HCL Tech bags $500-mn Merck deal
In one of the biggest outsourcing deals awarded to an Indian IT firm, Delhi-based HCL Technologies on Tuesday announced a $500-million (Rs 2,300 crore) contract with pharma major MSD (Merck & Co), signalling a sharp turnaround in the fortunes of a recession-stung software industry.business Updated: May 04, 2010 21:19 IST
In one of the biggest outsourcing deals awarded to an Indian IT firm, Delhi-based HCL Technologies on Tuesday announced a $500-million (Rs 2,300 crore) contract with pharma major MSD (Merck & Co), signalling a sharp turnaround in the fortunes of a recession-stung software industry.
Merck has been an HCL client for six years but the deal marks a substantial enhancement of the relationship.
Shiv Nadar-controlled HCL Tech, the country’s fourth-largest IT services firm by revenues, will manage Merck’s engineering, business and knowledge process services through appropriate software solutions.
Merck will pay HCL Tech $100 million (about Rs 460 crore) every year for five years.
“This is a landmark win for HCL,” said Shami Khorana, president, HCL Americas.
Last year, HCL bagged a $350-million outsourcing deal from media house Readers’ Digest.
In recent times Patni Computer Systems bagged a $250-million outsourcing deal from US-based health insurance provider Universal American.
The country’s IT and IT- enabled service companies earned export revenues of over $60 billion (about Rs 2,76,000 crore) in 2009-10 but earnings remained largely flat after downturn-hit clients sharply cut down their IT budgets.
Most firms, however, reported a bullish growth outlook for the current yearm, anticipating higher incomes as clients loosen purse strings and adopt new technology solutions.
HCL Technologies reported consolidated revenues of $2.6 billion (Rs 12,048 crore) for the year-ended March 2010.
“For five years, MSD has leveraged HCL’s extensive expertise in life sciences and healthcare to streamline operational
efficiencies and consolidate IT portfolio,” said Richard G. Branton, vice-president, application services, MSD.
HCL will expand its US team in North Carolina, relying on local recruits to staff projects and will deliver services out of 20 worldwide locations, including the US, Poland, China and Brazil.
“This is definitely is a big deal for an Indian IT company in recent times,” said an analyst with a leading brokerage firm, who asked not to be identified, told Hindustan Times.