Strong momentum for the second half, says HCLTech CEO & MD C Vijayakumar

C Vijayakumar, MD & CEO, HCLTech in a video interview with Shivani Shinde talks about the revenue guidance cut, growth drivers and hiring targets

HCLTech, which missed Bloomberg estimates for its second-quarter revenue but still managed to beat its larger peers in profit and revenue growth, expects to exit FY24 strongly. The information technology services major, however, slashed its top-line growth guidance for the current financial year to 5-6 per cent. C Vijayakumar, chief executive officer and managing director, HCLTech, talks about the revenue guidance cut, growth drivers, and hiring targets in a video interview with Shivani Shinde. Edited excerpts:

HCLTech has signed one of its largest deals; Q3 is traditionally strong for the company, and you have also said H2 (the second half of the financial year) looks better. Then why have you slashed the revenue guidance for FY24?

Yes, our bookings have been very good. We will have a strong exit as our third quarter is strong. But our first quarter was weak and the second quarter was reasonably okay. However, when you combine the first two quarters, the first half is weak. We see strong momentum for the second half. Based on these, we took the decision to cut the revenue guidance.

The mismatch between revenue growth and deal wins is happening quite regularly. Do you see client decisions also changing in the current order book?

Our deal bookings are only those where we go and start execution. In these deals, there will be no delays. A majority of the deals that are coming now are in the efficiency and cost optimisation segment. Hence, customers want to move faster on these things. That does not mean discretionary deals are not there. They are a little soft. Efficiency deals are not just about people transition but also about how you bring technology transformation, which will reduce the cost of operations. That’s where we are actively engaged.

Are there any updates on generative artificial intelligence (AI) deals for this quarter?

We have 100 projects underway that are generative AI-focused. Last quarter, the number was 70. While some are at the ‘proof of concept’ stage, others are getting implemented. We will continue to proliferate our offerings in this segment and this will eventually become a big offering. However, at this point, it’s about taking one step at a time.

Your peers have seen BFSI impacting their growth. In the case of HCLTech, the segment has grown. What is driving this growth?

In financial services, we have been positioned as a disruptive player. We have always questioned the status quo in every client’s tech landscape, in terms of how they have outsourced, what are the areas that they can do differently. A lot of traditional vendors are in a comfort zone and they don’t ask these questions. As a newcomer, as a challenger, we’ve really taken a position of challenging the status quo. And that has resonated extremely well.

You added 3,630 freshers, but still had a net fall in headcount in Q2. Will this continue in FY25?

The headcount has reduced because we have had attrition but did not backfill those positions. This is because we had access to trained people in the system. These freshers were hired in the last 18 months. For this fiscal year, we continue to hold our target of fresher hire at 10,000. For FY25, HCLTech teams are already at campuses.