HCL Infosystems Ltd, a major ICT system integrator and distribution company, announced a 23% drop in net profits for the quarter ending June 2008 compared to the same quarter in 2007 on Tuesday. The company?s net profit for the financial year 2007-08 also recorded a drop of 5% as compared to the previous financial year. According to company officials, lower margins on the systems integration (SI) business, slowdown in the consumer business and forex loss due to fluctuations in currency account for the dip.
For the quarter ending June 2008, the company?s net profit stood at Rs 651.3 million compared to Rs 849 million year-on-year, a decrease of 23%. HCL recorded revenues of Rs 31.55 billion for the quarter compared to Rs 31.08 billion in the same quarter last year.
?The SI business has been a bit lumpy as profits have still not started flowing in on the projects bagged during the period. As revenue from this business is huge, the impact is also significant,? said Sandeep Kanwar, CFO, HCL Infosytems. A good 15-20% of the consumer market is finance based, which has dried up lately. Overall, the inflationary pressures and economic turmoil have also added to the compressed margins, noted Kanwar. He added that there has also been an unrealised loss due to fluctuations in currency rates.
Growth in telecommunications and automation segment, which contributes close to 70% to the company?s revenues, has also remained largely flat. For the year ended June 2008, HCL?s net profit stood at Rs 3 billion compared to Rs 3.16 billion last year. The company?s revenues for the year were at Rs 126.05 billion compared to Rs 118.55 billion in the financial year ending June 2007.
