HCL Tech profit up 52%, beats forecast


2 May 2011
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NEW DELHI: HCL Technologies, country's fourth largest software services firm, posted a better-than-expected 52 per cent jump in net profit for April-June, as all its verticals and geographies posted strong growth.

HCL said consolidated profit rose to Rs 511 crore for April-June, compared with a profit of Rs 337 crore a year ago. Revenue rose 27.5 per cent to Rs 4300 crore, on an average exchange rate basis.

A media poll of brokerages showed analysts expected profit to rise 45 per cent to Rs 494 crore, on revenue of Rs 4318 crore.

Country's top three software firms, Tata Consultancy Services ( TCS)) , Infosys Ltd and Wipro Ltd have all in the past weeks warned of a volatile global economy which may reduce client spending.

Growth in country's $76 billion software services sector has slowed down in recent quarters due to global economic uncertainty, severe competition, rising wages, high staff turnover rates and management shakeups at Infosys and Wipro.

Most Indian IT firms see margins slipping sequentially for the June quarter, when they hike wages of employees -- a key factor to tackle high attrition rates in the ultra-competitive industry.

HCL, which follows a July-June fiscal, however raises wages only in its fiscal first quarter, enabling it to post better margins compared to peers. HCL, which added 3,626 employees on a net basis during April-June, said operating margin was almost flat at 18.5 per cent for the period.

At 09:35 AM, HCL shares, valued at more than $8 billion, were down 1.16 per cent at Rs 509 on the National Stock Exchange.

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