Financial Daily from THE HINDU group of publications
Thursday, Jan 19, 2006
Corporate Results - Software
Info-Tech - Software
HCL Tech Q2 net income up 40 pc Aims to be $1-b co by this fiscal
New Delhi , Jan 18
HCL Technologies today registered a 40.2 per cent increase in consolidated net income for the second quarter ended December 2005 to touch Rs 181.1 crore compared to Rs 129.1 crore in the same period previous year, and expressed confidence that it would notch revenues of $1 billion in the current fiscal.
The company sees profit for the year until June 2006 rising 30-40 per cent on the back on increased outsourcing, and also expects two mega deals in the current quarter in retail and insurance sectors.
"We have already crossed one milestone, as this is the first time that our quarterly revenue has gone past the Rs 1,000 crore mark on a consolidated basis. This fiscal, we are confident we will become a billion dollar company. We will be the fifth Indian company to reach that size," Mr Shiv Nadar, Chairman and CEO of HCL Technologies, said at a press conference here.
As per US GAAP, during the second quarter HCL's revenues rose 31.5 per cent year-on-year to touch Rs 1,054.2 crore (Rs 801.4 crore). On sequential basis, the revenues were up 8.6 per cent from Rs 970.7 crore clocked in the first quarter of fiscal 2006.
""Technology spending is back, and tech services are doing well. Aero and auto verticals are driving growth, so is the SAP practice. Total outsourcing is seeing significant large deals coming to us," Mr Nadar said.
Commenting on the results Mr S.L. Narayanan, Corporate Vice President (Finance) of HCL Technologies said that the margins were up year-on-year and sequential margins were up 30 basis points. "The productivity is up, the utilisation has improved to 73 per cent from 68 per cent earlier, and there has also been a marginal increase in pricing," he said adding that the company was well covered for forex exposure over the next 12 months.
In the software services segment, gross revenues were up 27.3 per cent to Rs 800 crore against Rs 628.6 crore in the year-ago period, while BPO services revenues grew 22.4 per centBPO revenues stood at Rs 133.9 crore in Q2 (Rs 109.4 crore).
"The Q2 performance in the BPO space has been consistent with our projection, as we added over 1,500 employees against the large contracts that will be executed in Q3," Mr Ranjit Narasimhan, head of HCL's BPO operations said.
Revenues from infrastructure management segment increased 80.4 per cent to Rs 120.2 crore during the quarter.
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