Allsec Technologies delivery facility at Trichy
Mr.
Mr. Adi Saravanan, Founder & President, Allsec Technologies, continues to spearhead the Business Development and Strategic Finance functions at the company. A Chartered Accountant by qualification, Adi had partnered Jagadish in building out, and managing, for over 10 years, till 1999, a highly successful Financial Advisory firm. As a Finance professional, Adi had a proven track-record of nurturing client relationships and exploring new horizons in structuring services, skills he honed well in his earlier assignments at Ashok Leyland and Sanmar, and has put to good use while driving business at Allsec Technologies. Allsec Technologies still draws on his entrepreneurial instinct and creative abilities to pitch the value-proposition, as they move towards establishing a differentiated BPO model.
Replying to India Infoline, Adi Saravanan says, “The Company has won a number of Fortune 500, MNC, and Indian clients in the last few quarters.”
The last two years have been challenging for Allsec? What are the reasons attributable to this?
Allsec grew rapidly from 2004-2007 and was poised for strong growth. However due to change in certain regulations in the US, two of our largest clients had to step back and re-orient the way they did business. We took a decision not to lay off any people and this impacted growth and profitability. In addition during this period, Allsec set-up delivery facilities in Trichy and Manila to offer an alternative and cost effective delivery option to its clients. All of this, coupled with the sharp appreciation in the US Dollar resulted in losses. These issues are behind us and Allsec is now poised to get back on the growth trajectory.
What steps are being taken by Allsec to bring the business back to profitability?
Allsec has taken several steps to ensure that it returns to profitability. First, Allsec was focused on ensuring that costs are kept to the minimum. Second, there was a renewed focus on improving the shift utilization by adding new clients and using some of the existing facilities to service domestic clients. Third, we also added a couple of more sales personnel. All of this we believe will propel Allsec towards revenue growth and resultant improvement in profitability.
We are already at close to cash break-even level in Q3 FY09. Excluding training costs, our Manila operations we profitable in Q3 FY09. We remain optimistic about the profitability prospects of the Company.
The capital raised from Carlyle was to be used for acquisitions? How has Allsec fared on this front?
We have done two acquisitions post the fund raising from Carlyle – one in Manila and a domestic acquisition. Post the Manila acquisition; we have increased the capacity in Manila from 150 seats to 600 seats. The Manila operations are shaping-up well. A delivery centre alternate to India appeals to most companies and we are seeing a number of enquiries, and a few of them have already converted into clients. Some of these clients can potentially take-up the entire centre when they ramp-up.
The domestic acquisition has helped us in several ways – (a) we have added a number of blue chip clients, all of whom can scale significantly, (b) added new service capabilities, and (c) provided a PAN India presence. The domestic acquisition has provided us with relevant domestic BPO experience and Allsec is now considered as a significant domestic BPO player. We are seeing significant traction in both the telecom and the financial services vertical. We are participating in a number of RFPs with seat requirements varying anywhere between 100-500 seats and we have started registering a few wins.
As regards additional acquisitions, the Company is well positioned as it has a large part of the cash invested in by Carlyle still in the bank. Given the cash balance, we are looking for acquisitions on an opportunistic basis.
Has the crisis in the financial services sector impacted Allsec?
A significant part of our revenues arises from clients in the financial services sector. Most of our US clients in this sector have been stable and with little or no growth. Over past year, we have also added new clients with at least one of them growing above 100 seats. We are however seeing significant traction in the Indian financial services clients, who are not affected much by the current crisis.
How long do you think the current economic slowdown will last? How is Allsec positioned to handle this?
The current downturn in the US and Europe could last anywhere from 2-4 years. One has to be patient, cost conscious, opportunistic to ride this out. I believe that Allsec today is probably one of the most well positioned BPO companies with very strong execution capabilities, optimistic profitability prospects, strong cash position, and a competitive cost structure.
Is Allsec planning any new initiatives?
Allsec has a strong HR BPO practice and today is the second largest HR BPO service provider processing. The Company has won a number of Fortune 500, MNC, and Indian clients in the last few quarters across verticals such as FMCG, Consulting, IT services, financial services, etc. Allsec proposes to take this business offering global and is targeting customers in the US and UK for the same.
