Indian IT major HCL Technologies’ top honor’s comments come at a time when investment and venture capital deal volumes in the startup space are beginning to dwindle, as investors become wary of doing big checks amid uncertain market conditions.
Asked about startup valuations approaching their peak, and whether the space is heading for a potential reset,
K Vijayakumar said in an interview to PTI: “I have full faith that India Startup StoryThe technological innovation, the product that is coming out of India, is very much intact”.
“Obviously there has been a dip in valuations… but barring that, the big picture is very vibrant and relevant to a lot of new things happening in the market. So, I am very positive on that,” Vijayakumar said. ,
After a dream run and head valuations over the years, the wave of venture capital chasing the Indian startup ecosystem (the third largest startup ecosystem in the world) seems to be waning.
Panicked by concerns over profitability, cash burn and corporate governance issues, investors are defending themselves, while a recovery in the stock market has taken away the sheen of newly-listed startups.
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According to industry body Nasscom, funding to startups fell 17% sequentially to $6 billion (about Rs 47,800 crore) in the April-June period.
According to a report by market intelligence platform Tracxn, the total funding raised by Indian startups in the June quarter
fell 33% sequentially to $6.9 billion.
Tracxn reports that funding has come out of previous highs, a major consensus among market players of a “winter of funding” or a decline in investor confidence and sentiment towards funding startups. Indicating “. ,
When asked whether HCL Tech would consider startup space for acquisition given that valuations have become attractive, Vijayakumar said, “It all depends… based acquisitions. If we find something interesting, we can look at it.”
HCL Technologies recently reported 2.4% The year-on-year growth in its consolidated net profit stood at Rs 3,283 crore for the three months ended June 2022. The Noida-headquartered firm’s revenue stood at Rs 23,464 crore, an increase of nearly 17% over the year-ago period.
The company maintained its FY23 revenue outlook in the 12-14% band, citing “strong momentum in the market” and said it is positive about the growth trajectory. The company expects a directed EBIT (earnings before interest and taxes) of 18-20% to be at the lower end of the margin band.
Vijayakumar stressed that the company is “on a good uptrend”, and will use multiple levers to mitigate challenges around margins.
Asked whether the Russo-Ukraine war had any impact on operations, Vijayakumar said the company has no presence in these locations, neither sales nor distribution presence.
“We have presence in some neighboring countries like Romania, Poland… so there is no problem in those countries, things are going well. We had no direct contact with Russia or Ukraine,” he said.
As far as Europe is concerned, the company has not seen any material change in the overall pipeline or demand in Europe, and “remains quite strong”.
To a question about the timeline, by which time the company plans to bring its employees back to the office, Vijayakumar said HCL Tech follows a policy of ‘Virtual First Hybrid Operating Model’.
“So wherever the work can be done virtually, we ask people to continue to do it virtually. We are putting together an engagement model where we expect them to be in one of our locations, Maybe a few days a month, or in some cases, a few weeks,” he said.
That model is still evolving, Vijayakumar pointed out.
“Maybe about 20 percent of our employee base is working from our locations, and that number varies from location to location. We think it will only increase marginally, not increase dramatically,” he said. , but did not disclose target ratio or timeline. To achieve the same