India's HCL Technologies Beats Quarterly Profit Estimates
HCL Technologies(HCLT.NS), India's fourth-largest software services provider, beat estimates with a 68.4 percent jump in quarterly profit, joining Infosys (INFY.NS) and Tata Consultancy Services(TCS.NS) in signalling a pickup in outsourcing.
Consolidated net profit for its fiscal second quarter that ended December 31 rose to 9.65 billion rupees from 5.73 billion rupees a year earlier. Analysts were expecting profit to rise to 8.26 billion rupees, according to the latest Thomson Reuters data.
"Our growth this quarter was driven by Infrastructure and Financial Services, both growing in excess of 10 percent sequentially," new Chief Executive Anant Gupta said in a statement. That augurs well for outsourcing spending as financial clients are among the largest spenders globally on technology.
Infrastructure refers to managing large banks of computer servers, networks and the software they run on.
HCL Technologies, whose customers include Freescale Semiconductor (FSL.N) and Finmeccanica (SIFI.MI), won six large contracts during the quarter, according to the statement. The company also added 2,118 employees in the three months to December.
Sales rose 19.6 percent to 62.74 billion rupees, just ahead of analysts' average estimate of 62.2 billion rupees.
Investors were hoping a strong showing by the top companies in India's $100 billion-a-year outsourcing industry would be an early sign of a broader pickup in outsourcing spending.
Research firm Gartner expects spending on IT services to grow 5.2 percent to $927 billion in 2013, compared with growth of 1.8 percent in 2012.
Economic uncertainty had led to concerns that clients in the United States and Europe, the IT industry's biggest markets, would continue to hold back spending.
The World Bank on Tuesday cut its estimate for global economic growth in 2013 to 2.4 percent from its 3 percent estimate in June, citing slow recovery in developed countries.
Infosys, India's No. 2 software services provider, on January 11 beat expectations for the December quarter and unexpectedly raised its dollar-terms revenue forecast for the fiscal year ending March 31. Tata Consultancy also beat forecasts, on December 14, and said it was "very confident" heading into the new year.
Third-ranked Wipro reports its earnings on Friday.
(Reporting By Harichandan Arakali; Editing by Chris Gallagher)