Patni Computer aims to beat industry growth

By Anshuman Daga

BANGALORE: Privately held Patni Computer Systems, India's sixth largest software exporter, aims to grow faster than its industry this year on strong U.S. orders, a senior official said. "We are targeting a 30 percent growth in revenue compared to the industry's estimated growth of 20 to 22 percent," Vijay Khare, senior vice-president, told Reuters in a telephone interview late on Wednesday from his office in Bombay.

The company posted revenue of 7.32 billion rupees ($150 million) in calendar 2001, up 42 percent from a year earlier. Khare said Patni's main client, General Electric Co, which accounts for half of its revenue and has a nearly 10 percent stake in the firm, is expected to ramp up orders. "GE continues to offer significant growth," he said. Patni does software work for a variety of GE's business including its aircraft engines, lighting and financial services units.

Japanese electronics giant Hitachi Ltd. and U.S. consumer products firm Gillette Co are among the other key clients in Patni's tally of about 135 customers. "We expect to hire throughout the year, adding about 800 people, taking our total staff tally to nearly 6,000," Khare said. The company was founded more than two decades ago by Chairman Narendra Kumar Patni, who studied and taught at MIT. He owns a majority stake in the firm.

N.R. Narayana Murthy and Nandan Nilekani -- the chairman and managing director of India's No 2 software exporter, Infosys Technologies Ltd., -- took the plunge to co-found Infosys while they were working at Patni.

Spending cuts hit growth

Indian software firms last year saw a sharp slowdown in their dizzy rates of growth as clients cut technology spending. But business is seen picking up as global companies, ranging from retailers to insurance firms, outsource to cut costs. "There have been lot of budget cuts among clients but that is where the opportunity to offshore has been created," said Khare. Armed with a large pool of cost-effective software workers, Indian companies provide services, which are roughly 30 to 50 percent cheaper than U.S.-based firms, he said.

Software majors including Infosys and Satyam Computer Services have forecast their revenue to rise by 17 to 20 percent in the current year to March 2003. Growth rates of the main industry players slumped to less than half last year after blistering expansion averaging more than 80 percent annually in the previous few years. One of the pioneers in India's software sector, which saw monstrous growth in the late 1990s, Patni started off representing U.S.-based Data General, a minicomputer firm leading the shift from mainframes.

Khare said the company has no immediate plans to list its shares, partly due to a slump in market conditions. "To even think about an IPO right now is not a good idea," he said, without giving details. Last month, Indian financial software maker i-flex solutions listed on the markets and raised 2.1 billion rupees, India's biggest IT issue in two years.

($1 = Rs 48.66 )

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