HCL Technologies, the country’s fourth-largest IT services firm, reported 8.6 per cent growth in net profit to Rs 2,188 crore for the July-September quarter. The Noida-based firm’s revenues grew 7.9 per cent to Rs 12,434 crore on the back of higher growth in manufacturing and financial services segments. During the year-ago period, HCL Technologies posted Rs 2,014 crore on revenues of Rs 11,519 crore. The company’s dollar revenues stood at $1928 million during the quarter. The company surprised the streets higher than industry average guidance at 10.5 to 12.5 per cent growth in constant currency terms. On Tuesday, Infosys, the larger rival of HCL Technologies, revised its guidance downwards by 200 basis points. “Our FY18 H1 revenues grew at 11.7 per cent over the same period last year and net income by 11.4 per cent. This growth trajectory is a result of the momentum our Mode 2 and Mode 3 services have created in the market even as our Mode 1 services continue to punch their weight. Our mature verticals like Manufacturing and Financial Services, which together contribute to 60 per cent of our revenues, grew at 21.9 per cent and 14.2 per cent respectively,” said C Vijayakumar, president & CEO, HCL Technologies. Mode 2 and Mode 3 segments include cloud-based services, cyber security, and other digital technologies.
Vijayakumar added top 20 customers of HCL Technologies grew faster than the company average.Analysts said HCL Technologies’ dollar revenue growth at 2.3 per cent over last quarter was “below estimates” and a good portion of this year’s growth would be fuelled by inorganic contribution from IBM IP deals, Geometric, and Butler. “HCL Tech has retained constant currency revenue growth of 10.5 - 12.5 per cent for FY18 (USD revenue guidance raised to 12.1-14.1 per cent against 11.3-13.3 per cent) and retained EBIT margin guidance band of 19.5-20.5 per cent. Achieving this would require the acceleration in growth in second half this year and require 2.6 - 4.9 per cent quarterly growth and hence an uphill task. The full impact of IBM IP deals, full impact of Butler and Geometric acquisitions would be the inorganic components for FY18 which are adding 5 per cent to revenues. Hence, revenue guidance implies organic revenue growth guidance of 5.5-7.5 per cent YoY growth,” said Madhu Babu, IT analyst at brokerage firm Prabhudas Lilladher. Another set of analysts, however, said HCL Technologies’ second-quarter numbers were in line with expectations.