At a time when its peers have given a bleak outlook, HCL Technologies posted better-than-estimated results in the first quarter ended September. Besides, the company maintained its margins despite wage hikes. In a chat with FE?s Kirtika Suneja, the company?s president and chief operating officer, Anant Gupta, attributes this stellar performance to the firm?s responses to the changing market dynamics. Edited excerpts:

Despite turning in a good set of numbers, you mentioned a few concerns. What are the causes of worry at this point of time?

The worry is that change-the-business (CTB) component of business is still subdued and the churn is happening on run-the-business (RTB) side. The RTB component is 65-70% of any company?s budget and our clients now want to optimise it as it adds value at the foundation level. However, it is CTB that ultimately drives business. In fact, some transformational engagements are becoming a part of RTB that reduces cost to customers.

Are there pricing pressures? How does the deal pipeline look?

Pricing is stable and there is no change in it. It is competitive and driven by changes in the business. As for deals, we are getting total outsourcing deals with multi-year engagements. We signed 12 such deals in the quarter across service lines, led by manufacturing, financial services and consumer services verticals.

How did two cycles of wage hikes impact margins?

We did one round of wage hikes in July that had an 80 basis points (bps) impact on margins and the other round will happen in the October-December quarter where we expect the impact to be close to 100 bps.

So, what are new Blue Oceans for HCL Tech in this churn?

The new Blue Oceans will be around developing businesses models, front office transformation to help customers grow, creating a one-to-one interaction with customers and the price points involved in scaling emerging technologies. Besides, we will sharply focus on the horizontals and verticals. It is imperative to have a better interface with clients during such a churn.

You talked about creating a new service line that would become a $1-billion unit just like the infra division…

We are progressing on that front and it is work in progress.

With your peers treading the inorganic growth path, what is HCL Tech?s acquisition strategy?

We don?t want to acquire just to gain market share. There will be no play of dollars behind such buys. We have a pointed inorganic growth strategy based on skills, verticals and geographies. In fact, it is a spontaneous strategy for acquisitions and not a short term one.