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Last Updated : Oct 19, 2015 05:17 PM IST | Source: Moneycontrol.com

HCL Tech Q1 misses forecast; net down 3%, $ revenue up 0.5%

Revenue increased 3.3 percent to Rs 10,097 crore from Rs 9,777 crore and dollar revenue rose 0.5 percent to USD 1,545 million from USD 1,537.5 million during the same period.


Moneycontrol Bureau


HCL Technologies marginally missed analysts' expectations on Monday with first quarter consolidated profit declining 3.2 percent sequentially to Rs 1,726 crore and revenue rising 3.3 percent to Rs 10,097 crore.


Dollar revenue rose half a percent to USD 1,545 million in July-September quarter compared to USD 1,537.5 million in same quarter last year and 1.2 percent in constant currency.

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The IT services provider failed to match expectations (on revenue and profit front only) that were scaled down by analysts immediately after company's profit warning before end of September quarter. It had intimated that revenue growth was likely to be tepid on account of adverse currency impact, client specific issue (provision of USD 20 million) and skewness in revenue growth due to transition timelines for complex engagements particularly in infrastructure services.


According to average of estimates of analysts polled by CNBC-TV18, profit was expected at Rs 1,740 crore on revenue of Rs 10,110 crore and dollar revenue was estimated at USD 1,551.5 million for the quarter.


The company follows July-June as its financial year.


"Investments in BEYONDigital, Next-Gen ITO and IOT offerings is reflected in healthy bookings and deal pipeline and continues to demonstrate ability to incubate blue ocean ideas and build them to be market leaders," Anant Gupta, President & CEO, HCL Technologies said.


HCL Tech has won 10 transformational engagements over USD 1 billion in TCV during the quarter. "We recorded broadbased bookings led by infrastructure and engineering and R&D services with continued momentum from Next-Gen ITO, BEYONDigital and internet of things offerings," the company said in its filing.


It has added one client of more than USD 50 million, three clients of more than USD 30 million and two clients of more than USD 20 million during the quarter.


Operational performance was ahead of estimates despite company's profit warning. EBIT (earnings before interest and tax) grew by 11 percent quarter-on-quarter to Rs 2,076 crore and margin expanded by 36 basis points to 20.56 percent in the quarter gone by. EBIT was estimated at Rs 1,975 crore and margin at 19.5 percent for the quarter.


HCL Tech said Q1 adjusted EBIT margin was at 19.4 percent after considering USD 18 million provisions.


In geographic performance, Europe business reported 5.6 percent growth during the quarter followed by America with 0.7 percent growth but Rest of World business declined 8.4 percent on sequential basis.


Engineering and R&D services growth was highest among segments, up 3.6 percent quarter-on-quarter followed by business services (up 2.4 percent), infrastructure services (up 0.9 percent) and application services (up 0.1 percent).


Attrition in IT services (last twelve months) declined to 16.3 percent during July-September quarter compared to 16.5 percent in June quarter and the same in IT business services business also slipped to 7.1 percent from 7.7 percent quarter-on-quarter.


Blended utilisation also improved during the quarter to 83.6 percent from 83.5 percent in preceding quarter.


The board today has approved scheme of arrangement between company and subsidiary HCL Comnet. As per scheme, India System Integration Business would be transferred to HCL Comnet.


Additionally the board today has announced an appointment of Thomas Sieber as independent director. With addition of Sieber, total board strength of the company increased to 10 directors, including 7 independent directors.


The software services provider has declared an interim dividend of Rs 5 per share for the year 2015-16.


At 09:42 hours IST, the scrip of HCL Technologies was quoting at Rs 825.40, down Rs 15.95, or 1.90 percent on the Bombay Stock Exchange.



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First Published on Oct 19, 2015 08:37 am
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