UMBAI | BANGALORE For once, HCL Technologies, analysts' favourite whipping boy for its low profit margin, has something to thumb its nose at the IT big boys - revenue per employee - a metric where HCL has beaten them all. More importantly, at 51% growth in its revenue per employee from five years ago, HCL far outstrips its larger peers, including TCS, Cognizant, Infosys and Wipro.
The latest data could well be sign of changing fortunes at country's fifth-largest information technology (IT) services exporter that traces its roots to a IT garage startup from 1976. From having the lowest revenue per employee in 2006 to the highest in 2011, HCL's growth may be a leading indicator of where the firm is headed.
The real test for HCL would be its ability to convert its high revenue per employee into profits in a reasonable timeframe, so that the firm can cement its position not only as one of the fastest growing Indian IT firms, but also achieve better profitability, thus addressing analysts' concerns.
With about $12,444 per employee for the September quarter, HCL emerges on top of the heap while TCS stacks at fourth position with $11,734, only marginally better than Wipro, which generated $11,174 per head, lowest among the lot. Cognizant and Infosys ranked right below HCL with $12,315 and $12,311, respectively. HCL is expected to end the financial year in June with revenues of .`19,593 crore or about $4 billion. The revenue-per-employee index gains significance at a time when Indian IT firms are hiring tens of thousands of engineers every three months, causing the employee population to bulge like never before.
TCS hired over 20,000 engineers in the three months to September 30, taking its employee base to 2,14,770, fast approaching the quarter of a million mark. TCS is the nation's largest private sector employer behind state-owned Indian Railways with 13.6 lakh employees. Technology behemoth IBM employs 4,27,000, double that of TCS, but at about $100 billion, Big Blue has nearly 12 times TCS' revenue.
"In business, one focuses on creating a momentum and that is now clearly with HCL," chief executive Vineet Nayar said in an emailed response from the US, where he is visiting clients. "HCL growing faster than all its peers is a fact proven by our industry leading three year compounded average growth rate of 24%."
During the same period, HCL's employee base grew only 14%. HCL now has about 80,520 employees.
Nayar explained that since 2005, HCL has been focusing on what he calls total IT outsourcing services (TOS) leveraging the firm's expertise in managing IT infrastructure. "Over the years this focus on TOS has enabled us to win large, multi-service deals," said Nayar. "We have been able to double the number of customers in $50 million, $20 million and $10 million categories in the last two years."
Recently, outsourcing advisory TPI ranked HCL amongst the top six global service providers across America, Europe, the Middle East and Africa (EMEA), as well as Asia-Pacific. The company cites it as a validation of its business model.
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/hcl-technologies-has-best-revenue-per-employee-in-it-sector/articleshow/10733631.cms
The latest data could well be sign of changing fortunes at country's fifth-largest information technology (IT) services exporter that traces its roots to a IT garage startup from 1976. From having the lowest revenue per employee in 2006 to the highest in 2011, HCL's growth may be a leading indicator of where the firm is headed.
The real test for HCL would be its ability to convert its high revenue per employee into profits in a reasonable timeframe, so that the firm can cement its position not only as one of the fastest growing Indian IT firms, but also achieve better profitability, thus addressing analysts' concerns.
With about $12,444 per employee for the September quarter, HCL emerges on top of the heap while TCS stacks at fourth position with $11,734, only marginally better than Wipro, which generated $11,174 per head, lowest among the lot. Cognizant and Infosys ranked right below HCL with $12,315 and $12,311, respectively. HCL is expected to end the financial year in June with revenues of .`19,593 crore or about $4 billion. The revenue-per-employee index gains significance at a time when Indian IT firms are hiring tens of thousands of engineers every three months, causing the employee population to bulge like never before.
TCS hired over 20,000 engineers in the three months to September 30, taking its employee base to 2,14,770, fast approaching the quarter of a million mark. TCS is the nation's largest private sector employer behind state-owned Indian Railways with 13.6 lakh employees. Technology behemoth IBM employs 4,27,000, double that of TCS, but at about $100 billion, Big Blue has nearly 12 times TCS' revenue.
"In business, one focuses on creating a momentum and that is now clearly with HCL," chief executive Vineet Nayar said in an emailed response from the US, where he is visiting clients. "HCL growing faster than all its peers is a fact proven by our industry leading three year compounded average growth rate of 24%."
During the same period, HCL's employee base grew only 14%. HCL now has about 80,520 employees.
Nayar explained that since 2005, HCL has been focusing on what he calls total IT outsourcing services (TOS) leveraging the firm's expertise in managing IT infrastructure. "Over the years this focus on TOS has enabled us to win large, multi-service deals," said Nayar. "We have been able to double the number of customers in $50 million, $20 million and $10 million categories in the last two years."
Recently, outsourcing advisory TPI ranked HCL amongst the top six global service providers across America, Europe, the Middle East and Africa (EMEA), as well as Asia-Pacific. The company cites it as a validation of its business model.
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/hcl-technologies-has-best-revenue-per-employee-in-it-sector/articleshow/10733631.cms
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