HCL Tech Spurts On Strong Quarterly Numbers

HCL Technologies announced its Q4FY13 (quarter ending June 30, 2013, since the company follows a financial year that begins in July and ends in June) results on July 31. The result, as usual, beat the street estimates and resulted in strong buying in the counter.

In Q4FY13, HCL Tech’s revenues shot to USD 1228 million, up 3.1% as compared to that in Q3FY13. Aided by depreciation in the domestic currency, the revenues in rupee terms grew by 8.1% on a sequential basis to Rs 6944 crore.

On account of such volatility in cross-currency movement, a constant currency basis gives a better understanding of the financials. In these terms, the revenues of HCL Tech grew by 3.9% on a sequential basis.

The company’s revenues from Americas, which constitute 57% of the total revenues, grew by 2.8%. As in the previous quarters, Europe saw more traction than America. The revenues from Europe grew by 9.6%, adding strength to its overall performance.

The traditional Enterprise Application Services segment, however, saw some weakness. Revenues from this service area declined by 3.2% on a constant currency basis. Infrastructure services continued to add to overall strength, the revenues from the service going up by 9.4%.

In terms of verticals, the growth was broad-based. All the industry verticals saw substantial strength, except for Retail & CPG which was flat in Q4FY13.

Along with an increase in revenues, HCL Tech also saw an improvement in profitability. Its operating profit grew by 9.2% to USD 258 million and the net profit by 10.9% to USD 214 million.

The company’s order book also displayed considerable strength. It added 36 clients in Q4FY13, and had 549 active clients at the end of the quarter. There were significant large deal wins, which added to the positivity in HCL Tech’s outlook.

HCL Tech has been a consistent performer even in uncertain times. It has managed to remain buoyant through weak macroeconomic conditions and cyclical changes in the way the industry operates. We continue to remain bullish on the prospects and performance of the company.