'Linking intangible assets to strategy & performances'
The year 2003-04 was exciting and eventful for your Company,
which was consistent in delivering solid performance.
The total revenue for the year increased 42% to Rs. 163
crores from Rs. 114 crores in the last fiscal.
The net profit at Rs. 76 crores showed an increase
of 22% over the previous year. The Company's main ITES-BPO
business grew 52% outpacing the Indian industry performance
of 46% in that segment during the year.
The consolidated revenues of HTMT and its subsidiaries
rose 32% from Rs. 217 crores last year to Rs. 285 crores.
The consolidated net profit for the year at Rs. 84 crores
represented an increase of 44% over the previous year.
The market and opportunities for your Company's core
business of IT and ITES continue to be very good. Potential
customers for HTMT's services operate in tough competitive
environments and our value addition through outsourced
work in terms of cost arbitrage, quality process flow
and response time is crucial for their competitive positioning
and in some cases, survival. This has been an enduring
driver of business even in the face of visible constraints
such as backlash against outsourcing, slow growth and
non tariff business in our major market, USA.
Another positive factor evident as well as espoused
by experts, Industry Associations such as Nasscom and
leading research firms such as Gartner, is the widening
spread of services being offered and performed by Indian
Companies across Industry sectors, practices and geographies.
Besides, Companies such as HTMT have also enhanced the
depth of their expertise and knowledge from domain,
technology and process viewpoints.
These positive drivers enable us to look forward to
the future with great optimism even though it will be
tempered by short term setbacks and constraints. Our
over dependence on North America as a market is an area
of concern which we are addressing through stepping
up our marketing efforts in Europe and elsewhere.
From a delivery viewpoint, India is expected to be
the key offshore outsourcing hub in Asia as compared
to other countries, notably Philippines and China in
2004-2005. For instance, India's large pool of highly
skilled, English speaking work-force with about 2.1
million graduates each year compares very favourably
(vs Philippines of 380,000 per year).
Domain knowledge, process expertise and clients' perception
of dependability of the service provider are the key
selection criteria of BPO customers and India has excelled
in these aspects.
It must however be said that in purely Voice related
work, Philippines has been doing well and today represents
a smart alternative to the customers.
Customers also look for diversification of global outsourcing
locations to increase cost competitiveness and ensure
business continuity. Your Company will continue to fare
well in meeting the selection criteria.
Acquisition of Call Center
Your Company has now acquired the controlling interest
of Customer Contact Center Inc. (c3) in Manila, Philippines
which operates a high quality Call Centre of 600 seats
for global Fortune 500 customers. c3 has excellent infrastructure
facilities to ramp up its seating capacity from 600
seats to 1100 seats. This company's financials will
be consolidated with that of HTMT from the current year
onwards. HTMT has now become one of the select few BPO
companies having service delivery capabilities outside
The domain expertise of the c3 in banking and financial
services, consumer electronics and energy sectors will
be a shot in the arm of HTMT to jointly market their
services to a wide range of clients looking for business
derisking through geographical diversity. The combination
of transaction based services from India and voice work
proficiency from Philippines could be a potential winning
strategy for your Company.
Your Company has taken on lease additional 80,000 sq.
ft. premises at Bangalore close to the existing state-of-the-art
62,000 sq. ft. offshore development center to increase
the capacity from 1050 to 2500 seats to meet the ever-growing
requirements of clients. The filling up of the additional
1450 seats is expected to be completed by March 2005.
As per the requirement of US based healthcare insurance
client, 200 seat Disaster Recovery Center (DRC) has
been set up at In-Center, Andheri, Mumbai.
Your Company has sufficient cash resources to meet
its expansion needs.
