Patni to tap Asia-Pacifc markets for higher revenues
13 Mar 2008
Bangalore: Indian IT solutions firm Patni Computer Systems Ltd is making further inroads in Asia-Pacific by stepping up sales in the region, a senior company official said on Wednesday. The move comes to offset a possible slowdown in its main US market, the official added.
Patni, which gets about 70 per cent of its revenue from the United States, expects 9 per cent of its revenue to come from Asia-Pacific, including Japan, in three years from 5 per cent now, according to Deepak Khosla, head of the Asia-Pacific region for Patni.
Patni is listed in the New York Sock Exchange and includes General Electric, Hitachi Ltd and Toshiba Corporation among its clients. Khosla also said that the company is also looking for acquisitions in Australia and Japan as part of its expansion plans.
Indian IT firms, which gets more than half their revenue from the United States, are looking at Asia-Pacific, Latin America and the Middle East for additional revenue generation on worries of a possible US recession that would force American firms to cut into technology spending.
The mid sized IT firm plans to boost its business in India, as local companies spend more on technology to cut costs and improve efficiency. Khosla expects good outsourcing demand from Japan, Australia and India in the Asia-Pacific region on the back of strong domestic economies should help Patni diversify its revenue base and offset the impact of a weak US dollar.
In January, Satyam had forecast weak earnings for the October-December quarter. Amid US recession worries, the company's Q3 profit fell 12 per cent due to a stronger rupee that rose more than 12 per cent in 2007.
The Indian IT services market is expected to grow to $10.73 billion by 2011 at a five-year compound annual growth rate of 23.2 percent, according to research and advisory firm Gartner.
Shares in Patni, which has a market value of $692 million, ended 1.6 percent higher at Rs204.35 in the Mumbai stock market. However, the stock price has fallen 38 per cent this year, compared with 20.5 per cent drop in the main index and 23 per cent loss in the sector index.