Don't see Europe on single-quarter basis: Anant Gupta

Last Updated: Thu, Oct 17, 2013 21:10 hrs

For several quarters, HCL Technologies has been a trailblazer in the information technology sector, consistently posting growth, even when its rivals found the going tough. Chief Executive Anant Gupta tells Surabhi Agarwal about the market trends he foresees through the next few quarters. Edited excerpts:

TCS and Infosys are upbeat on demand. What is your view?

I continue to feel demand is very good. It would differ across sectors and service lines. For example, in enterprise services - whether it is apps or infrastructure - there seems to be a lot happening, from a deal renewal point. I continue to see significant demand for business process services, too. Engineering services are yet to turn around from a market perspective, as these are complex services and affect the core of a business.

This quarter, the Americas fared well for HCL, while Europe increased just one per cent. Why?

Don't look at Europe on a single-quarter basis. It has grown 24 per cent on a year-on-year basis. There is still a huge pent-up market opportunity there. Also, the next-generation deals are mid- to large-sized and take their own time to ramp up. There is actually more demand coming from Europe, as the percentage of their (technology) spends is higher. In absolute terms, they are similar to the US. In the Americas, there are two different profiles of customers - some had taken the first step on efficiency two-three years ago, while some were waiting and watching. I think the latter lot is now coming on board.

Are you happy with the 3.6 per cent volume growth? Despite the fact that deals are said to be back in the market, you are lagging your peers.

I never said deals are back; I said deals have always been there. I am very happy with what we are...We are focusing on consistent performance. I am fairly happy with the 3.5 per cent (dollar-term revenue) growth. But should we be doing more? The answer is yes’.

Considering your performance in the quarter ended September, do you expect to grow more than Nasscom’s projection of 12-14 per cent revenue growth for the industry?

We will always try to be ahead of the market. The opportunity is there; we are not shying away from any investment. The operational efficiencies do not mean we are cutting away where we need to get business from, or not investing in new propositions. It would only accelerate. Our engagement models, transition methodologies, etc, will be shaped so as to avail of the opportunities in the market.

Would you continue to focus on the renewal market?

Absolutely! There is a big market in renewal, and I think what happened in the last two-three years was just the first phase. I think there is humongous play till 2014-15 and even 2016. We believe renewal deals would have components of transformation; earlier, these were purely based in the physical dimension of infrastructure. Now, these would be complicated, with the software dimension; these would include discretionary and non-discretionary spending, along with transformative technologies.

Why did attrition rise 16 per cent in the September quarter? Is it due to the uptick in demand, because of which companies are poaching talent from rivals?

Yes, it’s a part of that, but not much...I would say it is our first quarter and it is when we give hikes. So, there are always two points of view on that. I wouldn’t be too worried on whether someone was taking our talent or not. I think we have a very strong brand recall and desire to work in areas of service.

More from Sify: