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- Dec 28, 2017 - HCL Technologies: A Dull Performance
HCL Technologies: A Dull Performance
HCL Technologies announced its second quarter results for FY18. The company reported a 2.3% QoQ increase in sales and a 0.2%% QoQ fall in net profits. Here is our analysis of the results.
Performance Summary
- Consolidated sales increased 2.3% QoQ in 2QFY18. In constant currency terms, sales were up 0.9% QoQ. In US$ terms, sales were up 2.3% QoQ.
- Operating profits were up 2.3% QoQ. The operating margin was flat sequentially at 21.9%.
- The other income was up 6.1% QoQ while depreciation & amortization increased 30.4% QoQ.
- The consolidated net profit decreased 0.2% QoQ.
- The company declared an interim dividend of Rs 2 per share.
Consolidated Financials (Rs m) 1QFY18 2QFY18 Change 1HFY17 1HFY18 Change Sales 121,490 124,330 2.3% 228,560 245,820 7.6% Expenditure 94,910 97,140 2.3% 179,070 192,050 7.2% Operating profit (EBITDA) 26,580 27,190 2.3% 49,490 53,770 8.6% Operating profit margin (%) 21.9% 21.9% 21.7% 21.9% Other income (net of forex gain/loss) 3,130 3,320 6.1% 5,370 6,450 20.1% Finance costs 180 110 -38.9% 390 290 -25.6% Depreciation & Amortization 2,270 2,960 30.4% 3,590 5,230 45.7% Profit before tax 27,620 27,660 0.1% 51,660 55,280 7.0% Tax 5,520 5,720 3.6% 10,900 11,240 3.1% Minority interest & share of profit of assocIates 10 130 -50 140 Profit after tax/(loss) 22,110 22,070 -0.2% 40,710 44,180 8.5% Net profit margin (%) 18.2% 17.8% 17.8% 18.0% No. of shares (m) 1,392.0 Diluted earnings per share (TTM) 64.3 P/E ratio (x)* 13.7 *On trailing 12 month basis
Segmental Performance (Rs m) 1QFY18 2QFY18 Change Revenue by service offerings Application Services 44,101 44,634 1.2% Engineering and R&D services 26,120 27,353 4.7% Infrastructure Management Services 46,895 47,867 2.1% BPO 4,374 4,476 2.3% Revenue by geography Americas 76,296 77,582 1.7% Europe 33,288 36,180 8.7% RoW 11,906 10,568 -11.2% Revenue by industry vertical Financial services 30,251 31,083 2.7% Manufacturing 42,400 44,137 4.1% Telecom, Media & Entertainment 9,476 9,822 3.6% Retail & CPG 11,542 11,563 0.2% Healthcare 14,336 14,547 1.5% Public Services 13,485 13,179 -2.3%
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