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  1. HCL Technologies July-September profit down 5.4% on-quarter

HCL Technologies July-September profit down 5.4% on-quarter

Earnings of HCL Technologies reflects the tepid environment for technology companies.

By: | Updated: October 19, 2015 2:00 PM
HCL Technologies

HCL Technologies posted a standalone net profit of Rs 1,404.63 crore in Q1. (Express photo by Sunil Ghosh)

HCL Technologies Ltd., the country’s fourth-largest software and services company, on Monday said its net profits for the July-September quarter was down 5.4% to $264 million, compared to a quarter earlier, and down 14.2% from a year earlier.

During the fiscal first-quarter (the company follows a July-June fiscal year), its revenue was up 0.5% to $1,545 million from the previous quarter, and 7.7% higher than the same quarter last year, the company said in a statement.

The earnings comes after the Noida-based technology company had warned on September 30 that its revenue growth could be tepid because of a foreign exchange impact, and skewness in revenue growth due to transition time-lines for complex engagements in infrastructure business.

The impact was also because one of its clients in the public services vertical had differences on the programme objectives in its custom application development project, and HCL Technologies had  provided for $20 million during the quarter in its earnings statement.

HCL-tech-review-graph

“During this quarter, revenue to be reported in US dollar would have an adverse impact of 80 basis points on account of sharp depreciation of multiple currencies against the US Dollar,” it had said.

Earnings of HCL Technologies reflects the tepid environment for technology companies. Its larger peer Tata Consultancy Services Ltd., India’s biggest software and services company had last week reported a 3.2% increase in net profit from the previous quarter to $926 million while revenues rose 3% to $4.16 billion. Infosys, the country’s second-biggest software company had also reported a sequential revenue growth of 6.9% in constant currency terms, while it lowered its revenue guidance in dollar terms for FY16.

On Monday, HCL Technologies chief executive Anant Gupta, however, sounded optimistic about future prospects. “We do see a significant pipeline on ITO (Information technology outsourcing) and renew (contracts) markets,” he said and added this is being driven largely by unexplored outsourcing markets such as France, Germany and Switzerland, amongst others.  HCL Technologies order book at end of September is 10% higher, he said.

The company’s sales grew during the quarter because of a “broad-based growth across all revenue segments driven by engineering, and research & development services at 28.1%; business services at 23.4% and infrastructure services at 17.9% on constant currency basis,” the company said.

Among geographies, revenue from America grew 14.4%, followed by Europe which grew 18.7% and revenue from rest of the world increased 10.7%, it said. During the three months through September, HCL Technologies said it won “10 transformational engagements” in excess of $1 billion in total contract value, the company added.

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