FY17 revenue growth to be 10-12%, added 20 new clients: Infinite

A: As far as the year is concerned, at the start of last quarter we had said that based on the visibility that we had at that point in time, we should be growing about 10-12 percent as far as revenue is concerned. However, we also expect our operating margins to grow on the absolute term by about 10-15 percent. So that is the guidance that we had given at the start of the year. Therefore, after the first quarter, we believe we are in line with what we said at that point in time.Q: What is the targeted margin for this year?

A: Since last three years we have been transforming the company from services orientation to more of a product and platform based company. However, that has been going.

Our eventual operating margin target is about 15-16 percent and that's our goal. We are still far from that and we are gradually and surely moving towards that objective.

As far as this year is concerned we would see a couple of percentage point increase in the margin over the last year.

Q: Where is that going to come from? Do you have pricing power? I was looking at your billing rates and your onshore billing rates has been stable, if I take a look on a sequential basis though offshore, there is a dip close to 8-10 percent?

A: It is more on onset than offshore. Our business is -- and the margins are coming from - if the contribution of business that comes from products and platform goes up. So that's especially in mobility and messing space where we have a lot of products that we have launched, significant number of platforms have been built and in this quarter we have added about 20 new clients. So the bottomline growth is going to come from, if we manage to scale these clients up and manage to sell more of the mobility and messaging business or products and revenue growth is going to come from the other two businesses that we have which is the classic IT services and the product engineering services.

Q: Your top ten clients contribute more than 92 percent of your total revenues, so are you looking at diversifying a tad bit more, reducing the dependence on the top ten clients?

A: That is our long-term goal, but our top ten clients are so big, so to change that equation is going to take a long time but we are moving towards that. The total number of clients that we had two years back and what we have today is almost double, but the contribution from some of these newer clients are not showing up on the radar because compared to the top ten clients, who are big, USD 20-40 million, USD 100 million plus, so that is taking time.

However, what is also happening is, if you look at the industry, the nature of the business has changed; we are now talking more of small revenue value contracts but high margin value contract also, so we are not looking at very large number of people supporting infrastructure. So these are USD 1-2 million clients. So it is going to take a time to change that equation as far as the top ten clients are concerned but I look at it as a big advantage because those ten clients are giving me that stability on which we will try to build higher value businesses.

Q: Your buyback excited the street. I believe you are going to spend Rs 150 crore or thereabouts on buyback. What is the current cash in your books? I think you will be participating in this buyback. So post this buyback what is your cash going to look like?

A: At the end of the quarter we had about Rs 300 crore in cash and last year we generated about Rs 100-125 crore of free cash and we expect to do same thing this year. So, based on that, the board took a decision to recommend to the shareholder a buyback of Rs 150 crore at Rs 250 to essentially return value to the long-term shareholders that we have been having. However, after the buyback it will be Rs 150 crore which will be left out of Rs 300 and plus whatever cash we generate in the next three quarters.