HCL Tech puts acquisition plans on hold

Software services exporter HCL Technologies today said it has put on hold its acquisition plans as the global economic situation is uncertain and the local currency is volatile.

"We were bullish about inorganic growth till three months ago. However, there are three uncertainties that have come up. One what is going to happen to the euro. Second, what will happen to the currency (rupee) and number three what will happen to the total spend across the globe on IT," company's Vice Chairman and CEO Vineet Nayyar said.

He added that the company is not looking at acquisition for their present business. "We would look at acquisition for future business...With this kind of euro and currency (rupee) fluctuation, we can get our acquisition totally wrong. So, we are pausing our acquisition," he said.

The Indian rupee has depreciated by 15% against the US dollar since the end of July 2011.

"We are now waiting for the euro crisis and currency fluctuation to settle a bit for us to have a little longer term view of what's going to happen. And then take a decision on what would make sense as acquisition," he added.

Country's second largest software exporter Infosys has last week lowered its annual revenue-growth outlook and warned of lower IT budgets due to the eurozone debt crisis. Even analysts' reports suggest overall IT budgets being flat or being reduced in the year 2012.

HCL Tech had earlier said the economic uncertainties would throw up opportunities to acquire companies and it would look at buying companies at the right valuation. The company had bought UK software provider Axon Group for $658 million in 2008.

The company today announced 43.3% growth in the second quarter profit at Rs 572.7 crore. Its shares closed Rs 425, up nearly 5% on BSE.