HCL Technologies net grows 3.7 pc at Rs 342 cr

The good numbers by HCL Technologies, the country's fourth largest software company, indicates a rebound from the global recession in the sector. The consolidated revenue of the IT major rose 17.8 per cent to Rs 3,425 crore.

HCL Technologies cheered the market, with the shares moving up by 1.61 per cent at Rs 378.80 on the Bombay Stock Exchange. HCL Technologies CEO Vineet Nayar said, "HCL continues to demonstrate industry leading growth. The Q4’10 witnessed a revenue growth of 7.7 per cent quarter-on-quarter and  21.5 per cent year-on-year." The profits also increased as the company got a tax refund of USD 6.8 million, which got reflected in the topline.

The numbers reported by HCL is in line with the strong revenue growth reported by other IT majors-- Tata Consultancy Services Ltd and Wipro Ltd. In the last 2 eventful years the Top Indian IT Companies added USD 2.9 billion of incremental revenues. HCL contributed USD 844 million translating to 30 per cent share of the incremental revenues.

"This has been made possible by our conscious and focused investment in employee and value centricity," Nayyar added. However, HCL's strong revenue growth was muted by a wider foreign-exchange loss.

The company made a forex loss of USD 30 million during the quarter, against USD 14 million in the previous quarter, Chief Financial Officer Anil Chanana said. On the Eurozone crisis, Nayyar said Europe remains a concern for the company. But as part of its long-term strategy, HCL Tech will continue investing in Europe, which currently contributes 25 per cent towards the overall business. The company gets more than 60 per cent of its revenue from the US.

In anticipation of better business, HCL made the highest ever employee addition during a given quarter. It added 6,428 employees on a net basis in the said quarter, taking its staff strength to 64,557. Out of the gross additions nearly, 70 per cent were lateral (people with experience of three-five years) hiring.

The company, which experienced an attrition of 15.8 per cent, has also announced wage hikes for its employees. However, the management did not mention by how much the wage was increased. According to analysts, the quarterly numbers of HCL Technology is better-than-expected.

Dipen Shah, Senior Vice President, PCG Research, Kotak Securities said, "HCL Technology results are above expectations. The 10.7 per cent growth in constant currency terms in IT services business came in as a positive surprise and was higher than the growth reported by larger peers."

The board of directors of the company has recommended a final dividend of Rs 1 per equity share on the face value of Rs 2 each to the shareholders.

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