HCL Technologies Ltd on Tuesday reported a 4.9% sequential increase in its dollar revenue for the October-December quarter, the fastest among the large companies in India’s $167 billion information technology (IT) outsourcing sector.
HCL Tech’s dollar revenue improved sequentially to $2.2 billion in the quarter, while revenue grew 10.8% year-on-year (y-o-y).
In constant currency terms, the company’s revenue rose 5.6% on a sequential basis.
Net profit was at $364 million in the December quarter when compared with $357 million in the September quarter.
However, its operating margin fell 30 basis points from 19.9% to 19.6% in the quarter under consideration, on account of rising wages. One basis point is one-hundredth of a percentage point.
A Bloomberg survey of 29 analysts had forecast revenue of $2.18 billion, or ₹15,514.1 crore, besides profit of $357.54 million, or ₹2,541 crore, for the December quarter.
Noida-based HCL Tech’s performance in the October-December quarter was better than its Bengaluru-based rivals, Infosys Ltd and Wipro Ltd, which reported 2.2% and 1.8% sequential dollar revenue growth, respectively. Mumbai-based Tata Consultancy Services Ltd, which does more business than Infosys and Wipro put together, reported 0.67% growth.
For now, HCL Tech’s growth continues to be driven by higher business from its infrastructure management services unit, besides revenue from its acquisition strategy.
HCL Tech expects its full-year revenue for 2018-19 to grow at the upper-end of its guidance of 9.5-11.5%. Mumbai-based TCS, which does not provide a growth outlook, is expected to grow over 11%, while Infosys expects at-best 9% growth.
Industry body Nasscom expects revenue for the industry to grow between 7% and 9% in constant currency terms.
“I’m very happy with the outstanding performance delivered by us during this quarter," said HCL Technologies chief executive officer C. Vijayakumar.
“For now, we see healthy demand and we don’t see any impact on our client spends from either the continued shutdown in the US or any macroeconomic slowdown."
“HCL Tech delivered impressive revenues growth for the quarter with 5.9% constant currency growth, however, margins perHformance was a tad below estimates," said Sanjeev Hota, an analyst with brokerage Sharekhan Ltd.
The brokerage, however, said it continues to have concerns over the company’s $1.8 billion acquisition of eight software products from IBM, which was announced last month.
On Tuesday, HCL shares rose 1.24% to ₹988.1 on the BSE even as the benchmark Sensex slipped 64 points, or 0.18%, to end the day at 35,592.5 points. HCL Q3 results were announced after market hours.