Skip to main content

How mid-tier IT Services cos. are coping

Businessworld has an article on how mid-tier Indian IT Services are attempting to cope with the "great squeeze" by differentiating themselves.
Mumbai-based software firm Hexaware shares more than a few similarities with its peer iGate. Hexaware, like iGate, has established a presence in a number of verticals in order to maximise its competitive advantage. It initially started with a focus in the BFSI verticals, but over a period of time it has unveiled what it calls a multi-niche strategy and has entered into transportation, hospitality and logistics verticals too. Like the bigger companies, Hexaware’s strategy is to expand as quickly as possible through low cost centres globally. Adds Atul Nishar, chairman of Hexaware, “We are working on a $1-billion (Rs 4,000-crore) roadmap, where we envision a larger global footprint with a headcount in excess of 35,000 and we will have delivery centres in South Asia, eastern Europe and North America. We will also launch new verticals or add micro-verticals to existing focus areas.”

...While both iGate and Hexaware have a strategy and have to get their operations aligned to new cost dynamics, Chennai-based helios & matheson (H&M) has neither a strategy nor operational excellence. It is a relatively new entrant into the industry. It went public in 1999 and has been growing through acquisitions, most of them successful, barring Vmoksha, which failed and is now in the courts. H&M has a low PE of just five times for its stock price. The company derives 42 per cent of its revenues from healthcare thanks to its acquisition of Nasdaq listed TACT a few years back. “We may be small but we are on the verge of explosive growth,” says G. K. Murali Krishna, managing director of H&M. “It took Infosys 25 years to reach billion dollars of revenues and less than two years to reach the next billion.” H&M has slightly better operating and net margins at 13.3 per cent and 21.6 per cent compared with iGate, primarily due to its Nasdaq listed subsidiary.

...In an effort to adapt to a difficult business climate, Delhi-based NIIT Technologies has, over the past few years, gone through the process of cutting down its business to just three verticals: insurance, travel and transportation, and government. The decision to focus on verticals was taken because its growth was suffering and it could not compete against the big companies for either talent or business, which is when it decided to focus on a few verticals. “Our focus is on being the best,” says CEO Arvind Thakur. “We can only be the best if we focus on a few verticals and in those niches we can be bigger or equivalent to the global or Indian biggies."

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.

Popular posts from this blog

VC Interview: Shailendra Singh of Sequoia Capital India

In a recent interview to Venture Intelligence, Shailendra Singh discussed some of the firm’s newer investments in the early stage segment including in the online payments space, the progress at a few existing portfolio companies and the active role the firm is playing in helping its portfolio companies scale and succeed in India and globally. Prior to joining the firm in 2006, Singh was a strategy consultant at Bain & Company in New York and before that, an entrepreneur in the digital media industry. Venture Intelligence: How does Sequoia go about identifying potential early stage investments in India? Is there anything different you are doing today than, say, a couple of years back? Shailendra Singh: There is a lot more focus on technology investing and early stage investing. In general, as you might remember a few years ago, we were doing primarily growth investing but in the past 18-odd months, we have had a very strong focus on early stage and that’s continuing. In terms

ChrysCapital, Motilal Oswal PE & Sequoia named PE-VC Firms of the Decade

Press Release ChrysCapital, Motilal Oswal Private Equity and Sequoia Capital India have been named the top Private Equity & Venture Capital investors in India during the last decade, as part of Venture Intelligence’s APEX Awards. The Venture Intelligence “Awards for Private Equity Excellence” (APEX) is dedicated to celebrating the best that the Indian Private Equity & Venture Capital industry has to offer.  While ChrysCapital won the “Private Equity Investor of the Decade” award, Motilal Oswal Private Equity was feted as India’s “Growth Capital Investor of the Decade”. The Indian arm of the storied Silicon Valley VC firm, Sequoia Capital, was named the country’s “Venture Capital Investor of the Decade”. The APEX Awardees are selected based on both Self Nomination by the participating PE-VC firms as well as "crowd sourced" nominations and voting from the Limited Partner, PE-VC and advisory communities. (The main criteria were Exit Track Record, New Fund Raises & Fo

Ambit tops League Table for Transaction Advisors to Private Equity deals in 2019

Ambit Corporate Finance topped the Venture Intelligence League Table for Transaction Advisor to Private Equity Transactions for the year 2019. Ambit advised PE deals worth $2.4 Billion (across 4 qualifying transactions) during the period. Citi ($1.1 Billion across 2 deals) and  Avendus  ($969 million across 12 deals) took the second and third spot. Edelweiss Financial Services ($758 million across 9 deals) and  PwC  ($708 million across 15 deals) completed the top five in 2019.  The  Venture Intelligence League Tables , the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Financial and Legal Advisory firms. Ambit Corporate Finance advised the $1.9 Billion buyout of Pipeline Infrastructure from Reliance Industries   by Brookfield Asset Management  and the IFC and I Squared Capital-backed   Cube Highways' acquisition of Delhi-Agra Toll Road from Reliance Infrastructu

Jio deals help PE investments climb 12% in H1'20 to $18.8 B

Press Release With Reliance Industries' communications unit Jio Platforms attracting 51% of the investment value, Private Equity-Venture Capital (PE-VC) investments in India rose 12% during the first 6 months of 2020 to $18.8 Billion (across 341 deals), shows data from  Venture Intelligence , a research service focused on private company financials, transactions and their valuations. Investments totaling over $9.5 Billion in Jio by a troop of global private equity firms, following social media giant Facebook's $5.7 Billion mid April investment in the company, helped overall PE-VC investments better the $16.8 Billion (across 503 transactions) invested during the same period in 2019. (Note: These figures include Venture Capital investments, but exclude PE investments in Real Estate).   Jio Platforms' $9.5 Billion Private Equity haul (excluding Facebook’s strategic investment) was led by Middle Eastern and American investors with KKR, Saudi Arabia's Public Invest

Inventus, Sixth Sense, Blume & Norwest win Apex'20 Venture Capital Awards

Inventus Capital Partners, Sixth Sense Ventures, Blume Ventures and Norwest Venture Partners were voted the top Venture Capital investors in India during 2019. The Venture Intelligence “Awards for Private Equity Excellence” (APEX) is dedicated to celebrating the best that the Indian Private Equity & Venture Capital industry has to offer. Other 2019 winners in the VC segment included  Axilor Ventures which was voted   the  Accelerator of the Year for the second year running, 3one4 Capital (VC Fund Raise of the Year) and Innoven Capital (Venture Debt firm of the Year). The APEX Awardees are selected based on both Self Nomination by the participating PE-VC firms as well as "crowd sourced" nominations and voting from the Limited Partner, PE-VC and advisory communities. (The main criteria are Exit Track Record, New Fund Raises & Follow-on Funding Rounds for Portfolio Companies).    " It is an honour to be recognised by entrepreneurs and investors as