Investing in Global Capability Centres in India
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GCCs or global capability centres known as captive centers. These are offshore units established by MNCs to leverage India’s vast talent pool and cost advantages. Initially, these companies focused on back-office tasks, so earlier these global capability centers were known as back offices but now these centers encompass a wide range of functions, including research and development (R&D), data analytics, financial analysis, and a lot of other activities. As of 2024, India hosts over 1,700 GCCs, employing approximately 1.9 million professionals.
Table of Contents
In this article, I will discuss the companies that are directly or indirectly engaged in global capability centres business. I will also discuss if there are any investment opportunities in those companies. Mainly, I will focus on listed companies that are engaged in global capability centres business in India.
And Top Electronics Companies in India
Investing in Global Capability Centres in India
The global capability centers market in India is estimated at $64.6 billion in fiscal 2024 with a forecast to reach around $100 billion by 2030. The number of GCCs is expected to increase to around 2,100-2,200, with employment rising to 2.5 million to 2.8 million people by that time. Hence, this is an emerging sector in the Indian economy and there are huge opportunities for investors to look for the right companies.
Why Considering Indian Global Capability Centres Companies
Investing in companies with substantial GCC operations in India offers exposure to a rapidly growing segment of the global services market. The below points will substantiate the growth drivers that are likely to further boost this industry.
- Talent Integration: Indian firms provide seamless access to skilled professionals across IT, analytics, and R&D.
- End-to-End Support: Indian IT services firms offer holistic solutions, enabling smooth GCC setup and scalability.
- Focus on Innovation: Indian companies bring cutting-edge technologies like AI, IoT, and cloud computing to enhance GCC operations.
- Growth Potential: The expanding scope and scale of GCCs in India suggest robust growth prospects for companies leveraging these centers.
- Economic Impact: GCCs are projected to contribute significantly to India’s GDP, with estimates suggesting an increase from less than 1% currently to 2% by 2030.
Listed Global Capability Centres Companies in India
Investing in mid-cap and small-cap Indian companies engaged in supporting Global Capability Centers (GCCs) offers exposure to a dynamic sector with significant growth potential. These firms provide essential services such as staffing, IT solutions, and business process outsourcing, enabling multinational corporations to establish and expand their GCC operations in India.
Let us discuss the top 5 companies engaged in Global Capability Centres in India and their potential growth to understand the business opportunities in Global Capability Centres in India.
Best 5 Listed Global Capability Centres Companies in India
Here’s a list of the Best 5 Listed Global Capability Centres Companies in India that are directly or indirectly engaged in activities supporting Global Capability Centers (GCCs).
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Tata Consultancy Services (TCS): Global capability center as a service
TCS is one of the major players in the Global Capability Centres (GCC) ecosystem in India. It supports GCCs by providing a broad range of IT services, consulting, and business solutions, including cloud enablement, AI/ML technologies, cybersecurity, and digital engineering.
TCS’s expertise in industry-specific transformations and domain-driven solutions makes it a trusted partner for multinational corporations running GCCs.
Key Trends in Revenue and Profit
- TCS reported revenue of ₹240,893 crore in FY24, growing 6.8% YoY, with an operating margin of 24.6%. Net income for FY24 was ₹47,445 crore, showing consistent growth with a net margin of 19.3%.
- TCS generates significant revenue from BFSI (30.9%), Retail & Consumer (15.4%), and Manufacturing (8.8%), industries with extensive GCC operations.
Market Share and Strategic Priorities
- TCS is among the top IT services providers globally, second in brand value at $19.2 billion.
- Strong domain expertise, a vast talent pool (606,998 employees), and investments in emerging technologies like GenAI.
- Focus on AI. Cloud unit and GenAI integration across services.
- Strong cash flow, high margins, and consistent dividends (₹73 per share in FY24) make TCS an attractive investment.
- Focus on GCC partnerships through AI, cloud enablement, and digital solutions. AI, Cloud, and GenAI offerings are expanding TCS’s reach into GCC markets.
Quess Corp A Listed Global Capability Centres Companies in India
Quess Corp is indirectly engaged in the Global Capability Centers (GCC) business through its Global Technology Solutions (GTS) and Workforce Management (WFM) segments. The company provides staffing, business process management (BPM), HR outsourcing, IT services, and facilities management, all of which are critical for supporting GCC operations.
Key Trends in Revenue and Profit
- Revenue reached ₹19,101 crore in FY24, an 11% YoY growth. GTS and WFM were primary contributors.
- EBITDA grew 18% YoY to ₹6,935 crore in FY24, with margin improvements in key segments.
- Operating cash flow to EBITDA conversion improved to 86% in H1 FY25, supported by cost optimizations.
- Global Technology Solutions (GTS): Key contributor to EBITDA with ₹3,541 crore in FY24.
- Major revenue driver with ₹13,747 crore in FY24, growing 13% YoY.
Market Share and Strategic Priorities
- Quess is a top player in workforce management and among the top 5 global staffing firms by headcount.
- Diversified offerings, integrated services, and technology-led solutions.
- Strengthening digital platforms like WorQ and DASH for workforce management.
- Focused growth in Tier-2 cities and increasing international presence.
- Ongoing focus on Tier-2 cities and international markets. The demerger into three entities aims to unlock further value by FY26.
- Enhanced service offerings in telecom network management and payroll services for GCCs.
L&T Technology Services (LTTS): Global capability center as a service
L&T Technology Services (LTTS) is actively involved in supporting Global Capability Centers (GCCs). As a pure-play Engineering R&D (ER&D) services provider, LTTS partners with multinational corporations, enabling GCCs to leverage its expertise in digital engineering, AI/ML, IoT, and other cutting-edge technologies. LTTS operates across domains like mobility, hi-tech, sustainability, and more, which are integral to GCC ecosystems.
Key Trends in Revenue and Profit
- LTTS achieved $1.2 billion in revenue in FY24, a growth of 7% YoY in constant currency.
- Net profit for FY24 was ₹1,304 crore, growing 7.6% YoY, with EBIT margins at 17.1%.
- The company’s strong operational cash flow supports investments in innovation labs and strategic expansions.
- LTTS generates revenue from key sectors including transportation, telecom & hi-tech, industrial products, medical devices, and plant engineering.
- GCC-specific revenues are embedded within these segments, particularly in digital engineering and hi-tech offerings.
Market Share and Strategic Priorities
- LTTS is a leading ER&D services provider globally, working with 57 of the top 100 R&D spenders.
- Unique engineering expertise, a strong patent portfolio (1,394 patents), and dedicated innovation labs.
- LTTS is targeting $2 billion in revenue by FY26, with strategic investments in hi-tech segments and digital manufacturing.
- Partnerships with GCCs include AI-powered automation, 5G lab development, and digital transformation solutions.
eClerx A Listed Global Capability Centres Companies in India
eClerx is indirectly engaged in the Global Capability Centers (GCCs) business. It provides specialized services such as process management, data analytics, automation, and consulting, which support the operations of GCCs across industries like financial services, retail, and technology. Its services are designed to enhance efficiency, customer experience, and digital transformation for its global Fortune 2000 clients.
Key Trends in Revenue and Profit
- Operating revenue grew by 10.5% YoY in FY24 to ₹29,255 million (USD 354 million), showing consistent growth over the past five years with a CAGR of 15%.
- Net profit increased by 4.6% YoY to ₹5,117 million in FY24, supported by cost optimizations.
- Strong cash reserves, supported by efficient operational cash flows, and an active capital allocation policy, including dividend payments and buybacks.
- The company’s revenue is divided across four primary verticals: Financial Markets, Digital, Customer Operations, and Technology.
- Automation and Analytics services generated $71 million, while Business Process as a Service (BPaaS) or managed services contributed $86 million in FY24.
- GCC-specific revenue is embedded in its offerings for financial services and digital transformation.
Market Share and Strategic Priorities
- eClerx is a leader in process management and data analytics, recognized globally for its innovative solutions and long-standing client relationships.
- Strong expertise in automation and analytics, focus on innovation and long-tenured relationships with Fortune 2000 clients.
- Focus on GenAI, automation, and digital transformation to enhance service offerings.
- Growth in new accounts and deeper engagement with existing clients through managed services.
- Expansion into European and Southeast Asian markets.
- Recent additions include a new office in Paris for luxury clients and a center of excellence for KYC in North Carolina. It aims to expand its automation and analytics services.
- Increased demand for analytics products (eMatch, M360) and automation tools like GenAI360.
HCLTech: Global capability center as a service
HCLTech is one of the major players in the Global Capability Centers in India (GCCs) ecosystem. The company provides comprehensive IT and business services, engineering, and digital transformation solutions that align with the needs of GCCs. HCLTech partners with many Global 2000 organizations, a substantial portion of which include GCCs, focusing on cloud solutions, AI/ML, digital engineering, and managed services.
Key Trends in Revenue and Profit
- FY24 revenue reached ₹109,913 crore, a YoY growth of 8.3%, with digital services contributing 38.5% of total revenue.
- Net income for FY24 was ₹15,702 crore, up 5.7% YoY, with EBIT margins of 18.6% in Q2 FY25.
- Free cash flow for FY24 was $2.6 billion, with a strong cash conversion rate of 119% of net income in Q2 FY25.
- IT and Business Services: 71% of revenue in FY24, with 6.2% YoY growth.
