Kyndryl’s India business skids but margins on the mend

IT infrastructure services provider, Kyndryl, which is positioning India as a key hub for its global growth strategy saw a blip in the year ended March 2024 with overall revenues from the country operations declining around 5% after double-digit growth the previous year.

The firm was created after technology giant IBM hived off its managed infrastructure services business and later disposed of its 19.9% retained equity stake in Kyndryl, saws its revenue decline to ₹8,066.73 crore in India during the year ended March 2024, as per VCCEdge, the database platform of VCCircle.

Kyndryl India had recorded revenue of ₹8,504 crore in the FY23, compared to ₹7,714 crore in the preceding year, its first after the spinoff.

On the flip side, profit saw a significant increase, rising to ₹408.54 crore, compared to a loss of ₹352.65 crore in FY22 and a profit of ₹7.14 crore in FY23.

Kyndryl didn’t respond to TechCircle’s query at the time of publishing this article.

However, it is gathered that the domestic business, which comprises a quarter of total at Kyndryl, was just about flat but the exports business took a hit affecting the overall business.

The Indian business partly mimicked the global parent as Kyndyl Inc too reported 6% decline in revenues last year.

Notably, the global business is still sliding as revenues in the first half this year declined by around 10%. While the company attributed this decline to its efforts to eliminate low-margin third-party content from contracts, particularly in the US and strategic markets, in contrast, operations in India showed significantly stronger performance.

Kyndryl offers a range of services to help customers build the necessary infrastructure, trusted data foundation, and models to leverage Artificial Intelligence (AI) effectively. These offerings include machine learning operations (MLOps) and large language model operations (LLMOps) frameworks, as well as Kyndryl’s Data and AI Console, which provides a unified view of customers’ data for improved insights.

The company is heavily banking on its AI-centric platform, Kyndryl Bridge, which underpins its service delivery. Chairman and CEO Martin Schroeter said in a statement in June that Kyndryl Bridge is enhancing service offerings, attracting new clients, and delivering value to existing ones, positioning the company to leverage key IT trends for profitable growth.

Additionally, during an interaction with TechCircle in June, Dave Simpson, Global Cloud Practice Leader at Kyndryl the same month said that the company's focus is on Hybrid IT, leveraging advanced bridge capabilities and AI to enhance our customers' environments. 

It also leverages vast amounts of data, embedding advanced machine learning (ML) capabilities into its platform. This innovation, rooted in India, underscores the country's significant contribution to Kyndryl's technological advancements.

Over one-third of the company’s 80,000 global workforce (about 26,000 employees) is based in India. These employees play a key role in driving innovation, from developing new marketing and operational strategies to enhancing the company’s AI platform.

In an earlier interview with TechCircle, Lingraju Sawkar, President of Kyndryl India, reflected on Kyndryl’s progress since its spinoff from IBM in 2021, stating that the initial phase of Kyndryl was about transforming it by putting in place a new culture, building new offices, and establishing a brand to transform our customers.

The company, which counts Honda Motorcycle and Scooter India, Canara Bank, Suryoday Bank, Dilip Buildcon, and Dr. Lal PathLabs as key customers, recently opened a 250,000-square-foot office space in Bengaluru, which hosts the company’s first global Kyndryl customer experience centre (CEC), a global security operations centre (SOC), a network operations centre (NOC), and a Kyndryl Vital Studio. The facility can accommodate approximately 3,000 employees.

The SOC launched in August is designed to be a cyber-defence hub that operates around the clock to offer cyber threat intelligence and incident response, collaborating with Kyndryl’s global network of cybersecurity experts, the company had said.

Kyndryl is also addressing the skills gap by collaborating with universities to design and deliver curricula that equip students with the skills needed for the evolving job market.

Notably, Kyndryl has alliances with major cloud providers — AWS, Microsoft, and Google Cloud. In FY24, the company booked $1.2 billion worth of deals with cloud hyperscalers. Schroeter also credited the Indian teams for many of these signings.