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Oct 18, 2012, 07.29 PM IST | Source: Moneycontrol.com

Hinduja Global will continue to seek buyouts, says CFO

Business Process Outsourcing (BPO) services provider Hinduja Global Solutions will continue to seek acquisition opportunities in areas like healthcare, human resource management, says chief financial officer Srinivas Palakodeti.

Nachiket Kelkar
moneycontrol.com

Business Process Outsourcing (BPO) services provider Hinduja Global Solutions will continue to seek acquisition opportunities in areas like healthcare, human resource management, says chief financial officer Srinivas Palakodeti.

The company, directly or through subsidiaries, has already acquired four companies in the last two years, which include UK-based customer relationship management company Careline Services, Mumbai-based HCCA Business Services and Canada's On-Line Support Inc. Last month, its US arm Hinduja Global Solutions Inc signed a deal with Deloitte Consulting Extended Business Services to acquire its healthcare revenue cycle outsourcing business.

Palakodeti said that post the Deloitte deal, HGS has around USD 70 million in cash and as opportunities arise, the company will make acquisitions.

"We are strong in areas of telecom, healthcare and BFS (banking and financial services). There are certain areas where we are looking to grow. For instance, our presence in healthcare within the providers (hospitals) space was small. So this was one of the reason of doing the (Deloitte) acquisition so our presence in the provider space would increase. We want to grow our HRM practice; this whole pace of digital marketing, digital DRM, those are some of the areas we are looking at," he told moneycontrol.com in an interaction.

Apart from in-organic growth, the company will also look at expanding its presence overseas through on-shore and near-shore delivery centres.

Palakodeti says the company has a "global delivery model" and the client can pick and choose where he wants deliveries from, offshore, onshore or close shore locations like Jamaica.

HGS already has delivery centres in US, Canada, UK, Germany, France, Italy, Netherlands, Mauritius and Philippines apart from India.

In the first quarter, it expanded its capacities in Canada and opened a new centre at Preston in UK and Jamaica in West Indies. It is also closely assessing opportunities in Middle East and Latin America.

"Overall basis, share of offshore revenue is only 30%. Half of it is originating in US and being delivered in India, half of it originating in US and beling delivered in Philippines. Balance 70% is all same shore," he said.

It currently has 23,000 employees, of which little over 8,000 are based in overseas locations. Palakodeti says that there are more employees still in India since it has a huge presence catering to India's domestic market. It plans to hire 4,000 people this year. 

Commenting on the overall environment and growth prospects this year, Palakodeti said the overall business was looking good.

"Overall business pipeline looks good. We have typical seasonality in the business, first two quarters being slow and business picking up in the subsequent quarters. Thats what our quarterly trends would show. But we continue to get good requests for proposals etc," he said.

Healthcare and consumer electronics verticals are expected to drive growth in the second half of the year.

HGS shares closed up 0.4% at Rs 324.60 on NSE on Thursday.

nachiket.kelkar@network18online.com

Hinduja Global stock price

On October 23, 2014, Hinduja Global Solutions closed at Rs 650.25, up Rs 1.65, or 0.25 percent. The 52-week high of the share was Rs 736.55 and the 52-week low was Rs 370.00.


The company's trailing 12-month (TTM) EPS was at Rs 66.47 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 9.78. The latest book value of the company is Rs 371.66 per share. At current value, the price-to-book value of the company is 1.75.

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