12 per share for the second quarter.