C Vijayakumar, CEO and MD, and Prateek Aggarwal, CFO of HCL Technologies, have announced Q3 results. Get insight into the whole matter in the following section.
How is the Demand Environment? What are the big themes that are expected to play roles in going forward?
C Vijayakumar: The demand environment is strongly driven by multiple triggers, and a lot of these are around digitalisation, including application modernisation, data modernisation, digital engineering, and cloud. These are some big themes that are expected to play out for a long time, almost two-three years.
He added that some of these programs would perform better as more and more large enterprises engage in significant digital transformation programs. Therefore, we can see a strong pipeline. Our pipeline is the longest in several quarters as the booking went up almost 64% YoY if we see the last performance. We won nearly eight extensive services and products deals, respectively. So overall, the momentum is pretty good, making us feel confident and enthusiastic about the growth momentum in the market.
The CEO of HCL Technologies asked why not tighten and increase your revenue guidance to say the mid-teen figure of 14% to 16%; what is making you circumspect?
C Vijayakumar replied that we are making all possible efforts for long-term growth like we hired 1,000 people last quarter, around 10,000 people employed in the previous quarter. So we think hiring and booking is a very strong aspect. It is just a matter of time when booking will transform into numbers, and we already have 7.6% constant currency sequential growth─ the highest growth in the last 46 quarters.
What Prateek Aggarwal Says-
When he asked that despite the powerful performance of the P&P segment in the quarter gone by, you have maintained full-year guidance of 0% to 1% growth, he stated that “Let me help you understand that there are two factors that propped up and the P&P numbers this quarter. December is the peak, so that is one reason that there is going to be a seasonal decline next quarter like any other March quarter.”
Another reason is that there is a bit of lag in another quarter which has made up this quarter, and that itself is one-time in nature and is going to recur again.
He also mentioned that we are also investing in freshers’ hiring and will take a couple of quarters to make them completely productive. This is one investment. The second thing we have done in the last 9-12 months is on new geographics as we have entered several new countries.
We have made much investment in the last 12 months and look forward to putting many things together in FY23, Prateek Aggarwal added.
