HCL Tech reports weak Q3, net profit down by 12.2 pc

BANGALORE, INDIA: HCL Technologies failed to cheer the market today as it reported a sequential dip of 12.2 percent in the consolidated net profit for the quarter ended March 31, 2015. The revenue also dipped 0.2 per cent sequentially. The net profit for Q3 stands at Rs. 1,683 crore with 3.6 percent YoY growth. The company follows July-June fiscal.

Broad based business growth witnessed across Geographies, Verticals and Horizontals.

Americas, Europe and Rest of the World grew by 13.6 percent, 22.0 percent and 6.9 percent respectively.

The growth was driven by Business Services at 34.6 percent, Engineering and R&D Services at 32.4 percent, Infrastructure Services at 16.1 percent and Application Services at 6.9 percent.

Vertical growth led by Telecommunications, Media, Publishing & Entertainment at 23.5 percent, Lifesciences & Healthcare at 21.1 percent, Public Services at 16.6 percent, Financial Services at 15.4 percent, Retail & CPG at 14.8 percent and Manufacturing at 14.4 percent.

HCL has signed 14 engagements during this quarter adding up to more than $1 billion of total contract value.

Strong client addition in the quarter continued with one in 50 Million dollar + clients segment, one in 30 Million dollar + segment, and four additions in 20 Million dollar + clients segment.

“We also continued to make significant investments in expanding our global footprint, opening several new onsite facilities and Co-Innovation Labs as well as expansion of our existing presence in India. This along with hiring of 100+ senior industry leaders over the last two quarters will facilitate exponential advantage in key emerging growth areas like Enterprise Digitalization and Engineering Services,” said HCL Technologies President & CEO Anant Gupta.

During the quarter, HCL Technologies added 3,944 (net) employees, which takes its total headcount to 1,04,184.

With enterprise need for Digitalization, Internet of Things and next generation ITO, the company is well set to redefine the interface between technology and business. Our new-age propositions will significantly improve the competitiveness of global enterprises,” said Shiv Nadar, Chairman & Chief Strategy Officer, HCL Technologies Ltd.

Service providers with strong product engineering services skills will do well as partners for enterprise customers in their digital transformation journey, says market research firm Zinnov.

Karthik Ananth, Director, Zinnov said, "HCL’s 32.4 percent growth in Engineering and R&D services bodes well for this. Also the investments in co-innovation labs is also very forward looking. It does look like HCL is building the necessary assets required to position itself to succeed in enabling the digitization journey of customers.