Indian software services firm HCL Technologies Ltd. said Monday that quarterly profit fell 16.7 percent in dollar terms, stung by foreign exchange losses, higher costs and weak revenues from its back office business.
Net income for the December quarter was 2.97 billion rupees ($63.8 million), down from $76.6 million during the year earlier period, under U.S. accounting rules.
Revenues rose 28.5 percent in dollar terms, to 30.3 billion rupees ($651.7 million).
The results missed expectations — a Thomson Reuters poll of 18 analysts predicted net profit of 3.3 billion rupees — and disappointed investors, who sent the stock down 5.14 percent, to 363.2 rupees a share, in midmorning trade on the Bombay Stock Exchange.
“We see early signs of economic recovery, which we anticipate would gain momentum by middle of 2010,” chief executive Vineet Nayar said in a statement. “HCL is well positioned to leverage the structural shifts developing in the marketplace.”
The results were also at odds with positive earnings from the industry’s top three firms — Tata Consultancy Services, Infosys and Wipro — which have fueled optimism that India’s $60 billion software services industry is emerging from the worst of the global economic downturn.
HCL’s revenue from U.S. clients grew 26.8 percent from last year, but Europe and Asia-Pacific have provided the fastest sequential growth.
Revenue from retail, media, life sciences and energy clients all showed double-digit growth, while financial services inched up 0.4 percent over the prior quarter. However, revenues from manufacturing and telecom clients continued to slide, quarter over quarter, suggesting that a broad-based recovery has yet to fully materialize.
HCL added 1,691 employees net during the period and opened a center in Brazil.