hcl tech CEO: Indian startup history intact, tech innovation dynamic, relevant: HCL tech CEO

According to the Chief Executive Officer (CEO), India’s startup story is “unchanging” and its technology innovation foundations remain vibrant and relevant despite fluctuating valuations in the startup space. C Vijayakumar.

The comment by the chief executive of Indian IT firm HCL Technologies comes at a time when investment and venture capital deals in the startup space have begun to dwindle as investors wary of making large checks amid uncertain market conditions.

Asked about the valuations of startups that have reached their peak and whether the space is moving towards a possible reset,

Vijayakumar of PTI said in an interview with PTI: “I am absolutely sure that History of a startup in Indiatechnological innovations, products, everything that comes from India, remained safe and sound.”

“Obviously there is some sort of downgrading…but other than that, the overall picture is very bright and relevant to a lot of the new things that are happening in the market. So I’m very confident about that,” added Vijayakumar. .

After a fantastic run and dizzying valuations in recent years, the wave of venture capital chasing the Indian startup ecosystem (the third largest startup ecosystem in the world) seems to be dwindling somewhat.

Frightened by concerns about profitability, cash loss and corporate governance issues, investors are on guard as stock market adjustments have dulled the luster of newly listed startups.

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Startup funding fell 17% sequentially to $6 billion (about Rs. 47,800 crore) between April and June, according to industry body Nasscom.

According to a report from market analytics platform Tracxn, total funding raised by Indian startups in the just ended June quarter
fell 33% sequentially to $6.9 billion.

Funding appears to have pulled away from the previous high seen in the third quarter of 2021, Tracxn said in a report, while pointing to “great consensus among market participants for a ‘funding winter’ or a downturn in investor confidence and sentiment around startup funding.” .

Vijayakumar said that whether HCL Tech looks for a place to acquire startups, given that valuations have become attractive, “it all depends … we are constantly looking for opportunity-based acquisitions in services and products. If we find something interesting, we might take a look.”

HCL Technologies recently reported 2.4% year-on-year growth in its consolidated net income for the three months ended June 2022 of Rs 3,283 crore. The firm, headquartered in Noida, posted Rs 23,464 crore in revenue, nearly 17% higher than last year.

The company maintained its FY23 revenue guidance in the 12-14% range, citing “strong market momentum” and saying it is positive about its growth trajectory. The company expects it to be in the lower end of its estimated EBIT margin (earnings before interest and taxes) in the 18-20% range.

Vijayakumar said the company has a “good upcycle” and will use several levers to mitigate margin problems.

Regarding the impact of the war between Russia and Ukraine on operations, Vijayakumar said the company has no presence in those locations, neither sales nor supplies.

“We have a presence in some neighboring countries such as Romania, Poland … so there are no problems in these countries, everything is going well. We did not have direct contact with Russia or Ukraine,” he said.

As for Europe, the company has not noticed any significant changes in the overall structure of supply or demand in Europe, and “it continues to be quite resilient.”

Asked about the timeline by which the company plans to bring its employees back into the office, Vijayakumar said HCL Tech has a “first virtual hybrid operating model” policy.

“So wherever work can be done virtually, we tell people to keep doing it virtually. cases, a couple of weeks,” he said.

This model is evolving right now, Vijayakumar said.

“Maybe about 20 percent of our employee base works in our locations, and that number varies from place to place. We think that it will increase only slightly, not dramatically,” he said, but did not give a target ratio or time frame to achieve the same.