The Hindu Business Line : Geodesic Info scouting for buys to widen product range

Mr Kiran Kulkarni, Managing Director, Geodesic, told Business Line that, "We have identified two companies to which we are talking. They have technologies that would complement our product offering."

He added that Geodesic was in talks with several companies and identified some that can be merged or acquired.

These companies are based out of India, South-East Asia and the US, he said. Geodesic has built its entire business around Mundu Instant Messenger (IM), its flagship product.

Taking Mundu beyond its utility as a communications tool, it has built several value-added features on top of the instant messaging platform that help companies improve productivity, enhance customer retention and reduce overall communication costs.

Geodesic has targeted this product mainly at publishing portals, financial service and mobile companies at present.

Elaborating on the value-added strategy, he said, "We can't be masters of every application that we would like to offer. We have proved our capability with our products in the past. Now, it makes sense to acquire companies that have built such solutions and integrate it into our product."

By doing this, Geodesic plans to maintain its operating profit margin, he added. For the nine months ended December 31, 2004, the operating margin of Geodesic hovered above 60 per cent. Geodesic has not formally earmarked an amount for acquisitions.

Mr Kulkarni said, "The acquisition cost would be between $1 million and $1.5 million. We have $7 million in cash as of now."

According to him, the clients to whom these acquisitions would give Geodesic access would be an added attraction. Asked if he was looking at particular solution areas within which to make these acquisitions, Mr Kulkarni said, "We would be interested in companies specialising in say, CRM and unstructured data mining." The company's shareholders had earlier approved the issue of bonus shares in the ratio 1:1. They also approved the division of equity shares of Rs 10 each into five shares of Rs 2 each.

Geodesic has projected that it would end the year in March 2005 with revenues of about Rs 40 crore, post tax earnings of Rs 17 crore and per share earnings of Rs 30. For the nine months ended December 31, 2005, it had recorded revenues of 26.75 crore and post tax earnings of Rs 12.3 crore.

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