Hcl Technologies Limited · NSE:HCLTECH
Hcl Technologies — Investor Day (August 2024)
68 slides from Hcl Technologies's investor day presentation, Aug 29, 2024
Slide 1: Presentation made at the Company's Investor Day 2024
August 28, 2024 The General Manager The Manager BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Plot No. C-1, Dalal Street Block-G, Bandra-Kurla Complex, Bandra(E) Mumbai- 400 001 Mumbai-40
Slide 2: C Vijayakumar, CEO & Managing Director
SSSR EEEEYT 2 eee SB C Vijayakumar CEO & Managing Director
Slide 3: HCLTech Investor Day 2024
HCLTech Investor Day 2024 relating to th ability to r age increases in India, customer accepta Cquiled assels in a cost effective and limely manner, li wusl uv HCLTech
Slide 4: Relative TSR performance
Relative TSR performance Industry leading TSR for a decade CAGR as of Mar 31, 2024 BCE Techy 10 Years ovens in five out of the last ten 8 Years financial years 7 Years 6 Years Demonstrates consistency and predictability in delivering best-in-class PS, e Total Shareholder R over a long period 5 Years
Slide 5: Factors driving this outstanding performance
Factors driving this outstanding performance Our cultural DNA Entrepreneurial and empowering environment Innovation driven by our engineering pedigree Art of the possible Stable & home-grown leadership HCLTech
Slide 6: Factors driving this outstanding performance: all-weather portfolio
Factors driving this outstanding performance An all-weather portfolio Made possible by execution of our Mode 1-2-3 strategy since 2016 Has resulted in the right mix of discretionary, non-discretionary services and IP An improving mix across verticals and geos Developed Digital Business, almost all o
Slide 7: Factors driving this outstanding performance: client experience
Factors driving this outstanding performance Client experience Strong growth across categories demonstrates our strong execution with the best quality outcomes 22 Only service provider to win six $100M+ clients 2023 ISG Star of from 16 in FY22 Excellence Awards a a Impressive CX score of 82.3 vs. in
Slide 8: Factors driving this outstanding performance: our people
Factors driving this outstanding performance Our people Top Employer in 26 countries, with a #1 ranking in 15 19 24% y (e) —— : 299 % LTMattrition Increase in leadership aie i A from 21.7% in FY22 : gender diversity since FY19 Overall gender diversity os TechBees Differentiated talent strategy Nears
Slide 9: Our approach to ESG
Factors driving this outstanding performance Our approach to ESG Act. Pact. Impact. ai 41400Cr Leadership rating (A-) from CDP, . ‘ CSR investments in India eM OnE IngIS creidlems Transforms over 6.5 million lives Best rating among Indian peers by Sustainalytics HCLTech
Slide 10: Corporate governance
Factors driving this outstanding performance Corporate governance = RA vv» Diverse board + 70% independent directors + Gender-balanced board * Experts from diverse industries across the globe &S iii Among the World’s Most Ethical Companies® 2024 by Ethisphere HCLTech
Slide 11: These factors contributed to solid financial performance
These factors contributed to solid financial performance S Industry-leading organic growth Revenue S13.3B 7.5% CAGR since FY22 S —SA Gained wallet share across service lines in the last business cycle Earnings per share Operating cash flow $57.9 $2.711M 7.8% CAGR 19.7% increase since FY22 since FY22
Slide 12: What could have been better
What could have been better Market participation and bookings Increased market participation, resulting in better G2000 coverage Cost EBIT continued to remain Employee cost as a % of Fresher hiring and stable as against our revenue remains above deployment efficiency aspiration for expansion pre-pan
Slide 13: Top opportunities for sustained growth leadership
Top opportunities for sustained growth leadership Total addressable market for IT Services nearing $2T by 2030 Data and Al expected Enterprise business Cloud migration to qrow at a 19.1% CAGR applications to reach and cybersecurity $325B in 2027, witha great market opportunities CAGR of 14.3% Servic
Slide 14: Top opportunities for sustained growth leadership
Top opportunities for sustained growth leadership Total addressable market for IT Services nearing $2T by 2030 4. S 6 ER&D market for engineering Business process Largest two verticals, service providers will be services market to be BFSI and TMT is 43% ~$170B by 2027 $300B by 2028 of the market Gro
Slide 15: Priorities to sustain growth leadership
to sustain growth leadership Continue growth leadership in BFSI and TMT Take advantage of growth in cybersecurity services Growth through G2000 equivalents and future G2000 Gain share in DPO through engineering-led approach Expanding market participation in Focus and New Frontier markets HCLTech
Slide 16: Project Ascend
Project Ascend GenAlI-led delivery transformation Coding productivity, operational/managed services automation, knowledge base and customer support oe Al-led customized learning programs For reskilling/upskilling to improve utilization and productivity [ Entry level/fresher deployment To be accelera
