Tata Technologies eyes 30 p.c. growth

PUNE, INDIA: Amidst the growing economic uncertainty, Tata Technologies, the provider of Engineering Services Outsourcing (ESO) and Enterprise IT Services looks to push-up its business growth organically.

Growth strategy

''We are trying to balance the cycle of economic ups and down through our diversified business strategy,'' Samir Yagnik, Tata Technologies' president Global Services & COO - Asia, told CyberMedia News.

''As per our strategy we look for growth into identified markets and areas. Secondly, look at opportunities in such industries where there's potential to take it to next level in terms of capabilities, innovating products and working closely with them.''

According to Yagnik, India's growing need for infrastructure is definitely a big opportunity of growth. ''If you are riding on it (infrastructure) then definitely there are growth opportunities.''

 

''We have been growing organically at the rate of 20 per cent annually over last 5-7 years, except the recession period of 2008-2009. However the growth is expected to remain more or less in that proportion, but we need to growth at 30 per cent yearly,'' Yagnik said.

In fact, the Pune based company is part of NASSCOM's newly formed Special Interest Group (SIG) for the Construction & Heavy Engineering (C&HE) sector and Yagnik is heading the SIG.

According to Zinnov Management Consulting's study, the Indian C&HE industry revenue is expected to grow six times at $23 billion by 2020 from just over $5 billion in 2011.

Organic growth areas

While organic growth remains to Tata Technologies' business, Gopinath Jayaraj, president Global Delivery explained how the company has sustained its organic growth over the years.

''We have a PLM Consultancy with Deloitte Group, provide Engineering Services Outsourcing (ESO) and IT services focused on Manufacturing. Beside we not only bring engineered product but also develop and implement Enterprise applications and IT systems and help customers in managing products and bringing them to market,'' Jayaraj said.

Besides, Tata Technologies has a joint venture with Hindustan Aeronautics Ltd (HAL) for aerospace engineering services.

In terms of business and customers Yagnik pointed that company has three types of customers. Firstly, anchor accounts, which are large size clients followed by flagship accounts that are relatively small size but have the potential to grow rapidly by selling and delivering special services.

And rest is the market opportunities in the engineering, aerospace, automotive and heavy construction space, he added. At large the anchor and flagship accounts contribute 70 per cent of total business, which are outside the country and remaining 30 per cent comes from India and other territories.

''Lots of decisions are made outside India but growth happens in India, which makes engineering services very interesting because we also work with captives of organizations in the territories they operate,'' Jayaraj said.

Global facilities, staffs and outsourcing

The company has a total of 5900 staff spread across its global delivery centers based in Pune, Bangalore, Detroit (US), Conventry (UK) and Bangkok (Thailand). About 70 per cent of them are in India and rests are split between North America and the UK.

With the strong political pressure against outsourcing in the US and Europe, Yagnik informed how the company's model of ''on-site co-creation'' has helped overcome those issues.

''Having on-site lobbying of co-creation - working with local engineers along with Indian engineers helps us move up the value chain and remain closer to customers. It helps in building partnership with customers, understanding processes of designing and innovation and driving offshore activities more efficiently,'' Yagnik said.

Though, the Tata Group company is heavily relying on organic growth, it's been a while since it last acquired UK based INCAT International in 2005.

''Our acquisition strategy is based on capabilities and core-competency. So we need to look at companies that can fit into our strategy and fulfill needs of our customers then only we will like to acquire. Having said that we are open to acquisition but the condition is - it should fit our strategy,'' Yagnik concluded.