Makes net profit of $214 million.
By R. Chandrasekaran
CHENNAI: India’s fourth biggest software company, HCL Technology, has joined the other three big companies to deliver better than expected quarterly numbers for the recently concluded June quarter. The results and its comments could well suggest that better fortunes are ahead for the IT sector especially with the Indian currency showing more weakness.
Though a section of investors could feel that it may be premature to think that the IT sector is on the revival path, the fact is that all the four big IT software solutions provider see a strong momentum, though Infosys’ CEO preferred to play it safe by citing challenging environment.
HCL Technology’s fourth quarter net profit was $214 million on revenues of $1.23 billion, which is above analysts’ expectations of $179 million profit on $1.14 billion revenues. In terms of rupee, the company’s profit surged 41.6 percent on the back of a 17.3 percent growth in top line.
Sequentially, revenues rose 3.1 percent during the June quarter. This is better than Infosys’ 2.7 percent growth, but weaker than the leader Tata Consultancy Services’ (TCS) 4.1 percent.
HCL Tech’s growth came in primarily from its infra management sectors, whereas the core sector’s growth is subdued. However, there is a concern over the sequential fall in revenue from its enterprise application. The company clarified this point to state that big clients’ order during the June quarter will ensure a growth in the enterprise application services too.
The company disclosed that its board resolved to hike foreign institutional investments to 49 percent from the current 30 percent inviting more participation from the overseas institutions.
Commenting on the results and outlook, HCL Tech’s president and CEO Anant Gupta said that it sees continued strength in rebid market until 2015 since clients want more transformational deals including discretionary and non-discretionary spending. He added, “The momentum in the US and the Europe market is very strong and we will continue to focus on these geographies.â€
The company’s results indicate that it has delivered revenue growth that is more than what the National Association of Software Service Companies’ (NASSCOM) projection of 12 – 14 percent. TCS was the other company to have indicated that it will exceed NASSCOM’s target.
To contact the author, email to rchandrasekaran@americanbazaaronline.com