After TCS, HCL Tech earnings also disappoint; stock slumps
Shares slump over 8% as dollar revenue comes in below expectations
 "After TCS, HCL Tech earnings also disappoint; stock slumps")
Buffeted by fluctuations in global currencies against the US dollar, HCL Technologies on Friday reported a lower than expected 2.1% sequential growth in net profit to Rs 1,873 crore for the quarter ended September 30, 2014.
The net profit of the country's fourth largest software services firm also suffered due to salary hikes given in the last quarter.
On a year-on-year basis, HCL's profit increased 32% on the back of revenues of Rs 8,735 crore, which grew by 3.7% sequentially and 10% compared to the same quarter last year.
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In early morning trade today, HCL Tech shares fell more than 8% as its financials were below street expectations.
The results came just a day after India's largest software services firm Tata Consultancy Services disappointed the Street with its earnings. On Thursday, going by the International Financial Reporting Standards, TCS reported a 4.6% rise in net profit on a sequential basis, which was below expectations.
In dollar terms, HCL's revenues were up 1.9% and profit grew by just 0.6% sequentially.
The results came just a day after India's largest software services firm Tata Consultancy Services disappointed the Street with its earnings. On Thursday, going by the International Financial Reporting Standards, TCS reported a 4.6% rise in net profit on a sequential basis, which was below expectations.
In dollar terms, HCL's revenues were up 1.9% and profit grew by just 0.6% sequentially.
HCL Tech's chief executive officer Anant Gupta said the company's perfomance was good given that revenues grew by 3.2% on a "constant currency" basis.
"The performance has been strong through there have been significant currency headwinds." Gupta said. He added that HCL was not witnessing any softness in demand, but since the company is catering more to large deals that are more complex, "the timeframe of translation of deals from booking to billing is taking longer."
The company added 15 new clients which are among the Fortune 500 or global 2,000 corporations. Around 4,000 net employees were added to its workforce.
“Going forward our investments will continue in the three strategic markets of ITO, Engineering Services Outsourcing and the emerging Digitalization space which will enable a continued balanced business portfolio performance for the company”, Gupta added.