Lets hace Hcl info ion our portfolio bcz now every payment mode need ADHAAR card for kyc and now SIM card also going to need e-kyc
wanted to know how revenue is going to increase for HCL Info by getting hits to Adhaar card database as last 5 years revenue has decreased significantly and how they will get into black.
Disclosure - Not invested but interested
A good article for the digital india enthusiastics or belivers.
http://worldoutofwhack.com/2017/03/30/raoul-pal-on-next-big-macro-idea-india/
Results are out and revenue seem to be ok but margins are down. Not able to see if they are already monetizing from Aadhar transactions(if yes then growth) or whats the plan in future.
Very Bullish monthly chart structure.hope higher levels this time.
Disclaimer :- Not a recommendation or advise to buy,sell & hold. Personally holding since last 3 yrs .
2 Likes
HCL INFOSYSTEMS
CMP 54 MARKET CAP 1800 CRORES
BUSINESS DIVISIONS
CONSUMER DISTRIBUTION
Company distributes products of multiple brands for the Indian market. In one of the online market places company has tied up with Samsung for distribution of its products.
This division has shown good growth for q3 fy 18 with sales at 660 crores versus 221 crores for q3 fy 17 and 299 crores for q2 fy 18.
ENTERPRISE PRODUCTS DISTRIBUTION
This division has shown good growth in q3 fy 18 with sales at 395 crores as compared to 256 crores for q3 fy 17 and 316 crores for q2 fy 18.
Company has continued focus on building channel partners.
3 large orders have been won in q3 fy 18.
SERVICES BUSINESS
Enterprise services revenues declined to 216 crores in q3 fy 18 from 234 crores in q3 fy 17 and 235 crores in q2 fy 18.
Company focusses on cost optimisation in this division.
It has sold the CARE division to Quess Corp for a consideration of 30 crores.
SYSTEM INTEGRATION AND SERVICES BUSINESS
Pending order book 745 crores
Build phase 85 crores
Managed services 220 crores
Support and annuity business 440 crores.
For AADHAR card business, the company helps in looking after infrastructure and manage the data centre.
Focus is on closing the build phase orders most of which will be completed by March 2018 quarter except for one order for which management is focussed and working with client to close build phase as early as possible. 7-8 quarters ago build phase was around 450-500 crores which has now been brought down to 85 crores.
DEBT AND BALANCE SHEET
From details of q2 balance sheet, investments at 91 crores, cash and equivalents at 125 crores and other bank balance is at 65 crores. Total cash and equivalents is at 281 crores. Borrowing is 322 crores long term and 641 crores of short term amounting to total of 963 crores. Net debt after subtracting cash and equivalents is at 682 crores. Post Sep 2017, there was a rights issue which raised around 500 crores and most of funds were utlised for reducing debt so as on date debt should be much lower.
RIGHTS ISSUE
In recently concluded rights issue, promoters subscribed to 90% of rights issue at an issue price of Rs 47. Out of 500 crores raised through rights issue, 400 crores have been used for debt repayment.
NEGATIVES
Total receivables for the company stands at 1400 crores out of which 500 crores is from SI business.
Once the build phase of SI is over these receivables are likely to come back to the company.
Domestic services business and Middle East business are good candidates for divestments. Any delays on that front can keep affecting profitability of the company.
INVESTMENT THESIS
Increased focus on distribution business which could turn lucrative going forward.
System integration business seems to be coming closer to seeing the end of build phase. Once the maintenance and annuity part of business kicks in there could be a good impact on profitability
Debt reduction has taken place by utilising funds raised through rights issue.
Focus on divestment of non core businesses which are not contributing to profitability. An example of this is the sell off of CARE division to Quess Corp.
A lot of things like promoter infusion of funds (rights issue), divestment of non core assets and focus on core business, traction in core business etc seem to be falling in place for the company. How it fares in terms of results needs to be seen going ahead.
disc: invested recently around current prices.
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Great work hitesh sir, seems mgt trying to correct all errors lets c how it work out. Disclosure : on radar
How do you view the results published today ? Anyone tracking this company closely ?
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Distribution business revenue increased by 22% YOY.
Out of this, enterprise distribution saw 30% increase whereas consumer distribution saw 15% increase. -
Divestment of services business might improve the balance sheet in near future.
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The enterprise division is focusing on cloud, security, etc. related technologies which is a good sign seeing the growing revenues.
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Enterprise Distribution also signed a strategic partnership with Alibaba Cloud Services for the market in the country.
Not sure how much beneficial this would be. Alibaba contributes very less to cloud space where the leaders are Amazon, Google and Microsoft.
| Update On Sale Of Entire Ownership And Control Held By Nurture Technologies FZE (Formerly Known As HCL Infosystems MEA FZE) In Its Subsidiaries And Step Down Subsidiary. |  |
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| Exchange Received Time 27/11/2018 15:56:47 Exchange Disseminated Time 27/11/2018 15:56:53 Time Taken 00:00:06 | ||
| Further to our intimation dated 15th October, 2018 regarding sale of the entire ownership and control held by Nurture Technologies FZE in its direct subsidiaries namely Gibraltar Technologies LLC (Dubai) and Gibraltar Technologies LLC (Abu Dhabi) including in its step-down subsidiary namely Gibraltar Technologies WLL (Qatar), we wish to inform that the shares have been transferred in the name of the Buyer (consortium of individuals) and the abovementioned transaction has been closed today i.e. 27th November’ 2018. |
I think this will surely cut down the debt overhang… i think they will have cash on books now…
Yes but loosing the most valued business. They will sell land and unused offices to cut down. The main draw down is low margin government business where money is stuck. Once out of the rut should look reasonable for growth.
The company is in profits after so many quarters primarily because of the selling of its Singapore subsidiary… I think things may improve here on…Yet to see company performing on the operational numbers.