HCL Tech Q4 net up 27%; optimistic on FY'18 growth

IT firm HCL Technologies' net profit rose over 27 per cent to Rs 2,475 crore for the March quarter of last fiscal, showing a stronger growth than larger rivals like TCS and Infosys.
The fourth-ranked software services firm said it is also optimistic about opportunities, especially in new-generation services and provided a revenue growth outlook of 10.5-12.5 per cent in constant currency terms for 2017-18.
HCL Technologies had a net profit of Rs 1,938.66 crore in the January-March quarter of the previous fiscal, 2015-16.
The company's total income also grew over 20 per cent to Rs 13,183 crore for the fourth quarter of 2016-17, as per Indian accounting standards.

"We have posted a robust set of numbers... The demand for new generation services is very strong... We will continue to accelerate investment in high-growth areas, driven by our Mode 1-2-3 strategy," HCL Technologies President and CEO C Vijayakumar told reporters here.
He added that HCL has signed eight transformational deals this quarter across service lines, verticals and geographies.

HCL Technologies' performance outshines that of rivals Tata Consultancy Services (TCS) and Infosys. Compared to over 20 per cent rise in March quarter revenues by HCL, TCS posted 4.2 per cent growth, while Infosys registered 3.4 per cent growth although the two have a much bigger income base.

While Indian IT firms are staring at new opportunities ushered in by digitisation and automation, they are up against challenges like tighter visa norms in large markets like the US and the UK.
Talking about the stricter stance being taken by the US on work visas, Vijayakumar said this is not a major concern for HCL Technologies as 55 per cent of its workforce there are locals.
"We have been investing in the US market over the last many years and our visa dependence is very low. Also, about 55 per cent of workforce in the US is locals, so we are not worried," he added.

The US market accounted for the largest chunk of the company's revenues at 62.6 per cent. For the industry too, the North American market is the largest contributor to revenues.
Over the past few months, there has been a growing sentiment of protectionism across various markets, including the US, that are seeking to safeguard jobs for locals and raising the bar for foreign workers.
The US had also named Indian firms, Infosys and TCS, accusing them of unfairly cornering the lions share of America's H-1B work visas.
Indian IT firms are also ramping up their operations in the US by hiring more locals in order to comply with norms.

The tightening of visa norms not only pushes up operational costs for these tech firms but also makes movement of skilled workforce difficult.
At the end of March 2017 quarter, HCL had 1,15,973 employees with a gross addition of 10,605 people. Its attrition for IT services (on last 12 month basis) was at 16.9 per cent, lower than 17.3 per cent in the corresponding quarter last year.
The Board of Directors has declared an interim dividend of Rs 6 per equity share of Rs 2 each of the company for the financial year 2017-18.
On the buyback offer, HCL Technologies CFO Anil Chanana said the payout of the Rs 3,500-crore buyback would be completed in the next two months.