Moneycontrol Bureau
Country's fourth largest IT services exporter HCL Technologies started off the financial year 2016-17 on a strong note with April-June quarter earnings beating analysts' expectations on all parameters. Profit and revenue increased by 6.3 percent and 6 percent to Rs 2,047 crore and revenue at Rs 11,336 crore on sequential basis, respectively.
"Growth momentum is broad–based, encompassing all sectors and service lines, propelled by robust 21 Century Enterprise strategy and robust business model”, Anant Gupta, President & CEO, HCL Technologies in a release said.
Profit was estimated at Rs 1,890 crore on revenue of Rs 11,255 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.Dollar revenue for the quarter grew by 6.5 percent to USD 1,691 million on QoQ basis, which was expected at USD 1,678.5 million, and increased 6 percent in constant currency.
HCL Technologies expects FY17 constant currency revenue growth in the range of 12-14 percent that translates to 11.2-13.2 percent in US dollar terms, and operating margin (EBIT) in range of 19.5-20.5 percent.
While addressing press conference, Gupta said contribution of Volvo was at USD 40 million in Q1, adding FY17 guidance does not include Geometric acquisition. The company acquired external IT business of Volvo Group in February and Geometric in April.
"We have offshore wage hike at 6-8 percent & onshore at 2-3 percent, which will impact margins by 160 basis points spread over Q2 & Q3," he said.
Its FY17 revenue growth guidance is much ahead of industry growth of 10-12 percent predicted by NASSCOM.
Operating profit increased 5 percent quarter-on-quarter to Rs 2,333 crore and margin contracted by 22 basis points at 20.58 percent in June quarter. Analysts had estimated operating profit at Rs 2,195 crore and margin at 19.5 percent for the quarter.
“We have been able to maintain margins led by increased adoption of automation and higher offshoring. Layered hedging policy allowed to manage significant currency volatility this quarter and post exchange gains," Anil Chanana, CFO said.
Source - Company press releaseHCL Technologies signed 13 transformational deals in Q1, across service lines and industry verticals. It has 237 active clients at the end of June 2016, increased from 211 in year-ago period. It added 1 client under USD 50 million category, taking total to 20 while it added 3 clients under USD 40 million category, taking total to 32 and 5 clients under USD 30 million to 48 in June quarter.
"Broad based growth across all revenue segments driven by infrastructure services at 18 percent, engineering and R&D services at 10.4 percent, business services at 10.1 percent, and application services at 4.7 percent (LTM YoY on constant currency basis)," HCL Tech said, adding fixed price and managed services now contributes around 61 percent to the total revenue.
Source - Company press releaseIT services attrition rate increased by 50 basis points to 17.8 percent in the quarter ended June 2016 compared with 17.3 percent in preceding period.
Total headcount was up by 2.9 percent QoQ to 1,07,968 for the quarter with gross addition at 10,515 against 9,280 in March quarter. Blended utilisation improved to 85.8 percent from 85.6 percent on sequential basis.
The IT company has announced interim dividend of Rs 6 per share for the financial year 2016-17.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
