85% employees to get variable pay at HCLTech: Chief People Officer R Sundarajan

IT services exporter HCLTech will be awarding 85 per cent of its employees with variable pay for Q4 FY 2022-23, the company announced in its earnings call on Thursday.

During the quarterly earnings call on Thursday, HCLTech's Chief People Officer (CPO) Ram Sundarajan said that the variable pay for Q4 FY23 will be similar to previous quarters where 85 per cent of the company’s employees will be awarded variable pay.

“Let us start with the variable pay question. I think it's a very top of the mind question for everybody. We are not making any change to our variable pay plans. 85 per cent of our workforce will be in a variable pay plan this quarter,” the CPO said.

The CPO added, "Variable pay is just about five per cent, so it's not a big percentage of employee compensation. So far as the policy is concerned the variable policy pay, there is no change in the policy."

Variable pay is a part of employee compensation which depends on the performance of the company as well as performance of individual employees.

On Thursday, the IT company reported a 10.80 per cent year-on-year (YoY) growth in net profit at Rs 3,983 crore for the March quarter compared with Rs 3,593 crore in the same quarter last year.

Moreover, the company clocked 17.70 per cent YoY rise in net sales at Rs 26,060 crore for the quarter. This is against Rs 22,597 crore sales it reported in the corresponding quarter last year.

Prateek Aggarwal, Chief Financial Officer, HCLTech, after the earnings announcement, noted: "FY'23 concluded with resounding growth of 18.5 per cent in INR and 13.7 per cent in CC, with EBIT at 18.2 per cent. This quarter, we have started publishing a new metric, Annual Recurring Revenue (ARR) for our Software business. It is heartening to note that ARR is at US$ 1Bn+ level, which grew at 5.2 per cent YoY CC (ex. divested business).”

As per exchange filings, the company’s Profit After Tax (PAT) came in at 14,851 crore, up 10 per cent YoY, with Earnings Per Share (EPS) at Rs 54.79. The company also declared a Rs 18 dividend per share for the quarter.

Despite the decent numbers, the company noted that the guidance for the next financial year would be conservative.

HCLTech’s CEO, C Vijaykumar said, “Our pipeline is near an all-time high, which reflects our differentiated business mix and strong client demand for our offerings.”

“All these set us well in FY'24 for a healthy revenue growth in the 6-8% range with Operating Margins in 18-19 per cent range,” he added.

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