HCL Tech net up 9.7% sequentially

HCL Tech’s net profit at $177 million was up 59.1% year-on-year and 9.7% sequentially, thereby joining TCS and Infosys Technologies in signalling a rebound in the industry. Earlier this month, both firms surprised the Street by giving higher-than-expected revenue guidance though Infosys’ margins shrank.

HCL on Thursday announced the elevation of Anant Gupta (current COO and head of infrastructure business) as the president and CEO, taking over from Vineet Nayar who will continue as the vice-chairman and joint MD till July 2013 and as vice-chairman thereafter.

HCL won deals worth $1billion in this quarter, including 12 multi-year, multi-million dollar contracts, and recorded a 3% sequential growth in volumes even as it reduced the headcount.

“We have identified HCL as one of the bigger beneficiaries of regulatory IT spending as they expand their penetration in BFSI. Ebit margin expanded by 40 bp q-o-q despite the impact of wage hikes and higher SG&A, reaffirming our view that HCL has started to reap in benefits of operational leverage due to ramp-up of large deals last year, which underscores their execution capabilities,” said a statement from Goldman Sachs.