Key takeaways from HCL Tech's conference call

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HCL Technologies has announced its first quarter results. The company's net profit was up at Rs 250 crore (Rs 2.5 billion) from Rs 233 crore (Rs 2.33 billion) quarter-on-quarter, QoQ (US GAAP).

Key takeaway's from HCL Tech's brokerage conference call:

- 14% revenues came from new clients

- Acquired 24 clients; Top 20 clients are growing at faster rate than company

- US & Europe share is growing at expense of Asia, augurs well for margins

- Enterprise applications has grown 22% QoQ; Infrastructure management grew at 17% QoQ; Engineering services grew at 11%QoQ

- Teradyne deal was very competitive deal to win

- Bagged 2 large deals in FY07

- In Q4 change in accounting policy from hedge accounting to mark to market led to hit on forex front.

- Have not seen any pressure on billing rates. New deals coming at higher rates. Renegotiations in some cases have seen improvement in billing rates

- Salary hikes of 17% with effect from July 1; Salary hike due from Oct 1  for managers (about 15% of employee base) expect the quantum jump to be similar.

- Stabilised on infrastructure margins, don't expect significant improvement in margins for infrastructure in coming quarters

- 2/3 of BPO revenues from India operations, has higher margins, looking at increase in share of India operations

- Billing rates have improved by 8% in last 4 quarters, not giving optimistic outlook for billing rates

- LPO deal won in BPO, order of few million dollars per year

- Pharma vertical growing at 50% YoY

- Capex in Q1 at $ 21.8mn, targeting $ 100mn capex in FY07

- Multiple service offering is unique to HCL Tech. Trying to learn ropes of cross selling services

- Teradyne is existing customer for IT services; New deal was won through RFP in competition with Top 5

- SG&A level is likely to stabilise at current levels

- There is room for improvement in utilisation.

- Media & Publishing, Pharma and retail verticals expected to grow at higher rate

- Senior level changes in BFSI vertical to get larger share of large deals in BFSI space