HCL Infosystems Ltd— BUY—179—INR
Sector — Computer Hardware
Regd.Off.— E4, 5,6, Sector- XI, Noida - 201301
Listed — NSE, BSE.
Company overview—
Incorporated in April 86, HCL Infosystems previously known as HCL Hewlett-Packard is promoted by group of technocrats. In 86 company took over, Hindustan Computers, Hindustan Reprographics, Hindustan Instruments and Indian Computer Software Co. In 1991, the company entered into a joint venture with Hewlett-Packard Co, US, for combining the computer manufacturing, marketing and servicing activities of the company and Hewlett Packard India Pvt Ltd. In 1997-98, the company acquired the business of HCL Infosolutions, HCL Peripherals, and the customer support activities of HCL office Automation Ltd. In 1998-99, it entered into a relationship with Samsung, Korea to market and supports their range of key telephone systems. It also tied up with Novell to become the largest Novell authorised support centre. The company has tied-up with Pitney Bowes, a Fortune 500 company and global provider of integrated mail messaging and document management solutions, to provide world class mass mailing solutions. The alliance with Sun Microsystems India Pvt Ltd forged during 2002, to distribute the complete line of Sun Enterprises Products, will surely enhances the spectrum of services provided by the company to the customer. In dec2008, ICRA has reaffirmed the A1+ rating to Rs 3.25 billion Commercial Paper (CP)/Short-Term Debt (STD) Program of HCL Infosystems (HCL). A1+ is the highest-credit-quality rating assigned by ICRA to short-term debt instruments. The reaffirmation of the rating takes into account HCL’s established position in the networking market and the company’s strong liquidity position as reflected by its low gearing, substantial liquid investments and un-utilised bank limits.
Products & services—
HCL Infosystems Limited is India's premier information enabler and country's leading ICT system integrator and Distribution Company. Leveraging its three decades of expertise in total technology solutions, HCL Infosystems offers value-added services in key areas such as system integration, networking consultancy and a wide range of software and support services. HCL Infosystems is among the leading players in all the segments comprising the domestic IT products, solutions and related services, which include PCs, Servers, Imaging, Voice & video solutions, Networking Products, TV and FM Broadcasting solutions, Communication solutions, System Integration, ICT education & training, Digital lifestyle Solutions and Peripherals. Company has presence in the following areas-
DESKTOPS & NOTEBOOKS-- Business PCs, Home PCs, Infiniti Powerlite Notebooks
WORKSTATIONS-- Infiniti Challenger Workstations, SUN Workstations
SERVERS-- Intel Servers, Infiniti GL Servers, Infiniti Solutions, Infiniti Xcel Line Servers,
SUN Servers, HP Risc Servers & Workstations
THIN CLIENTS – Winbee Thin Clients, SUN Thin Clients
NETWORKING PRODUCTS
SECURITY PRODUCTS -- HCL InfoWall, HCL InfoSecuAccess, HCL InfoVPNe, HCL InfoSecuMon, HCL InfoNetMon, HCL InfoSurveillance, HCL InfoSecuDesk, Biometric Logon, HCL InfoSecuDesk, SmartCard Logon, HCL InfoSmartCard, HCL InfoLoadBalancer, HCL InfoSMS, HCL InfoDashboard
STORAGE SOLUTIONS
HCL Storage Solutions, IGL NAS 1400 BT, - IGL NAS 2700 SP, - IGL NAS 2700 BD,
SUN Storage Solutions, EMC Storage Solutions
Company’s hardware manufacturing plant is well located in the Union territory of Pondicherry and jharkhand. Company factories are ISO 9001:2000 and ISO 14001 certified. PMO was also Awarded MAIT Level 2 - by European Foundation for Quality Management in the year 2001. HCL was also awarded ELCINA's (Electronic Component Industries Association) Quality Award for the year 2002- 2003.
Recent developments—
Nokia Corporation is planning to set up a joint venture with HCL Infosystems to sell mobile value added services and entertainment content directly to consumers In India. The joint venture is subject to customary regulatory approvals. Once the requisite approvals are received, the joint venture will be primarily engaged in selling value added services for mobile devices.
HCL Infosystems tied-up with Korean major Nautilus Hyosung to launch customized automated teller machine (ATM) solutions for India banks with a special emphasis on service-offering for rural areas. The company said that with just 38,000-plus ATMs in India serving a population of over 1.2-billion, there is going to be a huge demand for ATMs in India. The company said that initially, it will import ATMs as semi-knocked down (SKD) kits, then move to completely-knocked down (CKD) kits, and eventually as a part of indigenization start manufacturing the whole units in India. The initial assembly will be done at HCL’s plants in Pondicherry and Uttarakhand.
HCL Infosystems received an order from BSNL for a rollout of over 60,000 ERP licenses. The value of the order is Rs 2.40 billion. The contract includes configuration, business process reengineering, hardware, networking, operations & maintenance customization, training to BSNL employees and program management for seven years.
Valuations—
We expect company’s operating margins to remain under pressure, given intensely competitive nature of the industry, but healthy cash accruals and low debt repayment obligations will help the company to perform better in coming quarters. India is the third fastest growing Notebook-PC market in the ASEAN region with a CAGR of around 22 per cent. At current market price, Stock is trading at only 11.96 P/E multiple of its FY2010 estimated earnings. We recommend investors “buy”, “HCL Infosystems” for medium to long-term investment horizon.
