Hinduja Global Solutions Q1 net falls 20% to Rs 41.5 crore

Hinduja Global Solutions (HGS), the BPO arm of diversified Hinduja Group, on Saturday said its net profit declined 20% to Rs 41.5 crore for the second quarter ended June 30, 2017.

In a BSE filing, the company’s net profit stood at Rs 51.9 crore in the year-ago period. The HGS Board also declared an interim dividend of Rs 2.5 per share. The company’s operating revenue, however, was up 1.9% to Rs 927.1 crore for the second quarter compared with Rs 909.5 crore in in the same period last fiscal.

Commenting on the results, HGS Chief Executive Officer Partha DeSarkar said the second quarter has traditionally been a soft quarter for HGS. “In line with this trend, top line in first quarter posted a moderate growth of 6.4% year-on-year in constant currency terms,” said DeSarkar.

Revenue growth and margins of the company in rupee terms were muted, mainly due to adverse forex impact of 4.5% from a strong rupee and lower profitability of India domestic business, he added.

HGS was really affected by its acquisition of a significant portion of Mphasis and its subsidiary MsourcE India’s BPO business for about Rs17 crore in 2015. During the current quarter, the company received about 65% of revenues from the US, 11% from Canada, 8% from the UK and Europe and 16% from India.

DeSarkar said the revenue growth in the first quarter was mainly driven by domestic revenues. “It is aided by a decent 10.3% year-on- year growth from healthcare, with US dollar originating revenues growing 5.2% year-on-year,” he said.

“Looking ahead, we see a robust pipeline led by our investments in client-facing activities and technology-led solutions in automation, digital and analytics. As with previous years, we expect the second half to be better than the first half (April-September),” he said.