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HCL Tech: A Stable Performance - Views on News from Equitymaster
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HCL Tech: A Stable Performance
Mar 28, 2016

HCL Technologies announced its second quarter results for FY16 (the company has a June year ending). The company reported a 2.4% QoQ increase in sales and an 11.2% QoQ rise in net profits. Here is our analysis of the results.

Performance summary

  • Consolidated sales increased by 2.4% QoQ in 2QFY16. In constant currency terms, sales were up 2.1% QoQ.
  • Operating profits were up by 6.4% QoQ. The operating margin improved to 21.5% in 2QFY16 as compared to 20.7% 1QFY16. This was largely due to good control over direct costs in the quarter.
  • The other income was up by 57.1% QoQ while depreciation & amortization increased 13.3% QoQ.
  • The consolidated net profit increased by 11.2% QoQ. The bottomline performance was largely due to the strong operating performance.

Conolidated Financial performance

(Rs m) 1QFY16 2QFY16 Change 1HFY15 1HFY16 Change
Sales 100,970 103,410 2.4% 180,180 204,380 13.4%
Expenditure 80,050 81,160 1.4% 135,070 161,210 19.4%
Operating profit (EBITDA) 20,920 22,250 6.4% 45,110 43,170 -4.3%
Operating profit margin (%) 20.7% 21.5% 25.0% 21.1%
Other income (net of finance costs) 2,190 3,440 57.1% 5,590 5,630 0.7%
Forex gain/(loss) 220 110 -50.0% -380 330
Depreciation & Amortization 1,350 1,530 13.3% 2,130 2,880 35.2%
Profit before tax 21,980 24,270 10.4% 48,190 46,250 -4.0%
Tax 4,720 5,080 7.6% 10,290 9,800 -4.8%
Minority interest 0.00 0.00 20 0
Profit after tax/(loss) 17,260 19,190 11.2% 37,880 36,450 -3.8%
Net profit margin (%) 0 0 0 0
No. of shares (m) 1,408.6
Diluted earnings per share (TTM) 50.9
P/E ratio (x)* 16.0

*On the basis of trailing 12 month; # Financial year ends June

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