HCL revenues may take a hit in Q2 on stronger $

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Bengaluru | December 24, 2014 12:38 AM

Adverse impact of about 210 basis points on strengthening US dollar

HCL Technologies, the country’s fourth-largest IT services exporter, on Tuesday sounded a word of caution about its October to December quarterly results, saying the company’s revenues in this period may take a 210 basis points hit due to strengthening of the US dollar against global currencies like the British pound, Euro and the Australian dollar. The HCL scrip slumped 3.20% to R1,536.10 on the BSE.

HCL also said its treasury income is likely to decrease by 5% in the December quarter from $33.4 million in the September quarter. Besides, HCL Technologies had recorded a capital gain of $25.2 million from property sale in the last quarter, which was a one off event and would not figure in the December quarter results.

However, the company expects a foreign exchange gain of $2 million this quarter. “At the beginning of the quarter, the company had estimated a foreign exchange loss of $2.5 million on account of cash flow hedges based on exchange rates prevailing as on September 2014 end. However, taking into account the exchange rate as on December 18, 2014, the company now expects to post a foreign exchange gain of $2 million covering the impact of both cash flow hedges and mark-to-market of the foreign currency assets and liabilities,” the company said in a statement.

In the quarter ended September 30, HCL had posted a sequential growth of 1.9 % in US dollar terms, after taking into account the adverse impact of 130 basis points on account of movement in various currencies. The company had also delivered a constant currency growth of 3.2%
The company expects effective tax rate to be in the guided range of 21% to 22%, the statement said.

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