After delivering Q3 results that were aligned with market expectations, HCLTech CEO, C Vijayakumar, said that the company's deal pipeline was nearing its all-time high, albeit with a twist this time. Unlike the previous peak, which was driven by a $2.1 billion mega-deal with Verizon Business, the surge in the company's deal pipeline this time is riding on the back of broad-based growth across verticals.
Vijayakumar also revealed that order books for both the Americas and Europe regions stood at an all-time high. "We saw strong growth in technology, retail, and consumer packaged goods services verticals," he said.
The broad-based growth across verticals is being fuelled by an improvement in discretionary demand, as highlighted by HCLTech's management in the post-earnings call. "Large deals are being broken into smaller deals. Deal cycles have shortened, and there is more demand for small deals," Vijayakumar said during the post-earnings call. "That is the reason why our TCV (Total Contract Value) has not changed materially, but ACV (Annual Contract Value) has," he added.
Also Read | HCL Tech Q3 results: Net profit rises 5.5% to Rs 4,591 crore, Rs 18 dividend declared
HCLTech's deal wins this quarter, led by its flagship services and software business, stood at $2.1 billion. In Q3, the company won 12 deals, with a sizeable number of them incorporating elements of AI (Artificial Intelligence) and Gen AI.
Previously, industry peer Tata Consultancy Services also highlighted a change in client trends, driven by shortened deal cycles.
In terms of verticals, HCLTech also reported seeing an improvement in client spending in the financial services segment and does not anticipate much impact from the Los Angeles wildfires on its contracts with insurance clients in the US. Additionally, the company highlighted a promising increase in both large and small deals across Europe.
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