Slide 17: HCLSoftware: Long-term strategic priority
HCLSoftware: Long-term strategic priority HCLSoftware - Largest-enterprise software business out of Asia FY24 performance S141R 247% 38.8% $102R \ 327 Revenue 2.3% EBIT EBITDA New large deal wins a w oo ww Product portfolio Key achievements Al & automation + Portfolio stabilization Data & analytics
Slide 18: Looking ahead — our strategic objectives
Looking ahead — our strategic objectives & Leadership through differentiated services and products leveraging our engineering pedigree Employer of choice for professional services talent across chosen geographies #) Preferred digital and:Al. partner for Global.2000, equivalent and:emerging enterpris
Slide 19: HCLTech to set up Migration Factory for SAP
HCLTech to set up Migration Factory for SAP HCLTech has signed an agreement with SAP for setting up a Migration Factory to simplify and accelerate the RISE with SAP _ transformations for SAP’s end customers. This is a pivotal moment in HCLTech’‘s relationship with SAP where SAP leadership have trust
Slide 20: HCLTech
HCLTech | 2: heltech.com
Slide 21: PoV and Offerings
PoV and Offerings * SSSR EEEEYT se F Vijay Anand Guntur Srinivas Kompella Alan Flower Chief Technology Officer | Senior Vice President, Executive Vice President and and Head of Ecosystems Data & Al Practice Head Head, Al & Cloud Native Labs
Slide 22: HCLTech Investor Day 2024
HCLTech Investor Day 2024 relating to th ability to r age increases in India, customer accepta Cquiled assels in a cost effective and limely manner, li wusl uv HCLTech
Slide 23: HCLTech AI pedigree
HCLTech Al pedigree Building and deploying Al solutions since 2016 Research Al team Engineering Set up an Built Al silicon for training, Al research team inference and validate production-grade Al infrastructure Al-led IP solutions SDLC (precursor to Al Force), DRYICE, iAutomate, Digital.Colleaque F
Slide 24: AI and GenAI offerings
Al and GenAIl offerings sy Al and GenAl <\> Engineering my Semiconductor engineering cs Hardware Se engineering “ AlForce Service transformation 2. Efficiency in IT and an business processes SAR Accelerating build S02 and modernization ZN Al Foundry Value stream innovation Modernized data B= and Al-
Slide 25: AI and GenAI engineering
Al and GenAIl engineering Cognitive infrastructure and semiconductor expertise Al-optimized compute (GPU, TPU, CPU) Networks Al-optimized Al platforms and security storage Edge Al chip Training accelerator Inference accelerator Japanese imaging company Increased its market share by launching Created
Slide 26: Service transformation through AI Force
Service transformation through Al Force Al Force modules Representative use cases Software Al-assisted plan and design Coding, testing and DevOps Legacy modernization Engineering Application & Product DevSecOps Runbook automation Root cause analysis Support Business Agent productivity Order-to-cash
Slide 27: Service transformation through AI Force
Service transformation through Al Force o Coding assistants = Al Force Limited Only one NS : : LLM-specific Coding onl customer deployment Software Engineering - is \ “he Tne pam ‘Uses patented Al accelerators to augment, . - ‘accelerate and significantly » improve the quality of the x . Software De
Slide 28: AI Force's integration with GitHub Copilot
Announcing HCLTech Al Force’s integration with GitHub Copilot™ + Al Force is now integrated with Microsoft Github Copilot and will be enabled as a Microsoft GitHub Copilot extension We are among the first Indian Sls to have this partnership Al Force and GitHub Copilot provide unparalleled extensibil
Slide 29: Service transformation
Service transformation Global networking OEM Accelerates its products’ GTM ina highly competitive market. Made possible by GenAl-infused testing Efficiency gains intr Afro, Leading Australian bank Legacy Modernization Patented GenAl solution helped migrate 200+ legacy net applications to modernized
Slide 30: AI Foundry: Value stream innovation
! . YN Al Foundry Value stream innovation ~ HCLTech Al Foundry shapes enterprise plans and embeds AI across value streams for outcomes Business templates* Al policies and governance Pre-built ae Data Integrated data Al = assets and Al ops FR HCLTech i; g aineisiiell vi OF Cognitive infrastructure *A
Slide 31: Value stream innovation
Value stream innovation HCLTech Al Foundry shapes enterprise plans and embeds AI across value streams for outcomes 45% savings in Al platform management Investments in industry- focused repeatable solutions faster time to production Oo 75 CXO outcomes 50% 3x increase in Al-driven KPls Sales and Mark
Slide 32: Industry-focused repeatable solutions
Industry-focused repeatable solutions Healthcare: Clinical advisor GenAl-powered clinical advisor allows healthcare specialists spend more time on patient care. Potential savings e1NN na a. Financial Services: Trade compliance GenAl-based trade surveillance system in a connected compliance platform.
