‘Joining the $10 bn revenue club was a great milestone’
''We are constantly looking for new locations to grow. Even in India if you look in the last four years, we have created four new locations in Madurai, Lucknow, Nagpur and Vijaywada - what we call New Vistas and these have grown significantly.''
PremiumNEW DELHI : HCL Technologies Ltd reported robust December quarter earnings on the back of 13 major deals and a covid-induced demand for digital services. India’s third-largest software services company by revenue posted a net profit of ₹3,982 crore in the three months ended 31 December, up 26.7% from the previous quarter, and 31.1% from the year earlier. It also crossed the key milestone of $10 billion in annual revenue in 2020. In an interview, C. Vijayakumar, president and chief executive, HCL Tech, spoke about the strategic investments the company has made over the years and future plans. Edited excerpts:
HCL Technologies has entered the $10 billion revenue club. What does this mean for the company?
$10 billion is a great milestone and puts us in the league of the big 10 services companies in India. It is definitely a new positioning and does have great market relevance too. Now, we are also in a very interesting time when there is a huge demand for tech services catalysed by the pandemic. A lot of techification of industries was underway but has got accelerated with the onset of the pandemic. We as a company have invested significantly in building the digital capabilities over the last five years. Now all of that is very mature, strong and compelling and it is going to significantly help us capture the opportunities which are coming our way, especially the good quality work around transformative projects.
HCL has been investing in Sri Lanka and Vietnam. Tell us about your expansion plans.
We are constantly looking for new locations to grow. Even in India, if you look in the last four years, we have created four new locations in Madurai, Lucknow, Nagpur and Vijayawada—what we call New Vistas and these have grown significantly. There are almost 15,000 people in these locations and this will only continue to scale. On the same note, we were exploring other countries where we could do offshore delivery for some of our global clients and Sri Lanka came in as a good location. Vietnam came in as a good location for our engineering services and for catering to the Asia-Pacific and Japan markets; Vietnam is a very strong base so these were the reasons driving the selection. Even in the US, we continue to expand near shore so it is a constant evolution of delivery footprint. We cannot afford to focus on one geography or one country. We want to be there in all the top 15 IT spending countries of the world that contribute 85% of the global IT spend, some of them not necessarily now. At least in 12 of the 15 countries we can make a big impact through our service offerings and that is what is driving some of our expansion plans.
What are the hiring plans for this quarter?
Last quarter was a good momentum in hiring and this will only accelerate. We have hired more than 6,500 people in this quarter and are looking to hire about 20,000 people in the next two quarters because we see good demand. Mid-level promotions have been done, for senior levels, the promotion is effective 1 January, so we are in the process of rolling it out. We are reinvesting in upskilling and training of employees, which was always a focus but now there is a heightened demand.
Is the H-1B visa issue a cause for worry?
We have reduced our dependence on visa significantly, now 70% of our workforce in the US are locals. Our hiring engines in local geographies have been strengthened so our visa dependency has come down significantly. So, I don’t see it materially impacting us.
What will be the model of working for employees in the future?
The return to office will be very gradual and highly calibrated. We believe eventually, 40-50% of our employees should be working from offices but that’s going to be a journey and it will increase only after a reasonable level of vaccinations has been achieved. Right now, it is a gradual increase but a step change is likely to happen once we reach a certain threshold on vaccination. Currently, 6% of people are working from office. The model eventually will be a hybrid model where 40-50% of people working from office and they will take turns from working from office and working from home. I think this is the model that will evolve keeping the various elements around the future of work.
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