HCL Technologies: PAT Surged 8.84% For March Quarter Result

HCL Technologies, a leading global IT services company posted its Q3FY14 result on April 17, 2014. The company has posted a strong set of numbers during this quarter. It follows July-June fiscal year.

The company posted a handsome growth in topline of 5.47 per cent on sequential basis to Rs 4045.91 crore compared to previous quarter of the current fiscal year. The total revenue of the company comprises income from software services, business process outsourcing, infrastructure services. During this quarter, the total revenue of the company increased primarily due to an increase in the income from the infrastructure segment (accounts 35.66 per cent of total revenue) by around 10.37 per cent on quarterly basis to Rs 1442.72 crore. Meanwhile, the software services segment stood at Rs 2388.06 crore in the Q3FY14, reporting a growth of around 1.25 per cent compared to the previous quarter of this fiscal year.

The total expenditure of the company in the Q3FY14 stood at Rs 2453.78 crore, reporting a growth of more than 2.5 per cent compared to the Q2FY14. The increase in total expenditure can be attributed to an increase in other expenses (contributes 43 per cent of total expense) up by 5.23 per cent Q-o-Q to Rs 1065.65 crore.

On EBITDA front, the company has posted an EBITDA growth of more than 9.52 per cent on Q-o-Q basis to Rs 1711.17 crore during Q3FY14. As far as margin is concerned, the EBITDA margin has increased to 42.29 per cent for the quarter ended March 31, 2014 as compared to 40.73 per cent for the quarter ended December 31, 2013. The margin improved mainly due to reduction in total expenses as proportionate to increase in total revenue of the company.

The company has reported a growth of around 8.84 per cent in Profit After Tax (PAT) to Rs 1412.54 crore in the Q3FY14 compared to Rs 1297.87 crore in the Q2FY14. The sharp increase in profit can be attributed to increase in income from other sources and due to reduction in interest expense. The other income during this quarter has increased by 21 per cent on quarterly basis to Rs 170 crore and the interest expense of the company has plunged by around 11 per cent Q-o-Q to Rs 19.18 crore during Q3FY14 as compared to Q2FY14.

Commenting on the performance of the company, CEO Anant Gupta said, ”The Application Services business registered a robust performance led by Digital Systems Integration proposition on the discretionary side and ALT ASM (offering) on the non-discretionary side this quarter.” 

The company also informed that it has signed 12 transformational engagements this quarter and over USD one billion in total contract value. They also added two clients each in USD 50 million and USD 30 million categories. The company has declared an interim dividend of Rs 4 per share (200 per cent of the face value of Rs 2). 

From the above, we can say that the company has been performing well. And we expect the company will continue to increase its profits and margins in the coming quarters. On BSE, yesterday (April 17, 2014), the stock opened at Rs 1446 and closed at Rs 1424.30. The stock is trading at a P/E (TTM) of 18.24x.