HCL Technologies Expects To Gain Market Share From Incumbent Leaders

HCL Technologies Ltd. expects its “differentiated strategy” to lead to newer growth opportunities in the future.

The software services provider also told investors and analysts, during a post-earnings call Tuesday, that it expects to gain market share from incumbent leaders.

That comes as the company’s profit for the quarter ended September beat estimates. It raised its revenue guidance for the ongoing financial year.

Here are the key takeaways on HCL Technologies’ strategy gathered from reports compiled by Morgan Stanley, HSBC, UBS and Axis Capital.

• Organic growth to be driven by market positioning.
• Ramp-up of large deals such as those with Nokia Oyj, Xerox Holdings Corp. and Broadcom Inc. aided its 14 percent organic growth year-on-year in H1FY20.
• Company seeing strong customer renewals and new mandates in digital business.
• New mandates from clients are helping reshape applications business.
• HCL Tech will be using software capabilities derived from acquisition of IBM products.
• Will also use IBM products to cross-sell services and open new growth opportunities.
• Hopes to garner $625-650 million with Ebit margins of 30 percent from IBM products.
• To focus on software-led network infrastructure modernisation and automation for cloud migration.
• Modernising products by improving functionalities, SaaS-ification of product portfolio (software-as-a-service).
• May put on hold product acquisitions for time being as IBM integration rolls out.
• This should assuage concerns about possible large back-to-back acquisitions.
• Company expects to gain market share from incumbent leaders.
• In scope, 10 million applications currently being maintained and enhanced by Domino platform, recently bought from IBM.
• AppScan is another platformed well positioned to grow in the industry.