Monday, July 31, 2006
Hyderabad Business News July 30,2006
Unitech’s Rs 7,000cr capex for IT, hotels
Hyderabad July 30: Registering a robust growth in its first quarter, the real estate firm Unitech Ltd has chalked out a Rs 7,000-crore investment plan to develop 15 hotels and seven IT parks in five years. Declaring the results for the first quarter of the current fiscal, Mr Sanjay Chandra, MD, Unitech, said,
“We are planning to construct 15 hotels in the next five years which will inv-olve an investment of Rs 3,000 crores in the construction process. Further, the company would also invest Rs 4,000 crores on developing seven IT parks.” Unitech reported a growth of 798 per cent in net profit at Rs 74 crores for the quarter ended June 30, as against Rs 8.24 crores of the corresponding period last year. Its total income during the period rose 114 per cent to Rs 306.21 crores compared to Rs 141.76 crores last year.
‘PPP is the way to go for infrastructure’
Q&A Grandhi Mallikarjuna Rao, chairman, GMR Group
Grandhi Mallikarjuna Rao, 56, is chairman of the Bangalore-based GMR Group, a major player in the infrastructure, roads and power utilities sectors. Mr Rao — who is fondly called ‘Malli babu’ by people in his native Rajam town in Srikakulam district of Andhra Pradesh and G.M. Rao in industry circles — is an amazing success story in corporate India, growing from a small-town jute trader to the head of a Rs 2,500 crore business group.
The GMR group, as the leader of different consortia, is building the new international airport in Hyderabad, and is modernising the Indira Gandhi International Airport in New Delhi. The group has four power projects with a gross capacity of 963 Mw, of which two are operational, one is set to achieve COD and one is under development. It is also developing six projects. GMR Infrastructure Ltd is entering the capital market with a public issue, and expects to raise between Rs 800 crore-Rs 953 crore. The media-shy Mr Rao is a mechanical engineer by training from Andhra University.
How did it all begin?My family had a small jute trading business in Rajam, which my father divided between my brothers and myself in 1972-73. After my engineering degree, I had joined the Andhra Pradesh government’s public works department, but I worked there only for five months, before joining the business. I wanted to diversify my business, so I applied for a scooter dealership in Visakhapatnam, which did not happen. So, I renewed my focus on the jute trade, buying and selling the commodity.
Subsequently, with great difficulty, I managed to buy a jute twining factory in Chennai and moved the machinery to Rajam. I also got into the sugar and brewery business, all in Srikakulam district. Things changed for me when I was invited to join the board of Vysya Bank (now the ING Vysya Bank), after the banking regulations pertaining to board composition were changed in the early nineties.
The bank had two rights issues in the early nineties, which faced the prospect of not being fully subscribed. I invested in both rights issue, borrowing from friends and family, which made me the single largest shareholder in the bank. I first moved to Hyderabad, and then to Bangalore in 1994 because it was difficult to commute from Rajam to Bangalore, where the bank is based.
What prompted you to enter the infrastructure sector, given that in India the common perception is that the government should create infrastructure like airports and roads. Honestly, the focus on infrastructure began during my time with Vysya Bank. The bank had NPAs of 15.6 per cent, and I worked closely with the top management to reduce the NPAs to about 4.6 per cent. This entailed constant interaction with government, RBI and industry officials. The reduction in the bank’s NPAs gave us credibility, and, around that time, the power generation sector was being opened up to the private sector.
The GMR group set up two power plants — the 220 Mw Tanir Bavi project in Karnataka and the 200 Mw Basin Bridge. We will be commissioning the 320 Mw Vemagiri power plant soon. I believe that public-private partnership is the best way to develop the sorely-needed infrastructure in India.
After we decided to focus exclusively on infrastructure projects, the GMR group exited from all other business, including banking, insurance and brewery. The group’s other interest is in sugar, while the ferro alloys business has been given on a long-term contract.
