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Money News

HCL Tech's Q4 net jumps, sees more growth

NEW DELHI (Reuters) - Software services firm HCL Technologies Ltd. on Monday said its June quarter profit more than doubled as it won outsourcing contracts from firms seeking to cut costs, and it saw more growth ahead.

“We are quite optimistic on this year. IT outsourcing deals, engineering-based services and remote infrastructure management will continue to drive the growth,” Vineet Nayar, president of HCL Technologies, told reporters.

HCL, India’s fifth-largest software services exporter, said consolidated net income in its fiscal fourth quarter rose to 4.9 billion rupees ($121 million) from 2.33 billion rupees in year earlier under U.S. accounting rules.

The profit was bolstered by foreign exchange gains of about 2.5 billion rupees on increased currency hedging, Nayar said, adding the company had hedged $1.2 billion of foreign exchange exposures for the next six months.

HCL’s revenue grew 28.6 percent to 16.12 billion rupees as it won more contracts in Europe, which accounted for 30.5 percent of its revenue up from 28.8 percent a year ago.

Ahead of the results, shares in HCL, which offers IT solutions and back-office services, had fallen 0.64 percent to 317.35 rupees in a Mumbai market that rose 1.0 percent.

The company, based on outskirts of New Delhi, added 8 new clients during the quarter, including film and camera maker Konica Minolta Holdings Inc. and New Zealand’s biggest company and dairy exporter, Fonterra Co-operative Group Ltd.

India’s large pool of English-speaking workers and cheaper wages, at nearly a fifth of western salaries, have helped attract outsourcing by overseas firms.

But the industry faces some obstacles -- a skills shortage and related wage rises of about 10 to 15 percent a year, inadequate infrastructure, and the rise in the rupee of nearly 7 percent against the dollar in the June quarter.

HCL competes with larger rivals such as Tata Consultancy Services Ltd., Infosys Technologies Ltd., Wipro Ltd. and Satyam Computer Services Ltd.

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