HCL says strong dollar likely to hit revenue in December quarter
New Delhi: HCL Technologies Ltd, India’s fourth largest software services exporter, on Tuesday said the strengthening dollar against global currencies including the British pound, euro and Australian dollar is likely to have an adverse impact on the company’s revenues for the three months ended December. The Noida-headquartered company has estimated an impact of about 210 basis points on its December quarter dollar revenue. One basis point is one-hundredth of a percentage point. “Since the company’s revenues are derived in multiple currencies, the revenues for the quarter to be reported in US Dollar would have adverse impact of 210 bps on account of strengthening of US Dollar against various global currencies,” the company said in a statement. The treasury income is likely to be lower by about 5% in the October-December quarter compared with the three months ended September, when the company reported a treasury income of $33.4 million. It had posted 1.9 % sequential growth for the September quarter in dollar terms after taking into account the adverse impact of 130 basis points owing to the movement in various currencies. The company had also recorded capital gains of $25.2 million on sale of property. It now expects to post forex gain of $2 million for the quarter, covering the impact of both cash flow hedges and mark-to-market of the foreign currency assets and liabilities, as against the loss of $2.5 million estimated at beginning of quarter on the account of cash flow hedges. The company expects effective tax rate to be in the guided range of 21% to 22%. The shares of HCL Technologies fell by 1.13% to Rs.1,569 at 9:17am, while the benchmark Sensex rose 0.03% to 27,709.87 points at 9:24am.