Thursday, July 26, 2012 Mint
Mumbai: In spite of the gloomy macro-economic environment, Pune-based Zensar Technologies Ltd is targeting $1 billion in revenue by 2016 and even beating its growth guidance for fiscal 2013, the management said on Wednesday while announcing the company’s June quarter results.
While the growth guidance for the fiscal would be met through organic or internal growth, the company is in talks with close to seven companies for a possible acquisition to meet its target of becoming a billion dollar company.
It has appointed two investment bankers, including The Chesapeake Group, a New York City and an investment banking boutique firm that also worked on three of Zensar’s earlier acquisitions that include the purchase of US-based ThoughtDigital and Akibia Inc., said Ganesh Natarajan, vice-chairman and managing director, who is looking at strategic acquisitions in segments such as infrastructure management and for an SAP company in manufacturing, mostly in the US or to aid its expansion in Europe.
He didn’t name the second banker.
Ganesh Natarajan talks about Zensar’s robust first quarter earnings and how the company has managed maintain growth even as competitors struggle.
For a good acquisition in the manufacturing space, the company “could even pay $50-60 million”, Natarajan said.
In the three months ended June, the RPG Group-owned Zensar recorded a net profit growth of 101.55% at Rs. 54.56 crore from Rs. 27.07 crore a year ago while revenue grew 36.49% to Rs. 544.29 crore from Rs. 398.78 crore.
Compared with the preceding quarter, profit grew 38.86% while revenue grew 10.20%.
“It has been a great quarter both in terms of volumes growth of the business and, of course, we have been helped by the currency,” said Natarajan.
Zensar would exceed the growth guidance of 15% for the fiscal year, he said.
Natarajan’s optimism is based on segments that the company operates in—manufacturing, insurance, retail and retail banking—being relatively less affected by the global crisis than others.
Moreover, more than 70% of its revenue comes from US, which has been growing.
Additionally, the company has been able to win new customers at higher prices in areas such as cloud computing and social media mobility. However, prices will remain flat in the case of existing clients, Natarajan said.
“Given the difficult economic environment, it could take longer for the company to join the billion-dollar club. It won’t be easy,” said Harit Shah, senior research analyst, Nirmal Bang Institutional Equities Pvt. Ltd.
Zensar gained 2.42% to close at Rs. 274.95, even as the benchmark Sensex fell 0.43%.