HCL Technologies Q1 profit falls 10 per cent at Rs320 crore
29 October 2009
India's fourth largest computer service player, HCL Technologies Ltd posted a 10 per cent decline in net profit for the quarter ended September with foreign exchange loss of Rs151 crore. The company's operational performance however matched that of its larger rivals in a market seeing reviving trends for information technology (IT) services.
Net profit for the three months ended 30 September, the company's first quarter as it follows a July to June accounting year stood at Rs320 crore as against Rs356 crore in the same period a year earlier the company said on Wednesday. The profit fell 3 per cent from the Rs330 crore it posted in the three months ended June.
The company's profit suffered hugely on account of the losses it incurred on long-term foreign currency hedge positions it took in 2007 when the rupee was appreciating rapidly, eroding the dollar-denominating earnings of IT firms and spurring companies to hedge against further advance in the value of the Indian currency. The rupee has since declined sharply against the dollar.
HCL posted revenue of Rs3,031 crore that was 29 per cent higher over the same period last year and 4.2 per cent over the previous quarter. The company's forex loss increased from Rs89 crore in April-June and Rs80 crore in the September quarter of the previous year to Rs151 crore.
According to analysts the company is slowly exiting its hedge position and will likely take smaller hedges of shorter duration Meanwhile rivals Tata Consultancy Services Ltd (TCS), Infosys Technologies Ltd and Wipro Ltd reported higher profits over the same quarter as they received a boost from a revival of demand for technology services in the US and European markets.
For the same period, Infosys and Wipro posted gains in foreign exchange of Rs85 crore and Rs23 crore respectively and TCS reported a forex loss of Rs113 crore for the three months to September.