Expect Welsco to contribute $10-12m this yr: Infotech Ent

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Expect Welsco to contribute $10-12m this yr: Infotech Ent

Infotech Enterprises announced that their US arm bought Welsco. According to the company's Chairman and Managing Director, BVR Mohan Reddy, Welsco will contribute revenue between USD 10-12 million in FY11.

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Q: Will this make a material difference to your margins?

A: In the short term, certainly not. In the longer term the answer is yes. In the shorter term no, because it basically is an onshore company. Onshore companies do not have more than 10% margins. It will not show up in terms of percentage of margins. If you are talking about absolute numbers, it will certainly be cash accretive and also EPS accretive for our business.

Q: Do you have any other acquisition targets on your plate of a similar nature?

A: Yes we do. If you look at our business, I keep describing it as a cuboid with three dimensions to it. Dimension number one is geographies, dimension number two is the verticals we operate in and dimension number three is must have customers.

When you look at this cuboid from different geographies, different service offerings and must have customer's perspective, there are a number of gaps that are there. Those gaps are being filled through acquisitions. We do have a very strong mergers and acquisitions (M&A) strategy in place. We do have an M&A group in the company and with the pipeline looking strong; we will continue to do these acquisitions based on the strategy.

Q: You said this deal would add about USD 10 million to USD 12 million, which would be about Rs 50 crore. Going by last year's revenue you would stand at about Rs 1000 crore. Over and above that what's your FY11 guidance in terms of turnover?

A: We are not giving a guidance at this point of time. We at least have said in the past that we will grow much more than what the industry average is. Industry average is at about 18% to 20%. So our growth rate will be higher than the 18% to 20%.