HCL Infosystems, Tie up with Dell adds to our portfolio significantly

In an interview with ET Now, Rothin Bhattacharyya, EVP-Strategy, HCL Infosystems, talks about their distribution tie-up with Dell as well as sales and margin targets. Excerpts: 

ET Now: Give us a sense of what this distribution tie-up with Dell really entails. Is there any exclusivity with Dell as well in the tie-up?Rothin Bhattacharyya: We are very pleased to announce the strategic tie-up that we have had with Dell. This tie-up is with our wholly-owned subsidiary which is our distribution arm. What we are really doing is that this is one step in our rollout of our multi-brand distribution strategy. We are very pleased that Dell is one of our early partners in this strategy. 
At the moment we are India's largest distribution company. The Dell portfolio significantly adds value to the portfolio we have. Dell rationalises the unique strength that we have both from our very deep service capabilities specifically in the mid-market segment and also our unique value proposition of being able to provide services to tier 3 and tier 4 markets. 

So this is one of the many distribution tie-ups that we are panning out. Not to say the least that it is unimportant; it is extremely strategic for us, but over a period of the next couple of months, we will be announcing a series of similar types of tie-ups. 

ET Now: What kind of sales do you expect from Dell products in the next 12-18 months at a time when there is immense competition in the segment? 
Rothin Bhattacharyya: It is early to quantify an incremental number in terms of sales. It is more important to rationalise the unique segment that HCL works in. We believe that tier 3, tier 4 and mid-market are extremely fast-growing markets. 

That said, very few people have been able to crack the puzzle of being able to service this market. We believe that HCL is uniquely positioned here and we would see results going forward. 

ET Now: But will the margins in this tie-up be similar to your other distribution tie-ups as well in the past? 
Rothin Bhattacharyya: The margins are mutually beneficial. They certainly add value to both Dell and HCL. 

ET Now: So are you positioning yourself as a distribution company because you have tie-ups with Toshiba, Apple, HitachiBSE 0.44 %, Kingston and now Dell? 
Rothin Bhattacharyya: I certainly consider HCL to be one of the largest distribution companies as we are in our current form. We have got a unique network of supply chain, logistics, distribution and value added distribution, and we certainly see distribution as being significant growth driver for ourselves. Other than distribution, we see growth drivers in the area of services and in learning. So we are just following on our multi-pronged strategy for growth. 

ET Now: You are planning to bet big time on ultra books and that really is the hottest fad. What kind of line up can we expect? Are you looking at more launches? Give us a sense of the product pipeline. 
Rothin Bhattacharyya: That launch really comes from another subsidiary of ours, which is called HCL Computing. Now HCL Computing envisages that to be in the inflection point of technology. We certainly see ultrabook as an important launch; however, our portfolio is much larger than the ultrabook, and goes on to computing right up to tablets. 

We have launched some models in the ultra books space and we continue to do so in very specific target segments, but our portfolio goes well beyond ultra books and what we are spending a lot of time now on is in terms of our tablets launch. I am happy to say that we have a unique position and a value segment of tablets and have almost 50% market share in the value segment. 

ET Now: There are talks about promoters in HCL Info selling out or the company looking at selling the Me line of products. Is there an truth to that? 
Rothin Bhattacharyya: We have put out a statement on our website saying that our promoter has no plans to sell its stake. 

ET Now: Have you been approached by anyone? 
Rothin Bhattacharyya: That is a hypothetical question. I am sure we are an attractive business being reviewed and viewed by many possible suitors, but it is purely hypothetical.