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  1. 1. Emerging Opportunities in India – Presentation by Evalueserve Dr. Alok Aggarwal Founder & Chairman [email_address] June 15, 2005
  2. 2. Presentation Plan <ul><ul><li>Evalueserve – An Overview </li></ul></ul><ul><ul><li>India’s Emerging High-Tech Industry </li></ul></ul><ul><ul><li>Capital Markets & Other Emerging Opportunities </li></ul></ul>
  3. 3. Presentation Plan <ul><ul><li>Evalueserve – An Overview </li></ul></ul><ul><ul><li>India’s Emerging High-Tech Industry </li></ul></ul><ul><ul><li>Capital Markets & Other Emerging Opportunities </li></ul></ul>
  4. 4. Evalueserve is… … a Knowledge Process Outsourcing company that provides Analytics & Research services to small, medium and large companies around the world …
  5. 5. Achievements …. Founded & Commenced Operations First major client signed up Acquired the IP of CommNOW in USA Achieved profitability 12 Client-Execs, 23 support & 205 Professionals 26 Client-Execs, 94 support & 650 Professionals 22 Client-Execs, 78 support & 450 Professionals 12-’00 07-’01 03-’02 12-’02 12-’03 12-’04 06-’05 08-’05 12-’05 After achieving profitability, EVS has been doubling every year and hopes to do so until December 2006! Goal: To have 5,500 billable professionals by December 2010. Expected: 35 Client-Execs, 100 support & 900 Professionals EVS-Shanghai Research Centre Will be Operational
  6. 6. Management Team <ul><li>Chairman </li></ul><ul><li>PhD, Johns Hopkins in EECS </li></ul><ul><li>BTech (Elec) IIT Delhi </li></ul><ul><li>Ex-Director of IBM (16 years, US/India) </li></ul><ul><li>VP Marketing and Sales </li></ul><ul><li>IBM Marketing & Sales Executive </li></ul><ul><li>Managed worldwide B2B Sales Group </li></ul><ul><li>Managed worldwide Supply Chain Sales Group </li></ul><ul><li>President & CEO </li></ul><ul><li>MBA, INSEAD </li></ul><ul><li>Masters in Telecommunications Engineering, ETH Zurich </li></ul><ul><li>Ex-Partner at McKinsey </li></ul><ul><li>COO & VP Operations </li></ul><ul><li>MBA, Carnegie Mellon </li></ul><ul><li>BTech (Mech.) IIT Delhi </li></ul><ul><li>Ex-Engagement Manager, McKinsey & Co. </li></ul>Alok Aggarwal Marc Vollenweider Robert Daigle Ashish Gupta
  7. 7. Truly Global North America <ul><li>Dr. Alok Aggarwal, NY </li></ul><ul><li>Robert G. Daigle, ME </li></ul><ul><li>David E. Cooley, CT </li></ul><ul><li>Andrew Adelson, MA </li></ul><ul><li>Donald Kruszenski, CA </li></ul><ul><li>Edmund Voyer, NY </li></ul><ul><li>George Sawyer, CA </li></ul><ul><li>Marty Perelstein, CA </li></ul><ul><li>Mahesh Bhatia, CA </li></ul><ul><li>Ravi Prakash, CA </li></ul><ul><li>Sumathi Pundit, Canada </li></ul>Evalueserve <ul><li>Holding company registered at Bermuda </li></ul>Europe <ul><li>Marc Vollenweider, AT & CH </li></ul><ul><li>Mike Taylor, UK </li></ul><ul><li>Amie Stark, UK </li></ul><ul><li>Ollie Snelling, UK </li></ul><ul><li>Geoff Simmons, UK </li></ul><ul><li>Prajeet Pa t el , Nordic </li></ul><ul><li>Tomas Backman, Nordic </li></ul><ul><li>Hedda P Moller, BENELUX </li></ul><ul><li>Jean Francois Lengelle, France </li></ul><ul><li>Reinhard Lorek, Switzerland </li></ul><ul><li>Urs Dommann, Switzerland </li></ul>India <ul><li>Ashish Gupta, Delhi-Gurgaon </li></ul><ul><li>650 professionals </li></ul><ul><li>Infrastructure, HR, IT, Finance, Logistics </li></ul>Asia-Pacific <ul><li>Daniel Sadhu, Singapore </li></ul><ul><li>William Kemmery, Australia </li></ul>Marketing and Sales, Front-end on client projects Operations, Service Back-end Offices Israel <ul><li>Laurence Neumann </li></ul>Brazil <ul><li>José Edson Bacellar, Brazil </li></ul>
