Hinduja Global Solutions (HGS) has posted quite a strong quarter with more than three-fold rise in net profit for the quarter ended June 2016, driven by robust domestic performance and increased offshoring. Hinduja Global Solutions’ global CEO Partha De Sarkar says focus on healthcare, consumer and public sector is witnessing a good traction. Healthcare reforms in the US has brought in rich dividend for the company while winning a contract for one of largest e-tailer will help it tap the booming e-commerce space. The acquisition of US-based firm Colibrium is also expected to ring in revenues, he said.

Can you run us through the highlights of Q1. What led to the sharp jump as far as the profits are concerned?

A large of the number is because we have an excellent growth. If we look at the growth year-on-year, it has been 23 per cent. Organic growth has been at 4 per cent. Inorganic growth, because of the two acquisitions that we did last year, contributed another 6 per cent. And Fx impact was about 3.1 per cent. A large part of the improved performance in Q1 has been driven by the fact that we have been able to grow so well. And that is because of the investment that we have done in sales and marketing.

We have had challenges in Canada last year. But that did not stop us from investing in sales and marketing. As far as the margins are concerned, the turnaround in Canada helped. We were also able to get the India business that we acquired last year to contribute handsomely in Q1. And the Colibrium business that we had acquired is really doing well. So the overall growth, turnaround in Canada, domestic and Colibrium, all of these are contributing to the good set of numbers.

You have seen a recovery in the Canadian operations. The domestic Indian business has been remain pretty strong quarter as well as a turnaround in terms of the Colibrium business is concerned. Do you think all these performance levels are sustainable in the coming quarters as well and will they contribute positively to FY17?

I would say that the domestic business will continue to do well. Colibrium will improve from where it is today. I think Q1 is just the start. The word of caution will be Canada. We have achieved a turnaround. I have to concede that there are still some fundamental weaknesses in that business. We do have a strong client concentration risk and industry concentration risk as well. Till we are able to solve that problem, we are not out of the woods in Canada yet. We are watching Canada very carefully.

But, having said that, I think going forward this year, our performance in the second half will improve because that has the prediction all along. Because of the seasonality in the businesses, the second half of the year is better than the first half.

Can you talk to us about various revenue verticals? Over 40 per cent of the revenue is coming in from telecom and healthcare. About 25 per cent of revenue is coming from IT. Which of these verticals are contributing to that growth going forward?

Healthcare has been our pillar of strength. That was the first vertical that we entered into and because of healthcare reform in the US, this is the vertical that is growing and we are investing in this business also. Three years back this vertical contributed about $100 million.

Today, it contributes about $200 million and we expect that to further improve this year to about $250 million if all goes well. We are also seeing good traction in public sector. Public sector work, which we do in the UK and Canada, is doing well. We are also doing well in the consumer vertical, which is the work that we do onshore for consumer electronics. We are also starting to work with one of the largest e-tailers of the world.

Telecom is something we always are conscious about. That is how you are seeing telecom revenue actually declining from a high 30 per cent level to about 25 per cent level just because we focused on other verticals.

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