HCL Tech net up 50%

HCL Tech net up 50%

Its revenue in the September quarter at Rs 4,299.50 crore was 25.40 per cent higher for the previous year’s Q1. Profits were higher by about 100 basis points (bps) due to fall of rupee against dollar.

On a sequential basis, however, HCL’s September quarter net profit was 2.7 per cent lower than the June 2011 quarter, mainly because of a sharp increase in wage hike in Q1 which has eaten up about 150 basis points from the company’s profits, it said.

“Our focus on providing total IT outsourcing to our clients has helped us not only by raising the volume of business but also the margins,” HCL Vice-Chairman and CEO Vineet Nayar said, while speaking to Deccan Herald from New Delhi. “We have doubled our quarterly revenues in just three years to record a billion dollar quarter despite the tough economic environment. This was achieved mainly because of the tremendous efforts of our employees,” he said.

To reward the employees on achieving the mark, HCL also announced a ‘Milestone Share Program’ for all its employees who are on the company’s rolls as on October 14, 2011. They will receive a minimum amount equivalent of 5 equity shares and a maximum equivalent of 10 shares based on years of tenure at HCL. The company has budgeted an amount of Rs 25 crores for this initiative.

HCL, however, expects that the company’s margins in the coming months will face challenges and the growth may stagnate in the current financial year as the global market is getting tougher. “Overall, IT budgets have been down for some time and the economic environment looks bleak.” Nayar said.

Clients are increasingly opening up old deals for bidding, and opportunities are opening up for new players. “The activity is now around churn. Clients were unhappy and they are looking to change their vendors, which throws up more opportunities for companies like us,” he said, adding that demand would be driven by firms in continental Europe, who are looking for vendor partners with a global presence.

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