Annual Report

Letter from the CEO

During a year of crisis and upheaval, HCL not only served its clients and safeguarded its employees but also delivered record results.

Dear Shareholders,

2020 was an unusual year which tested human ingenuity and resilience like no other span in recent memory. It will also perhaps go down in history as a period which reframed a lot of what we thought were “essentials” (whether it be freedom of movement, nature of livelihoods or even the frequency of primal human connections) in the face of a pandemic that has no equivalent precedence.

“The New Essential” is a thought that emerged as we tried to navigate this journey with our employee and customer family spread across nearly every industry and country across the globe that was impacted. We realized that the only way to successfully make this journey was through a combination of the best in digital technology and the best of the human spirit.

Being a global technology provider placed us right at the heart of ground zero where we were called upon to not only help our customers Act and Adapt to the changed circumstances but also to Advance despite the challenges posed by this unusual year.

The fiscal saw us surpass many of our previous financial achievements. We crossed the $10 Billion (₹ 75,379 Crores) revenue milestone and exited the year with a growth of 6.7% Year-on-Year (YoY), and outstanding EBIT (Earnings Before Interest and Taxes) performance. We also registered an all-time-high pipeline and the highest ever net new deal booking of $7.3 Billion in FY21 (this does not include renewals or rate card deals that we have signed, which were also significant throughout the year). And what’s most promising is that these deals span across verticals and geographies and represent Fortune/Global 500 companies where there is significant headroom for growth.

This record-breaking booking and broad-based pipeline augurs very well for our growth in near-term and is predominantly driven by our Mode 2 services. This momentum attests our belief that our Mode 2 and Mode 1 service revenue would be equal in the medium term. That is also the aspirational goal that we are working towards.

During the fiscal year, Mode 1 of our businesses remained steady despite weathering the greater impact of the pandemic-related headwinds. In Mode 2 and Mode 3 we posted a handsome double-digit YoY performance predominantly led by digital transformation acceleration. Our Mode 3 segment stands validated by better-than-expected business case performance. We see a lot of new opportunities to grow this business.

Under the canopy of these spectacular numbers, we also emerged as highest-ranked India headquartered company in Forbes’ “World’s Best Employers” global list and were ranked 30 overall, and received the highest governance quality score of 1st decile from Institutional Shareholder Services (ISS). Additionally, we were recognized as “Company of the Year” by India’s leading business newspaper, Business Standard, in recognition of our stellar financial performance coupled with a strong focus on innovation, capability building and strong business ethics.

I am also proud to share that the challenging circumstances of the year did not deter HCLites from giving any less than the best support to our clients despite all the odds. A reflection of which was visible in the Company achieving yet another all-time high client satisfaction index and Net Promoter Score.

Tailwinds in our favor

Driven by this robust all-round performance, we are very confident of retaining our growth momentum in near and midterm. At the heart of this optimism is the acknowledgment of some significant tailwinds which we are witnessing in favor of our strengths over and above our existing momentum in all our chosen segments and markets:

Unprecedented digital proliferation – experts believe the COVID-19 pandemic has put into motion one of the most intense periods of digital proliferation in modern history. Every sector – from healthcare to education, retail, transport to financial services – is being “techi-fied” and modernized through digital technologies to survive and thrive in the emerging new economic order. We are, however, still at an early stage of this multi-year transformation. Currently our industry constitutes 5 percent of the GDP of the U.S.A, for example, and it will expand to 10 percent in a decade with similar acceleration expected across the globe.

Heightened activity in the cloud space – estimates point to a $300 Billion services opportunity in the cloud space. To address this swiftly expanding opportunity we launched #HCLCloudSmart, an overarching offering, that helps enterprises accelerate and maximize business value from cloud in alignment with industry needs, specific organizational goals and unique client situations. One of the key enablers of this offering is our strong partnerships with leading cloud hyperscalers. We were amongst one of the first large Global System Integrators (GSI) in the world to design dedicated ecosystem business units for each cloud hyperscaler, some as far back as two years ago.

