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Investor Release Q2 FY ’05-’06 (.pdf file)
Unaudited Financial Results for the
Quarter ended 31st Dec, 05
(.pdf file)

HCL Infosystems Ltd, India’s premier Information enabling company today announced its un-audited results for the quarter ended December 31, 2005.


The company has reported a consolidated revenue of Rs 2806.5 crores (US$ 622.7 Mn) during the quarter ended December 31, 2005 as against Rs 1994.8 crores (US$ 442.6 Mn) in the corresponding quarter of the previous year, a growth of 41%.


Operating profit, excluding exchange fluctuation gain/loss and other income, is reported at Rs 89.1crores (US$ 19.8 Mn) as against Rs 66.3 crores (US$ 14.7 Mn) in the corresponding quarter of the previous year, a growth of 34%. Profit before tax for the quarter is reported at Rs 88.0 crores (US$ 19.5 Mn).


Revenue from the Computer Systems business is Rs 556.5 crores (US$ 123.5 Mn) as against Rs 502.2 crores (US$ 111.4 Mn) in the corresponding quarter of the previous year, a growth of 11%. Profit before interest and taxes excluding exchange fluctuation gain/loss is reported at Rs 31.5 crores (US$ 7.0 Mn)as against Rs 29.1 crores (US$ 6.5 Mn) in the corresponding quarter of the previous year, a growth of 8%.


Rupee has been volatile during the quarter ended December 31, 2005 touching a low of 46.40 and a high of 44.06 per dollar, as a result the effect of exchange fluctuation on import liabilities paid/ restated in accordance with AS 11, significantly reduced the profitability of the Parent company by Rs 5.7 crores (US$ 1.3 Mn) during this quarter as against exchange rate gain of Rs 10.1 crores (US$ 2.2 Mn) in the corresponding quarter of the previous year.


Revenue from the Office Automation and Telecommunication business is Rs 2243.7 crores (US$ 497.8 Mn) as against Rs 1482.6 crores (US$ 328.9 Mn) in the corresponding quarter of the previous year, a growth of 51%. Profit before interest and taxes is at Rs 61.7 crores (US$ 13.7 Mn) as against Rs 38.8 crores (US$ 8.6 Mn) in the corresponding quarter of the previous year, a growth of 59%.


Consolidated EPS for the quarter is Rs 3.79 per share (US$ 0.08).


The Company has reported consolidated revenue of Rs 5091.1 crores (US$ 1129.6 Mn) during the half-year ended December 31, 2005 as against Rs 3574.3 crores (US$ 793.1 Mn) for half-year ended December 31, 2004. Profit before tax is reported at Rs 170.1 crores (US$ 37.7 Mn).


Conversion rate: 1 US$ = 45.07 INR


The Board of Directors has declared a second quarterly Interim dividend of Rs 2/- per share (100 % on an equity share of par value of Rs. 2/- each).


The aggregate quarterly interim dividends paid represents 200% for the half-year


At the meeting held today, Board has inducted two eminent members, Mr. Jegadeesh Narasimhan and Mr. V. N. Koura. Mr Narasimhan is a B. Tech from IIT, Madras, P.G.D.M. from IIM, Ahmedabad and Ph.D. from Columbia University and is currently Dean’s Distinguished Professor, Emory University. Mr. Koura received his formal legal education at Lincoln’s Inn, London and currently is a senior partner of Koura & Co., a leading firm of legal consultants in India..


As approved by the Board of Directors at their meeting held on October 19, 2005, the Company is in the process of merging the Office Automation and Telecommunication segment of the subsidiary, HCL Infinet Ltd., with the Company with effect from April 1, 2006 through a Scheme of Arrangement, subject to the requisite approvals and sanction by the Hon’ble High Court of Delhi.


Announcing the results, Mr. Ajai Chowdhry, Chairman and CEO, HCL Infosystems, said, “The journey of transformation of India into a knowledge intensive economy calls for an intensive and fast paced IT adoption and penetration program. HCL continues to be focused in this direction by accelerating the pace of initiatives to take IT to the grass root level. This quarter, not only have we made the ownership of PCs for people affordable but also offered them numerous options of ‘computing’, ‘entertainment’ and ‘internet’ – the three things necessary to jumpstart the PC adoption in our country.”


Key initiatives of the Quarter:

– HCL’s foray into the High-End Enterprise Class Server segment:
The company announced its strategic alliance with Bull, a leading Europe based company, to launch HCL scalable Enterprise Class Servers on Open Architecture.


