HGSL's Q1FY11 revenue at Rs 2,266.8 mn

EBITDA at Rs 314.6 mn, PAT at Rs 231.1 mn

Hinduja Global Solutions, a leading provider of Outsourcing Solutions to Fortune 500 companies, today announced its Audited financial results for the quarter ended June 30, 2010

Financial Highlights

• Consolidated Revenue for Q1FY11 was Rs 2,266.8 million against Rs 2,216.0 million in Q1FY10, registering Y-o-Y growth of 2.3%. On a sequential quarter basis, revenues were 1.6% higher than Q4FY10 revenues of Rs 2,232.1 million.
• Consolidated EBITDA for Q1FY11 was Rs 314.6 million against Rs 415.7 million in Q1FY10, a Y-o-Y  decrease of 24.3%. On a sequential basis, the EBITDA in Q1FY11 was lower than the Q4FY10 EBITDA of Rs 339.2 million by 7.2 % , as the Company had to simultaneously operate centres as it was transitioning business from Tier 1 cities to Tier III cities in India and business was ramping  up.
• Consolidated PAT for Q1FY11 was Rs 231.1 million against Rs 361.4 million in Q1FY10,  a Y-o-Y decrease  of  36.1  %. On a sequential basis ,  Consolidated PAT in Q1FY11 was lower  than the Consolidated PAT of Rs 259.8 million in Q4FY10 by 11%.  The drop in Consolidated PAT is line with drop in EBITDA.

CEO’s message

Commenting on the results, Mr. Partha De Sarkar, CEO, said, “FY11 has started off on an eventful note. We just inaugurated our Centre at Guntur. Our expansion into Tier III Cities like Nagercoil and Guntur in India is a part of our strategy to  improve our value proposition to Indian domestic clients. We have also acquired 43,000 sq ft space in Global Village SEZ in Bangalore through our 100% subsidiary Hinduja Outsourcing Solutions India Pvt. Ltd., for our planned expansion of offshore businesses in India.

• Further, we acquired a 100% stake in UK based Careline Services during the quarter. Careline Services is a leading contact centre provider in the U.K. servicing more than 20 marquee customers across various verticals Established in 1997, it offers a range of services for inbound and outbound interactions and has nearly 800 highly trained employees across 3 sites in the U.K. - 2 in London and 1 in Scotland.  This acquisition provides us with a new geography, new clients and new delivery centres.

Investment in people and facilities in India and Philippines continues to grow to support the strong visibility of new business. The near term performance is slightly muted as we incur upfront costs while the resultant benefits will accrue in the ensuing quarters. We see continued demand for our services and the expansion of our global footprint during the quarter enhances our ability to capitalize on the opportunities of tomorrow.”

Operating Highlights

• The company added 2 new Clients during the quarter. 20 new Clients were added through the Careline Acquisition. 
• Headcount of 15,936 associates at the end of the quarter against 15,615 associates at the start of the quarter.
• During the quarter, the Company formally inaugurated its centre in Guntur in India. This 15,000 square feet facility has 400 seats of which 165 seats will be operational in the first phase for one of its largest customers. The capacity can also be scaled up further to meet future demands.
• The Company, through its subsidiary Hinduja Outsourcing Solutions India Pvt. Ltd., took on lease 43,000 sq ft in Global Village IT Sector SEZ in Bangalore to accommodate the growth planned in our international business in India.

Key Perspectives

• Consolidated PAT for Q1FY11 – Rs 231.1 million
  * Diluted EPS – Rs  11.21 per share (not annualized)
• Consolidated PAT TTM (July ‘09 to June ’10) – Rs 1,170.7  million
  * Diluted EPS  – Rs 56.72 per share
• Net Worth as on June 30, 2010 – Rs 9,950.7 million
  * Book Value – Rs 483.3  per share 
• Debt of Rs 1,363.7  million as on June 30, 2010
• Consolidated EV/EBITDA  – 2.9 times 
• Cash & Cash equivalents as on June 30, 2010 – Rs 6,689.3  million
  * Cash and Cash Equivalents – Rs 325 per share 
• Market Capitalisation – Rs 9,692 million
  * Based on the closing price of Rs 470.75 per share on NSE on July 29, 2010.

Note on Exceptional Items

Exceptional items represent a provision made towards mark-to-market losses on outstanding forward exchange contracts held for hedging future customer receivables. It has resulted in a gain of Rs 39.4 million for the quarter ended June 30, 2009 and a gain of Rs 57.6 million for the year ended March 31, 2010. The company’s forward covers relate to underlying business transactions and are not speculative in nature.

About Hinduja Global Solutions Ltd. (HGSL)
Hinduja Global Solutions, a part of the multi-billion dollar conglomerate - Hinduja Group, excels in providing outsourcing solutions that include Back Office Processing, Contact Center services and customized ITES solutions to its global clientele comprising several Fortune 500 Companies. HGSL has been ranked the Best performing Call Center Worldwide by the Global Services Magazine in association with Neo IT in January 07. HGSL has its registered office in Mumbai, is headquartered in Bangalore and has  29 delivery centers in the United States, Canada, U.K., Mauritius, Philippines and India. The Company employs nearly 16,000 people worldwide.

Disclaimer
Some of the statements in this document that are not historical facts are forward looking statements. These forward-looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate.

These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our services, the highly-competitive market for the types of services that we offer, market conditions that could cause our customers to reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and global market conditions and other risks not specifically mentioned herein but those that are common to industry.