The healthcare and life sciences business vertical of Wipro, India’s third largest IT services exporter, is aiming at a revenue of $1 billion through a combination of acquisitions and market leading growth, given that this sector has increased the pace of technology adoption.
The company is primarily looking at the continents of North America and continental Europe for these likely buyouts. These acquisitions would largely help Wipro in giving them market access as well as a certain technological edge.
Besides, the company is also interested in collaborations which could also possibly include a joint venture which will provide them with a stronger foothold in the healthcare and life sciences segment.
In an interview with FE, Wipro healthcare and life sciences senior vice-president Sangita Singh said that the $1-billion revenue target was quite aspirational and they expect to reach this figure by 2015-16.
The healthcare and life sciences vertical has a current annual revenue run rate in excess of $600 million and has been outperforming overall growth rates of Wipro. At the end of third quarter of FY13 fiscal, this vertical reported a revenue $155.9 million when compared to $145.6 million in the sequential quarter showing a growth of 7.1% while on a year-on-year basis it was 3.6%.
Singh said that they are very actively looking at acquisitions in this segment for companies with a revenue size of upto $30 million.
“We are interested in small companies which are good tuck-ins and fairly aggressive in our pursuit,” she added.
Wipro’s confidence for higher growth rates from this segment is driven largely by large scale reforms in the healthcare segment being undertaken by the US government and the focus of global pharmaceutical companies for having stronger presence in the emerging economies. In the US alone, there are an estimated 32 million people who would come under the insurance fold. Wipro primarily focuses on three segments in the sector: healthcare which includes hospitals and other allied units, pharmaceutical corporations and medical devices companies.
According to Singh, the US healthcare market has provided them with numerous opportunities as this segment has largely remained untouched by technology and now they are in aggressive pursuit of reducing their costs and increasing efficiencies. Wipro’s healthcare vertical is already engaged with one of the states in the US as the fiscal agent for processing all claims related to this segment.
In the current scenario, Singh said, they are able to provide a host of IT-related activity like infrastructure, managed services, data management, cloud solutions and analytics.