HCL Tech Continues To Lead The IT Pack

HCL Tech has been a consistent outperformer among IT companies and the trend continued in this quarter as well. The financials of HCL Tech have been all-round and the company has managed to grow in a uniform manner.

In the quarter ending March 31, 2013, HCL Tech saw sequential revenue growth of 3.16% to USD 1190.8 million. This was coupled with flat operating margins and a growth in the net profit margin. The company’s operating margin had been of concern but the efforts of the management to work on this have been visible. Since the last 4 quarters, HCL Tech has seen improvement in this metric. In the quarter under review, its net profit margin expanded by 80 basis points to reach 16.18% (USD 192.7 million).

The robust growth in HCL Tech was led by an exceptional performance in Infrastructure Services, wherein its revenues grew sequentially by 8.57%. This segment also saw profitability addition as the EBIT grew by 11.61%. But the overall EBIT margin was yet flat as software services witnessed margin decline.

In terms of geography, growth was uniform. America grew by 3.6% and Europe grew by 4.4% as compared to the previous quarter. The service offering of Infrastructure saw strength and so did the verticals of manufacturing and public services.

 “Amidst a challenging and uncertain business environment, HCL continues on its growth trajectory fuelled by its Alternative Outsourcing (AO) approach led by two unique value propositions of Alternative ASM and Enterprise Function as a Service (EFaaS)”, said Anant Gupta, President and CEO, HCL Tech.

Overall, HCL Tech added 37 clients making its total active client base touch 547. With this result announcement, the company once again displayed its strong ability to provide services and mine clients. We have been positive on the outlook of HCL Tech and continue to maintain this stand.