HCL projects double-digit revenue growth

New Delhi, Oct 21 (IANS) Software major HCL Technologies Ltd. on Friday projected 11-13 per cent revenue growth for fiscal 2016-17, based on robust performance in the second quarter (July-September) in dollar terms.

In a regulatory filing to the stock exchanges, the Noida-based IT outsourcing firm said its revenue will grow 12-14 per cent in constant currency (CC), which translates into 11-13 per cent annual growth for FY 2017 on dollar value as of September 30.

Operating margin (Ebit) for the fiscal is expected to be in the 19.5-20.5 per cent range.

Earlier, the company reported Rs 2,014-crore net profit for second quarter, registering 16.7 per cent annual growth in rupee terms.

“Revenue for the quarter under review (Q2) increased 14 per cent year-on-year (YoY) to Rs 11,519 crore,” noted the filing.

In dollar value, the firm’s net income rose 14 per cent to $301 million and revenue 11.5 per cent to $1,722 million ($1.7 billion) under the International Financial Reporting Standard.

Earnings before interest and tax (Ebit) grew 18.4 per cent to Rs 2,318 crore and 15.9 per cent to $347 million under IFRS.

Sequentially, however, net profit, revenue and Ebit were flat or marginally lower in rupee and dollar terms from the first quarter (April-June) of this fiscal (FY 2017).

“We are enthused with overall Q2 performance. Revenue increased 12.8 per cent YoY on CC, earnings per share (EPS) 16.8 per cent YoY, demonstrating that our business model is focused on growth and profitability,” said HCL Chief Financial Officer Anil Chanana in a statement later.

The broad-based growth across verticals was driven by public services at 25 per cent, retail and consumer packaged goods (CPG) 21.6 per cent, life sciences and healthcare 15.9 per cent and telecom, media, publishing & entertainment 14.9 per cent on CC basis.

Client addition has been strong in the quarter, with 8 in $1 million account, 13 in $10 million, 7 in $20 million, 10 in $40 million, two in $50-million and one in $100-million.

“We are a partner of choice for enterprises through differentiated strategy that encompasses core services, integrated next-generation offerings and platforms, in-line with our growth strategy,” said company’s new Chief Executive C. Vijayakumar.

The company also announced a whopping 300 per cent interim dividend of Rs 6 per share of Rs 2 face value for the first half (April-September) of this fiscal and 28 per cent return on equity for the quarter under review.

“Digital age is transforming the paradigm, redefining the way business and technology engage with each other. This is driving an inflection point in the global socio-economic landscape,” said Chairman and Chief Strategic Officer Shiv Nadar on the occasion.

The company is investing $55 million in IP (Intellectual Property)-based partnership with IT multinational IBM to cover API/web service enablement for mainframes.

“We have been reading early signals of this change and built a sustainable business model by driving focus around technologies of the future, investing in strategic platforms and creating value for the communities in which we operate globally”, said Nadar, also the company’s Chief Strategy Officer, on the occasion.

The company hired 9,083 people for the quarter during which 4,859 techies left, resulting in 4,224 net addition and taking the headcount to 109,795 from 107,968 quarter ago and 105,571 year ago.

The attrition rate climbed to 18.6 per cent from 17.8 per cent quarter ago and 16.3 per cent in like period year ago.

The company’s blue chip scrip of Rs 2 face value gained Rs 15.25 per share trading at Rs 830.50 in post-noon session from Thursday’s closing price of Rs 815.25 and after opening at Rs 826, touching a high of Rs 848.50 and low of Rs 822.