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ITC: Enduring Value

Sab Saath Baadhein

Media Centre


ITC Infotech eyes acquisitions in Europe and North America to become $1-billion company 06 Jan 2015

The Economic Times

ITC Infotech is planning a strategic shift to acquire firms in North America and Europe as part of a strategy to build the mid-sized business of Kolkata-headquartered conglomerate ITC into a billion dollar, or about Rs 6,300 crore, a year operation and more than triple its workforce over the next five years. The company has identified acquisition targets and expects to complete a deal in the next six months, said managing director and CEO Sushma Rajagopalan.'

"Our strategy is to have both a scale acquisition and several strings of pearl acquisitions, which will give us differentiated scale. Acquisition targets will support established verticals such as retail, airlines, BFSI (banking, financial services and insurance) and lines of business such as data, infrastructure, testing, ERP (enterprise resource planning), supply chain, product engineering services and customer experience," she said.

Rajagopalan, who took over as the CEO in November, has been given complete autonomy by ITC chairman YC Deveshwar to turn the IT business into a growth driver for the consumer goods-tobacco-hospitality conglomerate.

This will also mean accelerated organic expansion and the company plans to set up new delivery centres in Europe and the US, along with a few within the country in Pune, Kolkata, Bangalore and Hyderabad, after it recently opened a facility in Noida.

"Acquisitions will contribute around 15-20% of our targeted $1 billion revenue. Our overall goal is to expand the headcount from 7,000 people to 25,000 people as we move towards our revenue milestone and want to be a dominant mid-tier firm," Rajagopalan said.

ITC Infotech, a wholly-owned subsidiary of ITC, reported revenue of Rs 1,278 crore and Rs 86 crore net profit in 2013-14. The company operates in 16 countries across North America, Europe, Middle East, Asia-Pacific region and India.

Till now, the company has not focused significantly on any acquisitions. While ITC Infotech generates less than 10% revenue from the work done for its parent, Rajagopalan says this business enables it to be future ready and allows it to build innovative solutions in supply chain, trade promotion and marketing, loyalty and data analytics that are eventually marketed to other clients.

"The ITC culture of empowerment and developing thought leaders will be a natural advantage for ITC Infotech. In fact, we have recently launched a new business idea generation initiative for employees whereby we received 520 ideas and would incubate eight to 10 ideas to promote the innovation culture," she said.

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