Some Macro Observations :
Currency Benefit
India & Philippines account for bulk of the publishing outsourcing industry. It will be interesting to note respective countries’ currency appreciation/depreciation trend w.r.t. USD and GBP (since these two are the major billing currencies for MPS) :
Key things to note :
— Philippines currency Peso provided the country major advantage till FY09 vis-a-vis INR post which relatively strong INR depreciation v/s both, USD & GBP made India much more competitive than Philippines (only w.r.t. currency we are talking about).
— Peso overall depreciated by average ~15 % v/s USD & GBP in this 15 years of our study whereas INR depreciated by average ~40 % v/s USD & GBP over the same period.
Chennai Floods & H1B Visa controversy Impact on MPS
H1B visa issue might not have material impact on MPS as majority of its overseas staff seems to be local.
Chennai Floods could have an impact on Q3 performance of MPS as ~22 % of its total staff strength is placed in chennai . Also, chennai seems to exclusively cater to LNMS division of MPS as also forms major part of ‘Digital Services’ division which together account for ~14 % of yearly revenue. In addition, it also caters to ‘Books & Journals’.
In absence of any warning from the company, we can’t say for sure whether there will be any impact or not and it could be that major portion of the work might have been temporarily shifted to other locations to avoid any impact. Also, ‘Guindy’ area where MPS facilities are located seems to have been somewhat impacted by floods but to what extent the area was affected that we can’t say unless any VP localite member has any info.
Just to compare, MPS seems to be well placed as compared to many of its peers except Aptara, Innodata and SPi as far as chennai situation goes. Providing below approximate operation size of major publishing outsourcing players from chennai :
Rgds.
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