For the fourth quarter ended 30 June, 2006, consolidated net profits have increased 18.62 per cent to Rs70.03 crore from Rs59.04 crore for the same quarter of previous year. Consolidated revenues have increased 41.28 per cent to Rs3,098.1 crore from Rs2,192.87 crore.
Operating profits or EBITDA for the quarter has increased 52.84 per cent over the previous year quarter. Operating margins as a percentage of net sales has improved to 3.32 per cent from 3.07 per cent.
Cost of sales, mostly purchase cost of goods distributed, increased 42.69 per cent during the quarter. Staff costs went up by a modest 13.07 per cent and administrative and selling expenses remained flat.
The company booked an exchange loss of Rs6.45 crore as against a profit of Rs3.25 crore for the previous year quarter. Other income declined 27.56 per cent to Rs6.57 crore from Rs9.07 crore. Tax provisions went up 77.38 per cent to Rs29.8, resulting in a lower growth in bottom line.
For the full year 2005-06, consolidated net profits have increased 23.13 per cent to Rs280.36 crore from Rs227.7 crore for the previous year. Consolidated revenues increased 46.73 per cent to Rs11,368.31 crore from Rs7,747.89 crore.
Full year operating profits have increased 41.01 per cent, though operating margins as a percentage of net sales have declined to 3.32 per cent from 3.45 per cent for the previous year.
Though cost of sales increased 48.25 per cent for the full year, the company did a good job in managing operating expenses. Staff costs increased by 21.56 per cent while the rise in selling and administration expenses was limited to 16.79 per cent.
Other income for the full year went up by 29.25 per cent, but the company booked an exchange loss of Rs14.44 crore as against a gain of Rs14.5 crore for the previous year. An increase of 53.56 per cent in tax provisions impacted bottom line growth.
Till recently, HCL Info was the sole national distributor of mobile phones for Nokia. The mobile phone market leader has since decided to start its own distribution in some circles and the HCL Info stock had corrected substantially after this announcement.
HCL Infosystems continues to maintain that the tremendous growth in mobile phone sales would ensure that there is no impact on top line growth because of the loss of status as the sole distributor. The performance of the company seems to confirm this as the sales growth in telecom & office automation is 50 per cent for the last quarter and 57 per cent for the full year.
Sales growth in the computer systems business increased 22 per cent for the quarter and 21 per cent for the full year. The company derives 79 per cent of its revenues from telecom equipment and office automation while computer systems contribute close to 21 per cent.
The company had recently been appointed as distributor for DTH TV equipment by Dish TV and for iPod music players by Apple Inc. These two products are expected to see considerable growth in volumes in future.