52-WEEK FLOP: HCL INFOSYSTEMS ::Business Line,

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The stock of HCL Infosystems (HCL) has been beaten down considerably as the company faces the pressure of declining revenues in both of its segments. In fact, in the recent December quarter, gross revenues fell nearly 15 per cent over the same period in the previous fiscal, while profits dropped by almost 38 per cent. Its computer systems as well as telecom and office automation businesses have seen declining sales.

In the computer systems business, global players such as Dell, Acer, HP and Lenovo have made serious inroads in India and increased their market share (10-15 per cent each). According to a report from Gartner, HCL was the only vendor in the top five to face a decline in shipments in the third quarter of CY11.

In its telecom equipment business, HCL's key customer in this segment — Nokia, is not dominating the low-cost phone market the way it used to a few years back.

The order flow in segments such as system integration has been slow. Contracts from the Government, a segment from where HCL derives significant revenues, also have been affected due to delays in decision making.

The company was also adversely affected by the rupee's depreciation against the dollar, as it imports a good part of equipment that it distributes. Adding to the woes has been the floods in Thailand that has affected computer components availability and costs.