HCL Tech Q4 net drops, sees better outlook

By agencies   |   Tuesday, 23 August 2005, 07:00 Hrs
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NEW DELHI: HCL Technologies Ltd. posted a 14.7 percent drop in fourth-quarter earnings, but said it expects gross revenue and profit to rise 30-40 percent each year till 2008 as clients boost outsourcing. Shiv Nadar, chairman and founder of India's fifth-largest software services firm said on Tuesday he expected 10 customers to provide more than $100 million each in annual revenue in three years time. "Our visibility of the business has improved substantially," Nadar said. "More than five-sixth of this business will come from existing customers." New Delhi-based HCL now has only one customer -Deustche Bank -that outsources software services of more than $100 million annually. HCL, which designs software for customers such as Boeing, said its fourth-quarter consolidated net profit fell to $37.23 million from $43.63 million in the year earlier, mainly due to a drop in income from treasury operations. Other income in the April-June quarter fell to $1.98 million from $19.07 million in the same quarter last year as per U.S. accounting standards. The company, which competes with larger rivals such as Infosys Technologies Ltd., has some $404 million in liquid and short-term floating rate funds. Gross revenue rose 33 percent in the fourth quarter to $213.18 million, while its gross profit margin rose to 37.9 percent from 37.5 percent.