Yet to finalise acquisition plan
News | 5 Sep 2013
Yet to finalise acquisition plan: Ganesh Natarajan, Zensar Technologies In an interview with ET Now, Ganesh Natarajan, Chairman & CEO, Zensar Technologies talks about the company's acquisition plan in the US and shares his business outlook. Excerpts: ET Now: Could you confirm the deal size of acquisition in the US and timeline for the same? Ganesh Natarajan: Let me clarify that we had appointed an investment banker almost three-four months back, which we had mentioned during the last analyst call, and they are looking at two or three companies. The range of the deals that we are looking at could be between $25 and $75 million. Nothing has been finalised yet, but given the markets and given the fact that we are very optimistic about the market, we are definitely looking at acquisitions.
ET Now: Somehow the talk in the market was that you are very close. I am guessing your answer says that you are not very close. Ganesh Natarajan: No comment on that. ET Now: So it is a no, it is a no comment.
Ganesh Natarajan: Yes. ET Now: No problem. Just aside of that, how is the scenario looking? Everybody seems to be pencilling in a great time for the IT companies by virtue of what the currency has done. Is it the same for you too? Ganesh Natarajan: I would not look at currency. In fact, the markets are very buoyant. We are seeing very good traction both in terms of pipeline and in terms of deals coming in both in the US and even in Continental Europe, which was very slow last year and Africa of course is another good market for us. So, given the fact that these three markets account for close to 92% of our business, we are very buoyant about the demand environment in the markets, plus of course like every other company, we will get some benefits from the currency, but we are not even factoring that into the fact that we are seeing a good year as we progress.
ET Now: Pricing etc changing, not just because of the currency but just wondering in terms of client conversations because a lot of large companies saying that there is a bit of pressure on the pricing, are you sensing that too or in fact is pricing showing an uptick? Ganesh Natarajan: Let me clarify. Like most companies, today we are seeing the opportunities both in the traditional application support, infrastructure support, the pricing is not under pressure, but it is not really going in a very fantastic manner. Where we are seeing very good price uptick is the new services. For instance today we have a very compressive approach towards migrating infrastructure towards the cloud. We have had two or three good deals in the recent past. Similarly in mobility there are a number of our clients talking to us, social media how you can use enterprise social media for retail or manufacturing. See in these areas it is more a question of what value we bring to the table. So overall if you look at our business, I would say pricing is moderately up, there is really no pricing pressure from anybody that we have been talking to in the recent past and I do not see that happening because people are fairly confident about their economies and they are doing very little work at this point of time in Japan and other places. So overall pricing is very good.
ET Now: Now given the fact that we have seen improved organic growth, a positive deal momentum, are you redrawing your growth targets on the margin on the top line front? Ganesh Natarajan : No, not at all. We are still very happy if we do double digit growth. Where exactly it will end up is difficult to say because it is still very early in the year and Nasscom guidance, as you know, is 12% to 14%. So given what we are seeing, we are very confident about how we will grow, but at this point of time there are no specific numbers on either profit or revenue growth.