To maintain 10-12% $ revenue growth in FY16: Persistent Sys

Persistent Systems is expecting 10-12 percent dollar revenue growth in FY16, says Anand Deshpande, founder, MD & CEO of the company. Current partnerships and pipeline for more will aid growth, he says. The company has completed three acquisitions in the last few months. Deshpande says the company is on lookout for more acquisitions to expand its customer base. The deals are mainly to acquire products that are not strategic to our current customers, he says. However, margins could be impacted due to this, he adds. Deshpande expects the company’s subdued IT business to show improvement in the fourth quarter of next fiscal. Below is the verbatim transcript of Anand Deshpande's interview with Reema Tendulkar & Nigel D'Souza on CNBC-TV18.Nigel: Your revenue growth was seen at around 10-12 percent for FY16, in the first half of the year you have done around 8.5 percent so that means you are asking rates for the second half is around 11-11.5 percent. Do you maintain that guidance and how exactly will you achieve it?A: We are maintaining the guidance at this moment. We are seeing good traction in two-three different areas -- around enterprise digital transmission and some of the work that we have built out and the products that are coming in and the pipeline for takeovers of end-of-life products is also fairly good and we expect some of those to be also providing revenues for the second half of the year.Reema: What percentage or what portion of your guidance of 10-12 percent will be courtesy the acquisitions that you have done, can you break up your full year growth in to organic as well as the inorganic part?A: It is a little tricky to do that on the specific things but we do expect some of the ones that we have done, we have done three acquisitions in the last few months. They will generate revenues in different buckets and that should help -- I would not say it is a very substantial percentage because all these numbers are fairly small but acquisitions have reason why they have been done and there is an access to newer customers and all of those things that are happenign through that. So the question is that a lot of the acquisitions not all attributed to the acquisition but the acquisition gives us an entry into the customer base that we are trying to focus on.Nigel: You are sitting on quite a big cash pile so you are open to doing more acquisitions, can we see another one coming in before the end of this fiscal?A: All of these things can happen. We are looking at several deals at this moment. One of the things that we have had focused on as to acquire products that are not strategic to our large customers and we are keen to use that as a method for us to enhance our relationships with some of the companies that we work and do business there and some of those we could get slightly different kinds of deals by putting cash as part of the agreement and we have been considering or talking to some of them in that context.Reema: Could you close any of them anytime soon?A: It is always a hard question to answer. We have about half a dozen discussions going on. So we hope to close some of them but these things have a tendency of being very close but still far so I don’t anything about when they will close. Many of these deals since are with large companies so have to make an decision on whether they want to outsource or maybe put that thing into a strategic partnership with us, sometimes they have an option of doing nothing at all. So that is the risk that there is.However, overall it is fairly optimistic, the pipeline is good. Many of them are not very expensive from the context of pushing cash out. They do have a three-six months time period when we are investing and taking over, there is double expenses because we have to invest in training the people and getting them ready before they can start to build. So most of that is of that kind so that has a little bit of margin pressure but overall they should be very accretive within a 12-months period.Reema: What about the IP business because that has been giving you negative growth for the last many quarters, when will it bounce back, what is the outlook looking for Q3 as well as Q4?A: The acquisition that we did is an IP deal and that should contribute to that and in that bucket we have one more product that we have working with for a while that we should be launching Q1 of the calendar year. So that should have some impact at Q4 for us but it will be a next year business and some of the ones that we are talking about, I mentioned where we are taking on end-of-life for a non-strategic products, they are all IP related business as well.