FACT FILE CEO Vikram Talwar POSITIONING Strong in BFSI with more exposure to insurance STARTED IN 1999 OWNERSHIP Oak Hill Capital Partners, LP&FT Ventures, EXL Management REVENUE (2002-03) $ 29 million NO OF PEOPLE 2,860  (as on 31 Oct 2003) CORPORATE ADDRESS A-48, Sector 58, Noida WEBSITE www.exlservice.com  NO OF CLIENTS 8 QUALITY ISO 9001:2000 certified organization since November 2002 COPC under implementation Complies with Six Sigma for process excellence LOCATION FACILITIES: 4 (Noida—3, Pune—1) SALES & MARKETING: New York, US

In the history of the Indian BPO industry, we have seen companies who started as independents and got acquired on the way, companies who turned from captives to independent and companies who have managed to get good funding from some of the best VCs. Here is a company that is an example of all these and more.

Starting out as a venture-backed independent company, EXL made headlines as the first big BPO acquisition, when it was acquired by Consceco. And when Conseco filed for bankruptcy under Chapter 11 in November 2002, everyone wrote the company off. EXL was owned 100 percent by Conseco and 95 percent of its revenue came from doing Conseco work. Not only did the company manage to survive, it managed to rope in Oak Hill Capital Partners and FT Ventures and also ramped up its client base from two in December 2002 to seven in March 2003. Today, it is one of the top five BPO companies in India. The price it had to pay was a year of flat growth.

And they just did not happen. After the Conseco bankruptcy, EXL took some tough measures. It closed down two centers at Noida temporarily, initiated cost-cutting measures within the company and restructured its operations putting all its senior management team into business development roles. The measures apparently paid dividends as the company not only began full capacity utilization but also started on a massive recruitment drive around June this year.

EXL expects to rope in over 3,000 employees this year and the company is clear that such huge numbers would be difficult to attract within the metros. It has set up recruiting offices in other A class cities like Chandigarh, Lucknow and Kolkata offering leased accommodation as a sop to attract recruits. Migrant recruits are less prone to job-hopping so EXL expects to address attrition considerably with such initiatives. Attrition, an industry menace, has already pushed up the average labor cost of the industry by 15–20 percent over the last year.

It also productized its experience in the process knowledge by combining it with the local IT pool and created a tool called PROMPT which has been licensed to a few clients. This year the company has raked in 5–10 percent of its revenue from such products which will increase to 15–20 percent next year.

EXL has built impressive momentum to be counted among the top contenders in the third party BPO space. Although it has announced ambitious performance targets of achieving $100 million mark during this next fiscal, analysts are more moderate in their rating pegging EXL in the $50 million mark by next year.

The company’s financials look strong with year on year revenue growth, yet its client-revenue ratio is still an area of concern with unhealthy exposure to its top client at 43 percent. Its overwhelming dependence on BFSI as a vertical, a legacy of the Conseco association may also change.

Print

Comment

Email

Digg

Del.icio.us

Reddit