 "Hinduja Tech will go public in 3 years: Subu D Subramanian")
On Tuesday, Defiance Technologies Limited, a Hinduja Group Company, has been renamed as Hinduja Tech Limited and unveiled a new logo. The company said the new identity represents a vibrant and agile organisation, consistent with its DNA as a technology solutions provider. Subu D Subramanian, managing director and chief executive officer of Hinduja Tech Limited spoke to T E Narasimhan on the reason behind the new branding exercise and company's way forward including proposed IPO.
What is the idea behind the rebranding?
Name change and rebranding have been our long aspiration. We wanted to leverage the strength of being part of the larger group. In the engineering the continuity, stability, longevity matters.
In Silicon Valley, if you say you are a ten-year-old company then you are old. Because it is always the freshness what they are looking for, since technologies are new. On the other hand, if you go to Detroit, the longer the duration, the better you are, because you have gone through the complete cycle and you got the rich experience.
Its like wine - the longer duration means more value.
While we (Hinduja Tech) are 5-6 years old, but when we claim that we are part of 100-year group that gives us stability, continuity and we are backed by larger group it gives lot more comfort for them (customer) to enter into some of the critical projects, programme to engage.
We don't need to get through the extensive process of communicating and convincing and telling we are Defiance, but we are part of larger group. Now we don't have to say that.
Also Read
When it comes to talent, unlike IT sector, in automotive people look for longterm career. To attract such kind of people, being part of larger group will give lot more comfort.
What is your vision for the company and what would be the focus areas?
Since we are private company we can't share revenue numbers.
A large part of the revenue comes from India, though we have a global footprint. Focus this year is how do we get bigger and better share of US business, given the delivery challenges. We have put strategy in place.
Our vision is to be an integrated engineering and IT services, while the automotive engineering is going to grow. How do we expand our foot print in the IT space will be other focus.
IT become enabler for the product engineering itself and on the process. Virtulisation and simulation is what we are looking at. This would help the customers to cut down time and reduce the cost and will improve the quality.
We will have focus on IT for engineering, and the IT which is going into the product, such as electronic products like apps to guide drive, how email can be delivered into the vehicle and others.
While we will continue to focus on auto sector, at the best we will leverage automotive into other manufacturing industry, mainly in process. We will provide engineering services to the industrial needs.
Vision or the expansion plan is to stay with the industry, expand the services from engineering to enterprises to IT and to emerging technologies like social media, analytics and mobility.
Automotive industry is in the beginning of next good cycle, next five years are going to be good.
We don't want to get into too many areas. We want to stay focussed, achieve traction and achieve leadership.
What kind of opportunities do you see in this space?
For companies like us the estimated market size (product engineering) is around $1 trillion. US market throws lots of opportunities for companies like us. Europe (especially France, Germany and UK) and Japan are the other markets which will be in the focus.
We will be working for global OEMs in the Indian market, while the connection and contract would be with the parent entity in US, Europe or Japan.
The industry outlook is positive. While earlier goals were for a short-term like one or two years, now they are speaking about 3-5 years investment programme, mainly product development. This opens a lot more opportunity in the automotive design engineering capability.
Three 'E's are the key focus for the OEMs. They include environment friendly vehicle, electronics which makes consumer friendly and third is engaging the consumers (e-dealers) through social media.
OEMS are also cautious about quality, cost and time.
What are the key differentiators for Hinduja Tech compared to peers?
We have been focusing on automotive engineering more than 5-6 years. We are part of the large manufacturing house and got opportunities to go through product life cycle - from concept to launch, thanks to the association with Nissan and with our group companies including Ashok Leyland. This combination is unique.
We continue to associate with the clients post launch for launch of other variants and different markets from the same platform. This is a rich, unique and great experience. We are building on that.
What are the challenges and how you are planning to address it?
Shortage of quality people is the key challenge. Company want to triple number of employees from 1,000 to 3,000 in the next three years.
We are staffing up people who got automotive engineering background. IT people cannot sell engineering, so we are cautiously staffing our customer-facing team, who have automotive background.
We require people who have understanding the local market and service customer with sales experience, but the most important thing would be basic automotive experience. If somebody doesn't have that experience, we are not interested. It is very difficult to get talent with all the three requirements. We are able to identify and talking to a few people. Internally we have started grooming people to get to the leadership position. If we can't buy, we need to produce.
We are also looking at global sourcing model. Certain countries don't come under H1, we are looking at recruiting people from those markets and send them to US. One year down the line we will also get into campus hiring.
Are you open for inorganic growth?
If any of the options come to our way, we will consider. The options which may help the company to expand footprint.
There is a buzz that Nissan is planning to pick up stake in the company. Is it true?
Today, we are servicing Nissan as a customer across all areas from engineering to IT and every customer, including Nissan we always look for strategic partnership. While we are market focussed, rather than in a hunting mode, we operate in select industries - automotive and manufacturing. We are also focussed on certain geographies and services.
What is the straight answer for Nissan eyeing stake in the company?
I can't comment. At this stage it is premature to comment.
Any plans to take the company to public?
Yes, we will go for an IPO in the next three years.