HCL Infosystems drops after Q3 earnings

HCL Infosystems lost 3.01% to Rs 48.30 at 13:08 IST on BSE after net profit rose 11.3% to Rs 2.56 crore on 8.42% decline in income from operations to Rs 1316.49 crore in Q3 March 2014 over Q2 December 2013.

The Q3 result was announced after market hours on Monday, 28 April 2014.

Meanwhile, the S&P BSE Sensex was down 80.78 points or 0.36% at 22,550.83.

On BSE, so far 35.73 lakh shares were traded in the counter as against average daily volume of 25.31 lakh shares in the past two weeks.

The stock was volatile. The stock tumbled as much as 7.83% at the day's low of Rs 45.90 so far during the day. The stock rose as much as 1.4% at the day's high of Rs 50.50 so far during the day.

The net profit in Q3 March 2014 was boosted by an exceptional gain of Rs 21.57 crore in Q3 March 2014. There was a profit of Rs 26.19 crore on sale of properties while there was an inventory writeoff of Rs 4.62 crore due to phasing out of a product line.

Commenting on the results, Mr. Harsh Chitale, Managing Director and Chief Executive Officer, HCL Infosystems said, "Our transformation story is progressing well and is now taking roots. Distribution and Services, our focused growth areas have registered healthy traction. Our portfolio diversification strategy in Distribution continues to yield results as our non-telecom distribution business achieved a 12% QoQ and 25% YoY growth. Though our Telecom Distribution business did register a decline in topline, the gross margin expanded on account of increase in scope of engagement. As part of a new initiative, the Telecom Distribution business enrolled 88 new rural distributors in JFM Quarter that will further strengthen its footprint in the country. Our Enterprise Services also grew by 8% QoQ and 9% YoY on account of growth in our order book across India, MEA and South-East Asia. While our Break fix Services gained positive traction as a provider of multi-vendor technology support services, our Managed Services expanded its overseas foothold with a large contract in South East Asia. Our hardware-solutions businesses which we had decided to reduce focus on, are transitioning as per plan. However, business model transitions for these businesses led to repositioning charges in the current quarter and may impact next quarter as well".

HCL Infosystems is India's premier technology company and offers a wide spectrum of IT services and products ranging from Cloud to Learning Solutions.

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