HCL Tech Q1 net up 15% at Rs 2,047 cr; FY17 guidance at 12-14%

New Delhi: HCL Technologies, the country's fourth largest IT firm, saw its June quarter consolidated net profit rise by 14.8 percent to Rs 2,047 crore on account of broad-based growth across service offerings, while it expects 12-14 percent revenue growth in the ongoing fiscal.

The Noida-based firm, which had posted a net profit of Rs 1,783 crore in the April-June 2015 quarter, has resumed its practice of presenting a revenue outlook for the new fiscal after 12 years.

For the reported quarter, HCL Tech's revenues grew 15.9 percent to Rs 11,336 crore, from Rs 9,777 crore in the year-ago period, as per US GAAP accounting norms.

For FY2016-17, it expects its topline to grow 12-14 percent without fluctuations in currencies, higher than Nasscom's outlook of 10-12 percent rise in IT industry's export revenues for the fiscal.

On constant currency basis, HCL Tech's revenues were up 11.2 percent year-on-year in the June 2016 quarter.

"It has been a very good quarter, we have started with a very good performance with 6 percent revenue growth quarter-on-quarter in constant currency terms," HCL Technologies President and CEO Anant Gupta told reporters here.

He added that the growth momentum is broad?based, encompassing all sectors and service lines, propelled by its focus on new technologies and robust business model.

Reacting to results, the company's shares were trading at Rs 827.45 apiece, up 3.35 percent from its previous close on the BSE.

"For Q1 FY2017, the company posted numbers better than expected, on all fronts," Angel Broking VP (Research - IT) Sarabjit Kour Nangra said.

In dollar terms, the company's net profit grew 9.5 percent to USD 305.2 million, while revenues rose 10 per cent to USD 1.69 billion compared to the year-ago period.

HCL Technologies' deal with Volvo's IT services division in February added over USD 40 million to the June quarter revenue, up 6.5 percent than the previous quarter.

HCL Tech earlier followed the July-June fiscal but has now moved to April-March cycle as mandated by Companies Act.

Asked about the reason for resuming its practice of giving revenue outlook, Chief Financial Officer Anil Chanana said the company wanted to give a "lead indicator for the markets to take a view of the company" and its performance.

HCL Tech has announced a dividend of Rs 6 per share.

During the quarter, HCL Technologies added 1,211 people, taking total headcount to 1,06,107 people. Attrition in IT services (last 12 months basis) stood at 17.8 percent.

HCL Tech signed 13 transformational deals this quarter.

Talking about the geographies, Gupta said the company has seen growth across Americas and Europe at 13.7 percent and 10.6 percent, respectively.

"It's a little too early to talk about the impact of Brexit. In our discussions with customers, they have not said anything," he said adding that only 8 percent of its revenues are impacted by the British pound.

Also, HCL Tech has ensured that it is not heavily dependent on just one of its onsite, near-shore or offshore centres, which has helped the company be a little more resilient against such moves.

Gupta said the demand in the Americas, Europe (especially Dark region -- Germany, Austria and Switzerland) remains strong and that HCL will continue with its selective play strategy in markets like India and Middle East.

Following Britain's decision to exit the European Union, there were concerns that there might be an impact on the Indian IT firms on account of currency fluctuations and restrictions in terms of movement of labour.

Infrastructure services grew 18 percent, Engineering and R&D Services by 10.4 percent, Business Services at 10.1 percent and Application Services at 4.7 percent.

In terms of verticals, public services led the growth at 24.7 percent, Lifesciences and Healthcare at 21.5 percent and Financial Services at 5.7 percent.

The company's cash and cash equivalents stood at Rs 1,240 crore at the end of June 30, 2016.