HCL Technologies Q3 net profit up 3.6% at Rs 1,683 crore

By: | Updated: April 21, 2015 3:01 PM

IT services firm HCL Technologies today reported a 3.6 per cent increase in net profit at Rs 1,683 crore for the quarter ended March 31, 2015.

hcl technologies, hcl technologies q3 results, hcl technologies revenue, hcl technologies profit, hcl technologies ltd, Anant Gupta, Company news, Business newsHCL Technologies Ltd reported a 3.6 percent rise in quarterly net profit on Tuesday, lagging street estimates as margins dropped due to currency volatility. (Reuters)

Country’s fourth largest IT services firm HCL Technologies today reported a 3.6 per cent rise in third quarter’s consolidated net profit at Rs 1,683 crore, while margins were impacted due to currency volatility.

The Noida-based firm, which follows July-June fiscal, had posted a net profit of Rs 1,624 crore in the year-ago period.

The company’s consolidated revenue for the reported quarter rose 11 per cent at Rs 9,267 crore from Rs 8,349 crore in the corresponding period a year ago.

However, on a sequential basis, the net profit of the IT major declined by 12.2 per cent from Rs 1,915 crore in Q2 FY2014-15, while revenue dipped 0.2 per cent from Rs 9,283 crore as its margins dropped on account of currency volatility and a stronger US dollar.

Reacting to the performance, shares of HCL Technologies tanked nearly 10 per cent as the earnings came in below market expectations. The scrip plunged 9.64 per cent to Rs 834.10 at the BSE and slipped 9.65 per cent to Rs 835.10 on the NSE.

At 1248 hours, the stock was trading at Rs 889, down 3.7 per cent on the BSE.

During the quarter, HCL Technologies reported a foreign exchange loss of Rs 142 crore as against a forex gain of Rs 15 crore in the previous quarter, which also adversely impacted the net profit. The currency impact on the revenues was about 270 basis points or 2.7 per cent.

It also invested on setting up co-innovation labs to focus on “growth, differentiation and competitive edge”.

“HCL continues to deliver broad-based growth across geographies, verticals and horizontals. This quarter saw our revenue increase by 14.4 per cent (last 12 months year-on-year) in constant currency.

“We had transformational deal bookings in excess of USD 1 billion,” HCL Technologies President and CEO Anant Gupta said.

These engagements were primarily driven from industries like consumer services, manufacturing and public services and the European region, he added.

“We have seen our margins to be in the 21-22 per cent range and we have delivered on those lines. We expect it to continue on similar lines,” Gupta said.

The company has announced a dividend of Rs 4 per equity share. Its cash and cash equivalents stood at Rs 838 crore at the end of March 31, 2015.

“Operating margin metrics and enhanced working capital requirements have impacted our cash flows and are an outcome of our focused investment agenda for enhancing capability build up and delivery dynamics of large engagements,” HCL Technologies CFO Anil Chanana said.

During the quarter, HCL Technologies added 11,041 people (gross) and 3,944 (net), taking its total headcount to 1,04,184 as on March 31, 2015.

HCL has signed 14 transformational engagements during this quarter adding up to more than USD 1 billion of total contract value, led by consumer services, manufacturing and public services verticals.

In US dollar terms, HCL Technologies’ net profit grew 2.3 per cent to USD 270 million, while revenue rose 9.5 per cent to USD 1.49 billion in Q3 of FY 2014-15 from the year-ago period.

Revenues from Americas, Europe and Rest of the World (ROW) grew by 13.6 per cent, 22 per cent and 6.9 per cent, respectively, on year-on-year basis.

Revenue from Business services grew by 34.6 per cent, engineering and R&D services 32.4 per cent, infrastructure services 16.1 per cent and application services 6.9 per cent.

The vertical growth was led by telecommunications, media, publishing and entertainment at 23.5 per cent, followed by lifesciences and healthcare at 21.1 per cent and public services at 16.6 per cent.

Financial services grew at 15.4 per cent, while retail and CPG and manufacturing grew by 14.8 per cent and 14.4 per cent, respectively.

Talking about growth, Gupta said the next generation IT outsourcing and digitalisation offers tremendous opportunities of growth and the deal pipeline ahead looks larger than last year.

“We also continued to make significant investments in expanding our global footprint, opening several new onsite facilities and co-innovation labs to facilitate exponential advantage in key emerging growth areas like enterprise digitalisation and engineering services,” he added.

He said that six such centres will be set up in the next few quarters (apart from existing ones in Bangalore and London) specialising in different industry verticals.

hcl technologies, hcl technologies q3 results, hcl technologies revenue, hcl technologies profit, hcl technologies ltd, Anant Gupta, Company news, Business newsRead full report here: HCL Technologies Q3 FY2015 results

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