ITC Logo
Media Centre
Press Report

'Being part of ITC is a key differentiator for us'
Business Standard - 06 Dec 2010

Q&A: B Sumant, Managing Director, ITC Infotech

ITC  Infotech, a wholly-owned subsidiary of the tobacco-to-hotels conglomerate ITC  Group, recently completed 10 years of operations. With strong financial backing  of the parent, it is now aspiring to be a billion-dollar company, from the  presently estimated $125-130 million revenue and is looking at inorganic growth  opportunities. B Sumant, managing director, talks to Bibhu Ranjan Mishra on the  next phase of growth. Some excerpts:

Does it help  being a part of a diverse group like ITC?

We  see ITC as a huge area of strength for us and also as a differentiator from  other IT companies. ITC as a company is into FMCG (fast moving consumer goods)  products, paperboard, packaging, branded apparel, lifestyle, etc. We are the  second largest hotel chain in the country. We are into agri-business, as part  of which we procure a large amount of agri products at the farm level. These industries  we understand completely.

So,  whether it is travel, hospitality, CPG (consumer packaged goods) or  manufacturing, we are able to take the best practices from our core businesses  and convert these into IT solutions. Also, when we interact with clients, we  bring in domain experts and practicing managers from these businesses to  interact.

Does ITC give  you any preference for their internal IT contracts?

Yes.  But we have to bid for it and win. However, in most of the internal IT works,  ITC Infotech participates in an assisting role, as we provide support,  maintenance and enhancement services, post-implementation.

Is a public  listing plan there down the line?

That  is a decision ITC has to take. It's their call.

We  are seeing companies touching $1 billion in revenues in their 12th year. You  have already completed 10 years.

Our  own ambition is to become a billion-dollar company and we are working towards  that. We are looking at both organic and inorganic growth. We believe you  cannot organically grow and reach $1 billion at a great speed. We are now  aggressively looking to grow through the inorganic route. That is the only way  we can scale up in a short time frame.

Any particular  geography or space you are looking at?

In  our opinion, acquisitions make sense under three circumstances. If the company  we are looking at has got IP (Internet Protocol) or products we can took to for  our existing customers; if they have got marquee clients to whom we can sell  additional lines of services; if the valuation of the company is very  attractive. We are looking at companies in Europe in infrastructure services  and the US in SAP (software applications) and product lifecycle management.

What is your  organic growth strategy?

We  work regularly with consultants to identify areas and fine-tune our offerings.  We look at infrastructure services, Siebel, loyalty, PLM (product lifecycle  management) and testing (across the board) as the current engines of growth. We  are also foraying into newer areas like life sciences, healthcare and  eGovernance. In India, we are actively bidding for all the large eGovernance  projects.

You are going  quite aggressive on hiring - plan to add 1,800 people by March?

Right  now, we are over 4,000 people. We have been adding at a good rate, in line with  the business growth. Our business has been growing fairly strongly. The whole  industry was in a slump last year. I personally believe this (aggressive  hiring) is a correction. Next year may not be as strong as this year, as a lot  of projects on hold have started getting released. There is a sudden spike in  demand, which will settle into a steady pattern.

You  have fairly good exposure in Europe and most European economies are not yet out  of trouble.

About  55 per cent of our revenues come from Europe and about 30-35 per cent from the  US. This ratio has changed over a period of time, as the US is growing rapidly.  We are seeing substantially more growth in the US market than in Europe. Europe  is also growing but growth has been neutralised to quite an extent because of  the devaluation of the euro and the pound.

How does the  current fiscal look in terms of growth?

This  year, we have already added 46 clients. In 2008-09, we added 36 clients and  last year, we added 62. This year, we hope to beat last year's figure, as three  more months are left.

How big are  those contracts?

They  are certainly big. We measure our revenues on multiple parameters. We look at  the quality of the revenue stream by seeing if the deal sizes are improving; if  we are getting bigger clients and the deals are one-off or an annuity; are they  fixed price or time and material. On all these metrics, we are seeing an  improvement.

Click here to know more about the Information Technology