Financial Daily from THE HINDU group of publications
Thursday, Nov 17, 2005
Financial Daily from THE HINDU group of publications Thursday, Nov 17, 2005 |
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Info-Tech
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Interview 'We've gained on R&D, clientele'
ANALYSTS said that the acquisition will help MBT to strengthen its presence in the telecom service provider's space, and also help to strengthen its R&D capabilities. "The IPO is eminent. The CEO and Managing Director of MBT, Mr Vineet Nayyar, had told earlier that the next eight quarters are very crucial for the IPO, and this acquisition could be seen as a step towards the IPO. A couple of more acquisitions could be expected, and one of them could be in UK," said an analyst. Excerpts from CNBC-TV18's exclusive interview with Mr Vineet Nayyar. Give us details on the acquisition. The first thing to know is the logic of the acquisition; the revenues are important but relatively secondary. MBT has essentially been in the application service provider space. We are very good and fairly deep in it and weighted as the top company in the OSS, BSS space in India. However, our presence was marginal in the equipment manufacturer space, product engineering and in R&D. That has a huge potential in terms of revenues and possible earnings. That is why we acquired Axes, because this company is doing some outstanding work in terms of R&D, it has long-term relationships with some very important equipment manufacturers and has a very high level of client satisfaction. Is it a profit-making company? It has consistently been a profit-making company, almost right from the beginning. Are its margins in line with MBT? Yes, the margins are in line with MBT. It would end the year with revenue of about $30 million and its earnings before interest, tax, depreciation and amortisation will be close to $6-7 million. Any opportunity for cross-selling products? That was the precise purpose for the acquisition; it was basically to provide end-to-end service in this space. So yes, there will be a fair amount of cross selling, whether it is in terms of maintainence or new generation networks or providing R&D. What is the status on your IPO? We will be definitely going in for an IPO. The precise timing is not yet known. In many ways it will depend on how visible the revenue is for the next eight quarters. It will also depend on not only the diversification of clients, but also on the diversification of the space in which we operate. But yes, the IPO will come soon.
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