Can you shed some light on the importance of engineering and R&D services for HCL?

Engineering and R&D services at HCL, is one of the critical part of our business strategy from a growth perspective. Today, we are about 20 percent of the overall business where we work with our product engineering customers both from systems engineering, as well as, from software engineering and mechanical engineering perspective. We are present across multiple industry segments. It is a global business among US, EU and Japan who work on cutting edge of technology for software companies, semiconductors, telecom, aerospace, medical and consumer. We are also engaged on several next generation products for our customers.

What kind of growth can be seen in this division and the overall market in India?

Last two quarters we have grown more than 10 percent QoQ. The growth in this business segment is coming back. In engineering and R&D segment, if you have seen the report from Nasscom, is a pretty substantial growth oriented business. It is about 20 percent of the overall Indian IT business itself. It is about 10 billion dollar of the industry size this year and if you follow the trend it is expected to grow 4 times in the next decade because of several factors that have been enumerated. Domestic business in India is taking up, new segments are coming up – aerospace and automotive are the biggest growth drivers. The traditional Hi-Tech business which is the core strength for HCL is doing very well for which telecom, semiconductors, and consumer software are important parts. It is directly attributable also to where the product companies, OEMs are spending their own R&D dollars. Globally speaking, the amount spend by the companies on R&D were close to trillion dollars. This is what company spends on developing products. Penetration has huge headroom available, if you look at it from an Indian perspective and IT service point of view.

You recently tied up with Texas Instruments. How does the partnership with TI help HCL leverage this business in the future?

In engineering services we are one of the dominant players in the market. This partnership actually allows us to further expand and improve the design engineering cycle time for our customers. With this present partnership, given that we do full system development for our customers across the different industry segments - consumer or medical, automotive or aero are few segments where we are working with our customers in doing end to end design and development. And partnering with the market leaders like TI in semiconductors segment gives us preferred access to their product and technology which we can utilize in developing full system development for our end customer and it improves time to market because in engineering or product business, it is all about time to market. The faster you develop a product, the faster the customer can introduce the product in the market and help impact the market share, the growth, the revenue and profitability. The partnership with Texas Instruments gives us preferred access to their products and technology which helps us improve engineering design cycle time.
 
What are the important verticals for HCL? What kind of work are you doing in these verticals?

To begin with, we have taken chosen few market segments within our portfolio–medical devices, consumer electronics and aerospace. The reason for this being, in these segments, we see a significant traction from our customers in developing newer products.

Newer products in medical devices, both from consumer medical devices as well as from medical equipment require patient monitoring. There is significant investment going on. You would have probably read earlier about the whole healthcare reform bill in US, which has put a lot of investment with the medical devices company. We see significant opportunities for us to work with our customers in full system development and obviously TI is a critical part of the overall growth strategy. Another section we have picked up is consumer electronics. We are seeing a major impetus and growth coming from mobile internet devices, smart phones and eBooks and an involvement of electronics even at home.

We also work on full systems development with several of our customers, both in the telecom side which is on mobile internet devices as well as on the traditional white goods side where we see good role for TI partnership which will help our customers and of course Aerospace where we are a large dominant player in the aerospace design engineering and you would have seen many press releases talk about it. These are very mission critical products where safety requirement are critical in nature. You have to work with aerospace qualified electronic components and TI brings in those set of capabilities. We will also be adding more verticals, in course of time.