Sluggishness from Nokia will continue to impact us: Sasken

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Sluggishness from Nokia will continue to impact us: Sasken

In an interview to CNBC-TV18, Rajiv Mody, chairman and chief executive officer, Sasken Communication said, the company's revenues for the quarter were lower due to sluggishness from of its top client, Nokia.

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In an interview to CNBC-TV18, Rajiv Mody, chairman and chief executive officer, Sasken Communication said, the company's revenues for the quarter were lower due to sluggishness from of its top client , Nokia.

"Nokia shifted strategy moving away from Symbian to Windows space and that had an impact on us and that impact continues," he added.

Sasken Communication Technologies reported a sales turnover of Rs 94.92 crore and a net profit of Rs 13.22 crore for the quarter ended Dec '11. For the quarter ended September 2011, its sales turnover was Rs 98.57 crore and net profit was Rs 10.85 crore.

He further said, the company's margins are likely to be stable ahead. "We have stabilised the margins and we will continue to ensure that we do not take impact on the margins per se," he said.

It is seeing growth in order pipeline of key accounts.

Below is the edited transcript of Mody's interview with Gautam Broker and Latha Venkatesh of CNBC-TV18. Also watch the accompanying video.

Q: Your telecom software services revenue continues to decline while the overall numbers largely met what the street was expecting from you that vertical continues to be seeing some weakness. What is the expectation on that front and what is your outlook for the next quarter?

A: We continue to see pressure on the services side primarily because of our top customers' revenues decline and the change in the strategies that they have. We expect that we will continue to see decline from them, but efforts are on to see how we can make it up from our other clients, customers both in existing and newer verticals. Significant effort is on to see that we makeup for the revenue drop that we are seeing from the top customers.

Q: Was it a client who shifted. What caused the drop?

A: This is something which we have told the market, since Nokia shifted strategy moving away from Symbian to Windows space and that had an impact on us and that impact continues is what I am referring to.

Q: It's only the Nokia effect; you didn't lose any other client?

A: That's correct. We have not lost any customer.

Q: Can you give us some guidance for the current quarter in that case both in terms of your services and your product especially services?

A: It's difficult for me to give guidance because it is a dynamic environment that we are operating in. We are taking a month at a time in terms of our top customers, so its extremely difficult and it could not be fair on my part to guide which we cannot meet.

Q: Would you be able to stabilise margins at least or even that will be a fight?

A: We have stabilised the margins and we will continue to ensure that we do not take impact on the margins per se.

Q: Utilisations has improved this quarter to about 72%. What is the stable state utilisation level you are looking at and also how is the order pipeline looking?

A: We are looking at stabilising our utilisation at about 75%. As far as order pipeline is concerned, while we continue to see growth in certain key accounts. We are seeing stabilisation in other accounts while the drop is there in the top account so on the revenue front it's hard for us to give any guidance per se.