BPO provider HGS rides COVID wave to record profit

Hinduja Global Solutions, one of India’s top pure-play business process outsourcing companies, has been able to turn the massive challenge posed by COVID lock-down restrictions into an opportunity, posting record profits for the year.

Like many organizations that depend on thousands of staff working inside a single building, Hinduja Global Solutions found its working model upended by COVID-19 due the chances of the virus spreading inside air conditioned offices.

On the other hand, COVID also led to a spurt in demand for IT-related services as more and more companies and individuals shifted their activities from the offline world to the online world.

Because of this, HGS, which focuses on services such as customer support, found itself facing no shortage of work, but was faced with the challenge of transitioning its 40,000 employees to a work-from-home model, away from the company’s 56 offices across seven countries.

Going by the results for the year, the company indeed seems to have pulled it off.

Revenues have risen 14.6% on a like-to-like basis (after adjusting for the impact of the sale of a unit), while profits have kept pace or even done better.

EBITDA — a measure of the cash generated by the operations that excludes the impact of non-cash accounting provisions such as depreciation — increased by 16% on year, in line with the top-line growth.

Net profit jumped 63% to Rs 336 cr.

For the final quarter, like-to-like revenue growth was at 21.6% on year, while Q4 EBITDA rose by 31.7%. Net profit almost tripled to Rs 130.3 cr during the last three months of the year.

Partha DeSarkar, the long-time CEO of HGS, called it a ‘fantastic performance’ by the company, and credited the staff with turning an adversity into an opportunity.

He pointed out that the company’s net profit has hit all-time high, both for the year as well as the quarter.

“Our strategy in FY2021 was simple – shift our people to primarily Work@Home model, create a strong momentum in client wins (new and existing), add big wins in core verticals like Healthcare and Public Sector and sell more digital services,” he said. “This has helped us achieve significant growth in the business and improve profitability.”

Some of the changes forced by the pandemic, such as shifting to a more efficient, cloud-based telephony solution, turned out to be winning strategies for the long term, DeSarkar pointed out.

“The adoption of cloud telephony has helped us scale our business rapidly, without having to spend on capex for brick and mortar expansion. The successful transition to Work@Home has also given us the highest employee satisfaction scores and customer satisfaction scores ever.”

He said the company expects to “build on this momentum” and is investing in aggressive growth in the current year.