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BPOs are booming

india Updated: Aug 02, 2013 01:27 IST
Manu P Toms
Manu P Toms
Hindustan Times
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While India’s information technology (IT) companies have been struggling to claw out of a crisis in their prime US and European markets, their less fancied cousins in the BPO (business process outsourcing) industry have been growing at a healthy clip.

Shrugging off concerns about being beaten by cheaper rivals from China and the Philippines, major pure-play BPO companies led by Genpact, EXL, WNS and EXL, listed in the US but with their operations in India, have swapped low-end voice work at call centres for services that involve industry expertise, which requires for higher skills and results in increased profit margins in the back-office service business.

“We see strong demand in finance and accounting, insurance and analytics,” said Rohit Kapoor, CEO of Noida-centred EXL Service. Social media, legal and healthcare services are among other areas that Indian firms are specialising in.

“New jobs are created mostly in highly specialised domains. About 5% of today’s BPO workforce is doctors while 15% are chartered accountants or certified public accountants,” said Keshav Murugesh, CEO of WNS who heads industry association Nasscom’s business process management council. He expects “mid-teen” growth for BPO firms.

BPO, now a shorthand for a broad category of IT-enabled services, grew 12% to $18 billion — accounting for 17% of India’s $108 billion IT-BPO exports in 2012-13, while accounting for 920,000 jobs (or 30%) of its 3 million staff. While revenue per employee is lower, the growth is higher in BPO.


Understandably, BPO company shares have done well in the past year. Stocks of NYSE-listed WNS doubled over the past year, while Genpact and Syntel rose 20-22% growth and EXL moved up 13%.

In April-June quarter WNS and Syntel reported an identical 13% year-on-year growth in revenue at $119 million (Rs. 719 crore) and $ 202.5 million (Rs. 1,224 crore) while EXL posted a 7% topline growth at $ 116 million (R701 crore). Genpact is due to announce its results. The industry expects total revenues to nearly triple to $50 billion over the next seven years.