Shiv Nadar, chairman of fifth-ranked India-based offshore services firm, HCL, made local jobs the key theme of his comments on the company’s Q2 results (to 31st Dec.), poetically declaiming how HCL is “pushing the pedal on enterprise philanthropy in continuing cognizance of our social responsibility”. We understand a translation will be available on their website later today.
Meanwhile, HCL turned in a respectable performance for the quarter, with revenues growing by 18% yoy (2% qoq) to $1.02b. It was HCL’s domestic business that pulled back growth; US revenues increased by 7.3% qoq and Europe by 6.3% qoq at constant exchange rates. However, ‘RoW’ revenues fell back nearly 12%.
It was also a ‘good news/bad news’ story on the margin front, with group operating margins (15.8%) showing a 270bps improvement yoy and 150bps improvement qoq. However, margins were flattered by a 10% depreciation of the Rupee in the quarter, which I estimate gave HCL a 400bps margin tailwind. HCL’s troubled BPO business did not help, as losses started to deepen again. HCL BPO has not made a profit for two years.
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