Datamatics Global Services, set up in 1975, is among the pioneers in the Indian software and offshore industry, and is present across IT products, BPO and KPO services. The global slowdown notwithstanding, the mid-size company continues to see good demand from global markets, add employees and is exploring entry into smaller cities and towns.

In a tête-à-tête with Business Line , its Vice-Chairman and Chief Executive Officer Rahul L. Kanodia said the company, which had acquired two firms in 2011 (Cignex Global Holding Corp and Vista Infosystems), is hungry for more, and is hopeful of announcing a couple other acquisitions by the end of the year. Excerpts:

Following the slowdown across global markets, the industry is painting a gloomy picture for the IT sector. Your views?

We are not seeing such a gloomy picture. From the industry point of view, we find Europe a little slow, the US picking up, India is also responding well. We are also seeing a lot of growth coming from the emerging markets such as South America, Africa, India and China.

Datamatics is getting good traction from Europe, the US, India and West Asia. Out of these, Europe is the worst, and I honestly don’t think Europe countries, other than Germany, will pick up for the next four-five years. They won’t fall down, they are limping now, and will continue limping.

If the company is not stepping out of the present realm of verticals, where would the next wave of growth come from?

We see a lot of traction in e-retail as a vertical, and analytics, big data, mobility and cloud are areas that look attractive. These are areas where you can command a premium, garner customers quickly, with most of them being sticky ones. The markets are responding very well.

Has the slowdown hit your hiring plans?

Hiring is on track, there is no slowdown for us. We were 4,000 personnel by the end of 2011, and have now grown to 5,000. Over the year, we are aiming to increase it by another 1,500-1,700.

We believe that Datamatics is scouting for acquisitions …

We are in active dialogue with certain companies, and, if all goes well, we should be able to close some deals this year. There are non-disclosure agreements, and right now it would be difficult for me to divulge anything about it.

Datamatics is also looking to expand into smaller cities and towns across India.

The metros are expensive for operations, and we are looking at tier-II cities and some rural forays like Bellary (Karnataka) as it has an element of corporate social responsibility. We have a small operation in Bellary, where we employ over 40 spouses of steel mill workers.

Your comments on the BPO scenario in India?

The industry in India is experiencing very high cost increases, because employees are getting sort of spoilt and are seeking wage hikes. They are not fully sensitive to the slowdown that is happening across the world.

India has issues with costs and attrition, and the low-end stuff we are doing is becoming a commodity. India is rapidly losing it charm.

>rajesh.kurup@thehindu.co.in

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