HCL Technologies CEO and MD C. Vijayakumar on Monday said business was in the best shape that it could be and the company is optimistic of a good growth trajectory, especially in the medium term, driven by focus on digital transformation.
The statement comes after the company’s scrip fell 5.89% to ₹1,258.80 per share on the BSE, following the third-quarter result announcement. On Friday, the company said net profit fell 13.6% for the quarter ended December.
“Our business is really doing very well. Last quarter results, we saw the highest quarterly growth in probably the last 10 years and all of that is organic growth,” Mr. Vijayakumar told The Hindu. “Margin was flat… mainly because of the investments we are making in freshers, their training and some increase in costs due to wage hikes etc. We expect that to normalise. I don’t see any long-term concern of margin,” he added.
On the order flow being sustainable, he said the pipeline was close to the all-time high and “in terms of the visibility the sense that we are getting is this is going to be at least a medium-term trend, given a lot of focus that clients have in modernising their technology landscape and making them more agile [with] cloud adoption and application and data transformation…that is significant amount of work and lot of customers are very deeply driving transformation and technology is the biggest lever for the transformation journey. All this gives us confidence about a good growth trajectory in the medium term.”
Stepping up hiring
The company’s Chief Human Resource Officer Apparao V.V. Said while there remained a talent crunch in the industry, the company is looking at doubling its fresher hiring next fiscal year to about 40,000-45,000.
“Is the demand high; definitely it is. Are we able to hire freely; no we are struggling. We are not able to freely hire. The numbers are constantly increasing. In the last quarter, we saw a 5.41% [sequential] net headcount increase, while revenue grew 7.6% in constant currency…so somewhere those two have to match,” Mr. Apparao said.
He added that while this is a good problem to have, to solve the supply issue, the industry needed to look at the bottom of the pyramid or freshers, for scale. “We are working on how to improve the supply side. We just can’t expect that people are available and we can hire. So if you are looking at lateral hires with five years of experience, they are only finite in numbers…So where the scale will have to come is at the bottom of the pyramid.”
He added that while this year the company may end up with fresher hiring of about 20,000-22,000, next year’s estimates are between 40,000 and 45,000 freshers. “The problem [of supply] is common to everyone [in the industry]. I think the scale has to come only at the bottom of the pyramid and we all have to work with educational institutions.”
He further said the average entry level salaries had already gone up. “Today, the digital skills of people are not coming at anything less than ₹6-7 lakh…cybersecurity, digital, IoT.. all these. Only the typical Java guys are coming at ₹4 lakh… But this will further go up,” Mr. Apparao said.
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