Steep rise in revenue from infrastructure management services helps

HCL Technologies, on Thursday, reported revenues of Rs.7,961 crore in the first quarter ended September 30, 2013, 31 per cent higher than a year earlier. It made a net profit of Rs.1,416 crore, up 64 per cent on a year-on-year basis.

Revenues in dollar terms were $1.27 billion, 14 per cent higher than a year earlier.

The company’s dollar-denominated net profit was $226 million, 43 per cent higher than in the corresponding quarter of the previous year.

A striking feature of the quarter was the heavy concentration of the revenue growth in one line of business — infrastructure management services. Revenues from this service line, which mostly caters to data centres and networks, grew by a steep 42 per cent on an annualised basis.

However, no other service line managed to even register double-digit growth compared with year-ago.

Asked if the company was happy with rapid growth of the infrastructure management side of the business at the expense of other service lines, Anant Gupta, President and CEO, said, “This space is still largely under-penetrated with Indian companies accessing less than 5 per cent of the business that is available globally.” Margins improved by 300 basis points over the last quarter, mainly because of a 250 basis point gain due to the depreciation of the rupee, said Anil Chanana, Chief Financial Officer.

Shiv Nadar, Chairman and Chief Strategy Officer, said the company’s “strong and differentiated business model” had enabled it to take advantage of the “encouraging” macro-economic environment.

“There is also greater momentum in building second-generation implementation for enterprises,” he observed. He pointed out that the nature of the demand was more focussed on business instead of automation.

Dividend

The company had a workforce of 87,196. Although the attrition rate worsened by 250 basis points over last year, the utilisation rate improved by 4.6 percentage points during the period.

The company announced a dividend of Rs.2 per share for the quarter.

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