HCL Technologies ended its fiscal year strongly, growing across all its business segments, particular driven by large outsourcing deals in IT infrastructure management and despite a marginal blip in operating margins, continues to be confident about growth in the 2015 fiscal.

Net profits for the June-ended quarter were ₹1,834 crore, a 54 per cent rise when compared on a year-on-year basis. On a sequential basis (QoQ), profits were up 12.9 per cent. HCL, which counts July-June as its fiscal year for the whole year, grew net profit to ₹6,369 crore, a 58 per cent increase over the same period last year when the company had net profit of ₹4,023 crore.

Revenues during the quarter grew from ₹6,980 crore to ₹8,424 crore, a rise of 20.7 per cent. On a sequential basis, revenues grew by a mere 0.9 per cent, which resulted in the market beating the stock down 2.66 per cent to ₹1,554.9, on a day when the Sensex dropped 192 points.

Full-year revenue up 28% For the whole year, revenues grew 27.8 per cent from ₹25,758 crore in the 2013 fiscal to ₹32,917 crore in the 2014 fiscal, thereby signalling another strong year of growth and beating competitors such as Infosys and Wipro.

Analysts were upbeat about the company’s performance. Angel Broking VP-IT research analyst Sarabjit Kour Nangra said the numbers were better than expected on operating profit margins and net profit front, while top-line came in just in line with expectations. Other analysts feel that the market has reacted wrongly to the stock as a quarter does not reflect a trend.

According to Ravi Menon, analyst with Centrum Broking, told BusinessLine that the market has just looked at the growth differential between TCS and HCL this quarter and also looked at how much revenue both have added in the current quarter from infrastructure services and formed a conclusion that TCS will maintain growth greatly superior to HCL Technologies and that its lead in the IT infrastructure services is under threat.

To put in context, the infrastructure business contributed 34 per cent of its revenues, whereas TCS got 30 per cent of its revenues in this business segment and closing in.

The company has decided to focus on a new business area, around governance risk management and compliance in a bid to fuel its growth. “It is an area where corporations around the world are struggling due to increased regulatory requirements where we see growth,” said CEO Anant Gupta.

Operating margins down In the quarter, HCL’s EBIT margins were marginally down from 26.3 per cent to 25.9 per cent after quarters of margin growth, due to the appreciating rupee. On a yearly basis, margins were up 56.2 per cent. The company also declared a dividend of ₹12 a share. The company's employee utilisation at the end of the June quarter was 84.5, which was same as June 2013-ended quarter.