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HCL growth slows, but profits shoot up

HCL Technologies, the IT services arm of the HCL group, has put up an impressive performance in the June quarter, especially in the profits department.

EBIT, which shows actual profits from the company before being adjusted for interest and tax, was up a whopping 13% in the quarter compared to the immediately previous quarter ended March. Compared to the June 2010 quarter, it was up by around 32%.

Profit growth was a result of revenues growing faster than expenditure. Even the gross profits were up by around 6.5% (see chart.)

The quarterly sales revenues was lower than those of the previous quarter. For the last four quarters, it had grown at an average of 6.9%.

Similarly, revenues too did not do too badly. They were up 5.3% — less than TCS’ 6.3% but better than Infosys — in the June quarter, hitting $963 million. Year on year, they were up 30.5%.

It added 9,572 employees, but lost 5,946; resulting in a net addition of 3,626 people to its employee base. Total employees now stand at 77,046.

Europe did poorly this quarter compared to the past, growing at just 5.9% compared to the 9.5% average growth seen in the previous four quarters. But the Americas, primiarily the US market, did better than before, growing 5.5% instead of the 3.7% average seen before.

IT services revenues were up 5.8% while those of BPO continued to decline, falling 4.4% this quarter.

“HCL signed 20 transformational deals this quarter representing diverse industries including Manufacturing, Media and Publishing, Telecom, BFSI, Retail, Hi-Tech and Healthcare.

“Some customers with whom we signed these multi-million engagements this quarter include Xerox, Mecom Group Plc, Performance Food Group, Deutsche Bank, Dex One and Yahoo. These deals spanned across all service lines,” it said.

“Xerox and HCL have signed a 5-year global product engineering services partnership agreement. HCL will provide Xerox with embedded, mechanical and software engineering services for certain Xerox printer and imaging product line.. and a 5-year multimillion dollar Application Support Transformation deal with Deutsche Bank,” it added.

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