Bangalore: The $67 million (Rs 300 crore), US-based TechSpan is hoping to maintain its revenues at current levels in a market that is `completely knocked-down', even as it plans to improve profitability through better utilisation rates. The Arjun Malhotra-promoted company was initially planning $200 million in revenues by calendar 2003. However, in the wake of the current slowdown in the US IT market, TechSpan, has revised its revenue estimates. The software and services consulting company, which began its operations in late 1998, is focussed on e-business integration market. Speaking to The Financial Express, TechSpan chairman and chief executive officer Arjun Malhotra said,"If we stay flat for calendar 2001, that is a 5-10 per cent growth, I will be very very happy." However, simultaneously TechSpan also plans an at least 50 per cent jump in profits during 2001 on the same revenues. During calendar year 2000, the company's net profit is expected to be around $4.3m.
TechSpan hopes to achieve this by improving employee utilisation rates. "The challenge is to improve employee productivity by keeping costs same. We plan to build knowledge management of our people and provide them with training."
Also, the company would provide intangible benefits to the client by giving extra manpower on its project and completing it before time.
With the US market facing a slowdown, TechSpan is facing pressures on selling price and in acquiring new businesses. While the company has maintained its rates at around $109 per hour, it hopes to keep above $100 all through the crisis.
Further, with the recent relaxation of H1B visa rules, the company also plans to increase its employee intake from the US. The number of people recruited by TechSpan from India and to be placed in the US, is set to drop sharply to 100-200 people in 2001 from 800-900 earlier. Explained Mr Malhotra, "Soft skills are very important in our business which people in India must stay in the US market to acquire the skills." Also, while in India the recruitment cycle spreads over 3 months, in the US its far less at 5 days.
TechSpan is also eyeing the offshore market more aggressively, for which it plans to recruit 200-250 people from his home country. While its offshore revenues stood at $4m during 2000, the figure is expected to double during the following year and increase five-fold in the next 2-3 years.
The company is also looking at acquisition/mergers with companies which have strengths in telecom, financial services and high-level consultancy. Mr Malhotra said,"With banks in India likely to see their loans turn sour, they should identify small companies with synergies to get together. At a global level, banks must identify US companies to find a back-end in India and survive through the crisis."
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
