HCL Technologies share price plunges 5%; here is why

HCL Technologies share price dropped as much as 5 per cent in Wednesday's trade after the IT major disappointed Street by posting a 9.8 per cent decline in consolidated net profit for the quarter ended March 2018. The company's fourth largest software services firm had reported a net profit of Rs 2,474 crore in the corresponding quarter a year ago, as per Indian Accounting Standards (Ind AS). The IT firm's net profit grew 7.46 per cent on quarter-on-quarter basis. 

Reacting to the numbers, HCL Technologies share price slipped 4.74 per cent intraday to Rs 1001.55 on the BSE. The stock opened at Rs 1,050.00, and fell to a low of Rs 1,000.05 on the NSE.

For 2017-18, the HCL Technologies net profit was up 1.3 per cent at Rs 8,722 crore, while total income grew by 6.4 per cent to Rs 51,786 crore from the previous financial year.

HCL Technologies expects its revenues to grow between 9.5-11.5 per cent on constant currency basis in the fiscal year 2018-19. 

"We conclude the fourth quarter and the financial year 2018 with an industry-leading performance backed by broadbased growth across verticals, robust client additions and accelerated revenues from mode 2 and 3 services," HCL Technologies President and CEO C Vijayakumar said.

He added that the company remains confident of the new fiscal in light of the increasing relevance of the business offerings coupled with strategic investments in technologies of the future.

During the quarter, HCL Technologies signed 15 transformational deals, led by verticals of financial services, manufacturing, public services, lifesciences and healthcare. 

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At the end of March 2018, HCL had 1.2 lakh employees with a gross addition of 8,476 people. Its attrition for IT services (on last 12 month basis) was at 15.5 per cent.

The HCL Technologies board of directors has declared an interim dividend of Rs 2 per equity share.