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7. EXL SERVICE: Tough Times Don’t Last

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VoicenData Bureau
New Update

VIKRAM

TALWAR

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QUALITY
FACT FILE
CEO Vikram Talwar
POSITIONING Strong in BFSI with more exposure to insurance
STARTED

IN
1999
OWNERSHIP Oak Hill Capital Partners, LP&FT Ventures, EXL

Management
REVENUE

(2002-03)
$ 29 million
NO OF

PEOPLE
2,860  (as on

31 Oct 2003)
CORPORATE

ADDRESS
A-48, Sector 58, Noida
WEBSITE www.exlservice.com 
NO OF

CLIENTS
8

ISO 9001:2000 certified organization since November 2002
COPC under implementation
Complies with Six Sigma for process excellence
LOCATION
FACILITIES:

4 (Noida–3, Pune–1)
SALES & MARKETING:

New York, US

In the history of the Indian BPO industry, we have seen companies who started

as independents and got acquired on the way, companies who turned from captives

to independent and companies who have managed to get good funding from some of

the best VCs. Here is a company that is an example of all these and more.

Starting out as a venture-backed independent company, EXL made headlines as

the first big BPO acquisition, when it was acquired by Consceco. And when

Conseco filed for bankruptcy under Chapter 11 in November 2002, everyone wrote

the company off. EXL was owned 100 percent by Conseco and 95 percent of its

revenue came from doing Conseco work. Not only did the company manage to

survive, it managed to rope in Oak Hill Capital Partners and FT Ventures and

also ramped up its client base from two in December 2002 to seven in March 2003.

Today, it is one of the top five BPO companies in India. The price it had to pay

was a year of flat growth.

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And they just did not happen. After the Conseco bankruptcy, EXL took some

tough measures. It closed down two centers at Noida temporarily, initiated

cost-cutting measures within the company and restructured its operations putting

all its senior management team into business development roles. The measures

apparently paid dividends as the company not only began full capacity

utilization but also started on a massive recruitment drive around June this

year.

EXL expects to rope in over 3,000 employees this year and the company is

clear that such huge numbers would be difficult to attract within the metros. It

has set up recruiting offices in other A class cities like Chandigarh, Lucknow

and Kolkata offering leased accommodation as a sop to attract recruits. Migrant

recruits are less prone to job-hopping so EXL expects to address attrition

considerably with such initiatives. Attrition, an industry menace, has already

pushed up the average labor cost of the industry by 15—20 percent over the

last year.

It also productized its experience in the process knowledge by combining it

with the local IT pool and created a tool called PROMPT which has been licensed

to a few clients. This year the company has raked in 5—10 percent of its

revenue from such products which will increase to 15—20 percent next year.

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EXL has built impressive momentum to be counted among the top contenders in

the third party BPO space. Although it has announced ambitious performance

targets of achieving $100 million mark during this next fiscal, analysts are

more moderate in their rating pegging EXL in the $50 million mark by next year.

The company’s financials look strong with year on year revenue growth, yet

its client-revenue ratio is still an area of concern with unhealthy exposure to

its top client at 43 percent. Its overwhelming dependence on BFSI as a vertical,

a legacy of the Conseco association may also change.

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