*HCL Confidential
HCL TechnologiesBusiness Performance
JFM’11
*HCL Confidential2
Revenue Growth IntactAll 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 - $915 MnLTM Revenues cross INR
15,000 Crore milestone
*HCL Confidential3
While expanding Profit MarginsOperating and Net Income register double digit growth. Big Turnaround in Profits Margins over last 6 months
Margins AMJ'10 JAS'10 OND'10 JFM'11
Gross Margin 33.1% 31.6% 31.6% 32.0%
EBITDA Margin 18.6% 16.3% 16.3% 17.3%
EBIT Margin 15.3% 12.9% 13.1% 14.4%
Net Margin 10.0% 8.9% 10.3% 11.3%
EBIT Margins expand by 130bps
Operational Parameters AMJ'10 JAS'10 OND'10 JFM'11
SG&A as a % of Total Revenue 14.5% 15.4% 15.2% 14.7%
Days Sales Outstanding (DSO) 66 61 61 55
Utilization Offshore-Including trainees 72.9% 70.1% 70.1% 71.9%
Utilization Offshore-Excluding trainees 77.0% 74.1% 75.0% 76.3%
Utilization Onsite 95.2% 95.7% 95.9% 96.5%
Offshore Realization per man-month ($) 3,545 3,616 3,640 3,692
Onsite Realization per man-month ($) 12,983 13,107 13,274 13,426
Operating efficiencies helping gain of Profit Margins SG&A down. DSO down. Utilization up. Realization up.
HCL recorded lowest DSO in Indian IT Industry.
*HCL Confidential4
Cash Flow Conversion - Net Income to Operating Cash Flow @ 114% for JFM’11
Financial Year Ended…9 months
ended
US$ 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 YearsRolling Average
113% 90% 109% 101% 108% 101% 107% Not Applicable
*HCL Confidential5
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
*HCL Confidential 6
Market Share Momentum… - ~300 bps increase in Market Share in Last 3 Years
*HCL Confidential7
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 $50,000 milestone. Highest in the Industry.
*HCL Confidential8
Leading in Client Reference Scores
Source: 2010 N.America Application outsourcing wave
HCL Client Reference Scores are the highest across 10 parameters Survey conducted by independently by Forrester for the North America Application wave HCL positioned above larger peers like Dell, Cognizant, TCS, CSC, Infosys, HP and Capgemini In Forrester’s own words “HCL, which was not included in our prior analysis, has come a long way in the
marketplace in that time frame and is clearly worthy of its Leader status”
*HCL ConfidentialRecent Downgrades
Asia Poll Rankings
Analyst 2010 2009 HCL Infosys TCS Wipro
CLSA 1 1 Under Perform Outperform* Outperform* Outperform*
JP Morgan 2 3 Over Weight Neutral Over Weight Over Weight
CSFB 3 4 Buy Neutral Buy Buy
Kotak 4 2 Reduce Buy Buy Add*
Citi 5 5 Buy Hold Hold Buy
IIFL 6 12 Buy Buy Add* Add*
Morgan Stanley 7 11 Over Weight Over Weight Equal Weight Equal Weight
HSBC 8 7 Over Weight Over Weight Over Weight Neutral
Religare 9 22 Buy Hold Hold Hold
Motilal Oswal 10 19 Buy Buy Neutral Neutral
Analyst Rating Impact …
9
Composite Rating (Top 10) +8 +6 +6 +6
Dip
Flat
Improvement
Change in Ranking in Asia Poll Rankings
Buy / Over Weight Outperform
Neutral / Underperform
/ Reduce / Hold
Sell / Restricted
Legend of Ratings
*HCL Confidential10
HCL has positioned itself as the CIO’s Best Friend
Dec 2010
Finding the right vendor partner for your ITorganization: HCL
*HCL Confidential11
Leadership : Infrastructure Management
March 11, 2011The Forrester Wave™: Global IT Infrastructure Outsourcing, Q1 2011
29 March 2011 Gartner Magic Quadrant for Help Desk Outsourcing, North America
*HCL Confidential12
Leadership : SAP
*HCL Confidential13
Leadership : ADM
*HCL Confidential14
Reported Revenue (US$ 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