Helios & Matheson eyes larger pie from healthcare vertical

Plans facility on Chennai IT Corridor

Helios & Matheson Ltd, an IT services organisation, expects its healthcare vertical to contribute about 50 per cent of its total revenue in the next two years.

The company is also planning to set up a new development centre on the IT Corridor of Chennai at an investment of Rs.25 crore as part of its expansion plans. The centre would house 400 people.

V Ramachandran, chairman, Helios & Matheson, told Business Standard that the healthcare vertical currently contributed about 37 to the company's revenue. This vertical used to account for 35 per cent in the past.

He said that the healthcare vertical was expected to contribute about 50 per cent to the total revenue as the company was witnessing growth in business volumes and signs of adding more clients from Europe, which accounts for 20 per cent of its revenue.

We are a company focused on healthcare sector and we will step up our focus on Europe as the clients in Europe are expanding their relationship with Indian companies due to its proximity. Europe is a very good market to expand our business and its share in total revenue is likely to go to 25 per cent in the next couple of years, he added.

The US market currently accounts for 65 per cent of the revenue and rest flows from Asia Pacific.

Asked whether the company would pursue inorganic growth, he said the company had grown well organically as 52 per cent of the revenue came from its top 10 clients and Helios & Matheson sees potential to garner a revenue of $ 100 million from these clients in the next three years.

However, he said that the company would look at acquiring companies to strengthen its focus on Europe and its healthcare vertical.

Helios & Matheson is also focusing on other verticals that include BFSI, which accounts for 15 per cent of its revenue, technology vertical for 27 per cent and retail and manufacturing for 21 per cent.

A company statement said that it would invest Rs 75 crore in additional facilities. It will invest Rs 25 crore in a new facility, which would employ 400 people, in Chennai. "We have short-listed a few properties on the Old Mahaballipuram Road and we are likely to finalise the plans before March," he added.

To drive down costs further and increase its margins, the company is expanding into tier II cities like Coimbatore, where it will invest about Rs 50 crore in the next two years to create its facilities.

Coimbatore has huge resources pool and it churns out 25,000 engineers a year. The resources cost too is lower compared to other cities, he added.

The company is also planning GDR issue in the next 12-14 months. Helios reported a gross revenue of Rs 145 crore and a net profit of Rs 19 crore for the year 2004-05.