HCL Tech Q1 net up 63.8%, disappoints on revenue growth

Consolidated revenues of the company grew by 31.2 per cent at Rs 7,961 crore in the July-September quarter this financial year against Rs 6,069 crore in the same quarter of the previous financial year.

HCL Technologies President & CEO Anant Gupta. PHOTO: Reuters HCL Technologies President & CEO Anant Gupta. PHOTO: Reuters
Posting a better-than-expected performance, IT services firm HCL Technologies has reported a 63.8 per cent increase in consolidated net profit for the quarter ended September 30, 2013, aided by a weak rupee and encouraging macro-economic trends.

India's fourth largest software services exporter's net profit rose to Rs 1,416 crore in the first quarter from Rs 864 crore in the year-ago period.

The firm follows July-June as the fiscal year.

Consolidated revenues grew 31.2 per cent to Rs 7,961 crore in the July-September quarter this financial year from Rs 6,069 crore in the same quarter of last financial year.

Commenting on the performance, HCL Technologies Chairman and Chief Strategy Officer Shiv Nadar said: "Against the backdrop of encouraging macro-economic trends, these results cement HCL's position as a company with a strong and differentiated business model."

In dollar terms, net profits rose by 42.8 per cent to $225.6 million in the first quarter of the current fiscal against $158 million in the year-ago period. Revenues rose by 14.1 per cent to $1.27 billion during the review period from $1.11 billion in the corresponding quarter last fiscal.

"HCL continues to strengthen its position in the momentum markets of the industry with Europe crossing a milestone run rate of $1.5 billion reflecting a very healthy 23.6 per cent growth y-o-y," HCL Technologies President and CEO Anant Gupta said.

The year-on-year growth of 42.8 per cent in net income and 14.1 per cent in revenues continues the 8 successive quarter of HCL's story of profitable growth, he added.

"The results reflects our strategy on both the momentum and emerging momentum markets. In momentum market, significant growth in financial services and manufacturing segment and in emerging momentum markets, which are life sciences, healthcare and public services, continue to drive," Gupta said.

"From a deal win perspective, we booked over $1 billion this year. Nine transformational deals, which are a significant mix of integrated deals between applications and infrastructure, driving the growth," he said.

Deal wins were led by manufacturing, financial services, life sciences & healthcare and public services, with the US and Europe continuing to drive wins during the quarter.

However, market analysts said that sequentially a below-expected performance by the Noida-based firm on revenue front compared to rivals, TCS and Infosys, disappointed investors.

Compared to a TCS's sequential revenue growth of 5.4 per cent in US dollar terms and Infosys's 3.8 per cent, HCL's revenues rose by 3.5 per cent quarter-on-quarter.