The effects of the sub-prime crisis and the resultant slowdown of the US market is evident on the margins of Indian information technology (IT) and IT-enabled Services (ITeS) firms. Business process outsourcing (BPO) firms such as Firstsource, Pune-based HOV Services, Zenta, Aegis BPO and others have been receiving inquiries from existing as well as new customers for ramping up their account receivables management (ARM) business.
Players in the Indian animation industry, who primarily cater to movie studios in the US, are increasingly looking at the domestic market, especially after the commercial success of animated movie Hanuman. Of the total revenues generated by the Indian studios, approximately 70 per cent comes from outsourced work.
Sony Entertainment Television is bringing back once-a-week serials as it readies to launch up to 10 new shows in the next seven months.
Prime Focus, a post-production and visual effects service company is close to acquiring a special effects studio situated on the west coast of United States. The deal size is reportedly pegged at around $100 million or under Rs 400 crore. Prime Focus is a leading integrated post production and visual effects services company.
INX Media, the company set up by Indrani Mukherjea, wife of ex-Star Group CEO Peter Mukherjea, has roped in three top advertisers -- Vodafone, Reliance Industries and Future Group -- for their Hindi entertainment channel 9X. Each of these advertisers are believed to be paying Rs 35-40 crore (Rs 350-400 million) for a three-year contract. The television broadcaster has formed Club INX, which will include corporates keen to advertise on the channel.
As a sign of things to come, Future Media, the media arm of the group, recently launched a women's magazine, My World, priced at Rs 25, given away as gratis to shoppers at Future Group stores (Pantaloon, Big Bazaar, etc) spending over Rs 1,500. The company plans to launch a magazine each quarter.
With the rupee going from strength to strength and attrition a continuing concern for Indian business process outsourcing companies, the new poster child of private equity investors is witnessing adjustments in valuations in the changed scenario.
Hyderabad-based Applabs, providing quality management, testing, and certification solutions, will be increasing its business from the domestic market. In the next 12 months, the company is aiming at a revenue of $4-5 million (around Rs 15-19 crore) from India.
For instance, while Digitial Media Convergence -- a part of ESSEL Group (promoter of ZEE TV) -- provides the mobile TV (also known as the fourth screen -- the other three comprising the silver screen, TV and PC) application service 'ISEE' along with telecom service provider BSNL.
The concerns were legitimate as unlike the IT industry, more than 90 per cent of the cost of BPOs is in rupees while earnings are in dollars. However, the firms have managed well by focusing on increasing productivity, enhancing employee utilisation, increasing billing rates and effecting better management strategies.
The two-film rally by Sony Pictures and Eros International - Saawariya and Om Shanti Om - has set the cash registers ringing. Diwali day usually does not have audience flocking in large numbers, but this Diwali has brought prosperity to multiplex owners with over 85 per cent occupancy on Friday. All leading theatre chains are running to packed houses on Saturday and Sunday.
Om Shanti Om, which will hit theatres on Friday, and others in the pipeline such as Welcome and Race have done it already. Harry Baweja's Love Story 2050 is said to be in talks with jeans brand Killer to introduce a denim clothing line based on the film.
Neeraj Bhargava, CEO of Mumbai-based business process outsourcing (BPO firm) WNS Global Services, and his team have voluntarily decided to forfeit their bonuses if they are not successful in getting the attrition rates below 30 per cent. This is probably the first such move of its kind in the industry in which attrition has become a critical issue. WNS has over 15,000 employees, and its current attrition rate stands at 43 per cent.
Indian cricketer Yuvraj Singh is close to sealing a deal with tennis player Mahesh Bhupathi's sports marketing agency Globosport after his seven-year contract with Percept Talent Management ends in a few weeks. The move could prompt Percept taking Yuvaraj Singh to court because it is believed to have the first right to refusal to match the Globosport offer.
While this is a global phenomenon, it is for the first time that the Indian Music Industry (IMI) is making an effort to stop this before it erodes the revenue stream of music companies like it is already happening in the software, gaming and the movie segments.
Sony Computer Entertainment, an arm of Sony Pictures, is planning to increase its console-based business in India.The company - responsible for the distribution, marketing and sales of PlayStation - opened its India office four months back and is now getting its strategy in place to offer variety and a better experience to gamers.
Indian IT service providers are increasing their exposure in the healthcare and pharma segments. Multi-million dollar deals in this space by IT firms over the past three-four months only buttress this trend. Healthcare outsourcing has moved away from just undertaking medical transcription and business process outsourcing (BPO) work to core functions such as drug discovery, testing, research and development.
Diwali blockbusters Saawariya and Om Shanti Om may not be screened at a multiplex near you. Leading multiplex chains PVR Cinemas, Inox Lesiure, Cinemax India and Fame, which account for 80 per cent of the country's multiplex screens and half the box office collections, have rejected a demand for a higher revenue share by the films' distributors and have threatened a blackout.
US-based Spectrum Global Fund Administration, providing back-office operations to hedge funds in the US and the UK, is closing its facilities in India. The company had started its operations in India two years ago.
Unlike the first quarter of FY08 when Indian IT small- and mid-caps were hit hard due to a nearly 7 per cent appreciation in the rupee against the dollar, the July-September period was relatively kind to these firms. It spared them to some extent, since the rupee appreciated around 1.5 per cent over the period. However, the rupee rose around 12 per cent against the dollar over the last 12 months.
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