No material changes planned in strategy, vision: Sudhir Singh, NIIT Tech

We believe that we will see a very significant uptick in both revenues and margins on a sequential basis, says CEO SIngh

NIIT Technologies will be rechristened as Coforge this week, after the change of its ownership last year to Baring Private Equity Asia. The mid-tier IT services firm's Chief Executive SUDHIR SINGH tells Sai Ishwar there will be no material change in leadership. Edited excerpts:

How should a client or an investor read into this rebranding?

The change is emblematic. We trace our roots four decades back with the founding of NIIT in 1981. We scaled up into the business consulting space later. We have emerged as a global systems integrator in the past two decades. In the past three years, we have positioned ourselves as one of the fastest-growing IT services firms in the world. The change is also a reflection to shareholder agreement that was signed pursuant to the strategic transaction among Barings PE Asia, NIIT, and the founders in May 2019 for 18 months.

Will the rebranding extend throughout the organisation?

Yes. Subsidiary Incessant Technologies will now be called Coforge Digital Process Automation.

Would there be changes in senior leadership or overall strategy?

We will not make material pivot in terms of strategy, but will continue to drive our differentiation through the three things that helped us grow rapidly. We won't materially change the mission or vision. The first is our approach towards organisational capability. We will continue to work with clients to drive transformation. The second thing we will continue to focus on is underlying our differentiation in our approach to being a digital-first organisation. Our digital and intellectual property-lead revenues are now approaching roughly 45 per cent of our global revenues, and we plan to hit 50 per cent as soon as possible.

A lot of analysts still believe NIIT Tech and Hexaware Technologies may be heading for a merger...

We have addressed this clearly 18 months back. There are no plans that we are aware of.

You had given revenue growth guidance for Q2. Are you on track to achieve that?

We should see a significant uptick in revenues and margins on a sequential basis. As we had indicated, we expect to see a sequential (revenue) growth of at least 7 per cent in constant currency terms over the previous quarter. We also expect operating margins to jump at least 150 basis points over the previous quarter. We stand by that outlook. For the whole financial year, we expect to grow in mid-single digit.

What is driving the confidence for a bullish outlook?

It is a mix of the order intake and large deals signed in the past three quarters, where we have the tailwind coming in. We have registered a large deal win this quarter. It is also due to the fact that we have been able to increase our wallet share in key accounts even during these times.

Some of your larger peers are looking at moving a large part of the staff to work from home permanently...

We do not want to ride this bandwagon of moving to a primarily work-from-home model. We always had the flexibility to work from home, and that will continue. One of the reasons why we have been able to do well is because of the spirit of camaraderie and trust that only comes when you meet people in person. These are early days on the long-term security implications of having a very distributed workforce in an offshore context.

What are your the hiring plans for the year?

From Q2 (FY21), I expect that there will be a net addition in headcount, as we expect to keep growing. We are hiring at this point in time.