HCL Tech’s focus on hardware and system integration business during late 1990s and early 2000s turned out to be a poor choice. However, since then, it has been the most proactive to experiment with pricing strategies, having entered into revenue-sharing agreements with clients. Further, it developed expertise in infrastructure services. Its ERP offerings and consulting abilities improved after the acquisition of Axon. This enhances HCL Tech’s full services ability and its standing in winning large total-outsourcing deals. Its BPO business also diversified into offering platform-based BPO solutions for the insurance domain by acquiring Liberata Financial Services. Unlike most other vendors, services to manufacturing industry clients contribute the most to its revenue.
Manufacturing and Lifesciences led the growth: Growth of 3.5% cc QoQ was led by Manufacturing (+8.1%) and Life Sciences (+7%), while BFSI (+0.4%) and Retail (+0.9%) were weak. HCL sees strong demand outlook for digital engineering, application modernisation and cloud transformation. Products & Platforms is expected to grow at 0-1% (from a mid-single digit) in FY22. HCL expects momentum in the services business to continue and P&P to bounce back due to seasonality and return of deferred revenues in 3Q.
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