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Vineet Nayar’s colleagues call him one of the most honest, candid, and transparent person. He is also a master in disruptive thinking.
Vineet Nayar, CEO, HCL Technologies, said most companies will come back to quarter-on-quarter growth in two quarters. He stated that HCL is considering restoring dividends in the next 6-7 quarters.
Here is a verbatim transcript of the exclusive interview with Vineet Nayar on CNBC-TV18. Also see the accompanying video.
Q: The sense that one gets when one talks to CEO’s, especially with regards to the
A: I was at a
If you turn that into the IT services sector, I will look at the data and non data. We started with USD 8 billion of deals of outsourcing which Data Monitor reported for IT services in July-September of last year. That USD 8 billon come down to USD 4 billion and then down to USD 2 billion. That is the total reduction in outsourcing deals as per Data Monitor. If I combine the S&P upswing which is happening and if I combine the data, it is at the lowest at USD 2 billion which is not sustainable. The deals would start coming back, but the question is when. If I believe the S&P data, then that is going to be earlier. But if I believe the hands which were raised, I think that is going to be January onwards.
Q: What about HCL Tech? I would like to link the noises coming out from the
A: When we started the transformation journey in 2005 in HCL we said there are a couple of things that the current business model will not sustain the model of high quality, low cost
In my mind, the business model is definitely collapsing, no value, only because the global majors have as much as large a presence as there is for anyone in India, so that’s a first model, the business model of global majors is also collapsing because we had these long term contracts which I call trust me contracts, zero transparency, very low flexibility, the customers want discounts in recession, the customers in recession wants discounts it wanted more cooperation and more value and they didn’t get it, so you have an environment today that the customer is hugely dissatisfied with their existing vendors whoever they may be, one reason or other and that’s a very interesting market space. So, I am less worried about Goldman Sach’s results or someone else’s results for right or wrong reasons. It offers unique opportunities for hungry management and hungry companies.
Q: There has been a lot of talk about this vendor switching or consolidation but we really haven’t seen it play out as the Indian CEO’s are talking about it. What is the sense you are getting of how soon are we actually going to see this?
A: One of the unique things which we have done is in the last two years, we have announced our deals with name and the questions we need to ask with reference to Dr Pepper, Reader’s Digest, AMD, Viacom who were they doing business with and why is that they are suddenly doing business with HCL. So, here is your answer for vendor consolidation.
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Today's Special Column
with Ashok Gulati
International Food Policy Research Institute , Director in Asia


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