It's raining deals for Birla Minacs

If last year was bad for Aditya Birla Minacs, as it was for most companies hit by the global recession, this one is very different.

Last year, the Rs 1,900-crore information technology and business process outsourcing (BPO) arm of Aditya Birla Nuvo saw net profit growth fall. Its CEO, Deepak Patel, says their fortunes are changing for the better.

In the last 30 days, he says his company has closed deals worth $250 million (around Rs 1,150 crore) from North American companies across verticals like banking, financial services, manufacturing, pharmaceuticals, technology and telecom. And for the first half of this year, the company has finalised deals worth $500 million (around Rs 2,300 crore — total contract value).

These include new businesses, renewed deals and cross-selling opportunities in its IT and BPO services. The de-listing of its IT business arm, PSI Data Systems, from the Indian bourses and integrating it with Aditya Birla Minacs was one of the strategies to bring in the capability of end-to-end solutions and look for cross-selling opportunities, says Patel.

Moreover, adds Patel, “Our company has a pipeline of $1 billion worth of deals for the next two quarters.”

“Vendor consolidation is one of the reasons for the recent ramp-ups. We also saw that if one has the right mix of delivery and right products, customers are willing to outsource processes and broaden their relationship with us,” he asserts, adding: “These are the efforts of having a clear focus and consolidating our cost base.”

There were lessons to be learnt from last year’s dip in growth. “Last financial year, our performance was impacted primarily because of a stagnant top-line growth and long-time committment on international infrastructure. We have reduced that by consolidating our centres and reworked on some lease contracts. We are also working towards streamlining the existing processes,” explains Patel. The company, for instance, closed three sites in North America and consolidated operations within its 15 centres in the US and Canada. The company has over 25 centres across geographies.

Patel now plans to make the IT-BPO company a $1 billion entity over the next four years. Towards this end, Aditya Birla Minacs is sharpening its focus on building non-voice based capabilities, scaling its centres in the Philippines and strengthening the India market, which it entered a year earlier. Having recently won a Rs 600 crore deal from Idea, Patel says that in the next 45 days, the company will announce a few more wins in the telecom sector.

The company plans to add close to 4,500 employees in US and Canada over the next six months and open some centres in the US. “We will look at both organic and inorganic route to scale our Philippines’ presence, as well as look at targets that will enhance our non-voice capabilities,” says Patel.

“Our dedicated focus is offering IT services, voice-based services and the broader BPO offerings,” concludes Patel. Currently, voice comprises 74 per cent of the company’s revenue and onshore revenue is over 86 per cent. Patel is looking for a 50:50 ratio in voice and non-voice and offshore and onshore operations in four years.