Top 5 key takeaways from HCL Technologies Q2 results

NEW DELHI: HCL Technologies reported a set of stellar numbers for the quarter ended December 31 before market hours on Tuesday.

India’s fourth largest IT service provider reported a strong quarter on the back of higher margins and deal wins. “HCL has always been on the forefront of changing market dynamics. As a company with good corporate governance practices and robust financial performance, we continue to create exceptional value, both for businesses as well as communities in which we operate,” said Shiv Nadar, Chairman & Chief Strategy Officer, HCL Technologies.

“We are proud to launch HCL Grant – an initiative to empower, enhance and institutionalise the work being done by NGOs in India, by offering them strong governance frameworks and management capabilities,” he said.

Here are 5 takeaways from HCL Technologies Q2 results:

Net Profit:

HCL Technologies reported 11.2 per cent QoQ and 0.2 per cent YoY growth in net profit at Rs 1,920 crore for the quarter ended December 31. In dollar terms, net income grew 10.3 per cent QoQ but fell by 5.4 per cent YoY to $291 million.

Revenues:

Revenue grew by 2.4 per cent QoQ and 11.4 per cent YoY to Rs 10,341 crore. Broadbased growth was seen across all revenue segments. In dollar terms, revenues grew 1.4 per cent QoQ and 5.1 per cent YoY to $1,566 million.

Revenues for the US, Europe and ROW (rest of the world) grew by 13.8 per cent, 15.1 per cent and 7.9 per cent, respectively. Segmentwise revenues from engineering and R&D services rose 23.0 per cent, business services 23.9 per cent, infrastructure services 16.4 per cent and application services at 6.4 per cent.

Dividend:

The company has informed BSE that the board of directors of the company at its meeting declared an interim dividend of Rs 6 per equity share of Rs 2 each for 2015-16.

Client additions:

Strong client addition continues in the calendar year 2015. 3 new clients were added in the basket of $50 million client category, 5 new clients were added in the $30 million category, and 5 new clients were added in the $20 million category.

Top five clients contribute as much as 13.6 per cent of revenues, while top 10 clients contribute nearly 21.7 per cent and top 20 clients as much as 32.4 per cent.

Margins:

HCL Technologies, which was widely expected to report a drop in margins by as much as 30 basis points largely due to the impact of the Chennai floods, reported a gross margin of 34.5 per cent for the quarter ended December 31 compared with 33.2 per cent reported in the previous quarter.

EBITDA margin came in at 21.5 per cent for the second quarter of the financial year, compared with 20.7 per cent reported for the previous quarter. Net income margin grew 18.6 per cent compared with 17.1 per cent reported for the September quarter.