Key highlights Q3/2011

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Key highlights Q3/2011

  1. 1. *HCL Confidential HCL Technologies Business Performance JFM’11
  2. 2. *HCL Confidential 2 Revenue Growth Intact All Businesses continue to deliver positive revenue growth QoQ Growth AMJ'10 JAS'10 OND'10 JFM'11 4-Qtr CQGR Revenues 7.7% 9.0% 7.5% 5.8% 7.5% Service Lines Enterprise Application Services 11.9% 6.3% 5.5% 6.7% 7.6% Engineering and R&D Services 10.9% 4.0% 6.3% 1.6% 5.7% Custom Applications 6.7% 15.0% 9.1% 6.7% 9.3% Infrastructure Services 8.9% 8.8% 9.5% 8.5% 8.9% BPO Services -12.5% 5.7% 2.8% 0.8% -1.1% Verticals Financial Services 5.5% 10.0% 5.2% 12.6% 8.3% Manufacturing 9.9% 8.7% 7.2% 6.3% 8.0% Telecom 1.0% 9.9% 5.8% 1.0% 4.4% Retail & CPG 17.5% 13.0% 15.5% 0.3% 11.4% Media Publishing & Entertainment 0.7% 1.9% 6.2% 2.3% 2.8% Healthcare 18.3% 11.7% 7.5% 1.2% 9.5% Energy Utilities Public Sector 6.0% 7.9% 13.2% 7.1% 8.6% Geos US 11.3% 2.8% 5.8% 0.7% 5.1% Europe -0.7% 18.2% 7.2% 7.3% 7.8% Asia Pacific 8.3% 19.8% 14.5% 21.7% 16.0% Growth engines for the quarter – Infra, Custom Apps, EAS Custom Apps business crosses $1Bn milestone Growth engines for the quarter - Financial Services, E&U Public Sector, Manufacturing Growth engines - Asia Pacific, Europe Asia Pacific business cross $500 Mn milestone * Businesses with JFM’11 QoQ or 4-Qtr CQGR >5% marked Green Q3 Revenues - $915 Mn LTM Revenues cross INR 15,000 Crore milestone
  3. 3. *HCL Confidential 3 While expanding Profit Margins Operating and Net Income register double digit growth. Big Turnaround in Profits Margins over last 6 months Margins AMJ'10 JAS'10 OND'10 JFM'11 Gross Margin 33.1% 31.6% 31.6% 32.0% EBITDA Margin 18.6% 16.3% 16.3% 17.3% EBIT Margin 15.3% 12.9% 13.1% 14.4% Net Margin 10.0% 8.9% 10.3% 11.3% EBIT Margins expand by 130bps Operational Parameters AMJ'10 JAS'10 OND'10 JFM'11 SG&A as a % of Total Revenue 14.5% 15.4% 15.2% 14.7% Days Sales Outstanding (DSO) 66 61 61 55 Utilization Offshore-Including trainees 72.9% 70.1% 70.1% 71.9% Utilization Offshore-Excluding trainees 77.0% 74.1% 75.0% 76.3% Utilization Onsite 95.2% 95.7% 95.9% 96.5% Offshore Realization per man-month ($) 3,545 3,616 3,640 3,692 Onsite Realization per man-month ($) 12,983 13,107 13,274 13,426 Operating efficiencies helping gain of Profit Margins  SG&A down.  DSO down.  Utilization up.  Realization up. HCL recorded lowest DSO in Indian IT Industry.
  4. 4. *HCL Confidential 4 Cash Flow Conversion - Net Income to Operating Cash Flow @ 114% for JFM’11 Financial Year Ended… 9 months ended US$ Mn June'03 June'04 June'05 June'06 June'07 June'08 June'09 June'10 March’11 Net Income 58.0 171.9 138.0 169.1 293.5 280.0 264.4 280.6 264.0 Operating Cash flow 89.7 123.6 149.8 186.3 268.1 348.7 205.9 383.5 207.4 Operating Cash Flow/ Net Income For the Period 155% 72% 109% 110% 91% 125% 78% 137% 79% Two Years Rolling Average 113% 90% 109% 101% 108% 101% 107% Not Applicable
  5. 5. *HCL Confidential 5 Market share momentum demystified..  HCL is the only company to expand market share  33.5 % of all new customer revenue across the above peer group came to HCL – demonstrating the increasing value customers see in engaging with HCL
  6. 6. *HCL Confidential 6 Market Share Momentum… - ~300 bps increase in Market Share in Last 3 Years
