HCL Technologies , India's fourth largest software services firm, on Wednesday posted a better-than-expected 33 per cent rise in net profit for Jan-March, boosting its shares nearly 10 per cent to their highest in more than a decade.
The company reported a net profit of about Rs 4.68 billion in Jan-March, while revenue rose 31.5 per cent to Rs 41.38 billion.
Profit was expected to rise 25 per cent to Rs 4.3 billion, according to a Reuters poll of 17 analysts. Revenue was seen at Rs 40.79 billion.
Shares of the company, which the market values at $7.34 billion, rose as much as 9.8 per cent to a 11-year high of Rs 522.35, in a Mumbai market that was up 0.77 per cent. The BSE IT index was up 1.6 per cent.
At 10:15 a.m, the stock was at 7.95 per cent at Rs 513.4. HCL's business outside Europe and the Americas grew as much as 81 per cent. All its service offerings also showed strong growth of 34-43 per cent.
Net employee addition -- a key parameter of the IT sector's health -- stood at 1,153 for the period, taking the total headcount to 73,420.
HCL also said it bought certain software assets from Citibank International Plc during Jan-March for $26 million, revenues from which are expected to come from the middle of its fourth quarter this year.
Through the deal, HCL is also taking over 41 employees from Citi and an "assured revenue stream" of $135 million spread over 10 years, HCL said in a statement.
Earlier this week, Infosys Technologies Ltd , the No.2 player in the Indian IT sector, sparked worries about the sector's growth after it forecast annual sales lower than expected on slower client spending.
A slew of brokerages downgraded the target price of the Infosys shares, citing concerns over its earnings and annual forecast that came in below expectations.
Jan-March is a seasonally weak quarter, as clients generally finalise their budgets for the next fiscal during this period, leading to a spurt in spending in the first two quarters of the upcoming fiscal year.
A slight depreciation of the rupee against the dollar, making up for a dip in utilisation rates, somewhat aided HCL's core operating (EBITDA) margins for the period, improving by about 1 per centage point from the December quarter to 17.3 per cent.
The rupee weakened about half a per centage point against the dollar during Jan-March.
Indian software companies, which get most of their earnings in foreign currency, hedge some of the risk, but with a chunk of their costs being in rupees, currency appreciation tends to squeeze margins.
The company reported a net profit of about Rs 4.68 billion in Jan-March, while revenue rose 31.5 per cent to Rs 41.38 billion.
Profit was expected to rise 25 per cent to Rs 4.3 billion, according to a Reuters poll of 17 analysts. Revenue was seen at Rs 40.79 billion.
Shares of the company, which the market values at $7.34 billion, rose as much as 9.8 per cent to a 11-year high of Rs 522.35, in a Mumbai market that was up 0.77 per cent. The BSE IT index was up 1.6 per cent.
At 10:15 a.m, the stock was at 7.95 per cent at Rs 513.4. HCL's business outside Europe and the Americas grew as much as 81 per cent. All its service offerings also showed strong growth of 34-43 per cent.
Net employee addition -- a key parameter of the IT sector's health -- stood at 1,153 for the period, taking the total headcount to 73,420.
HCL also said it bought certain software assets from Citibank International Plc during Jan-March for $26 million, revenues from which are expected to come from the middle of its fourth quarter this year.
Through the deal, HCL is also taking over 41 employees from Citi and an "assured revenue stream" of $135 million spread over 10 years, HCL said in a statement.
Earlier this week, Infosys Technologies Ltd , the No.2 player in the Indian IT sector, sparked worries about the sector's growth after it forecast annual sales lower than expected on slower client spending.
A slew of brokerages downgraded the target price of the Infosys shares, citing concerns over its earnings and annual forecast that came in below expectations.
Jan-March is a seasonally weak quarter, as clients generally finalise their budgets for the next fiscal during this period, leading to a spurt in spending in the first two quarters of the upcoming fiscal year.
A slight depreciation of the rupee against the dollar, making up for a dip in utilisation rates, somewhat aided HCL's core operating (EBITDA) margins for the period, improving by about 1 per centage point from the December quarter to 17.3 per cent.
The rupee weakened about half a per centage point against the dollar during Jan-March.
Indian software companies, which get most of their earnings in foreign currency, hedge some of the risk, but with a chunk of their costs being in rupees, currency appreciation tends to squeeze margins.
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