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BW Businessworld

HCL Tech July-Sept Net Up 50% But Shares Slide

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HCL Technologies, India's fourth largest software services firm, on Tuesday posted a 50 per cent jump in quarterly profit, but shares fell as much as 7 per cent on a cloudy outlook for the sector amid slowing global growth.

HCL, which counts Microsoft, IBM, HP and Oracle as partners, said consolidated profit rose to 4.97 billion rupees for July-Sept on growth across geographies and categories.

Revenue rose 25.4 per cent to 46.51 billion rupees, on an average exchange rate basis.

Cloudy Outlook
A lower-than-expected profit reported by India's top software exporter Tata Consultancy Services (TCS) late on Monday has plunged its shares and turned the outlook negative for the outsourcing sector.

India's $76 billion showpiece IT sector, which feeds off increased outsourcing by companies looking to cut costs, is expected to face pricing pressure and a decline in new orders as Europe struggles with a debt crisis and the United States sees an economic slowdown.

No. 2 software exporter Infosys Ltd had cut its full-year sales outlook by less-than-expected last week, easing investor worries of a sharp slowdown in the sector.

A Reuters poll of brokerages showed analysts expected HCL Tech's profit to rise 45.6 per cent to 4.81 billion rupees, on revenue of 47.7 billion rupees.

The operating margin expanded to 17.1 per cent for the period from 16.3 per cent a year-ago but was lower from 18.5 per cent in the June quarter.

Chief Financial Officer Anil Chanana told reporters on Tuesday that the company has a capex plan of $230 million for its current fiscal year ending June. "We continue to see growth both in revenue and earnings," he said in a statement.

HCL signed 12 deals and added 3474 employees on a net basis during July-Sept.

HCL shares, valued at more than $6 billion, have lost a little more than a tenth in market capitalisation in three months. At 09:53 am, its shares were down 6.34 per cent at 412.40 rupees in a Mumbai market that was down 1.5 per cent.

(Reuters)