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Research
HCL Technologies - Q2FY14 Result Update - Microsec
Posted On : 2014-01-19 20:55:59( TIMEZONE : IST )
HCL Technologies Ltd (HCL) announced its consolidated Q2 FY2014, December Quarter, results on 16 January 2014. While the company's top line came in line with the Bloomberg Consensus Estimates, whereas on bottom line front it beat street estimates.
HCL's top line increased 2.8% sequentially to Rs. 8,184 Crores while its bottom line expanded 5.6% q-o-q to Rs. 1,496 Crores in Q2 FY2014. Growth in the company's revenues was led by a strong sequential rise in $ terms revenues, which jumped 4.0% q-o-q to $1,321 Mn during the quarter. Europe, with 5.0% sequential expansion in constant currency revenues, remained the top performing region whereas Business Services and Retail & CPG, with 11.4% and 20.8% respective growth in constant currency top line, emerged as the leading growth Service and Business Vertical. The growth in HCL's top line also trickled down in its bottom line, which expanded a litter better, 5.6% q-o-q, to Rs. 1,496 Crores in Q2 FY2014. Despite wage hike impact, the company was able to maintain its margins during the quarter, Furthermore, the company maintained historically high Return on Equity of 35%, intact, during the quarter. Additionally, in line with its initiatives to reward shareholders, HCL announced a dividend of Rs. 4.0 per share, the 44th consecutive dividend by the company, in Q2 FY2014.
In our TECK SECTOR UPDATE Report dated 08 January 2014, we mentioned the stock as most attractive in the IT Sector, based on 'Valuation Heat Map'. Since then, the stock has outperformed its peers with an approximate return of 10%. Furthermore, significantly better performance than its larger peer INFY and its attractive valuation may keep the stock striking in near to medium term. With another quarter of upbeat performance, HCL continue to remain our most preferred pick in the sector. Moreover, the stellar set of numbers by the company may raise some buying interest in TCS and Tech Mahindra as well. The former is likely to come up with its results in later part of the day, after market hours.
