Bangalore-based IT services and business process outsourcing (BPO) firm MphasiS is looking at a string of acquisitions in the sub-$100 million range to strengthen capabilities in areas of business support, package implementation, BPO and remote infrastructure management (RIM).
The erstwhile parent of MphasiS, EDS was acquired by American technology giant HP in 2008. MphasiS currently gets around 70% of its revenues from HP and the acquisitions are aimed at increasing revenues from direct clients other than HP, which currently contribute 30% to its topline.
Ganesh Ayyar, CEO, MphasiS told FE that the company was scouting for firms to strength the company?s existing portfolio and verticals such as banking, financial services, healthcare, life sciences and pharma. ?We plan to fund these acquisitions from cash in hand. Our cash position had increased to $200 million at the end of 2009 from about $10 million at the end of 2008,? said Ayyar.
He added that the jump in the company?s cash position was largely on the back of increased focus on RIM and application-led services other than BPO, cost optimisation and reducing days of sale outstanding from 83 days in October 2008 to 72 days in October 2009. In August last year, MphasiS acquired the captive unit of AIG (AIG Systems Solutions) which provides IT services and solutions to AIG companies worldwide for an undisclosed amount. However, he refused to divulge details on the revenue contribution from the acquisition since then.
Ayyar added that the company was looking at increasing revenue flow from direct customers. ?We have been working with a set of clients for a long time and want to grow our footprint with existing clients. At the same time there are markets that HP may not be addressing and we would want to capture those,? he added. MphasiS, which gets 12% of its revenues from HP as a direct client and 58% as a partner, is also simultaneously looking at increasing the share of joint-go-to market-led revenues with HP, and tap into new revenue streams in HP such as implementation services for its software products.
A significant portion of the company?s future investments will also go into expanding its geographical presence.
?We are looking at accelerating our efforts in India, Australia and Europe,? he said. In the offing are more offshore and near shore centres by the company in these emerging geographies.
The company, which is yet to announce its financials for the quarter ending December 2009, reported consolidated revenue at Rs 4,263.9 crore for the year ended October 31, 2009, compared to Rs 2,977.4 crore last year, registering a growth of 43.2%. Its net profit zoomed by 121.2% from Rs 410.7 crore to Rs 908.7 crore.