HCL Q1 net profit rises 6.1% to Rs2,171crore, shares soar over 4%
New Delhi: Noida-based HCL Technologies Ltd on Thursday reported a 6.6% sequential drop in net profit and 6.1% rise year-on-year (y-o-y) at Rs2,171 crore in the quarter ending June. Revenue for the quarter rose 0.8% quarter-on-quarter to Rs12,149 crore, and was 7.2% higher on y-o-y basis, the company said. Revenue in constant currency terms was up by 2.6% quarter-on-quarter (q-o-q) and 12.2% y-o-y.
“We continue to propel forward on our Mode 1–2–3 growth strategy, delivering a revenue growth of 2.6% QoQ and 12.2% YoY in constant currency terms in Q1’FY18. This quarter, we also expanded our EBIT (earnings before interest and tax) margins from 20% to 20.1%, through continued superior execution in our core business, integration and assimilation of the acquired entities, as well as our IP investments” said C.Vijayakumar, president and chief executive officer, HCL Technologies Ltd.
The last 12 months saw broad-based growth across all revenue segments. The Americas, Europe and rest of the world grew by 15.8%, 10.6% and 11.7%, respectively.
The growth across verticals was driven by financial services at 9.3%, manufacturing at 18.2%, lifesciences and healthcare at 11.8%, public services at 22.5%, retail and consumer goods at 16.0%, and telecommunications, media, publishing and entertainment at 3.4%, in constant currency. The company also reported strong client addition (on y-o-y basis).
This quarter, HCL extended its IP partnership agreement with IBM, marking its expansion into business solutions in the marketing automation area, which complements HCL’s digital and analytics offerings. HCL has invested around $140 million in the extended partnership during this quarter.
The software company also successfully concluded its buyback programme within the quarter. The buyback entailed 3.5 crore equity shares at the price of Rs1,000 per share, the company said. This mirrors a trend followed by other large IT services companies.
The IT major expects FY18 revenues to grow between 10.5% and 12.5% in constant currency terms. This constant currency guidance translates to 11.3-13.3% in dollar terms based on 30 June rates.
“Overall, we are happy with our first quarter FY’18 performance. Accompanied with US dollar revenue growth at 3.7%, we have demonstrated effective margin performance reporting EBIT at 20.1%, within the guidance range. Cash flow generation continues to be robust with net income to operating cash flow conversion at 104% on LTM (last 12 months) basis. The share buyback of Rs3,500 crore was successfully concluded during the quarter, which together with the dividend per share of Rs2 this quarter, is demonstrative of our balanced capital allocation focus,” said Anil Chanana, CFO, HCL Technologies