HCL Tech’s ERS continued high growth. Up 17% in Q3 FY19
The revenue growth of HCL Tech’s ERS unit continued to be high in Q3 FY19 to 17.4% yoy at CC. Revenues well above the half-billion threshold, to USD 562m, comforting HCL Tech as the third largest ER&D service vendor globally.
ERS’ growth has slowed down but continues to be well in double-digit level.s. Revenues from large deals signed in 2015 and 2016 declined and were counterbalanced with mostly software product development and maintenance services, from IP partnerships with IBM, from the recent Actian acquisition, and SaaS-ification projects with ISV clients.
HCL Tech has been providing limited visibility on how and why its ERS unit has been in such high growth in the past nine quarters. Taking out acquisitions, and stripping out the impact of the IBM IP partnership, ERS seems to be excelling in the software product engineering space.
Altran is depicting a similar story, highlighting that its September 2016 acquisition of Lohika, a Ukraine delivery-centric US firm is enjoying high growth. This should be food for thought for European onshore ER&D vendors, which are completely out of this market. In the meantime, well done HCL Tech!