NIIT Technologies to stay focused on non-linear business

The publicly-listed company garners around 24% of its revenue from non-linear businesses like managed services, IP assets

Powered by new technologies like SMAC (social, mobile, analytics and cloud), mid-cap IT services and solutions provider, NIIT Technologies Limited, is sharpening its focus on non-linear business models, according to a top official of the company.

“Our intent and direction is to grow our non-linear business. New technologies like SMAC will give us domain-led tech strength and an opportunity to compete with Tier-I vendors, and increase the revenue share from non-linear activity,” Arvind Mehrotra, president (Asia-Pacific, India and West Asia), told Business Standard.

At present, the publicly-listed company garners around 24 per cent of its revenues from non-linear businesses like managed services and IP assets. While travel, transportation and logistics (TTL) vertical contributes 42 per cent to its revenues, banking, financial services and insurance (BFSI), government and manufacturing account for 32 per cent, 9 per cent and 7 per cent respectively with the remaining flowing in from verticals like media.

“As part of our portfolio approach and strategy, we are making conscious efforts to keep the government vertical’s contribution in the vicinity of 10 per cent on an annual basis,” Mehrotra said.

NIIT had recently bagged a five-year comprehensive financial management system (CFMS) contract from the finance department of Andhra Pradesh, which is valued at Rs 185 crore, and a Rs 35-crore project from the Indian Tobacco Board to implement an auction system in Karnataka and Andhra Pradesh last year.

Mehrotra said these were big projects which a lot of other states would try to replicate. “We are currently in discussions with other states for similar projects. As and when such contracts are announced, we will bid for them.”

Stating that NIIT Technologies, which had acquired Spainish software services company Proyecta Sistemas de Informacion SA for $7 million in 2011 and US firm Sabre Holdings' Philippines development centre for an undisclosed sum in 2012, was constantly looking for acquisitions, Mehrotra said M&A was more aligned to helping NIIT’s IP assets and serve its existing customer base.

“M&A is an ongoing process ... we have earmarked a war chest for it,” he said, while declining to comment further.