Zensar expects 20% of revenue from digital in next three years

MUMBAI: Zensar, the IT arm of the RPG Group, expects its digital business to contribute about a fifth of its revenue in the next two-three years, as it continues to invest in the fast-growing sector.

Digital is becoming a key driver of earnings at Indian IT firms, which have started breaking out the revenue contribution from the business. Zensar said digital contributed over 12% of revenue at the end of the last financial year.

“Digital is growing at about 30% year-over-year. And we expect that rate of growth to continue for the next few years. In two to three years, we think digital and ecommerce will contribute at least 20% of revenue,” Ganesh Natarajan, chief executive at Zensar, told ET.

Earlier this month, Tata Consultancy Services said digital offerings contributed over 12.5% to its $15.5 billion revenue. Tech Mahindra has said it expects to end the year with over $500 million in digital revenue.

Natarajan said the growth would mostly be organic but that the company could look at acquisition in the data analytics space. He however ruled out following the footsteps of large IT company such as Infosys and Wipro and making investments in startups.

“We would make strategic investments in company but these would not be minority stakes. These would definitely be a 51% or higher stake. Making small investments in startups is not part of our strategy,” Natarajan said.