FY13 Performance Review and FY14 Outlook

8/12/2019 FY13 Performance Review and FY14 Outlook

1/22


2/22

AGENDA

Where is the global economy heading

How is the Indian IT-BPM Industry evolving

Which are the new growth markets/ emerging verticals

The year that went by, and the year ahead

What challenges lie before us

AGENDA

2Source: NASSCOM


3/22

Global sourcing continues to outperformIT-BPM spend

Worldwide IT-BPM SpendUSD billion

1,311

748

269

156

627

1,350-1,400

797

278

164

648

ER&D

Hardware

Packaged Software

Business Process

Management

IT Services

20122011

USD 1.9trillion*

* 2012

70-72

44-46

2011 2012IT Sourcing Business Process Sourcing

Global Sourcing Market size

USD billion~9%

114-118124-130

76-80

48-50

Global IT- BPM market recorded growth of 4.8 per cent in 2012

APAC recorded highest growth of 6 per cent , ~1.6X Global IT-BPM spend; driven by BPM services (~9 per cent)

Global sourcing continues to outpace global technology andservices spend; growing ~2X as fast as global IT spend

Cost remains a key driver of outsourcing; along with simplificationand standardisation

Source: Everest, Forrester, Gartner, IDC

GLOBAL IT-BPM SPEND & SOURCING

3


4/22

GDP Share

Contribution to Indias GDP grew ~3X in the last 10 years

Source: NASSCOM * funded startups

IT-BPM: Highest impact sector for India

Total exports share

IT-BPM exports share grew > 5X in the last 10 years

Direct EmploymentOne of largest organized private sector employers in India

Global Sourcing Share

Indias share of the global sourcing market

Domestic Market Growth

Outperforms exports-fastest growing IT market in the world

Start-up companies

Vibrant start-up community grew ~3X over the last 5 years

IT-BPM FACTS

4

~24%

~8%

3 mn

>52%

14.1%

450+*


5/22

IT-BPM Industry resilient, growing, evolving

64.076.3

87.7 95.0

10.212.2

13.213.0

FY2010 FY2011 FY2012 FY2013E

Hardware Services

100.9108

88.1

74.2

E: EstimateSource: NASSCOM

IT-BPM revenue break-up

USD billion

IT-BPM REVENUES

Growth figures reflect variable impact ofcurrency

Highest value add sector for India 60-70 percent

Exports mainstay of the industry - >70 per cent

Indian IT- BPM exports offsets 50% of Indias oilimports

IT services today is a USD 50+ billion dollarindustry

BPM is a USD 20 billion segment

ER&D and products segment closing in on theUSD 20 billion mark too

H/W Growthin INR= 8.5%

5


6/22

IT-BPM exports logs double digit growth inFY2013

IT-BPM Export revenues*(USD billion)

39.9 43.9

15.917.8

13.014.1

FY2012 FY2013E

IT Services BPM S/W prod and Engg

68.875.8

Industry growth in constant currencyterms meets NASSCOM guidance

Exports: Y-o-Y growth 10.2 per cent , over2X greater in INR terms

Segments: IT service growth at ~10 percent; BPM growth faster at 12.2 per cent

Business Drivers for the year-

New verticals and geographies SMAC based services Transformation and innovation

Restructured business models

Growth Service lines: RIM, softwaretesting, knowledge services and F&Aservices

FY2013E Y-o-Y Growth INR 21.4%

Constant USD 10.9%

USD 10.2%

IT-BPM EXPORTS

6* Excluding HardwareE: EstimateSource: NASSCOM


7/22

Domestic market outperforms exports at 14.1per cent

589 674

148167180

205

FY2012 FY2013E

IT Services BPM S/W products

918

1,04714.1%

IT-BPM Domestic revenues*(INR billion)

Source: NASSCOM * Exclud ing Hardware

Meets NASSCOM guidance

Domestic: Y-o-Y growth 14.1 per cent , fastestgrowing IT market in the world

Segments: IT services fastest growth 14.5 percent , BPM grew at 12.7 per cent

Services: Managed services, unifiedcommunications, collaborative applications,integration of core enterprise applications

