New Delhi/ Mumbai: HCL Technologies Ltd, the computer-services provider controlled by billionaire Shiv Nadar, reported less-than-expected first quarter profit after the rupee’s gains and wage increases crimped earnings.
Net income in the three months ended 30 September rose 23% to Rs308 crore, or Rs18.1 a share, from Rs250 crore, or Rs14.8, a year earlier, the Noida-based company said in a statement on Tuesday. The earnings missed the median estimate of Rs337 crore in a survey of six analysts.
Vineet Nayar, who has been promoted to the post of chief executive officer, speaks at the earnings conference in New Delhi.
The exporter reduced its dependence on the US, the world’s largest market for computer services, to 54% from 60% a year ago as the rupee, Asia’s best-performing currency in the past two quarters, reduced the value of earnings repatriated from the US. HCL also boosted wages for employees in India by 12% to 15% during the quarter.
Revenue in the three months climbed 24% to Rs1,710 crore from Rs1,380 crore, under US accounting rules, HCL said.
The exporter promoted president Vineet Nayar to the post of chief executive officer effective Tuesday, and said Nadar would remain chairman and chief strategy officer.
HCL Technologies fell 3.3% to Rs302.50 at the close of trading on the Bombay Stock Exchange. The earnings were announced after trading ended. The shares have declined 6.7% this year, compared with a 38% increase in India’s benchmark Sensex.
Earnings before interest, taxes, depreciation and amortization as a percentage of sales, a measure of profitability, narrowed to 21.3% from 21.7% a year ago, the company said in a statement.
The margin was expected to shrink to 20.3% due to the rise in salaries and the rupee’s gains, Sandeep Shah, an analyst at ICICI Securities, said in a note to clients before the results were reported.
HCL Technologies added 19 new clients during the quarter, and won an order worth more than $250 million, it said on Tuesday. Other new contracts included a “multi year, multimillion-dollar” order from Hercules Inc., a manufacturer of chemicals used in making paper.