IT services firm HCL Technologies on Friday posted a 16.7 per cent increase in net income at Rs 2,014 crore for the second quarter ended September 2016. The IT services providers, which had reported net income of Rs 1,726 crore in the same quarter last fiscal, also announced that its Chief Executive Officer Anant Gupta has put in his papers, following which the company has elevated current Chief Operating Officer C Vijayakumar to the post.
The Noida-based firm’s revenues for the reported quarter were up 14.1 per cent to Rs 11,519 crore, from Rs 10,097 crore in the year-ago period. On a sequential basis, however, the company’s net profit was lower by 1.6 per cent from Rs 2,047 crore in April-June 2016, while revenue grew 1.6 per cent from Rs 11,336 crore.
The company maintained its revenue growth guidance for 2016-17 at 12-14 per cent on constant currency basis.
Another significant announcement by HCL Technologies is buying of Butler America Aerospace for USD 85 million in cash. The move is likely to help the firm strengthen its position in the aerospace and defence engineering services.
Revenue growth in the last twelve months was led by infrastructure services at 21.4%, followed by engineering & R&D services at 5.7%, applications at 4.7% and Business Services at 2.5% year-on-year. America and Europe grew by 14.9 per cent and 8.2 per cent, respectively. The company has announced a dividend of Rs 6 per share.
During the quarter, HCL Technologies added 9,083 people (gross), taking the total headcount to 1,09,795 as on September 30, 2016. Attrition in IT services (last 12—month basis) in the reported quarter stood at 18.6 per cent.
HCL signed 12 transformational deals this quarter, across service lines and industry verticals.
The company’s cash and cash equivalents stood at Rs 1,242.8 crore at the end of September 30, 2016.
The company, which just completed the appraisal process, said they have given 6-8% compensation increase to employees in India while those working onsite got about 2 per cent hike.
The company shares were trading at Rs 828.65 per share, up 1.64 at 12:58 pm.
Butler Acquisition
Butler America Aerospace had revenues of $85.4 million for the year ended December 31, 2015. "The consideration for the proposed transaction is $85 million to be paid in cash. The proposed acquisition will exclude the staffing business of Butler America Inc," the country's fourth largest IT company said.
The firm has over 900 engineers and seven design centres in the US. "The acquisition will bolster HCL's capabilities in this space and access to clients with large R&D spends," HCL said.
New CEO
Mr Gupta has decided to leave the company to pursue personal interests outside of HCL, the firm said.
HCL Technologies Chairman and Chief Strategy Officer Shiv Nadar said, “Vijay has been a transformational leader in the company leading from the front. His vision and flawless execution trackrecord best positions him for taking our journey forward."
Mr Vijayakumar will continue to be based in the US. He had been elevated to the role of COO in July this year, taking on additional responsibility, besides heading infrastructure services.