– HCL launches India’s first affordable broadband ready PCs with MTNL:
Under this offer, HCL’s PC with Windows-operating system, built on Intel platform, with 128 MB memory, HDD 40 GB and FDD 1.44MB is being offered with an easy finance scheme. The EMI will range from Rs 451/- to Rs 939/- depending on the configuration selected by the customer.


– HCL preloads free Indian local language software, tools & fonts, developed by C-DAC under Department of IT, Govt of India, across all its PC brands, a landmark initiative to maximise the use of PCs amongst non-English speaking people of the country.


– HCL launched Notebooks for the consumer and the SMB segment with a price range starting from Rs.29990/(HFFI extra) with IntelÒ Celeron M processors.


– HCL launched Notebooks for the consumer and the SMB segment with a price range starting from Rs.29990/(HFFI extra) with IntelÒ Celeron M processors.


– HCL introduced high performance BeePOS Dot-matrix Printers especially for printing of Pass Books used in bank applications this quarter.


– HCL also launched a new range of notebooks from Toshiba, which offers multiple choices of multimedia performance and productivity in mobile computers. A new 2-step process service initiative by Toshiba is launched for users to instantaneously reach Toshiba directly for service support solutions.


– HCL’s Imaging Business has continued to do well in this quarter too. New initiatives such as Audio Visual System Integration, Konica Minolta Printers have found an encouraging response from the customers.


– On the Telecom front, a new series of HCL-owned Asymmetric Digital Subscriber Line 2+ Customer Premises Equipments called ‘Swift’ were introduced across the country for efficient broadband connectivity.


– In the Corporate Networking area, HCL rolled out multiple Wireless Access POPs in all metro regions of the country, creating large coverage area cells to provide wireless last miles to its corporate Internet and VPN customers.


– In the Infostructure services, HCL launched Enterprise & Service Provider Class ‘InfoLoad Balancer’ & ‘InfoWall’ appliances. HCL ‘InfoLoadBalancer’ is a multi application load balancer appliance providing full availability, optimized operation & complete security to application servers. HCL ‘InfoWall’ appliances provide network security across LAN, WAN, VPN & Internet.


– In the Cellular Phone business, the country saw a big growth in GSM subscribers in the previous quarter. The company leveraged its wide-reaching distribution channel and support centers to witness an excellent growth in the sales of Nokia phones. A focused approach towards increasing penetration to Rural & Semi-urban areas led to satisfying results and also improvement in market share across the country.


– The GSM communication devices business has done well in the previous quarter and as per the ORG-GFK report for November, Nokia leads the market with a 77% market share, a further increase of 3 points over the previous quarter.


Awards/industry recognitions

– “Most Customer Responsive Company 2005” in the ‘IT Hardware Category’ by Economic Times-Avaya GlobalConnect. This Award evaluates and rewards India’s best companies, for its Customer Responsiveness policies & practices.


– HCL declared winner in Deloitte Technology Fast 500 Asia Pacific and Deloitte Technology Fast 50 India program. The program recognizes and rewards fast growing technology companies in India and Asia-Pacific based on the percentage revenue growth over the last three years.


– HCL has also received the ‘7th IETE (Institution of Electronics and Telecommunication Engineers) Corporate Award’ for Performance Excellence in the field of computer and telecommunication systems.


About HCL Infosystems
HCL Infosystems, India’s premier information enabling and integration company offers its customers technology solutions across multiple platforms. It has partnerships with some leading global player like Intel, AMD, Toshiba, Ericsson, Microsoft, Nokia and Sun Microsystems among others.


HCL Infosystems has direct customer services center across 300+ locations and two ISO 9001 certified state-of-the-art manufacturing facilities. With a mission to provide world-class information technology solutions and services to enable its customers to serve their customers better, HCL Infosystems is forever setting new standards of IT in the country. For more information please visit www.hclinfosystems.in


About HCL Enterprise:
HCL Enterprise is a leading Global Technology and IT enterprise with annual revenues of $2.7 billion (Rs.12,000 cr). The HCL Enterprise comprises of two companies listed in India, HCL Technologies & HCL Infosystems. The 3-decade-old enterprise, founded in 1976, is one of India’s original IT garage start ups. Its range of offerings span Product Engineering, Technology and Application Services, BPO, Infrastructure Services, IT Hardware, Systems Integration, and distribution of technology and telecom products. The HCL team comprises of 30,000 professionals of diverse nationalities, who operate from 15 countries including 300 points of presence in India. HCL has global partnerships with several leading Fortune 1000 firms, including leading IT and Technology firms. For more information please visit www.hcl.in

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