Infotech Enterprises Ltd, a Hyderabad-based technology solutions provider offering engineering and geographic information services, expects a 20-25 per cent growth in revenues from relationship with Boeing, according to Krishna Bodanapu, president - engineering.
The global integrated aerospace practice, established by Infotech early this year, contributed $100 million to its revenues of $260 million during fiscal 2010-11. Of this, Boeing accounted for $12 million or 12 per cent of the $100 million.
“Contribution from Boeing, with which we have had a strong relationship from 2004, was about 4-5 per cent of our revenues in FY11. It was a down tick for us in 2010 and that was expected given what happened in the aerospace market. But, the revenues from Boeing have consistently been picking up since then,” Bodanapu said.
He said the company was in talks with other global aerospace players like Lockheed Martin and Northrop Grumman for aircraft structures and avionics contracts and expected them to crystalise soon.
“It is an ongoing discussion and we are hopeful of having it (Lockheed) in place quickly as they have some offset commitments. And, they are not choosing us just for offset. The way offset is working for us is we are having separate discussions and at some point they are converging,” he said, adding the new contracts would be multi-year in nature with a significant business potential.
Stating that the global addressable aerospace market is presently pegged at $30 billion (offshore) and $60 billion when it comes to engineering outsourcing, Bodanapu said the recent award from Boeing added credibility and visibility to both the OEMs and the supply chain. It recognises the company as the ‘Supplier of the year’ in the non-production category, Infotech operates a dedicated centre of excellence for Boeing with 656 associates in Hyderabad. “One of the things which we are consciously doing is we are playing there (aerospace) not just in the offshore space but also in the engineering outsourcing space. That’s why even out of the, 2,500 people that we have (for aerospace practice, its biggest contributor), about 400 are based primarily in North America,” he said.
Bodanapu said of the 8,780 employees the company has, around 1,100 were in the US which accounted for 13-14 per cent of their employee base. “We see that number increasing in the US because we need more domain expertise and that is not easily available in India. Overall, in about three years, I would imagine that 20-25 of our workforce will be outside India - in Europe and in North America (which contribute 36 per cent and 56 per cent to its overall revenues),” he added.
On the pricing issue, Bodanapu said the company received a price increase of 3 per cent, 5 per cent and four per cent from its top-3 customers. “Even though we were supposed to get contractually, we didn’t get any price increases last year. However, this year, most of the price hike commitments are being honoured,” he said.