HCL Infosystems, India’s Premier Distribution, IT Services and Solutions Company today announced its financial results for the first quarter ended September 30th, 2013
Mr. Harsh Chitale, Chief Executive Officer and Managing Director, HCL Infosystems Limited, commenting on the results said, “Our Scheme of Arrangement on Restructuring has become effective from 1st Nov 2013. Under the restructured organization, the Company’s businesses of Solutions, Services and Learning stand transferred to the wholly-owned subsidiaries - HCL Infotech Ltd., HCL Services Ltd, and HCL Learning Ltd. respectively. The restructuring would now enable us to have undivided focus and attention on our key growth engines – Distribution and Services business. Our Distribution business witnessed a Q-o-Q growth of 13% backed by robust growth of our Telecom Distribution revenues. Continued growth of our Telecom Distribution since last two quarters is a testimony that the revamped product portfolio of our Principal is now gaining positive traction in the market. At the same time, our momentum of diversifying our product portfolio to non-Telecom products continued with signing up of many leading brands such as HP, Microsoft, Delta, Lenovo, Karbonn Tablets, Lava Tablets, etc. in this quarter. Our Services business has built a healthy order book on back of large Managed Services deals, Application Services growth in Middle East and Break-fix services outsourcing deals. Our Managed Services business continued robust growth in Singapore as well with a major win from a large Public Board in Singapore. The Services business saw a Y-o-Y growth of nearly 15% in this quarter. However, our Hardware and Solutions business was significantly affected with an exchange rate fluctuation of as high as 15% during the quarter”.
Key Updates and Quarter Snapshot
Distribution
· Our Telecom distribution business registered a 16% growth in Q1FY14 over Q4FY13 owing to a robust growth in the First Phone Category as well as in the Windows Phone Category. This business achieved the landmark of selling 1 million units of the first ULCH (Ultra Low Cost Handset), in the month of August 2013. Continued growth of our Telecom Distribution business over the last two quarters is a clear indication of growing acceptance of the refreshed product portfolio of our Principal in the market.
· Our non-Telecom Distribution business signed many important partnerships in this quarter including Microsoft, HP, Delta, Lenovo and eScan in the IT space, and Karbonn and Lava in the Tablets space. This business appointed more than 100 new channel partners to further strengthen its distribution footprint in India. This business also achieved a landmark of selling over 100,000 tablet units in the quarter. In the Office Automation space, we strengthened our product portfolio by signing new partnerships with Samsung for LFDs (Large Format Displays), Huawei for Videoconferencing and Datatcard for ID card printers.
Enterprise Services
Our Enterprise Services, now part of HCL Services Ltd, strengthened its footprint in the enterprise segment by winning many large deals and services contracts from various leading corporate and government customers. Enterprise Services business saw Y-o-Y growth of 15% in this quarter.
· Infrastructure Management Services (IMS) business recorded significant wins from a Large Consulting & Audit MNC and a large Manufacturing Organization with pan India presence, among others. This business also won a multi year program of TCV of over Rs 100 Cr, from the Department of Stamps and Registrations, Government of Karnataka. This business successfully launched Tefilla Maestro and Tefilla Astra, HCL owned Service Desk and Asset Management Tools. Singapore division of this business showed robust growth with a major IMS win from a large Public Board in Singapore and achieved recertification of ISO 27001 and ISO 9001 for the Singapore Delivery center.
· Our Enterprise Application Services (EAS) business added new customers both in the Middle East and India, and also saw growth in repeat business from existing customers. This business saw a healthy growth in T&M (Time and Material) deals over the last quarter. EAS enhanced its portfolio by building strong middleware capabilities in Oracle Fusion Middleware, and by adding SDL Tridion web content management services to our Enterprise Content Management portfolio. EAS business was also awarded the ‘eINDIA Public Sector Enterprises Award 2013’ for an e-Procurement project by the Indian Railways.
HCL Learning
· HCL Learning business launched three innovative products, MyIIT Tutor, MyEduWorld and Easy SRP (School Resource Planning). This quarter HCL Learning expanded its footprint to Nepal, Oman & Nigeria adding renowned schools like Indian Language School, Lagos, Nigeria and Ullens School, Nepal. HCL Learning added many new customers such as St. Xaviers High School, Sri Shrdi Sai Vidya Niketan-Ravi Educational Society, Kongu Vellalar Higher Secondary School and many more in India.
Hardware & Solutions
· Our Enterprise Solutions, now part of HCL Infotech Ltd. business, faced headwinds due to exchange rate volatility of as high as 15% during the quarter which resulted in a large exchange rate loss and also impacted gross margins of the hardware solutions business. This business also continued to be challenged with project delays and overdue receivables with many public sector customers. In view of such headwinds, this business continued to be extremely selective in pursuit of new deals. Our landmark project, Unique Identification Authority of India (UIDAI) – MSP Program, has now crossed 40 crore Aadhaar cards generation mark.
· Our Mobility (Tablet) Business registered good growth in the MEA market and also launched many new tablets - Sync 1.0, Connect V3 and Connect 3G 2.0 each in the non-calling, 2G & 3G categories respectively.
