HCL Infosystems Q1 results: Loss narrows to Rs 37 cr

NEW DELHI: IT firm HCL Infosystems on Thursday reported narrowing of its loss to Rs 36.86 crore for the quarter ended June 30, 2020.

The company had posted a loss of Rs 39.97 crore in the year-ago period, HCL Infosystems said in a regulatory filing.

Consolidated revenue from operations decreased to Rs 105.69 crore in the quarter under review from Rs 576.96 crore in the year-ago period, it added.

The parent company's management is pursuing strategies including scale down of loss-making businesses, sale of certain non-core properties and reduction in outstanding debts, it said.

Distribution business revenue in the June 2020 quarter was about Rs 70 crore, while that from system integration and solutions business stood at about Rs 36 crore.

"During the quarter, we continued to focus on initiatives to reduce the company's debt and business losses by optimising our businesses.

"Accordingly, we have been scaling down our Consumer and Enterprise Distribution businesses, which has resulted in the decline in revenues in the quarter," HCL Infosystems Chairman Nikhil Sinha said.

The board of directors has approved the merger of HCL Learning Ltd and Digilife Distribution and Marketing Services Ltd (DDMS), wholly-owned subsidiaries of the company, with HCL Infosystems.

"The proposed merger is for the purpose of simplifying the group structure. As part of the ongoing rationalisation of the business, the learning business and the distribution business are being scaled down," it said.

As a result, separate entities for these businesses, that is HCL Learning Ltd for learning business and DDMS for distribution business, are no longer required, it added.

The proposed merger is subject to approval of the shareholders and other regulatory approvals.

The board has also approved the sale/surrender of immovable properties of HCL Infosystems Ltd.

"The sale/surrender will take place as and when an appropriate buyer is identified. These properties are lying vacant/partially vacant, as the Group is not utilising/fully utilising these properties after scale down of its operations and change in its business requirements, though the Group continues to incur cost on maintenance of these properties," it said.

The proceeds from the sale/surrender of these properties will be used to pay off part of the group's debts and thereby to reduce its finance cost, it added.