HCL Tech logs 32.3% jump in quarterly net
18 Oct 2014 10:41 PM GMT
The Noida-based company had posted net profit of Rs 1,416 crore in the year-ago period. The firm follows July-June as its financial year. Its consolidated revenues grew 9.7 per cent at Rs 8,735 crore in Q1, 2014-15 as against Rs 7,961 crore in the same quarter of the previous fiscal.
However, the company's scrip tanked over 9 per cent to Rs 1,505.55 apiece as the results were below market expectations.
The shares had opened 7.50 per cent lower on the BSE. ‘HCLT's results were below estimates.
Revenues disappointed with a Constant Currency growth of 3.2 per cent. EBIDTA margins also came in slightly below expectations,’ Kotak Securities Head Private Client Group Research Dipen Shah said.
In dollar terms, net profits of the fourth largest IT & ITes firm rose by 36.1 per cent to $307.2 million in Q1, as against $225.6 million in the year- ago period.
Revenues rose by 12.8 per cent to $1.43 billion, as against $1.27 billion in Q1, 2013-14.
‘We have posted another healthy quarter of broad-based growth. We saw revenues from Americas growing 5.7 per cent quarter-on-quarter, while engineering and R&D services grew 8.1 per cent,’ HCL Technologies CEO Anant Gupta told reporters here.
Customer acquisition momentum also continues to be strong with yet another billion dollar quarter, he added. On year-on-year basis, Americas revenues grew 11.1 per cent, while that from Europe was up 20.8 per cent. It said that in the coming quarters, strong growth will continue to come from the two geographies which account for over 80 per cent of the company's turnover.
‘Going forward, our investments will continue in the three strategic markets of IT outsourcing, engineering services outsourcing and the emerging digitalisation space which will enable a continued balanced business portfolio performance for the company,’ Gupta said.
HCL Technologies added 11,631 employees (gross) during the September quarter taking the total headcount to 95,522. The company also gave wage hike to the tune of 2-3 per cent onsite and 5-7 per cent offsite during the quarter, which had a 80 basis points impact.
‘There will be a further impact of about 130 bps in the next quarter as the total impact of the wage hike kicks in,’ HCL Technologies Chief Financial Officer (CFO) Anil Chanana said. It signed 15 transformational engagements with more than $1 billion of Total Contract Value in this quarter.
HCL Technologies has declared an interim dividend of Rs 6 per equity share of Rs 2. ‘HCL Technologis’ performance has exceeded the market expectations. It's showing signs of healthy growth but not industry leading as yet,’ Greyhound Research Chief Analyst and Group CEO Sanchit Vir Gogia said.
The company holds a strong foothold in infrastructure management which has been generating a steady stream of revenue for the company, he added.
Asked about the demand environment, Gupta said the demand continues to be stable. ‘Europe primarily has rebids coming in, while in the Americas, clients are looking at IT outsourcing with digitisation components. There are opportunities in the market and we are aggressively going after them,’ he added.
The company has also increased investment in expanding its sales and marketing team. In terms of verticals, retail and CPG grew at 15.8 per cent, manufacturing at 5.3 per cent and financial services at three per cent.
However, the company's scrip tanked over 9 per cent to Rs 1,505.55 apiece as the results were below market expectations.
The shares had opened 7.50 per cent lower on the BSE. ‘HCLT's results were below estimates.
Revenues disappointed with a Constant Currency growth of 3.2 per cent. EBIDTA margins also came in slightly below expectations,’ Kotak Securities Head Private Client Group Research Dipen Shah said.
In dollar terms, net profits of the fourth largest IT & ITes firm rose by 36.1 per cent to $307.2 million in Q1, as against $225.6 million in the year- ago period.
Revenues rose by 12.8 per cent to $1.43 billion, as against $1.27 billion in Q1, 2013-14.
‘We have posted another healthy quarter of broad-based growth. We saw revenues from Americas growing 5.7 per cent quarter-on-quarter, while engineering and R&D services grew 8.1 per cent,’ HCL Technologies CEO Anant Gupta told reporters here.
Customer acquisition momentum also continues to be strong with yet another billion dollar quarter, he added. On year-on-year basis, Americas revenues grew 11.1 per cent, while that from Europe was up 20.8 per cent. It said that in the coming quarters, strong growth will continue to come from the two geographies which account for over 80 per cent of the company's turnover.
‘Going forward, our investments will continue in the three strategic markets of IT outsourcing, engineering services outsourcing and the emerging digitalisation space which will enable a continued balanced business portfolio performance for the company,’ Gupta said.
HCL Technologies added 11,631 employees (gross) during the September quarter taking the total headcount to 95,522. The company also gave wage hike to the tune of 2-3 per cent onsite and 5-7 per cent offsite during the quarter, which had a 80 basis points impact.
‘There will be a further impact of about 130 bps in the next quarter as the total impact of the wage hike kicks in,’ HCL Technologies Chief Financial Officer (CFO) Anil Chanana said. It signed 15 transformational engagements with more than $1 billion of Total Contract Value in this quarter.
HCL Technologies has declared an interim dividend of Rs 6 per equity share of Rs 2. ‘HCL Technologis’ performance has exceeded the market expectations. It's showing signs of healthy growth but not industry leading as yet,’ Greyhound Research Chief Analyst and Group CEO Sanchit Vir Gogia said.
The company holds a strong foothold in infrastructure management which has been generating a steady stream of revenue for the company, he added.
Asked about the demand environment, Gupta said the demand continues to be stable. ‘Europe primarily has rebids coming in, while in the Americas, clients are looking at IT outsourcing with digitisation components. There are opportunities in the market and we are aggressively going after them,’ he added.
The company has also increased investment in expanding its sales and marketing team. In terms of verticals, retail and CPG grew at 15.8 per cent, manufacturing at 5.3 per cent and financial services at three per cent.
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