The Hindu Business Line : HCL Tech net income up 72% in March quarter

New Delhi April 17 HCL Technologies on Tuesday reported a 72-per cent jump in its net income to Rs 331.8 crore for the quarter ended March 2007. The company's revenues stood at Rs 1,577 crore during the same period, recording a 40.6 per cent increase compared with the same quarter last year.

"Among the key growth drivers have been markets such as Europe which grew at 69.2 per cent and Australia, New Zealand that registered 83.2 per cent growth year-on-year. Among the different services, infrastructure services witnessed accelerated growth and life sciences and retail sector were the verticals that recorded fastest growth," said Mr Vineet Nayar, President, HCL Technologies.

Highest Growth

Infrastructure services grew at 71.3 per cent, followed by enterprise application services, at 51.9 per cent and engineering and research and development services at 42.6 per cent year-on-year. During the fiscal, among the different verticals, life sciences recorded the highest growth at 96.6 per cent, against retail business that recorded a growth of 79.3 per cent with financial services at 65.7 per cent.

In dollar terms, HCL Technologies' net income rose to $76.2 million, 76.3 per cent up from $43.2 million made during the same period last fiscal. The company's revenues stood at $362.4 million, recording a 44.1 per cent increase from $251.5 million reported for the same quarter last year.

Rupee concerns

Commenting on the impact of the depreciating dollar, Mr Anil Chanana, Executive Vice-President, Finance, said: "We have forex reserves worth $900 million which will cover us for the next one year." However, Mr Nayar said that the rise of the rupee was a concern.

"For every 1 per cent appreciation of the rupee against the dollar, our EBITDA (earnings before interest, tax, depreciation and amortisation) margins will be impacted by 35 basis points. However, we will build operational efficiencies to be able to subside its impact," said Mr Nayar.

Attrition down

He also added that the company's attrition rate had gone down marginally, by about 2 per cent from 19.3 per cent for IT services and by 19 per cent, from an earlier 19.5 per cent for the BPO segment.

Mr Nayar said that he expected the wage inflation to be at 10-15 per cent for the next fiscal for Indian employees and 3-5 per cent for its global employees.

At present, HCL has three SEZs operational in Noida, Chennai and Bangalore with a capacity of 43,500 seats.

The company plans to increase capacity by another 900 seats.

HCL shares fell 2.2 per cent to Rs 301.90 from a previous close of Rs 308.75 at the BSE.