Take Solutions expects 22.5-23% margin in FY12

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Take Solutions expects 22.5-23% margin in FY12

In an interview with CNBC-TV18, H R Srinivasan, VC, Prime Founder, Take Solutions says, the margin dip was due to the bonus and also due to the one time expenses in relation to the acquisition. He expects 22.5-23% margin in FY12.

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In an interview with CNBC-TV18, H R Srinivasan, VC, Prime Founder, Take Solutions says, the margin dip was due to the bonus and also due to the one time expenses in relation to the acquisition.

He expects 22.5-23% margin in FY12.

Also read: Take Solutions FY11 cons PAT up at Rs 70 cr

Below is the verbatim transcript of his interview with Reema Tendulkar and Ekta Batra of CNBC-TV18. Also watch the accompanying video.

Q: Your revenues on a sequential basis have seen quite an upliftment of around 20%. Could you just take us through the key highlights in terms of where this demand came from?

A: I think one of the significant events was the addition of WCI that we acquired in January. So, for the quarter, the WCI numbers of Europe gets reflected as well. And that would account for about Rs 17 crore. Even otherwise, we have grown very smartly in the United States. We did have a muted middle-east operation, given the political environment there. But, overall, the growth scenario was very good during the quarter and 38% for the year overall.

Q: Tell us a little bit about your margin picture. This quarter, there was some bonus that you all made as a payment to employees on account of which I think your margins dipped through that 20% level. Is that the level that you will sustain at 20% or will it get back to those 23-24%?

A: We would expect it to be around 22.5-23% for the year. The margin dip was due to the bonus and also due to the one time expenses in relation to the acquisition that we had which came in during the current quarter. But we would expect that you go back to the region of about 22.5-23% during the course of FY12.

Q: WCI Consulting Group acquisition, what kind of benefits are you expecting to see on your numbers in the next couple of quarters?

A: WCI as a company had numbers of Rs 71 crore for the calendar year 2010. As a part of our FY12, we anticipate them to also promote the offerings that Take Solutions traditionally had. So, we expect Europe business to be in the region of about Rs 90 crore for FY12.

Q: You spoke about these one offs in terms of payment of bonuses etc, anything we could expect in FY12 that you are factoring in at all?

A: Not really because this was one we carry forward of some bonuses on the WCI and also for some new management that came into Take to bolster our overall growth. I don't think that would repeat during FY12.

Q: So what kind of a growth are you expecting to see in FY12? You said Rs 90 crore from a European business, what about the rest of the business? How much do you think you had grown by both top-line and bottom-line?

A: Overall, we would like to look at a growth anywhere in the region of 35-40% on the top-line organic and with an EBITDA in the region of 22.5-23%, I think that would be the scenario.

Q: So, there is some more inorganic expansions lined up, is it?

A: No, it is not lined. In fact there is nothing on the annual in the near future.