Manu Parpia, MD and CEO of Geometric gives an insight on his views on the company’s December quarter numbers. He says the company saw constant currency growth at 4 percent in the third quarter. He expects Geometric's standalone business to grow in high single-digits in FY15.
He believes that the second half of fiscal year FY15 will be better than the first half, but not significantly so. The company is close to winning a few large deals that will reflect in FY16.
Below is the verbatim transcript of Manu Parpia's interview with Latha Venkatesh & Ekta Batra on CNBC-TV18.
Ekta: What was the reason for the weakness that we saw on the margins this quarter?
A: There is no particular reason. It is more to do with a little bit of adjustments. There were some prior period cast that had not been recorded so there were recorded it is not very significant. So, over all it is nothing significant in terms of operations. There is no pricing pressure nor is there any sort of cost upward push.
Ekta: What was the quantum prior period adjustments which impacted the margins this quarter and if you strip that component what would the margins then look like?
A: If I strip it out it would be flat with last quarter. The currency hasn’t had any impact as such. The currency last quarter this quarter is more or less similar.
Latha: In that case what is the constant currency growth this quarter?
A: If you look at Geometric standalone that is excluding our joint venture we recorded just over 4 percent in constant currency. The impact of the weakening of the euro marks about 1.50 percent of the growth so it is about 2.50 percent if you take it in actuals in US dollar terms.
Latha: Last time you told us that your second half will be better than your first half does that still hold?
A: Second half will be better than the first half but it is not as I had hoped that is why I revised the guidance last quarter. I had hoped it would be significantly better it is not going to be significantly better, it will just be better.
Ekta: This quarter the deal closure stood at around 13. 09 million is the highest in the recent years. Is this a one off and what is the pipeline looking like according to you?
A: We believe it is because we have been working hard - restructuring our go to markets and so on. We believe it is going to payoff and which is paying off to a certain extent. I believe we are also close to winning some large deals which will have an impact for FY16 it won’t have much impact for the quarter.
Latha: How will you likely end the year in terms of deals?
A: The standalone Geometric will grow at its high single digit rate but on a consolidated basis, it will be lower because the joint venture was on a cost plus formula and that is the way it should run. Even the joint venture itself has grown in number of people.
Latha: Which vertical are you seeing the most tractions? This quarter it was aerospace right?
A: It will be more in the signs of automotive, aerospace won’t show so much of growth because in aerospace, it also reflects the win of a large deal which was mostly software. So then next quarter that revenue which is the one time revenue won’t be there but overall when I look at FY16 I see that the aerospace vertical will be higher growing fast.
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