ValueLabs, a Hyderabad-based software development, testing and knowledge process outsourcing (KPO) company, is planning to set up its second facility in the city at an investment of Rs 150 crore. ValueLabs currently has two facilities – a 175,000-sft centre in Hyderabad employing 1,420 and the other in Kuala Lumpur in Malaysia housing 40 professional.
“We are in the initial stages of discussion with the state government for allotment of 10 acre of land in an SEZ near Hyderabad and expect a positive response in the next few weeks. We plan to start work on the facility within two and a half months of allotment,” Arjun Rao, chief executive officer of ValueLabs, told Business Standard.
Rao said the first phase of the new facility will involve an investment of Rs 100 crore and would accommodate 750 employees upon completion in the next two years. “The 500,000-sft facility will be fully operational in the next four years employing 5,000, two-thirds of which will be catering to new businesses,” he said. The zero-debt company would fund the expansion partly through debt and the rest through internal accruals.
The company has also acquired 30 acres in Pune’s upcoming IT hub Hinjewadi and had already received necessary approvals from the Maharashtra government for setting up its centre there. “We believe that our current and proposed facilities in Hyderabad will meet our requirements for the next three to four years. We plan to take the Pune project forward after three years from now,” Rao said. ValueLabs headcount will go up to 7,000 when its Pune facility is ready.
The company had also secured a licence to operate in Dubai’s IT cluster – Dubai Internet City – and recently opened its sales office there, which besides acting as the primary engine of growth in the Gulf Co-operative Council countries will also serve as the springboard into the central Asian and African markets.
Rao said the company saw a huge traction in energy and telecom sectors in West Asia and expects to clinch five clients in the region to offer them custom application development, maintenance solutions and remote infrastructure management services. “We expect West Asia to contribute 10 per cent to our revenues in the next one year,” he added.
At present, the US contributes around 60 per cent to ValueLabs business, which it plans to bring down further to 50 per cent by expanding to other markets including South Africa, West Asia, India and Europe.
ValueLabs reported revenues of Rs 120 crore in the last financial year. It expects to close the current fiscal with a revenue run rate of Rs 200 crore on the back of its extended team model (ETM) and geographical diversification. The company follows an ETM approach in which its team becomes a part of the independent software vendor’s (ISV) organisation. Today, 50 per cent of its 60 clients are ISVs.
