Mastek plans to shift focus to Indian biz

MUMBAI: The domestic IT market is luring more large IT players and multinationals. Soon after Infosys Technologies said it was re-considering its strategy to stay focussed only on exports for IT services and BPO, another Indian software firm has joined the fray. Mid-size IT solutions and services player Mastek has set up a separate business unit to focus on the domestic market and has recruited a professional with over 22 years of experience to head it.

For the Rs 700-crore Mastek, this will be a second coming in the domestic market. In 1990s, when it started as an information technology products company nearly 70 per cent of its revenues came from the domestic market. However, later the firm diversified into services and solutions and also reduced its India focus. Currently, less than 1 per cent of its revenues are from the Indian market.

Like Infosys, which has been selling its core-banking product, Finnacle, in India, Mastek has also been marketing its insurance solution, Elixir, in the country. “We are the leaders in channel management in India - we have 7 of the 15 insurance firms in India as our customers,” said chairman cum managing director Sudhakar Ram. But the focus will be to now start offering services as well solutions in India and increase the India business to about 10 per cent of revenues in the next three years.

While an India business will serve to de-risk its geography mix which is currently more dependent on UK, Mr Ram said one of the drivers behind the push was to be in direct touch with the end customer.

“The Indian market will give us direct exposure to the customer which is not the case in the other markets, so the learning will be enormous,” he told ET. An additional area of interest for Mastek, could be the access it gives the company to the foreign parents of the some of the insurance companies here.

In line with this, its India business unit will initially focus on the insurance and government verticals and later extend it to others service lines. The government vertical is also one of Mastek’s key revenue areas overseas.

The margins in the domestic business are expected to be only half that of the international business about 6 per cent -7 per cent. However, the learnings from the projects are is expected to make up for that and give it a higher leverage at the company level.