After the company’s Q1 scorecard missed street estimates, HCL Technologies CEO C Vijayakumar on Thursday said he is optimistic about coming quarters given the strong deal pipeline as well as “good opportunities” that are currently in the advanced stages.
On the business sentiments, the HCLTech top boss disclosed that the US market is showing more velocity than Europe, which is seeing relatively slower decision-making.
The Noida-headquartered IT services company — which competes in the global market with larger rivals such as TCS and Infosys — asserted that it has “a strong pipeline at this point and a good amount of opportunities which are in the advanced stages.” These will translate into revenue during this year, Vijayakumar told PTI in an interview.
He also expressed confidence that order bookings will pick up from here on.
Vijayakumar noted that contrary to the overall negative commentary about demand, there is in fact a “lot of positivity on what technology can do for business and the role that technology leaders can play in transforming the business”, and this mindset is reflecting in client conversations as well.
“There’s a lot of excitement about the technology initiatives, the progress that they are making and all the outcomes that they are achieving and how some of the new technologies can help them even achieve better outcomes. So I think there is a lot of positivity…,” he said.
The company believes that overall tech spends will continue to rise.
“So, I think some of this is going to help us gain some market share,” he said.
While the pricing environment is currently stable, the market volatility is making it difficult to take predict timelines for a full recovery.
“I think there is more velocity in the US, and in Europe the decision-making is a little bit slow,” he said.
HCLTech on Wednesday reported a 7.6 per cent year-on-year rise in its June quarter net profit. Its consolidated net profit at Rs 3,534 crore in April-June period was up from Rs 3,283 crore in the same period a year back.
The numbers for the first quarter of this fiscal came in weaker than anticipated, trailing even the company’s own expectations. While financial services, lifesceinces/ healthcare and manufacturing logged strong growth, the telecom and tech verticals suffered “steep declines”.
“I think the pipeline is very strong. In the last two quarters, the pipeline has picked up quite a bit. So, I think we will see better bookings from here on,” he said.
The net new wins, which stood at USD 2 billion in the March quarter, was at USD 1.6 billion in the June quarter.
“So, I think on the back of the two quarters, whatever bookings that we’ve done, we will see some growth momentum… but we are also having a strong pipeline at this point and good amount of opportunities which are in the advanced stages, which we believe will also translate into revenue during this year,” he said.
HCL Tech’s head count grew significantly in FY22 and FY23, and though the company plans to hire in the current fiscal, Vijayakumar said the levels will not be similar to the past year.
“So, we will see some hiring for sure this year, which will contribute to the overall growth, but it is not going to be similar to FY23,” he said.
There are no delays in onboarding and all offers are being honoured, he emphasised.