Key Enablers: Mobile apps, cloud environment ,SMB out reach Government accelerating economic reforms, IT seen as a critical enabler for inclusive growth

and transformation Internet and Ecommerce companies driving

adoption

IT-BPM DOMESTIC

7

INR/USD rate used for calcQ4FY13- 53.5FY13E-54.2


8/22

Industry continues to be a net hirer- Adding188,300 jobs in FY2013

Industry employs ~3 million professionalsdirectly, and ~9.5 million indirectly

Employee growth supplemented by nonlinear model

Over > 100,000 foreign nationals employedby the industry

~30 per cent (800,000+) women employees

Worlds largest talent pool: ~ 4.7 million graduates and post graduates

Faster role progression and development,structured training programs

Sustained investment in structured trainingprograms, in-house universities andaffiliations with academia

Source: NASSCOM

Direct Employment (000 )*

7%

* Excluding Hardware ** includes IT services, ER&D and Products *** includes S/w products

1,296 1,407

879917

601640

FY2012 FY2013E

IT exports** BPM exports IT-BPM Domestic***

2,7762,964

IT-BPM KNOWLEDGEBASE

8


9/22

Industry unique differentiator- business,service and delivery model evolution

M&A for domain and skill

End to End deliveryMoving upthe Value

Chain

Pricing models Outcomebased

Products, Platforms,Software assets, Solution

AcceleratorsInitiate NonLinear Play

Future-ready workforce

Tier 2/3 movement

Changing employee mixExtendCost

Advantage

Source: NASSCOM

460580

FY2009 FY2012

Number of global centers

8.6%

Employee Revenue

12.8%

CAGR 2008-13E

1.4 3.3

2009 2012

M&A deal value, USD bn

100121

FY2008 FY2013E

Rev/employee (Indexedto FY08=100)

FY2008 FY2012

Tier-II/III: Share inemployees

9-10%11-12%

FY2009 FY2012

Domain Specialists as a% of total employees

Integrating SMAC

Transformation

9

10% 12%


10/22

Operational metrics driving flexibility forclients and efficiency for providers

CAPACITY UTILISATION*

73.9%

71.8%72.4%

2010 2011 2012

18%15%

13%

2010 2011 2012

ATTRITION (IT SERVICES)

ONSITE EFFORTFIXED PRICE CONTRACTS(% of revenue)

44.7%45.0%

46.6%

2010 2011 2012

SG&A (% of revenue)

14.1%14.0%

13.8%

2010 2011 2012

26.1% 26.2%

25.2%

2010 2011 2012

*: Excluding traineesSource: NASSCOM

INDICATIVE

Note: Data of top 4 companies as of December ending

E F F I C I E N C Y

F L E X I B I L I T Y

Utilization levels increasing

Attrition remained lower; employee

investments are paying off

SG&A lower due to operationalefficiency

Firms re-engineering, adoptinginnovative operating models

Offshore higher than onsite10


11/22

India a preferred destination: Five prongedvalue proposition

INDIA VALUE PROP

Source: NASSCOM

SCALE & MATURITY- 25+ years of outsourcing- 5000+ companies, 750+ MNCs- 580 ODCs in 75 countries

UNLIMITED TALENT

- Annual tech talent output :1ibllion- Established training engine: 2-3%- Industry revenues spent on

training

COMPETITIVE-60-70% more cost efficient thansource countries-15-20% lower than next lowestoffshoring destination

CUSTOMER CENTRIC- 30-32% revenues from verticalisedBPM services- Domain experts :12% Consultativeselling

STRONG ECOSYSTEM- Largest no delivery locations : 50- Training & certification- Secure environment

11


12/22

Global tech spend set to improve grow over5 per cent in 2013

Worldwide IT-BPM services spending growth

3.3%

4.2%4.6%

4.9%5.3% 5.4%

2012 2013E 2014P

IT BPM

GLOBAL IT-BPM OUTLOOK

Global IT-BPM spend expected to be on thesurge; growth of over 5 per cent in 2013 totouch USD 2 trillion

Rate of introduction of disruptive technologieswill continue to be faster; SMAC technologies

over USD 1 trillion by 2020

IT shifting from traditional process automationto strategic BI, collaboration, customer facingtechnologies

Future of industry is beyond just services -- acomplete blend of services, products,solutions and platforms

Expanding focus on unsung markets APAC,SMBs, domestic - the next big spenders

12Source: Forrester, Gartner, IDC, NASSCOM


13/22

FY2014: Optimistic outlook, industryexpected to add USD 12-15 billionIT-BPM Export revenues*

