HCL Technologies Case Study: Financials, KPIs, And SWOT Analysis

Did you know there is an Indian listed company which is in the list of 2025 World’s Most Ethical Companies?

We are talking about HCL Technologies Limited, an Indian multinational technology company headquartered in Noida, India, and established by Shiv Nadar in 1991. In this blog, we will cover the company’s overview, market data, financials, balance sheet, and SWOT analysis.

HCL Technologies is a pioneer company in IT services, powered by a global and diverse team of 224,700+ employees across the globe, providing services in 60+ countries. This company comes under the HCL Enterprise.

Further, as of April 2024, HCL Tech has 210+ delivery centres and 60+ innovation labs. The company has cumulatively served more than 10,000 clients.

There are three main business units:

1. Products & Platforms (P&P)

2. IT and Business Services (ITBS)

3. Engineering and R&D Services (ER&D)

Formerly	Hindustan Computers Private Limited
Company	Public
Founder	Shiv Nadar
Headquarters	Noida, Uttar Pradesh, India
Area served	Worldwide
Parent Company	HCL Group

HCL Technologies Business Model

HCL provides a broad array of business lines, products, and services. The company engages in different segments:

Application Services

The company provides the services industrialized delivery model sets and brings exceptional value to its customers. It includes:

•  Oracle Services
•  Quality Assurance & Testing Services
•  SAP Services
•  Microsoft Services.

Business Process Services

HCL understands the business priorities and is helping organizations transition from operational excellence.

• Automated Product Support
• Cognitive Automation
• Finance & Accounting
• Supply Chain Management
• Digital and Content

Engineering & R&D Services

HCL partners with a majority of the global top research and development corporations. The services offered in this segment are:

•  Mechanical Engineering
•  Experience in Design and Engineering (EDGE)
•  VLSI Design Services
•  Product Lifecycle Management
•  Product Testing and Verification
•  DevOps
• Systems & Hardware Engineering
•  Embedded Engineering
•  Digital Engineering
•  Software Engineering

IT Infrastructure Management Services

•  Cloud-Native Services
•  Cyber Security Services & GRC Services
•  Service Integration & Management
•  Application Operations
• Next-Generation Data Center Services
•  Digital Workplace services
•  Next Generation Network Services

DRYiCE

HCL Technologies is also focusing on establishing AI-powered products and platforms for the digital world. It is simplifying and transforming enterprise IT and business operations. The company enables enterprises to operate in a faster, and cost-efficient manner while ensuring superior business outcomes.

Key Performance Indicators (As of April 2024)

Market Cap	₹ 4,00,890 Cr.
Stock P/E	25.7
ROCE	28.3 %
Current Price	₹ 1,477
Book Value	₹ 242
ROE	23.0 %
Dividend Yield	3.52 %

Financial Statement Analysis

Let’s analyse the financial statement, key ratios and peer analysis of HCL Tech.

Income Statement

Particulars (INR Cr)	Mar-23	Mar-22	Mar-21	Mar-20
Operating Revenue	1,01,456	85,651	75,379	70,676
Operating Expenditure	78,832	65,125	55,354	53,390
Profit before Tax	19,488	16,951	15,853	13,980
Net Profit	14,851	13,499	11,145	11,057

Balance Sheet

Particulars (INR Cr)	Mar-23	Mar-22	Mar-21	Mar-20
Non-Current Liabilities	5,330	7,076	7,548	5,438
Current Liabilities	21,431	18,775	17,383	23,730
Non-Current Assets	38,582	39,816	41,962	42,169
Current Assets	53,577	48,041	43,051	38,420

Cash Flow

Particulars (INR Cr)	Mar-23	Mar-22	Mar-21	Mar-20
Cash From Operating Activities	18,009	16,900	19,618	13,359
Cash Flow from Investing Activities	-3,931	1,477	-5,730	-12,374
Cash from Financing Activities	-15,881	-14,508	-11,192	-3,168

Financials Ratios

Particulars	Mar-23	Mar-22	Mar-21	Mar-20
ROCE (%)	29.71	26.63	27.23	28.42
ROE (%)	23.41	22.22	20.09	23.87
ROA (%)	16.49	15.65	13.49	16.18
EBIT Margin (%)	18.21	18.91	20.45	19.62
Net Margin (%)	14.44	15.59	14.63	15.51
Cash Profit Margin (%)	18.72	20.84	20.93	20.48

Peer Comparison (As of March 2023)

Particulars	HCL Technologies	Tata Consultancy Services	Infosys	Wipro	LTIMindtree
Market Cap (As of April 24 in ₹ Cr)	4,14,675	14,04,759	6,15,657	2,51,434	1,45,139
Revenue (₹ Cr)	1,08,020	2,38,818	1,53,189	90,742	35,315
Net Profit (₹ Cr)	15,696	45,033	24,407	11,350	4,598
Net Margin (%)	14.33	18.51	15.66	12.16	12.82
RoE (%)	23.95	47.70	31.24	15.34	26.52

Read Also: Mahindra & Mahindra Case Study: Products, Financials, KPIs, and SWOT Analysis

HCL Technologies SWOT Analysis

Strengths

• HCL Technologies enjoys a high-grade research team to understand the market and create innovative products.
• The company is the third-largest listed Indian technology service provider in terms of revenue.
• The company has a global presence and offers a diverse set of IT services.

Weakness

• The multinational corporation in IT space such as Wipro, Infosys, and Tata Consultancy have direct competition with HCL Tech, and the company has to maintain the brand value for the upcoming stakes in the future.
• HCL is facing issues in retaining customers because the company is unable to assist in providing cross services to the customers.

Opportunities

• The company can focus on eliminating the overutilization of subcontractors, which will improve the cutting out expenses and eventually improving the profitability.
• The company has a great Research & Development department that can take the business to the next level.
• The company develops end-to-end customer segment strategies, further development in this area will improve in revenue generation.

Threats

• HCL Technology has a global presence and generates a healthy part of the revenue outside India. Any kind of depreciation in domestic currency, i.e., INR can significantly affect the revenue of the company.
• The company engages with high-risk investments and intense competition from its peers such as Wipro, Infosys, TCS, and global players such as Accenture, IBM, and many more.

Read Also: LTIMindtree Case Study: Products, Services, Financials, KPIs, and SWOT Analysis

Conclusion

In summation, HCL Technologies, with its robust research & development capabilities, is a leading IT services company with a global presence and a diverse range of products and services.

The company’s recent growth and cost optimization contribute to its market success, which may further help the company to experience momentum in revenue and market growth in the coming years.

Frequently Asked Questions