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Our Bureau

New Delhi, Oct. 17

IT services company HCL Technologies’ dialogue with the beleaguered HBOS Plc has not revealed any change in the latter’s business outflow, so far. The Delhi-headquartered IT services firm — which is eyeing acquisition of UK consulting company Axon Group — counts UK major HBOS amongst its top 10 customers.

“We have not assessed the impact, if any, for HBOS. However, in our conversation with HBOS, the latter has not indicated any change in outflow. It is business as usual,” HCL Chief Executive Officer, Mr Vineet Nayar, said in response to a specific query on HBOS.

He said while the global financial crisis would lead to “short term headwinds”, the long term impact would be positive for the Indian IT industry. “In the next five years, the Indian IT industry will be very different because of its value proposition, and cycle time reduction. It is, therefore, necessary to change the business model, and as a company we have been focusing on that for the last two-three years,” he said.

Mr Nayar said while there had been pressure on pricing, HCL had been able to expand the IT services margin in the last five-six quarters by moving to output-based pricing from a time and material model.

Sequentially, the company’s margins have expanded 10 basis points and 50 basis points for core software services and infrastructure services business, respectively. However, the EBIT margins in case of BPO contracted significantly to 13.5 per cent in the first quarter ended September 2008, against 23.1 per cent in the previous quarter.

More Stories on : Software | HCL Technologies Ltd

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