MphasiS, a BPO company that crossed the $1-billion mark in 2010, now wants to derisk by getting more revenues from direct customers, rather than depending on clients of its parent company Hewlett-Packard (HP).

When contacted by Business Line , an MphasiS spokesperson said, “Currently, H-P accounts for around 72 per cent of our revenues. Out of this, 14 per cent comes from H-P itself acting as a client of MphasiS, while the remaining comes from H-P's and EDS's (now, H-P Enterprise Systems) clients.” The company has also hired Boston Consulting Group to help it restructure its operations and increase growth.

Direct focus

The company feels it should spread the risk and not have one company contribute the bulk of its revenues. Towards this end, it wants to increase its direct focus.

In fact, this is in line with the statement made earlier by Mr Ganesh Ayyar, Group CEO, MphasiS: “The objective of the transformation is to have a well-balanced approach towards both channels, H-P and direct, (and) stay in chosen verticals and countries to establish leadership position. Here, the focus is to distance ourselves from the competition in areas of strength. The third element is to maintain a good balance of developed and emerging countries; have IP (intellectual property) and surround IP-led offerings to drive non-linear growth.”

MphasiS has been getting new clients regularly. During the quarter ended October 31, 2010, the company added 22 new clients. However, revenues from its top ten clients have remained the same (45 per cent) for the year ended October 31, 2010, and the year ended October 31, 2009.

But Mr Ayyar quickly points out: “Our focus on direct business is less to do with anything on negative sentiments around H-P business. It has more to do with the fact that we want to have greater positive sentiments around our direct business. So it's not because one is not influenced by the other — if you look at our track record our business through H-P channel has been growing at a healthy clip. And we want to make sure that we have similar vibrancy in our direct channel, it is as simple as that.”

Rich history

MphasiS has a rich history of mergers and acquisitions. After acquiring BFL Software in 2000, it was acquired by Electronic Data System (EDS), which got a controlling stake in MphasiS in 2006. In 2008, when H-P acquired EDS (the name was changed to H-P Enterprise Systems a year later), MphasiS became a division of H-P. According to a research document released by Keynote Capitals Institutional Research, the company wants to make a concerted effort to get more clients in the BFSI (banking, financial services and insurance) sector, which accounts for over 42 per cent of its revenues. Of the 22 clients the company acquired during the quarter ended October 31, 2010, one was a bank.

Related Topics
comment COMMENT NOW