Growth of 12-14%

E: Estimate, P: ProjectedSource: NASSCOM

IT-BPM Domestic revenues*

Growth of 13-15%

* Exclud ing Hardware

69 7685-87

FY2012 FY2013E FY2014P

918 1,047

FY2012 FY2013E FY2014P

1,180-1,200

USD billion

INR billion

INDIAN IT-BPM OUTLOOK

Indian IT-BPM industry transitioning fromenterprise services to a enterprising solutions

Outsourcing models changing- driven bynew technologies, reinvented businessmodels, new buyer segments and solutions foremerging markets

Technology changes cloud, mobility,analytics, social media creating newopportunities

New vertical, customer and geographicmarkets will continue to gain importance

Focus on greater efficiencies and flexibilities reengineer internally; diversify; non-linearity;transforming customer business

Internet and mobile expansion will encourage

entrepreneurship in products and content13


14/22

1412-Feb-13

Imagineering the Future Journey to the next 100 billion

21 st edition 3 power packed days 120+ speakers 50+ sessions

1400+ delegates 35+ country representations

Thought Leadership Future of Technology Customer Speak Emerging Markets

India opportunity Reinvented business models


15/22

Future of Technology and Leadership Keynotes

Imagineering:Seeding the field ofthe Future!

Mike Walsh

Consumerism:Responsible businessesfocus on needs notwants

Stephen LuUniversity of SouthernCalifornia

Leading in UncertainTimes

Ram Charan,Business Advisor &

Author

Transactional totransformational: Co-relating businessto hidden intelligenceManoj Singh,Deloitte

Playing to Win: HowStrategy really works

Roger Martin

Rotman School


16/22


17/22

Creative Keynotes

Reinvention of Self:The Real Comeback!

Amitabh Bachchan

Storytelling:Transforming throughtales!

Devdutt Pattanaik,Chief Belief Officer,

Future Group

Valedictory Session

Rahul Dravid

Emotional intelligence& bottomline

Dr Travis Bradberry,EmotionalIntelligence Expert


18/22

1812-Feb-13

Various formats

Analysts corner: interactive session to discuss changes in the sourcing sector Vendor consolidation & strategic partnerships - through the customers eyes - Chris Andrews,

Forrester

Generation Y: New Users, New Expectations, New Challenges - Frank Ridder, Gartner

Transformation agendas & how they are driving two different market segments - Peter BendorSamuel, Everest

The Changing Dynamics of the G2000 - Paul Reynolds, ISG

[R]evolution - Six trends that will drive business transformation and competitive advantage in2013 - Ben Towbridge, Alsbridge

Theme: Global IT Outsourcing Market Forecast: 2012-2016 - Rachael Stormonth, NelsonHall

Country sessions

Analyzing Japan Conundrum: Is there an IT marketMaster Class workshops

Outside In: Customer centricity

Build a "Lean" Robot!


19/22

1912-Feb-13

Global Participation

Delegates from across 35+ countries Americas - US, Canada, Colombia Europe - Belgium, France, Germany, Netherlands,

Sweden, UK

APAC & Middle East - Australia, New Zealand, China,Japan, Hong Kong, Malaysia,Philippines, Sri Lanka,Singapore, Pakistan, Bangladesh

Africa - South Africa, Kenya, Nigeria


20/22

Executive Presence

2012-Feb-13

Anand Sharma, Honble Union Minister of Commerce andIndustry

Prithviraj Chavan, Honble Chief Minister of Maharashtra Sachin Pilot, Honble Minister for Corporate Affairs Milind Deora, Honble Minister for Communications and IT Jack Markell, Governor, Delaware US Takeshi Yagi, Ambassador of Japan to India Nandan Nilekani, Chairman, UIDAI


21/22

2112-Feb-13

Structured Networking

NILF

NASSCOMConnect

Enables delegatesto connect and set

up meetings

Peer-to-Peernetworking at

focused sessions

Country Delegations partnershipopportunity

The socialplatform

Entertainmentevening, Awardsnight and more

Social Mediagroups Twitter,

Facebook,Slideshare, You

tube


22/22

Questions

Documents

FY13 Performance Review and FY14 Outlook