HCL Tech loses ground

HCL Tech is amongst the top losers on the BSE today morning. The stock fell 4.75% to Rs.1001.55; it has recouped since then and did not fall below the Rs.1000-mark. Its 10% LC for today is at Rs.946.30.

What worked for the company was that its profit for the Jan-March quarter met street estimated at Rs.2227 crore, up 1.5% (QoQ). Revenue in dollar terms rose 2.5% to $2038 million while operating profit was up 3% at Rs.2538 crore. Margins were unchanged at 19.6%.

But what did not go down too well is the almost doubling of interest outgo at Rs.21 crore on a sequential basis. Cash outflow was at Rs.3037 crore – the lowest in last six half yearly periods. The growing perception is that the company is now borrowing more to fund its operations and liquidity might be stressed, with pace of settling debtors also showing a slowdown.