HCL Tech gains after Q3 results

HCL Technologies rose 1.30% to Rs 1427.70 at 9:35 IST on BSE after consolidated basis net income as per US-GAAP rose 8.5% to Rs 1624 crore on 2% increase in revenues to Rs 8349 crore in Q3 March 2014 over Q2 December 2013.

The company announced the result before trading hours today, 17 April 2014.

Meanwhile, the BSE Sensex was up 56.13 points, or 0.25%, to 22,333.36.

On BSE, so far 42,000 shares were traded in the counter, compared with an average volume of 72,182 shares in the past one quarter.

The stock hit a high of Rs 1,455 and a low of Rs 1,415.65 so far during the day. The stock hit a record high of Rs 1,588.65 on 28 February 2014. The stock hit a 52-week low of Rs 673.60 on 29 April 2013.

The stock had underperformed the market over the past one month till 15 April 2014, rising 0.63% compared with the Sensex's 3.10% rise. The scrip had however, outperformed the market in past one quarter, rising 6.67% as against Sensex's 5.62% rise.

The large-cap company has an equity capital of Rs 139.90 crore. Face value per share is Rs 2.

HCL Technologies' earnings before interest, taxes, depreciation and amortization (EBITDA) rose 5% to Rs 2232 crore in Q3 March 2014 over Q2 December 2013. EBITDA margin stood at 26.7% in Q3 March 2014, higher than 26% in Q2 December 2013.

The company said it added 2 clients each in $50 million and $30 million categories during the quarter.

"Our leadership has been driven by our commitment towards sustainability, diversity and trust through transparency. With an emergence of an increasingly positive macro environment these values will continue to be HCL's key differentiators and provide an impetus to our future growth," said Shiv Nadar, Chairman & Chief Strategy Officer, HCL Technologies.

"We continue on our growth momentum with a strong revenue growth of 3% QoQ along with 10th straight quarter of margin expansion. Our EBIT has registered an impressive expansion of 7.1% sequentially and 44.5% YoY resulting in a healthy EBIT margin of 24.6%. The Application Services business registered a robust performance led by Digital Systems Integration proposition on the discretionary side and ALT ASM on the non-discretionary side this quarter. Infrastructure Services have continued to punch their weight in the market," said Anant Gupta, President & CEO, HCL Technologies.

"We continue on our journey of making significant investments in talent acquisition by on-boarding several senior leaders representing a mix of industry and skill profiles to exponentially multiply our capability in the emerging Digital Systems Integration space," he added.

"Our success with the industrialized delivery model, increasing number of contracts moving into steady state, savings on G&A front, helped in improved net income margin of 19.4% this quarter, up from 15.9% in the corresponding quarter of last year. This has provided us more room for making relevant investments in a rapidly changing market landscape. Our focus on generating higher free cash flow continued during the quarter with free cash flow as %age of EBITDA reaching 73%, up from 61% in the corresponding period last year. The return on capital employed (LTM basis) was at 38%, higher than 32% achieved in the corresponding quarter last year," said Anil Chanana, CFO, HCL Technologies.

HCL Technologies is a global IT services company. HCL leverages its extensive global offshore infrastructure and network of offices in 31 countries to provide holistic, multi-service delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare & Life sciences.

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