HCL expects 23% net growth this year

MUMBAI: HCL Technologies Ltd., fifth-largest software services exporter of

the country, said on Thursday it expects its net profit in the year ending June

2002 to grow 23 per cent to Rs six billion ($125 million). This profit estimate

excludes a provision for Rs 250 million for doubtful receivables and possible

investment losses, the company said in a statement. This could drag down net

profit growth to 17.8 per cent, lower than the company's forecast in August of

more than 25 per cent.

The company said revenue for the year will grow 25 per cent and exceed Rs

17.50 billion ($366 million). The company's chairman had earlier said revenue,

too, would grow by more than 25 per cent. He had also forecast the firm's

profits and revenue would grow between 30 to 40 per cent over a two-year period.

For the current quarter ending September 30, the statement said revenue would

rise more than 17 per cent from Rs 3.18 billion in the same quarter a year ago.

The guidance lifted HCL Technologies' shares and the stock closed Thursday up

11.83 per cent at Rs 122.40, recouping over a third of its 30 per cent loss of

the previous two days. Delhi-based HCL Technologies specializes in networking

and high-end technology software development.

In the past year ended June 2001, the company's net profit jumped 101 per

cent to Rs 4.88 billion or Rs 16.45 per share broadly in line with analysts'

expectations.

Provision to lower net

HCL said the provision of Rs 250 million was due to a conservative policy as

it expected that the September 11 attacks in the United States could have a

short-term impact on its clients' businesses, particularly in the travel,

insurance and finance sectors, and also impact its on-site billing rates. The

provision also included possible losses from investments in technology funds,

the statement added.

On Wednesday, HCL Technologies bought a 51 per cent stake in a holding

company of Deutsche Software, and HCL Tech's chief executive said the software

company aimed for $100 million in revenue in three years. Deutsche Software is

an Indian subsidiary of Germany's Deutsche Bank AG.

(C) Reuters Limited 2001.