HCL Tech Q2 net profit up marginally at ₹1,920 crore

S. Ronendra Singh New Delhi | Updated on January 19, 2018 Published on January 19, 2016

Anant Gupta, President and CEO



Company hopes for better days ahead, says CEO Anant Gupta

The country's fourth-largest software services exporter, HCL Technologies, on Tuesday reported a marginal growth in consolidated net profit to ₹1,920 crore for the second quarter ended December 31 compared with ₹1,915 crore in the same period of the previous year.

Its consolidated revenue grew 11 per cent year-on-year to ₹10,341 crore during the quarter compared with ₹9,283 crore in October-December 2014, the company said.

The growth in revenue was mostly driven by financial services and manufacturing. The company follows the July-June fiscal year. But, the results were lower than the expectations as per the analysts.

“HCL’s results were lower than expectations. Margins continue to reflect profitability challenges faced by HCL in a bid to sustain high growth. SG&A spends at about 13 per cent do not provide much room for further downsides,” Dipen Shah, Senior Vice-President and Head of Private Client Group Research, Kotak Securities, said.

On the other hand, it may be difficult for HCL to significantly improve the 84.7 per cent employee utilisation rates (including trainees). Number of engineers fell for the second successive quarter, he said.

“We will watch out for the improvement in growth rates in future quarters,” Shah added.

During the last quarter, the company booked business in excess of $1 billion, including eight transformational deals during the quarter and broad–based business wins across service lines and industry verticals were driven by its next–generation offerings – Next-Gen ITO, BEYONDigital and IoT WoRKS, the company said.

“As part of HCL's 21st Century Enterprise blueprint, our investments and focus on BEYONDigital, Next–Gen ITO and IoT WoRKS is enabling us to stay ahead of the curve and achieve a healthy business growth and financial performance,” Anant Gupta, President and Chief Executive Officer, HCL Technologies, said.

Going forward, Gupta said the second half of the year continues to look good in terms of deal, especially re-bids. Citing analyst reports, the company said an estimated $50 billion TCV (total contract value) worth of deals could come up for re-bidding in 2016-17.

Overseas plan

The company is also expanding its presence in China to cater to its clients that have a manufacturing presence in the country, he said.

As of December 31, the company had a headcount of 1,03,696 employees compared with 1,00,240 employees in December 2014. The company's shares closed at ₹838.50 on the BSE on Tuesday, down 0.58 per cent from the previous close.

Published on January 19, 2016
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