HCL Technologies Ltd, India’s fourth largest software exporter, on Wednesday posted a 3.6% rise in net profit to Rs.1,683 crore for the three months ended March compared with the year-ago period, missing analysts’ expectations. Net sales rose 11% to Rs.9,267 crore from last year. Net profit fell 12.2% from the December quarter, during which the company had delivered its strongest performance in the past 16 quarters. Revenue fell 0.2% sequentially.
Sanchit Vir Gogia, chief analyst and chief executive officer, Greyhound Research called HCL numbers “a mixed bag”. “On the positive side, the overt reliance on IMS is slowly expected to reduce over time, and increasing exposure to Europe is a worry since the geo remains volatile. This has been a tough quarter for nearly everyone in the industry, but the HCL results is a classic case of the dark cloud with a silver lining.”
HCL’s planned focus on application services business will be welcomed by investors, Gogia said. “In terms of the geo spread, while HCL has been decreasing reliance on the US market, increasing exposure to the European market is only worrying given the fluctuations in exchange rate in Euro and GBP. Outside of financial services, nearly all other revenue-heavy verticals either remained muted or the revenue contribution declined from Q2 FY15,” Gogia said.
To read the Full Article, click here: Livemint