How was Q2 for you?
C Vijayakumar: Our services business grew 5.2% sequentially and 13.1% year on year. Yes our product business declined and product business declined and a specific number of deals slipped into the next quarter which we expect to be a very strong quarter. What is even more important is our bookings — $2.3 billion, 14 large deals, that is 36% up year on year and our net addition was 11,135. This is the highest ever net addition that we have had ever and this is the highest ever.
So the booking numbers and highest ever net hiring are very strong reflections of the good growth momentum that we have in our services business. Product business is a long-term bet. It is going to take some time for us to understand all the dynamics and that is how I would summarise the quarter. I think it was a great quarter. The services momentum is very strong.
A quick word on the deal pipeline. Going forward, what are they going to look like? Are they going to be mostly smaller deals or could we also have the likes of Xerox, Ericsson one?
C Vijayakumar: I called out at the end of the June quarter that the deal pipeline was at its all-time high. Since we have converted some of the deals, it is a little bit lower than what it was at the end of last quarter. But we have a very good mix of small deals, mid-sized deals and large deals. Large deals usually have multiple service offerings that go into a particular client and it is mostly led by consolidation and taking out costs to fund the digital transformation and then the digital transformation that is the chain of large deals that we are seeing and there is quite a good mix of all cross sections of deals.
It is also very important to see that a lot of existing clients continue to scale because they are all investing in newer digital initiatives and that is creating a good tailwind. Almost all client categories have increased. For example, our $50 million clients increased from 29 to 41, a growth of 12 on a year on year basis. We see a similar trend across all client categories which is really reflected in all the incremental spend that we are getting from our existing clients.
All tech companies are dealing with attrition. You also have had to deal with attrition. What is this going to mean? What kind of wage inflation are you likely to see?
Prateek Aggarwal: This is one of the most happening things in the industry right now. In fact, in the last two to three quarters, attrition has been going up for all of us. There are various ways we are managing it. The good thing is HCL’s attrition continues to be significantly lower than most of our other peers. We are trying to take care of it as much as we can and despite that, it is going up by giving good variable pay, good skill allowances, good increments and doing all the right things which started at the beginning of the pandemic.
If you go back 18 months, the care the company has taken of every employee and their families has been instrumental in getting the company known better to its employees and families. I am sure it is helping us already and will continue to help us in the future as well.
C Vijayakumar: I would also like to point out we were rated number one in the Forbes World’s Best Employers List. We are number one globally across all professional services fronts. This is a big recognition for us and we are really proud of that.
Going forward, what is it going to mean because now you are not just competing with the tier I tech firms, you are also competing with startups, unicorns backed by billions and billions of dollars. You heard about the BMW superbikes. We heard about the Mercedes plan of the HCL Group as well. How is this going to play out?
C Vijayakumar: Our employee value proposition is to help them build a long-term career. The person who joins us right from the college, joins with a lot of hope and aspirations and we really shape it and build them into great technical professionals, great leaders and we have got amazing examples. Our value proposition is to ease a much more long-term association with the company and long-term association also results in a very mutually beneficial association for our employees. This is strong and our attrition even in this situation is fairly under control.
H2 has seen a strong ramp up growth of about $4 billion worth deals. Can you give us an idea about the next six months.
C Vijayakumar: Yes, our pipeline continues to be good and we expect the full year to see a decent increase from a year on year perspective. In the first two quarters, we have done very well from year on year booking numbers. Even for the full year, we will have a decent uptick in the bookings which is the right metric to look for momentum and some of this will convert as we hire people.
