India's HCL profit soars 50 pct but shares dive

Oct 18, 2011

India's fourth-biggest software services firm HCL said Tuesday quarterly net profit leapt 50 percent but its shares slid on fears about the global downturn crimping the sector's future growth.

New Delhi-based HCL Technologies said net profit for the three months to September jumped to 4.97 billion rupees ($107 million) compared with 3.31 billion rupees a year earlier, beating market forecasts.

The performance of HCL, controlled by tycoon Shiv Nadar and whose customers include IBM and Microsoft, was helped by a rise in outsourcing orders and a sharp drop in foreign exchange losses.

The company, which has a July-to-June fiscal year and is the country's fourth-largest by sales, has achieved "tremendous momentum" in revenue growth, Vineet Nayar, HCL's chief executive, said.

Revenues surged 25.4 percent to 46.51 billion rupees ($1 billion) and HCL reported good performances in all divisions.

"We have doubled our quarterly revenues in just three years and crossed the $1 billion quarterly revenue mark despite the tough economic environment," Nayar said.

"We continue to see growth both in revenue and earnings," added Anil Chanana, HCL's chief financial officer.

But HCL's shares on Tuesday fell 7.25 percent to 407 rupees over worries about the sector's future in the face of a slowing economy in its main US market and the in Europe.

Nayar said macroeconimc indicators were "troublesome".

"There are concerns over the eurozone debt situation," he said.

India's flagship software services sector derives over 90 percent of its revenues from providing technology services to foreign customers.

HCL's margins "were slightly lower than our expectations," said Dipen Shah, at Kotak Securities, said in a note.

Shares of or TCS -- India's largest IT company -- also plunged more than seven percent to 1,038 rupees after it said it was unlikely to to hike prices in the near term due to global uncertainty.

Late Monday, TCS reported quarterly profit rose by a lower-than-expected 14.7 percent year-on-year to 24.39 billion rupees ($498 million).

Explore further: Out-of-patience investors sell off Amazon

add to favorites email to friend print save as pdf

Related Stories

India's HCL profit soars, outlook upbeat

Jul 27, 2011

India's fourth-largest software firm HCL on Wednesday posted a leap of 52 percent in quarterly net profit, beating expectations and giving an upbeat outlook despite global economic uncertainty.

India's TCS announces 14.7% Q2 profit jump

Oct 17, 2011

India's biggest software exporter, TCS, said Monday its quarterly net profit rose 14.7 percent, marginally below estimates, as concerns over global uncertainty offset improved outsourcing demand.

India's TCS quarterly profit jumps 21 percent

Jul 15, 2010

India's largest software exporter Tata Consultancy Services (TCS) reported Thursday its quarterly net profit jumped 21 percent, beating forecasts, as demand for outsourcing improved.

Wipro posts 9.7 percent profit rise, below forecast

Oct 22, 2010

India's third-biggest software firm Wipro reported Friday a lower-than-forecast 9.7 percent rise in quarterly net profit, blaming a higher rupee and wage costs for the disappointing earnings.

India's TCS announces 29 pct quarterly profit jump

Oct 16, 2009

India's biggest software services exporter, TCS, reported Friday that its quarterly net profit rose by 29 percent as the company sealed more deals in a better global business environment.

Recommended for you

Out-of-patience investors sell off Amazon

20 hours ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

States ascend into the cloud

Oct 24, 2014

Seven years ago, the state of Delaware started moving computer servers out of closets and from under workers' desks to create a consolidated data center and a virtual computing climate.

Microsoft drops Nokia name from smartphones

Oct 24, 2014

Microsoft said Friday it was dropping the Nokia name from its Lumia smartphones, rebranding following the acquisition earlier this year of the Finnish group's handset division.

Amazon's loss makes holidays a question mark

Oct 24, 2014

Amazon's trademark smile icon is becoming more of a grimace. The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

User comments : 0