BirlaSoft Under Pressure

This infotech company of the CK Birla
group posted a 20% growth in its total turnover. It got a strategic investment
from GE Capital, which picked up a 20% stake in it.

Birlasoft posted a turnover of Rs 166
crore, with exports alone contributing Rs 164 crore or about 99% of its total
revenue. In the 1998-99 fiscal, it had clocked Rs 137 crore from software
exports on a total turnover of Rs 139 crore. The growth in software exports was
thus around 20%. Though the company had made massive plans for this fiscal, it
has not been able to cope with the changing technologies and keep pace with
them.

The US continued to be the company’s
major source of revenue. It improved upon its market share from this region,
which made up for 90% of Birlasoft’s software exports. The revenue component
from the European market showed a dip of 3% in the last fiscal as compared to
the previous year. The company, despite identifying Europe and Asia-Pacific as
the growth regions during 1998-99, was able to get a mere 2% of its revenue from
the region.

Looking at the domestic market, it was
able to marginally improve its performance, with the domestic market growing by
8% to clock Rs 1.7 crore as compared to Rs 1.6 crore in 1998-99.

The company hopes to compete in the
internet space by providing quality professional services and solution
implementation services. It has tied up with BEA Systems for delivering
ecommerce solutions using BEA’s integrated Weblogic family of products.

However, during 1998-99, the company had set an
ambitious growth plan of becoming a $200 million-company within five years, but
going by the rate at which it is growing, it looks like a tall order. DQ

Fact Sheet

START-UP YEAR: 1995 PRODUCTS AND SERVICES: Software
development, consultancy EMPLOYEES: 663  ADDRESS: 10th Floor, Prakashdeep
Building, 7, Tolstoy Marg, New Delhi 110 001 TEL: 445 0784 FAX: 445 0819
WEBSITE: www.birlasoft.com