But you did not have the track-record of building or modernising airports or laying roads. Or setting up power plants, for that matter. Do you believe that GMR has the bandwidth to execute such major projects?We have a very strong management team in place. More importantly, the GMR group always makes it a point to work with world-class companies. We have Fraport AG, one of the largest airport management companies in the world, which manages the Frankfurt Am Main airport, and Malaysia Airport Holdings Berhad, which manages the Kuala Lumpur International Airport, as our partners for modernising the Indira Gandhi International Airport in Delhi, along with Airport Authority of India. For the Hyderabad project, we have MAHB as a partner, while UEM, a Malaysian road management firm, manages our road projects in India.
The GMR Group developed expertise and management bandwidth during the nearly five-years it took for the signing of the agreement for the international airport in Hyderabad. For the Delhi and Mumbai airport projects, we worked with 16 international consultants, investing over Rs 32 crore, to draw up the bid.
Were you surprised when the government said the GMR consortium had emerged as the favoured bidder on various parameters? The GMR-led consortium was given the choice of taking up the modernisation and expansion of the IGIA and the Chhatrapati Shivaji International Airport in Mumbai. What made you choose IGIA?No, I was not surprised. We had put in a lot of hard work to make the bids. The consortium had also made a financial commitment of about Rs 4,000 crore even before the technical bids were opened, with ICICI Bank providing Rs 3,200 crore and PNB, Rs 750 crore.
The GMR group chose IGIA for two reasons. IGIA sits on 5,000 acres of land, so there is enormous scope for development. Also, under the contract, we can develop 250 acres of the land for commercial purposes. Delhi International Airport Private Ltd., the joint venture company which is modernising the airport, has the management contract for IGIA for 60 years. DIAL will be giving 46 per cent of its revenues to the government. IGIA currently has annual revenues of Rs 600 crore.
DIAL has already begun work on improving the facilities for passengers and air traffic. Under the first phase, DIAL will be investing Rs 2,800 crore. It will be building a common arrival and departure terminal spread over three million sft. The first phase will be completed by 2010, as per schedule.
What would be the status of the existing employees of IGIA?The airport has 2,300 employees, and under the contract we will retain 60 per cent of them. The first thing we did after DIAL got management control of IGIA was to bring in a change management firm to calm the anxieties of the employees.
Will the GMR group be bidding for the modernisation of the Chennai and Kolkata airports as well?Yes, of course. But right now we are focussing on building a world-class airport in Hyderabad, which we expect to complete in early 2008, and in New Delhi.
GMR offer opens today
IPO Monitor
GMR Infrastructure Ltd., which is modernising Delhi airport, will hit the capital market on July 31, with its IPO to raise up to Rs 950 crore. The IPO comprises 3.81 crore shares at a price band of Rs 210-250. Retail inve-stors would, however, be given a five per cent discount.
GMR Infra would use the proceeds raised from the issue to part finance modernisation of Delhi airport and the greenfield Hyderabad international airport, besides in other power and infrastructure projects. The issue closes on August 4 and the listing is expected in September. At the upper limit of the band, the company would raise about Rs 954 crore and at the lower end about Rs 800 crore.
Tech Mahindra IPO at Rs 315-365:IT solutions provider, Tech Mahindra is all set to enter the capital market and has fixed a price band of Rs 315 to Rs 365 for its Initial Public Offer. Tech Mahindra, a Mahindra and Mahindra (M&M)-British Telecom venture, would issue 127.46 lakh equity shares of Rs 10 each, consisting of a fresh issue of 3,186,480 equity shares and offer for sale of 9,559,520 equity shares by M&M and BT.
SBH to raise interest rates, net up 11.3%
Hyderabad, July 30: The State Bank of Hyderabad, an SBI associate bank, will be raising its credit and deposit rates from August 1, in the wake of the increase in the repo and reverse repo rates by the Reserve Bank of India.
