An employee works at a computer terminal in Brisbane, Australia. (Photographer: Ian Waldie/Bloomberg)

Q4 Results: HCL Technologies’ Profit Slips But Meets Street Bets

HCL Technologies Ltd.’s profit for the three months ended March was in-line with analysts’ estimates, despite a drop compared to the December-ended quarter.

Net profit of the software services provider fell 2.1 percent to Rs 2,550 crore in the January-March period on a sequential basis, it said in a regulatory filing. That compares with the consensus estimate of Rs 2,552 crore of the analysts tracked by Bloomberg.

Revenue rose 1.9 percent to Rs 15,990 crore for the three-month period compared with a Rs 15,926-crore estimate. Its dollar revenue was up 3.5 percent at $2,278 million.

Its earnings before interest and tax fell 1.5 percent sequentially to Rs 3,039 crore, in line with the Rs 3,123-crore expectation. Margin contracted 70 basis points to 18.9 percent in the reported period, while analysts had forecast a 10 basis points contraction.

The company, founded by Indian billionaire Shiv Nadar, purchased some software assets of the International Business Machines Corp. in a deal worth $1.8 billion, which it says would help in adding more clients.

HCL Technologies’ net profit for the full financial year breached the Rs 10,000-crore-mark. The company’s net profit jumped to Rs 10,128 crore in 2018-19 from Rs 8,608 crore a year ago.

Net profit of Tata Consultancy Services Ltd. crossed Rs 10,000 crore in 2012, and Infosys in 2014. Wipro Ltd.’s net profit, however, has still not surpassed the Rs 10,000-crore mark.

HCL Technologies’ earnings before interest and tax fell 1.5 percent sequentially to Rs 3,039 crore, in line with the Rs 3,123-crore expectation. Margin contracted 70 basis points to 18.9 percent in the reported period, while analysts had forecast a 10 basis points contraction.

The company, founded by Indian billionaire Shiv Nadar, purchased some software assets of the International Business Machines Corp. in a deal worth $1.8 billion, which it says would help in adding more clients.

The software company also announced an interim dividend of Rs 2 per equity share of of the company for financial year 2019-20, with the record date set for May 17. The payment date for the dividend payout will be out by May 24, the company said in its filing.

HCL Technologies kept its revenue guidance between 14 percent and 16 percent on constant-currency terms and it expects its margin to be between 18.5 and 19.5 percent.

Also read: HCL Drops Most in Seven Weeks on $1.8 Billion IBM-Asset Buy