HCL Infosystem : Poor Performance In December Quarter

HCL Infosystem, whose major exposure is into the distribution services (telecom and non-telecom), yesterday (February 11, 2014) announced its December quarter FY14 result after the market hours. The other business segments are services, learning business, enterprises solution etc. The company’s financial year ends in the month of June. 

HCL Infosystem posted a bad performance on sequential basis. Its consolidated revenue dropped drastically by 10% to Rs 1981 crore on sequential basis. The company reported a decline in sales in almost all its business segments except the services segment (up by 6% to Rs 165 crore) during the period under consideration. It’s major business segment, the telecom distribution business revenue dropped by 7% sequentially (Rs 1215 crore in Q2FY14). Also its non-telecom distribution business sales fell by 7% to Rs 210 crore in the same period. As we move on to its learning, enterprise and consumer computing business, every segment dropped significantly on sequential basis. However, it showed a recovery in its losses during the quarter. The company’s consolidated loss before tax expenses for Q2FY14 stood at Rs 41 crore against Rs 69 crore loss (before tax) in Q1FY14, due to the combined impact of decrease in exchange losses and finance expense. 

The company’s standalone revenue on sequential basis also declined by 10% to Rs 1438 crore. However, due to the decrease in its various operating expenses its operating expenses decreased by 10% to Rs 1425 crore. This resulted in an increase in the operating profit of Rs 1.63 crore to Rs 13 crore. The profit after tax grew by 55% to Rs 2.3 crore during the quarter on account of reduction in tax expenses (down by 77% to Rs 1.33 crore).

The stock price is trading 2.23% down from the previous closing price of Rs 24.70.