Date:06/02/2008 URL: http://www.thehindubusinessline.com/2008/02/06/stories/2008020652461500.htm

Back Deal win for HCL Infosystems

Increased thrust towards government clients

BL Research Bureau

HCL Infosystems’ recent deal win, which envisages setting up of a state-wide area network for the Punjab Government, indicates a greater focus towards seizing opportunities arising from increasing PSU and government spend on IT services. The company’s operations span a wide gamut of IT infrastructure offerings such as desktops, laptops, servers, storage solutions, security, and networking solutions. The setting up of wide area network may open up opportunities for the company on most of the above. In addition, this deal would require significant level of system integration, a relatively high margin service for the company. Plain hardware reselling is a low margin service. With a significant system integration component in this deal however, realisations for the company may improve.

This deal also appears a challenging one as this e-governance initiative will require HCL Info to provide converged voice, data and video network services as well as security services. Success here will mean that the company may be viewed favourably for other such government initiatives. This deal along with large deal wins with BSNL and PSU banks means that HCL Info is now where the action is on IT spend – government clientele. The downside with government deals however is that the receivables cycle may be longer, thus increasing working-capital requirements.