Enhanced traction in digital engineering services and platforms – driven by Industry 4.0, Hyperscale Platforms, Data Engineering, PLM, and 5G/Edge, we are witnessing a steadily rising demand in HiTech, Telecom, Manufacturing, and related industries for full-scale Digital Engineering solutions. Being a world leader in Engineering and R&D Services gives us vantage position to leverage this trend in our favor.

FY22 pressing forth!

As we look ahead, we see a significant opportunity to take the driving seat on these trends. In the medium term, we will focus on four critical arenas:

  • We will continue to invest in new emerging technologies like AI, data analytics, hybrid cloud, digital engineering (Softwareization, IoT, 5G etc), Edge, and cybersecurity. A significant part of this investment would focus on training our employees on these new technologies along with enhancing our digital Centers of Excellence (CoEs) for deeper capability incubation
  • In terms of geographies, we are witnessing accelerating demand for a global delivery model in mature economies like Germany, France, Canada, Australia, and Japan. While we have meaningful presence in these countries, we will now be doubling down on sales and marketing investments there to capture expanding opportunities. We are also expanding into mid-sized markets like Brazil, Mexico, Spain, Portugal, South Korea, Vietnam, and Taiwan.

In adjacency we will further expand our onsite delivery centers in U.S, continental Europe and Australia supported by near-shore centers in Canada, Mexico, Costa Rica, and Eastern Europe, alongside “New Vistas” locations in India, Sri Lanka, Vietnam, and the Philippines.

  • The year ahead will also see us further accelerating actions on the important agenda of environmental and social responsibility. We have been working passionately on this mission for many years now and recently (in June 2021) received an important accolade from the leading investment and financial services group, Edelweiss, ranking us as the No. 1 company in India on environmental and social governance (ESG)
  • Last but not the least, I am convinced that nothing we do is more important than hiring and developing our people. We have several programs in place to enable grooming of top-notch talent including hiring entry-level college and school graduates (“TechBees”, as we call them) from local academic institutions across the world as well as attracting lateral hires with distinguishing domain expertise. We have also further strengthened internal training systems to upskill our employees on emerging next-gen technologies

Together in pandemic response

We have structured our crisis response team into three layers – at the core is a group of our Executive leadership who evaluate and plan rapid response. The second layer consists of region/country leads who direct the execution at local level, and the third layer consists of our employee volunteers who are helping us in ground zero outreach.

With this multi-layered machinery we have been able to provide a range of timely support provisions to our employees and their families across the globe. Based on each country’s point-in-time need, our support provisions have spanned three arches of Policy, Prevention, and Response. On policy we have undertaken timely interventions like WFH enablement, family assistance program for dependents of deceased employees, and comprehensive pandemic leave.

With regards to preventive measures, we have been offering COVID-19 testing assistance, organizing vaccination drives wherever allowed by country administrations as well as working on getting our GDCs (Global Delivery Centers) certified as ready for “Prevention of Spread of Infection” wherever such workplace certifications are available. Our response measures have also been exhaustive, including hospitalization support, isolation facility, ambulance service, doctor consultation, medicines delivery, life coach and mental health support, and tie-up with food delivery services for those self-isolating.

Together for a better tomorrow

We are entering FY22 with great confidence as an organization, but as a community and as a team we remain deeply humbled and cautioned by a pandemic that is testing our resilience every day.

Before I end this note, I want to express my deepest gratitude to the front line and healthcare workers who have looked after us so tirelessly throughout this tough year.

I also want to pay my most heartfelt condolences to the families who have lost their loved ones at the hand of this cruel pandemic. The despair we all feel can never be sufficiently expressed in words, so all we can do, and must do, is honor those dearly departed with our actions. At HCL, we are committed to make all the investments and embrace all the best practices it will take to end this pandemic and prepare the world for a better, more resilient future.

The HCL family stands


C Vijayakumar