The Hindu Business Line : Game plan to change, says VisualSoft

The news is now official that the VisualSoft-Applabs deal is off. Without Applabs, questions would be raised about VisualSoft's growth going forward in the next one year. Applabs is in the testing space, which is lucrative and it could have become a large global testing player.

According to Mr V. Krishnan, ED, VisualSoft, the deal is off due to delay in the regulatory process. He discusses the impact this would have on the company, along with the change in the company's game plan going forward.

Excerpts from CNBC - TV18's exclusive interview with Mr V. Krishnan:

Why was the deal off? Is it because shareholders raised some concerns on valuation and so on?

That was delaying the process of regulatory approvals and as all the three companies are fast track growth companies, a lot of uncertainty was prevailing in terms of integration moving forward. At that point in time, we felt that businesses, customers and these people too, would get affected if things were to go beyond this time. Though it is a painful process and decision, I think it is good, keeping the larger interest of all the companies and customers in mind.

Have you revised your FY07 guidance and what will it stand at now, because a lot of it was factoring in the Applabs revenue?

I would only talk about FY06, where we have done some restructuring and are pretty confident of a the growth of Rs 150 crore plus and a Rs 20-crore profitability. The board will definitely come out with the guidance for the next year, when we consider the fourth quarter of the next year.

What is the plan for VisualSoft? Are you looking at any other companies for synergies or tie up?

As of now, the board has said very clearly that we will be stand-alone and will move forward. It is too early to comment now. We will be consolidating our business and moving forward.

Does it hamper your plans quite a bit? Does it change your game plan completely for the next two years?

We would have been much bigger as a combined entity and it would have benefited everyone on the whole. The game plan has to be changed now. As a development player, the focus on product development business is very clear. The game plan is being worked out clearly in terms of consolidating and moving forward.