Infy banks on retail, Mphasis eyes technology

So, how is the business mix in Corporate India changing? Infosys is focussing heavily on retail where revenues as well as margins are rising. Same is the case with Crisil, the ratings major, which is finding advisory services more remunerative than its ratings business. Mastek is shifting focus from US to UK to combat the tech slowdown. Mphasis BFL is making major headway in its technology segment while its retail, logistics and transportation segment is not doing well. In case of Zee, its subsidiaries Siticable Network, EL Zee Television and ZEE TV US have really performed well, much better than the parent company.

These are some of the trends noticeable from a study of the segmental information submitted by companies alongwith their quarterly results. With Sebi having made segmental results mandatory alongwith quarterly results a year back, companies are now also publishing their segment-wise revenues, profit before tax and capital employed.

In Infosys, a marked trend is the huge jump in its revenues from retail and financial services segment. In retail, its revenues more than doubled to Rs 233 crore for the nine months period ended December 31, 2001, from Rs 110 crore for corresponding period last year. Retail now comprises 12.1 per cent of its total revenues, up from 8.1 per cent last year. Financial services, which is Infosys` bread and butter business, saw revenues jump to Rs 700 crore from Rs 453 crore and now comprises 36.4 per cent of its revenue pie compared to 33.8 per cent last year. The segment contributes one-third of the software major`s bottomline. Another trend is a drop in margins across all segments except in retail and telecom. Margins are nothing but profit before tax as a percentage of revenues. In retail, margins rose to 47.5 per cent from 37 per cent last year and in telecom margins went up to 48.5 per cent from 46.8 per in previous fiscal.

For Mastek, its UK operations are turning out to be a source of big strength contributing 77 per cent to its bottomline while being just 53 per cent of its revenues for the three months period ended December 31, 2001. The share of revenue from this segment, too, shows an increasing trend as it comprised just 51.3 per cent of its revenues for the six months period ended December 31, 2000. This is in line with the company`s focus on Europe to be its growth engine.

Mphasis BFL is doing well in its technology segment with revenues rising to Rs 28.1 crore for the nine months ended December 31, 2001, from Rs 16.4 crore during same period last fiscal. It now comprises a much larger 44 per cent of its revenues against 36 per cent last year. Even margins in this segment have risen to 48.4 per cent from 36.5 per cent last year. It is doing quite well in its financial services segment, too, with revenues rising to Rs 17.2 crore from Rs 10.2 crore. The segment now contributes a larger 13 per cent to its topline from 8 per cent a year back. However, its retail, logistics and transportation segment has seen revenues fall to Rs 49 crore from Rs 59 crore a year back and the segment now contributes a reduced 37 per cent to its revenues compared to 47 per cent a year back. The key growth drive in case of Mphasis is going to be its business process outsourcing (BPO) subsidiary, MSource India, which is expected to post a turnover of around Rs 23 crore in fiscal 2001-02 and triple it next year.

Crisil is finding its advisory business more profitable and has seen revenues for the segment jump to Rs 8.2 crore for nine months ended December 31, 2001, from Rs 5.5 crore for same period last fiscal. Advisory business now comprises 19 per cent of its total revenues compared to 17.3 per cent for same period last year. Ratings, however, continue to remain its bread and butter business contributing 72.3 per cent to its total revenues and contributing 85.5 per cent to its bottomline.

In case of Zee, the segmental information is available for the group as a whole and takes into account performance of its subsidiaries as well. Its India broadcasting operations under Zee Telefilms Ltd has seen a rise in revenues as well as margins and contributes nearly 30 per cent to consolidated revenues and 56 per cent to consolidated profit before tax. Its US operations under Zee TV US have seen multifold rise in its revenues, which went up to Rs 68.3 crore for the nine months period ended December 31, 2001, from Rs 11.8 crore for same period last year. It now contributes 5.8 per cent to its consolidated revenues compared to just 1.2 per cent last year. Its two other subsidiaries EL Zee Television Network and Siticable Network too have seen a sharp rise in revenues and now comprise a bigger portion of the consolidated revenue pie. For the nine months period ended December 31, 2001, revenues from these two segments were Rs 63 crore and Rs 84 crore respectively, and they comprised 5.4 per cent and 7.1 per cent respectively, of consolidated revenues.

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