‘Infra services sector key driver for HCL Tech’s revenues’

Noida-based HCL Technologies sees infrastructure as a growth driver and strong area for the company. For the quarter ended March, HCL Tech reported revenue of $1,191 million, up 3.2 per cent, on the back of a 9 per cent quarter-on-quarter revenue growth in constant currency terms in its infrastructure services business, though volume growth in core software services stood muted at 0.4 per cent quarter-on-quarter.

Its growth in sales was driven by infrastructure services as corporations in the US and Europe look to cut costs on routine maintenance of their IT infrastructure.

“We are witnessing extremely strong growth in infrastructure services. While America is doing good, Europe is doing even better and has emerged as significant growth contributor. The Nordic countries are especially doing well. Growth is coming from both existing customers and acquired ones,” R Srikrishna, company’s corporate vice-president, Infrastructure Services & Healthcare told Express.

For the last 12 months HCL Technologies’ revenues from Europe have witnessed a 17.8 per cent increase and America by 13.3 per cent. 

According to Angel Broking, infrastructure services has emerged as the primary growth driver for HCL Technologies. “The management indicated that infrastructure services is doing well globally. Currently, the segment is witnessing continued demand traction from the re-bid market with more than 75 per cent of the total contract value (TCV) coming from it. The management attributes signing up of large multi-year transformational deals in the segment to changing customer business models and to the trend of putting in place enterprise class infrastructures,” the report points out.

A new trend that is emerging, Srikrishna points out, is of providing workplace services as younger tech savvy generation joins work.

For the healthcare vertical too, Srikrishna says that it is a great time to be working in the space. “While US spends a sizable chunk of its GDP on healthcare we have to see how we can improve healthcare systems and reduce the cost too,” he said. 

HCLTech has won over $1 billion in large multi-year deals and over 90 per cent of them were from rebid market and more than 50 per cent are integrated deals. During the quarter, the company added 37 new customers, including one $100 million client.

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