‘Tech mood not as bad as in 2008; bet on strong growth’
NEW DELHI : On Thursday, HCL Technologies Ltd beat Street estimates to report a better-than-expected September quarter. Quarterly revenue remained sequentially flat, although net profit surged 7.9% to $464 million, while operating margin rose by a significant 1.5 percentage points. In an interview, C Vijayakumar, managing director and chief executive of HCL Technologies, said the company has slashed its FY24 guidance despite this result due to a weak overall first half of this fiscal.
He added that the overall industry sentiment is not as negative as the 2008 financial crisis, and elaborated the company’s stance on internal adoption of generative artificial intelligence (AI) tools. Edited excerpts: Are you seeing similar caution and sentiment among clients as the 2008 financial crisis? No; I don’t think there’s any sentiment that is so negative as during the financial crisis. Customers are continuing to spend on technology projects, only not as much (as last year).
That is why our revenue continues to grow, and there is some sense of stability. But, during the covid-19 pandemic, there were a lot of new projects that got initiated. Some of them came to an end.
But, other areas—data analytics, cloud migration, cyber security and network resiliency remain important priorities, and I don’t see customers cutting down on these core areas. The client-side slowdowns are coming from specific projects that aren’t delivering returns—those are the ones that are being cut down. Yet, there was a mid-year guidance revision. Are large-deal executions being delayed? While we’ve revised the guidance, this is largely post facto.
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