Indian Rayon Plans To Double BPO Seat Capacity To 1,600

Mumbai, Feb 27: | Updated: Feb 28 2004, 05:30am hrs
The BPO (business process outsourcing) business of Aditya Birla group company Indian Rayon & Industries TransWorks which has performed well eight months after the acquisition, plans to double the seat capacity to 1,600. This has augured well for the group which is said to be betting big on its software business.

Indian Rayon & Industries president & chief financial officer Adesh Gupta said: TransWorks, the BPO subsidiary has earned positive net profit for January 2004, which is very encouraging. It has achieved the revenue run rate of $1.7 million per month. The software business is expected to break even at the EBTA level in the ensuing quarter.

The company has a growth strategy in each of its business and the outlook for the future is considered to be positive. The company does not have any M&A or expansion plans as of now, either domestically or abroad. But once, some of the new businesses stabilise, it may examine M&A opportunities, according to Mr Gupta. However, there are no plans for backward or forward integration in any of its businesses for the time being.

The expected breakeven in software business comes in the wake of new customers, improved revenue flow and curtailed losses during the December quarter.

Indian Rayon acquired TransWorks (an Indian ITES/BPO company) in June 2003. The acquisition was aimed at giving Indian Rayon a running start in the BPO sector and enhance TransWorlds business through the Aditya Birla groups financial depth, professional excellence and strong relationships with potential BPO customers. The move seems to have paid off as of now.

In the results for the third quarter ended December 2003, Indian Rayons sales increased by 11 per cent to Rs 411.23 crore, while the profit before tax grew by 4.6 per cent to 42.42 crore. The net profit was not comparable with previous year, which had the benefit of an income tax refund. Segment-wise break up of revenue shows 13.95 crore coming from business that includes BPO, which is 3.39 per cent of the total.