HCL Tech Q4 net dips 19.3 % to Rs 161.9 cr

HCL Technologies on Tuesday said its net profit dropped 19.3 per cent during the fourth quarter ended June 30, 2005, to Rs 161.9 crore due to reclassification of other income.

For the quarter, other income of the company declined to Rs 8.6 crore from Rs 87.7 crore in the last corresponding period.

"The decline in the net profit was due to the fact that part of the other income in 2002-03 was shifted to 2003-04 owing to regulatory reasons, which pushed up the figure last year," said a senior company executive.

The company declared a final dividend of 200 per cent on every share of a face value of Rs 2, taking the total dividend payout during the fiscal to 800 per cent.

HCL Technologies' EBIT (earnings before interest and tax) rose 34.4 per cent to Rs 170 crore in the last quarter of 2004-05, against Rs 126.5 crore during April-June 2004. The company's consolidated revenues for the quarter grew 25.7 per cent to Rs 927.5 crore, against Rs 738.2 crore in the corresponding period last year.

During the full 2004-05, the company's net profit went up 17.8 per cent to Rs 600 crore, while revenues increased 27.2 per cent to Rs 3,322.9 crore.

The company is sitting on reserves of $ 450 million and plans to spend a part of it for acquisitions.

"The expected cash flow will be enough for dividend and capital expansion, and will continue to add to our reserves. The return on reserves is 5.5 per cent. We have made successful acquisitions in the past and if the right one comes, we will make it ," Shiv Nadar, chairman, HCL Technologies, said.

"We are expecting a growth of at least 30-40 per cent in the topline and in EBIDTA (earnings before interest, taxes, depreciation and amortization) in the next three years," he said.

During the fourth quarter, HCL Technologies added 2,056 employees "" 1,420 in software services and 479 in BPO services "" to take the total workforce to 22,034.

In all, its headcount during the year increased by 7,732 people. "The company plans to take the headcount to 60,000," said Nadar, without clarifying the timeframe.

The company is also planning to enter China. "Our china strategy is on the drawing board and will be finalised in the next 12 months," he said.

The strategy will entail not only setting up of a development centre but also servicing the global and domestic market, said Vineet Nayar, president, HCL Technologies.