Australia seemed like a natural-growth area for us: Sanjiv Goenka

RPSG group-owned business process management (BPM) firm Firstsource has announced its expansion into Australia and New Zealand. Sanjiv Goenka, chairman, RPSG, in an interview tells Ashutosh Mishra this will open up avenues for the company and create jobs locally. He gives insights into the plans to increase margins for Firstsource in the next 30 months through organic and inorganic growth. Edited excerpts:

How do you see this expansion into Australia and New Zealand?

We’ve been looking at English-speaking geographies for expansion. With our dominant presence in the United Kingdom and United States, Australia seemed like a natural-growth area. The country has a large number of corporations, and therefore, it was logical to look at it. When we examined Australia, we discovered the state of Victoria, particularly Melbourne, was supportive, and so the idea was to grow there.

For the first few years, jobs will ramp up to about 500 seats locally, based on the indication we have at this point in time.

Are you looking at other geographies too?

South Africa. This week two of our major clients are visiting facilities there.

It’s been over a decade since you acquired Firstsource. How do you assess your bet on the tech sector?

It was a Rs 400 crore investment when we acquired it. At present its worth is Rs 22,500 crore. It’s going good for us, and hopefully in the next couple of years, it will double from where it is.

The company has provided a revenue guidance of 10-13 per cent. What gives you the confidence this is achievable in this uncertain macro-environment?

We are having wins each quarter -- that is one reason. Our pipeline has increased by almost 70 per cent. Winning new logos is one part of it and inorganic growth is another. But mining your existing clients better is going to be the most important element. Our top 50 clients’ contribution to revenue is still small. We have an opportunity to grow. Even if we grow this by 8-10 per cent that itself is a $550 million opportunity.

In 2021, you had said Firstsource was transitioning from a BPM to a platform-based service. How has the transition been so far?

It’s about giving and adding value to your client. The definition of BPO (business process outsourcing) has changed. So it’s not only about being a call centre, which is what it was in the past. It’s now about being an analytics provider and a data provider. It’s about using generative artificial intelligence as a tool to give all this data and service to your client. So, I’m not boxing myself into any category. 

We have a target to grow our profitability two and a half times by 2028. The idea is to increase margins by 3 per cent over the next 30 months, and there is a clear plan for that. Last quarter, we had the highest revenue growth in the whole sector. We hope to be in the top quartile of growth rates, and this will be done by a combination of costs and operational efficiencies, and mining our existing clients better.

So the idea is that now we increase sales and revenues, change the onshore-offshore ratio, which improves margins, and lower attrition, which again improves margins. So it’s a combination of things.

Apart from Firstsource, is there any other tech avenue where we can see RPSG group’s entry?

Yes. Soon you’ll get to hear something.

As a group, what are the avenues you would like to focus more on in the coming years?

We are focusing on chemicals. That is going to be high growth for us. Domains such as information technology-enabled services, carbon black, renewable energy, and distribution will show good growth for us.