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The Company reports Standalone PAT of Rs. 3 crores for the quarter ended March 31, 2014

HCL Infosystems, India’s Premier Distribution, IT Services and Solutions Company today announced its financial results for the third quarter ended March 31st, 2014.


Mr. Harsh Chitale, Managing Director and Chief Executive Officer, HCL Infosystems Limited, commenting on the results said“Our transformation story is progressing well and is now taking roots. Distribution and Services, our focused growth areas have registered healthy traction. Our portfolio diversification strategy in Distribution continues to yield results as our non-telecom distribution business achieved a 12% Q-o-Q and 25% Y-o-Y growth. Though our Telecom Distribution business did register a decline in topline, the gross margin expanded on account of increase in scope of engagement. As part of a new initiative, the Telecom Distribution business enrolled 88 new rural distributors in JFM Quarter that will further strengthen its footprint in the country.


Our Enterprise Services also grew by 8% Q-o-Q and 9% Y-o-Y on account of growth in our order book across India, MEA and South-East Asia. While our Break fix Services gained positive traction as a provider of multi-vendor technology support services, our Managed Services expanded its overseas foothold with a large contract in South East Asia.


Our hardware-solutions businesses which we had decided to reduce focus on, are transitioning as per plan. However, business model transitions for these businesses led to repositioning charges in the current quarter and may impact next quarter as well.”


Investor Pack for Q3 FY 14   Unaudited Financial Results for the Quarter ended March 31, 2014(.pdf file)


Key Updates and Quarter Snapshot

Distribution Business

  • Our Telecom Distribution remained flat on a Y-o-Y basis while registering a decline on a Q-o-Q basis. However, our widened scope of engagement with the Principal and delayering of our distribution channel to shorten the time-to-market resulted in significant increase in gross margin percentage for the business. The business also expanded its coverage footprint and strengthened its rural presence by adding 88 RRDs (Regional Rural Distributors) and as part of the new initiative enrolled 2345 ‘champion’ outlets in this quarter.


  • Our Non-Telecom Distribution continued its growth trajectory with new Principal sign-ups and volume expansion with existing Principals in IT Hardware, Office Automation, Software Products and Consumer Electronics. This business segment achieved a 12% Q-o-Q growth and signed many important partnerships in this quarter such as Philips and HP. Office Automation and Software Product categories registered impressive quarterly growth with healthy margins.


Services Business

Our Enterprise Services registered an 8% Q-o-Q and 9% Y-o-Y growth. Our Services contract bank across India and Overseas geographies continues to expand and showed a sequential growth in ACV from Rs. 400 Crore as on December 31st, 2013 to Rs. 487 Crore as on March 31st, 2014


  • Infrastructure Managed Services business registered a healthy 20% Q-o-Q growth. In India, the business signed many new deals with many prestigious clients across automotive, defense, steel and industrial equipments sectors. In Singapore, the IMS business continued to register robust growth with a large win (from an existing account) of US$ 9 mn ACV.7


  • Our MVTS (Multi Vendor Technology Support) service offerings of our IT and Office Automation Break Fix business has received an encouraging response from various OEMs. Concurrently, our Field Force Automation initiative has gone live which is designed to yield higher productivity and better customer service levels.


  • Our Services business registered wins in MEA from large organizations such as Emirates National Oil Company, Dubai Airport and Etisalat.


  • New Infrastructure Service offerings were also launched like Enterprise Mobility Services, EMS (Enterprise Management Services) & HCL Smart Enterprise Network Services.


HCL Care

HCL Care, which provides after-sales and support services to end consumers and OEMs in Telecom, consumer electronics and appliances space, continued its expansion with near doubling of revenues of a Y-o-Y basis and 13% Q-o-Q growth. The business, with one of the most extensive service networks across the country, has expanded scope of OEM relationships with Delonghi, Lenovo and Lava. It also added 14 Walk-in-Centers under the “TOUCH” brand taking the total number of TOUCH walk-in centers to 268 across India.


HCL Learning

The Jan-Mar Quarter is a lean season for Learning business and hence it registered modest class-room additions in this quarter. An important development in this quarter was international breakthrough in winning more than 200 classrooms from DPS Ghana, Ullens School Nepal and Indian School Al Wadi. MyEduWorld, HCL Learning’s interactive self-learning plug and play tool for students was also introduced into Nepal in this quarter.


SI and Hardware Solutions

  • Our Systems Integration (SI) business, continued on disciplined execution of existing hardware centric large projects. Our order backlog of SI Projects, stands at Rs 2418 Crore as on March 31st 2014 (Down from Rs. 2639 Crore as on December 31st 2013). As announced earlier, this business is executing on its strategy of transitioning to a new asset-light business model of Services in future. One of the key projects, Unique Identification Authority of India (UIDAI) Managed Services, continues to progress well and reached the milestone of generating 60 crore Aadhaar Cards.


  • Our Infrastructure Solutions (Server, Storage, Security and Networking products) business has started transitioning to the new Distribution like business model, where it pursues opportunities along with our network of channel partners, to bring together our strength of solution design and pre sales consulting and extensive reach provided by channel partners. This transition is beginning to pay-off as the business turned profitable in this quarter. In this new business model, the business registered important wins from a State Wide Area Network in Eastern India, leading Pharma Players and a Housing Finance Company. This Infrastructure Solutions business also implemented the first open source cloud for a reputed technical institute.


About HCL Infosystems

HCL Infosystems Ltd. with revenue (LTM) of Rs. 8297 crores (US$1.4 Bn) is India’s Premier Distribution and IT Services and Solutions Company. HCL Infosystems’ has one of the largest sales & distribution network in the country and provides value added distribution for partners including last mile connect and support in marketing and promotions for Telecom, IT , Office Automation and Consumer Electronics products covering more than 15000 towns across 664 districts in India. Our distribution business has an unparallel network that reaches more than 100,000 retail outlets, over 800 Direct and Micro Distributors and over 12400 Channel Partners across India. In the services space the Company has robust services offerings such as a comprehensive portfolio of Infrastructure Managed Services, Enterprise Application Services, System Integration Services, Office Automation Services, Managed Print Services, Life Cycle Services and After-Sales Support Services. HCL Learning, the Company’s learning solutions business, serves the entire spectrum of education and training requirements across schools colleges, individuals and enterprises and offers Digital Content & Learning Solutions.


For more information please visit us at www.hclinfosystems.in


About HCL 

HCL is a business enterprise with presence in the fields of technology and healthcare. Founded in 1976 as one of India’s original IT garage startups, the HCL enterprise currently comprises of three companies in India – HCL Technologies, HCL Infosystems and HCL Healthcare with annual revenues of US$ 6.4 billion and over 90,000 professionals from diverse nationalities operating across 31 countries including over 500 points of presence in India. In the technology space, HCL’s offerings span a wide range of software and hardware services and solutions including R&D, technology services, enterprise and applications consulting, Remote Infrastructure Management, IT hardware, systems integration, distribution of technology and telecom products. A new entrant in healthcare, HCL aims to provide innovative medical services, products and training to meet the growing demand for quality healthcare in India. For further information, visit www.hcl.in

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