“We have decided to lie low in Indian market from a business perspective. Because of the current economic scenario and low margin business, both shareholders and investors have agreed that India will not be a big focus. This quarter, our revenue from India is in higher single-digit, but it will go down further as we see demand in other geographies grow,” said Sarkar.
For the quarter ended September 30, 2013, HGS’ revenue contribution from India was eight per cent; the figure was 12 per cent for the same quarter in 2011. India’s share in the company’s revenue was 12.25 per cent for FY11.
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While the Indian market was growing strong four years ago, of late many have resorted to pricing cuts with too many vendors entering the domestic market in the recent past. Hence, the firm’s focus is to be selective and have profitable client acquisitions across sectors to improve profitability.
“In India, it is only the telecom sector which has looked at outsourcing in a big way. The banking and insurance sector still has its own captives. If we see good traction for outsourcing from players in the banking and insurance space, we will get back into the play,” Sarkar added.
Meanwhile, the company has managed to grow well in its majority markets - the US and Canada - and even in the Philippines where the firm forayed recently. US contribution to the firm’s revenue is about 75 per cent, and it expects the region to grow well. “We are seeing strong demand for our services in the US. We are seeing a good uptick in offshoring, and our capacity utilisation has also increased. We completed 40 years of operation in the US and the good thing is, we still have customers with us for that long,” Sarkar noted.
Although Europe and the UK will be a tad slow, Sarkar said West Asia and the Philippines are growing fast. “Europe is a bit difficult to expand at this time. We do see Latin America and Middle East (West Asia) as good growth markets.”