The increase in rates on deposits will be between 25 and 50 basis points on different maturity slabs, SBH managing director Amitabha Guha said. The super-saving scheme for deposits of over five-year tenure would be increased to 7.5 per cent, while senior citizens would get an interest rate of eight per cent.
Mr Guha said housing loan interest rates would be raised by 50 basis points, with existing floating interest rates increasing from the current 8.5 per cent to 9 per cent. Fixed rates would be hiked by one per cent. Meanwhile, the bank posted a profit of Rs 78.32 crores in the first quarter of 2006-07, an increase of 11.33 per cent over the Rs 70.35 crores in the same quarter of last year.
The operating profit had increased by 61.75 per cent to Rs 247.83 crores from Rs 153.22 crores in the first quarter of 2005-06, he said. Interest on advances in the first quarter was Rs 463.03 crores, up 38.23 per cent over the Rs 334.97 crores year-on-year.
“The increase in interest expenditure, Rs 460.52 crores was contained at 16.24 per cent above that of the first quarter of last year, when it was Rs 396.18 crores,” Mr Guha said. The net interest income in the first quarter of 2006-07 was Rs 310.57 crores, up 17.95 per cent.
The bank’s total business crossed Rs 57,000 crores, with a year-on-year growth of 19.54 per cent, while net NPAs had declined to 0.22 per cent from 0.55 per cent. The bank’s deposits had crossed Rs 36,011 crores as on June 30, while gross advances had increased to Rs 21,817 crores from Rs 16,630 crores as on June 30, 2005.
The bank’s book value per share of a face value of Rs 100 had increased from 10,643 in June 2005 to Rs 12,709 in June this year, he said. Asked about the bank’s initial public offering, Mr Guha said the bank was waiting for Parliament to pass the amendment to the SBI (Subsidiary Banks) Act,
Microsoft’s Zune aims to take on iPod
IT Today
Most people agree that Apple’s iPod has a lock on the personal digital music player business. It is a great product and one of the most disruptive technologies in a generation. In the consumer electronics space, the last such disruptive technology was Sony’s Walkman.
So, when the iPod has captured the imagination and the market, would you expect another company to go headbanging with Apple to get some of the pie? You bet. It seems Microsoft wants to try this task with its Zune, a portable music device.
“This is not a six-month initiative, where somehow in six months we will have captured the marketplace,” Microsoft entertainment and devices division president Robbie Bach was quoted as saying last week by InformationWeek. “This will be a four, five, six-year investment horizon.”
The Zune brand is stated to be a line of hardware and software for mobile entertainment, both music and video. Microsoft isn’t aiming to simply recreate the iPod experience, Bach said. “We’re not just doing Zune to copy what others have,” Bach said. “We think there are real adva-ntages to what Microsoft has to offer here.”
According to IW, YouTube may be as much of an inspiration to Microsoft as the iPod. Mr Bach cited video search as an area where Microsoft hopes to differentiate itself, by enabling users to seek out and recommend to each other multimedia content. Social networking will be another focus for Microsoft, Bach said, pointing to Microsoft’s experience in building the Xbox community.
Apparently, Microsoft hasn’t been sitting on its hands in the coming battle with Apple. It has shifted key developers from the Xbox team to the Zune project. Micr-osoft’s dependence on their expertise forced it to hold off on initiating Zune until after it shipped Xbox 360, Microsoft CEO Steve Ballmer was quoted as saying. “I wish we’d had the capacity to do Zune a year earlier,” he said.
Mr Ballmer also acknowledged that Apple’s iPod is a daunting rival. “There’s no other company, for better or for worse, that would be trying to get into that business at this time,” he said. “Nobody else has the optimism, nobody else has the financial resources.”
Microsoft says Zune will be a partner-friendly play; other companies will be invited to build around the Zune brand and platform. “We’re going to encourage people to continue working with PlaysForSure and the interfaces that interact with Media Player and all the technologies that are in the core platform of Windows,” Mr Bach said.
