HCL Technologies has posted a 52 per cent rise in consolidated net profit for the June quarter at Rs 510 crore, helped by forex gains against hedging losses a year ago.
HCL Technologies – whose results come after a rather lacklustre quarterly showing by rivals, Infosys and Wipro - remained cautious about the macro indicators. At the same time, it added that vendor churn in contracts coming up for renewal and first-time outsourcers in Europe were throwing up opportunities.
Its Vice-Chairman, Mr Vineet Nayar, said he was cautiously optimistic – “cautious because of macro-economic indicators and optimistic because of the way customers are responding to challenges (by opting to increasingly outsource)”.
HCL Tech further expects October-December to be a strong quarter for the industry in deal signing, courtesy vendor churns and finalisation of client budgets for next fiscal.
The company's shares, however, closed 2.32 per cent lower on the BSE at Rs 502.85 a share, as sales growth slowed sequentially.
“The volume growth (four per cent in June quarter against 4.8 per cent in March quarter) is lower than anticipated. The management also seems to have indicated that priority is growth and not margins,” said Mr Sanjeev Hota, senior research analyst at Mumbai-based brokerage Sharekhan.
Q4 revenue up 27%
HCL reported fourth quarter revenue of Rs 4,300 crore, up 27.5 per cent year on year. It logged an Rs 8.3 crore forex gain in the June quarter against a loss of almost Rs 135 crore a year ago, when its hedging bets went awry.
For the year ended June 2011, net profit stood at Rs 1,709 crore, up 31 per cent and annual revenue at Rs 16,034 crore, up 27.4 per cent.
The EBITDA margin rose to 18.5 per cent (17.3 per cent in March quarter). HCL Tech, however, said that its margins are likely to be hit by 300 basis points in September quarter on account of wage hikes (12-14 per cent for offshore) and fresher hiring. The company has taken in 3,000 freshers in June quarter and another 3,000 are set to join in September quarter.
Seen sequentially, Europe grew 5.9 per cent, followed by Americas (5.5 per cent). Amongst service lines, infrastructure services posted 10.5 per cent growth, whereas in industry verticals it was energy/ utilities/ public sector, and Media, Publishing and Entertainment which notched double-digit growths.
UK phone hacking
Meanwhile, the company has denied allegations of storing or deleting data of its client News International, which is mired in UK's phone-hacking scandal. “On the question of whether we deleted any data, the answer is since we do not have any data, the question doesn't arise,” Mr Nayar said.