Indian software services firm HCL Technologies Ltd. said quarterly profits surged by 110 percent in dollar terms as media, infrastructure services and Asia-Pacific business pulled the company out of last quarter's slump.
HCL said yesterday it earned 3.3 billion rupees (US$68.9 million) in net income during the quarter ended June 30, up from US$32.8 million in the same period a year earlier, a 110 percent increase in dollar terms. Revenue was 29.1 billion rupees (US$607 million), up from US$501.7 million a year earlier, a 21 percent increase in dollar terms.
"The past year has been remarkable for us. We have posted industry leading growth while expanding margins at the same time," chief executive Vineet Nayar said in a statement.
The results, which beat expectations, represent a strong turnaround from last quarter, when profits plunged by nearly half as the company battled foreign exchange losses, lower prices, and declining demand from financial services and telecom customers.
HCL's torrid growth outpaced all its peers. Tata Consultancy Services, India's largest outsourcing firm, came closest, posting a 22.3 percent increase in quarterly profit. Infosys lagged with a 1.6 percent increase in quarterly profit, while Wipro posted a 13 percent gain.
Nayar told reporters that HCL's recession-beating strategy was to focus on large deals, broad-based growth, and to keep investing despite the global downturn.
"At HCL we do not believe recession is an excuse," he said. "We are trying very hard to make sure it is an opportunity for HCL to increase its market share."
HCL has made four acquisitions since July 2008. The largest was the acquisition of British consulting firm Axon Group PLC for pounds 440 million (US$664 million). In 2008, HCL also acquired Control Point Solutions Inc., a U.S. telecom expense management company, for US$20.8 million, and Liberata Financial Services, the UK insurance claims processing subsidiary of Liberata Ltd., for an undisclosed amount.
In July 2009, HCL Axon bought part of UCS Group Ltd., a South African company that specializes in information technology for retailers, for an initial cash payment of US$7.7 million.
HCL said it added net 14 clients during the quarter, winning new deals with Dr. Pepper Snapple Group, Sony Corp, Nokia Corp, MTV Networks and Agilent Technologies, among others.
HCL added net 190 employees during the quarter, bringing its global headcount to 54,216.
Company executives have said they're sensitive to growing concerns about job losses in the U.S. and have been emphasizing local hiring plans.
Nayar said that in the last financial year 3,500 of the company's 15,000 recruits came from the U.S. and Europe.
"We are committed to local recruitment," he said.
The stock was up 6.0 percent, at 307.5 rupees in midafternoon trade on the Bombay Stock Exchange, beating the benchmark Sensex index's 0.2 percent gain.