Latest news with #SrikrishnaRamakarthikeyan
Economic Times
18-07-2025
- Business
- Economic Times
Hexaware acquires two SMC Squared firms for over Rs 1,000 crore in GCC space
ANI Mid-sized IT player Hexaware Technologies Thursday said it has acquired two SMC Squared group firms for a cumulative cash consideration of Rs 1,029.12 crore (about $120 million). The acquisition of Tech SMC Squared India and Tech SMCSquared (GCC) India is aimed at expanding Hexaware's presence in the global capability centre (GCC) space, the company said. 'The acquisition is a strategic step in Hexaware's mission to deliver future-proof GCC solutions that go beyond cost efficiency, anchored in a combined human and digital agent-driven model,' Hexaware said in a regulatory filing. The recently listed IT company is the latest to join the race to help multinationals establish GCCs in India, a growing market over the past two years expected to cross $100 billion by proposed acquisition does not require any governmental or regulatory approvals, the filing said.'Our clients are increasingly looking for GCC partners who bring more than staffing or infrastructure… This acquisition enables us to deliver long-term value to enterprises, leveraging our human and digital agent-driven model and proprietary IT delivery platforms,' said Amrinder Singh, president and head-EMEA & APAC operations, are offshore or nearshore hubs set up by foreign companies to deliver back-office business functions such as IT, finance, HR, analytics and research & development (R&D). Over the past few years, such centres are expanding from being cost arbitrage-driven support units to value-generating strategic centres.'Historically, we have not addressed the GCC market, and I think there are three sets of opportunities. One is to help set up new GCCs, there's quite a velocity of it happening. And with the current macros, that may accelerate new clients setting up GCCs…The second opportunity is scaling within GCCs once it is set up… the bigger opportunity is to transform with AI,' Hexaware CEO Srikrishna Ramakarthikeyan told ET third is that there is a percentage of GCCs that will exit back into outsourcing. That is also an opportunity, he SMC Squared has helped set up over 30 GCCs across commerce, manufacturing, financial services, health care and consumer brands. It operates through engagement models, such as managed services, build-optimise-transfer and hybrid solutions, which lower operating costs while assembling GCC GCC enabler has a total workforce of around 500 employees, with a go-to-market office in the US and two delivery centres in India—Bengaluru and Hyderabad—supporting operations across HR, infrastructure, employee well-being, finance and strategic technology consulting.'Enterprises are shifting toward outcome-based models, requiring partners who can deliver stable, scalable and high-accountability operations… SMC's proven playbook and relationships in the mid-market GCC segment will accelerate our go-to-market strategy… We will extend SMC's offerings to our broader client base, including existing Hexaware customers,' Hexaware said in its filing. By integrating SMC's GCC setup capabilities with Hexaware's strengths in AI, analytics, cloud transformation, modernisation and enterprise platforms, we can deliver end-to-end solutions for clients looking to optimise and scale their GCC operations, it added. SMC Group's turnover for calendar year 2024 stood at $22.58 million (Rs 189.15 crore at an exchange rate of Rs 83.77 per dollar).'For over a decade, we've helped shape the GCC industry, and this acquisition expands what we can deliver globally with strengthened capabilities across AI, analytics, modernisation, cloud transformation, and enterprise platforms while growing our delivery footprint with new centres in Latin America and increasing client activity in the UK and Europe,' said Patricia Connolly, CEO, SMC in India have grown at a CAGR of 11% over the past five years with one new GCC being set up per week at least on an average in the GCC capital of the world, India is home to about 55% of global GCCs with nearly 1,800 centres, generating $68 billion in export revenue, contributing around 1.6% to the national GDP, as per latest government around 32% of global GCC talent is based in India with nearly 2.16 million employed professionals in the GCC sector, which is expected to touch 2.8 million by 2030. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. As deposit ground slips under PSU banks' feet, they chase the wealthy If data is the new oil, are data centres the smokestacks of the digital age? Can Grasim's anti-competition charge against Asian Paints stand amid intense war Can Indian IT's 'pyramid' survive the GenAI shake-up? Stock Radar: Igarashi Motors showing signs of momentum after 30% drop from highs; time to buy? These mid-cap stocks with 'Strong Buy' & 'Buy' recos can rally over 25%, according to analysts Multibagger or IBC - Part 15: Strong margins & no loans. Is this the auto sector's dark horse? Get ready for volatility with the big, better & experienced. 7 large-caps from different sectors with an upside potential of up to 39%
