HCL Tech doubles Q4 profit on forex gains

Driven by growth in its domestic business, New Delhi-based HCL Technologies recorded a 109 per cent increase in its consolidated net profit to Rs 486.7 crore for the fourth quarter ended June 30, 2007, as compared with Rs 233 crore in the year-ago period.

The company's consolidated revenues stood at Rs 1,612 crore, a 28.6 per cent increase over the Rs 1,253.8 crore in the corresponding period of FY07.

When compared with the net profit of Rs 331.8 crore in the March 2007 quarter (sequential growth) the increase was 46.7 per cent. But revenue increased a mere 2.2 per cent over the Rs 1,577.1 crore in the previous quarter. 

SOFT TOUCH
Rs crore	Quarter ended June		% chg
	2006	2007
Revenues	1,254.00	1,612.00	28.50
Gross profit	459.00	608.00	32.50
EBITDA	282.00	347.00	23.00
EBIT	225.00	278.00	23.60
Net income	233.00	487.00	109.00
Gross margin (%)	36.60	37.70

The company made forex gains of Rs 250.4 crore which was a significant contribution to net income. Otherwise, the company was impacted by 100 basis point due to the rupee appreciation in the quarter (April-June 2007).

For the year ended June 30, 2007, HCL Technologies posted a revenue of Rs 6,033.6 crore, a 37.5 per cent increase over the last financial year's figure of Rs 4,388.2 crore.

Net income increased by 75.1 per cent to touch Rs 1,354.9 crore as compared with last year's figure of Rs 773.9 crore. The forex gains for the entire year stood at Rs 328.1 crore.

The company expects its IT products business to be the growth driver in the coming year. "HCL has a time-tested ability to anticipate change and the most recent transformation which began in 2005 is paying off,'' said Shiv Nadar, chairman and CEO, HCL Technologies.

"We have managed to face the challenges in the financial environment well, through our foresight and prudent treasury management measures. The future looks bright and we are poised well for success," Nadar said. HCL's core software revenues was the key highlight of the result as it crossed the $1 billion mark after the company adopted SAS, SOA, Web 2.0 along with master data management.

Meanwhile, a decline in the company's dependence on the US by 2 per cent also helped add to its profitability.

While the enterprise application service segment recorded a 0.9 per cent increase y-o-y, sequentially it suffered a decline of more than one per cent to stand at 12 per cent of the total service offerings.

Vineet Nayar, president, HCL Technologies, noted: "For four consecutive quarters we have grown sequentially over 9 per cent. Thanks to our unique employee first focus, we have not only been able to manage our attrition, but more importantly we have been able to attract leadership talent in key positions."