The Hindu Business Line : HCL Tech net income doubles; final pay-out at Rs 4

Mr Saurav Adhikari, V-P (Corporate strategy), HCL Technologies and Mr S. L. Narayanan, V-P (Finance), at a press conference in the Capital on Wednesday. -- Kamal Narang

New Delhi , Sept. 15

HCL Technologies today registered a decline in net profit for quarter ended June 2004 at Rs 57.7 crore as compared to Rs 101 crore during the year-ago period, as per Indian GAAP.

However, according to the consolidated income statement as per the US GAAP, the company has recorded a 194 per cent rise in its net income at Rs 791.4 crore in 2003-04 from Rs 269.4 crore in the previous year.

Its gross revenues also rose 35 per cent to Rs 2613.5 crore during 2003-04 from Rs 1930.7 crore in the previous year.

For the fourth quarter ended June 2004, the consolidated net income stood at about Rs 208.8 crore from Rs 125.8 crore in the preceding quarter (Q3).

The Indian GAAP figures relate to the Indian standalone listed entity, while the US GAAP numbers captures the performance of HCL Technologies along with its subsidiaries and three businesses - business process outsourcing (BPO), infrastructure and software.

Elaborating on the fourth quarter update in various business categories, Mr S.L. Narayanan, Corporate Vice-President ( Finance), HCL Technologies, said that the revenues from software services recorded an 11.9 per cent sequential growth.

HCLT's BPO revenues registered a quarter-on-quarter (QoQ) growth of 21.4 per cent. EBITDA for the business grew by 78 per cent. EBITDA margins in BPO expanded from 0.1 per cent in the first quarter of 2003-04 to 19.2 per cent in the current quarter.

Meanwhile, the infrastructure services business recorded a QoQ growth of 6.2 per cent in revenues. The EBITDA margins in this business have almost doubled during the quarter.

The company's `Government practice' business has seen a sequential increase of 75.7 per cent in revenues. A sharp increase in revenues has led to a virtual doubling of EBITDA margins.

The board has recommended a final dividend of 200 per cent at Rs 4 per share for the year ended June 30, 2004, even as the company hinted that it could be `liberal' with the dividend pay-out ratio going forward.

"With the business stabilising and revenues going up, we could be liberal with the pay-out ratio," Mr Narayanan said.

During each of the previous three quarters of the current financial year, the company declared interim dividends of Rs 2 per quarter.

The company currently has Rs 2,100-crore cash reserve. Mr Narayanan said :If there are any compelling opportunities we would like to keep strategic cash reserves of $300-350 million. However, as of now we do not have any acquisition opportunity on table."

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