Separator

HCL Records 19 Percent Rise in Profit in the Third Quarter

Separator

According to reports, HCL Technologies’ net profit has raises 19 percent in the third quarter, beating Street estimates, but the IT services provider cut the top end of its annual revenue and operating margin guidance amid a challenging demand environment.

India’s third largest software services firm by revenue now expects annual revenue growth to be in the 13.5-14 percent range on year, compared to 13.5-14.5 percent forecast earlier.

According to the company, last month it expected revenue to come in at the lower end of guidance during the fiscal year due to a challenging demand environment.

Revenue from its software services business is also forecast to grow by 16–16.5 percent on year in constant currency terms, from 16-17 percent predicted previously.

“The ongoing fiscal fourth quarter will be weak for its software business and will weigh on its overall numbers,” says HCLTech chief executive C Vijayakumar.

Net profit for the October-December period stood at Rs. 4,096 crore compared to Rs. 3,442 crore in the corresponding quarter last year.

Vijayakumar says, “Total spending on technology is expected to increase despite some moderation in the enterprise spending environment and change in the deal mix. Overall, we are continuing to see a good demand environment, especially deals which involve IT operating model changes, cloud adoption and vendor consolidation deals where we see good traction.”

HCLTech expects $115 billion worth of vendor consolidation deals to come up in the next three years, with the company hoping for a good share of the pie, especially in the financial services and consumer packaged goods (CPG) segments

The company reported a new deal total contract value (TCV) worth $ 2.34 billion compared to $2.38 billion last quarter.

“HCLTech expects $115 billion worth of vendor consolidation deals to come up in the next three years, with the company hoping for a good share of the pie, especially in the financial services and consumer packaged goods (CPG) segments,” Vijayakumar adds.

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