HCL Technologies first quarter consolidated net profit up 6.1 per cent to Rs 2,171 crore

India's fourth largest software exporter HCL Technologies on posted 6.1 per cent rise in consolidated net profit at 2,171 crore for the April-June quarter, helped by broad-based growth across verticals like financial services and healthcare.

The company had a net profit of Rs 2,047 crore in the year-ago period. HCL Tech's consolidated revenue grew 7.2 per cent to Rs 12,149 crore in April-June 2017 as against Rs 11,336 crore in the same quarter of 2016-17.Stock markets cheered the first quarter numbers with its scrip rising 3.87 per cent to touch one-year high of Rs 926 on BSE in early trade.

"We continue to propel forward on our Mode 123 growth strategy, delivering a revenue growth of 2.6 per cent quarter-on-quarter and 12.2 per cent year-on-year in constant currency terms in Q1 FY2018," HCL Technologies President and CEO C Vijayakumar told reporters here.

Margins grew from 20 per cent to 20.1 per cent through continued superior execution in core business, integration and assimilation of the acquired entities, as well as IPinvestments, he added.

HCL Technologies also maintained its revenue growth guidance of between 10.5-12.5 per cent in constant currency terms. "We see a positive environment ahead. While the deal size is coming down for Mode 1 service (plain outsourcing services), there is a huge opportunity in Mode 2 and 3 services as clients look for more digital services," he said.

However, HCL Technologies' net profit declined 6.6 per cent on a sequential basis on account of a tax provision of USD 45.5 million paid during March 2017 quarter. In dollar terms, the company's net profit increased 10.3 per cent to USD 336.7 million in the reported quarter, while revenues grew 11.4 per cent to USD 1.88 billion. During thequarter, 13 transformational deals were signed across service lines, industry verticals and geographies.

HCL Technologies CFO Anil Chanana said the share buyback of Rs 3,500 crore was successfully concluded during the quarter. "... together with the dividend per share of Rs 2 this quarter, is demonstrative of our balanced capital allocation focus," he added.

The company registered a capital expenditure of USD 50.8 million in the June quarter. Asked about the impact of currency, Chanana said there was 40 basis point impact.

"Despite four per cent rupee appreciation, we saw margins grow from 20 per cent to 20.1 per cent," he added. HCL Technologies reported broad-based growth across all revenue segments with the Americas and Europe growing by 16.9 per cent and 0.3 per cent, respectively, year-on-year.

Financial services grew at 19.2 per cent, manufacturing at 17.1 per cent, life sciences and healthcare at 10.6 per cent, public services at 6.4 per cent, retail and CPG at 7.1per cent.

However, telecommunications, media, publishing and entertainment posted 2.7 per cent y-o-y decline in constant currency. For the June quarter, HCL Technologies had cash and cash equivalents of Rs 1,226 crore. Its total headcount stood at 117,781 at the end of June 2017, with a gross addition of 9,462 people. The attrition for IT services on LTM (last twelve months) basis stood at 16.2 per cent.

The company also announced the appointment of former Chairman & CEO of PwC India, Deepak Kapoor as an independent director on its board. With the addition of Kapoor, the total board strength increases to 11 directors, including eight independent directors. The company has three women directors.
Kapoor retired from PwC in March this year after having been associated with it for 39 years. His appointment is effective from July 26, 2017.