Srinivasan HR, Vice Chairman and MD of IT firm TAKE Solutions, says the company’s milestone deliveries got shifted to the fourth quarter of FY16, due to the heavy rains in Chennai.
“We might see a minor impact on revenue and margins for the third quarter of FY16, but expected rate for the overall year will be maintained,” Srinivasan says.
The company is likely to suffer a one-time hit of approximately Rs 1 crore due to the expenses towards amelioration of the employees affected due to the rains and some asset losses, although most of it is covered under insurance.
TAKE and its subsidiaries have a large employee base of over 450 people at its multiple facilities in Chennai.
Srinivasan also clarified that the company is not affected by any alterations in the H-1B visa norms as they largely employ only local US residents.Below is the transcript of Srinivasan HR’s interview with Reema Tendulkar and Latha Venkatesh on CNBC-TV18.Reema: Would you be able to quantify the impact on revenues and consequently the margin impact because of what has happened in Chennai?A: Primarily, there are three areas that we need to look at. The first is what happens on revenues. Fortunately for us, we are a company which operates six big contracts, so we are not on time and material, we are on fixed rate. But, due to loss of those seven working days when people could not make it to the office and consequently, there was later on a little poor attendance, some of the milestone deliveries get shifted. So, it is not loss of revenue, but it is really the spilling over of revenue what should have occurred in this quarter to the next quarter. We are of course we are trying to make up what we can during the course of the month. So, at this stage, I would say that we have a postponement of revenue, but I will not be able to quantify what that is.Latha: Is there any one-time hit in terms of setting things right?A: The one-time hit is really on two accounts. One is to help our employees get back, so the company has shifted with contributing to amelioration of employees hardships. And the other is moving people to the business continuity centre and ensuring customer deliveries from there. So, these one-time costs would be let us say, around Rs one crore for the quarter. The third part is there has been some marginal asset loss. All our assets are ensured and covered fully under insurance. But we will have to estimate once the survey is done whether there is any impact on account of that. All-in-all, it is basically to inform that it has been a very significant event and the company has done all it can to see that there is no customer impact. But, certainly, there should be some impact on the quarter’s revenues and margins.Reema: So, you will still hold on to your full-year revenues. You are quite confident that the revenues will get advanced from this quarter to the next quarter, but the full year revenues will not be impacted?A: Yes, they will not be impacted.Latha: There was a little bit of other bad news as well. The US Congress has increased Visa fees. Did you take a look at that? Will that also impact margins, most likely will be passed by the senate as well?A: No, it will not because our business model is not built on H-1Bs. So, we employ a lot of people who are resident or locals in the US, so that is not something that is going to impact us.
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