HCL Technologies Ltd. maintained full-year revenue growth forecast even as India's fourth-largest software services provider reported a flat profit growth, weighed down by headwinds from its joint venture.
Net profit for the quarter ended December rose 0.3 percent over the previous three months to Rs 2,194 crore as per U.S. GAAP standards according to its exchange filing.
That met Rs 2,145 crore consensus estimate of analysts tracked by Bloomberg.
Sales in dollar terms rose 3.1 percent to $1,988 million, just beating the $1,971 million estimate. In constant-currency terms, sales rose 3 percent to Rs 12,809 crore. The company stuck to its guidance of 10.5-12.5 percent growth in the year ending March.
HCL Tech's sales were expected to remain flat because of sluggish growth in the insurance and marketing segment and restructuring of the company's partnership with DXC Technology Ltd., said Motilal Oswal in a report.
Digital, analytics, internet of things, cloud and cybersecurity services, and products and platforms, contributed more than 25 percent to its sales. “That strongly validates the success of our next–gen offerings in the market. This was a strong quarter in terms of deal signings where we signed twenty transformational deals across services,” said C Vijayakumar, president and chief executive officer of HCL Technologies.
Earnings before interest and tax rose 2.4 percent to Rs 2,510 crore on a sequential basis while EBIT margin remained mostly flat at 19.6 percent, meeting estimates.
Other Highlights
- Financial Services vertical grew 2.8 percent sequentially, in constant currency terms
- Engineering and R&D Services grew 13.6 percent
- Application services grew 2.6 percent
The company announced a dividend of Rs 2 per share.
Client Additions
- 3 new clients in the $40 million+ slab
- 4 new clients in the $30 million+ slab
- 1 new client in the $20 million+ slab
- 1 less client in the $10 million+ slab
- 2 new clients in the $5 million+ slab
- 16 new clients in the $1 million+ slab
The stock has risen 15.2 percent over the last 12 months compared to a 22.8 percent growth in the Nifty IT Index, making it the least performing member on the index.
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