HCL Infosystems Q3 net declines 57%
July 28, 2012 at 4:35 pm | Posted in The Market | Comments Off on HCL Infosystems Q3 net declines 57%HCL Infosystems Q3 net declines 57%
NEW DELHI: Domestic IT hardware player HCL Infosystems on Wednesday reported a sharp decline of 57% in its Q3 net profit to Rs 23 crore, down from Rs 53 crore, in the same quarter last year.
This is a third consecutive decline in net profit for the Noida based company, which makes computers and distributes telecom and office automation products. The company’s share price has more than halved from Rs 110, a year ago. HCL Infosystems shares closed at Rs 45 on Wednesday on the Bombay stock exchange.
Harsh Chitale, CEO of HCL Infosystems however felt optimistic. “After a slow period of almost four quarters, this quarter we have seen some positive movement in large contracts with enterprise and government sector customers.” Revenues from both segments of its business the computers systems services and its telecom and office automation business declined. Revenues for three months ended March, also declined 5% to Rs 2611 crore from Rs 2758 crore, a year ago.
HCL Infosystems has won a letter of intent from Unique ID Authority of India, for managing its entire IT infrastructure, a contract worth Rs 2200 crore. The firm is yet to get the final award letter. It also won a Rs 250 crore order from Electronics Corporation of Tamil Nadu Ltd. (ELCOT) to provide 2 lakh laptops to state aided schools and colleges across Tamil Nadu.
Industry analysts close to the deals however say both contracts are low margin deals, and may not result in highly improved profits for the company in near future. “Cost of hardware has significantly gone up since the bids for UIDAI deal last year, due to currency volatility,” said an industry expert on condition of anonymity.
The company relies heavily on its telecom distribution business for Nokia handsets, whose market share has fallen considerably in last 12 months in India. Revenues from its telecom business declined from Rs 1856 crore last year to Rs 1733 crore this year. Nokia’s market share in India has succumbed to competition from local players, falling from about 60% to less than 40% in just two years.
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