The Hindu Business Line : Infotech eyes $100 m revenues by next year

INFOTECH Enterprises, the 12-year-old software, engineering and geographic information system provider, has embarked on an expansion plan that could see the company setting up two more overseas centres — one each in Australia and China. The company is targeting more acquisitions and eyeing revenues of about $100 million by next year.

The Chairman and Managing Director of Infotech, Mr B. V. R. Mohan Reddy, told Business Line about the company plans to expand operations and broaden the scope of services.

After having acquired Vargis, Infotech recently completed the restructuring of its business operations across verticals and is set to complete the Phase II expansion of its Hyderabad facility.

Expansion is also likely in Bangalore. Excerpts:

Have you decided on locating a centre in Australia?

Our strategy for overseas growth is two-fold. We expended with strategic alliances. Strategic alliances do not always work out, as they come with some problems. We decided to locate our own centres.

We have six offices in the US and three in Europe. Now, we are in the process of considering opening up a centre in Australia, possibly Melbourne or Sydney.

Australia offers a good opportunity to tap the regional market out there.

Likewise, we are internally finalising plans for an entry into China. Both these centres could be commissioned in the first quarter next fiscal.

How do you see the company expanding in the next two years?

Having completed the internal restructuring along verticals, we expect about 50 per cent growth in overall revenues. Last year, we recorded revenues of $41 million (about Rs 187 crore), and expect this to touch Rs 300-320 crore (about $ 62 million) this year.

If we manage to stretch this a little further, by recording a growth of about 60 per cent, our projected target of becoming a $100-million company by 2006 is clearly achievable.

With increased customer focus and a wider range of services, we are able to dig deeper into existing accounts and expand the scope of services.

Clients such as Pratt &Whitney, Schlumberger and Bombardier are some examples that reflect the long-term association.

Acquisitions have helped you enter new markets. Do you see more acquisitions?

Our expansion would be a combination of organic and inorganic growth. This time around, the thrust would be on organic growth.

Therefore, the second phase of expansion with an investment of Rs 40 crore is likely to be completed early next year, which would help add about 100,000 sq.ft to our existing campus.

Once we move in to that centre in February, we would then seek to address the proposed expansion at Manikonda.

With regard to acquisitions, we would continue to look for strategic buyouts. So far, our acquisitions have been relatively smaller, in the range of $2-3 million. We have invested about $10-12 million (about Rs 45-50 crore) in various acquisitions.

This time, our acquisition would be larger. Our earlier acquisitions ASI and Vargis, have not only helped us cut short time to enter new markets, but also helped us in client acquisitions.