HCL Technologies expects weakness in financial services to continue in H2

Software exporter HCL Technologies on Tuesday reported a near 15 percent increase in second-quarter net profit, beating analysts' estimates. C Vijayakumar, CEO and Prateek Aggarwal, CFO of HCL Tech, spoke to CNBC-TV18 about the earnings and business plans.

“If you look at the overall pipeline and the outlook, the demand environment seems to be better than what it was last year at this time. Our funnel itself is at least 10 percent more than what it was in the same time last year. So I think that should give you a good indication that things are moving in the positive direction,” said Vijayakumar.

Talking about how rupee depreciation benefited the company, Aggarwal said, “We have got a benefit from the currency tailwind but equally we had those planned for wage increments etc coming in the planned quarters, this quarter and the next. At the same time, given the extra benefit that we got, we chose to plough it back into the business particularly in the Mode 2 side."

“The impact of the forex change was 90 bps (basis points) and as far as wage increment was concerned, it was about 70 bps,” he said.

“On financial services, the fiscal 18 was one of the top performing sectors. Across industry, we were the highest in the financial services. That kind of buoyancies I still feel optimistic about in the broader segment. There are pockets where we have some weakness and I do expect that weakness to continue into the second half as well. So overall financial services will be a little soft compared to our average growth rate,” Vijayakumar added.