Financial Daily from THE HINDU group of publications
Tuesday, Feb 18, 2003
Money & Banking - Software
i-flex looks to Citibank for more products' revenue
CHENNAI, Feb. 17
I-FLEX Solutions Ltd expects a gradual reduction in its dependency on services business from Citibank to around 20-25 per cent, from the present 75 per cent, even as the company projects a significant increase in non-Citibank clients.
A top company official who spoke to reporters here today did not give a timeframe for this to happen.
Similarly, the products' revenue from Citibank was expected to be around 20 per cent in a year from zero till recently, Mr R. Ravisankar, CEO, International Operations and Technology, i-flex, said.
About 75 per cent of services business revenue was still from Citibank, compared to 100 per cent a few months ago.
However, in future this would drop to 25-30 per cent, but in absolute revenue terms (as the non-Citibank clientele would increase) the figure would grow, he added. In the third-quarter earnings conference call with research analysts last month, company officials had said that non-Citibank business for i-flex increased at a faster rate and accounted for 32 per cent of the services revenue in December 2002 quarter, which was a five per cent increase over the September quarter.
For i-flex, the products' business accounted for 65 per cent of the company's top line revenue in December quarter, which was the same as the last quarter.
The company's December quarter revenue was Rs 175 crore, a 50 per cent year-on-year growth and four per cent quarter-on-quarter.
According to Mr Ravisankar, i-flex had started implementing Flexcube suite of products for Citibank to replace the bank's core systems across geographies.
This would increase its product business from Citibank to 20 per cent in one year, from zero till recently, and remain stable for a year. I-flex had replaced Citibank's core systems, Cosmos, in the Asia-Pacific region, and would be doing similar implementation in Japan, Latin America and Europe, he added.
Mr Ravisankar said that even as consumer-banking technology spend the US was expected to grow faster to about $6 billion in 2005, the company expected a significant growth for its Reveleus product suite.
Reveleus enables organisations to respond to market needs, enhance customer service levels, and manage risk through its suite of information management products and services.
The company planned to foray into insurance sector. Though nothing had been finalised yet, Mr Ravisankar said that insurance would be the next logical step for expansion. Acquisition could be one way of expansion, he added.
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