$2-B DEALS WAITING TO BE DECIDED: HCL TECH

Chennai
The Hindu Business Line

HCL Technologies’ CEO, Vineet Nayar, has said he sees deals worth about $2 billion, on which decisions would be made by clients in the next 90 days.

Revealing this in a conference call with analysts after announcing results for the quarter ended September 2008, Nayar said, “I haven’t seen something like this in the last 3 years.”

He cited outsourcing advisory companies as saying that deal flows would slow down. “Despite this, I feel that Indian service providers would see a larger deal flow should decisions go in their favour,” referring to the same deals.

Of these deals waiting to be decided on, 45 percent are from the manufacturing sector, 25 percent from the media and entertainment segment while financial services brought in the rest, according to him.

He also clarified that 55 percent of deals that HCL Technologies pitches for is populated by non-Indian MNCs as competition. “That is, no other Indian provider figures in these deals we pitch for. Also, for 34 percent of these deals, or five deals, in this context, we have to compete with only one large player.”

Asked if HCL Tech has seen significant reductions in business with customers, Nayar said, “Clients have frozen (action, on the overall front). There has been no considered response to what has been happening (in the macro economic environment). They are not sure what the impact of these events (such as Lehman Brothers filing for bankruptcy, Wachovia being bought over and importantly, the global liquidity crunch) would be on their business.”

He added that he would have to wait for the end of this calendar before he could respond to questions on what HCL’s customers are saying. He also said that there had been no significant change in customers making decisions on the IT front in the last month. “In sum, if you look at the data points, things are not as bad as newspapers make them out to be,” he said.