NEW DELHI: HCL Technologies Ltd, India’s third largest information technology (IT) services firm, was the second IT company, after Infosys Ltd, to give positive guidance for 2020-21, based on healthy bookings and a strong deals pipeline. In an interview, the IT firm’s president and CEO C Vijayakumar spoke about issues ranging from the business environment, growth possibilities for the IT sector and the role of the new chairperson. Edited excerpts:
What has been the impact of the pandemic on HCL Technologies?
We saw topline decline in the June quarter and that is largely due to covid impact. If we look at the future, we will continue to do quite well, our bookings are good, the (deals) pipeline has increased 40% compared to the March quarter, thanks to vendor consolidation and digital and cloud modernization efforts of customers. There are a lot of digital initiatives and cost transformation programmes which are on the horizon where we are participating.
Due to the pipeline increase and good bookings, we are confident that the worst is behind us, and we are going to see a good growth trajectory from here on. We have given a guidance of an average 1.5 2.5 % growth every quarter for the next three quarters.
How is the demand environment? What are the growth sectors for the IT industry?
Demand environment for tech services is very strong because if you look at the takeaways from covid-19, technology has been instrumental in enabling lot of businesses to thrive and survive. So, there is a lot of emphasis on the importance and resilience of tech infrastructure and business applications. That is a positive aspect from a tech services perspective and that is also driving some demand trends to investing in faster cloud migration, cybersecurity, analytics, Internet of Things – all of these are only going to get accelerated due to the situation that has emerged post-covid-19. Sectors like energy, manufacturing and auto will see slow recovery while others like technology, telecom, life sciences, financial services will continue to grow.
HCL Software performed well in the June quarter. How do you plan to drive growth in the software business?
We have set up a very good platform for the software business which is global in nature, with a large number of customers and we have a very good portfolio of products which is going to do well in this environment more than ever. We are investing close to $200 million in research and development every year, in modernizing these products and bringing out new versions and features, built upon requirements of users. This will also help us gain some more traction in the HCL software business.
What will be Roshni Nadar Malhotra’s role as the new chairperson?
Roshni has been on the board of HCL Technologies for more than seven years and she has been very closely involved. Now, she is going to take over as chairperson of the board, so she will look into governance issues and associated responsibilities, which are normal for a chairperson is what she will play. Shiv (Nadar) will continue to be the chief strategy officer and he will provide the long-term direction and strategy and play an active role. HCL has a very differentiated strategy, what we call our Mode 1-2-3 strategy, which is well-thought through and that is helping us deliver industry leading growth the last four years. We will continue to build upon it and Shiv will continue to provide us insights and inputs in the overall strategy.
Will there be any change in strategy or direction of the company?
No, I don’t think so. Strategy has been thoroughly discussed and it has delivered extremely well and the outlook is also good, so I don’t there will be any major changes in strategy. But as the business evolves, there is some fine-tuning that happens. We continue to place emphasis and importance on execution and that is what really differentiates HCL. Keep the strategy simple and focus on execution.
What about hiring and layoffs?
No covid-19-related layoffs, but there could be some performance-related exits. We are continuing to hire and have a plan to hire about 15,000 freshers across the world. In Q1, we hired 1,000 and rest will follow in the subsequent quarters. From now on, we are seeing only a growth trajectory in our business so that may lead to some incremental hiring also.
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