Despite the key economies of US and Europe continuing to struggle for growth, HCL Technologies has recorded a 17-18% year-on-year revenue growth in these regions on a LTM (last 12 months) basis. Anil Chanana, chief financial officer, HCL Technologies, tells Debojyoti Ghosh that the company is extremely focused on these markets, as large long-term deals are up for renewals in these regions. Excerpts:
During the July-September period, Europe had a growth of 16.4% year-on-year, while Americas grew 13.5%. How do you see business growing in these regions?
We are seeing very good growth in these regions. Both the geographies has grown significantly between 17-18% on a last twelve months (LTM) basis. We are extremely focused on these markets, because this is where the deal renewals are taking place. The deals from these regions are mostly long term. It is not just a project but a kind of relationship that you establish with the customers as they look for partners who can deliver capabilities. IT infrastructure is the backbone of any business. We are seeing very good traction across sectors in these regions except for telecom. We have opened centres in the overseas markets and are expanding our presence. We have also said that we will be creating 10,000 local jobs over a period of five years.
With the continuing slowdown in the mature markets, how do you see the deal pipeline going forward?
We are seeing a very solid deal pipeline. The market in which HCL operates, we are seeing good growth. According to latest TPI study, the deals in the current quarter, which are maturing for renewals will be maximum.
Going forward in FY13 and 14, the market is also expected to pick up. We are focused on winning deals in these markets, because we have the right capabilities and skills required in the current environment.
HCL Technologies saw a 3.6% rise in net income for the quarter ended September. Will the company be able to maintain this current level? What are the factors contributing to this improved performance?
Of course we have been increasing our margins. This quarter we had a salary increase, which impacted our margins by 80 basis points. However, we were helped by the utilisation level particularly offshore, which went up by 180 basis points. Going forward we don’t give any guidance, however, this particular quarter we had salary increase and for the remaining employees it is coming up in