Sector — Computer Hardware
Regd.Off.— E4, 5,6, Sector- XI, Noida - 201301
Listed — NSE, BSE.
Company overview—
Incorporated in April 86, HCL Infosystems previously known as HCL Hewlett-Packard is promoted by group of technocrats. In 86 company took over, Hindustan Computers, Hindustan Reprographics, Hindustan Instruments and Indian Computer Software Co. In 1991, the company entered into a joint venture with Hewlett-Packard Co, US, for combining the computer manufacturing, marketing and servicing activities of the company and Hewlett Packard India Pvt Ltd. In 1997-98, the company acquired the business of HCL Infosolutions, HCL Peripherals, and the customer support activities of HCL office Automation Ltd. In 1998-99, it entered into a relationship with Samsung, Korea to market and supports their range of key telephone systems. It also tied up with Novell to become the largest Novell authorised support centre. The company has tied-up with Pitney Bowes, a Fortune 500 company and global provider of integrated mail messaging and document management solutions, to provide world class mass mailing solutions. The alliance with Sun Microsystems India Pvt Ltd forged during 2002, to distribute the complete line of Sun Enterprises Products, will surely enhances the spectrum of services provided by the company to the customer. In dec2008, ICRA has reaffirmed the A1+ rating to Rs 3.25 billion Commercial Paper (CP)/Short-Term Debt (STD) Program of HCL Infosystems (HCL). A1+ is the highest-credit-quality rating assigned by ICRA to short-term debt instruments. The reaffirmation of the rating takes into account HCL’s established position in the networking market and the company’s strong liquidity position as reflected by its low gearing, substantial liquid investments and un-utilised bank limits.
Products & services—
HCL Infosystems Limited is India's premier information enabler and country's leading ICT system integrator and Distribution Company. Leveraging its three decades of expertise in total technology solutions, HCL Infosystems offers value-added services in key areas such as system integration, networking consultancy and a wide range of software and support services. HCL Infosystems is among the leading players in all the segments comprising the domestic IT products, solutions and related services, which include PCs, Servers, Imaging, Voice & video solutions, Networking Products, TV and FM Broadcasting solutions, Communication solutions, System Integration, ICT education & training, Digital lifestyle Solutions and Peripherals. Company has presence in the following areas-
DESKTOPS & NOTEBOOKS-- Business PCs, Home PCs, Infiniti Powerlite Notebooks
WORKSTATIONS-- Infiniti Challenger Workstations, SUN Workstations
SERVERS-- Intel Servers, Infiniti GL Servers, Infiniti Solutions, Infiniti Xcel Line Servers,
SUN Servers, HP Risc Servers & Workstations
THIN CLIENTS – Winbee Thin Clients, SUN Thin Clients
NETWORKING PRODUCTS
SECURITY PRODUCTS -- HCL InfoWall, HCL InfoSecuAccess, HCL InfoVPNe, HCL InfoSecuMon, HCL InfoNetMon, HCL InfoSurveillance, HCL InfoSecuDesk, Biometric Logon, HCL InfoSecuDesk, SmartCard Logon, HCL InfoSmartCard, HCL InfoLoadBalancer, HCL InfoSMS, HCL InfoDashboard
STORAGE SOLUTIONS
HCL Storage Solutions, IGL NAS 1400 BT, - IGL NAS 2700 SP, - IGL NAS 2700 BD,
SUN Storage Solutions, EMC Storage Solutions
Company’s hardware manufacturing plant is well located in the Union territory of Pondicherry and jharkhand. Company factories are ISO 9001:2000 and ISO 14001 certified. PMO was also Awarded MAIT Level 2 - by European Foundation for Quality Management in the year 2001. HCL was also awarded ELCINA's (Electronic Component Industries Association) Quality Award for the year 2002- 2003.
Recent developments—
Nokia Corporation is planning to set up a joint venture with HCL Infosystems to sell mobile value added services and entertainment content directly to consumers In India. The joint venture is subject to customary regulatory approvals. Once the requisite approvals are received, the joint venture will be primarily engaged in selling value added services for mobile devices.
HCL Infosystems tied-up with Korean major Nautilus Hyosung to launch customized automated teller machine (ATM) solutions for India banks with a special emphasis on service-offering for rural areas. The company said that with just 38,000-plus ATMs in India serving a population of over 1.2-billion, there is going to be a huge demand for ATMs in India. The company said that initially, it will import ATMs as semi-knocked down (SKD) kits, then move to completely-knocked down (CKD) kits, and eventually as a part of indigenization start manufacturing the whole units in India. The initial assembly will be done at HCL’s plants in Pondicherry and Uttarakhand.
HCL Infosystems received an order from BSNL for a rollout of over 60,000 ERP licenses. The value of the order is Rs 2.40 billion. The contract includes configuration, business process reengineering, hardware, networking, operations & maintenance customization, training to BSNL employees and program management for seven years.
Valuations—
We expect company’s operating margins to remain under pressure, given intensely competitive nature of the industry, but healthy cash accruals and low debt repayment obligations will help the company to perform better in coming quarters. India is the third fastest growing Notebook-PC market in the ASEAN region with a CAGR of around 22 per cent. At current market price, Stock is trading at only 11.96 P/E multiple of its FY2010 estimated earnings. We recommend investors “buy”, “HCL Infosystems” for medium to long-term investment horizon.
Source: Internet (Valuenotes by Abhishek Jain)
