HCL Tech logs 16.7% rise in quarterly profit to Rs 2,014 cr

Country’s fourth-largest IT firm HCL Technologies on Friday posted 16.7 per cent jump in net profit for the September quarter and expressed optimism on growth in coming quarters amid “softness” in traditional IT spending. It saw profit growing to Rs 2,014 crore in the said quarter from Rs 1,726 crore a year-ago. Revenues were up 14 per cent at Rs 11,519 crore, as per US GAAP accounting norms. The company maintained its revenue growth guidance for 2016-17 at 12-14 per cent on constant currency basis.

“I do agree that some of the traditional discretionary spends are a little bit soft, but they are being more than offset by disruptive discretionary spends. So, we remain very optimistic about our growth,” Vijayakumar said. Its larger rivals, Tata Consultancy Services and Infosys, posted muted numbers and admitted that they were witnessing softness in the banking and financial services sector and client spending. In constant currency terms, HCL Tech’s revenues were up 12.8 per cent year-on-year. Angel Broking’s V-P Research-IT, Sarabjit Kour Nangra said the results were “more or less in line with expectations”. Reacting to the results, the company’s scrip closed higher by 1.94 per cent at Rs 831.05 on BSE. However, on sequential basis, HCL’s net profit dipped by 1.6 per cent from the April-June quarter impacted by wage hikes. In dollar terms, the company’s net profit grew 14.2 per cent to $301.2 million while revenues rose 11.5 per cent to $1.72 billion compared with the year-ago period. The company has announced a dividend of Rs 6 per share. During the quarter, HCL Technologies added 9,083 people (gross), taking the total headcount to 1,09,795 as on September 30, 2016. Attrition in IT services (last 12-month basis) in the reported quarter stood at 18.6 per cent. HCL signed 12 transformational deals this quarter, across service lines and industry verticals. The company’s cash and cash equivalents stood at Rs 1,242.8 crore at the end of September 30, 2016. It saw broad-based growth across all revenue segments. Revenues from Americas and Europe grew by 17.9 per cent and 7.3 per cent, respectively in constant currency terms.

Growth was driven by infrastructure services that saw revenues rising 30 per cent year-on-year (in constant currency), followed by application services growing 5.6 per cent and engineering and R&D services by 3.3 per cent. Business services revenues, however, declined 11.3 per cent in the said quarter. Vertical growth was led by retail and CPG at 34.2 per cent, followed by public services at 24.1 per cent and lifesciences and healthcare at 14.2 per cent.

Meanwhile, shares of HCL Technologies rose by over 4 per cent after the results announcement. The stock surged 4.1 per cent to Rs 848.70 on BSE. On NSE, it went up by 4 per cent to Rs 848.70.