'Offshore services offer vast opportunities'

IRIS

`There is no significant rise in the IT budgets of US companies. However,

there is a definite strategical change in the clients as they are shifting to

low-cost vendors. US IT companies are reallocating projects to more cost

efficient vendors,` said HCL Technologies chairman, president and CEO, Shiv

Nadar, at the conference call held in Mumbai today.

`Offshore services offer vast opportunities to domestic IT companies and to

HCL Technologies as well. Big international players are looking at offshore

services to control costs, and we hope this trend will percolate to small

companies as well which will offer more offshore business to Indian IT

companies. This will requires strategic reorientation,` he added.

`There is a good amount of increase in number of visits of customers.

Further, US-based companies are decisively moving towards low-cost vendors.

However, this cannot be treated as a reversal of downturn, as no significant

improvement is seen in the IT spending of US companies,` Nadar said.

HCL Technologies, which declared its quarterly results today, has reported a

net profit of Rs 101.38 crore for the third quarter ended March 31, 2002, down

10.24 per cent compared to the net profit of Rs 112.95 crore posted last year.

Total income increased from Rs 217.4 crore last year to Rs 218.05 crore this

year, of which offshore-centric business contributed 71 per cent. It has not

issued a revenue guidance for the fourth quarter.

The company plans to focus on strategic alliances and partnerships to boost

its revenues. Sticking to its strategy of forging long-term alliances with

customers, the company set up two new offshore development centers (ODC) during

the quarter, taking the total number of ODCs to 47.

During the quarter, HCL Technologies strengthened its presence in the

application development space by entering into two major alliances —

Answerthink and Zamba Solutions.

Answerthink brings formidable business transformation and technology

integration skills along with a prestigious client base to the relationship.

The company and Zamba Solutions will offer joint CRM solutions to its

customers. The alliance would bring synergies in terms of Zamba`s business

strategy, process expertise and CRM implementation experience with the quality,

cost efficiencies, breadth-of-technology and time-deployment advantages that HCL

Technologies brings by virtue of its extensive offshore infrastructure and

global scale.