HTMT, alongwith its subsidiaries, operates in all three
areas of Information Technology, Media and Telecommunication
leading to real convergence play. While the Company
is well on its way to achieve its vision of becoming
a scale player in its core business of IT, the Media
subsidiaries of the company are yet to perform to their
potential. This is due to the unorganized structure
and unprofessional nature of the industry and not because
of any lack of efforts or commitment of resources or
IndusInd Media & Communication Limited, a subsidiary
of HTMT and India's leading MSO (multiple system operator)
has been making substantial investments in its business
since 1996 for building extensive Hybrid Fibre Cable
network and introducing high quality analog and digital
delivery of Cable TV services and high-speed Internet
connections in association with group company In2cable
In the year under review, IMC invested in state of
art equipment to make its network Conditional Access
system (CAS) ready, based on a Central Law on CAS for
metros. However, subsequent retractions on the implementation
of CAS have meant this investment not yielding results
in the year. It is hoped that the appointment of TRAI
as a regulator will streamline the functioning of the
industry thereby ensuring equitable returns to all stakeholders
viz: broadcasters, MSOs, operators and subscribers in
the business supply chain. While there is short term
uncertainty in CAS implementation, we believe that over
the long term, the digital delivery of Cable TV services
through Set-Top-Boxes, which is superior in quality
and broadband internet value added services at a reasonable
cost should enable the subsidiaries to effectively meet
the competition from new players and new technologies
such as DTH and IPTV.
The announcement of broadband policy by the Government
is due shortly. It is expected that such a policy will
stimulate the development of broadband products and
services thereby improving the prospect of the subsidiary
Investment adding value
to the shareholders
The value of your Company's investment in Fascel, the
cellular partnership with Hutchison has received a big
boost with the decision of Hutchison to consolidate
its circle companies into one entity and go for an IPO.
Their announced acquisition of Aircel will add further
value to the investment.
Your Company had invested in 47 acres of landed property
in Bangalore off the proposed international airport
road and the value thereof will also grow significantly
with the airport now becoming a reality.
Mission and Vision statements set the general goals and
direction for an organization. They help shareholders,
customers and employees understand what the organization
is about (Mission) and what it intends to achieve (Vision).
While HTMT has set for itself the vision of becoming a
scale player in IT business with focus on BPO space, a
need was felt to redefine its mission after it became
technology Convergence Corporation. Accordingly, a new
mission statement has now been drafted in 3 inter-related
parts service offerings, economic and social - for creating
a new corporate concept of linked prosperity across the
Company's stakeholders and circulated among all concerned.
You will find a detailed exposition of this in the Annual
The consistent growth in the Company's revenue and profitability
was the tangible outcome of the alignment of its three
important intangible assets with its strategy viz: delivering
differentiated value offerings to clients in the ITES-BPO
segment supported by IT services.
The three intangible assets are Human Capital represented
by the Company's people, Information Capital comprising
its information systems, networks and technology infrastructure
and Organization Capital encompassing its culture and
leadership encouraging staff empowerment, knowledge
sharing, teamwork and belief in its value system.
In addition to solid financial performance, alignment
of the intangibles with the Company's strategic goals
has enhanced its internal processes most critical to
creating value for customers and shareholders.
HTMT's dependence on a narrow client base for its ITES-BPO
business is changing for the better with addition of
new clients in the telecom, health and general insurance
space. The Company is planning to revamp its marketing
strategy in USA and Europe to increase visibility and
Gaining control of c3 will reinforce the capabilities
of HTMT to increase scale and cost effectiveness, enter
new markets, customer segments and regions and, above
all, offer geographical diversity to clients.
The combining and leveraging of resources - human resources
(intellectual capital, for instance), brand names and
technological, physical and financial resources will
generate reciprocal synergies that will enable the two
companies to work closer together, evolve joint marketing
strategies and execute tasks through iterative knowledge
sharing process, propelling HTMT closer to realization
of its vision to become a scale player in IT business.
The Company is on the look out for further opportunities
of acquisition in BPO space and in IT services segment.
HTMT is also keen to grow IT services business and enhance
the share of the business in its total revenue and upgrade
its intellectual capital through Research and Development.
With innovation as a distributed capability across
the Company and co-creation of value in partnership
with clients as its goal, HTMT will continue to inspire
the confidence of the clients for its getting steady
flow of new business.
I am sure that the challenges of business growth will
spur the employees of the organization to organize and
contribute the best of their energies and skills and
help us win.
With this confidence, I sincerely thank the shareholders
and the customers for the trust reposed in us and the
employees for their unstinted co-operation and commitment.