  8. 8. Evalueserve’s Research Services Investment Research Business Research Market Research Intellectual Property Research Data Analytics’ Research Emerging Markets Research
  9. 9. Six Service Lines with Strong Synergies <ul><li>Market Research </li></ul><ul><li>Design, Conduct, Analysis of Surveys </li></ul><ul><li>Experience of more than 15,000 surveys so far </li></ul><ul><li>B2B surveys including </li></ul><ul><ul><li>Spending Decision Criteria </li></ul></ul><ul><li>B2C surveys including </li></ul><ul><ul><li>Consumer Preferences and Behaviour </li></ul></ul><ul><ul><li>Decision Criteria </li></ul></ul><ul><li>Intellectual Property </li></ul><ul><li>IP Research and Analysis </li></ul><ul><ul><li>Patentability Assessment Search </li></ul></ul><ul><ul><li>Technology Due-Diligence </li></ul></ul><ul><ul><li>Patent Landscape analysis </li></ul></ul><ul><ul><li>Patent drafting and filing </li></ul></ul><ul><li>Data Analytics’ Research </li></ul><ul><li>Financial Modeling for Fixed Income and Hybrid Instruments </li></ul><ul><li>Market Risk Analysis </li></ul><ul><li>Credit Risk analysis </li></ul><ul><li>Asset Liability Management </li></ul><ul><li>Usage Pattern Analysis </li></ul><ul><li>Investment Research </li></ul><ul><li>Valuation of public and privately-held companies </li></ul><ul><li>Creating/ Updating/ Maintaining/ Auditing Valuation Models </li></ul><ul><li>Business Research </li></ul><ul><li>Market Studies & Segment Analysis </li></ul><ul><li>Commercialisation and Business Plans </li></ul><ul><li>Company, Industry Profiles & Analysis </li></ul><ul><li>Product & Value Chain Analysis </li></ul><ul><li>Updating Databases & Existing Research </li></ul><ul><li>Newsletters (outsourcing and off shoring, telecom, financial services) </li></ul><ul><li>Emerging Markets Research </li></ul><ul><li>Opened EVS’ Shanghai Research Center that will be operational in August 2005 </li></ul><ul><li>Research on India and China </li></ul><ul><li>Cover 8 Languages in addition to English and Indian languages: German, French, Spanish, Italian, Chinese, Portuguese, Japanese and Korean </li></ul>
  10. 10. Presentation Plan <ul><ul><li>Evalueserve – An Overview </li></ul></ul><ul><ul><li>India’s Emerging High-Tech Industry </li></ul></ul><ul><ul><li>Capital Markets & Other Emerging Opportunities </li></ul></ul>
  11. 11. IT off-shoring Revenues for Apr. 1, 2003 – Mar 31, 2004 were $17 Billion approximately * In addition, nearly 58,000 Indian IT professionals with H1B and L1 visas in US, UK etc. generate revenues of $3.88 Billion. ** For Canada, China, and Ireland, this number also includes those IT professionals who work in manufacturing and software producing companies that export products to other countries. 135 4,000 Mexico, South Africa, Latin America 265 9,000 CIS & Eastern European countries 16,935 385,000 Total 170 5,000 The Philippines 285 8,000 Russia 900 15,000 Israel 3,840 60,000 Ireland** 7,560 212,000 India* 1,680 42,000 China** 2,100 30,000 Canada** IT Export Revenues (million $) Number of Export-focussed IT Professionals Country
  12. 12. Prediction : Global off - shoring opportunity in business processes (non- IT) will be $141 Billion by 2008 Current cost of all business elements with remote location potential Savings generated by new business model s 288 429 141 Price of procuring the service from a low cost location such as India 33 15 1 5 44 18 Non- IT Services – 2008 Source: NASSCOM - McKinsey Report, 1999 15 1 1 8 141 <ul><ul><li>Customer interaction services </li></ul></ul><ul><ul><li>Finance & accounting </li></ul></ul><ul><ul><li>Translation, transcription, etc. </li></ul></ul><ul><ul><li>Engineering & design </li></ul></ul><ul><ul><li>HR services </li></ul></ul><ul><ul><li>Data search, integration & management </li></ul></ul><ul><ul><li>Remote education </li></ul></ul><ul><ul><li>Legal content & services </li></ul></ul><ul><ul><li>Medical content & services </li></ul></ul><ul><ul><li>Others (Pharma, R&D etc.) </li></ul></ul><ul><ul><li>Total </li></ul></ul>
