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Market trends purely being driven by microeconomic indicators

Market trends purely being driven by microeconomic indicators
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First Published: Thu, Apr 21 2011. 12 05 AM IST

Coping with change: HCL vice-chairman and chief executive Vineet Nayar says the management of the future is about handling dynamic uncertainties.
Coping with change: HCL vice-chairman and chief executive Vineet Nayar says the management of the future is about handling dynamic uncertainties.
Updated: Thu, Apr 21 2011. 12 05 AM IST
New Delhi: His company beat the Street’s expectations and announced healthy results for the quarter ended 31 March but HCL Technologies Ltd vice-chairman and chief executive Vineet Nayar says several uncertainties remain. Edited excerpts:
Is the dynamic environment making it difficult for you to plan things such as hiring because you don’t know what growth will be like?
Coping with change: HCL vice-chairman and chief executive Vineet Nayar says the management of the future is about handling dynamic uncertainties.
There is a certainty about what kind of business is happening, but there is an uncertainty on what is going to be the mix of the business as we move forward. I told you in July that December will be a very big quarter and after that it would taper down, and that’s what has happened. It takes six months for the customer to decide; we have a 30-40% win ratio; so there is a stability in earnings. So the six months forward (picture) is pretty clear.
You have said you expect some small deals and project-related work; it doesn’t sound exciting...
We all have to be clear that we are not post-recession; we are at more than the 10% growth rate, but we are also not in the 40% growth region. So that is the band in which growth will happen in the near term.
How long before the trend reverses?
It is purely being driven by microeconomic indicators. The housing data which came from the US last night (Tuesday night) is pretty good; but now elections are coming in the US. There are too many elements which determine spends. We have to wait and watch. What is certain is that the old predictability of year-on-year growth is gone. We are in a dynamic environment and have to manage it.
Are the elections in the US a big worry?
I don’t know. When elections come, the vocabulary on certain issues (read: outsourcing) become more prominent. At HCL we have a board where we keep writing about various uncertainties that could impact our business. This is a new uncertainty which is just walking in. Right now it is low impact because a lot has already happened. I don't know what else can happen.
What are the other uncertainties?
There are several of them —currency, debt in Europe, macroeconomic indicators in terms of domestic consumption in the US, inflation rates in emerging markets. I can tell you ten things that can depress you a lot. That’s what business is. The management of the future is about handling dynamic uncertainties.
Over the past two quarters big IT firms such as Wipro and Infosys have restructured their businesses. Does HCL also feel a similar need?
We are what I call a skin-fit jeans. It’s very important to understand that even in structure there is a competitive advantage. If everybody else is structured like a block, we will structure ourselves like a triangle. The reason is that if you are not different, you do not win. In the end, it is all about your win ratios. So we are not focused on managing ourselves; we are more focused on creating more value for customers. Maybe we have higher overheads, but we create a great experience for the customers which is the competitive differentiator.
surabhi.a@livemint.com
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First Published: Thu, Apr 21 2011. 12 05 AM IST