Pune-based Persistent Systems bullish on government spending on IT

Pune-based software firm Persistent Systems is bullish on government spending on Information Technology to give a boost to its revenues. Providing data and digital solutions to State governments is expected to be one of the ways forward for the company.

According to Mritunjay Singh, Executive Director and President – Services, the company’s order pipeline from government contracts stands at around ₹400 crore, up from about ₹150 crore in the year-ago-period.

The total contract value of government business for Persistent will be around ₹100 crore, with revenues being spread over the next 5-6 quarters.

While Singh admits that the government business is not huge compared with the other verticals of the company, he does foresee opportunities.

“We are taking a bet. We started this in 2015 and have been fairly successful. We want this to become bigger. But this (increase in the share of government business) won’t happen immediately,” he told BusinessLine .

“But, yes, 3-5 years from now, this has significant potential… I think it will be upwards of ₹500 crore (in revenues).”

The contracts Persistent will be eyeing as of now are mostly below ₹200-300 crore, annually. However, in the long run, it may look at larger contracts.

Incidentally, Persistent seems to be looking at government orders at a time when IT majors seem to be shying away from them. Delayed payments seem to be an issue for the industry.

“I have not had any issues in collecting my payments from the government, even in States such as Uttar Pradesh and Madhya Pradesh,” Singh said, adding that opportunities around digitisation will be huge especially if one tries to bring in “turnkey solutions to specific problems.”

There remains a huge gap in the amount of data generated and the actual digitisation done in the country. And India may have to spend “a couple of billion dollars” in its efforts towards digitisation.

Singh said the firm has figured out its core strengths when it comes to government services.

“We sell IP end-to-end and bundled solutions (including hardware, software and products). We are not trying to do vanilla services in India. Now that we know our strengths, we are focussing on a couple of solutions.”

Some of the offerings that Persistent is looking at include creating a dashboard for Chief Ministers’ offices and digitising the health records of patients (as a pilot).

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