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HCL looks to raise digital business share to 40%: CEO C Vijaykumar

"Yes, there is the India drag on infrastructure — it has been flat last quarter and this quarter. I expect it to continue this way for one more quarter," he said.

, ET Bureau|
Last Updated: Jan 20, 2018, 01.38 PM IST
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Apart from deli vering one of the highest constant-currency revenue growths for the December quarter at 3.3%, HCL Technologies said the contribution of its digital business has crossed the 25% mark. In an interview with ET’s Surabhi Agarwal, C Vijayakumar, president and CEO, HCL Technologies, talked how HCL intends to raise the share to 40% in the next couple of years and its target to increase intellectual property partnerships to 10 from the current three in order to broadbase its portfolio. Edited excerpts…

What has led to the huge stride in the digital business this quarter?

We were at 19% at the end of FY 2017 but we were gradually increasing and this quarter we crossed the 25% mark. The spend pattern with a lot of customers is changing and if you are able to follow the spend pattern and make sure you are there to win the business then you can do it. We need to get to 35-40% in revenues in the next couple of years – that’s what I would expect.

The engineering and R&D business has been doing well and has led the growth this quarter, what’s the overall strategy there?

The core engineering business is doing well. Some of the acquisitions we made, we are trying to realise the synergy of those acquisitions such as Geometric. Also, the third factor is what is driven by our Mode 3 strategy of products and platforms.

The infrastructure business, which is your largest contributor, has been dragging due to a decline in India business — why is it not getting offset by demand elsewhere?

Yes, there is the India drag on infrastructure — it has been flat last quarter and this quarter. I expect it to continue this way for one more quarter; next year we expect infrastructure services to pick up because we have some good bookings, so they will translate into revenues.

Why this softness?

I think large outsourcing deals suffered in the US. Due to all the political changes, there was some slowdown in decision-making and that continued till the last quarter of last year. But we found some good uptick and some good bookings and that gives us some optimism. I think next year we should have decent growth in infra business.

So, you are saying that the uncertainty is waning now?

I think it is. People are trying to take a decision on what is good for their business, so they are not holding back. And I expect next year to be better.

What are your focus areas in digital?

We identified four broad areas six quarters ago — digital and analytics; cloud native services; cyber security is where a lot of spend is happening; and IoT. These are the four services. We have senior leaders assigned to each ones of these services, and we have taken them out of big portfolios and put them on to this because we believe this needs a lot of leadership attention, since you need to create new offerings and you need to bridge the gap between what the market expects and what we have.

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