"Ours is a guerrilla strategy. Till now, we were in the execution phase of contracts won in last 12 months. In the October to December quarters, our hunters will go after the $40 billion worth of contracts coming up for renewal. At least $8 billion worth of contracts will change hands to new vendors," said Vineet Nayar, CEO of HCL Technologies.
Nayar said HCL was till now executing and farming deals worth $2.5 billion won in the October to December quarter of last year. "We won 51% of deals in last 12 months where we have participated."
He said IT budget of companies are not expected to go up next year, suggesting that there would be intense competition to win over incumbents. The company displaced incumbent vendors likeIBM from large IT contracts of firms such as AstraZeneca last year.
HCL Tech also surprised analysts on Wednesday by posting a increase in profit margins by 500 basis points. Its net profit grew 78%.
However, the full impact of wage hikes on margins was not visible in this quarter. The company's margins were impacted by 80 basis points. The company is expected to complete wage hikes in October-December quarter which will again impact its margins by 100 basis points. HCL is expected to beat rivals Infosys, Wipro and Mahindra Satyam in volume growth in the next two quarters.
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