HCL Technologies(HCL) has outpaced its large-sized peer Infosys on several counts in the latest March quarter.

Larger client additions, higher volume growth, increased utilisation levels are some of the key highlights of HCL's results. Turnaround of its BPO division at the operating level, too augurs well for the company.

During the quarter, HCL's revenues fell marginally (0.6 per cent sequentially) to Rs 5,215.6 crore, while net profit rose 5.2 per cent to Rs 602.5 crore. In dollar terms, revenues grew 2.5 per cent and profits expanded by 8.6 per cent as the company managed to realise an average exchange rate of Rs 49.77. Infosys had a fall in revenues in dollar terms. A tight leash on direct costs as well as lower selling expenses helped HCL's profits.

There were a couple of points of concern though as revenues from financial services and the Americas geography fell.

Key factors healthy

Volumes grew by a robust 2.9 per cent sequentially. Realisations have been stable. On both these counts, HCL has done better than Infosys which witnessed a slippage on both these parameters.

Utilisation too was healthy at 82.5 per cent, among the highest in the industry and reaching TCS' levels. Clearly, client traction seems favourable for the company, further testified by the fact that revenues from its top five customers have grown by 4.5 per cent.

HCL also had healthy large-client additions with one customer each being added in the $100 million and $50 million categories and four in the $30-40 million buckets.

Enterprise applications, which account for over a fifth of HCL revenues have grown five percent, indicating that the company has been able to tap into discretionary spends of clients as well.

Its largest vertical, manufacturing, grew marginally, while telecom, which has been a troubled segment for most IT majors has actually expanded 10 per cent this quarter. This makes the growth all the more balanced for the company.

Its BPO division has after several quarters turned profitable at the operating level, posting sound revenue growth.

Industry Concerns

Revenues from financial services, a key segment, fell three per cent for the company, while that from the Americas geography fell marginally. Infosys too witnessed a decline in these two segments, raising concerns about recovery in the North American market.

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