Oct 26, 2007, 06.26 PM | Source: CNBC-TV18
Adi Saravanan, Founder and President of Allsec Technologies said that they were adding a few more clients in this quarter and trying to ensure normalcy in the next quarter.
They expect to be in the black by the end of the year.
Excerpts from CNBC-TV18's exclusive interview with Adi Saravanan:
Q: If you can take us through your second quarter revenues and profit?
A: For the second quarter ended September 30, FY07, we have reported a loss of Rs 176.78 lakhs against a profit of last quarter of last year, which is about Rs 7.4 crores.
And the revenues have remained flat from last quarter and there are three components for the cost, which has basically brought us to a level of incurring a loss. First is the dollar depreciation, due to which correspondingly within the last half year we lost close to about Rs 2 crores on that.
And then we were also affected by one of the regulations on the student loan consolidation industry wherein one of the clients closed business for about some 40-45 days. This was the second impact.
And of course, third quarter we also built up considerable bench expecting certain businesses. These are all the components of the loss we have incurred.
Q: Just walk us through how much of these have actually accounted for a loss? First of course, is the client that you are talking about, given to understand that your top client effectively had a de-growth of about 21% in the first quarter, am I right?
A: The top client competitor remains stable, in fact it has marginally grown. But one of our second largest client, we had close to 380 people doing work for them, and that actually came to a grinding halt. We have restarted the operation very recently, that is because of some regulatory changes in the student loan consolidation Industry in the US.
Q: How do you expect the current quarter and the next quarter, that is the second half to pan-out? Do you think your problems with that student loan company are behind you and you can see growth?
A: We have incurred about Rs 216 lakhs of expenditure late into a particular software development product launching the ITES business and that cost also has been charged off to the expenditure. Other than that we expect the student loan consolidation industry to kick start the operations again, but not on the same scale. We are also adding few more clients in this quarter and trying to ensure that we get back to normalcy in the next quarter.
Q: Will you be in the black by the end of the year?
A: We should be, we are pretty much used to profits and we will get back to the profits.
Q: Do you still have a substantial number of people on the bench?
A: We do have about 350-400 people on the bench, who are expected to be deployed this quarter, because we are anticipating certain large contracts. We recruited them because there was a situation in the past wherein we had the business, we did not have the people. This is a transition stage where we have to go through this at some point of time, because historically we have all been matching the three aspects of business, infrastructure and people.