Zensar Technologies, the listed IT arm of Mr Harsh Goenka-controlled RPG group, is one of the top 10 software companies in India.
The company, following the successful acquisition and integration of Akibia in this financial year, has reported a 54 per cent increase in net profit for the quarter ended December 31. Having already upgraded its guidance for the year to Rs 1,700 crore (from the previous Rs 1,650 crore), the company is looking to grow at nearly 20 per cent in the next fiscal.
In an interview to
Which verticals are looking at for growth in the next fiscal?
In the next two years, growth will largely be around BFSI (banking, financial services and insurance) and manufacturing verticals. The manufacturing vertical is almost 55 per cent today and BFSI is the next largest vertical with 25 to 30 per cent. The new verticals we are looking at are healthcare and utilities.
What sort of growth are you looking at in the next fiscal?
Next year we are looking for at least 20 per cent growth. In the current year, thanks to our acquisition of Akibia (US firm), we have been able to achieve a 40 per cent growth.
But the industry has forecast a lower growth rate of 11 to 14 per cent.
Despite the industry looking at 11 to 14 per cent, we are expecting a robust growth, of which BFSI and manufacturing should be 17 to 18 per cent and healthcare being a new vertical we will be looking at 80 to 90 per cent growth. Overall we should expect 20-22 per cent growth.
What new countries are you looking at for expansion?
Our focus geographies will continue to be the US and UK. Big growth plans are there in the Middle East and in Africa. We are already very strong in South Africa and are looking towards Kenya and Nigeria next year.
We also look towards increasing our presence in Asia-Pacific. Today we have our delivery centre in China. So we can expand in all the four markets: Singapore, China, Australia and Japan.
If you look at the broad verticals it will be the US, the UK and then continental Europe, followed by Africa.
Have you revised your guidance for this fiscal?
Yes. This year we have upgraded our guidance to Rs 1,700 crore.
How do you see the new US corporate tax policy and its impact on the Indian IT industry?
There are two perspectives. He (President Mr Barrack Obama) also talked about giving tax breaks to companies in the US which were generating employment in the US but if that extends to Indian companies having subsidiaries there, then it will obviously be good. But I really do not know how he will implement that.
The second thing is that people who have been doing massive employment abroad and are repatriating their profits to the US are receiving tax breaks. But those tax breaks he will probably recede. But I don't think that the corporate will like it very much if they don't have tax breaks. What I am saying is, obviously that they will not repatriate profits then. They will reinvest it in other countries.
Will Indian firms be affected — in terms of hiring or payments — with recessionary trends setting in?
Definitely there are concerns. People will be more circumspect about hiring. Wage increases are going to be low. It's going to be a tough year for the industry. But again companies with a good track record of getting customers and employee retention will do well.
How many do you plan to hire next year?
Next year we will look for hiring 800 to 1,000 people. Of these, 400-450 will be freshers. The balance will be lateral hiring.
Is the Indian BPO industry losing out to other nations?
[In] BPO, as you know, a lot is happening in [the] Phillipines. If you are looking at voice then [the] Phillipines is a strong contender. But if you look at transaction processing and core IT, then India is probably the strongest provider. Nearly 56 per cent of global outsourcing is happening from India. It is for us to ensure that the strength does not get corroded by Government taxation. But the confidence is very much there that we will continue to grow and sustain our global market.
What are your Budget expectations?
There are two things I[‘d] like to see. One is that the MAT (minimum alternate tax) issue on SEZ needs to be eliminated or minimised. The other thing is, there must be something to make sure like the Phillipines where the Government subsidises to ensure that all people in small towns are trained for IT and BPO. There must be some subsidy or benefit available to tier-2, tier-3 cities that helps the industry to broad-base.