CMS Info Systems eyes Rs 2,000 cr revenue in 3 years

Blackstone-backed compnay is confident that over next three years all its business unit will grow 20-30%

Unlike several of the Indian IT services that have faced headwinds due to the troubled business environment in their majority markets—US and Europe—companies that have focused on the domestic market have done well.

One such company is the private equity firm Blackstone-backed CMS Info Systems.

CMS is on track to close the financial year 2012-13 at around Rs 1,000-1,200 crore in revenue, and is confident that over the next three years all its business unit will grow 20-30%.

Taking its total revenue to Rs 2,000 crore. CMS' revenue was Rs 550 crore when Blackstone came on board along with ex-Microsoft managing director Rajiv Kaul in 2009.

For Kaul, who was with Microsoft and was also a partner with PE firm Actis, taking over CMS operations has been an entreprenuerial bet.

“I see all the business units for us growing at least 20-30%. In the next three years we see ourselves touch revenue of Rs 2,000 crore,” said Kaul, executive vice chairman and CEO, CMS Info Systems.

Some of the reasons driving this growth include the change in the strategy of the company's business of IT services, and Card and printing business.

CMS Info Systems, provides services for cash management, ATM services, card services, IT services, systems integration and printing, has seen multiple fold growth in business due to the increased ATM outsourcing contracts that the domestic market has seen as well as the restructuring the company underwent when Blackstone took over.

CMS provides direct services to 32,000 ATMs across 1,200 locations with a dedicated team of 21,000 trained people.

“Over the last two years we have beefed up the management team. From just four member senior team, we now have eight people. The important thing is we have been able to attract the best talent in the industry. Add to this the inorganic strategy we adopted too has helped. We acquired Securitrans India in 2011. This has taken our market share up in the cash management segment from 25-27% to 55-59%,” said Kaul.

Kaul is also bringing in his technology expertise to this business. One such focus has been to integrate technology at various levels in its ATM/ cash management offering to stay ahead of the growth curve currently being witnessed in the ATM management space.

This includes, use of handheld devices in cash management which enables customers to get an immediate credit entry into their bank accounts and earn instant interest, which in the traditional method takes two to three working days.

“When we manage cash from a retail client of a bank, the handheld devices sends in information that is live, and up-to-date. As and when active transaction happens we are able to give live feed to banks or their retail customers. This can help the end-client of the bank to get credit for the company faster. We want to be able to give such information on finger tips for banks and their clients,” he added.

Managing risk in cash management is another area where CMS is making use of analytics. The company is yet to come up with a formal plan, but it has started to streamline all the data that it gets from clients.

“It is still work in progress and we will need to talk to banks and other players. Tracking ATM transaction is easy, we would like to create indices on how cash is being used on certain events. At present there is huge time lag. Today we touch at least 30% of cash in circulation in India. I think it will be quite relevant for analyst and banks and regulators if we can collate this information,” added Kaul.

The first target of collating such data would be for analysing risk patterns at ATM, which can then be reconciled with banks. This will help tackle issues like theft, misuse, skimming etc.

CMS has also started providing end-to-end services for banks and some of their large clients. For instance, for HSBC, CMS manages counters for some of the banks large clients.

“We have been providing such services to a handful of customer. Where we set up counters and manage these end-to-end with the banks,” added Kaul.

For CMS, almost 60% of revenue comes from cash business such as ATM and cash management, and the rest comes from IT services and card and printing units.