ExlService BPO to expand in India

Monday, 16 July 2007, 07:00 Hrs
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New Delhi: ExlService Holdings Inc, one of India's leading integrated business process outsourcing (BPO) firms, plans to invest $8 million for a new unit in Hyderabad even as it eyes overseas markets.

"We are looking at expanding to Hyderabad, which would typically be a 1,000-seater with the option of ramping it up in the future," said Rohit Kapoor, president and co-founder of EXL, who is also its chief operating officer.

EXL has three units in Gurgaon, Pune and Noida. The Hyderabad unit is slated to open by mid-2008.

"We are currently focussed on both organic and inorganic growth and are constantly scouting for captive partners as we want to take full advantage of the increasing trend of captives selling out to third-party BPOs," Kapoor said while elaborating on the company's plans to expand overseas.

The Nasdaq-listed BPO firm will soon open its BPO facilities in the Philippines, Romania and Croatia by following both the inorganic as well as greenfield route.

"We selected the Philippines because of their voice capability to handle international clients. Romania and Croatia were chosen because of their language skills," Kapoor maintained.

ExlService Holdings was recently rated one of the top 10 Indian third-party BPO players by the Indian IT industry's apex body Nasscom (National Association of Software and Service Companies).

On the issue of the appreciating rupee eroding the margins of some of the major players in the Indian IT space, Kapoor said: "The appreciation of the rupee would continue for some time now and it would definitely have a negative impact on the IT sector.

"Having said that, I must say the appreciation of the rupee won't affect us much, because unlike other domestic IT companies, 65 percent of our cost base is in rupees whereas for others it is 80-85 percent."

He further elaborated: "Moreover, 50 of our total revenues is in pounds sterling and the remaining 50 percent is in dollars, so we are more diversified."

The company, which follows the calendar year as its financial year, reported revenues of about $121 million for 2006. It has set a revenue target of $160-$170 million for the current year.

In a landmark judgement on global investment major Morgan Stanley's BPO unit, the Supreme Court ruled that the income of its back-office unit in India was not taxable.

This, according to Nasscom, would reassure multinational companies who have their back offices here.

On this, Kapoor said: "Even though this has given a lot of clarity, it has also given rise to a lot of complexities regarding the deputation of expatriates and what kind of tax they pay."
Source: IANS
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