/dq/media/agency_attachments/UPxQAOdkwhCk8EYzqyvs.png)
Follow UsHCL Technologies is a leading player in the Indian software
services industry providing services in the area of embedded products, product
development, Internet, e-commerce and networking. The company currently has 25
offices in 15 countries.
|
/dq/media/post_attachments/cd1659a26a266806bb5edd61d08c9a9794a78fe853d78c12e16a2c5eaf494d36.jpg)
HCL reported a modest performance in the fourth quarter that
ended June 2001. On a sequential basis, total group revenues were up 2% to Rs
369 crore whereas the net profit was up 9% to Rs 124 crore. Compared to the
corresponding quarter in the previous year, the net profit grew by 35% and 49%
respectively. Annual revenues of HCL Technologies stood at Rs 1,405 crore, up
52%. Net profit was up 105% to Rs. 442.90 crore.
Prominent among the additions in the fourth quarter were
Panasonic, Honda Motor Company, Deloitte Touché Tohmatsu, Scient Corporation,
Denso Corporation, Thomson Financial and Fuji Film.
Technology Development Services remains the key division of
the company contributing up to 45% of the total revenues during the year
compared to 34% in the previous year. These have improved from 41% of the
revenues in the first quarter to 48% in the fourth quarter. The company provides
solutions to embedded software product companies. HCL Tech’s other services
include software product development, application engineering services and
networking services.
HCL Tech added 23 clients during the quarter and 71 during
the year. HCL Technologies achieved 68% of the total revenues from offshore
activities. The company provides these services through the 14 technical
development centers and 35 dedicated offshore centers out of which 14 were added
during 2000-01. HCL Tech’s employee strength stood at 4,652, up 951 over the
previous year.
| Financials | ||||
| (All figures in Rs crore) |
||||
| Â | 2000 | 2001 | 2002* | 2003* |
| Sales | 925.60 | 1405.10 | 1712.01 | 2157.14 |
| Other Income | 71.40 | 127.30 | 156.59 | 180.07 |
| Operating Profit | 300.90 | 525.90 | 673.00 | 825.00 |
| OPM (%) | 24.79 | 28.37 | 30.16 | 29.90 |
| Profit After Tax | 243.60 | 445.00 | 568.10 | 700.00 |
| Equity | 55.90 | 55.90 | 55.90 | 55.90 |
| EPS (Rs) | 8.72 | 15.92 | 20.33 | 25.04 |
| Projected; Other income includes share of income from equity investment;Â Face Value = Rs 4 per share Year ended June |
||||
HCL Tech expects its massive offshore infrastructure to play
a key role in driving future business as more and more companies look at
outsourcing their requirement from India. HCL Tech has built strong long-term
relationships with major clients and plans to look at targeting such clients
through similar relationships or joint ventures. In terms of performance, the
company expects the next couple of quarters to be flat and its operations in
terms of maintaining the billing rates and increase and improve revenues from
clients in R&D outsourcing would be crucial.
HCL is trading at Rs 213 discounting its projected June 2002 EPS by 10 times
and June 2003 EPS by eight times. The stock has receded sharply in the past six
months in line with the fall in the valuation of the IT sector and the lower
than expected fourth quarter results.
Sushanto Mitra is the founder
of Technology Capital Partners
The views reflected here are of the author and not of this
publication. No liability is accepted for losses based on the information
presented here