Slide 33: Journey to value
Journey to value Value stream innovation at Al Labs How can | use Al Share vision with Art of the We show and Scalable to create enterprise trusted advisor possible build what deployment competitiveness? good looks like What to do? How to build? Not sure what we want? Acontinuous journey of transfor
Slide 34: Journey to value
Journey to value Value stream innovation at Al Labs Clients have leveraged the Labs 9NN+ GenAl projects undertaken in Labs 2AN)+ HCLTech
Slide 35: Journey to value: Idea to MVP at AI Labs
Journey to value Idea to MVP at Al Labs. London *—~ New Jersey Santa Clara + Austin - Al DC HCLTech
Slide 36: HCLTech
HCLTech | 2: heltech.com
Slide 37: Srinivasan Seshadri, Chief Growth Officer
SSSR RRErr 2 eee SB Srinivasan Seshadri Chief Growth Officer and Global Head, Financial Services
Slide 38: HCLTech Investor Day 2024
HCLTech Investor Day 2024 relating to th ability to r age increases in India, customer accepta Cquiled assels in a cost effective and limely manner, li wusl uv HCLTech
Slide 39: Market success playbook
Market success playbook Dominant growth, consistently. Dominant growth, the drivers CQGR over 9 quarters Engineering DNA (AMJ’22 — AMJ'24) . ay Platformication, agile @scale @pace, next-gen tech Differentiated challenger Pivot to digital, operating model. transformation Verticalized digital foundati
Slide 40: Cashing in on our strengths, as the market eases
Cashing in on our strengths, as the market eases Big bets are paying off Wealth core transformation for a leading wealth manager on Temenos Strategic partner for a large card and payments network Experience transformation for retirement arm of a leading US FSI White spaces as growth engines Insuranc
Slide 41: GenAI success guardrails
GenAl success guardrails Accelerating Al-led outcomes in financial services Al-driven Digital enterprise Data-driven foundation organization Al expects interoperability Al systems need to be Net positive ROI of systems taught, not programmed for use cases Data valve - mitigate internal Traceability
Slide 42: GenAI impact is a journey
GenAl impact is a journey From service efficiency with zero disruption, to zero marginal cost of applying intelligence O32 ie iB. Digital Al Service Foundation capabilities transformation Data Personalized communications Resilient digital supply chain Cloud Extract doc info ADM S \\\ Cognitive infra
Slide 43: Client relevance leading to deeper engagements
Client relevance leading to deeper engagements Service transformation Leading US insurer Service desk transformation ticket assignation Oow7%, s projected pa. 15-20% Email categories - automated INNN+ Leading European bank Transforming contact center operations Reduction in AHT A0Y% Pro omated 20N-A
Slide 44: Client relevance leading to deeper engagements
Client relevance leading to deeper engagements Value stream innovation Leading European investment bank Trade and communication surveillance for alert analysis and improved decisions Detect anomalies and potential compliance breaches for corrective actions Reduced time Less for alerts investigation
Slide 45: HCLTech
HCLTech | 2: heltech.com
Slide 46: Industry Focus
Industry Focus SSSR EEEEYT 2 eee SB Anil Ganjoo Chief Growth Officer, Americas, TMT and RCPG Industries
Slide 47: HCLTech Investor Day 2024
HCLTech Investor Day 2024 relating to th ability to r age increases in India, customer accepta Cquiled assels in a cost effective and limely manner, li wusl uv HCLTech
Slide 48: TMT is fastest growing amongst peers
TMT is fastest growing amongst peers Industry-leading growth drivers HCLTech Peer] Peer 2 Peer 3 Peer 4 CQGR over 9 quarters (AMJ’22.— AMJ’24) -1.9% Peer 5 Peer 6 Peer7 Large customers, highest.spend intensity Long tenured, satisfied customers Driving mindshare with multi- tower presence, with engin
Slide 49: CSP industry spend is one of highest worldwide
CSP industry spend is one of highest worldwide $200B+ TAM growing at 8% CAGR HCLTech
Slide 50: Telecom market success playbook
Telecom market success playbook Telecom transformation journey a——~ NetCo 2 ServCo “—~ Traditional Telco Ny Service-oriented Telco 0 (Standard connectivity service) (Traditional and value-added services) Siloed operations and manual processes Data and automation-driven Speed to market (Accelerated d
Slide 51: Even more growth opportunity ahead
