CEO C Vijayakumar has taken over because the handling director of HCL Technologies after co-founder Shiv Nadar stepped down as MD on July 19 after forty five years with the corporation at some stage in which the business enterprise reached the milestone of $10 billion in revenues.
While the 76-yr-vintage Nadar, who will retain because the strategic adviser to the board, has been named the Chairman Emeritus, it’ll be Vijayakumar, 53, who can be withinside the warm seat.
In an interview to Moneycontrol, Vijayakumar talks approximately his new position, the call for environment, the hiring growth and investments. Edited excerpts:
With founder Shiv Nadar stepping down because the Managing Director and your elevation to the position, what adjustments for you in phrases of position and obligations other than the designation?
I assume the daily commercial enterprise operations, I changed into already completely mastering it. But truely sure very long-time period strategic tasks he changed into very centered on, preferably searching at what might the subsequent 10 years or 15 years appearance like, and what type of tasks that we lay the inspiration on.
I assume whilst he spent 50 years, he is a legend withinside the enterprise and he should virtually see what lies 10 or 15 years ahead. He will stay to be had as a strategic adviser. We could have the advantage of having his steer on a number of those topics. But executing a number of the ones long-time period techniques is a duty that I, and the relaxation of the management crew, type of wearing forward.
If we have a take a observe the June zone, HCL Tech registered a vulnerable zone in comparison to its friends, aleven though it changed into consistent with your steering. Do you spot a turnaround withinside the subsequent zone and what are the important thing challenges?
So I anticipate Q2 to be a robust zone. In the case of Q1, we deliberate it to be a touch much less because of diverse dynamics withinside the commercial enterprise, whether or not it’s far transitions, or initiatives getting completed. All of that changed into factored in whilst we gave the steering however we got here a touch under our very own expectancies due to the fact there has been a few unanticipated effect because of the second one wave, wherein we had allowed pandemic leaves for our employees. This changed into a further depart on pinnacle of the kitty of leaves each person had. So which means it’s far going to bring about an immediate billing loss. But we’re very assured to make up and supply on the general double-digit growth.
During the profits call, you stated which you anticipate to develop withinside the low double digits, at round 10 percentage. This is in comparison to a number of your friends who’ve guided for mid to excessive teens. Are there any motives which can be preventing you from giving extra beneficiant steering?
We consciously do not need to offer very unique steering due to the fact that, I consider, focuses the crew on a completely short-time period objective. I need them to cognizance on mid to long-time period objectives. So the proper metric to preserve monitoring might be reserving as it ultimately converts to sales.
If you have a take a observe the headcount that still ultimately interprets to sales. So that manner we need to cognizance the groups extra toward reserving, and sales will follow. It is only a depend of time. So it’s the method we’re taking. We assume that that is a higher long-time period method and a higher use of control time than simply chasing the quarterly.
Do you furthermore mght see margins coming below pressure—growing worker expenses because of wages and tour selecting up?
We factored all that during our 19-21 percentage margin. So, a number of the salary inflation and tour expenses are coming back, all of this is factored in and we also are making plans to rent 22,000 clean skills throughout the world. So, I assume as they arrive into the workforce, get educated and deployed, a number of the skills fee pressures may also slight a touch bit. Then this zone we had one off effect because of the pandemic and so one can additionally slight into the subsequent zone.
Your bookings have come down sequentially on this zone to $1.sixty seven billion. Though that is 37 percentage extra than the identical duration final yr, which changed into amid the pandemic, wouldn’t it not be a truthful comparison? Are there any segments/industries which can be taking time to near?
Our fourth zone changed into the height and that changed into why we saw $three billion reserving. Also, the proper manner to have a take a observe bookings is on a yr-on-yr basis, as opposed to zone-on-zone. If you have a take a observe Q1 FY20 and Q1 FY21, you’ll anticipate an growth however it (deal wins) changed into extra or much less flat. That has been made up via way of means of 37 percentage. If you’re taking an average, it’s far 17-18 percentage in keeping with yr. Also, we consider for the whole yr our bookings can be higher than what we had withinside the preceding yr. The pipeline is at its maximum and they may convert, and our win ratios are very good.
With the conservative steering of 10 percentage, the peer you overtook in sales phrases in FY19, Wipro, is trying to near the gap. It has additionally introduced a $1-billion funding in cloud over 3 years. What are your thoughts? Is this pecking order extra pressure?
I can not virtually touch upon others however obviously, at any point, human beings will attain new milestones. I do not need to evaluate myself with anyone. We had been now no longer running toward the pecking order in any case. We need to do our quality and be the quality model of ourselves.