DQ Top 20 2018: Rank #5 HCL Technologies

DQ Estimates Revenue (Rs Crore)

For the year 2016 to 2017 : 46,722

For the year 2017 to 2018: 50,570

Increase of 8%

In the crowded IT outsourcing space, companies need to differentiate and build a unique identity. Companies like HCL Tech are just doing this. The company has restructured its services across three modes:

As part of Mode 1 services, HCL delivers core services in areas of Applications, Infrastructure, Engineering & R&D and Business Services, leveraging DRYiCETM Autonomics to transform clients’ business and IT landscape, making them ‘lean’ and ‘agile’. As part of Mode 2 services, HCL delivers an experience-centric and outcome-oriented integrated offerings across Digital & Analytics, IoT Works, Cloud Native Services and Cybersecurity & GRC services.

HCL leverages its expertise in building software IP led businesses over the last forty years to execute its Mode 3 strategy, in an evolving world of high automation and cloud platforms. This strategy is well positioned to enable HCL to emerge as a strong leader at the end of this tectonic shift in various software arenas including IT Automation, Orchestration, Hybrid Data, Security, and Collaboration. This strategy is well executed by being adaptive and is built through a flexible combination of organic IP, acquisitions and IP partnerships, supported by HCL’s Mode 2 high-value services and solutions. These offerings are delivered to the market in various modes through SaaS platforms, cloud, and on-premise deployments

If we contrast HCL Tech’s performance during FY 18 across these three modes, the bulk of revenues have come from Mode 1, which contributed to 76.6% of the total revenues. Here HCL continues to leverage its strategic partnerships with leading enterprise software providers like SAP, Oracle, and Microsoft to deliver innovative solutions to its customers and continues to retain its market leadership position. With Digitalization and Internet-of-Things driving customer investment and playing critical roles in business success in the 21st Century

Revenues from Mode 2 and Mode 3 offerings together grew 41.5% in 12 months period ending Mar’18. The share of Mode 2 and Mode 3 revenues together stands at 23.4% for FY’18, compared to 18.6% for FY’17 were primarily led by Digital and Analytics, Mode 2 grew by 29.4% YoY across lines of business and geographies. In FY’18 Mode 3 contributed 8.7% to the revenue and grew at a healthy rate 68.3% YoY. Investments proposed in Product Management, R&D and GTM.

Meanwhile, broad-based growth across Verticals driven by Manufacturing at 18.3%, Financial Services at 13.3%, Lifesciences & Healthcare at 8.1 %, Retail & CPG at 7.5% and Public Services at 2.6% (on Constant Currency basis). Strong client addition continues (on YoY basis): $5+ Mn clients up by 18, $10+ Mn clients up by 7, $20+ Mn clients up by 2, $40+ Mn clients up by 6, and $50+ Mn clients up by 3.

“We concluded the fourth quarter and the financial year 2018 with an industry-leading performance backed by broad-based growth across verticals, robust client additions and accelerated revenues from Mode 2 and 3 Services. Our quarterly revenues have exceeded the $2 billion mark while our YoY revenues grew by 10.5% YoY. We remain confident of the new Fiscal in light of the increasing relevance of our business offerings coupled with our strategic investments in technologies of the future”, said C.Vijayakumar, President & CEO, HCL Technologies.

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