HCL Tech to close 3-4 clients in retail space by year end

Delhi-based information technology (IT) company HCL Technologies expects to sign around four deals in the retail and consumer packaged goods (CPG) space across geographies this year. The deals are likely to be signed in the Middle East, Australia, South Africa and South America. 

“In retail and CPG, we are seeing growth in emerging economies and 3-4 deals will be closed this year in the vertical. These could be in areas of food and beverages, alcohol and tobacco,” said a company official familiar to the development. 

Analysts peg the deals at around $4-5 million (Rs 19-23 crore) each which will be ramped up in future and the nature of the services range from vendor management, planning, supply chain activities to store and multi-channel offerings. 

Retail and CPG grew 19.6 per cent quarter-on-quarter for the fourth quarter ended 30 June, 2010 and contributed 8.2 per cent to the company’s revenues up from 7.5 per cent in the trailing quarter and 6.6 per cent in the corresponding quarter a year ago. 

“In these emerging areas, only small deals can happen and the scope of these deals goes beyond multi-brand retail chains to retail banks as retail is still behind the curve when it comes to technology. In fact, retail is one of the sectors that gets maximum productivity from technology,” said Alok Shende, principal analyst, Ascentius Consulting. 

Last year, HCL Technologies bagged a five-year deal from US-based flavoured beverage producer Dr Pepper Snapple Group to provide it with application support and maintenance, infrastructure operations, end-user computing, integrated service desk and network management. It had also added headcount at its new facility in North Carolina for it. 

HCL Technologies’ CEO Vineet Nayar too said that retail is one of the new blue oceans for the company and that it is leading the growth. 

Shende further added that starting with small deals is a strategic move as it lets the company establish reputational capital in the country and helps to get bigger clients then. “HCL Tech has been offering services locally in the US as of now but to offshoring them is such new markets is a new trend especially in the Gulf region where they are growing fast,” he added.