Despite a slowdown in tech spends in the North American geography, Coforge will continue to focus on and invest in the region, according to CEO Sudhir Singh.
In an interaction with FE, Singh said, “Unlike most of our peers, we have about 49% of our revenue from North America. Many of our peers of our size have about 70%-80% of revenue exposure in North America. We believe we are very underpenetrated in North America, and growth has to come by taking market share away.”
He added the company has been investing in North America. “Our SG&A (selling general and administrative) expenses has climbed from 12.6% to 15.1% in the last eight quarters. Our revenue from North America will grow irrespective of whatever happens to the macro environment.”
The IT firm added three new clients in the Americas and two each in EMEA (Europe, Middle East and Africa) and RoW (rest of the world), respectively. Fresh order intake during Q3 was at $110 million out of the total order of $354 million.
The company also has significant exposure in the banking, financial services and insurance (BFSI) vertical. It derives about 32% of its revenue from the first three and 22% from the insurance vertical. And because furloughs were very acute in the BFSI sector, the IT firm faced challenges in increasing its utilisation ratio.
While attrition during the quarter fell to 12.1% from 13% in Q2, the company saw a marginal decline of 60 basis points (100 basis points is one per cent) in its utilisation ratio in the quarter from 80% in Q2 .
Singh said, “Furloughs are behind us. In our case, it has not continued in this quarter. We will be back to 80% – 81% by the end of Q4.” Coforge emerged as the only material board-governed professionally run Indian IT services firm in the industry after promoter-investor firm, Baring PE Asia exited Coforge in August last year.
Singh said Baring had four members on the eight-member board. “Two of them had stepped down. The other two will also step down as soon as we onboard two more non-executive directors.” He added the new board should be in place over the next two–three months.