Dear Shareholders,
The last mile of Fiscal 2020 was a bookmark period for the entire world, as a global health crisis brought all of humanity to a virtual standstill. In those early weeks of the proliferation of COVID-19, as we all mounted our response to this unforeseen challenge, seeing HCLites rally so ardently, look out for each other, and support our customers’ best interests against all odds reminded me once again why the HCL family is so special.

Landmark Fiscal

While our response to the pandemic has been a phenomenal testament to our remarkable resilience as an organization and as a family, the journey leading to that point was not any less remarkable.

As we closed the books on FY20, we emerged as the fastest growing large technology company for the fourth consecutive year with revenue and net income growth of 17.0% and 9.3% respectively. This momentum was led by our superior organic growth and acceleration of our Mode 2 and Mode 3 revenue – that is, revenue involving next-generation technologies such as digital and analytics, IoT, cloud native and cybersecurity, as well as new IPs and products – which helped deliver strong double-digit growth across all segments, geographies and verticals. Mode 2 and Mode 3 revenues for the year made up 33% of total revenues, increasing from 28.4% in fiscal 2019.

Diversifying our Differentiation

Our unique business model is the foundation of this leadership position. To further strengthen this posture, we launched a new business unit called ‘HCL Software,’ which provides modernized software products to help businesses transform their environment. We acquired and tucked in select IBM products for Security, Marketing, Commerce and Digital solutions - AppScan, BigFix, Commerce, Connections, Digital Experience (Portal and Content Manager), Notes, Domino and Unica - under this BU. The business made significant strides in FY20, onboarding 2,000+ partners and concluding 13,000+ sales transactions.

We added several other capabilities to our portfolio this year. We acquired Strong-Bridge Envision, a digital transformation consulting firm; expanded our preferred professional services partnership with Broadcom to include Symantec Enterprise Division; created a separate division called ERX within our Engineering and R&D business to drive an IP-led strategy in the segment; and acquired Sankalp Semiconductor, an advanced technology design services provider in the semiconductor space.

Frontline Innovation

HCL shone the brightest, though, at the frontline. Continuing our tradition of ‘ideapreneurshipTM,’ our employees filed 29 patents in FY20, out of which 16 were granted. They also created immense value for our customers through ideation platforms like Value Portal, through which they generated 12,225 ideas with a verified value to customers of $1.7B for the year.

The year also highlighted our ‘Think Global, Act Local’ philosophy, as we celebrated 20 years of our operations in Australia and New Zealand and 10 years of success in France. We also opened several new local hubs, including a CyberSecurity Fusion Center in Frisco, Texas, USA, and a new technology delivery center in Lithuania. We announced two new Global Delivery Centers, in Hartford, Connecticut, USA, and Colombo, Sri Lanka.

Today, the HCL family of 150,000+ employees is proudly diverse, representing 155 nationalities spread across 46 countries, with women constituting 26% of our workforce.

Abiding Resilience

Before I conclude this letter, I want to take a few moments to give you a wider view of our response to the pandemic, as it has truly brought to life the best of HCL.

We kicked off our extensive COVID-19 business continuity measures as early as the last week of January. Our first priority since then has been the wellbeing of our employees, 98% of whom are now working from home. We have launched a global helpline to provide timely physical and mental health support to them and have increased digital connections to keep HCLites and their families engaged during the lockdowns.

Our next most important priority has been to keep our clients’ businesses running. As a first step we helped transition almost 3.5 million client users to remote working format. With several customers in Healthcare, Pharmaceuticals, Food Supply & Distribution, as well as local governments and public utilities, we have had to handle countless new service requests. Our employees have responded ably to all such asks with agility and urgency. Thanks to their hard work and efforts, in a recent customer satisfaction survey, 99% of the respondents agreed that our pandemic response has been “very effective” or “effective”.

For supporting the communities in which we work, we have taken a pragmatic assistance approach. In the two states in India where we have our largest operations, we donated thousands of medical equipment and PPEs and also took over the running of COVID-19 Command Centers for the Noida and Chennai administrations. We are also running a meal distribution program for some underprivileged sections in Noida. Various other community support programs are being run locally in several other countries of our operations.

Looking Ahead

I think the future prospects for broad-based technology companies like us are stable and bright. We are seeing a number of opportunities playing out in the market. For example, digital transformation is being significantly accelerated across industries. Digital programs which were planned for completion in two to three years are now expected to close in a matter of months. While momentum sectors such as Life Sciences and Healthcare, Online Grocery Distribution, Telecom and the Tech sector continue to create strong demand, we are also seeing impacted sectors like Retail, Auto, Travel, Hospitality, etc., starting work on redefining customer engagement to ‘zero touch’ interactions by leveraging conversational AI, analytics and digital innovations.

We believe we are well-positioned to capture these opportunities. Not only because we are a technology company with a very strong portfolio of relevant capabilities – such as workplace transformation, cybersecurity transformation, digital scaling and cloud migration – but more importantly because we have in our driving seat our employees, our ‘ideapreneurs,’ as we call them, who always think ahead of the curve, who are not afraid to place future bets and who are boldly reimagining the enterprise of tomorrow, today!

Thank you.

C Vijayakumar