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