Mr. Adi Saravanan, Founder & President, Allsec Technologies, continues to spearhead the Business Development and Strategic Finance functions at the company. A Chartered Accountant by qualification, Adi had partnered Jagadish in building out, and managing, for over 10 years, till 1999, a highly successful Financial Advisory firm. As a Finance professional, Adi had a proven track-record of nurturing client relationships and exploring new horizons in structuring services, skills he honed well in his earlier assignments at Ashok Leyland and Sanmar, and has put to good use while driving business at Allsec Technologies. Allsec Technologies still draws on his entrepreneurial instinct and creative abilities to pitch the value-proposition, as they move towards establishing a differentiated BPO model.
Replying to India Infoline, Adi Saravanan says, “The Company has won a number of Fortune 500, MNC, and Indian clients in the last few quarters.”
The last two years have been challenging for Allsec? What are the reasons attributable to this?
Allsec grew rapidly from 2004-2007 and was poised for strong growth. However due to change in certain regulations in the US, two of our largest clients had to step back and re-orient the way they did business. We took a decision not to lay off any people and this impacted growth and profitability. In addition during this period, Allsec set-up delivery facilities in Trichy and Manila to offer an alternative and cost effective delivery option to its clients. All of this, coupled with the sharp appreciation in the US Dollar resulted in losses. These issues are behind us and Allsec is now poised to get back on the growth trajectory.
What steps are being taken by Allsec to bring the business back to profitability?
Allsec has taken several steps to ensure that it returns to profitability. First, Allsec was focused on ensuring that costs are kept to the minimum. Second, there was a renewed focus on improving the shift utilization by adding new clients and using some of the existing facilities to service domestic clients. Third, we also added a couple of more sales personnel. All of this we believe will propel Allsec towards revenue growth and resultant improvement in profitability.
We are already at close to cash break-even level in Q3 FY09. Excluding training costs, our Manila operations we profitable in Q3 FY09. We remain optimistic about the profitability prospects of the Company.
The capital raised from Carlyle was to be used for acquisitions? How has Allsec fared on this front?
We have done two acquisitions post the fund raising from Carlyle – one in Manila and a domestic acquisition. Post the Manila acquisition; we have increased the capacity in Manila from 150 seats to 600 seats. The Manila operations are shaping-up well. A delivery centre alternate to India appeals to most companies and we are seeing a number of enquiries, and a few of them have already converted into clients. Some of these clients can potentially take-up the entire centre when they ramp-up.
The domestic acquisition has helped us in several ways – (a) we have added a number of blue chip clients, all of whom can scale significantly, (b) added new service capabilities, and (c) provided a PAN India presence. The domestic acquisition has provided us with relevant domestic BPO experience and Allsec is now considered as a significant domestic BPO player. We are seeing significant traction in both the telecom and the financial services vertical. We are participating in a number of RFPs with seat requirements varying anywhere between 100-500 seats and we have started registering a few wins.
As regards additional acquisitions, the Company is well positioned as it has a large part of the cash invested in by Carlyle still in the bank. Given the cash balance, we are looking for acquisitions on an opportunistic basis.
Has the crisis in the financial services sector impacted Allsec?
A significant part of our revenues arises from clients in the financial services sector. Most of our US clients in this sector have been stable and with little or no growth. Over past year, we have also added new clients with at least one of them growing above 100 seats. We are however seeing significant traction in the Indian financial services clients, who are not affected much by the current crisis.
How long do you think the current economic slowdown will last? How is Allsec positioned to handle this?
The current downturn in the US and Europe could last anywhere from 2-4 years. One has to be patient, cost conscious, opportunistic to ride this out. I believe that Allsec today is probably one of the most well positioned BPO companies with very strong execution capabilities, optimistic profitability prospects, strong cash position, and a competitive cost structure.
Is Allsec planning any new initiatives?
Allsec has a strong HR BPO practice and today is the second largest HR BPO service provider processing. The Company has won a number of Fortune 500, MNC, and Indian clients in the last few quarters across verticals such as FMCG, Consulting, IT services, financial services, etc. Allsec proposes to take this business offering global and is targeting customers in the US and UK for the same.
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