Infinite Computer to tap new markets for messaging products

Nachiket Kelkar
moneycontrol.com

IT solutions provider Infinite Computer Solutions, which is heavily dependent on United States for most of its business, is tapping new markets and new clients, especially in the Asia Pacific (APAC) region, to expand its messaging and mobility product based service offerings. US accounted for 85.4% of Infinite Computer's total revenue last quarter, followed by India at 7.2%, APAC at 6.9% and Europe 0.5%. "We have a cloud-based platform that we sell to telcos as well as enterprises. This was an offshoot of the acquisition of the business that we did with Motorola Networks in 2010, where we got a license for their messaging platform. That supports about 130 million subscribers in the US...We now have four new products on that platform...We got the first customer outside US in Japan. We are also aggressively trying to sell some of our mobility products in Asia Pacific as we believe there are opportunities there," Upinder Zutshi, MD and CEO, told moneycontrol.com in an interview. Zutshi says the messaging products are based on fourth generation mobile spectrum or 4G-LTE and where ever 4G is being rolled out, there is business potential. Infinite Computer's arm Infinite Convergence Solutions had in 2010 entered into an alliance with Motorola to develop and support the later's software enabled short messaging service (sms) and multi-media messaging service (mms). Under the agreement, Infinite had acquired a non-transferable, royalty bearing, worldwide license to Motorola's messaging product solutions. Currently messaging and mobility accounts for 20% of Infinite's business, Zutshi said, adding, the goal is that it will contribute 33% of its business by 2015-16. Infinite Computer's first quarter net profit rose 18% year-on-year to Rs 35 crore, while revenue was up 22% to Rs 319 crore. Its EBITDA margin, however, fell slightly to 16.8% from 17.1%. Gross margin declined to 35.8% in April-June from 38.5% a year ago. Zutshi said the company was willing "to compromise on margins for the sake of faster growth" this year. The company had 58 clients as of June-end and top five clients contributed for as much as 75% of its total revenue. It has so far maintained its guidance for the full year, although Zutshi says overall the environment is challenged and in some areas there are delays, there are limited budgets available. For the full year (2012-13), Infinite expects profit after tax to grow 21% to Rs 146 crore and revenue is seen up 31% to Rs 1,380 crore. In US dollar terms, profit is seen up 11% to USD 28 million, on revenue of USD 265 million, up 20%. Uttarakhand project One of the project that Infinite Computer has seen delays is the IT modernisation project from Uttarakhand Power Corp. The company had bagged the Restructured Accelerated Power Development & Reforms Programme in 2010. Zutshi said the application development has finished, the data centre has been built and the company has now started going live. He is hopeful that the project will be completed by the end of the current financial year. Infinite Computer continues to seek opportunities to execute government projects in India, but Zutshi said the company was not aggressive as it was a couple of years ago. Infinite Computer shares were down 1.6% at Rs 119 on NSE in afternoon trade on Friday. The stock has gained 57% since March-end. nachiket.kelkar@network18online.com