SYNT

Syntel, Inc. (SYNT)

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Syntel, Inc (SYNT)

41st Annual JP Morgan Global TMT Conference

May 14, 2013 09:20 AM ET

Executives

Bharat Desai - Founder and Chairman

Analysts

Puneet Jain - JP Morgan

Presentation

Puneet Jain

All right. This is Puneet from JP Morgan Computer services and IT consulting team. Glad to have here with us Mr. Bharat Desai, Syntel’s Founder and Chairman. Welcome Bharat.

Question-and-Answer Session

The format of this presentation is going to be fireside chat. I’ll ask a few questions and then we’ll open up for questions from the floor. So Bharat, for the benefit of investors who may not be as much close to Syntel story, could you talk about what Syntel does for its clients, who these clients are and how do you differentiate in the marketplace?

Bharat Desai

Sure. Thank you, Puneet. Syntel is in the technology services industry. And within technology services, we are in the outsourcing business for operations and technology. And the services we provide to our large global customers include application development, application management and Knowledge Process Outsourcing.

This is a large and highly fragmented industry, we compete with, on the one hand, very large global companies IBM, on the other hand, several very small niche players. And our key value proposition to our customers is our DNA of innovation and our flexibility and adaptability and a real strong focus on strong customer service.

Puneet Jain - JP Morgan

One thing you have talked about in the past is investments in domain accelerators and investment implementation frameworks. Could you share what exactly these accelerators are and how much investments you have done in building these?

Bharat Desai

I’ll address both the parts. We made a strategic decision to go to market by industry. And the first step there was to build industry expertise through training, through hiring people with industry expertise and requiring ongoing certification in each of the industries that we serve. That program has gone really well. And as we got deeper into our strategy, we came to the realization that we could actually help our customers by making investments in tools and frameworks that could help them speed up their implantation cycles, improve the quality of our deliverables and their outcomes and overall, increase reliability and time to market.

And these pan almost every area that we serve our customers in, including data warehousing, business intelligence, testing, mobile application development, social media application development, cloud migration, cloud managements. Each of these areas, we’ve stepped up our investments. We file several patents and copyrights every month. And it’s very clear that this strategy is been embraced quite well by our customers.

Puneet Jain - JP Morgan

And who owns building these frameworks, like who is responsible for the, is there a dedicated group within the company which builds this or is it more like the delivery people who are closer to clients who do that job?

Bharat Desai

Great question. We have several business units. They are both industry focused business units as well as competency focus business units. So, each of the business units owns developing these frameworks and these tools.

Puneet Jain - JP Morgan

Staying on this investment theme, there has been like a lot of chatter about like cloud, social media, mobility and analytics, and these, we think, are one of the big trends in IT overall technology space. So can you talk about what you’re doing for your clients in those areas?

Bharat Desai

All of these areas are game changing. And our customers, all our customers are grappling with two key aspects. One is, how do they embrace these technologies and with the potential they have, and the need for them to serve their customers very differently going forward. And the second aspect is, how do they bring down their run the business cost.

So think of it as bringing down the run the business cost, and then investing in change the business. And all our accelerators, frameworks, domain investing is now converging to help our customers to exactly this.

Puneet Jain - JP Morgan

And what’s typically the mix of to run-the-business versus change-the-business in client spending right now?

Bharat Desai

I think today there’s probably customers are trying to figure out how do they free up dollars for change-the-business. So our focus is, how can we help you bring down the run-the-business cost and free up dollars where we can help you with change-the-business.

Puneet Jain - JP Morgan

And is there any kind of work that you would prefer of these two given run-the-business will be more sticky and core, while change-the-business might provide upside?

Bharat Desai

Well both, we focus on what is important to our customers. And both, having a very efficient run-the-business engine as well as a change-the-business mechanism that prepares the organization for the future are both critical to our customers. So we focus on both.

Puneet Jain - JP Morgan

You have heavily invested in India based delivery centers with huge facilities in Pune and Chennai in India. But recently you set up a center in Philippines which was first non-India offshore location for the company. Can you talk about what was our rational need for the Philippine center?

Bharat Desai

Sure. We have, again this is in response to what we believe is going to be our customer’s future needs. Customers over time have expressed a desire to have some kind of diversification strategy in their off shoring. And we looked at various locations, looked at the different attributes that each location offers. And Philippines as you know has a very large English speaking population similar to India. A large population of highly educated people. They are culturally quite well aligned to the U.S. And then in particular in the healthcare industry they have a fair degree of expertise. So we thought that, that combination provided a good set of pluses for us to venture and open a center there.

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