HCL Infosystems net falls 74% on tepid sales

Quarterly net profit of HCL Infosystems plunged 74% as its flagship computer retailing business suffered in an economic slowdown worsened by lesser government investment in computing and office automation business.

The company earned Rs.12.15 crore for July-September, compared with Rs.47.46 crore a year ago. Net sales dropped 6% to Rs.2,788 crore.

“Their partnership with Nokia hurt. Nokia has not been doing well, and that pressured HCL’s margins. This impacts their distribution business,” said a sector analyst.

HCL Info has earlier this year renewed an agreement with Nokia to distribute the Finnish firm’s devices. That partnership is due for renewal on December 31, 2014.

“The desktop market is also very slow. This used to be their bread and butter segment,” said the analyst, who declined to be identified. HCL has a less than 10% market share in personal computers. Dell, Acer and Hewlett-Packard lead the Indian market, according to a report by researcher Gartner in August.