Even more growth opportunity ahead Carve-out of HPE Communications Tech Group allows for widespread global penetration HPE-CTG partnership includes Solutions and 19 Intellectual property Co-innovation 360-degree in Network Services, BSS, and co-creation GTM partner OSS, Data, Media and IOT 7 : a Bh
Slide 52: Tech market success playbook
Tech market success playbook Tech share of S&P 500 2014 18 Ten large tech companies with ~$1T revenues, ~60% of HCLTech tech vertical 2024 28% Balanced portfolio also including emerging big tech; 20 new logos added in last two years Driven by G Outcome-centric model Focused on semiconductor engineer
Slide 53: The growing semiconductor market
The growing semicond $591B 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Custom chip development for non-traditional players’ market A = Industrial Automotive Aerospace Telecom and Medical Consumer Servers and defense networking electronics and storage Source: Internal Research based on company
Slide 54: Best positioned to address the growing semiconductor market
Best positioned to address the growing semiconductor market D7 + Years of experience CINNONM+ Lab investments across 10+ labs, partnerships with top 4 FABs and 40+ IP partners First silicon success Process nodes N2, N3, N5, 18A 200+ Tapeouts 8/10 Work with eight out of top 10 R&D spenders HCLTech
Slide 55: Best positioned to address the growing semiconductor market
Best positioned to address the growing semiconductor market HCLTech is uniquely positioned Development stages @ ucttech OSAT/FAB S&S Um &G KR BOD EDA IP OSAT Labs Ops Parts Materials HCLTech
Slide 56: Big bets on AI leading to big spends
Big bets on Al leading to big spends Server device and DC Ops market is expanding rapidly with top-tech competing for market share expansion and GenAl integration. 2024-2030 Cloud computing market forecast >» CAGR 21.2% e Cloud engineering e DC infrastructure and ops wsa408” CAGR 9.6% Silicon engine
Slide 57: Chip to cloud
Chip to cloud Accelerating time-to-market through silicon to Al-E2E offering . Cloud/ data engineering Cloud/data engineering Enterprise Al transformation Silicon and HW engineering Silicon design Data center infrastructure and operations DC hardware engineering DC infrastructure engineering . . Ent
Slide 58: Telecom, Media & Tech: Force to be reckoned with
Telecom, Media & Tech: Force to be reckoned with Highest TMT vertical revenue share among the peers = HCLTech Fastest growing industry vertical among peers.- 100% organic growth 70% of top 50 TMT companies are our clients Very healthy balance of all service lines Industry-differentiated propositions
Slide 59: Momentum to deliver
Momentum to deliver Industry-leading growth innext two years >
Slide 60: HCLTech
HCLTech | 2: heltech.com
Slide 61: Finance: Shiv Walia, CFO Designate
Finar 2 eee SB Shiv Walia CFO Designate
Slide 62: HCLTech Investor Day 2024
HCLTech Investor Day 2024 relating to th ability to r age increases in India, customer accepta Cquiled assels in a cost effective and limely manner, li wusl uv HCLTech
Slide 63: Past performance
Past performance CAGR five years (FY24) HCLTech CC revenue O Joy HCLTech Services CC revenue 0 2y EBIT (INR) 1) 1% Past performance CAGR Five years \l J] te) EPS (INR) 9 By HCLTech INR revenue 19 Joy HCLTech Services INR revenue 10 Dx FCF (INR) 2) Dy HCLTech
Slide 64: Capital allocation: Minimum payout 75% of net income over next five years
Capital allocation: Minimum payout 75% of net income over next five years (FY22 to FY26) 2% 3% 9% FYI9toFY21 — FY22 to FY24 88% ~@ Cash returned to shareholders @ Retained/(used) in balance sheet Against stated policy o j 88%i HCLTech
Slide 65: Improving ROIC and capital efficiency
Improving ROIC and capital efficiency ROIC mmm Capita efficiency HCLTech — roe HCLTech Services — roe HCLSoftware —= Capital efficiency any : == Capital efficiency 0.75 2.49 0.54 14.2% HCLTech
Slide 66: Significant Improvement in DSO
Significant Improvement in DSO Significant reduction in the DSO by 8 days 89.6 88.6 89.8 88.4 o > a ac] £ ie} QD a OND22 i DSO (UBR) MM DSO (overdue) DSO (not due) DSO (Total) HCLTech
Slide 67: HCLSoftware performance round up
HCLSoftware performance round up Aggregate Investment e2 Bp We have made aggregate investment of ~$3.5B in HCLSoftware business since June 2016. This includes the IPP relationships as well as the acquisitions of Actian July 2018) and 7 products from IBM for $1.8B announced in December 2018 Customers
Slide 68: HCLTech
HCLTech | 2: heltech.com