HCL Tech eyes acquisitions abroad

After a lull of around two years, India's fifth largest information technology (IT) company HCL Technologies is on the prowl for acquisitions in the  European and US markets. It is looking at companies in the sub $500 million range.

"After we announced the transformation of our business in 2005, we have been focusing on the growth of our business organically in the first phase of the transformation, and now we are moving on to our collaborative stage where we will also resort to inorganic means like acquisitions," said Vineet Nayar, HCL Technologies, who donned the mantle of CEO a couple of days back. He was President of the company earlier.

"Due to our focus on a value-centric approach rather than being volume-centric, we will be looking at product companies and platform companies, which will create more value for us," said Nayar, adding, "it will be to enhance our capabilities in financial services, telecom, retail, life sciences, media publishing and entertainment among others."

To stress further on their strategy of collaborative transformation, HCL is organising its annual Global Customer Meet (GCM) in New Delhi on 29 and 30 October. This meet will see over 350 CIOs assembling under one roof to discuss various issues keeping in line with the technology track like SOA and SAS, and the opportunities that the new verticals hold, and the responsibilities that the industry holds towards the environment.

"In our first phase we were focused at our employee centric strategy which has now evolved to collaborating with our customers and technology partners to create products for other customers and partners," said Nayar.
The company is also on path to decrease their employee induction rate, "we aim at achieving a level where our increase in revenue exceeds, the number of employees we hire," the compnay recorded a 7.8 per cent growth in the per person realistion this quarter.

Nayar recently succeeded Shiv Nadar as the CEO of the HCL tech, and confidently states that beyond its collaborative transformation strategy, the company will be aiming at achieving dominance in the field, beyond 2010, maintaining its focus on large deals of over $100 million.

As the rupee took a downward leap, Nayar claims that the company is well hedged for 9 quarters to absorb the affect to some extent. Beyond hedging the company is also focusing its efforts on moving away from the US market. US currently accounts for 55 per cent of HCL tech' revenues---a 5 per cent decline from 60 per cent which was reported in the previous quarter. Nayar hope to brig this figure to sub-50 per cent soon.

HCL had last acquired Answercall Direct contact centre in Northern Ireland for Rs 29.39 crore in 2005. The contact centre was acquired by HCL's subsidiary in Northern Ireland, HCL Technologies BPO Service Ltd, from receivers, PriceWaterhouseCoopers (PWC).