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| Edited By: Sreejiraj Eluvangal |Source: DNA |Updated: Mar 17, 2018, 03:44 AM IST
HCL Technologies seems to be living up to its promise of focusing more and more on cloud-related infrastructure projects.
The Delhi-based firm increased its income from infrastructure services by a whopping 78% to $152 million (Rs 682 crore) during the fourth quarter of the last fiscal.
Even when compared to the immediately preceding quarter, revenue from infrastructure or hardware related services jumped 15%, nearly three times the rate of overall revenue growth of 5.1%.
Total revenues grew 21%, when compared to the same quarter of the previous year, clocking in $685 million (Rs 3,076 crore).
Profit before tax and interest, too kept pace, increasing 20% to reach $111 million during the quarter.
Revenue growth for HCL, the fourth largest IT vendor from India, was slightly higher than that of TCS, which posted an 18% increase and Infosys, which saw revenues increase 16% during the March quarter.
However, it was the infrastructure services that stole the show, showing growth rates that are many times that of similar services offered by TCS and Infosys, which are twice the size of HCL.
According to CEO Vineet Nayar’s vision, the next five years will see most of the software shift from small PCs at the customers’ premises to giant farms that run hundreds and thousands of powerful computers called servers.
Accordingly, services too, will have to be tailored for software running in datacentres or server farms, instead on PCs. Most of the traditional revenue for Indian IT services firms comes from work done at customer premises, such as development and deployment of new software on their PCs, maintaining existing software etc, rather than work done in datacentres.
As they have almost doubled in size, infrastructure-related services have also significantly grown their share in HCL’s total revenues. They accounted for more than 22% of the firm’s revenues for last quarter, compared to just 8.3% for TCS and 7.2% for Infosys.
“We have seen a huge pick-up in the number of cloud-related projects in the last three quarters,” said Anant Gupta, who heads the infrastructure division.
The ongoing shift towards cloud or SaaS services require huge build outs of datacentres by companies that were, until recently, engaged primarily in shipping out CDs with their software on it, he said.
The new architecture creates savings for companies by splitting a single physical server into many ‘virtual’ servers, each of which can be assigned to a different client. “During the last nine months alone, we have virtualised 50,000 servers for our clients. Most of the ISVs (packaged software vendors) are building out their own proprietary platform,” he said, referring to platforms such as Microsoft’s Azure and SAP’s StreamWork.
HCL said it will hire around 5,000 fresh graduates in the calendar year 2010, against less than 2,000 hired during 2009. Like other exporters, HCL also faced strong currency headwinds as more than 60% of the company’s contracts are inked in US dollar, which lost around 10% of its value with regard to the rupee compared to the same quarter a year ago.
As a result, the 21% revenue growth resulted in just a 7.5% increase in rupee revenues during the quarter. Profit before tax and interest, converted into rupees, was just 6.1% higher than a year ago.