  13. 13. <ul><li>According to Evalueserve, global off-shore BPO (non-IT) revenue in FY 2003 was $8.9 Billion and this industry will grow at 30% CAGR (during 2004-2010). </li></ul><ul><li>According to NASSCOM- McKinsey report, the BPO (non-IT) opportunity for 2008 is $141 Billion but Evalueserve estimates that only $54.6 Billion will be realized by 2010, and 2.12 million people in low-wage countries will be thereby employed. </li></ul><ul><li>About 1.07 million of these people will be employed in India by 2010. </li></ul>However, only 39% of the total off-shoring opportunity is likely to be realized even by 2010
  14. 14. Examples of two industries – low end to high end IT Industry Insurance Industry Programming and Maintenance Services Project Implementation Package Implementation System Integrations IT-led- Business Strategy 100% off-shoring possible 80:20 or (100-x) : x delivery model Contact Centers & Customer Support Claims Processing & Policy Servicing Underwriting & Asset Management Knowledge Process Operations: Domain Expertise required
  15. 15. Low - end services are likely to grow from 7.7 Billion in 2003 to $39.8 Billion by 2010 26% 39.8 7.7 Total ($Billion) 31% 1.0 0.3 Medical transcription, translation of foreign language documents Translation & Transcription 49% 8.0 0.5 Recruitment processing , payroll processing HR Services 36% 13.0 1.5 Data entry , mortgage, claims processing , payroll processing , receivables Finance & Accounting 18% 17.8 5.4 Call centers - - Helpdesk, telemarketing , s ales support Customer Interaction Services CAGR 2010 2003 Description Opportunities
  16. 16. Knowledge Process Outsourcing likely to grow from $1.2 Billion in 2003 to $16 Billion by 2010 40% 3.0 0.28 CROs, drug discovery etc. Biotech & Pharmaceuticals N/A 0.3 0 Research in case law etc. Paralegal Content & Services N/A 0.3 0 Remote diagnosis, etc. Medical content and services 29% 2.0 0.4 CAD/CAM, plant designs Engineering & Design 54% 0.4 0.02 Industry reports & data Market Research, Competitive Intelligence N/A 2.0 0 Professional education, etc. Remote Education, Publishing 45% 16.0 1.2 Total ($Billion) 39% 1.0 0.1 Other non-IT areas Research & Development 46% 1.4 0.1 E.g. simulation of new designs for cars, engines Animation and simulation services - 0.2 0 Compensation, modeling and benchmarking Research and Information Services in Human Resources 50% 5.0 0.3 catalog and database creation, updating & mgmt. Data Search, Integration & Management N/A 0.4 0 Equity research, Accounting reports Equity, Financial, Insurance Research CAGR 2010 2003 Description Opportunities
  17. 17. India is likely to earn about one-third in higher end services and so may other countries… India provided $3.5 Billion of BPO and KPO (but non-IT) services in 2003 and is expected to grow at a CAGR of 36% during 2004-2010. Hence, it is likely to earn $30 Billion in 2010 by providing these services . $12 Billon $18 Billion Total Revenue Generated 250,000 820,000 Total Employment Opportunity $48,000 $22,000 Total Annual Revenue per professional per annum (every 2000 hours) $24 $11 Price per hour High-end Services Low-end Services Services
  18. 18. Presentation Plan <ul><ul><li>Evalueserve – An Overview </li></ul></ul><ul><ul><li>India’s Emerging High-Tech Industry </li></ul></ul><ul><ul><li>Capital Markets & Other Emerging Opportunities </li></ul></ul>
