IT services provider iGate Corporation which has a large offshore presence in India, is foraying into healthcare space to de-risk its business even as the global meltdown continues to wreck havoc on the IT outsourcing sector across the world.
The California-headquartered company has already won two marquee clients in the healthcare space, and would soon be ramping up its offerings for the sector, Phaneesh Murthy, CEO of the Nasdaq-listed company, told Business Standard.
“The global financial slowdown has affected all segments except healthcare. This is one of the sectors which will see a significant growth over the next five years because there is so much focus on the healthcare in the US. So we thought it is prudent to get into that segment,” said Murthy. The healthcare clients will start contributing to the revenues of iGate in the ongoing quarter, he added.
iGate, which was recently in the news for participating in the bidding process to acquire scam-tainted Satyam Computer, uses offshore to the extent of about 78 per cent for its services delivery. The company has not changed its offshore-onsite strategy as it believes offshore will be instrumental in bagging newer contracts from global clients in future as they are under tremendous pressure to reduce costs.
iGate derives over 50 per cent of its revenue from financial services vertical, whereas the rest is contributed by media and entertainment, manufacturing and retail. In the quarter-ended December 31, 2008, iGate registered an 8 per cent increase in its revenues to $218.8 million compared to the previous year. However, the company won just eight new clients of which none were from financial services vertical.
“Last quarter was not much of a problem for us as we managed our costs well. However, I do believe financial services will start recovering after the next three quarters and will be the biggest driver in the revival of the economy,” added Murthy.
According to market analysts, most customers in the financial services sector have already gone in for a budget cut of 25-30 per cent for the ongoing calendar.
