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HCL Technologies is one of India’s biggest software services companies. It shared its numbers for the first quarter that ended on September 30, 2015. The data shows both good and bad news.
Key Numbers for Q1 2015
Net profit fell 2.7% to Rs 1,823 crore. Last year’s same quarter the profit was Rs 1,873 crore.
In U.S. dollars the profit fell 9.3% to US$ 278.5 million from US$ 307.2 million a year earlier.
Revenue (the money earned from customers) grew 15.6% to Rs 10,097 crore (ex‑adjusted). In the same quarter last year revenue was Rs 8,735 crore.
When we look at revenue in dollars it rose 7.7% to US$ 1.54 billion from US$ 1.43 billion.
The company also announced an interim dividend of Rs 5 per share. The stock closed at Rs 824.20, down 2.04% from the previous close.
Revenue Growth and Sources
HCL said the revenue boost came from many parts of its business.
- Europe revenue grew 18.2% year‑on‑year.
- Americas revenue grew 12.3% year‑on‑year.
- Top industry verticals that grew the most were:
- Life sciences & health care – 40.5% growth.
- Telecom, media, publishing & entertainment – 23.2% growth.
- Public services – 22% growth.
- Manufacturing – 12.7% growth.
- Retail & consumer packaged goods – 6.6% growth.
- Financial services – 7.7% growth.
These numbers show that HCL is getting more work from many different customers around the world.
Why Net Profit Fell
Even though revenue went up, profit went down a little. HCL gave two main reasons.
- Adverse currency effect – The Indian rupee got weaker against the U.S. dollar. Because HCL earns a lot of money in dollars, a weaker rupee can reduce the profit when it is converted back to rupees.
- Customer‑specific issue – One big client had a problem that affected HCL’s earnings for the quarter.
When the company removes the impact of these two items, the profit before adjustment would have been Rs 1,726 crore. This shows the core business is still strong.
Workforce, Contracts and Future Outlook
HCL’s total employee count at the end of the quarter was 105,571. During the quarter, 536 employees left. This is called attrition.
The firm also signed 10 transformational engagements that together have a total contract value of more than US$ 1 billion. These are large projects that can bring steady income in the future.
CEO Anant Gupta said the company started FY16 with a strong balance sheet and a 15% year‑on‑year revenue growth in constant currency. He also highlighted investments in “BEYONDigital, Next‑Gen ITO and IoT offerings” as reasons for a solid order book and pipeline.
Overall, the company expects the next quarters to be steady, but it warned that the September quarter could be “tepid” because of the same currency and client issues.
FAQ
What does net profit mean?
Net profit is the money a company keeps after paying all its costs, taxes and other expenses. It shows how much the business actually earned.
Why did HCL’s profit drop even though revenue grew?
The profit fell because of a weaker rupee (currency effect) and a specific problem with a big customer. These factors reduced the profit when the numbers were converted to rupees.
What is an interim dividend?
An interim dividend is a cash payment to shareholders that is paid before the company’s full‑year results are announced. HCL paid Rs 5 per share as an interim dividend for this quarter.
How does employee attrition affect the company?
Attrition means employees leaving the company. High attrition can increase hiring costs and affect project delivery. HCL’s attrition of 536 people is a figure investors watch.
Understanding these points helps readers see why HCL’s numbers look the way they do and what they could mean for future performance.
Conclusion
HCL Technologies showed strong revenue growth in Q1 FY15, but profit slipped a little because of currency changes and a client issue. The company’s large new contracts and steady dividend suggest confidence in future earnings. Investors can watch the next quarters to see if the profit dip is only temporary.