“We’re going to keep working with our partners on those fronts and hope that, between what we do on PlaysForSure and what we do with Zune, we can scale the Windows ecosystem.”
CSC India bets on ERP, testing space
Hyderabad, July 30: Computer Sciences Corporation India, part of the $14.6 billion NYSE-listed CSC, is gearing up to include testing as one of its major practices even as the IT services giant sees considerable traction in the ERP segment, a senior company executive told this newspaper on Sunday.
Present in three centres at Noida and one each in Hyderabad, Chennai and Indore, CSC India, as part of its growth plans, has decided to “acquire competencies in certain areas this year.” This marks a tactical shift in focus for CSC India which still relies on IT outsourcing, infrastructure management services and network design, BFSI and telecom verticals for a majority of its revenues.
“We expect growth in the ERP and the testing business that has been emerging as a key practice for the industry,” Mr P.S. Karthikeyan, director (Global Transformation Solutions) at CSC India, said. With nearly 5,400 employees in India, CSC has been growing at a compound rate of 75 per cent since 2001 when it set up its centre in Noida and subsequently in Hyderabad.
“Last year, CSC India grew by 100 per cent and our goal this year is to again better the 75 per cent growth performance,” Mr Karthikeyan noted. With almost 2,400 employees at its Hyderabad centre the company, in a year or two, intends each of its centres to be 3,000-3,500 people-strong.
At 75 per cent growth per year, CSC India is adding 2,100 to 2,200 people and expects to touch the 9,000-mark by this year-end and about 11,000-12,000 emp-loyees in two years.However, like all its peers, CSC India has to reckon with attrition as a major issue but at 14.8 per cent per annum, Mr Karthikeyan puts it as “one of the lowest in India”.
Although only 2.5 per cent of the size of CSC globally, CSC India is ranked at the No. 3 slot jumping from the 21st position in three years, Mr Karthikeyan said. CSC has till date invested $60-65 million in its Indian operations.
Hyderabad July 30: Registering a robust growth in its first quarter, the real estate firm Unitech Ltd has chalked out a Rs 7,000-crore investment plan to develop 15 hotels and seven IT parks in five years. Declaring the results for the first quarter of the current fiscal, Mr Sanjay Chandra, MD, Unitech, said,
“We are planning to construct 15 hotels in the next five years which will inv-olve an investment of Rs 3,000 crores in the construction process. Further, the company would also invest Rs 4,000 crores on developing seven IT parks.” Unitech reported a growth of 798 per cent in net profit at Rs 74 crores for the quarter ended June 30, as against Rs 8.24 crores of the corresponding period last year. Its total income during the period rose 114 per cent to Rs 306.21 crores compared to Rs 141.76 crores last year.
‘PPP is the way to go for infrastructure’
Q&A Grandhi Mallikarjuna Rao, chairman, GMR Group
Grandhi Mallikarjuna Rao, 56, is chairman of the Bangalore-based GMR Group, a major player in the infrastructure, roads and power utilities sectors. Mr Rao — who is fondly called ‘Malli babu’ by people in his native Rajam town in Srikakulam district of Andhra Pradesh and G.M. Rao in industry circles — is an amazing success story in corporate India, growing from a small-town jute trader to the head of a Rs 2,500 crore business group.
The GMR group, as the leader of different consortia, is building the new international airport in Hyderabad, and is modernising the Indira Gandhi International Airport in New Delhi. The group has four power projects with a gross capacity of 963 Mw, of which two are operational, one is set to achieve COD and one is under development. It is also developing six projects. GMR Infrastructure Ltd is entering the capital market with a public issue, and expects to raise between Rs 800 crore-Rs 953 crore. The media-shy Mr Rao is a mechanical engineer by training from Andhra University.
