HCL Tech reported good set numbers for its Engineering and R&D Services (ERS) business in Q1 FY21. Revenues were down by 5.1% at CC to USD 378m. The growth is mostly organic (CS) and only includes an estimated USD 5m in acquired revenues, resulting from the Sankalp acquisition. This positions ERS among the best-performing units this quarter.
HCL Tech’s ERS accelerated its yoy growth in Q2 FY20 to +15.0% at CC, from +13.3%. Its EBIT margin also increased from 16.0% in Q1 to 21.4% in Q2. The financial improvement results from mostly a catch-up effect: ERS recognized revenues in Q2 that it could not in Q1.
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You may have noticed we had not reported HCL Tech’s Q1 FY20 earnings. HCL has changed the way its reports its segments.
HCL Tech, ÅF, and Belcan have announced tuck-in acquisitions in the past week.
HCL Tech has closed the acquisition of several IBM products. The company has now ownership of AppScan, BigFix, Commerce, Connections, Digital Experience (Portal and Content Manager), Notes Domino, and Unica. We assume the price of the transaction has not changed and still is USD 1.8bn.
HCL Tech’s ERS unit posted an excellent growth of +12.1% yoy at CC. The growth positioned ERS as the second fastest ER&D services vendor (among top ten vendors) behind Alten, ahead of Altran. ERS’s growth is, however, slowing from its peak of +47.7% at CC in Q3 FY18.
We are now entering the season for Q1 earnings, and as always we will look into changes in major trends. The state of the automotive industry will be an area we will be closely monitoring.
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We have created an interim ranking of the top ten ER&D service vendors. Several large ER&D
The revenue growth of HCL Tech’s ERS unit continued to be high in Q3 FY19 to 17.4% yoy at CC. Revenues well above the half-billion threshold, to USD 562m, comforting HCL Tech as the third largest ER&D service vendor globally.
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ERDservices is pleased to announce its ranking of the fastest-growing ER&D service vendors in CY 2017.
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We have commented in many aspects the planned acquisition of Aricent by Altran. Obviously, Altran is
HCL Tech reported an amazing 47.7% y/y revenue growth in its Engineering and R&D services (ERS)