HCL Infosystems Ltd. will be shutting down its manufacturing business in India, in a bid to improve its margins and efficiencies. The company has been in India for more than 37 years since its foundation back in 1976. However competition from global brands like HP and Dell have attributed to this move by the company.
Though, the company will still be in PC distribution and their maintenance, so as to utilize its distribution network with presence in more than 170 cities reaching more than 4000 towns throughout India. Speaking on the announcement, HCL Infosystems CEO Harsh Chitale said “We will be stopping manufacturing. “My” distribution today does lot of distribution of PCs of multiple brands… We will be in PC distribution and in after sales services but will not manufacture HCL branded products some time in the future.
The PC business contributed around 1,000 crores to the company, accounting for just 8 % of HCL’s overall revenues. In the last quarter company reported a profit before tax figure of Rs 7 crores. Company has been facing huge losses since past few years due to fluctuating rupee against US dollar and other currencies. Even other Indian PC manufacturers are facing the heat as they import almost 90-95 % computer components from foreign players.
Additionally not clear whether the company will continue manufacturing its HCL Me range of tablet products or not.