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NTL unveiled changes to its organisation structure, with new heads of Europe and global Sales &
Marketing. There were positive data points on the business front - ROOM won its first large order
for IPF3, price hikes are coming through and the first cloud services project is underway.
New organisation structure aligned to better capture demand growth
NTL has appointed a European head who will have P&L responsibility for the region. The
company had geography heads for important markets within Europe, will now report to the
European Head.
The company has strengthened its sales organisation, particularly in Europe, to address new
client opportunities (identified as 'must have' accounts) as well as better mining of existing
accounts by identifying gaps in its footprint in these accounts.
NTL has also created a new leadership position that will oversee overall sales and marketing
efforts in the organisation, reporting to the CEO.
NTL plans to create differentiated offerings in sub-verticals, and also plans to invest in
creating platform-based solutions.
Strong growth at ROOM should continue
ROOM solutions (10% of FY11 revenues), which has a platform based offering for the reinsurance
industry has shown strong growth of late - 4Q11 revenues were up 36.9%.
According to management, revenue growth was driven by addition of a couple of important
accounts, including one on the back of acquisition done by a client.
ROOM's next generation platform, IPF3, which had so far seen a lukewarm reception so far,
has now signed up its first transformation engagement.
Management hopes to showcase this to other clients, and expects more sign ups over the
next few quarters.
Implementation of such transformation programs are sizeable in terms of revenues, and can
drive significant growth at ROOM, according to management.
Separately, NTL also announced the full-scale implementation of cloud services (partnership
with Hitachi), for an Asian Travel client.
Management also spoke of continued traction in the GIS business, on the back of a 46.4%
growth in FY11.
Margin levers adequate to handle pricing pressures, according to management
According to management, new business signings are coming in at 5-8% higher pricing than
the current pricing. NTL is also able to pass on some price hikes to existing clients.
NTL's employee pyramid is highly skewed towards experienced staff, with over 70% of its
workforce having more than 3 years of experience, according to management. Freshers will
form a significant proportion of hiring going forward, in order to re-balance the employee
pyramid.
Management sees faster than company average growth in IP-based solutions and managed
services, it believes should help defend margins, as they have elements of non-linear
delivery.
The company also believes it can improve the offshore mix (41% of revenues), which should
also have a positive impact on margins.
Management reiterated its target to improve margins on a reported basis, which includes
hedging losses reported in the top line. We currently estimate a 108bp margin improvement,
including the impact of hedging losses/gains.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
NTL unveiled changes to its organisation structure, with new heads of Europe and global Sales &
Marketing. There were positive data points on the business front - ROOM won its first large order
for IPF3, price hikes are coming through and the first cloud services project is underway.
New organisation structure aligned to better capture demand growth
NTL has appointed a European head who will have P&L responsibility for the region. The
company had geography heads for important markets within Europe, will now report to the
European Head.
The company has strengthened its sales organisation, particularly in Europe, to address new
client opportunities (identified as 'must have' accounts) as well as better mining of existing
accounts by identifying gaps in its footprint in these accounts.
NTL has also created a new leadership position that will oversee overall sales and marketing
efforts in the organisation, reporting to the CEO.
NTL plans to create differentiated offerings in sub-verticals, and also plans to invest in
creating platform-based solutions.
Strong growth at ROOM should continue
ROOM solutions (10% of FY11 revenues), which has a platform based offering for the reinsurance
industry has shown strong growth of late - 4Q11 revenues were up 36.9%.
According to management, revenue growth was driven by addition of a couple of important
accounts, including one on the back of acquisition done by a client.
ROOM's next generation platform, IPF3, which had so far seen a lukewarm reception so far,
has now signed up its first transformation engagement.
Management hopes to showcase this to other clients, and expects more sign ups over the
next few quarters.
Implementation of such transformation programs are sizeable in terms of revenues, and can
drive significant growth at ROOM, according to management.
Separately, NTL also announced the full-scale implementation of cloud services (partnership
with Hitachi), for an Asian Travel client.
Management also spoke of continued traction in the GIS business, on the back of a 46.4%
growth in FY11.
Margin levers adequate to handle pricing pressures, according to management
According to management, new business signings are coming in at 5-8% higher pricing than
the current pricing. NTL is also able to pass on some price hikes to existing clients.
NTL's employee pyramid is highly skewed towards experienced staff, with over 70% of its
workforce having more than 3 years of experience, according to management. Freshers will
form a significant proportion of hiring going forward, in order to re-balance the employee
pyramid.
Management sees faster than company average growth in IP-based solutions and managed
services, it believes should help defend margins, as they have elements of non-linear
delivery.
The company also believes it can improve the offshore mix (41% of revenues), which should
also have a positive impact on margins.
Management reiterated its target to improve margins on a reported basis, which includes
hedging losses reported in the top line. We currently estimate a 108bp margin improvement,
including the impact of hedging losses/gains.
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