Continue to be very positive on products and platform biz, Dec qtr to be strong: HCL Tech
IT services major HCL Technologies on Monday said it continues to be positive about its products and platform business and expects to see strong growth in the segment in the December quarter.
In the July-September quarter, HCL Technologies logged a 13.1 per cent year-on-year increase in its services revenue (IT & Business Services and Engineering & R&D Services) in constant currency terms. Its products and platforms revenue, however, declined by 5.5 per cent in the reported period.
Speaking to PTI, HCL Technologies CEO and MD C Vijayakumar said there were certain deals that were to close towards the end of the quarter but slipped into the current quarter. ''So that's the only reason, it will come back in the next quarter, we continue to be very positive on our Products and Platforms business. The core of the business is intact, and we see a good momentum in this quarter. This is going to be a strong quarter for us,'' he added.
He noted that the services business delivered a solid growth of 5.2 per cent constant currency growth in the September quarter (sequentially).
''We are probably the among the top two companies in terms of organic performance on that. And our bookings have been very good, our client additions have been very good, there were a number of positives in the last quarter. In the services business, we've grown very well in the September quarter and we will continue to do well in the December quarter barring some seasonal aspects,'' he added.
HCL Technologies posted a 3.7 per cent increase in consolidated profit after tax to Rs 3,263 crore for the July-September quarter of this year, while its consolidated revenue from operations rose by 11 per cent to Rs 20,655 crore during the reported quarter as against the year-ago period.
The total contract value (TCV) from 14 new deal wins during the reported quarter increased by 38 per cent year-on-year to Rs 16,563 crore (USD 2,245 million).
Talking about the change to its existing long-term incentive (LTI) programme, Vijayakumar said the programme will now cover more leaders.
''We've already had a long-term incentive plan for senior leaders, which is a three-year plan. Now, we are expanding the number of people who will get covered in this incentive from 1,000 to 3,000 leaders. The second aspect is a portion of the incentive we are replacing with restricted stock units (RSUs), which will vest at the end of three years typically,'' he added.
So this really allows HCL Technologies' leaders ''to also participate in the stock upside as we continue to see a good market momentum'', the top executive said.
HCL Technologies' LTI programme will now include RSU grants as part of the compensation mix. The company will move from 100 per cent cash awards to a mix of 70 per cent cash, 30 per cent RSUs for the grants it will offer later this calendar year.
Subject to shareholder approval, the plan proposes to allocate 11.1 million shares to almost 3,000 senior leaders. The structure of the programme will ensure there is no equity dilution for existing shareholders of the company. HCL Technologies net headcount addition was the highest in the last six years at 11,135 during the September 2021 quarter. Its total headcount reached 1,87,634 at the end of September 30, 2021.
HCL Technologies plans to hire 20,000-22,000 freshers this year and is looking at hiring 30,000 freshers next year.
''Our hiring has been very strong in the last couple of quarters and I expect that to continue for the next few quarters, based on the overall demand situation. We had indicated that we will hire 20,000 to 22,000 freshers all over the world. I think we are mostly on track on those numbers. And next year, that number will go up significantly,'' Vijayakumar said.
He added that for lateral hiring, the company is focussing on skills in newer areas, especially around application modernisation, Software as a Service (SaaS), cloud migration, cloud application development, cybersecurity and digital engineering.
The Noida-headquartered firm has also seen its attrition rates (last 12 months) going up to 15.7 per cent in September 2021 quarter as against 12.2 per cent in the September 2020 quarter, and 11.8 per cent (June 2021 quarter).
''Obviously we're doing everything possible to control attrition. Fortunately the attrition at HCL is definitely much better than what we're seeing in the industry...we've given good increments, we are looking at niche skills and compensating with special allowances. There are a number of things. Training is a very important aspect, training and role enhancement is a good motivation for a number of people,'' Vijayakumar said. The company had rolled out increments for junior management after nine months starting from July. The increment was in the range of 7-8 per cent for offshore employees and 3-4.5 per cent onsite. For senior management, the increment has been rolled out starting October 1.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)