Time of India
17-07-2025
- Business
- Time of India
Hexaware acquires two SMC Squared firms for over Rs 1,000 crore in GCC space
Academy Empower your mind, elevate your skills Mid-sized IT player Hexaware Technologies Thursday said it has acquired two SMC Squared group firms for a cumulative cash consideration of Rs 1,029.12 crore (about $120 million).The acquisition of Tech SMC Squared India and Tech SMCSquared (GCC) India is aimed at expanding Hexaware's presence in the global capability centre (GCC) space, the company said.'The acquisition is a strategic step in Hexaware's mission to deliver future-proof GCC solutions that go beyond cost efficiency, anchored in a combined human and digital agent-driven model,' Hexaware said in a regulatory recently listed IT company is the latest to join the race to help multinationals establish GCCs in India, a growing market over the past two years expected to cross $100 billion by proposed acquisition does not require any governmental or regulatory approvals, the filing said.'Our clients are increasingly looking for GCC partners who bring more than staffing or infrastructure… This acquisition enables us to deliver long-term value to enterprises, leveraging our human and digital agent-driven model and proprietary IT delivery platforms,' said Amrinder Singh, president and head-EMEA & APAC operations, are offshore or nearshore hubs set up by foreign companies to deliver back-office business functions such as IT, finance, HR, analytics and research & development (R&D). Over the past few years, such centres are expanding from being cost arbitrage-driven support units to value-generating strategic centres.'Historically, we have not addressed the GCC market, and I think there are three sets of opportunities. One is to help set up new GCCs, there's quite a velocity of it happening. And with the current macros, that may accelerate new clients setting up GCCs…The second opportunity is scaling within GCCs once it is set up… the bigger opportunity is to transform with AI,' Hexaware CEO Srikrishna Ramakarthikeyan told ET third is that there is a percentage of GCCs that will exit back into outsourcing. That is also an opportunity, he SMC Squared has helped set up over 30 GCCs across commerce, manufacturing, financial services, health care and consumer brands. It operates through engagement models, such as managed services, build-optimise-transfer and hybrid solutions, which lower operating costs while assembling GCC GCC enabler has a total workforce of around 500 employees, with a go-to-market office in the US and two delivery centres in India—Bengaluru and Hyderabad—supporting operations across HR, infrastructure, employee well-being, finance and strategic technology consulting.'Enterprises are shifting toward outcome-based models, requiring partners who can deliver stable, scalable and high-accountability operations… SMC's proven playbook and relationships in the mid-market GCC segment will accelerate our go-to-market strategy… We will extend SMC's offerings to our broader client base, including existing Hexaware customers,' Hexaware said in its integrating SMC's GCC setup capabilities with Hexaware's strengths in AI, analytics, cloud transformation, modernisation and enterprise platforms , we can deliver end-to-end solutions for clients looking to optimise and scale their GCC operations, it Group's turnover for calendar year 2024 stood at $22.58 million (Rs 189.15 crore at an exchange rate of Rs 83.77 per dollar).'For over a decade, we've helped shape the GCC industry, and this acquisition expands what we can deliver globally with strengthened capabilities across AI, analytics, modernisation, cloud transformation, and enterprise platforms while growing our delivery footprint with new centres in Latin America and increasing client activity in the UK and Europe,' said Patricia Connolly, CEO, SMC in India have grown at a CAGR of 11% over the past five years with one new GCC being set up per week at least on an average in the GCC capital of the world, India is home to about 55% of global GCCs with nearly 1,800 centres, generating $68 billion in export revenue, contributing around 1.6% to the national GDP, as per latest government around 32% of global GCC talent is based in India with nearly 2.16 million employed professionals in the GCC sector, which is expected to touch 2.8 million by 2030.
