HCL Technologies Q3 profit rises to Rs2,194 crore, misses estimates
HCL Technologies posted a marginal 0.3% increase quarter-on-quarter in consolidated net profit at Rs2,194 crore for the quarter ending December
New Delhi: Noida-based IT major HCL Technologies Ltd on Thursday posted a marginal 0.3% increase quarter-on-quarter (q-o-q) in consolidated net profit at Rs2,194 crore for the quarter ending December. This translated into 6% year-on-year (y-o-y) growth in net profit. For the same quarter, HCL Tech’s revenues grew 3% q-o-q and 8.4% y-o-y to Rs12,808 crore.
HCL signed 20 transformational deals this quarter across Mode 1–2–3 services, with several of them representing next generation offerings of autonomics and artificial intelligence, digital and analytics, internet of things, cloud native services and cybersecurity.
“We finished last quarter on a strong note, with a growth of 3.3% sequentially and 11.2% year on year in constant currency terms. Our Mode 1–2–3 strategy and success of our client partner program for top accounts, continued to drive industry leading growth. Over 25% of our revenues this quarter came from Mode 2 and Mode 3 services, which strongly validates the success of our next-gen offerings in the market. This was a strong quarter in terms of deal signings where we signed 20 transformational deals across services,” said C. Vijayakumar, president and chief executive officer, HCL Technologies.
In a statement, the company said that revenue grew by 14.1% in constant currency terms in the last 12 months. There was broad-based growth across all revenue segments and this was largely driven by engineering and R&D services at 37.7%, infrastructure services at 11.5% and application services at 7.3%. Vertical growth was led by manufacturing at 23.1%, financial services at 16.8%, retail and consumer packaged goods at 11.2%, public services at 10.1%, and lifesciences and healthcare at 7.6%, according to the company. With respect to markets, Americas, Europe and rest of the world (RoW) grew by 15.6%, 11.1% and 13.4%, respectively.
The IT major expects FY18 revenues to grow between 10.5% and 12.5% in constant currency terms. The revenue guidance 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 31 December 2017 rates.
Nitin Padmanabhan, an analyst with Investec Capital Services, said, “HCLT’s Q3FY18 results currently appear to be a non-event. Revenue growth of 3.1% QoQ (0.8% ahead of expectations) was largely driven by the Engineering & R&D services business which accounted for 95% of incremental revenues. It’s important to understand incremental revenues from new IP acquisitions that could have contributed to this growth. Revenue and EBIT guidance remains unchanged.”
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