Tech Mahindra, the $3.2-billion IT services major, aims to generate close to 25% of its revenues from the banking, financial services and insurance (BFSI) vertical in the next three years through a combination of large deals, inorganic options and a platform-driven strategy. The BFSI vertical currently accounts for 10% of Tech Mahindra’s revenues. Traditionally, it has derived 50% of its revenues from the telecom vertical.

Talking to FE, Ravi Vasantraj, global practice head – BFSI competency, Tech Mahindra, said that over the last five years it has made investments in the business and grown at a CAGR of 18% year-on-year.

The BFSI business came under Tech Mahindra’s fold following its acquisition of troubled IT firm Satyam Computer, though it had to face a churn in customer accounts. Tech Mahindra decided to go for a micro-vertical strategy to get a foothold in the BFSI space.

“We decided to go after specific areas and get deeper into it with the ability to provide end-to-end IT services,” said Vasantraj. Some of the segments Tech Mahindra is focused on are retail banking, payment, cards, digital services, reinsurance etc.

The BFSI segment is a key vertical for the $98- billion IT export industry. Large Indian IT services companies, like Tata Consultancy Services (TCS), Infosys and Wipro, get their highest revenues from this segment.

Vasantraj said Tech Mahindra’s differentiated strategy for the BFSI vertical has been generating positive momentum as it is able to provide services in the entire value chain, be it technology platforms or consulting.

As part of its future plans, Tech Mahindra will look at both organic and inorganic options. “We will always look at acquisitions of companies which either fit into our micro-vertical strategy, or are a value buy,” said Vasantraj.

Tech Mahindra in January this year acquired Geneva-based consulting and services company Sofgen Holdings, which specialises in private, commercial and retail banking solutions. This gave it deeper entry into European markets like Germany and France.

Tech Mahindra’s BFSI vertical at the end of the third quarter of FY15 grew 3.6% sequentially, which was higher than the company’s overall growth. The US market accounts for 50% of its revenue, followed by Europe (25%).

Tech Mahindra reported a consolidated revenue of $924.3 million for the third quarter of FY15, recording sequential growth of 2.7% and net profit of $129 million.