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Q&A: Vineet Nayar, Vice-Chairman and CEO, HCL Technologies

'All service lines are firing aggressively'

Vineet Nayar
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HCL Technologies, India’s fourth largest information technologies services company, posted a sterling December quarter with a better than expected profit and revenue growth. The company brought down its forex exchange losses, which had been denting its profitability for several quarters. Posting better volume growth than the big boys of India IT sector, and Infosys, an optimistic Vice-Chairman and CEO Vineet Nayar explains the opportunities in the dynamic business environment to Piyali Mandal. Edited excerpts:

With results of TCS and out, we are getting contradictory picture. While Infy’s management was cautious about the environment, TCS looked very upbeat. How does the environment look to you?
I don’t want to comment on other players. They have different strategy and look at the market through their lenses. During this quarter, all our services lines had been firing aggressively, and all geographies and verticals registered positive growth. On the overall environment, the US firms are still on investment mode, while continental Europe is resetting costs. The rest of the world, including Asia, is growing very fast. Business is moving from developed to developing markets. So, we have to follow a different strategy for different markets as demand is not consistent across geographies.

When you talk about an upbeat market can you give us a sense of the deal pipeline?
The deal pipeline is very good. We have won 17 transformational deals during the last quarter. We also continue to register impressive win ratios with over 50 transformational deals signed during the year.

Will you continue with aggressive hiring? And, are you going to the campuses for hiring?
This quarter we had a gross employee addition of 8,379. Going forward, our focus would be to increase the utilisation. So, hiring will be lower in the next quarter. We will follow just-in-time hiring. We will go to campus, but the plan is to maintain the number of freshers to 20 per cent of our workforce.

Can you shed some light on the company’s volume growth?
We had a volume growth of 6.1 per cent.

How is business process outsourcing (BPO) shaping?
The BPO business will continue to make losses of about $6 million for another four quarters before turning positive in January-March quarter of 2012.

Any acquisitions on the anvil?
By 2015, we would need more utility-based services. We have to make acquisitions for adding capabilities and also divest non-strategic businesses.

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