Amid Economic Slump, Zensar eyes 18% Growth
News | 30 Aug 2012
Zensar is a software and services major spread across 18 countries. The firm provides end- to- end services from application development to support & maintenance, cloud development, infrastructure management, business intelligence, CRM, testing, consulting to business process management. Zensar has also forged strategic technology partnerships with global technology leaders, such as Microsoft, Oracle, SAP and IBM. These partnerships have enabled Zensar to leverage its core competencies, ensuring comprehensive and state- of- the- art business solutions to its customers. Ganesh Natrajan Vice Chairman and CEO talks about future plans in this interview with Chandrashekhar Patwardhan .
What is the current scenario of India's strengths in IT and what are the challenges the domestic industry faces? IT services is the fastest growing industry in the Indian domestic market, growing by 18% to reach Rs. 589 bn, driven by increasing adoption from all customer segments - government, enterprise, consumers and SMBs. Domestic BPM segment is expected to grow at 17% in F2012, to reach Rs. 149 bn, driven by demand from voice- based ( including local language) services and increasing adoption by both - traditional and emerging verticals, including the government. The domestic software products segment is set to grow to Rs. 180 bn in F2012, a growth of13% over F2011. This segment is being driven by the need to replace legacy systems and technology advancements around cloud, mobility, etc. Growth in industry revenues expected to slowdown with immediate impact on discretionary spends as the recovery in largest markets, i. e. US and UK continue to be slow. Currency fluctuations is also a worry. Also, back- office support and other non- discretionary spends to remain constant or increasing due to higher pricing pressure in the local markets, continued inflation and margin pressure in Indian companies imply change in business models, non- linear growth and employee pyramid mix to be the major focus areas.
Are you looking at some more acquisitions to consolidate? Any plans for expansion? Non- linearity has been one of the cornerstones of Zensar's growth in the recent past. With customers demanding more from outsourcing and moving from basic services to higher partnership and focused growth, Zensar is focused on achieving revenue growth higher than employee growth in the years to come. The current strategy is to achieve this through development of Intellectual Property - that includes usage of technical and domain capabilities to develop products, tools, technologies and processes that can be used for multiple clients and through acquisitions that fit into our strategy. These new acquisitions are likely to be in the segments of infrastructure management and SAP in Europe or US. We have recently tied up with Palash Healthcare in Pune.
Is recession in Europe and US affecting your growth? Despite the slowdown in Europe and US Zensar's revenues continue to grow well. We expect to grow 15- 18% this year. While there is an expectation that overall IT spend will go down there is also an expectation that overall IT outsourcing will go up as the pressure to cut costs will go up for companies.