HCL Infosystems posts net profit of Rs 2.3 cr in Dec qaurter

IT hardware firm HCL Infosystems reported a standalone net profit of Rs 2.3 crore for the quarter ended December 31, 2013.
This is against a net loss of Rs 28.67 crore in the year-ago period, it said in a statement.
However, the company's standalone net sales was lower at Rs 1,437.58 crore in the reported quarter from Rs 2,458.03 crore in the October-December quarter of 2012-13 fiscal.
Commenting on the performance, HCL Infosystems CEO and Managing Director Harsh Chitale: "Since our restructuring in November 2013, we are well on course in our planned transformation journey. Our focus businesses -- Distribution and Services, continued to drive growth and profitability in this quarter."

HCL's non-telecom distribution business registered 60 per cent year-on-year growth and signed many new partnerships in the reported quarter, he added.
However, after two consecutive quarters of growth the telecom distribution business did witness a decline in this quarter, Chitale said.

"The other pillar of our growth story, Services business, continued its momentum with a y-o-y growth of 14 per cent in this quarter too. Our break-fix services business is emerging as a preferred provider of multi-vendor technology support services for OEMs and customers alike," he added.
Besides, HCL's infra managed services and application services business witnessed positive traction in overseas markets such as Singapore and the Middle-East.

"As we reduce focus on hardware solutions business, in the short term we would have to take charges on account of the wind-down of old business model," Chitale said.
The transition of traditional hardware-oriented system integration to asset-light SI services remains on course though the collections of receivables in the old projects continue to remain sluggish thereby impacting HCL Infosystems' profitability in this quarter, he added.
In its non-telecom distribution business, the firm signed many partnerships in the December quarter like with Canon (printers), DeLonghi (home appliances), Lenovo (tablet), Huawei (video conferencing) and Datacard (ID card printers).
In November last year, HCL Infosystems announced it will will phase out its manufacturing business in the next few years to improve margins and increase organisational efficiency and will on strengthening services and distribution verticals.

Shares of the company today declined by 2.23 per cent to settle at Rs 24.15 apiece from their previous BSE closing.