HCL Tech Q3 Net Up 7.8%, Co Maintains Full-Year Guidance

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HCL Technologies on Tuesday reported a 7.8% rise in consolidated net profit at Rs2,070 crore for the third quarter ended December 31, 2016, as compared to Rs1,920 crore reported in the year-ago period.

Anshoo Nandwaani, Vice President & Principal Analyst, Greyhound Research said, “The appointment of C. Vijayakumar in the last quarter is proving to be a good move for HCL Tech. HCL is going through a change and he is bringing in fresh perspectives in the way their deals are being constructed.

There are clear efforts to modernise existing traditional infrastructure contracts (the ones with lower margins) and increase the use of digital technologies.”

“While the company has managed to come out in good stead this quarter, sustaining this growth momentum, particularly amidst the realms of uncertainty in key markets like the US and the UK, will require both back-breaking work and innovative approaches towards IP development, automation and local/remote delivery to ensure non-linear growth,” Nandwaani added.

“At present, across all Indian IT Services providers, the digital revenues for IT services broadly range between 10 to 15%. Although HCL’s current digital revenues are smallish, compared to other Indian IT Services providers HCL’s thrust on Internet of Things (IoT) is impressive and significant. Further, at a time when IoT is growing in a big way, having expertise in embedded systems is an added strength for HCL Tech,” said Nandwaani.

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