HCL Infosystems Reports Revenue of Rs. 1,310 Crore in Q3 FY 2018

Business Wire India

• Revenue growth of 49% Q-o-Q and 71% Y-o-Y
• Strong growth in Consumer Distribution due to multi-brand business model

​Business Highlights

• Q3 FY18 revenue at Rs. 1,310 Crore vs. Rs. 881 Crore in Q2 FY18 and Rs. 764 Crore in Q3FY17
• Distribution business revenue increased from Rs. 615 Crore in Q2 to Rs. 1,055 Crore in Q3, a growth of 72% Q-o-Q
• Services business revenue declined 8% Q-o-Q due to rationalisation of contracts
• Profit / (Loss) before interest, tax is Rs. (16.4) Crore vs. Rs. (22.5) Crore in the preceding quarter
• Profit / (Loss) before tax and after exceptional items was Rs. (60.6) Crore in Q3 vs. Rs. (454.4)  Crore in the preceding quarter. Q2 was impacted by goodwill write-off of Rs. 390 Crore.
• The company successfully concluded a capital raising exercise for ~ Rs. 500 Crore by way of a rights issue to its existing shareholders at a price of Rs. 47 in December 2017. The promoters subscribed to 89% of the issue.

HCL Infosystems, India’s pioneer IT Services, Solutions & Distribution Company, today announced its financial results for the quarter ended December 31^st, 2017.

Mr. Premkumar, Executive Vice-Chairman and Managing Director, HCL Infosystems Ltd., commenting on the results said, “The transformation focus of expansion in the Distribution business was on track with a strong Q-o-Q growth of 72%.The optimization of the services portfolio continued and the SI projects execution was also on track.”

Distribution Business

The Distribution Business reported robust revenue of Rs. 1,055 Crore in the quarter.

Consumer Distribution gained 121% Q-o-O as the business underwent a successful transition from a single-brand into a multi-brand distribution model. In the quarter the business reported revenue of Rs. 660 Crore versus revenue of Rs. 299 Crore in the preceding quarter. This uptake can be attributed to the revenue contribution from distribution of multi-brand consumer technology products of Apple, Nokia, Samsung and Microsoft.

In the telecom segment the business distributed the new iPhone X apart from iPhone 8 & iPhone 8+ in aligned Territories & Channels. Consumer Distributions’ partnership with HMD Global continued for Nokia thereby contributing to the overall revenue growth in the quarter. In one of the online marketplace the business tied up with Samsung to sell its products. In the non-telecom space the business started distribution of Apple products like iMac and iPad from October 2017 onwards.

Consumer distribution also added more than 200 distribution channel partners in the quarter to take forward its multi-brand distribution strategy.

Enterprise Products Distribution had revenue of Rs. 395 Crore in the quarter with a robust growth of 54% Y-o-Y and 25% Q-o-Q. The channel as well as the direct business posted robust growth. Business units including End User Computing (EUC) and Enterprise Security, Storage and Networks (ESSN) gained traction thereby contributing to the growth of the overall business.

The P3 or Premier Partner Programme launched by Enterprise Distribution has increased its engagement with the target partner community. The programme enables select channel partners to grow their respective business by offering business aligned new-age technologies to customers. So far 26 Channel Partners have been inducted into the programme.

Services Business

Domestic Enterprise Services has posted a revenue of Rs. 66 Crores with a PBIT loss of Rs. 18 Crores and a revenue decline of 24% Y-o-Y and 18% Q-o-Q despite ongoing business optimization efforts. Basis the performance, the Board reviewed the state of the business and is evaluating all strategic options including divestment of this business. Similarly, the Board reviewed the Middle East (MEA) Business and is evaluating strategic options for divestment.

The board also approved the sale of HCL Care division for a total consideration of Rs. 30 Crores to Quess Corp Limited. The transaction is subject to conditions precedent being met.

System Integration (SI) & Solutions

The SI and Solutions business reported revenue of Rs. 43 Crore in Q3FY18 with focus on project execution. The total order book size stood at Rs. 745 Crore as on 31^st December 2017.