Cognizant, TCS and Infosys have all said demand from banking and financial services (BFSI) customers has slowed, hampering overall growth.
However, Kris Canekeratne, CEO, Virtusa, told in an interview: “For us, BFSI business has been a growth enabler. We are not seeing what other companies have said they are experiencing in BFSI. Our leadership in digital means we are very much in demand and our non-digital offerings are also growing in double-digits. One of the reasons is that we are taking market share.”
Canekeratne attributes Virtusa’s growth in BFSI to the successful acquisition of Inda-listed Polaris in 2015. “Before acquiring Polaris, our BFSI business was growing in the single digit percentage range. Now, it is growing at 30%. I think Polaris was one of the most successful at-scale acquisitions in the IT sector.”
Prior to acquiring Polaris, BFSI contributed about 40% to Virtusa’s revenue, which is the same with most other large IT service providers. Currently, BFSI contributes 68% of Virtusa’s revenue, an outsize share that Canekeratne said was part of strategy.
“We had decided to double down on BFSI. But in the future, as other business verticals such as hi-tech and internet grow, BFSI’s percentage of revenue will come down.”
Virtusa acquired eTouch Systems this month as part of a strategy to boost its connection to Silicon Valley, which the company feels will be an important client base, moving forward.
Virtusa will pay about $140 million for eTouch, with an additional $15 million set aside for retention bonuses to be paid to eTouch management on the second anniversary of the deal.
The acquisition gives Virtusa, which had under 20,000 employees at end of December, an additional 1,600 employees, of which about two-thirds will be based in India.