HCL Infosystems: Tough times - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

HCL Infosystems: Tough times

Jan 18, 2002

The slowdown in the Indian industry has taken a toll on the topline and operating margins for HCL Infosystems. The company has reported a 4% decline in revenues on a YoY basis. However, the net profits have climbed down even more sharply. The bottomline has registered a sharp 17% decline. This is inspite of a large other income component for Rs 28 m. Had the other income been equal to Rs 4 m (the other income figure in 2QFY01) the bottomline would have fallen by a sharp 30%.

(Rs m)2QFY012QFY02Change
Sales 2,826 2,719-3.8%
Other Income 4 28 658.9%
Expenditure 2,600 2,558-1.6%
Operating Profit (EBDIT)226161-29.1%
Operating Profit Margin (%)8.0%5.9%-
Interest 106-
Depreciation 31 29 -5.7%
Profit before Tax 189 154 -18.7%
Tax 14 8 -45.7%
Profit after Tax/(Loss) 175 146 -16.6%
Net profit margin (%)6.2%5.4%
Diluted number of shares 31.9 31.9
Diluted Earnings per share* 21.9 18.3
P/E (x) 5.6

The bleak performance is due to the fact the PC markets are witnessing a downturn. Revenues from PC sales constitute about 56% of HCL Infosystems total. The company is the largest PC manufacturer in India with an 8.6% market share according to IDC. According to MAIT, PC markets have shown a decline for 4% for 1HFY02 in unit terms (though IDC contests this and claims that the markets have actually grown). However, the real cause for concern is the fact that the realisations have come down quite sharply in 1HFY02. The drop in realisations for 1HFY02 was a significant 20% as compared to 6% in FY01.

At the current market price of Rs 103, the stock is trading at a P/E multiple of 6x its 2QFY02 estimated earnings. In light of the tough market environment impacting the financials adversely, the stock may see a decline in valuations.

Equitymaster requests your view! Post a comment on "HCL Infosystems: Tough times". Click here!


More Views on News

Why Subex Shares Rallied 32% in the Last Two Sessions? (Company Info)

Apr 22, 2021

Share price of the company witnessed upward rally in the last trading session even as share markets remained volatile.

HCL INFOSYS 2018-19 Annual Report Analysis (Annual Result Update)

Sep 24, 2019 | Updated on Sep 24, 2019

Here's an analysis of the annual report of HCL INFOSYS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of HCL INFOSYS. Also includes updates on the valuation of HCL INFOSYS.

HCL INFOSYS Announces Quarterly Results (1QFY20); Net Profit Up 0.8% (Quarterly Result Update)

Aug 2, 2019 | Updated on Aug 2, 2019

For the quarter ended June 2019, HCL INFOSYS has posted a net profit of Rs 400 m (up 0.8% YoY). Sales on the other hand came in at Rs 7 bn (down 40.1% YoY). Read on for a complete analysis of HCL INFOSYS's quarterly results.

HCL INFOSYS Announces Quarterly Results (4QFY19); Net Profit Up 50.0% (Quarterly Result Update)

Jun 14, 2019 | Updated on Jun 14, 2019

For the quarter ended March 2019, HCL INFOSYS has posted a net profit of Rs 439 m (up 50.0% YoY). Sales on the other hand came in at Rs 10 bn (down 5.3% YoY). Read on for a complete analysis of HCL INFOSYS's quarterly results.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

Top 3 Nifty ETFs to Buy Now (Fast Profits Daily)

Apr 20, 2021

In this video I tell you the three Nifty ETFs I think are the best.

A Stock with 700% Return Potential Comes with Additional Payoffs (Profit Hunter)

Apr 15, 2021

Narayana Murthy was one of the first unicorn founders to get the backing of this entity...

11x Bankruptcy to Bluechip Stock: A Rare India Revival Story (Profit Hunter)

Apr 16, 2021

There is no stopping this 11-bagger stock from significant upside.

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 22, 2021 (Close)


  • Track your investment in HCL INFOSYS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks