Aegis to emerge billion dollar player in BPO space
10 Feb 2011
The pecking order in the Indian IT services landscape is due for a major change in 2011, following Cognizant's rapid rise. So will the $14 billion BPO market. Aegis, an Essar company, will likely join Genpact as it second member in the pure play billion-dollar BPO club.
It will also displace Wipro BPO from its perch as the third largest Indian BPO exporter overall.
Aegis is expected to make it with its recent $2 billion 8-year deal with Saudi Telecom Company, Saudi Arabia's largest telecom operator. The deal would add $250 million every year to the company's revenue. The $2 billion deal is one of the largest deals ever inked by an Indian service provider.
The firm has projected FY 2011 income at about $700 million and FY12 earnings at over a billion dollars - 25 per cent of the growth coming from the STC deal.
While Genpact's revenue is over a billion dollars, TCS BPO is on a fast-track growth with revenues of $729 million in FY2010.
Analysts say FY 2012 could see a neck and neck tussle between Aegis and TCS BPO in FY2012 with the possibility of Aegis toppling TCS if India's largest IT-BPO exporter fails to sustain its current pace of growth.
According to them, it may be difficult for IT services companies that are also into provision of BPO work to maintain high growth rates for too long. They add that the companies often tend to pick and choose business to protect margins.
An Indian Express report quoting Gopinathan Padmanabhan, executive vice president and global delivery head of MphasiS, said pure play BPO providers can go after all businesses as their margins are low. On the other hand, IT services companies have to be careful as picking up everything can erode margins.
