ITC Infotech Eyes $500 Mn Revenue Over Five Years From New Business Unit

ITC Infotech is eyeing revenues of $500 million over the next five years from DxP Services – a unit being created from the acquisition of a portion of US software and services company, PTC’s, product lifecycle management (PLM) business.

Last month, ITC Infotech announced that it would be acquiring a part of PTC’s product lifecycle management (PLM) implementation services business and create a new business unit, DxP Services, combining professional services experts from both companies. The transaction is set to close.

The acquisition is the first from ITC Infotech, set up in 2000 by the diversified conglomerate, ITC. The financial commitment from ITC Infotech towards this agreement is $115 million over five years.

ITC Infotech has had a 20-year working relationship with PTC. With DxP services, it’s now taking it to the next level.

Sources close to ITC indicated that ITC Infotech is looking at upselling and cross-selling business solutions to the tune of $500 million over the next five years.

In FY22, ITC Infotech – a wholly owned subsidiary of ITC – recorded revenues of Rs 2,853 crore, an increase of 16.3 per cent; profit after tax was at Rs 541 crore, a growth of 19 per cent over the previous year.

The acquisition is expected to boost revenues with deeper access to markets and a range of clients. DxP Services will work towards enabling customers to move from on premise software to a Saas environment.

“On the back of this transaction, we have an inside track to hundreds of clients - blue chip clients in Europe and in America, which is again over 70 per cent of our revenues,” said Sudip Singh, managing director and chief executive officer, ITC Infotech.

“We are already working in 29 countries. But this transaction is deepening our footprint in 15 countries of which a few are new for us,” he added.

As part of the transaction, ITC Infotech will be acquiring a significant part of PTC’s professional services team.

“This is not only a very strong technical team that we are acquiring but also the management team which is very important because they were running the implementation for clients and had deep client relationships built over decades,” said Singh.

As far as projects that DxP will have access to, Singh said, “At this point in time across the world, we are talking of close to 5,000 current on-premise PLM Windchill implementations that we can migrate to the Saas ecosystem.” Windchill is a PTC PLM software.

ITC Infotech is in the growth phase especially with companies riding the digital wave during the pandemic.

In FY21, ITC Infotech’s net profit more than doubled to Rs 451.30 crore from Rs 209.47 crore in the previous year. It had also fuelled speculation about the listing of ITC Infotech on the bourses. Singh, however, did not want to comment on it.

In tandem with its growth, Infotech plans to ramp up headcount. In FY22, the company hired over 4,000 employees with a higher percentage of them being freshers. The total headcount right now is about 10,500 and Singh said, hiring next year would increase significantly given the growth plans.

The IT sector is facing a war for talent and Singh said that the average attrition rate in the industry was 25 to 30 per cent and ITC Infotech was in that range.