Nasdaq-listed Syntel has about 80 per cent of its global workforce of 23,652 (as of December 2013) employed across its 12 development centres in India. The company is growing much faster than the industry and expects to post revenues of about $910-940 million this year. The Troy, Michigan-headquartered IT and software services company, which earns 85 per cent of its revenues from IT and the rest from knowledge process outsourcing, recently set up a team to scout for acquisitions.

In February, Syntel named Nitin Rakesh as its Chief Executive Officer and President, effective April 21. He will succeed Prashant Ranade, who is moving to a higher role. Rakesh, who joined Syntel in his second stint 18 months ago, is currently President, Americas, Business Development and Nearshoring Centre. In his previous stint, he was the founder of Syntel’s knowledge process outsourcing business, and led it from 2002 to 2008.

In a tête-à-tête with Business Line , Rakesh said the company is looking at acquisitions to expand geographically and improve capabilities. Here are some edited excerpts from the interview:

Syntel has been well-entrenched in the sector, posting good growth and profits. So, there are probably no immediate challenges before you…

Absolutely not… We have a great platform. I am fortunate that we have a strong tailwind of growth and good positioning among customers. There wouldn’t be any drastic changes or turns we need to make. All we need to do is carry on the good work. It’s an exciting time to be in the technology business.

Syntel has been a mid-tier company. When do you plan to move up the ladder?

I think each of the companies in the business have different capabilities and positioning. We are clear that we are not everything to everybody, but in our chosen areas of expertise we are far better than top-tier companies. I am not a believer in top, mid-tier or tier-I segmentation.

At present, North America, including Canada, contributes about 90 per cent of your business. Will this change?

We are trying hard to change the mix, but in the right way. We want North America to grow fast, but we want the rest of the world, including Europe, to grow even faster. So, this contribution of about 10 per cent (non-North America) has grown over the last five years or so. Europe is growing faster than the US.

About 80 per cent of your employees are based out of India. Will this also continue?

We took a long-term call on India when we started investing in our centres almost 10 years ago. We probably are one of the biggest investors in bringing capability, bringing jobs and creating an environment in India. Even though we have centres in the US and the Philippines, the 80:20 model will continue.

What are your expansion plans? You recently broke ground for a new delivery centre in Tirunelveli, Tamil Nadu…

For the next three years, our focus will be to balance between Pune and Chennai and build out Tirunelveli. But I won’t be surprised if we look at another location in India. The investments, if any, would be based on long-term calls.

We made the company successful by constantly shifting business model. We are a US company, started in the US, focused on US customers. We then created the mix, we moved away from customer locations and took work to the people. We are trying to find that next location, where we have talent pool and infrastructure available. And to create the next hub, not just for Syntel but for this industry.

Now that you have a team in place to scout for acquisitions, is a buy on the horizon?

We are definitely looking at expanding geographically. Europe is an interest area. We have a very strong financial BPO business and can make a tuck-in (capability) acquisition. I don’t think I can divulge anything at this point.

Related Topics
comment COMMENT NOW