HCl announces results

HCL Infosystems  today announced its financial results for the second quarter ending December 31st 2011.

Mr. Harsh Chitale, Chief Executive Officer, HCL Infosystems Limited, commenting on the results said, “Due to the ongoing challenging environment, business growth in this quarter has not been as per expectations.  We have been affected like the rest of the industry on account of uncontrolled circumstances like rupee depreciation and natural calamities like floods in Thailand which has led to a scarcity of computer components and thereby impacted market availability and also increased costs.  However we are committed to our journey of transformation and confident that persistent efforts through our company wide excellence program ‘Aspire’ will deliver results in times to come. Multiple steps are being taken for concrete realignments and synergies to shape our internal business processes and workings.”  


Key Updates and Quarter Snapshot

 

In our enterprise business segment -

  • Government segment, which forms significant part of our enterprise business, continued with the trend of delay in decision making & slowdown in spending, impacted the company’s performance. On the other hand company’s focus on ramping up the non-Government verticals, especially corporate sector (IT-ITES, Pharma, BFSI, etc) and Small & Medium businesses, yielded positive results with Y-o-Y growth in sales from these segments
  • Services business comprising of Life cycle services & Infrastructure Management services continued to perform well, growing at 10% sequentially
  • There was also an impact due to continued rupee depreciation Rupee depreciated by nearly 19 % during the first half of the current financial year. The company recorded an accounting loss of Rs 12crores on this account during the quarter. Additionally, the rupee depreciation also resulted in contraction of margins where orders were accepted in earlier periods. The company, as a result of steep rise in forex rates, had to refuse/defer certain orders which would have added to our revenue & profitability. As a result of the above, the overall estimated impact on company’s margin due to for-ex fluctuation was Rs. 48 crores during the quarter & Rs. 80 crores during the first half of FY12.
  • We expect this situation to stabilize in January to March 12 quarter, as the market prices are expected to start reflecting increase in costs
  • Due to recent floods in Thailand, Hard disk drives were in short supply resulting in price of this key component firming  up by nearly 50%.The HDD supplies are expected to stabilize starting April 2012, till then prices are expected to stay firm

 

  • These factors have severely impacted revenue & profitability in our Computing & Office automation business during the quarter gone

·         Despite above factors some of the key successes included –  

  •  
    • Core Banking, Infrastructure and Financial Inclusion solutions from multiple banks
    • Multiple orders from institutions like Corporation Bank, Dena Bank, UCO Bank, Central Bank of India and Himachal Pradesh State Cooperative Bank Ltd. (HPSCB)
    • The company has also been empanelled with the National Federation for Urban Co-Op Banks and Credit Societies (NAFCUB) for roll out of core banking solution to urban co-operative
    • The company has been awarded some key infrastructure projects including implementation of 22 Automated, Computerised and Integrated Border Check Posts (BCPs) in the State of Maharashtra. New technologies such as a RFID Solution for AVI (Automatic Vehicle Identification) will be implemented in this project

 

  •  
    • The company bagged significant orders from organizations like BHEL and Asian Paints for supply of IT equipment
    • In the Defense segment the company won a major network expansion project from one of the armed forces. The implementation involves Design, Planning, Engineering, Supply, Installation; Testing & Commissioning of MPLS based IP Network
    • In the Healthcare segment the company also won the cloud based New Health Insurance project in Tamil Nadu

·         Office Automation Business, won various orders from SBI (All India); LIC Mumbai, Ericsson Global, Delhi, Reliance General Insurance, ABB among others

·         HCL Learning had some major wins in Digischool and for its Language Labs. Also the business implemented new technologies for customers like its IMS (Institute Management System), which is a cloud based ERP for educational institutes

·         HCL Infosystems MEA, company’s subsidiary based out of Dubai  added new customers like Federal Electricity and Water Authority (FEWA), Dept. of Finance, (Abu Dhabi), Saudi American Bank   (SAMBA), Sharjah  Municipality, Qatar Islamic Bank(QIB) and Qatar International Islamic Bank(QIIB)

  • The Consumer Computing Division launched the exclusive Ra.One Series of laptops which included HCL ME ICON 1034, XITE 2025 & XITE 2035. The Ra.One High definition Laptop series was power packed to give consumers an exhilarating on the go cinematic experience this festive season.








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