HCL Infosystems Q1 net profit down by 19.5 percent

NEW DELHI - HCL Infosystems Wednesday reported a 19.5 percent decline in net profit at Rs.47.46 crore for the first quarter ended Sep 30 from Rs.58.97 crore in the year-ago quarter.

The consolidated revenue for the quarter under review of the company stood at Rs.2,990.7 crore.

While the revenue from computer systems business remained Rs.898.9 crore, the earnings from telecommunication and office automation business for the quarter stood at Rs.53.7 crore.

“The telecom business has remained the same, computer business has dipped slightly,” said Ajai Chowdhry, chairman.

The company said the decline in the margin has been due to the large amount of investments made.

“In last one year we invested over 40 crore in getting our SAP infrastructure up and ready to be able to handle larger projects business. We have created a cloud computing infrastructure for us and we have also booked some good orders on cloud,” said Chowdhry.

The software exports order of the company is also gaining momentum as it recently bagged new orders from Cameroon in Africa. Earlier, it had won orders from Sri Lanka and Afganistan.

For the quarter under review, the company’s forex gains was Rs.6.7 crore against loss of Rs.1.7 crore in the same period a year ago.

The earnings before interest taxes, depreciation and amortization margin for the quarter ended Sep 30 stood at 2.9 percent compared to 3.2 percent over the same period in 2009.

The company also increased the wages of the employees by 12 to 14 percent in July. The company added 295 people with over 100 in research and development, taking the headcount to 7,000.

“Over the last quarter, HCL Infosystems has successfully ventured into new markets vertical expertise to sustain company’s transformation journey with solutions centric practices through specialised products,” said Chowdhry.

“With the company expanding into the Middle East market through its subsidiary HCL Infosystems MEA, it will not only reach out to a large customer base but also further build capacity to develop and deliver world class solutions,” he added.

Speaking on the opportunity the third generation (3G) services will bring for the IT company, Chowdhry said: “3G will create new opportunity in many areas for us. It will generate business for our notebooks and netbooks.”

“Our high-end sales will improve… more and more people will move towards high end products,” he added.

The company also declared an interim dividend of Rs.2 per equity share of Rs.2 each for the financial year 2010-11.