HCL Technologies reported better-than-expected profit growth for the second quarter, showing no signs of any impact from the global economic downturn. The software services provider's net profit for the Oct-Dec quarter jumped 43.3% from a year ago to Rs 572.7 crore.
However, the company's net earnings were pinched by higher foreign exchange losses due to the depreciation of the rupee. HCL Tech had a forex loss of Rs 75.8 crore in the second quarter, much higher than the Rs 13.4 crore loss in the year ago quarter and Rs 17.9 crore loss in July-Sept.
Barring the loss, HCL Tech's EBITDA (earnings before interest, taxes, depreciation and amortization) during the second quarter surged 53% year-on-year to Rs 970.2 crore.
Anil Chanana, CFO, said that the company remained watchful of the volatile currency movements and would continue with its layered hedging policy.
Meanwhile, HCL Tech's revenue for the quarter was up 35% year-on-year to Rs 5,245.2 crore.
On a sequential basis, HCL Tech's net profit was up 15.3%, while revenue rose nearly 13%.
Analysts on average were expecting HCL Tech to report a net profit of Rs 523 crore on revenue of Rs 5,245 crore, according to a CNBC-TV18 poll.
Its Gross margin was at 33% compared with 31.6% in the year ago quarter and 31.5% in the July-Sept quarter. HCL Tech's second quarter EBITDA margin was also significantly higher at 18.5% in Oct-Dec, versus 16.3% in the year ago quarter and 17.1% in the first quarter.
HCL Tech net hired 2,556 employees in Oct-Dec, and now has a headcount of 83,076 employees.
The company said it won 18 multi-year, multi-million dollar deals during the quarter, excluding the normal contract renewals. The deal wins were across sectors like BFSI (banking and financial services), healthcare, aerospace, logistics, telecom and manufacturing and the total contract is over USD 1 billion.
"The topline was inline with expectation but margin expansion was slightly ahead of what the consensus we were anticipating. So overall I would say a marginal positive in terms of operational performance. But the key positive which came out of the result is in a seasonally weak quarter they have signed 57 new clients and onsite volume which was up 5.7% quarter-on-quarter indicates that the second half is going to be better than what consensus might be factoring in at this point of time," Prabhudas Lilladher analyst Shashi Bhushan told CNBC-TV18.
Markets cheered HCL Tech's second quarter performance and the stock was up 3.3% at Rs 419.20 on NSE in morning trade.
Source: www.moneycontrol.com
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Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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