HCL Tech chief on the better metric to show demand

HCL Technologies sees continued demand from clients across sectors for shifting their applications to the cloud and for cybersecurity solutions, said its CEO, C Vijayakumar. Vijayakumar told ET's Surabhi Agarwal and Raghu Krishnan in an interview that being transparent in order booking due to the increased demand is a better metric than guiding specific numbers for the year ahead. Edited excerpts:Q: The industry was expecting a more aggressive guidance. Not just double digits, but more specific?A: Over the last five years, we've been giving guidance and have met it. We (earlier) used to only share qualitative information on booking. We have decided to share more precise booking numbers. You do booking and there is a certain execution plan. Instead of focusing on precisely what the number will be, we thought it is a better metric to provide a booking kind of an outlook, rather than getting to be very precise and guiding the streets. So that we can focus more than booking in this market condition where there is a lot of demand.Q: Your numbers are lagging in Europe and engineering services vertical?A: Engineering services (vertical) has little more exposure to some of the asset-heavy industries like office automation, industrial engineering and manufacturing kind of industry, which have had the biggest impact due to Covid. Some of that was playing out. We think it has bottomed out now. We should only see (demand) uptick and Europe also is somewhat linked to that. We had a very good quarter in the previous quarter in Europe.Q: There is the second wave of Covid-19, both in India and Europe. Is there a concern? Should India have vaccinated people faster?A: Definitely, it is a serious concern. People are seriously impacted, (whether) it is our employees or their families and friends. We're trying to do everything possible to help. We have now almost tripled our doctor helpline capacity to help people to call in and get the right medical advice. We're trying to work with some hospitals. And we're also setting up some additional beds and makeshift arrangements at certain locations. The vaccination obviously could have been better, and we want more people vaccinated. But even when we opened vaccination, when we were providing it in our own campus, it was picking up slowly. I think now a lot more people want to get vaccinated. I don't disagree with you that we should have focused more on vaccination in between the waves.Q: Does the second wave disturb the return to work plans?A: We were also trying to get people back to work in a small number, but all of that we have put aside and we have worked it back to working from home--98% of the people are now working from home. And that model will continue I think at least for the next three months.Q: What are your calculations on how long it will take to get to normal?A: It will take a long time to be normal, but I think at least two to three weeks more (the Covid-19 wave) will start coming down at least. That is our internal assessment, but there are so many models which are available. But I think that is going to be a little more pain before things become better.Q: We have seen the UK and the US getting more people vaccinated. Do you see business revive faster there?A: In both technology services and life sciences and healthcare, the demand is very robust. And these two verticals showed a very solid growth even in a pandemic. Financial services also showed moderate growth, but we see very good demand in that segment. There is enough spend, both from a cost optimisation perspective and some of the transformation and on digitisation and cloud. The segments that are also picking up, like energy and utilities, (companies) are very focused on reducing cost. Retail and consumer goods--they're focused on more customer experience and supply chain. It will take some more time for them to do something for the spending to really come back. I don't see that happening very quickly.Q: What will be the focus areas in business for HCL this year?A: The booking was very strong. We booked contracts worth $3.1 billion in the last quarter, and over $7 billion for the full year. This is across multiple areas. A lot of contracts are in application modernisation and cloud migration. That's a very big theme. And there are a lot of contracts in analytics, cybersecurity, digital foundation and infrastructure modernisation.Q: Is there a buyback plan?A: Nothing planned. We have given a higher dividend, including a 10 rupees special dividend. We've increased our quarterly dividend from four rupees to six rupees. And we've also communicated that six rupees per share is what we expect to do in the future.

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