HCL projects 10-12% growth; net up 7.8% in Q3

New Delhi: Software major HCL Technologies Ltd on Tuesday reported that its revenue for the fiscal 2016-17 would grow 10-12 per cent in dollar terms.

"We expect our annual revenue for this fiscal (FY 2017) to be in the middle of 10-12 per cent range in dollar terms, based on the December 31 exchange rates," said the Noida-based IT services firm in a statement here.

The company had earlier (October) guided revenue to grow 12-14 per cent, based on the average exchange rates of fiscal 2015-16.

The operating margin - earnings before interest and tax (Ebit) for the fiscal is expected to be 19.5-20.5 per cent post-acquisitions.

"We expect the margin to be in the same range for the fourth quarter (January-March) of FY 2017," noted the statement.

"The acquisitions and IP (Intellectual Property)-led partnerships during the third quarter are likely to contribute 0.6-1 1.0 per cent in revenues depending upon the date of consummation of Geometric deal," added the statement.

The company's blue chip scrip, however, lost Rs 7.60 per share of Rs 2 at par (face value) to close at Rs 849.55 at the end of Tuesday's trading as against Monday's closing rate of Rs 857.15, and after opening at Rs 847.

The company declared 300 per cent interim dividend of Rs 6 per share for this fiscal (FY 2017).

Earlier, the outsourcing firm reported Rs 2,070 crore net profit for the third quarter (Q3) registering 7.8 per cent annual growth from Rs 1,920 crore in same period year ago and 2.8 per cent sequential growth from Rs 2,014 crore quarter ago (July-September) under the Indian accounting standard.

Revenue for the quarter under review (Q3) grew 14.2 per cent annually to Rs 11,814 crore from Rs 10,341 crore in like period year ago and 2.6 per cent sequentially from Rs 11,519 crore quarter (Q2) ago.

Under the International Financial Reporting Standard (IFRS), net income for the quarter grew 5.2 per cent annually to $306 million from $291 million year ago and 1.6 per cent sequentially from $301 million quarter ago.

Likewise, revenue grew 11.4 per cent annually to $1,745 million from $1,566 million in same period year ago and 1.3 per cent sequentially from $1,722 million quarter ago.

Ebit for the quarter grew 16.2 per cent annually to Rs 2,408 crore from Rs 2,072 crore year ago and 3.9 per cent sequentially from Rs 2,318 crore quarter ago in rupee terms.

In dollar terms, Ebit grew 13.4 per cent annually to $356 million in Q3 from $314 million year ago and 2.7 per cent sequentially from $347 million quarter ago.

"We have delivered yet another quarter with robust performance. Our focus on execution and operational efficiencies on back of automation has helped us deliver margin expansion and 13.4 per cent Ebit growth on annualised basis," said HCL Chief Financial Officer Anil Chanana in the statement.

The company added 50 clients across verticals during the third quarter.

The company extended its IP partnership with IBM to define the future roadmaps for additional products in application security, B2B data transformation, testing automation and mainframe management tools.

"The disruptive market forces are creating a rapid evolution in the environment, posing several challenges as well as opportunities," said HCL Chairman and Chief Strategy Officer Shiv Nadar on the occasion.

As technology disrupts and drives a new interplay of socio-economic models, Nadar said the company was investing in core and next-generation services, leveraging its engineering heritage to build products and platforms business.

"This is helping us drive value, growth and innovation through collaborative ecosystems consisting of employees, clients and partners," added Nadar.

The company added 8,467 techies for the quarter, taking the headcount to 111,092 by December 31 from 103,696 year ago and 109,795 quarter ago.

Though attrition increased annually to 17.9 per cent in Q3 from 16.7 per cent year ago and declined from 18.6 per cent quarter ago, it declined sequentially to 5.3 per cent in Q3 from 6.4 per cent year ago and 7.4 per cent year ago.

"Our revenues from fixed price/managed services contracts increased to 63.2 per cent from 61.3 per cent sequentially, strengthening our success in outcome based business model," said Chief Executive C. Vijayakumar.