HCL Technologies Ltd.’s profit surpassed analysts' estimates in the April-June quarter. The information technology firm also maintained its revenue guidance for the full year.
Net profit stood at Rs 2,171 crore, a fall of 6.6 percent compared to the quarter-ended March, according to the Shiv Nadar-led company's press release. The consensus estimate of analysts tracked by Bloomberg stood at Rs 2,034 crore.
Revenue in rupee terms rose 0.8 percent to Rs 12,149 crore, compared to the Bloomberg consensus estimate of Rs 12,200 crore. Revenue in dollar terms grew 3.7 percent to $1.88 billion, meeting the $1.89 billion consensus estimate.
India’s fourth largest information technology company reiterated its revenue guidance for the financial year 2017-18 at 10.5 percent to 12.5 percent growth in constant currency terms.
The Margin Picture
Earnings before interest and tax rose 1.2 percent to Rs 2,444 crore. EBIT margin was largely unchanged at 20.1 percent.
HCL Technologies said it will maintain full-year operating margins in the 19.5 percent to 20.5 percent range. The guidance confidence comes despite the uncertainties faced by the Indian technology sector due to regulatory and H-1B visa hurdles in the U.S.
The cash flow generation “continues to be robust with net income to operating cash flow conversion at 104 percent on a last-12-month basis,” Chief Financial Officer Anil Chanana said.
Deal Wins, Client Additions
The information technology firm signed 13 deals during the quarter, mainly from the U.S. and Europe.
The firm also added 11 new clients in the April to June quarter:
- Two clients in the $1 million and above slab
- Three clients in the $5 million and above slab
- One client each in the $10 million and $20 million and above slab
- Three clients in the $30 million and above bracket
- One client in the $40 million and above bracket
Shares of HCL Technologies rose as much as 3.9 percent to Rs 928 after the announcement.
With the sector facing several headwinds over the last few months, HCL Technologies' shares have given a total return of 9.4 percent return in 2017. This compares to the 22.8 percent rise in the benchmark S&P BSE Sensex Index and 3.7 percent return offered by the NSE Nifty IT Index year-to-date.
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