HCL reports 19% rise in consolidated net profit for Q3

Shiv Nadar-promoted HCL Technologies, which displaced Wipro as the third largest tech player in the country after league players TCS and Infosys a few quarters ago, has reported remarkable numbers during the third quarter ended December 31.

The company posted a 19 per cent increase in consolidated net profit to Rs 2,611 crore for the quarter compared to the same period last fiscal while revenue for the quarter jumped 22.6 per cent to Rs 15,699 crore compared with Rs 12,808 crore in the December 2017 quarter. In dollar terms, the company’s net profit rose 7 per cent at $364 million for the period under review while revenue was up 10.8 per cent year-on-year to $2.2 billion.

HCL Technologies president and chief executive officer C Vijayakumar said, ``We are entering 2019 with a healthy growth outlook backed by the strong relevance of our propositions in the market.’’

“Our revenues grew 5.6 per cent sequentially in constant currency. We crossed $1.5 billion run rate in our Mode 2 next generation offerings. We once again set a new bookings' record this quarter,’’ he added.

“These numbers are a great reflection of excellent execution of all our 1,32,000 employees positioned across 42 countries,’’ he further said.

During Q3, HCL signed 17 transformational deals, which are a mix of Mode 1 and Mode 2 services across all its service lines. These deals were led by sectors such as Financial Services, Technology & Services and Manufacturing.

Commenting on the results, Hansa Iyengar, SR analyst, at Ovum, a US-based analyst firm, said: “HCL continues its strong performance across its segments. Mode 2 is maintaining momentum and growth while Mode 1 is slowing down - this was anticipated. Continued investments in boosting Mode 2 portfolio will continue to pay off over coming quarters. The acquisition of IBM's products and their integration will further boost Mode 2 offerings over the coming year. The results are very good for the last calendar quarter - most vendors witness slowdown in this quarter due to it being the holiday season.”

Core services in areas of applications, infrastructure, engineering, R&D and business services, etc are under Mode 1 while under Mode 2 the company offers experience-oriented integrated offerings across Digital & Analytics, IoT WoRKS, Cloud Native Services and Cybersecurity & GRC services. Mode 3 strategy comprises creating innovative IP-partnerships to build products and platforms business.

On the people front, HCL has added 13,191 people (gross) during the quarter to take its total headcount to 1.32 lakh in Q3 while attrition in the IT services business stood at 17.8 per cent in the past 12 months.