Increasing digitisation, Cloud adoption, customers embracing Industry 4.0 for smart manufacturing and cost optimisation are among the key factors that will ensure the deal pipeline remains robust over the next few years, HCL Technologies CEO and MD C Vijayakumar said on Tuesday.
The company, which logged 12.5 per cent rise in revenue to Rs 20,068 crore in the June 2021 quarter, is confident of double-digit constant currency growth in FY22 on the back of strong deal pipeline.
Speaking to PTI, Vijayakumar said the bookings number is the right indicator that the company is internally tracking to assess its performance.
"The right indicator to really track how we are doing, how we will do in the future will be the booking numbers...In Q1 of this year, we booked USD 1.67 billion (total contract value of new deal wins)...which is 37 per cent increase over Q1 of FY21...The revenue flow will be driven by the execution, fulfilment and all other aspects," he added.
Vijayakumar, who took over the managing director position on Tuesday, succeeding HCL founder Shiv Nadar, said the company's deal pipeline is stronger compared to the end of the last quarter.
"...in the last 3 or 4 quarters, the pipeline has been steadily increasing and the demand for services is driven by three or four important factors. One is the digitisation and digital transformation initiatives, while the second one is around cloud enablement where clients are looking at cloud strategy as integral to their business strategy," he explained.
The top executive added that the next phase of extensive digitisation is happening with Industry 4.0, where connected factories, smart manufacturing and Internet of Things (IoT) integration, among other technologies, are coming into play.
"The fourth is the all encompassing cost optimisation and vendor consolidation kind of areas. So these are the four key themes which drives the pipeline.
"And I do believe these themes will play out for a longer time, for at least the next couple of years, that's the expectation that I have," Vijayakumar said.
Also Read: HCL Technologies shares dip 3%; Q1 earnings fail to enthuse investors
HCL Technologies has seen sequential growth during the June quarter across geographies, except Europe where it registered a 3.9 per cent quarter-on-quarter decline.
Vijayakumar, however, said the company was not very concerned about the small "blip" that it saw in Europe this quarter.
"Europe will turn around very quickly because apart from the geographies like UK and the Nordics, where we are already a very dominant player, France and Germany are opening up for global sourcing in a very significant manner.
"We have also strengthened our teams and country presence in these two countries and we've also started building presence in Spain and Portugal to cover the Iberian market," he said.
Vijayakumar added that Europe is expected to perform well in the coming quarters.
HCL Technologies has also been strengthening its operations in countries like Sri Lanka and Vietnam as part of efforts to diversify its overall offshore presence.
"Having additional locations helps to diversify overall delivery, making delivery much more resilient in the long run. Vietnam also offers an opportunity to service the Japanese market...These countries also have good talent pools, and we want to tap into as many talent pools as possible across the globe," he said.
HCL Technologies expects to hire 20,000-22,000 freshers this year, and will also roll out salary increments effective July 1 to retain talents amid rising attrition rates in the industry.
At the end of the June 2021 quarter, the Noida-headquartered company had 1,76,499 employees with a net addition of 7,522 people. Its attrition for IT services (on last 12-month basis) was at 11.8 per cent.
Also Read: HCL Tech Q1: Consolidated PAT rises 9.9% to Rs 3,214 cr; to pay Rs 6 per share dividend
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