- Engineering and R&D Services: Contributed 16%, focusing on product development and smart technologies.
- HCLSoftware: Contributed 13% and achieved an ARR of $1.05 billion, highlighting software-driven GCC partnerships.
Market Share and Strategic Priorities
- HCLTech is one of the top global IT service providers, recognized for its robust delivery and innovation.
- Focus on AI, digital transformation, and cloud solutions.
- Enhancing global delivery capabilities through nearshore centers.
- Aiming for net-zero emissions by 2040, integrating ESG goals into the business strategy.
- Strengthening nearshore centers and expanding in emerging markets.
- AI-powered automation projects in BFSI and manufacturing, and cloud transformation for multiple GCCs.
Final words on Listed Global Capability Centres Companies in India
Based on the analysis of all listed Global Capability Centres Companies in India, TCS and HCLTech emerge as the most promising companies to invest in within the Global Capability Centers (GCCs) ecosystem. Both have strong financials, extensive global presence, and robust capabilities in AI, cloud, and digital transformation, which are critical for GCCs.
TCS leads with its consistent growth, high-margin services, and innovation in AI/ML, while HCLTech leverages its engineering DNA and GenAI platforms like AI Force, backed by a healthy deal pipeline and strong execution capabilities.
LTTS is another contender for niche investments, excelling in engineering R&D services with a clear growth roadmap and expansion into autonomous technologies.
Companies like Quess Corp and eClerx are valuable for exposure to staffing and digital transformation services but come with margin and scalability challenges. TCS and HCLTech are thus best suited for long-term, stable returns, among listed Global Capability Centres Companies in India while LTTS offers potential for growth in engineering services.
Other Major Players in Global Capability Centers in India (GCCs) ecosystem
Cyient Ltd.
- Industry: IT and engineering services
- Relevance: Provides engineering, manufacturing, and analytics services that are often leveraged by GCCs for high-value tasks.
- Potential: Focused on sectors like aerospace, telecommunications, and utilities, with a growing emphasis on digital transformation.
Persistent Systems
- Industry: Software development and IT services
- Relevance: Collaborates with global organizations to provide custom software and product development, which are core needs for many GCCs.
- Potential: Strong focus on emerging technologies like AI, IoT, and cloud solutions.
Zensar Technologies
- Industry: IT and business process management
- Relevance: Offers services such as application development, infrastructure management, and digital transformation.
- Potential: Works closely with GCCs in retail, banking, and manufacturing sectors.
Sonata Software
- Industry: IT consulting and software solutions
- Relevance: Offers digital transformation services and software platforms tailored to GCC needs.
- Potential: Growing presence in cloud computing, AI, and analytics services.
KPIT Technologies
- Industry: Engineering and IT services
- Relevance: Focuses on providing technology solutions for automotive and mobility GCCs, especially in areas like autonomous driving and electric vehicles.
- Potential: Positioned as a niche player in automotive engineering.
Mindtree Ltd. (Part of L&T Group)
- Industry: IT services
- Relevance: Collaborates with global companies on digital transformation, cloud migration, and customer experience solutions.
- Potential: Its focus on GCC-specific services has positioned it as a preferred partner for multinational corporations.
Coforge Ltd.
- Industry: IT and business process outsourcing
- Relevance: Offers customized solutions for GCCs in travel, insurance, and financial services sectors.
- Potential: Expanding its portfolio in digital services and emerging technologies.
Mphasis Ltd.
- Industry: IT services and solutions
- Relevance: Works with GCCs in financial services, logistics, and healthcare sectors, offering automation and analytics solutions.
- Potential: Strong foothold in AI-driven services and cloud solutions.
Birlasoft Ltd.
- Industry: IT consulting and services
- Relevance: Specializes in digital transformation, ERP solutions, and cloud computing for GCC clients.
- Potential: Focuses on sectors like manufacturing, banking, and healthcare.
Infosys Limited
- Role: Provide IT services, digital transformation, and consulting solutions to support GCCs.
- Relevance: Works closely with global MNCs by offering end-to-end managed services and customized technology solutions for GCCs in India.
- Example: Helps in scaling and innovating operations for various multinational clients in India.
Wipro
- Role: Provides technology services and business solutions tailored to GCC needs.
- Relevance: Supports GCCs in industries like banking, retail, healthcare, and manufacturing.
- Example: Focused on delivering innovative tech solutions, such as cloud computing and cybersecurity, to multinational GCCs in India.
Tech Mahindra
- Role: A key player in IT and BPO services supporting GCCs in delivering digital transformation, customer experience, and operational efficiency.
- Relevance: Focused on sectors such as telecom, banking, and manufacturing.
- Example: Collaborates with multinational firms to set up GCCs leveraging India’s skilled workforce.