HCL Technologies (HCLTECH) Q4 06/07 earnings summary

Executive summary

• FY07 consolidated revenue was Rs. 6,068.7 crore and net profit Rs. 1,318.3 crore; adjusted YoY growth was 39.1% and 90.9%, respectively, excluding the extra three months of merged entities in FY06.

• Growth was supported by IT services, BPO and infrastructure management; currency appreciation pressured export economics, while recorded exchange gains materially lifted other income.

Financial highlights

• Consolidated revenue Rs. 6,068.7 crore, up 39.1% YoY on an adjusted comparison; other income Rs. 455.9 crore and total income Rs. 6,524.6 crore.

• Consolidated PBT Rs. 1,427.9 crore, up 91.5% adjusted; net profit Rs. 1,318.3 crore, up 90.9% adjusted, versus Rs. 690.6 crore in FY06.

• Standalone revenue Rs. 3,768.6 crore, up 33.5% adjusted; PAT Rs. 1,101.8 crore, up 90.9% on the adjusted comparison.

• Consolidated operating cash flow was Rs. 1,079.8 crore; cash and bank balances reached Rs. 660.7 crore at June 30, 2007.

Outlook and guidance

• Indian IT-ITES industry revenue grew 30.7% to US$39.6bn in FY07; NASSCOM projected global technology spend above US$2tn by 2010 and offshore spend of US$110–120bn.

• Addressable opportunities included IT infrastructure offshoring estimated at US$70–85bn and engineering/R&D services amid projected global engineering spend growth to US$1.1tn by 2020.

• Expansion plans included SEZ campuses in Noida, Chennai and Bangalore; capacity of ~39,000 seats was planned to increase by 20,000 over two years.