Mr. Harsh Chitale, Chief Executive Officer and Managing Director, HCL Infosystems Limited, commenting on the results said, “Our Scheme of Arrangement on Restructuring has become effective from 1st Nov 2013. Under the restructured organization, the Company’s businesses of Solutions, Services and Learning stand transferred to the wholly-owned subsidiaries - HCL Infotech Ltd., HCL Services Ltd, and HCL Learning Ltd. respectively. The restructuring would now enable us to have undivided focus and attention on our key growth engines – Distribution and Services business. Our Distribution business witnessed a Q-o-Q growth of 13% backed by robust growth of our Telecom Distribution revenues. Continued growth of our Telecom Distribution since last two quarters is a testimony that the revamped product portfolio of our Principal is now gaining positive traction in the market. At the same time, our momentum of diversifying our product portfolio to non-Telecom products continued with signing up of many leading brands such as HP, Microsoft, Delta, Lenovo, Karbonn Tablets, Lava Tablets, etc. in this quarter. Our Services business has built a healthy order book on back of large Managed Services deals, Application Services growth in Middle East and Break-fix services outsourcing deals. Our Managed Services business continued robust growth in Singapore as well with a major win from a large Public Board in Singapore. The Services business saw a Y-o-Y growth of nearly 15% in this quarter. However, our Hardware and Solutions business was significantly affected with an exchange rate fluctuation of as high as 15% during the quarter”.
Key Updates and Quarter Snapshot
Distribution
· Our Telecom distribution business registered a 16% growth in Q1FY14 over Q4FY13 owing to a robust growth in the First Phone Category as well as in the Windows Phone Category. This business achieved the landmark of selling 1 million units of the first ULCH (Ultra Low Cost Handset), in the month of August 2013. Continued growth of our Telecom Distribution business over the last two quarters is a clear indication of growing acceptance of the refreshed product portfolio of our Principal in the market.
· Our non-Telecom Distribution business signed many important partnerships in this quarter including Microsoft, HP, Delta, Lenovo and eScan in the IT space, and Karbonn and Lava in the Tablets space. This business appointed more than 100 new channel partners to further strengthen its distribution footprint in India. This business also achieved a landmark of selling over 100,000 tablet units in the quarter. In the Office Automation space, we strengthened our product portfolio by signing new partnerships with Samsung for LFDs (Large Format Displays), Huawei for Videoconferencing and Datatcard for ID card printers.
Enterprise Services
Our Enterprise Services, now part of HCL Services Ltd, strengthened its footprint in the enterprise segment by winning many large deals and services contracts from various leading corporate and government customers. Enterprise Services business saw Y-o-Y growth of 15% in this quarter.
· Infrastructure Management Services (IMS) business recorded significant wins from a Large Consulting & Audit MNC and a large Manufacturing Organization with pan India presence, among others. This business also won a multi year program of TCV of over Rs 100 Cr, from the Department of Stamps and Registrations, Government of Karnataka. This business successfully launched Tefilla Maestro and Tefilla Astra, HCL owned Service Desk and Asset Management Tools. Singapore division of this business showed robust growth with a major IMS win from a large Public Board in Singapore and achieved recertification of ISO 27001 and ISO 9001 for the Singapore Delivery center.
· Our Enterprise Application Services (EAS) business added new customers both in the Middle East and India, and also saw growth in repeat business from existing customers. This business saw a healthy growth in T&M (Time and Material) deals over the last quarter. EAS enhanced its portfolio by building strong middleware capabilities in Oracle Fusion Middleware, and by adding SDL Tridion web content management services to our Enterprise Content Management portfolio. EAS business was also awarded the ‘eINDIA Public Sector Enterprises Award 2013’ for an e-Procurement project by the Indian Railways.
HCL Learning
· HCL Learning business launched three innovative products, MyIIT Tutor, MyEduWorld and Easy SRP (School Resource Planning). This quarter HCL Learning expanded its footprint to Nepal, Oman & Nigeria adding renowned schools like Indian Language School, Lagos, Nigeria and Ullens School, Nepal. HCL Learning added many new customers such as St. Xaviers High School, Sri Shrdi Sai Vidya Niketan-Ravi Educational Society, Kongu Vellalar Higher Secondary School and many more in India.
Hardware & Solutions
· Our Enterprise Solutions, now part of HCL Infotech Ltd. business, faced headwinds due to exchange rate volatility of as high as 15% during the quarter which resulted in a large exchange rate loss and also impacted gross margins of the hardware solutions business. This business also continued to be challenged with project delays and overdue receivables with many public sector customers. In view of such headwinds, this business continued to be extremely selective in pursuit of new deals. Our landmark project, Unique Identification Authority of India (UIDAI) – MSP Program, has now crossed 40 crore Aadhaar cards generation mark.
· Our Mobility (Tablet) Business registered good growth in the MEA market and also launched many new tablets - Sync 1.0, Connect V3 and Connect 3G 2.0 each in the non-calling, 2G & 3G categories respectively.
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