HCL Tech Q2: Result Analysis, Revenue Guidance and Important Announcement

HCL Technologies Ltd. reported its results for the three months from June to September which managed to meet analysts' estimates. 

Net income for the quarter decreased 1.9 percent to Rs 2,015 crore compared to Rs 2,055 crore in the quarter ended June 2016, according to the filing of the company on trade. A Bloomberg analyst estimate had set the figure at Rs 1,969 crore.

The turnover of the company increased 1.6 percent to Rs 11,336 crore from the previous quarter to Rs 11,520 crore. In US dollars, revenue rose 1.8 percent to $ 1.72 billion.

The earnings before interest and taxes amounted to Rs 2,351 crore, down 2.6 percent sequentially, while margins decreased by 90 basis points to 20.4 percent from 21.3 percent. (Bloomberg Quint, 2016)¹

Revenue Performance and Important Announcement

The financial service sector of the company in constant currency terms grew 5.6
percent sequentially.
Manufacturing income decreased by 0.9 % QoQ.
Revenue from infrastructure services rose 4.4 %.
Revenue from engineering and R & D services increased by 2.3 %.
Attrition for IT enterprise business
services was 18.6 % for the quarter, compared to 17.8 percent the previous
quarter.
The company announced an interim dividend of Rs 6 per share of Rs. 2 each.
The company also named C Vijayakumar as the new CEO.


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FY17 Guidance 

The company maintained its revenue forecast for FY17 in terms of constant exchange between 12-14 percent. In dollar terms the United States, the direction is between 11-13 percent. The company also expects its EBIT operating margins vary between 19.5 to 20.5 percent in FY17.

Acquisition Proposal

HCL Tech has concluded an agreement to acquire Aerospace Butler America, LLC (Butler Aerospace), an engineering services provider and design for clients US aerospace and defense. The cash transaction is said to be worth $ 85 million.

Shares of HCL Tech closed at Rs. 830.45, up by 14.90 (1.83%) at NSE on 21 Oct, 2016.   

About HCL Technologies Ltd

HCL Technologies Limited is an Indian multinational IT services company based in Noida, Uttar Pradesh, India. A subsidiary of HCL Enterprise. First research and development division of HCL, it has emerged as an independent company in 1991, when HCL went into software services sector. Provides HCL Technologies (HCL Enterprise acronym) services including IT consulting, business transformation, remote infrastructure management, engineering and R & D, and business process outsourcing (BPO).

The company has offices in 34 countries, including the United States, European countries such as France and Germany, and Northern Ireland in the United Kingdom. It operates through a number of sectors, including aerospace and defense, automotive, consumer electronics, energy and utilities, financial services, government, industrial manufacturing, life sciences and healthcare, media and entertainment, mining and natural resources, utilities, retail and consumer, semiconductor, server, and storage, telecommunications, and travel, transportation, logistics, and hospitality. (Wikipedia, 2016)².

References;

1. http://www.bloombergquint.com/markets/2016/10/21/hcl-technologies-delivers-in-q2-maintains-fy17-guidance
2. https://en.wikipedia.org/wiki/HCL_Technologies
3. http://www.hcltech.com/investors/fast-facts

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