Financial Analysis of HCL

Technologies
Submitted To:
Presented By:
Prof. Gaurav Dawar
BM-018071 Astha Kansal
BM-018081 Ayushi Agarwal
BM-018091 Charu Kamboj
BM-018101 Devesh Anand
BM-018111 Divya Khanna
BM-018121 Mabin Mathew
BM-018385 Bibhav Raj
 Subsidiaries of HCL Enterprise

HCL
ENTERPRISE

HCL HCL HCL

TECHNOLOGIES INFOSYSTEMS HEALTHCARE
 HCL Technologies Ltd.
 Global IT Company.
 Headquarters in Noida.
 Subsidiary of HCL Enterprise.
 Emerged as an Independent Company on
November 12, 1991.
 Operates in 41 Countries.
 Is on the Forbes Global 2000 list.
 Among the top 20 largest publicly traded
companies in India.
 Market capitalization of $18.7 billion as of May
2017.
 Helps India’s largest stock exchange to manage
10 million transactions per day.
 MODE 1-2-3 STRATEGY
 Mode 1: Core Services
Mode 1 is all about sustaining a leadership position and gaining market
share in existing product or service offerings. It revolves around
strengthening the existing core, be it through forging expansion into new
markets or by digging further into existing markets.

 Mode 2: Next Generation Services

This involves close study of the direction in which customer preferences
are headed, the resultant changes in market landscape and potential
impact on the business. And based on this review, making the strategic
investments to move urgently to capitalize on adjacent opportunities.

 Mode 3: Products & Platforms

Mode 3 is about looking beyond tomorrow and aligning with the trends
shaping the future. It entails “future proofing” your business by making
the required business model changes and building innovative alliances
within an ecosystem of strategic partners.
 Board of Director
• CEO :- Roshni Nadar Malhotra executive director of the 8.5 billion
global enterprise. She is responsible for providing strategic guidance
to the organisation. Roshni is also a director on the board of one group
companies. HCL Technologies and chairman of its CSR Committee.
•Founder & Chairman :- Shiv Nadar.
•Kiran Nadar :- Chairperson Kiran Nadar Museum of Art Justee, Shiv
Nadar Foundation.
•Shikhar Malhotra :-
 Vice chairman
 HCL Healthcare
 Director & Board members
 HCL Corporation Trustee Director :- Robin Abraham
 Shiv Nadar Fondation Director :- R. Srinivasan Sasale Shankar
 Trustee, The Habitat. Sastry Keki Mistry Subhramanian
Madhavan Sudhindar Krishna
 RATIO ANALYSIS

 There are 4 broad category of ratios:

i. Liquidity ratios
ii. Long Term Solvency Ratios
iii. Turnover / Efficiency Ratios
iv. Profitability Ratios
 LIQUIDITY RATIOS

S.No. RATIO 2014-15 2015-16 2016-17

1. CURRENT 3.30:1 3.90:1 3.06:1

RATIO
2. QUICK RATIO 3.2:1 3.88:1 3.04:1

3. CASH RATIO 1.93:1 2.02:1 1.50:1

4. NET WORKING 2.30:1 2.90:1 2.06:1

CAPITAL RATIO
 PROFITABILITY RATIOS

S. No. RATIO 2014-15 2015-16 2016-17

1. NET PROFIT 34.57% 32.76% 33.89%

RATIO
2. OPERATING 42.24% 40.42% 41.07%
PROFIT
RATIO
3. EXPENSES
RATIO
a) PURCHASE 1.98% 1.12% 0.60%
OF STOCK-
IN-TRADE
b) CHANGE IN 0.36% 0.32% 0.190%
INVENTORY
OF STOCK-
IN-TRADE
c) DEPRECIATION 1.63% 1.92% 2.362%
AND
AMORTISATION
EXPENSE
d) FINANCE COSTS 0.33% 0.318% 0.276%

e) OTHER 22.18% 11.60% 11.04%

EXPENSES
f) EMPLOYEE 32.28% 33.79% 33.75%
BENEFITS
EXPENSES
4 RETURN ON 1.74% 0.78% 1.74%
ASSET
5. RETURN ON 31.08% 26% 31.08%
CAPITAL
EMPLOYED
6. RETURN ON 22.56% 16.72% 24.08%
EQUITY
LONG TERM SOLVENCY RATIOS
TURNOVER / EFFICIENCY RATIOS
 COMPARATIVE
BALANCE SHEET
Particulars 2015 2016 2017 Absolut Absolut % diff % diff
e diff e diff 2015- 2016-2017
2015- 2016- 2016
2016 2017

