HCL Infosystems Registers A Increase of 12% In The Revenue For The Financial Year 18

HCL Infosystems announced its financial results for the year ended March 31st, 2018.

Distribution Business:

The Distribution Business reported robust revenue of Rs. 908 Crore in the quarter.

In FY18 the Consumer Business underwent a successful transition from a single brand to a multi-brand distribution model with engagements with leading brands like Apple, HMD (Nokia), Samsung and Microsoft. The partnership with HMD Global continued for Nokia on a stronger note contributing to overall revenues.

Also, in September 2017 the partnership with Apple was a highpoint in the unfolding of the multi-brand journey. In the year, new and flagship mobile phone models were launched by the Principals which led to increased business traction.

Consumer Distribution clocked revenue of Rs. 464 Crore in Q4FY18 versus Rs. 166 Crore in Q4FY17, an increase of 179% Y-o-Y. In the quarter Consumer Distribution performed well in new lines of businesses - a Direct to Consumer (D2C) initiative was kick-started in the quarter by partnering with HMD for Nokia.com. In other channels like MFI and Online Marketplace, the business made a start through its alignment with Samsung.

Gross margin dropped in Q4FY18 due to supply mismatch of new products launched and lower demand for new models.

Enterprise Distribution registered a Y-o-Y growth of 31% with revenue of Rs. 444 Crore in Q4FY18 versus Rs. 338 Crore in Q4FY17. In the quarter the business won the contract from marquee customers from various verticals including BFSI and ITeS. The division also has laid special emphasis on driving and building emerging technology businesses like Cloud, Security, Hybrid Infra and Collaboration. Enterprise Distribution also signed a strategic partnership with Alibaba Cloud Services for the market in the country.

The Enterprise Distribution Business during the year launched the P3 or Premier Partner Programme which led to increased engagement with the target partner community. Within the programme, select channel partners are enabled to grow their respective business by offering business aligned new-age technologies to customers

Overseas Business:

The Overseas Services business in Singapore also posted growth in the quarter as well as in FY18. In Q4FY18 the business posted an 18% Y-o-Y growth over Q4FY17. In FY18 the business grew 16% Y-o-Y over FY17 with good profitability.

System Integration (SI) & Solutions Business:

The SI and Solutions business reported revenue of Rs. 56 Crore in Q4FY18. In FY18 the business registered revenue of Rs. 182 Crore with focus on project execution. The total order book size stood at Rs. 690 Crore as on 31st March 2018.

The company successfully concluded a capital raising exercise for Rs. 499 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.

The Board of Directors in its meeting held on January 31, 2018 also approved the sale of CARE business, a division of HCL Services Limited (wholly owned subsidiary) on slump sale basis, to QDigi Services Limited (Earlier known as HCL Computing Products Limited (HCPL) and then transfer of entire shareholding of QDigi Services Limited to M/s Quess Corp Limited.

Pursuant to above, the CARE Business division has been transferred to QDigi Services Limited on March 31, 2018 and entire shareholding has been transferred to M/s Quess Corp Limited on April 11, 2018.

The Board of Directors of HCL Infosystems Limited (the Company) in its meeting held on 9th February 2018 had approved, sale of HCL Services Limited (consisting of Domestic Enterprise Services Business), a wholly owned subsidiary to M/s Karvy Data Management Services Limited for a consideration of approximately Rs.108 (including tax refunds payable to the extent received). The consideration is subject to final adjustments at the time of closing date. This transaction excludes IT & Facility unit and investment in Singapore & its subsidiaries