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HCL Q3 net up 17%, raises revenue growth outlook

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New Delhi: HCL Technologies increased the lower end of its guidance and operating margins for the year ahead as the Noida-headquartered IT services firm’s business grew significantly faster from sales of products it acquired from IBM. The firm forecast growth to be 16.5 per cent-17 per cent for the year to March, with operating margins — a measure of profitability — at 19-19.5 per cent. “We continue our stellar performance over the years and have now crossed a revenue run rate of $10 billion in this quarter.

Our revenues have grown 16.4 per cent YoY in constant currency and we have delivered a strong 20.2 per cent EBIT,” C Vijayakumar, president and CEO at HCL Technologies said in a statement.

“Within two quarters of its inception, HCL Software has already onboarded 4,600 customers.” In July, HCL completed the acquisition of seven IP assets of IBM, which included its Lotus Notes mail software, and Commerce Connections, a platform to help companies sell online.

HCL paid $1.8 billion for the acquisition, which included 5,000 customers globally. “HCLT has outperformed the peers (Infosys and TCS) in revenue and margin performance,” said Aniket Pande, lead analyst, telecom and IT, at brokerage Prabhudas Lilladher.

“We continue to find HCLT valuation inexpensive in context of strong growth outlook coupled with margin performance and clarity of stable performance in product business.

HCLT remains our top pick in IT services pack.” The company grew 2.1 per cent in the third quarter ended December sequentially, outperforming rivals such as Infosys, TCS and Wipro.

TCS grew 0.3 per cent, with Infosys at 1 per cent and Wipro at 2 per cent. For the nine months in the current financial year, the company has clocked a revenue growth of 17.8 per cent.

Out of the 17 per cent revenue guidance, 6 per cent is expected to come from inorganic growth while 10.5-11 per cent is expected to come from organic growth. HCL Technologies reported a 17.2 per cent year on year increase in its net profit for the third quarter at $426 million.




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Category: Stock Market


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