IT firm HCL Infosystems’ on Wednesday said that its net profit slipped 19.5 per cent to Rs. 47.46 crore for the first quarter in FY’11 on account of slower system integration business, wage hikes and investment in service practices, among others.
The company had reported a net profit of Rs. 58.97 crore in the year-ago period.
However, the company expects to post better numbers in the coming quarters on the back of an all-time high orderbook in the systems integration business of about Rs. 4,000 crore from various verticals like the government and banking and financial services.
“The orderbook was slow in the last quarters, especially in the system integration space. But going ahead, we expect steady business to come in from our Rs. 4,000-crore strong orderbook,” HCL Infosystems Chairman Ajai Chowdhry told reporters here.
The company’s net sales decreased to Rs. 2,959.37 crore during the quarter ended September 30, from Rs. 2,998.97 crore in the corresponding period last fiscal.
The revenues from system integration and services have grown to Rs. 867.51 crore, while that from telecom and office automation has come down to Rs. 2,077.13 crore.
HCL Infosystems’ margins have come down to 2.9 per cent from 3.2 per cent same period last fiscal.
“The reason for margin decline has been on account of investment in strengthening services like cloud offering, which will help us in getting more orders as we go along,” HCL Infosystems CEO Harsh Chitale said.
Also, the company has added domain experts for systems integration and other application practices, along with annual employees’ wage hike in July, all of that impacted the margins, he added.
The company added about 300 people in the quarter, taking its total headcount to 7,000.
The consolidated numbers also include the financials of Dubai-based NTS, in which HCL Infosystems bought 60 per cent stake earlier in the quarter.
Besides, the company has declared an interim dividend of Rs. 2 per share for the financial year 2010-11.
The company’s share closed at Rs. 114.80 on the Bombay Stock Exchange, down by 3.24 per cent from the previous close.
Keywords: HCL net profit