1. ASSETS
1) Non Current
Assets
(a) Property Plant
nd Equipments 2766.93 2762.90 3126.45 -4.03 363.55 -0.14 13.15
(b) Capital (W.I.P.) 543.95 582.12 410.53 38.17 -171.59 7.1 -29.47
(c) Goodwill - 18.16 553.17 535.01
(d) Other Tangible
Assets
39.25 35.18 4310.19 -4.07 4275.01 -10.3
INANCIAL ASSETS
i) Investments 3500.23 3502.58 3810.1 2.35 307.52 0.06 8.77
(ii) Loans 15.01 15 0.07 -0.01 -14.93 0.06 -99.53
(iii) Others 175.75 120.02 186.85 -55.73 66.63 -31.7 55.68
(f) Deferred Tax
Assets 986.53 1179.72 1211.07 -193.19 -31.35 19.58 2.65
(g) Other non - -
Current Assets 695.62 732.18 646.59 36.56 85.59 5.25 11.68
(2)
(
2015 2016 2017 Absolut Absolut % diff % diff
e diff e diff 2015- 2016-
CURRENT 2015- 2016- 2016 2017
2016 2017
ASSETS
(a) Inventories 83.65 128.56 89.93 44.91 -38.63 53.68 -30.04
(b)Financial
Assets

(i)Investments 627.7 471.72 914.14 -155.98 442.42 -24.84 93.78

(ii) Trade
receivable 3578.28 4084.53 4418.39 506.25 333.86 14.14 8.17

(iii)Cash 432.73 125.17 352 -307.56 226.83 -71.07 181.21

(iv) Bank 8396.68 8537.79 7610.35 141.11 -927.44 1.68 -10.86

(v) Loans 1193.19 2014.37 2542.76 821.18 528.39 68.82 26.23

(vi) Others 1298.37 1610.16 1518.06 311.79 -92.1 24.01 -5.71

(c) Other Current
Assets 573.8 667.88 671.26 94.8 3.38 -16.54 0.5
 2015 2016 2017 Absolut Absolu % diff % diff
e diff te diff 2015- 2016-
2015- 2016- 2016 2017
2. EQUITY 2016 2017

(A) Equity Share

Capital 281.2 282.08 285.36 0.88 3.3 0.31 1.16

(b) Other Equity 19116.44 21214.49 25687.93 2098.05 4473.44 10.97 21.08

3. LIABILITY
Non Current
Liabilities
(a)Financial
Liabilities
(i) Borrowings 27.22 28.16 31.24 0.94 3.08 3.45 10.93

(ii) Others 38.58 75.47 7.16 36.89 -68.31 95.61 -90.51

(b) Provisions 304.45 344.08 411.27 39.63 67.19 13.01 19.52

©Other Non Current
Liabilities 245.2 130.77 34.37 -114.43 -96.4 -46.66 -73.71
 2015 2016 2017 Absolut Absolute % diff % diff
e diff diff 2015- 2016-
Current 2015- 2016- 2016 2017
Liability 2016 2017
(a)Financial
liabilities

(i) Borrowings 0.03

(ii) Trade Payable 468.58 453.92 484.59 -14.66 30.67 -3.21 6.75

(iii) Others 2955.28 2521.26 4003.65 -434.62 1482.39 -14.70 58.79

(b) Other Current

Liabilities 690.63 765.61 885.46 74.98 119.85 10.85 15.65

©Provisions 100.01 96.34 110.89 -3.67 14.55 -3.66 15.1

(d)Current Tax
Liabilities 679.38 675.883 429.99 -3.5 -245.84 -0.51 -36.37

TOTAL EQUITY 24906.9

AND LIABILITY 5 26588.04 32371.91 1681.09 5783.87 6.75 21.75
 CONCLUSION
HCL Technologies Limited (HCL) is a leading Company in the IT / ITES space, offering a full array of
services to its customers. HCL is a leading provider of innovative customer specific solutions, backed by
best-in-class processes.
From the last 3 years the HCL technologies is struggling in terms of keeping pace with its industry
counterparts but still it is able to achieve its position of having good financial results compared in the IT
Industry. After analysing all the ratios, current ratio remain above 3 and there is constant decrease in the
ratio year after year but the company have enough assets to repay their short term obligations. Quick
ratio suggests that the company has more liquid assets than liquid liabilities, it is good sign for the
company and will be able to meet the liquid liabilities which are in control of the liquid assets. Current
assets turnover ratio shows that company current assets value is more than 1 times in that year, company
capability to earn profit through current assets is very good. As per the data, the working capital not that
much capable to generate the sales revenue, when company needs the working capital that were not
available at that time so it should defiantly have impact on sales. The capital employed shows that when
shareholder’s invested their money in to the business, it helps to increase the sales. The net sales in
increasing reasoned may be requirement of working capital or machinery etc. The debt equity ratio
describes that company creditors have lower contribution than shareholders. Company is not only
dependent on debt but also utilizing the shareholders capital. The gross profit is continuously going up
and net profit ratio also positive over the three years. The company overall performance is satisfactory
but still he company needs to reach the level of maintaining its trend in upward direction in terms of the
turnover , liquidity & capital structure ratios so that the long term goals of the company are achieved in
this very dynamic globalized world. After analysing the financial parameters of the company it can be
suggested to invest in the company only having a close watch on the results of year 2018.