TBR report on HCLT - Conservative hiring coupled with IT transformation signings will sustain HCLT's margin and revenue growth in 2H13

19 August 2013

HCLT will continue leveraging aggressive price undercutting to drive signings growth in core regions

HCLT has maintained accelerated growth for three consecutive quarters, posting 13.7% year-to-year growth in 2Q13, once again ahead of Infosys’ and Wipro’s growth of 13.6% and 4.2%, respectively, however trailing TCS’ increase of 14.8% year-to-year. At the service line level, continued strong demand for infrastructure and BPO services among Fortune 500 and Global 2000 clients in its core U.S. and Europe markets drove HCLT’s top-line. HCLT will continue leveraging slashed prices as a lead-in to capturing deals in the renewal market as well as new logo transformational signings to drive growth into the 14% to 16% range during fiscal 2014.

Expand LATAM operations to better support local and global customers

HCLT will continue investing in expanding its operations in Latin America (LATAM) to capitalize on sustaining growth opportunities in the region, namely at its Brazil-based delivery hubs in Sao Paulo and Sao Leopoldo where the firm aligns with increasing demand from customers located in North America, Europe and Asia, as well as throughout greater LATAM in Mexico, Argentina, Puerto Rico and Chile. TBR believes HCLT will continue hiring domain-specific IT professionals with expertise in enterprise applications services and infrastructure management services to better address rising demand from global and local customers for low-cost delivery of total IT outsourcing services in the region. TBR expects LATAM to support overall Americas growth in 2H13 as global Fortune 500 customers are increasingly seeking delivery expansion to serve LATAM-based clients. Additionally, the firm will address growing opportunity by bolstering its LATAM ecosystem through expanding its network of relationships with surrounding technical universities and governments.

Expand partnerships with IT mainstays to bolster innovative technology solutions

HCLT is addressing demand among CTOs and CIOs for expanded portfolios of mobility solutions, illustrated by its expanded partnership with SAP for their mobile platforms and applications. HCLT is highlighting customer-centricity by improving the end-user experience through the SAP Mobile Platform, SAP Afaria (mobile device management) and SAP’s breadth of mobile applications. This strategic alliance incorporates HCLT’s extensive expertise in ongoing maintenance and managed mobility services encompassing mobile application testing, application management, mobile device management and platform integration with SAP’s mobile solutions technologies. This fills gaps in HCLT’s mobility portfolio and will provide HCLT customers with a value-add to their existing SAP back-office solutions by enabling them to access valuable business insight directly from their smartphone or tablet.

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