No merger plan; lower rupee fuels profits: Kale Consultants

Kale Consultants stock today rallied and has frozen at an upper circuit of 20% at Rs 159, after the company reported a much better than expected annual growth in profits. While net profit came in up by 48.5% at Rs 12.98 crores vs Rs 8.74 crores, revenues shot up 27.3% to Rs 69.35 crores, reports Kritika Saxena of CNBC-TV18.

Below is the edited transcript of Vipul Jain, MD & CEO, Kale Consultants interview to CNBC-TV18. Q: The net profit figure has excited the market the most. What led to the growth and what percentage of the growth was led by the currency boom that you could have seen for this quarter?
A: In our business model we use IPR and to provide services to customers. As we grow, our revenue we don't require resources proportionately, it is not linear relationship between revenues and cost and that is displayed in the result and this is helped by what is happening to the currency. So, it is a mixture of both these factors that are reflected in the result. Q: What was the forex impact for the quarter?
A:  I don't have it for the quarter but if you look for the year as a whole, we started the year at Rs 46 and during the year the rupee has depreciated down to the present 55 level.
The depreciation of the rupee has contributed 20-25% to our profits and the rest of it is from the core business itself. Q: Pricing seems to be a little bit of a concern overall for a midcap and the large cap space. How was pricing for the quarter and can you breakup how pricing has been in revenue terms as well?
A: Our pricing is not the traditional pricing as per hour or per day basis. In most of the cases we have a long term contract where the pricing is fixed per transaction and so I can't say that there is pressure on pricing in particular. Of course customers all the time want something faster, better, cheaper but it’s not the traditional pricing. Q: What is the update on the merger process, you have rebranded the company to Accelya Kale Consultants. By when final merger process will be completed and when do you plan to carry out the entire branding exercises?
A: There will be no merger between Accelya Kale Solutions Ltd and Accelya. We are independent companies and we are part of the same group, but we will continue to operate as independent companies.