NIIT Tech to revamp biz model

Arvind Thakur, CEO, NIIT Technologies said they need to alter their business model to address the global challenges. He added that the order intake has been increasing steadily in each quarter. According to him, growth in H1 FY09 may be muted but there would be growth towards the end of the year.

Excerpts from an exclusive interview with Arvind Thakur:

Q: How has this quarter been in terms of banking and financial services, the insurance side and the retail space? Analysts are looking at some sort of slowing down in the quarters going forward. How do you expect it to pan out in FY09?

A: I cannot talk about this quarter since  the board has not yet approved our result. But I can talk about the situation as we see it in the industry. The global economic environment is challenging and we are seeing definite slowdown in the US, particularly on account of the subprime crisis, the related credit crisis and low consumer spending.

The financial markets are also quite volatile and the unprecedented increase in oil prices is also having a significant impact on various factors like inflation as well as the exchange rate. We need to alter the business model to address these challenges. This is true for all segments whether it is financial services, retail or any segment.

Q: Is it true that the order intake or orderbook has not grown very impressively? 

A: No, that would be incorrect. If you look at our order intake, it has been increasing steadily in each quarter. In Q1, the intake was 40 million, in Q2 it was 49 million and in Q3 it was 59 million. I can’t talk about Q4 since we have not yet declared our results.

Q: Do you expect the increase in growth of orders to continue in FY09 as well?

A: Certainly, we don’t see an impact on any intake as such. We will see growth into FY09. Growth in H1 of FY09 may be muted but there would be growth towards the end of the year.

Q: Can you update us on your new platform at Room Solutions?

A: We are investing and moving the business from the current IT services model, which is linear to a non-linear model. The linear business model is where growth and revenue is, as a result of an addition of a equivalent proportionate increase in head count.

So, our Room Solutions platform is a platform to move a business into a non-linear mode, where we are looking at IT-based integrated offerings. Currently, we are replatforming the solution that we acquired through Room Solutions and making it basically SOA or Service Oriented Architecture, which is more current, modern and acceptable in the market place. That is the process which we hope to complete over the next two quarters.