Optimistic about products and platforms business as we move into next year: HCL Tech CEO C Vijayakumar

C Vijayakumar, Chief Executive Officer of HCL Technologies

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26 Aug, 2025 12:21

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India’s third-largest software firm HCL Technologies is confident about double-digit revenue growth this fiscal year on the back of a strong demand environment and a robust deal pipeline, which stood at $2.25 billion in new bookings for the quarter ended September 2021. Though its products and platform segment, which accounts for 13.3 percent of revenue, declined 6.4 percent during the quarter, its top executive sees a turnaround in the coming quarters.

The company posted revenue of $2,791 million for the quarter ended September 2021, up 2.6 percent sequentially. It also added 11,135 people during the quarter, its highest addition in a single quarter, even as attrition increased to 15.7 percent.

In an interview with Moneycontrol, HCL Tech CEO & Managing Director, C Vijayakumar spoke about the company's perspective on demand, attrition, the chip shortage, and the coal supply crisis, which could affect electricity supply at a time when many of the IT services sector's 4.5 million employees are working from home. Edited excerpts:

So, if you look at it holistically, it’s been a pretty good quarter. Some of the highlights are our IT services business, which is 88 percent of our revenue, growing 5.2 percent sequentially, and 13.1 percent year on year. So, this is very strong growth. And all of this growth is organic. This is probably in the top quartile of growth performances across the industry in the services business. We had a headwind on the product business where some of the deals slipped from the September quarter to the December quarter. That is the nature of the product business. A lot of transactions get completed towards the end of the quarter, and some things potentially can slip. But our fundamental hypothesis on business on products continues to be pretty strong.

The second big highlight was our bookings, which were at $2.25 billion, growing 36 percent year on year compared to the same quarter last year. Our client additions have been very impressive as well. For example, our $50 million clients have increased from 29 to 41 from a year-on-year perspective. In fact, all client categories have increased in the last quarter. The fourth important highlight is that our net additions have been the highest ever at 11,135 people. The icing on the cake is the payout policy, where we said over the next five years, we’re going to pay at least 75 percent of our net income to our shareholders. It is a much clearer and firmer payout policy, which we have formally announced.

If you look at the products and platforms business, a large part of it is what we had acquired from IBM. Now, there are a lot of puts and takes when you do a big divestiture. This includes some one-time revenue ... there are some settlements and things like that. So, I think if you do this comparison, it’s kind of declining for the last two-three quarters. For the full year, we have already said that it would be in low single digits, but we are looking at flat to 1 percent growth. Many products have very strong growth products in this portfolio. So, we remain confident. If you move into the next year, we are optimistic about the business trajectory here.

It is going to be a strong quarter in any case, so we’ll definitely see good sequential growth. From a full-year perspective, some of the shortfalls that we had in the previous quarter will get covered, I think.

This is where you have to differentiate a product business. It is not going to follow the same trajectory as the services business, which will follow a similar trend. Product businesses have a very different business rhythm. But it’s still early days. It’s a long-term strategic bid for us to invest in products and platforms. We have to give it time and space to really evolve. So, I would really evaluate product investment over a longer period of time.

I think this trend is what we would expect in a market that is very buoyant, where a lot of new investments are happening in digital initiators. You don’t really see a very large transaction that you would see in a little more stressed economic situation. So, there will be a lot of action in digital initiatives ... mid-size deals is where a lot of the action is.\

We are not going to give very precise guidance. That is something we consciously said: instead of chasing a specific target, let’s keep it a little broad based. On the services side, there are three areas that we think are going to continue having a strong momentum. One is application modernisation; a lot of applications are getting modernised and are moving to the cloud. The second theme is cloud migration. A lot of our business on the data centre side, the infrastructure, which is on-premise, will migrate to the cloud. Right now, 30 percent is already in the cloud, and you will see a lot more acceleration happening. The third element is digital engineering, which is a part of our engineering and R&D services. There are a lot of investments in asset-intensive industries, in technology-platform companies, to drive new initiatives. So, these are the three areas: application modernisation, cloud, and digital engineering.

The chip shortage definitely has had an impact when we have to deliver hardware for a transformation project — network transformation, for example. There are even big programmes where we are setting up a private cloud, and some of the hardware delivery is getting delayed. But that’s all factored into our guidance. And we are not alone. We’re not dealing with a lot of hardware. It’s very small. So, there’s nothing to really be concerned about.

In terms of the coal shortage, we are obviously watching it very carefully to see what impact it can have on our operations. So, I don’t have any firm view. I personally don’t think it will have an impact at this point.

As I see it, it’s quite intense now. But I think, given the long-term value proposition that we offer to employees, it’s not about a one-time salary increase; we are focused on building long-term careers for the fresh talent joining us. And (focusing on) whether we are investing in training and the capabilities that we build in our teams,

We are always competing with ourselves, not with others. We always want to do the best possible from our perspective. And right now, I think the market demand is very good. So, we are very focused on organic growth. There may be some small tuck-in acquisitions. So, that’s what we are doing and can’t comment on what others are doing.

I think over 90 percent of our employees globally are at least vaccinated with one dose. In terms of return to work, we’ve already mandated that our mid-level leaders and senior leaders have to come into office at least for two days. That’s something we are building as a practice. For broader roles, there are certain roles we want working from office and there are certain roles that we are comfortable working remotely. Then, there are certain roles where we do want them to come to offices for a certain duration, for a week, a fortnight, or a month. That is the model we are putting in place. Overall, we think our stable state is a hybrid model, with 50 percent at work and 50 percent working virtually.