HCL Technologies result drops

HCL Technologies Ltd., among India’s top five software exporters by sales, said Wednesday its consolidated third-quarter net profit fell 36% from a year earlier, dragged by foreign exchange and accounting losses.

Net profit in the three months ended March 31 fell to 2.18 billion rupees ($43.3 million) from 3.43 billion rupees a year earlier. The company’s financial year runs from July through June.

Profit fell despite a 49% rise in revenue to 28.62 billion rupees from 19.15 billion rupees a year earlier, the company, which reports its results based on U.S. accounting standards, said.

The company reported a cash flow accounting loss of 1.26 billion rupees and a forex loss of 761 million rupees. The Indian rupee lost about 4% against the U.S. dollar in the just-ended quarter.

Provisions for taxation rose 32% to 485 million rupees from 368 million rupees a year earlier, further hurting profits.

The results were below expectations. Fifteen analysts on average expected net profit of 2.48 billion rupees on revenue of 28.36 billion rupees, according to a Dow Jones Newswires poll.

Its quarterly earnings before interest, tax, depreciation & amortization margin fell marginally to 21.3% from 21.8% in the second quarter ended Dec. 31, and rose from 21.1% a year earlier, the company said.

HCL Technologies’ results follow those of India’s largest software exporters by revenue – Tata Consultancy Services Ltd. and Infosys Technologies Ltd. – both of whom gave a cautious outlook for the April-March financial year.

India’s software exporters earn most of their revenue from clients in the U.S. and Europe, and have been hurt by global customers cutting back spending on technology.

In dollar terms, HCL Technologies’ quarterly net profit was $43 million compared with $85.4 million a year earlier. Revenue rose 18% on the year to $564.4 million.

HCL, headquartered in the northern city of Noida, counts U.S.-based Cisco Systems, Deutsche Bank AG and U.K.-based DSG International PLC as customers and about 59% of its revenue comes from the U.S.

It said during the quarter, it signed 11 new contracts with customers including UTi, NASDAQ OMX, Shoprite, Moduslink and Xerox.

Nano a great success

In India, customers are lining up to buy the world’s least expensive car, the Nano, which went on sale this week. The impact the Nano is expected to have a positive effect on the auto industry, which is facing a worldwide slump in sales.

Forty-year-old bus driver Ram Nath in New Delhi never dreamed of owning a car on his $300 a month salary. But he was among the first in line at a dealership when orders for the Nano opened.  

After taxes, the base model of the car will cost about $2,200 – making it the least expensive automobile in the world.  

Ram Nath says he is happy that a car he can afford is now on the market. He says he too, like richer people, can take his family out in a car on holidays.