HCL Technologies Q2 net profit rises 8.6% to Rs2,188 crore
New Delhi: HCL Technologies Ltd on Wednesday reported an 8.6% increase in net profit for the September quarter, from a year earlier.
Net profit rose 0.8% to Rs2,188 crore in the three months ended September, from Rs2,171 crore in the preceding quarter. Quarterly revenue in constant currency terms rose 0.9% from the preceding three months, and 10.6% from a year earlier.
“Our mature verticals like manufacturing and financial services, which together contribute to 60% of our revenue, grew 21.9% and 14.2% respectively, quarterly y-o-y (year-on-year). Our top 20 customers have grown faster than the company average, reflecting the strong performance of our client partner programme,” said C. Vijayakumar, president and chief executive officer, HCL Technologies.
Revenue growth was driven by manufacturing at 22.3%, financial services at 15.4%, public services at 14.5%, retail and consumer packaged goods at 9.2% and life sciences and healthcare at 7.4%, in constant currency terms. Growth was also driven by engineering and research and development services at 28.2%, infrastructure services at 17% and application services at 6.8%.
The company also reported strong client additions. During the quarter, HCL signed 15 transformational deals. The deal wins were led by the insurance, healthcare, telecommunications, public services, hitech and manufacturing verticals.
HCL also expanded its relationship with IBM to collaboration solutions, including Notes, Domino, Smart Cloud Notes, Verse and Sametime.
With respect to markets, the Americas and Europe grew 1.5% and 4.4% from the preceding June quarter, respectively, while the rest of the world declined by 12%. The management attributed this to a $20 million decline in revenues from India due to completion of business.
In a conference call with reporters, Vijayakumar said that growth was broad-based across all service lines and the so-called Mode 2 services that include digital, analytics, IoT (internet of things), cloud and cybersecurity were delivering strong growth and have created a robust pipeline.
The IT major expects FY18 revenue to grow between 10.5% and 12.5% in constant currency terms. The forecast is based on FY17 (April to March) average exchange rates.
The above constant currency guidance translates to 12.1% to 14.1% in dollar terms based on 30 September rates.
Nitin Padmanabhan, an analyst with Investec Capital Services, said that HCL Tech’s earnings were below expectations. “The results are negative from a stock perspective unless the management is able to justify a stronger QoQ trajectory for H2FY18.”
Shares of HCL Technologies fell 0.71% to Rs 907 on BSE, while the exchange’s benchmark Sensex gained 1.33% to 33,042.50 points.
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