Interview with One Point One Solutions
Our teams are always adjusting to fresh technology and collaborating with new-age enterprises to deliver the best possible business solutions, asserts Akshay Chhabra, Managing Director, One Point One Solutions.
What are your key growth triggers?
Businesses continue to employ digital technology to keep up with market developments as the global macroeconomic environment changes drastically. Given the present technology disruptions and their role in both enabling business processes and developing innovative business modes, business process management is becoming a more important driver of digital transformation. Businesses consider BPM solutions as critical enablers of digital growth; hence the market is likely to grow rapidly for us in the current scenario.
What is your earnings outlook for the upcoming quarters?
Since mid-February 2022, we have seen a flood of new clientele and are confident that with further advancement and refinement in our processes we would continue to witness increased efficiency and improved seat occupancy across locations. Our recent strategic partnership with Bahwan Cybertek, our efforts to onboard new clients in the domestic and international geographies, increasing our billable hours and increasing existing capacity utilization are expected to help us grow realistically at 30-40% CAGR for the next 5 years.
How does India as a country, fit in the BPM dynamics, globally? What is the scope for development?
India is a leader in global outsourcing with a 55% market share. India’s strength lies in its young and technically educated workforce; it is home to 4.14 mn IT-BPM professionals. When it comes to building up Global Capability Centers (GCCs), India is one of the most popular locations. In FY21, more than 1,400 GCCs have around 2,300 GCC units in India, employing more than 1.38 million professionals. Further, the Indian government has been at the forefront with supportive policy initiatives like the setting up of Information Technology Investment Regions (ITIRs), these regions are supported and equipped with excellent infrastructure. In the Union Budget 2022-23, the allocation for the IT and telecom sector stood at Rs 88,567.57 crore.
Scope for the Indian BPM sector is enhanced by the emergence of newer regions and industry sectors, and non-linear growth brought on by platforms, products, and automation. Increasing strategic alliance between domestic and international players to deliver solutions across the globe.
What are some of the biggest challenges the company is currently facing? What steps are you taking to deal with them?
Expansion to new geographies - The company is presently a domestic-focused Process Management and Outsourcing services company with a target to achieve a 30-40% CAGR for the next 3-5 years. The company has entered into a strategic partnership with Bahwan Cybertek to tap into the USD 5 bn IT service market in MENA region.
Additionally, a significant change in the numbers is anticipated as a result of their current activity in international business. The process of setting up a base in the UAE and the appointment of a sales staff are both ongoing.
Entry into New Verticals – The firm is presently focusing on the government vertical, which was not previously a priority, to increase domestic sales. There are several government contracts that the states are required to carry out, such as the Labor Helpline ordered by the Supreme Court. There are around 22 states where this has to be done, and each tender would cost between Rs 100 and Rs 120 crore. Even one such tender would mean doubling the present topline with a net margin of around 20%. The company is also currently working on large tenders from large public sector banks which could potentially be a game changer for the company. A team was formed by the company to focus on these initiatives.
Low margin clients affecting overall profitability - Company had taken a hard call of letting go off certain customers like DTH clients and Telecom clients which were occupying capacities and were low margin industries. As of today, there’s a huge shift in the client profiles with contributions from BFSI, new age Tech businesses, etc increasing to almost 75%. The average realization per seat has increased from Rs 29, 000 to Rs 37,000 and now inching towards Rs 40,000.
What are your plans to further expand the new age business segment in the overall revenue mix?
Tata Nexarc, Cred, Domino Pizza, Razorpay, and other major new age company segment clients are just a few of the ones we've been providing services to. Over time, they have steadily increased their share of our total income. With a planned increase of around 30-40% CAGR over the next three to five years, we are quite enthusiastic about our progress in this sector. Our teams are always adjusting to fresh technology and collaborating with these new-age enterprises to deliver the best possible business solutions.
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