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HCL Tech Q2 Net up 28%; bets big on digitalisation

HCL Technologies

New Delhi: India’s fourth-largest IT firm HCL Technologies today posted 28 per cent jump in consolidated net profit at Rs 1,915 crore for the December 2014 quarter, helped by strong growth in engineering services and rising customer preference for digital solutions.

The city-based firm, which follows July-June fiscal year, had posted a net profit of Rs 1,496 crore in the year-ago period.

Consolidated revenues grew by 13.4 per cent at Rs 9,283 crore in the October-December 2014 quarter as against Rs 8,184 crore in the same quarter of the previous fiscal.

“Three megatrends — digitalisation, engineering platform services and target operating model for enterprise IT — are driving growth for us and have allowed us to stay ahead on the innovation curve and gain significant market share in the global IT services market,” HCL Technologies President and CEO Anant Gupta told reporters on a conference call.

In the July-September quarter, the firm had reported a net profit of Rs 1,873 crore and revenues of Rs 8,735 crore.

Reacting to the results, the shares of the firm were trading 8.63 per cent up at Rs 1,788 apiece during afternoon session on the BSE.

In dollar terms, the company’s net profit rose by 27.3 per cent to USD 307.2 million in the reported quarter, while revenues grew 12.8 per cent to USD 1.43 billion.

During the quarter, the company saw a 220 basis points impact of currency headwinds and a 100 basis points impact on account of wage hikes.

Talking about the opportunities in the infrastructure space, HCL Technologies President (Enterprise Services and Diversified Industries) Steve Cardell said for the first time it is witnessing end-to-end services being contracted in engineering.

“Also, the second thing we see is digital platforms. These two trends are giving us momentum… We have seen it quite consistently in over the last three-four quarters,” he added.

During the said quarter, HCL Technologies signed 15 transformational engagements with more than USD one billion of total contract value (TCV).

“The Global IT industry is undergoing a seismic change as the scope of IT buying expands to capture adjacencies beyond IT. This is not only changing the contours of the traditional buyer as we know it but also bringing technology to the very centre stage of organisational competitiveness,” HCL Technologies Chairman and Chief Strategy Officer Shiv Nadar said in a statement.

In such a scenario, a balanced portfolio, integrated IT services and engineering capabilities have ensured that HCL remains service provider of choice for companies looking for business model transformation, he added.

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