HCL Tech Q1 net dips 2.7%, but co bullish on quarters ahead

India's fourth-largest software services company HCL Technologies today posted 2.7 per cent dip in consolidated net profit for the September quarter, but remains bullish on the quarters ahead on the back of a strong deal pipeline.
The company's net profit of Rs 1,823 crore in the reported quarter as against Rs 1,873 crore in the year-ago period was just in line with market estimates.
It attributed the fall to the investments being made over the last few quarters in setting up development and collaboration centres globally, hiring senior talent and investments in new technologies like IoT (Internet of Things) and cloud.

HCL Technologies CFO Anil Chanana said the company has invested about Rs 1,300 crore over the last few quarters across these areas.
The company's profit also includes an adjustment related to a public sector client, which when factored in takes the net profit to Rs 1,726 crore in July-September, 2015.
HCL, which had already warned of a "tepid" September quarter on account of adverse currency impact and a client-specific issue, said its consolidated revenues grew 15.6 per cent to Rs 10,097 crore (ex-adjustment) as against Rs 8,735 crore in the same quarter of the previous fiscal.

"We have started FY16 on a strong footing... Our investments in BEYONDigital, Next-Gen ITO and IoT offerings are reflected in our healthy bookings and deal pipeline," HCL Technologies CEO Anant Gupta told reporters here.

He added that the company sees a good healthy pipeline, especially in Europe.
"The orderbook is 10 per cent higher than what we have previously seen in our history. We believe a lot of that will kick in in the second half of our fiscal which is in January-June of 2016," he said.
On the fiscal ahead, Gupta said unlike its peers, HCL Tech does not expect a muted performance in quarters ahead.
"We are not seeing that (muted guidance by others). We play in a selective market and we do see a significant pipeline... Which is largely driven by large untapped markets such as the dark region like Germany, Austria and Switzerland as well as the Benelux region which is France and Belgium there is untapped business," he added.

The firm follows July-June as the fiscal year.
Reacting to the results, the company's shares were trading 1.23 per cent higher on BSE at Rs 851.70 in late afternoon.
"HCL Tech posted results just in line with expectations, while Ebit margins came ahead of expectations. On the sales front, the company posted a 0.5 per cent sequential growth in USD revenues at USD 1,545 million vs USD 1,547 million expected," Angel Broking VP Research (IT) Sarabjit Kour Nangra said.