  7. 7. *HCL Confidential 7 Clients not only giving more business to HCL, but also recognizing Value created by HCL Employees Number of $10mn+, $20mn+, and $50mn+ clients have more than doubled over last 3 years Revenue per Employee AMJ'10 JAS'10 OND'10 JFM'11 HCL Revenue per Employee 48,096 47,714 48,515 50,219 HCL Revenue per Employee crosses $50,000 milestone. Highest in the Industry.
  8. 8. *HCL Confidential 8 Leading in Client Reference Scores Source: 2010 N.America Application outsourcing wave HCL Client Reference Scores are the highest across 10 parameters  Survey conducted by independently by Forrester for the North America Application wave  HCL positioned above larger peers like Dell, Cognizant, TCS, CSC, Infosys, HP and Capgemini  In Forrester’s own words “HCL, which was not included in our prior analysis, has come a long way in the marketplace in that time frame and is clearly worthy of its Leader status”
  9. 9. *HCL Confidential Recent Downgrades Asia Poll Rankings Analyst 2010 2009 HCL Infosys TCS Wipro CLSA 1 1 Under Perform Outperform* Outperform* Outperform* JP Morgan 2 3 Over Weight Neutral Over Weight Over Weight CSFB 3 4 Buy Neutral Buy Buy Kotak 4 2 Reduce Buy Buy Add* Citi 5 5 Buy Hold Hold Buy IIFL 6 12 Buy Buy Add* Add* Morgan Stanley 7 11 Over Weight Over Weight Equal Weight Equal Weight HSBC 8 7 Over Weight Over Weight Over Weight Neutral Religare 9 22 Buy Hold Hold Hold Motilal Oswal 10 19 Buy Buy Neutral Neutral Analyst Rating Impact … 9 Composite Rating (Top 10) +8 +6 +6 +6 Dip Flat Improvement Change in Ranking in Asia Poll Rankings Buy / Over Weight Outperform Neutral / Underperform / Reduce / Hold Sell / Restricted Legend of Ratings
  10. 10. *HCL Confidential 10 HCL has positioned itself as the CIO’s Best Friend Dec 2010 Finding the right vendor partner for your IT organization: HCL
  11. 11. *HCL Confidential 11 Leadership : Infrastructure Management March 11, 2011 The Forrester Wave™: Global IT Infrastructure Outsourcing, Q1 2011 29 March 2011 Gartner Magic Quadrant for Help Desk Outsourcing, North America
  12. 12. *HCL Confidential 12 Leadership : SAP
  13. 13. *HCL Confidential 13 Leadership : ADM
  14. 14. *HCL Confidential 14 Reported Revenue (US$ Mn) Column1 OND'09 JFM'10 AMJ'10 JAS'10 OND'10 JFM'11 HCL               652               685                738              804                864               915  TCS            1,635            1,686             1,794           2,004             2,144  Infosys            1,232            1,296             1,358           1,496             1,585            1,602  Wipro IT            1,127            1,166             1,204           1,273             1,344  Reported Incremental Revenue (US$ Mn) OND'09 JFM'10 AMJ'10 JAS'10 OND'10 JFM'11 HCL                   33                   52                66                   60                  50  TCS                   51                108              210                140    Infosys                   64                   62              138                   89                  17  Wipro IT                   39                   38                69                   71    Reported Revenue Market Share OND'09 JFM'10 AMJ'10 JAS'10 OND'10 JFM'11 HCL 14.0% 14.2% 14.5% 14.4% 14.6%   TCS 35.2% 34.9% 35.2% 35.9% 36.1%   Infosys 26.5% 26.8% 26.7% 26.8% 26.7%   Wipro IT 24.3% 24.1% 23.6% 22.8% 22.6%   Reported Incremental Revenue Market Share OND'09 JFM'10 AMJ'10 JAS'10 OND'10 JFM'11 HCL   17.8% 20.1% 13.7% 16.7%   TCS   27.2% 41.5% 43.4% 38.8%   Infosys   34.1% 23.8% 28.6% 24.7%   Wipro IT   20.8% 14.5% 14.3% 19.8%   Absolute Numbers

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