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New Delhi, Oct 15 HCL Technologies on Wednesday posted nearly 16 per cent year-on-year rise in its consolidated net income for the first quarter ended September 2008, as rupee’s sharp depreciation against the dollar raised the value of overseas sales.

“Considering the fact that our first quarter sees salary hikes, and given the difficult times in the global market, we seem to have come out reasonably well…the currency changes that we see are, however, extremely worrying,” Mr Shiv Nadar, Chairman of HCL Technologies, said.

HCL met street expectation as its net income for quarter ended September 2008, increased to Rs 356.2 crore. Computed sequentially, the net income growth adds-up to a whopping 152.5 per cent but this was largely because the company’s forex losses had been nearly Rs 300 crore in the April-June quarter (forex loss stood at Rs 97.4 crore in the just-ended quarter).

The company’s sales jumped 39 per cent to Rs 2,369.3 crore with growth coming from key verticals such as life science, telecom services, media publishing and entertainment. “We have seen a volume growth of 1.8 per cent on a sequential basis. The performance is also being driven by bullishness in the Asia Pacific geography, and inking of deals worth $270 million,” its CEO Mr Vineet Nayar said.

While HCL’s EBIT margin dipped 90 basis points sequentially on account of salary hikes and integration of two acquisitions (Liberata and Control Point Solutions), the company had been able to expand its IT services margins by shifting to fixed price and outcome based business models. The company derives over 57 per cent of its revenue from the US, and 27.5 per cent from the financial services, a sector hit most by the US financial crisis.

However, the revenue in dollar terms grew 17.6 per cent year-on-year and a mere 0.1 per cent sequentially. Revenue remained flat compared to the previous quarter due to cross currency headwinds – the dollar appreciated against currencies such as euro and pound.

More Stories on : Financial Performance | Software | HCL Technologies Ltd

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