Home / Companies / People /  Demand environment is good for India’s digital transformation: C. Vijayakumar

C. Vijayakumar has taken over as chief executive officer (CEO) and managing director (MD) of HCL Technologies Ltd for a term of five years after founder Shiv Nadar stepped down as MD last month. In its first quarter earnings, the Noida-based IT services firm retained its double-digit revenue growth guidance for FY22, without getting into specifics. In an interview, Vijayakumar talked about his new responsibilities, the demand environment, and growth markets. Edited excerpts:

As Shiv Nadar steps down, will you be taking on some new responsibilities in your additional role as the MD?

Shiv had focussed on some very long-term initiatives of the company, like the Tech Bee programme where we get very bright students from 12th standard to join the software services career. Likewise, there are at least five or six very strategic, long-term programmes that Shiv used to drive. While I have been involved with some of them already, I will have to take on more direct responsibility on those. Shiv is playing the role of chairman emeritus and strategic advisor to the board, so he will always be available for advice, consultation and guidance.

How does the overall demand environment look in terms of digital transformation which has accelerated during the pandemic?

We are in the early stages of digital transformation in the corporate sector. While a lot of the basic things are done, clients are now leveraging the power of artificial intelligence (AI), big data and all of that. A lot of them have digitalized their systems and integrated their front and back offices in a seamless manner. They have gone omnichannel. But now it is about taking it to the next level— migration to cloud, industrial IoT (internet of things), and industry 4.0 which deals with connected factories and smart manufacturing. Those are the next level of opportunities that will come as digitalization gets more intensive. So the demand environment is good and the momentum will continue for some time.

HCL Tech retained its FY22 guidance as double-digit growth without sharing a specific number. Please explain the premise for that.

We are not going with a specific number. I personally believe giving a very specific number and executing to that is not a good use of the management’s time. I do believe that giving the booking numbers and the net hiring numbers are the right metrics—because these are already done, and there is certainty about them. Now it’s only a matter of time that booking flows into revenue. So that is the approach we want to take and give a directional guidance, which is the double-digit growth we shared.

What kinds of deals are you really focusing on now? Is it the large long-term digital transformation deals or the smaller ones?

It’s a combination of multiple things. There are small deals, midsize, and mega deals—all of them are part of our pipeline which is at the highest level now. In the June quarter, HCL Tech signed new deals worth a total contract value (TCV) of $1.67 billion across eight large services deal wins and four product wins.

Between your key markets—the US and Europe—where do you see the highest growth coming from in the next few quarters?

I think Europe offers a lot of growth opportunities, especially France and Germany, because they are more open to global service providers now than before. And similarly, Spain is another big market to look at. The traditional markets like the US, UK and the Nordics, all of them have good potential. The US will also continue to grow but may not be as much as Europe because the penetration in the US is already quite mature. To that extent, I think Europe will grow a little faster than the US.

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