HCL Technologies Q3 net up 7.8%

Our Bureau Noida | Updated on January 12, 2018

India’s fourth largest software exporter has maintained its full year revenue guidance at 10-12 per cent in US dollar terms REUTERS

Extends partnership with IBM; will invest $155 million on additional features

HCL Technologies has reported a better than expected revenue growth due to increased use of automation and plans to hire a higher percentage of locals in an effort to counter the stricter curbs around H1-B visa.

“We will step up our campus hiring efforts,” C Vijayakumar, President and CEO, HCL Tech told reporters.

India’s fourth largest software exporter has maintained its full year dollar revenue guidance at 10-12 per cent in US dollar terms. In the December 2016-ended quarter, HCL Tech posted net profits of ₹2,070 crore, a 2.8 per cent rise when compared to the September-ended quarter.

When compared to December 2015-ended quarter, the rise was 7.8 per cent. Revenues came in at ₹11,814 crore, a 2.6 per cent increase when compared sequentially.

On a year-on-year basis, the increase was 14.2 per cent. Vijayakumar told BusinessLine that its usage of automation in a number of projects is yielding results.

IBM partnership

Further, HCL said that it has extended its partnership with IBM and will invest $155 million to build additional features and functionalities based on business realities and client priorities. It also announced a finance services contract renewal with UBS, its client since 2012. HCL Technologies also announced a dividend of ₹6 per share. Despite this, the stock closed marginally down by 0.93 per cent to ₹849 in the exchanges.

Geography-wise, Europe posted a 6.8 per cent sequential growth and the US was up 1.7 per cent, but revenues from other parts of the world went down by 0.5 per cent, all in constant currency terms. Financial Services posted a 4.5 per cent Q-o-Q growth, partly because of a deal renewal with UBS. “We have a client partner model which is working,” said Rahul Singh, President of HCL Technologies’ Financial Services.

From a vertical perspective, manufacturing posted a 8.3 per cent Q-o-Q growth and Public services posted a 5.6 per cent Q-o-Q growth. According to Karan Puri, Senior Corporate Vice-President (Head Commercial and Consumer Services), HCL as Germany and France have kickstarted a manufacturing revival, which opens up more outsourcing opportunities.

However, the results were spoiled by retail and CPG, which dipped 6.9 per cent Q-o-Q; Life Sciences and Healthcare vertical that dipped 2.9 per cent; Telecom, Media and Publishing, and Entertainment by 3.3 per cent on constant currency basis.

Published on January 24, 2017

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