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In The SpotlightZensar Technologies to acquire IT firms for growthDate: 24/07/2009|Financial ChroniclePune-based Zensar Technologies, a global IT and BPO services provider, is in an acquisition mode to strengthen its existing business and growth plan. “We will be scouting for IT companies in the Remote Infrastructure Management services and KPO verticals,” Ganesh Natarajan, vice chairman and managing director, Zensar Technologies, said. He said the company was looking for companies in India and overseas with a turnover of over Rs 100 crore. The board of directors at its meeing on July 23 had authorized the management to begin strategic acquisitions to double the company’s revenues in the next five years. In 2008-09, it posted revenue of Rs 908.08 with a 16 per cent growth year-on-year (Rs 782.93 in 2007-08). It clocked a net profit after tax of Rs 86.56 crore with 35 per cent year-on-year growth. Natarajan said the company wanted to tap the rapidly growing remote infrastructure management services business, information security, data center management and KPOs. Zensar which started the remote infrastructure management services three years ago, clocked revenue of Rs Rs 30 crore in 2007-08 and Rs 70 crore in 2008-09. He said Zensar in the first quarter had a reserve cash flow of Rs 160 crore which would easily cross Rs 250 crore by the end of the year. “Money is not an issue but finding a suitable company is,” Natarajan said, adding that at least two companies would be bought by the end of this calendar year. The board of directors also announced a buyback plan of equity shares of the company with a maximum price of Rs 165 per share and a maximum outlay of Rs 40 crore by the company to buy the shares. With an uncertain global market, the company is looking for more business in emerging markets in India, China, South Africa, Latin America, Eastern Europe, Japan, Singapore and Australia. “We are targeting 40 per cent of our business to come from these countries in five-10 years,” Natarajan said. At present 59 per cent of the business comes from the US, 30 per cent from Europe and the rest from other parts of the world. “Business is slow and we are not out of the wood yet. From Jan-March 2009, there was not much business but it has begun picking up,” Natarajan said. Vivek Gupta, executive vice president, Zensar Technologies said the company was targeting business worth Rs 200 crore in India in key segments of e-government, education, and healthcare services. “In India, technology expenditure is on the upswing and companies are increasingly looking at solutions to increase efficiencies,” he added. Natarajan said the future outlook for the company was bright with a single largest deal of over $17 million dollars signed with a significant insurance company in the US in the first quarter. At present the company has over Rs 200 crore book order, including a deal signed with an Australian airline Jet Star. The company reported a net profit of Rs 29.74 for the quarter ended Jun 30, 2009, as compared to Rs 24.73 crore during the corresponding quarter a year ago. It posted an increase of 9 per cent in its revenue to Rs 229.23 crore during the quarter, as compared to Rs 211.07 crore during last year. Earning per share of the company stood at Rs 12.41 during the quarter, as compared to Rs 10.23.
Parul Vaidya - Market Innovation Group, Zensar Technologies, |
