HCL Technologies appoints Vijay Kumar as COO

Amid concerns of slowing growth, HCL Technologies appointed C Vijay Kumar as chief operating officer in addition to his present role as president of infrastructure services, which contributes about 40% of the company's revenue. He will report to chief executive officer Anant Gupta.

Experts said given the headwinds such as Brexit facing the industry, the dual leadership structure will help the CEO drive customer acquisition and mining of existing clients, while the COO can focus on execution. They also don't rule out the move as succession planning.

Gupta, who also headed infrastructure services earlier, was elevated to the position of CEO in January 2013, five months after he was appointed COO of HCL Technologies. "A role of chief operating officer has been established to accelerate growth in the core business," HCL said in a statement.

"I think it will give Anant more bandwidth to focus on strategy and revenue generating initiatives. Margins have been volatile in the recent past. Also, they need to do significant cost optimizations with Volvo and Geometric deals/acquisitions," said Sandeep Muthangi, VP Research at IIFL Institutional Equities.

Muthangi said the only small issue is that Kumar is based in the US. "COO roles are usually based close to the delivery locations," he said.

The Indian IT industry is facing challenges at multiple levels. While Britain's separation from the European Union is the most topical, there are others, including the slow ramp up of clients, as articulated by Infosys last week. Most companies also face issues related to new-age demands of clients around digital, cloud and mobility.


"The company needs some sales effort in the digital side and more business should definitely help," said Dipen Shah of Kotak Securities. "So, through this model, the CEO can focus on getting the business while the COO can handle the operations part." He added that though Gupta is not too old in his role, succession planning could be one of the reasons behind the move.

HCL announced full-year revenue of $6.2 billion, a growth of 11.6% at constant currency rates. Industry body Nasscom had estimated the industry would expand 12-14% in FY16 and later arrived at a growth figure of 12.3%. Some concerns have been expressed about HCL's ability to retain clients, which the company has denied.

Sudin Apte, research director & CEO at Offshore Insights, said client requirements have changed drastically in the past few years and HCL needs to up its game in applications, consulting and BPO.