The last year was a challenging one for the IT industry due to the economic slowdown. The hardware sector was affected badly and sales dipped in the enterprise and consumer segments. HCL Infosystems, a leading player in the hardware segment, experienced the effects of both the slowdown and a depreciating rupee. Chairman and CEO AJAI CHOWDHRY spoke to Kirtika Suneja on the challenges and the path ahead. Edited excerpts:
You’ve had a tough year, with net profit for the quarter down 7 per cent year-on-year, and gross sales flat.
This is because the last year was a challenging one for three reasons. First, the markets showed signs of depression and slowdown in October till May-June this year. Another area that posed a challenge was the volatility of the rupee, because we buy in dollars and sell in rupees. The third cause relates to the general elections, because of which business got disturbed, as government decisions were not happening. We have maintained a flat top line and it is an achievement that it did not fall. Though there has been some impact on the bottom line, but there has been an upward sequential trend there.
Your company recently got approval to raise Rs 825 crore. What will you spend this on?
We have got an approval from the board to raise Rs 825 crore but are yet to raise the funds. The funding will be used for future growth, like investing in infrastructure and acquisitions. The system integration (SI) and services businesses are growing and we need to support these with infrastructure like software development. As far as acquisitions are concerned, we will be looking at them and have set up a reasonably-sized acquisition team for the first time. System integration is our main area of interest in acquisitions.
Which are the growing verticals for HCL Infosystems in system integration?
We have won major orders for SI from the government, railways, telecom, power, BFSI and education. One third of our enterprise business comes from the government. ICT education is another area of interest for us, where we will create more content this year in multimedia software. The order book is healthy, specially for telecom, education and power.
What is the hiring outlook for the year?
The employee strength has increased from 5,753 in 2008 to 5,921 in 2009. HCL’s attrition rate declined to 10.4 per cent in 2009 from 14.9 per cent last year . For people with over five years experience, the attrition rate is less than two per cent. We added around 50-60 people in the last quarter. This year also the headcount will increase, depending on the projects we get. The sales headcount will definitely go up.