  19. 19. Other Growth Areas Pharmaceuticals Specialty Chemicals Exports to grow from $12 billion/year to $30 billion/year by 2010 Exports to grow from $2 billion / year to $14 billion / year by 2015 <ul><ul><li>$10 billion domestic market growing at 6% per year </li></ul></ul><ul><ul><li>$4 billion export market growing at 20% per year </li></ul></ul><ul><ul><li>Investment opportunities driven by CR&Ms (contract research & manufacturing) </li></ul></ul><ul><ul><li>India has the largest number of US FDA approved plants outside the US </li></ul></ul>Exports from $1 billion/year to $25 billion/year by 2015 CR & MS opportunity of $5 billion over the next 5 years Source: Made in India, A CII-Mckinsey Report, Oct 2004
  20. 20. Other Growth Areas Auto Components <ul><ul><ul><li>Exports grew at CAGR of 26% between FY99 and FY04 </li></ul></ul></ul><ul><ul><ul><li>According to ACMA, this will grow at CAGR of 38% until 2015 </li></ul></ul></ul>Textiles Exports to grow from $12 billion/year to $30 billion/year by 2010 Exports from $1 billion/year to $25 billion/year by 2015
  21. 21. Other Growth Areas Telecom Banking and Insurance Total asset size of the Indian banking sector is estimated at around $270 billion <ul><li>India is the fourth largest telecom market in Asia after China, Japan and South Korea. </li></ul><ul><li>The Indian telecom network is the eighth largest in the world and the second largest among emerging economies. </li></ul><ul><li>Growth in the telecom industry is estimated to lead to an expenditure of over $50 billion over the next six years ending 2010 </li></ul><ul><li>The Indian telecom market size of over US $ 8 billion is expected to increase three fold by 2012. </li></ul>Growth in the telecom sector is estimated to yield an expenditure of over $50 billion by 2010 <ul><li>Total asset size of the Indian banking sector is estimated at around $270 billion </li></ul><ul><li>Total deposits amount to $220 billion and foreign exchange reserves of more than $130 billion </li></ul><ul><li>Estimated market potential of premium income of $80 billion </li></ul>
  22. 22. Expected Growth of Price and Earnings BSE Sensex earnings are expected to grow at 20% per year for the next four years 7% Real GDP Growth Rate 20% Growth rate for BSE’s SENSEX – next four years 3% Non-agriculture GDP growth i.e. for manufacturing & services 5% Expected Inflation 5% Increase in P/E Ratio from 13 to 16
  23. 23. SENSEX: Under-invested & Attractive <ul><ul><li>Under-invested </li></ul></ul><ul><ul><ul><li>15% of market controlled by foreign investors compared to 20% in Malaysia; 20% in China and 40% in Korea and Taiwan </li></ul></ul></ul><ul><ul><li>Under-represented </li></ul></ul><ul><ul><ul><li>India has 5% weightage in the MSCI EM Index while Korea is at 20%, South Africa at 14% and Taiwan at 12% </li></ul></ul></ul><ul><ul><li>Trading at Low P/Es </li></ul></ul><ul><ul><ul><li>Bombay’s SENSEX has been trading at P/E ratio of 13 as compared to an average of 16 during last 15 years </li></ul></ul></ul><ul><ul><ul><li>China’s stock market trading at P/E of 20 </li></ul></ul></ul><ul><ul><ul><li>By 2009, SENSEX is likely to be trading at P/E ratio of 16 </li></ul></ul></ul><ul><ul><li>Expected Growth of Sensex </li></ul></ul><ul><ul><ul><li>SENSEX was at 6,400 in March 2005 </li></ul></ul></ul><ul><ul><ul><li>Expected to go to 13,300 by March 2009, I.e., a growth of 20% per year </li></ul></ul></ul>
  24. 24. Emerging Opportunities in India – Presentation by Evalueserve Dr. Alok Aggarwal Founder & Chairman [email_address] June 15, 2005