HCL poised to replace Wipro as No. 3 IT firm
BENGALURU: HCL Technologies Ltd is set to surpass Wipro Ltd to become India’s third biggest software services provider in the three months to June 30, marking the first change in the pecking order of the country’s $167 billion information technology outsourcing industry in six years.
Billionaire Shiv Nadar-led HCL Technologies expects its dollar revenue to grow by as much as 12.5% in the current financial year, implying that it will race past Azim Premji-led Wipro.
HCL Technologies’s rise has come on the back of years of underperformance by Wipro. Until a few years ago, both companies used to generate significant business from managing data centres or offering infrastructure services to their clients. That revenue disappeared with the rise of cloud computing or offerings of computing power by the hour by firms such as Amazon Web Services.
To mitigate this, HCL Technologies has invested over $1.3 billion over the past two years in licensing intellectual properties from firms and then building products around them for clients. This has proved financially lucrative for the company in the short run.
Noida-based HCL Technologies reported 2.5% sequential dollar revenue growth in the quarter ended March to end with $2.038 billion in revenue, a mere $24 million less than Wipro’s $2.062 billion.
HCL Technologies’s revenue in the June quarter will total $2.087 billion if the firm grows at the lower end, or 2.4%, sequentially, which will be more than Wipro’s $2.082 billion in revenue at the end of the June quarter.