Targeting 11% organic revenue growth in FY17: Trigyn Tech

R Ganapathi, Chairman and Executive Director, Trigyn Technololgies is confident of maintaining the strong momentum in managed services vertical.

The company reported a very strong fourth quarter with consolidated fourth quarter revenues up 11.4 percent at Rs 173.4 crore versus Rs 155.6 crore in the third quarter. The EBITDA margins for the quarter were also up at 12.7 percent versus 9.5 percent QoQ and the PAT stood at Rs 13.54 crore versus Rs 8.92 crore QoQ. The year-on-year revenues, too, were up 27 percent for FY16.

Ganapathi said the organic revenue growth for FY17 is likely to be only around 11 percent because the market in India is still muted but expect some greenshoots soon.

With the company already being present in America, entering Latin America makes a logical sense. Moreover, they also plan to enter the continental European market. Entering both these markets will be through the organic route. However, he does not rule out inorganic expansions going forward.Below is the transcript of R Ganapathi’s interview with Reema Tendulkar on CNBC-TV18. Q: This is a very strong performance for Trigyn Technologies. It is a double digit revenue growth. It is the best that we have seen in the last many quarters. Your margins too, have now gone to 12.72 percent at the earnings before interest, taxes, depreciation and amortisation (EBITDA) level. Could you tell us what resulted in this improved performance in this quarter? What will be the sustainable revenue and margin growth in the coming quarters? A: We are very happy to have closed FY16 with good momentum in the managed services vertical. We are expecting growth momentum to be maintained in managed services and looking forward to grow aggressively and increasing margins. And also, our focus will be on increasing revenue per employee as we go forward. We have closed the year with the satisfaction that we continue to deliver what we promise and primarily, our marketing initiatives in India have begun to pay off. We are hopeful that this could be the difference going forward. Outside India, apart from maintaining existing performance, we do hope to make strong forays in Latin America and also Continental Europe. Q: So, in Latin America and Continental Europe, would it be an organic move by the company or do you believe that you will tap the inorganic route? A: At this time, our focus continues to be organic, but we are not ruling out inorganic initiatives, like any company, we are looking at them. These are in a very embryonic stage. As we progress, I am sure we will be able to share the information with you, if we have any levels of success there. But we have a presence in America as you know. Strong revenues continues year-on-year coming from there, so Latin America is a logical foray and of course, we do have a presence in Europe and increasing our presence in Europe by going across the geography is a logical initiative again. India has begun the pay off and that is the big story for us. Q: Give us some numbers. FY16 you have closed with a revenue growth of nearly 27 percent and EBITDA margins of 10 percent. What will FY17 look like? A: We still maintain that we will be able to grow by about 11 percent in FY17 and we do believe that markets globally and in India are muted but we do expect green shoots towards the last quarter of FY17. 11 percent is safe to bet is what we are looking at and we are hopeful of achieving our target. Q: But 11 percent is significantly lower than the kind of growth rate you have enjoyed last year. A: That is on a bigger base, but as I said, this is what we are believing we could grow at organically and any other initiative could come otherwise. Q: Do you still maintain hitting USD 250 million of revenue by 2020? A: It is our ambition and we will look at it hopefully and some of the initiatives which are in the pipeline will navigate us towards higher growth trajectory in the coming years. Q: Your improving your revenues per employee has been paying off. Your margins have almost doubled in the last one year or so. I remember just last year, when we used to talk to you, your margins were at 6.5-7 percent and this quarter, you have ended with 12.5 percent of EBITDA margins. What is the outlook on the EBITDA margins going forward? A: We should do much better than where we stand in terms of EBITDA. Of course our ultimate desire would be to post 15 percent plus, but that will take several more quarters before we get there, but we should do better than where we are at this time. FY17, hopefully we will see a better EBITDA margin.