Mint
09-06-2025
- Business
- Mint
Hexaware faces challenges in one of its top three accounts
Hexaware Technologies Ltd is facing challenges in one of its top three accounts, which will knock off at least 1% of the company's incremental revenue because of the client's cost-saving efforts. The country's tenth-largest information technology (IT) services firm, which ended 2024 with $1.43 billion in revenue, counts Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corp. (Freddie Mac) among its five largest customers. Both these companies collectively bring the IT outsourcer about $150 million in revenue annually. Chief executive Srikrishna Ramakarthikeyan maintained that slower business from one of these clients will impact 1% of the revenue during the company's post-earnings analyst call on 29 April. This implies a ramp down from the business in the current year by $14.3 million. Minthas learnt from at least three people with knowledge of the matter that Hexaware has seen a slowdown in business from Fannie Mae, one of its top three clients. While CEO Srikrishna did not specify the clients' names, he referred to two 'JSCs' or joint stock companies. Also Read: Cognizant wins $1 billion deal from US-based healthcare company Minthas learnt that Fannie Mae is ramping down, and there was a delay in project execution from another mortgage company, which it has learnt to be Freddie Mac. The company's management said the ramp-down was an attempt to reduce costs and reduce the number of IT outsourcers they work with. 'They have roughly 2,500 contractors, which they do business with over hundred people. We are less than 20% of that, but we are the largest. And they said they want to get it down to a very small number, somewhere between two and 10," said Srikrishna, during the post-earnings call. Hexaware has three clients that fetch the company upwards of $75 million in revenue annually. The company follows a January-December financial year. Two US accounts He said there was another delay in project execution with a client they won earlier in the year as part of the latter's vendor consolidation drive, which narrows the number of IT outsourcers a company works with. However, Srikrishna said work on the project has started after the delay. Hexaware ended the three months through March 2025 with $371.5 million in revenue, down 0.2% sequentially. Still, the genesis of the ramp down can be traced to a change in management at Fannie Mae. US President Donald Trump appointed William Pulte as the chairman of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, in January this year. The aim was to privatise both mortgage companies that were under government control since the 2008 financial crisis, and to help in more borrowing and more home construction in US. Pulte's first move was to rejig the leadership of the two companies. To this end, Diana Reid, chief executive of Freddie Mac, was also sacked, along with at least 700 employees of both companies. This rejig also led to both companies reducing the IT vendors they work with and renegotiating their contracts. For now, at least one analyst has raised concerns. 'The recent board shake-up at Freddie Mac and Fannie Mae has introduced uncertainty around IT spending priorities, particularly in light of tightening US federal budgets. Given HEXT's (Hexaware) exposure to Fannie Mae as one of the top accounts, we see short-term uncertainty and a possible risk to revenue estimates if spending slows or contracts are re-evaluated," said Abhishek Pathak, research analyst atMotilal Oswal Financial Services, in a report released in May 2025. Driving consolidation He added that while Hexaware has been getting stable revenue from the company for 15 years, 'it has also resulted in heavy onsite exposure, which has dented margins compared to more offshore-centric competitors." Challenges in two of its top accounts signal that the company will have to beef up revenue in its remaining top accounts or bag new deals at a time when companies are holding back tech spending due to tariffs imposed by Trump. Also Read: Age is catching up with Big Tech. Blame it on automation To be sure, the company expected both projects to ramp up from April this year, with both clients giving between $20 million and $35 million in incremental revenue annually from next year. A second analyst said the rampdown and delay were part of a consolidation drive by the two US-based mortgage companies. 'The game plan of Freddie and Fannie is to do away with on-site vendors as part of a vendor consolidation drive, which is basically with an aim to cut costs, but Hexaware has a diversified client base, so challenges can be overcome," said a Mumbai-based analyst on condition of anonymity. Hexaware seems to be offsetting the challenge. Its other top three clients, including consulting firm Ernst & Young Global Ltd, are expected to help the company grow. Revenue from its top five clients, which make up roughly a fourth of its revenues, grew 14.16%, faster than the company's 12.37% at the end of January-March 2025. Another thumbs up for the IT outsourcer is its diverse client base. No single client has contributed more than a tenth of its total revenue over the last three years, ensuring that its destiny is not tied to one or two large accounts. US top market Revenue from financial service providers makes up almost a third of the company's revenue, and its biggest market is the US, where the company gets more than three-fourths of its business. Despite the challenge in these accounts, private equity giant Carlyle-backed Hexaware, which does not give guidance, maintains it will have a solid year. 'So just between these two, we'll convert Q2 from what would've been a great Q2 to a good Q2. So we still expect to have a good Q2, but actually the underlying performanceex of these two, will actually be a very solid Q2. And that momentum will continue into Q3," said Srikrishna, adding that more deals in the pipelineand those that ramp up later in the year will help the company grow sequentially in the fourth quarter. Also Read: Staffing firms find it more profitable putting employees in GCCs than IT firms 'So we actually expect to have a pretty solid year," said Srikrishna. Emails sent to Hexaware, Freddie Mac, and Fannie Mae on 2 June went unanswered. Still, this ramp-down in business for Hexaware underscores a trend for IT service providers in the last 12 Ltd lost a chunk of its business with FedEx to Accenture Plc, while Microsoft reduced the business it gave to LTIMindtree Ltd andSonata Software Ltd.
