Although the company has recorded an increase in the other income by 138.8 per cent, but still the decrease in the gross sales and rise in the interest expense has offset it. The interest expense grew by 164.8 per cent to Rs. 24.1 crore from Rs. 9.1 crore in the quarter ended March 2010. Moreover, the gross sales decreased to Rs. 2,757.9 crore in the quarter ended March 2011 as compared to Rs. 2,842.5 crore in the quarter ended March 2010.
Further, the expenditure declined by 2.88 per cent to Rs. 2,660.2 crore in the March 2011 quarter from Rs. 2,739.1 crore in the corresponding quarter last year. The company also recorded decrease in tax expense by 46.76 per cent to Rs. 15.6 crore in the March 2011 quarter from Rs. 29.3 crore in the corresponding quarter last year.
During the quarter, System Integration (SI) business opened the quarter with a healthy backlog and added to the same as Rs. 750 crore of additional orders (TCV) were booked during the quarter.
However, the division recorded a sharp decline in revenue during the quarter due to the delays in conversion of backlog to revenue on account of delays in decision making in certain Government and other Public Sector Undertaking led projects in the last 3 months. Sharp decline in the revenue recognition in the high margin SI Business did suppress profits of the company for the quarter and this may continue over a few quarters.
During the quarter, SI Business won various orders from leading banks like PNB, PSB, SBI, Canara Bank etc to undertake financial inclusion mandates including banking for the unbanked, UIDAI enrolment across the country apart from other deployments for UIDAI.
HCL Learning, the education and training division on the company recorded growth of over 233 per cent YoY for the quarter ended March 2011 and a growth of 183 per cent YoY over the last 9 months. Over 2200 classrooms have been signed up for the DigiSchool Solution of this business. This division also launched an innovative program called 'Xcelerate" for Test Prep Coaching into Schools through interactive distance learning across the country.
Additionally, HCL Cloud Services 'Ozone" added new offerings in the area of Infrastructure as a service, HRM, Mail and Hospital information systems (HIS) and registered many wins including one of the largest Cloud order in India from a leading healthcare institution for implementation of HIS. The company also introduced its range of HCL ME Tablets and became the first to introduce computing products with Bureau of Energy Efficiency (BEE) star compliance with the introduction of HCL ME Laptop M54.
Meanwhile, HCL Infosystems" completed in February 2011, acquisition of 20 per cent equity stake and management control in Dubai based Techmart Telecom Distribution FZCO. This investment contributed to Rs. 61 crore of sales and Rs. 1.2 crore of Profit in the consolidated P&L of HCL Infosystems, upon line by line consolidation as a joint venture. The Office automation business recorded a 7 per cent growth YoY for the quarter ended March 2011 and over the last 9 months, a growth of 28 per cent YoY.
Commenting on the occasion, Mr. Ajai Chowdhry, Founder HCL and Chairman, HCL Infosystems Limited said, “HCL Infosystems has been strongly focusing on building an organisation for tomorrow.
As we further strengthen our teams, expertise and consolidate, we need to prepare and build capacity to cater to the demand that the much awaited IT boom in domestic market that National initiatives like Aadhar, financial inclusion, right to quality education and rollout of broadband etc. will generate across the country.
I am also enthused with the New Electronic Manufacturing Policy that is expected to be a reality soon and am hopeful that it would lead to greater thrust to R&D and investments in electronic manufacturing in India."