HCL Infosystems net plunges 83%

IT firm HCL Infosystems on Wednesday reported nearly 83 per cent decline in net profit to Rs 11.48 crore for the quarter ended June 30, 2011.

The company had a net profit of Rs 67.23 crore for the same period last year, HCL Infosystems said in a statement.

Net sales of the company dropped by 18.39 per cent to Rs 2,615.40 crore for the reported quarter, against Rs 3,204.86 crore in the same quarter last year.

"As we had indicated last quarter, systems integration business continued to be severely impacted by slow down in projects and customer decision cycles and that may continue over a few quarters," HCL Infosystems Chief Executive Officer Harsh Chitale said.

Also, considering the current environment, with likelihood that delay in projects may continue for some more time, there could be some additional cost impact on the projects business of the company, he added.

"Hence we are reviewing the possible impact project by project and discussing the same with the customers and the vendors. We shall finalise this assessment by end of first quarter of FY 2011-12," he said.

For the year ended June 30, 2011, the company's net profit stood at Rs 168.19 crore, down 30.6 per cent from Rs 242.38 crore in the last quarter.

Net sales declined by 5.22 per cent to Rs 11,419.92 crore for FY'11 from Rs 12,049.82 crore in the last fiscal.

"The economy at large has been going through a difficult phase with both enterprises and consumers being cautious in decision making and discretionary spends," HCL Infosystems Founder HCL and Chairman Ajai Chowdhry said.

IT sectors like system integration, IT product and services have been affected in the domestic markets with the slow government project execution and decision process, he added.

The employee strength increased to 7,231 in 2011, from 6,731 in 2010.

The company has recommended final dividend of Rs 2 per share on the fully paid-up equity shares of Rs 2 each for the financial year ended June 30, 2011.

HCL Infosystems has already paid three interim (quarterly) dividends aggregating to Rs six per share during the year.