InfosysNSE 0.39 % BPM, the business process outsourcing subsidiary of Infosys, is expected to nearly double its revenue to $1 billion in the ongoing fiscal year, as recent acquisitions by its parent are expected to increase business from banking and insurance clients, analysts said.
In May, Infosys acquired a 75% stake in Stater, a unit of ABM AMRO that offers end-to-end mortgage administration services to customers in the Benelux (Belgium, the Netherlands and Luxembourg) region.
Infosys BPM also acquired in October a 1,400-employee contact centre in Ireland – Eischtec – which has clients in the telecom, social media, healthcare, educational technology and financial technology sectors.
The company is expected to hit $1 billion in revenue, said Phil Fersht, chief executive officer at industry consultancy HfS Research. “While Infosys BPM has predominantly grown through mainstream back-office finance and procurement services, its success in the insurance domain and, more recently, banking, with the acquisition of Stater, has seen it emerge as a serious competitor in industry domains,” Fersht said.
Infosys declined to comment.
Infosys BPM, led by Anantha Radhakrishnan who was elevated as CEO in 2016, reported revenue of 3,932 crore (about $590 million) as on March 31, 2019.
During the yearago period, the company reported revenue of ?3,061 crore.
Backoffice firms, which have large strategic contracts with clients globally, are seeing higher growth than IT services providers.
ET reported last week that BPM companies have forecast doubledigit growth as clients shift technology spending into digital.
For instance, Genpact has forecast revenue growth of 18% in constant currency. While companies that offer platform-based solutions are seeing double-digit growth, traditional voice-based services are seeing 9-10% growth on average.
IT services firms are growing at a slower clip, though. “A surge in Infosys BPM’s growth has been contributed by a strong deal pipeline and work that came via recent acquisitions,” said a senior analyst who closely tracks Infosys and Infosys BPM. The middle management’s strong performance also aided growth at the company, Fersht said.
“Infosys has benefitted well from keeping its BPO business separate from its mainstay IT services business for many years and enjoying cross-pollination of sales across accounts. Today, Infosys BPM is a tier 1 business services competitor that can hold its own against the likes of Accenture, Genpact, TCS and WiproNSE -0.75 %,” he said.
Apart from the existing service areas, the acquisition of Eishtec is putting Infosys BPM “firmly in customer-facing process areas and adds significant abilities in digital operations domains,” Fersht said.