Telecom Lead India: IT services company Virtusa is set to expand in Indian telecom market.
Srinivasan Jayaraman, vice president and global head – Telecom Practice, Virtusa, said: “We aim to expand our telecom business in India in a big way. We are in talks with a number of key mobile operators.”
Virtusa targets Indian telecom service providers and ISPs to assist them in monetizing from services. Virtusa utilizes its expertise in big data, analytics, etc. to guide Indian telecom operators to enhance their revenue streams.
Virtusa’s Telecom Practice head says though Indian wireless operators are offering premium mobile data services — through 2G, 3G and 4G – they are unable to differentiate their service offerings compared with competition.
“To improve customer experience of the 800 million plus mobile users, Virtusa’s offerings will assist Indian telecom operators. We hope to sign 1-2 big operators soon,” Jayaraman added.
At present, Virtusa’s telecom and technology vertical contributes around 27 percent revenue. Recently, Forbes listed Virtusa as one of the best small companies in the U.S.
Virtusa’s third quarter fiscal 2013 revenue increased 7 percent sequentially and 20 percent year-over-year to $86.5 million. Third quarter fiscal 2013 operating income increased 39 percent to $9.1 million or 10.6 percent of revenue compared to $6.6 million or 9.1 percent of revenue in the year ago period.
Despite the financial performance, J.P. Morgan analyst Puneet Jain recently downgraded the rating on Virtusa Corporation to Neutral from Overweight.
“We are downgrading VRTU from Overweight to Neutral as we think the 46 percent stock rally this year (vs. S&P 500 up 9 percent) already prices in much of the earnings growth upside we expect in FY14 (initial guidance to be issued in early May). Moreover, unlike in the previous years, the company’s large clients may not be a significant driver of its overall growth next year, potentially triggering growth slowdown in FY14. However, VRTU’s growing pipeline and margin expansion potential should still result in solid earnings growth this year (we est. 30 percent), keeping us at Neutral,” Jain said.
But Kris Canekeratne, chairman and CEO, Virtusa, is confident of offering fiscal year 2013 revenue guidance of $332 to $334 million, with diluted EPS of $1.05 to $1.07.
Canekeratne recently said Q3 was a strong quarter for Virtusa driven by broad-based revenue growth across all of our industries and geographies.
Baburajan K
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