HCL Tech net jumps to Rs. 1496 crore in Q2; beats estimates

0
34

HCL-Tech-net-jumpsHCL Tech, India’s fourth largest outsourcer, has continued with its tradition of reporting better-than-expected earnings. The Noida-based company’s net profit for the December quarter jumped 5.7 per cent sequentially to Rs. 1,496 crore, while consolidated sales went up by 2.8 per cent quarter-on-quarter to Rs. 8,184 crore.

Analysts polled by NDTV had estimated HCL Tech to report a profit of Rs. 1,428 crore on sales of Rs. 8,116 crore for the October to December period, which is the second quarter for the company.

Shares in HCL Tech surged over 5 per cent to an all-time high of Rs. 1,398 on the NSE, before ending the session at Rs. 1391.90, up 4.23 per cent. HCL Tech was the top gainer on the 50-share Nifty benchmark.

Dollar revenues, the most important indicator of growth, jumped 4 per cent to $1,321 million, ahead of estimates of $1,311 million. This was the highest revenue HCL Tech has posted in the last six quarters.

Operating margins (ebit) rose to 23.7 per cent against expectations of 22.3 per cent.

AnkitaSomani, IT analyst at Angel Broking told NDTV that excluding infrastructure management (IMS), revenues have grown by 3 per cent in the December quarter as against 1 per cent rise in the previous quarter, so HCL Tech has a more balanced portfolio now.

We expect a price earnings re-rating could happen for HCL Tech, she added.

However, Bhavin Shah of Equirus said there are challenges to HCL Tech’s IT services business.

HCL Tech managed a strong performance despite the seasonality factor. The fiscal third quarter is supposed to be tepid for outsourcers because of lesser working days (at client sites) and year-end shutdowns in US and Europe, which are key markets for Indian IT firms.

The company has also announced an interim dividend of Rs. 4 per share, which will be paid on January 31, 2014.