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You are here : IndiaNotes >> Research & Analysis >> Companies >> HCL Technologies Ltd. >> Research

HCL Technologies beat analysts' expectations on all counts in Q3FY17

SMC | 01 Feb, 2017  | Follow Author | Add to my Favourites 
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Country's fourth largest IT services exporter HCL Technologies started off the financial year 2016-17 on a strong note with October - December quarter earnings beating analysts' expectations on all parameters.


Financial Highlights


- Broad based growth across Verticals driven by Public Services at 24.1%, Retail & CPG at 22.7%, Lifesciences& Healthcare at 14.0%, Manufacturing at 11.2%, Telecommunications, Media, Publishing & Entertainmentat9.7%,and Financial Services at 5.4% (LTM YoY on Constant Currency basis).


- Strong client addition continues: $5+ Mn clients up by 14, $10+ Mn clients up by 8, $20+ Mn clients up by 13, $40+ Mn clients up by 9, $50+ Mn clients up by 5 and $100+ Mn clients up by 1 (on YoY basis).


- HCL has extended its IP partnership with IBM to define the future roadmaps for additional products in the areas of Application security, B2B data transformation, Testing automation and Mainframe management tools.


- ŸHCL has committed to invest ~$155 million in the extended partnership. Operating Cash Flow / Net Income conversion at 113% for LTM ended December 31, 2016.


- Announces dividend of Rs. 6 per share, 56th consecutive quarter of dividend payout. Return on Equity at 28% for LTM ended December 31, 2016.

 

FY’17 Guidance


Revenue:



- Guided for FY'17 Revenues to grow between 12.0% to 14.0% using the average exchange rates for FY’16. This translates to 10% to 12% in USD terms based on December 31, 2016 exchange rates.


- Expect FY’17 revenues to be in the middle of this range.


- The acquisitions and IP led partnerships announced after 30th September, 2016 are likely to additionally contribute 0.6% to 1.0% in revenues depending upon the date of consummation of Geometric deal.

 

Operating Margin (EBIT):


- FY’17 expected Operating Margin (EBIT) range continues to be in the range of 19.5% to 20.5% post consummation of acquisitions as above.


- We expect JFM’17 quarterly margin to be in the same range.



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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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