HCL Technologies is likely to overtake rival Wipro to become India’s third biggest software services provider shortly.
This development will be marking the first change in the order of the country’s $167 billion information technology outsourcing industry in six years, Hindustan Times reported .
Billionaire Shiv Nadar-led HCL Technologies expects its dollar revenue to grow by as much as 12.5 percent in the current financial year, implying that the company will race past Azim Premji-led Wipro.
Until a few years ago, both HCL Technologies and Wipro generated significant business from managing data centres or offering infrastructure services to their enterprise clients. Wipro and HCL lost that revenue due to the emergence of cloud computing or cheap offers from Amazon Web Services (AWS).
To mitigate this, HCL Technologies has invested over $1.3 billion over the past two years in licensing intellectual properties (IPs) from companies and then building products around them for clients. This has proved financially lucrative for the company in the short run.
HCL Technologies posted 2.5 percent sequential dollar revenue growth in the fourth quarter to $2.038 billion, a $24 million less than Wipro’s $2.062 billion.
Wipro does not provide full-year revenue forecast but expects its quarterly revenue to be between a decline of 2 percent and growth of 0.2 percent in constant currency terms in the April-June period from the preceding quarter.
If Wipro manages to retain its revenue in constant currency terms and gains from currency movements, it will mean reporting at best 1 percent dollar revenue growth.
HCL Technologies does not provide a quarterly revenue outlook but the management expects dollar revenue to grow between 10.5 percent and 12.5 percent in 2018-19. Based on its full-year forecast, HCL Technologies expects its dollar revenue to grow between 2.4 percent and 3.2 percent in the April-June period.
HCL Technologies’s revenue in the June quarter will total $2.087 billion if the IT services company grows at the lower end, or 2.4 percent, sequentially, which will be more than Wipro’s $2.082 billion in revenue at the end of the June quarter.
In 2012, Cognizant Technology Solutions overtook Infosys in quarterly revenue.
