CompanyGraph
HCL Technologies Limited
HCLTECH · NSE India · India
Hires Indian engineering graduates at rupee salaries and bills their work to Fortune 500 companies at dollar rates.
HCL Technologies takes engineering graduates recruited directly from IIT and NIT campuses in Chennai, Bangalore, and Hyderabad, pays them rupee salaries, and bills their work to Fortune 500 clients in dollars on SAP, Oracle, and Azure transformation programs — the gap between those two currencies is where the profit comes from. That profit funds a bench of pre-cleared engineers held in reserve across specific technology stacks, and that bench is what lets the company bid credibly on fixed-price integration contracts, because without engineers ready to deploy within weeks, no contractor can promise a delivery date and win the work. Once an integration is complete, the custom code is woven into the client's live SAP or CRM system, and unwinding it means months of risky knowledge transfer, so clients typically stay on for multi-year maintenance contracts supported by the same graduate pipeline that built the system. The model's vulnerability sits at both ends of that chain: if the rupee strengthens enough against the dollar, the arbitrage stops funding the bench; and if H-1B visa caps prevent Indian engineers from reaching client sites in the United States, the most complex on-premises work has to be done remotely, which bills at lower rates and compresses the margin the whole structure depends on.
How does this company make money?
Money comes in three ways. First, consulting and development work billed by the hour — the rate is a blend of lower offshore hours and higher onshore hours, depending on how much of the work happens in India versus at the client's site. Second, fixed-price contracts for building and integrating systems, where the client pays in stages as defined milestones are reached. Third, ongoing monthly fees for maintaining and managing the systems after they go live, with the fee set by how complex the system is and what response-time guarantees the client requires.
What makes this company hard to replace?
The custom code the company's engineers write gets woven directly into a client's SAP or CRM system. Handing that knowledge to a new vendor takes months of structured transfer work, during which the client's systems are at risk. The company also installs its own monitoring tools as part of maintenance contracts, and those tools would need to be replaced if the client left. For clients partway through a multi-year transformation program, switching vendors mid-project means absorbing the cost of everything already built while starting the relationship process over from scratch.
What limits this company?
The US government caps the number of H-1B and L-1 visas issued each year, which limits how many Indian engineers the company can send to client offices in the United States. The most complex ERP and core banking projects — the ones that pay the most — require engineers to be physically on-site. Because visa caps prevent enough engineers from going, those high-paying projects have to be handled remotely instead, which bills at a lower rate and squeezes the margin the whole business runs on.
What does this company depend on?
The company cannot run without five things: H-1B and L-1 visa approvals from USCIS to place engineers at US client sites; a steady flow of graduates from Indian Institutes of Technology and National Institutes of Technology to keep the bench full; Microsoft Azure and AWS certifications that qualify delivery teams to work on cloud projects; SAP and Oracle licensing partnerships that allow the company to implement those vendors' software; and the submarine cables that carry data between Indian delivery centers and North American client networks.
Who depends on this company?
Fortune 500 manufacturing companies rely on the company to keep their SAP systems running — an interruption would cause production systems to go down. European banks depend on it for real-time transaction processing through core banking systems; if maintenance stopped, those banks would lose the ability to process transactions as they happen. North American healthcare systems use the company to connect Epic and Cerner patient record platforms; if those integrations broke, hospital staff would lose access to patient data.
How does this company scale?
Adding more offshore delivery center space and rolling out the same project methods to new cities or new technology areas is relatively cheap and straightforward. What does not scale easily is finding senior solution architects who deeply understand a specific client's industry — manufacturing, banking, healthcare — well enough to redesign how that business actually operates. Those people take years to develop and cannot be replaced quickly, so every large, complex transformation program eventually runs into a bottleneck of experienced people, not desk space.
What external forces can significantly affect this company?
If the Indian rupee strengthens against the US dollar, every contract the company bills in dollars becomes less profitable, because engineer salaries are still paid in rupees but the dollar revenue buys fewer of them. US immigration policy changes that reduce H-1B visa numbers shrink the company's ability to put engineers in front of American clients. In Europe, GDPR and data localization rules mean client data often cannot leave the country, which forces the company to build expensive local delivery centers instead of serving European clients from India.
Where is this company structurally vulnerable?
If the Indian rupee rose sharply against the US dollar, the gap between what the company pays its engineers in rupees and what it charges clients in dollars would shrink. A smaller gap means less money to pay engineers who are sitting on bench waiting for the next project. Without that bench, the company cannot promise fast staffing, cannot win fixed-price contracts, and the whole delivery model falls apart. Separately, if Indian government rules cut off the data links between the Chennai, Bangalore, and Hyderabad delivery centers and North American client networks, remote delivery would stop entirely.