Take Solutions, after coming out with positive results for this quarter, expects their total income to be around early 20s in the next fiscal, Vice Chairman & Managing Director Srinivasan HR told CNBC-TV18.
The focus in last fiscal was on good yeilding businesses. “Primarily, we focused on high margin businesses. We expanded our offerings into more functional services in the Life Sciences area and brought in a lot more thought leadership in to the system,” Srinivasan said. The company's plan is to focus on their business in Europe and to increase contribution from there.
Below is the edited transcript of Srinivasan HR’s interview with Ekta Batra & Nigel D'Souza on CNBC-TV18.
Nigel: Your numbers are looking quite good. The topline, in fact, has grown only by around 5-6 percent but your net profit is higher by close to around more than double. Could you give us a sense of what were your margins? What was your operational performance?
A: We have had a stellar quarter but if you look at the numbers, revenue quarter-on-quarter (QoQ) is about 15 percent up. Annually, we had targeted lower revenue than last year because we wanted to focus on high margin businesses.
Our EBITDA has grown very smartly over 3 percent during the year. For the current quarter, the EBITDA is at 22.8 percent which is very good and the profit after tax (PAT) is Rs 27 plus crore which is the best ever that we have had. By all accounts, we have had a fabulous quarter with the life sciences business driving the margins up.
Ekta: You spoke about margins. Could you tell us in detail what you did in terms of your EBITDA as well as your margins this quarter?
A: You don’t do anything for the EBITDA just for the quarter. We had a strategy over the entire year to see that our margins sequentially went up by at least 2 percent. We are happy to say that it went up by 2.6 percent.
Primarily, we focused on high margin businesses. Certain businesses that were low yielding or where we felt the competitive intensity was high or differentiation was not there, we gave up those lines of businesses. We expanded our offerings into more functional services in the Life Sciences area and brought in a lot more thought leadership in to the system. All this has resulted in a pretty good set of numbers this quarter. But the effort has gone in long before the numbers have appeared in this quarter.
Nigel: Your topline has come in at around Rs 215 crore that compares with a reading of Rs 197 crore. I think you have a fair presence in United States. I believe that 2/3 rd of revenues come from there. Are you seeing more traction out there? You were looking on focusing on Europe as well, so just give us that geographical break-up?
A: US currently account for about 70 percent of our business and Europe is 7 percent. Rest is constituted by Asia Pacific. In US, there was a very positive demand environment and we capitalised on that. We have not exactly done well in Europe; it has been very flat for us in Europe. We need to focus on building our European business a little more. Rest of the world has been kind of tight, but largely the numbers have been led by the US demand increase.
Ekta: You alluded to your life sciences business actually leading the gains in terms of your total income. Can you just tell us specifically how did that vertical do for you and how exactly did the other verticals do? What might the guidance be?
A: The life science vertical for the quarter contributed about 69 percent of our revenues, up from 60 or 64 percent which was there during the last quarter. The EBITDA margin in this business is traditionally high about 25-26 percent.
As the volume of this went up, it had an impact on the overall business margins. We are in a very niche space of data management relating to pharmaceutical R&D. That is a highly domain centric area, so the prices points are good. There is a lot of value that we deliver to our clients and that has been recognised in the set of numbers. We don’t give a guidance, but we do anticipate that we will grow somewhere in the early 20’s from here.
Ekta: Early 20 for the next fiscal in terms of your total income or within your segments?
A: In our total income.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
