HCL Technologies banks on Govt deals

| Updated on: Apr 22, 2014

Looks to increase revenue from domestic market; focus on banking, insurance sectors

The country’s fourth largest information technology services provider, HCL Technologies, has turned its focus to the Indian market. The company expects to increase its revenue from the domestic market, largely from Government business.

Competitors like TCS and Infosys have been getting revenues from the Government segment through projects such as Passport Seva and other e-governance initiatives.

During the last quarter, HCL won three major deals from Central undertakings, including the roll-out of a countrywide enterprise network, upgradation and expansion of private cloud ICT infrastructure and implementation of an enterprise-wide unified communication and collaboration system. The company did not provide details of the deal size or the departments that awarded the contracts.

According to a senior official, HCL Technologies will soon announce another deal.

Financial services

“In India, our focus is around financial services, banking and insurance — that is where the big traction is coming from,” Ajit Kumar, President, System Integration and Application Services, HCL Technologies, told Business Line .

He said the majority of clients from the Government sector are new and not re-bids.

The company reports India revenue as part of the rest of the world (RoW), which grew 10.4 per cent over the last quarter (January-March) from -3.2 per cent in the previous quarter (October-December) in constant currency terms.

The company reported overall net profit of ₹1,624 crore during the quarter, up 8.5 per cent from ₹1,496 crore notched up in October-December. Its revenue grew two per cent sequentially to ₹8,349 crore (₹8,184 crore).

Growth outlook

“HCL Technologies is internally aligned now and with businesses like Oracle Practice and SAP, it is gung-ho about getting businesses in India. It has good account management also as compared to earlier days,” Sanchit Vir Gogia, Chief Analyst at Greyhound Research, said.

He said more deals would come in future in the IMS and cloud services in India, given the firm’s experience in overseas markets including the US and Europe. However, the company’s growth could be slower than counterparts such as TCS, Infosys and Mindtree, which have broader plans in India Government businesses, said Ankita Somani, Research Analyst–IT at Angel Broking.

“HCL Tech still has a broad ‘go out and explore’ in developed markets (like the US and Europe) strategy and India is not yet one of its focus areas,” she added.

Published on November 24, 2017

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