HCL Technologies Q2 Profit Rises 58.4% To Rs 1,496 Crore, Beats Estimates

BANGALORE: HCL Technologies, India’s No 4 IT services exporter, joined larger rival Infosys in signalling a strong year ahead after ramp ups in its biggest markets helped it beat street expectations.

The company’s shares were trading about 2.8% higher in early Mumbai trading on Thursday after it reported better-than-expected earnings for the December quarter.

HCL, which follows a July-June fiscal calendar, added $1 billion in total contract wins in the December quarter including 15 “transformational” deals. For the calendar year 2013, the company crossed $5 billion in revenue.

Infrastructure Services, Europe as a market and the manufacturing vertical each crossed $1.5 billion in annual revenues, CEO Anant Gupta said in a statement.

PROFIT BEATS

HCL beat expectations with a 58.4% rise in quarterly profit, after order ramp ups boosted earnings. Consolidated net profit for the fiscal second quarter that ended December 31 rose to Rs 1,496 crore from Rs 944 crore a year-earlier, NOIDA-based HCL said on Thursday.

That compares with analysts’ expectation of Rs 1,450 crore, the average of eight estimates compiled by ET. Profit margin on the basis of earnings before interest and taxes were little changed at 23.7% for the quarter versus 23.8% for the September quarter.

Sales in dollar terms rose 4% from the September quarter to $1,321 million.

HCL added 1,136 staff to end the quarter with 88,332 employees, but staff churn on a leading-12-months basis rose a bit to 16.6% versus 16.1% at the end of the September quarter.

The company increased the number of clients contributing $100 million and $50 million in annual revenue from a year earlier.

Larger rival Infosys beat expectations and raised its forecast earlier this month. Top-ranked Tata Consultancy Services doesn't provide an official forecast but is widely expected to grow faster than the industry exports growth forecast of 12-14 percent made by the sector lobby Nasscom.

TCS may say profit rose 45% when it reports its December quarter earnings later today, according to analyst estimates compiled by ET. Third-ranked Wipro will report its earnings on Friday.