How did it all begin?My family had a small jute trading business in Rajam, which my father divided between my brothers and myself in 1972-73. After my engineering degree, I had joined the Andhra Pradesh government’s public works department, but I worked there only for five months, before joining the business. I wanted to diversify my business, so I applied for a scooter dealership in Visakhapatnam, which did not happen. So, I renewed my focus on the jute trade, buying and selling the commodity.
Subsequently, with great difficulty, I managed to buy a jute twining factory in Chennai and moved the machinery to Rajam. I also got into the sugar and brewery business, all in Srikakulam district. Things changed for me when I was invited to join the board of Vysya Bank (now the ING Vysya Bank), after the banking regulations pertaining to board composition were changed in the early nineties.
The bank had two rights issues in the early nineties, which faced the prospect of not being fully subscribed. I invested in both rights issue, borrowing from friends and family, which made me the single largest shareholder in the bank. I first moved to Hyderabad, and then to Bangalore in 1994 because it was difficult to commute from Rajam to Bangalore, where the bank is based.
What prompted you to enter the infrastructure sector, given that in India the common perception is that the government should create infrastructure like airports and roads. Honestly, the focus on infrastructure began during my time with Vysya Bank. The bank had NPAs of 15.6 per cent, and I worked closely with the top management to reduce the NPAs to about 4.6 per cent. This entailed constant interaction with government, RBI and industry officials. The reduction in the bank’s NPAs gave us credibility, and, around that time, the power generation sector was being opened up to the private sector.
The GMR group set up two power plants — the 220 Mw Tanir Bavi project in Karnataka and the 200 Mw Basin Bridge. We will be commissioning the 320 Mw Vemagiri power plant soon. I believe that public-private partnership is the best way to develop the sorely-needed infrastructure in India.
After we decided to focus exclusively on infrastructure projects, the GMR group exited from all other business, including banking, insurance and brewery. The group’s other interest is in sugar, while the ferro alloys business has been given on a long-term contract.
But you did not have the track-record of building or modernising airports or laying roads. Or setting up power plants, for that matter. Do you believe that GMR has the bandwidth to execute such major projects?We have a very strong management team in place. More importantly, the GMR group always makes it a point to work with world-class companies. We have Fraport AG, one of the largest airport management companies in the world, which manages the Frankfurt Am Main airport, and Malaysia Airport Holdings Berhad, which manages the Kuala Lumpur International Airport, as our partners for modernising the Indira Gandhi International Airport in Delhi, along with Airport Authority of India. For the Hyderabad project, we have MAHB as a partner, while UEM, a Malaysian road management firm, manages our road projects in India.
The GMR Group developed expertise and management bandwidth during the nearly five-years it took for the signing of the agreement for the international airport in Hyderabad. For the Delhi and Mumbai airport projects, we worked with 16 international consultants, investing over Rs 32 crore, to draw up the bid.
Were you surprised when the government said the GMR consortium had emerged as the favoured bidder on various parameters? The GMR-led consortium was given the choice of taking up the modernisation and expansion of the IGIA and the Chhatrapati Shivaji International Airport in Mumbai. What made you choose IGIA?No, I was not surprised. We had put in a lot of hard work to make the bids. The consortium had also made a financial commitment of about Rs 4,000 crore even before the technical bids were opened, with ICICI Bank providing Rs 3,200 crore and PNB, Rs 750 crore.
The GMR group chose IGIA for two reasons. IGIA sits on 5,000 acres of land, so there is enormous scope for development. Also, under the contract, we can develop 250 acres of the land for commercial purposes. Delhi International Airport Private Ltd., the joint venture company which is modernising the airport, has the management contract for IGIA for 60 years. DIAL will be giving 46 per cent of its revenues to the government. IGIA currently has annual revenues of Rs 600 crore.
DIAL has already begun work on improving the facilities for passengers and air traffic. Under the first phase, DIAL will be investing Rs 2,800 crore. It will be building a common arrival and departure terminal spread over three million sft. The first phase will be completed by 2010, as per schedule.
