• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Kamal Narang

Chipping in: Mr Shiv Nadar, Chairman and Chief Strategy Officer, HCL Technologies (right), with Mr Vineet Nayar, CEO, at a press conference in the Capital on Tuesday. The company’s consolidated net income for the first quarter rose 23.2 per cent year-on-year as it won more orders from overseas clients, improved realisation per employee, and reduced its dependence on the US market.

Our Bureau

New Delhi, Oct. 16 IT services giant HCL Technologies on Tuesday saw its consolidated net income for the first quarter rising 23.2 per cent year-on-year as the company won more orders from overseas clients, improved realisation per employee, and reduced its dependence on the US market.

The first quarter net income at Rs 308.4 crore, however, represented a drop sequentially (compared to the previous quarter) as foreign exchange gains had boosted earnings in the previous quarter.

“The forex gain in the last quarter stood at $61.5 million and this quarter, it is $3.5 million. This is owing to the fact that there was almost 6-7 per cent appreciation of the rupee last quarter and since HCL covered its risks, it substantially gained from hedging. Second, we have now started recognising forex gain under the cash flow hedge accounting method. With this, about $55-million gain which accrued to us this quarter, has been taken into account in the balance sheet and not the Profit and Loss statement,” Mr Anil Chanana, Executive Vice-President - Finance, HCL Technologies, said.

The company’s revenues rose to Rs 1,709.2 crore, which represented a growth of 23.9 per cent over the corresponding quarter previous year, and six per cent sequential growth.

“In dollar terms, our revenues are up 42.8 per cent year-on-year and 8.4 per cent quarter-on-quarter. We are seeing higher realisations – a 43 per cent growth in revenues and only 25 per cent increase in headcount. So the strategy we put together on output-based pricing, larger deals, fixed price deals, and ‘blue ocean strategy’ is helping us depart from the manpower-driven growth and we are seeing it happening now,” Mr Vineet Nayar, CEO of HCL Technologies, said.

HCL’s non-US business grew 62 per cent year-on-year, reducing its dependence on the US to 55 per cent of total revenue, from 60 per cent a year earlier.

Among the service lines, infrastructure services, engineering and R&D services, BPO and custom application services witnessed accelerated growth. Continuing the trend of the last two quarters, the fastest growth among verticals was recorded in life sciences, aerospace and automotive and financial services.

As of September 30, the company bought forward covers worth $1.86 billion, said Mr Chanana.

HCL Technologies as a whole added 3,625 staff on a net basis during the quarter, increasing the total number of its employees to 45,642 at the end of September.

HCL Technologies added 19 new clients during the quarter, and won an order worth more than $250 million. Other new contracts included a “multi-service, multi-year, multi-million dollar” order from Hercules Inc, a manufacturer of

speciality chemicals. Salary hikes hurt EBITDA margins by 250 basis points, but it was offset by higher billing rates and cost controls. “The rupee hasn’t really impacted our operating margins because of the hedges we had,” Mr Chanana said.

In dollar terms, the company’s BPO revenues were up 43.6 per cent year-on-year to $55.1 million, while the growth sequentially was 2.2 per cent.

HCL Technologies today announced that Mr Vineet Nayar, currently President of the company, will assume the CEO chair from Mr Shiv Nadar. Mr Nadar would take on the chief strategy officer rank while retaining his current position of Chairman.

In his new role, Mr Nadar would mentor the HCL’s core management team and provide thought leadership to them. Mr Nadar said: “‘HCL’s ability to anticipate change and adapt to the changing market dynamics ahead of time has stood us in good stead.”

More Stories on : Financial Performance | Software | Financial Performance | HCL Technologies Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Non-basmati rice prices crash on export ban

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line