Diversifying into mkts other than US not on cards yet: IntraSoft

Arvind Kajaria, Managing Director, IntraSoft Technologies in an interview to CNBC-TV18 speaking about the company’s stellar third quarter performance said holiday season during the quarter boosted sales because e-commerce picks up during that time. IntraSoft Technologies Limited is in the business of providing back-ended IT Enabled Services to its subsidiary companies. Their subsidiary www.123stores.com focuses on the US Online Retail market and was ranked as the 392nd largest Internet Retailer in USA as well as the 13th fastest growing Internet Retailer in the 2015 Top 500 Internet Retailer Guide.Kajaria is confident of sustaining the current momentum mainly because their business is US oriented and depends on the US consumers shopping online and US economy, which is currently doing fine. When asked if hew would look at expansions beyond US, he said at present they don’t feel the need to diversify into other markets since US itself is a very huge market.Below is the verbatim transcript of Arvind Kajaria's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Latha: What went right? You have reported a fairly strong growth both in revenues and in EBITDA?A: We cannot compare from previous quarter. Q2 and Q3 are very different because our business is mainly US oriented where the holiday season is very high for both of our businesses.The e-commerce business picks up around Thanksgiving which is around November 15 and the holiday buying continues right up to Christmas. So the correct way to analyse that is if you do Q3 over 2014 and 2015 -- both the quarters even last year we got a boost.Latha: Even then it is fairly strong. Year-on-year (Y-o-Y) also you have grown by about 100 percent. So even Y-o-Y it is a good performance?A: We continue to see momentum. We are very happy as I have written in my release that as the software comes into play, as our relationship with our vendours, our suppliers continue to increase and more and more shoppers prefer to shop online, we see the business moving upwards and that is very clear in the results.Sonia: The nine months revenues that you have done at Rs 530 crore is more than double of what you did in the nine months of last year. So what kind of run rate do you think you can see by the end of the year on the back of this Rs 530 crore base and also in FY17 what would the trigger be for the company and what kind of growth do you envisage?A: We are dependent on US consumers to increasingly shop online and also we are dependent on how the US economy does. Right now it seems that both are on track.Third internal metric should be our relationship with our existing suppliers which has also increased quarter-on-quarter (Q-o-Q) for the last three quarters and also whether we are able to launch more market places. Right now, we are seeing the momentum -- most of what I said is on our side. We hope to continue to keep on the growth rates that we have been experiencing for the last year and for the last three-four quarters as we can see from the results.Latha: You can double your revenues even next year you think?A: I don’t know whether EBITDA can keep up because it is a pretty competitive out there and it is a trade-off between whether you want a topline growth or you want an increase in bottomline. It is almost impossible to achieve both. So if you keep on investing in maybe infrastructure, like any other e-commerce company, we could see a topline growth.Latha: Have you expanded to any other geographies beyond US?A: US is so large in its scope and we are just a small drop in the ocean as far as the US market is concerned. At this point we would like to see a much larger portion of the business, we will need to see our leadership position before we would like to expand into the other geographies but that is our radar, maybe 2017-2018.Sonia: We understand that about 770,000 orders were shipped out in this quarter, is that better than what you have done in the past and how much can it grow to in terms of orders per quarter?A: 770,000 is a number of physical packages that we delivered in the last quarter. I have given you a comparison. In the same period, October to December 2014, we did 285,000 orders and in this year we have done 770,000 orders. This is basically an indication that our automated systems are working fine, the customers are very happy with what we are delivering.(Copy edited by Vaishali Karulkar, interview transcribed by Sonal Jadhav)