What would be the status of the existing employees of IGIA?The airport has 2,300 employees, and under the contract we will retain 60 per cent of them. The first thing we did after DIAL got management control of IGIA was to bring in a change management firm to calm the anxieties of the employees.
Will the GMR group be bidding for the modernisation of the Chennai and Kolkata airports as well?Yes, of course. But right now we are focussing on building a world-class airport in Hyderabad, which we expect to complete in early 2008, and in New Delhi.
GMR offer opens today
IPO Monitor
GMR Infrastructure Ltd., which is modernising Delhi airport, will hit the capital market on July 31, with its IPO to raise up to Rs 950 crore. The IPO comprises 3.81 crore shares at a price band of Rs 210-250. Retail inve-stors would, however, be given a five per cent discount.
GMR Infra would use the proceeds raised from the issue to part finance modernisation of Delhi airport and the greenfield Hyderabad international airport, besides in other power and infrastructure projects. The issue closes on August 4 and the listing is expected in September. At the upper limit of the band, the company would raise about Rs 954 crore and at the lower end about Rs 800 crore.
Tech Mahindra IPO at Rs 315-365:IT solutions provider, Tech Mahindra is all set to enter the capital market and has fixed a price band of Rs 315 to Rs 365 for its Initial Public Offer. Tech Mahindra, a Mahindra and Mahindra (M&M)-British Telecom venture, would issue 127.46 lakh equity shares of Rs 10 each, consisting of a fresh issue of 3,186,480 equity shares and offer for sale of 9,559,520 equity shares by M&M and BT.
SBH to raise interest rates, net up 11.3%
Hyderabad, July 30: The State Bank of Hyderabad, an SBI associate bank, will be raising its credit and deposit rates from August 1, in the wake of the increase in the repo and reverse repo rates by the Reserve Bank of India.
The increase in rates on deposits will be between 25 and 50 basis points on different maturity slabs, SBH managing director Amitabha Guha said. The super-saving scheme for deposits of over five-year tenure would be increased to 7.5 per cent, while senior citizens would get an interest rate of eight per cent.
Mr Guha said housing loan interest rates would be raised by 50 basis points, with existing floating interest rates increasing from the current 8.5 per cent to 9 per cent. Fixed rates would be hiked by one per cent. Meanwhile, the bank posted a profit of Rs 78.32 crores in the first quarter of 2006-07, an increase of 11.33 per cent over the Rs 70.35 crores in the same quarter of last year.
The operating profit had increased by 61.75 per cent to Rs 247.83 crores from Rs 153.22 crores in the first quarter of 2005-06, he said. Interest on advances in the first quarter was Rs 463.03 crores, up 38.23 per cent over the Rs 334.97 crores year-on-year.
“The increase in interest expenditure, Rs 460.52 crores was contained at 16.24 per cent above that of the first quarter of last year, when it was Rs 396.18 crores,” Mr Guha said. The net interest income in the first quarter of 2006-07 was Rs 310.57 crores, up 17.95 per cent.
The bank’s total business crossed Rs 57,000 crores, with a year-on-year growth of 19.54 per cent, while net NPAs had declined to 0.22 per cent from 0.55 per cent. The bank’s deposits had crossed Rs 36,011 crores as on June 30, while gross advances had increased to Rs 21,817 crores from Rs 16,630 crores as on June 30, 2005.
The bank’s book value per share of a face value of Rs 100 had increased from 10,643 in June 2005 to Rs 12,709 in June this year, he said. Asked about the bank’s initial public offering, Mr Guha said the bank was waiting for Parliament to pass the amendment to the SBI (Subsidiary Banks) Act,
Microsoft’s Zune aims to take on iPod
IT Today
Most people agree that Apple’s iPod has a lock on the personal digital music player business. It is a great product and one of the most disruptive technologies in a generation. In the consumer electronics space, the last such disruptive technology was Sony’s Walkman.
