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Mr Keshav Murugesh

T.E. Raja Simhan

Chennai, April 9 Syntel Inc, a US-based software company with offshore development centres in India, plans to invest $50-60 million (Rs 200-240 crore) in capacity expansion in India this year. This will enable the company to add around 6,000 seats to accommodate 2,800-3,500 employees, according to the company’s President and Chief Operating Officer, Mr Keshav Murugesh.

A provider of integrated information technology and knowledge process outsourcing solutions, Syntel added over 1,000 employees during the fourth quarter to finish 2007 at 11,709 worldwide. In the year, the company added more than 3,300 employees, a 40 per cent increase over 2006.

It spent over $32 million in capex during 2007 and added more than 4,000 finished seats in India.

“In support of our revenue guidance, we will be building out phase II of our Pune campus and phase I of our Chennai campus for 2008 requirements and beyond,” he told analysts while discussing the company’s 2007 fourth quarter and year’s financial results.

Many companies are being forced to address strategic business decisions in a challenging economic climate. Regardless of the outcome of these decisions, Syntel is well positioned in both short and long-term to take advantage of the trend towards globalisation of services.

“Our confidence is demonstrated by the 2008 investment levels,” he said.

Syntel for 2007 reported net income of $63 million compared with $51 million in 2006 on revenues of $338 million ($270 million). Based on the current visibility, the company’s initial guidance for 2008 is expected to be $405-420 million, says a company release.

Mr Bharat Desai, Chief Executive Officer, Syntel, said macro economic trends are very strong towards globalisation of services. “This is an irreversible mega trend,” he said, adding that challenges to an economy have always only resulted in more outsourcing —such as during ‘Y2K’ and ‘9/11’. Economic pressures are going to force customers to look at cost structures and make strategic decisions about both IT and operations outsourcing, he said.

He said there has been lots of noise on the wage side. But offshore wage inflation is going to be 14-15 per cent and onsite it is to be 4-5 per cent.

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