Biz continuity plan in place for Sri Lanka operations, says HCL Tech CEO

HCL Technologies on Wednesday said it has a business continuity plan for operations in Sri Lanka, with adequate flexibility for workloads to be taken over by teams in India and other geographies.

The Indian IT services company has about 1,500 employees in Sri Lanka, a nation that is facing an economic and political crisis.

Asked about how the company is managing its operations in Sri Lanka, Vijayakumar told PTI, "Obviously, there are difficulties, but still deliverables are happening and we are supporting them with some additional bandwidth from our India teams."

"For all the operations in Sri Lanka, there is a business continuity plan...however as we speak, we see that team in Sri Lanka continues to deliver their work quite well in spite of challenges," the top honcho said.

In case the teams are not able to deliver, the loads will be taken over by teams in India or other geographies, he explained.

Sri Lanka's embattled President Gotabaya Rajapaksa on Wednesday fled to the Maldives on a military jet, hours before he was supposed to step down in the face of a public revolt against him and his family for mishandling the economy that has bankrupted the country.

The 73-year-old leader left the country along with his wife and two security officers on a military jet, a brief statement from the Sri Lanka Air Force had said.

The Noida-headquartered firm, HCL Technologies, on Tuesday reported a 2.4 per cent year-on-year rise in its consolidated net profit for the three months ended in June 2022 at Rs 3,283 crore. The revenue of the company stood at Rs 23,464 crore, nearly 17 per cent higher than the year-ago period.

The company retained its FY23 revenue outlook in the 12-14 per cent band, citing "strong momentum in the market" and said it is positive about growth trajectory. The company expects to be on the lower end of the guided EBIT margin band of 18-20 per cent.

In an interview on Wednesday, Vijayakumar asserted that the company is "on a good upcycle", and will use multiple levers to mitigate the challenges around margins.

"Our services business has grown 19 per cent year-on-year, we crossed USD 3 billion quarterly run rate, which is really a USD 12 billion annual run rate... Our engineering and Research and Development (R&D) services crossed half a billion dollars quarterly, which is like USD 2 billion a year, which is the largest engineering services portfolio that any service provider has," he said.

The current market environment reflects IT transformation, led by cloud as a pivotal technology platform, and HCL is "very well-positioned to tap into the cloud opportunities".

"So I think we are in a good spot. Of course, there are challenges around margins...there is a lot of demand, and supply is not as much as the demand. So, there is going to be some dynamics around talent cost and execution cost," he noted.

HCL Tech has enough operating levers in hand, he emphasised.

"I think the most important lever is upskilling and ensuring that teams are productive, and utilisation is an important lever. We have hired a lot of freshers, they continue to get trained and we have to deploy them," he said.

The company is also talking to number of customers about increasing rates and prices, Vijayakumar said.