So, when the iPod has captured the imagination and the market, would you expect another company to go headbanging with Apple to get some of the pie? You bet. It seems Microsoft wants to try this task with its Zune, a portable music device.
“This is not a six-month initiative, where somehow in six months we will have captured the marketplace,” Microsoft entertainment and devices division president Robbie Bach was quoted as saying last week by InformationWeek. “This will be a four, five, six-year investment horizon.”
The Zune brand is stated to be a line of hardware and software for mobile entertainment, both music and video. Microsoft isn’t aiming to simply recreate the iPod experience, Bach said. “We’re not just doing Zune to copy what others have,” Bach said. “We think there are real adva-ntages to what Microsoft has to offer here.”
According to IW, YouTube may be as much of an inspiration to Microsoft as the iPod. Mr Bach cited video search as an area where Microsoft hopes to differentiate itself, by enabling users to seek out and recommend to each other multimedia content. Social networking will be another focus for Microsoft, Bach said, pointing to Microsoft’s experience in building the Xbox community.
Apparently, Microsoft hasn’t been sitting on its hands in the coming battle with Apple. It has shifted key developers from the Xbox team to the Zune project. Micr-osoft’s dependence on their expertise forced it to hold off on initiating Zune until after it shipped Xbox 360, Microsoft CEO Steve Ballmer was quoted as saying. “I wish we’d had the capacity to do Zune a year earlier,” he said.
Mr Ballmer also acknowledged that Apple’s iPod is a daunting rival. “There’s no other company, for better or for worse, that would be trying to get into that business at this time,” he said. “Nobody else has the optimism, nobody else has the financial resources.”
Microsoft says Zune will be a partner-friendly play; other companies will be invited to build around the Zune brand and platform. “We’re going to encourage people to continue working with PlaysForSure and the interfaces that interact with Media Player and all the technologies that are in the core platform of Windows,” Mr Bach said.
“We’re going to keep working with our partners on those fronts and hope that, between what we do on PlaysForSure and what we do with Zune, we can scale the Windows ecosystem.”
CSC India bets on ERP, testing space
Hyderabad, July 30: Computer Sciences Corporation India, part of the $14.6 billion NYSE-listed CSC, is gearing up to include testing as one of its major practices even as the IT services giant sees considerable traction in the ERP segment, a senior company executive told this newspaper on Sunday.
Present in three centres at Noida and one each in Hyderabad, Chennai and Indore, CSC India, as part of its growth plans, has decided to “acquire competencies in certain areas this year.” This marks a tactical shift in focus for CSC India which still relies on IT outsourcing, infrastructure management services and network design, BFSI and telecom verticals for a majority of its revenues.
“We expect growth in the ERP and the testing business that has been emerging as a key practice for the industry,” Mr P.S. Karthikeyan, director (Global Transformation Solutions) at CSC India, said. With nearly 5,400 employees in India, CSC has been growing at a compound rate of 75 per cent since 2001 when it set up its centre in Noida and subsequently in Hyderabad.
“Last year, CSC India grew by 100 per cent and our goal this year is to again better the 75 per cent growth performance,” Mr Karthikeyan noted. With almost 2,400 employees at its Hyderabad centre the company, in a year or two, intends each of its centres to be 3,000-3,500 people-strong.
At 75 per cent growth per year, CSC India is adding 2,100 to 2,200 people and expects to touch the 9,000-mark by this year-end and about 11,000-12,000 emp-loyees in two years.However, like all its peers, CSC India has to reckon with attrition as a major issue but at 14.8 per cent per annum, Mr Karthikeyan puts it as “one of the lowest in India”.
Although only 2.5 per cent of the size of CSC globally, CSC India is ranked at the No. 3 slot jumping from the 21st position in three years, Mr Karthikeyan said. CSC has till date invested $60-65 million in its Indian operations.
