The Rs 3,000 crore Yash Birla group expects its information technology business to turn profitable by early next fiscal.

Group company Melstar, which was acquired two years back, has already moved out of the red and is on course to doubling its turnover (from Rs 19 crore last year) for the year ending March 31.

“Even though we acquired the company two years back, the actual management takeover happened only last year. We broke even three months back and are on course to generating profits of about Rs 2 crore by the end of this fiscal,” Mr P. V. R.Murthy, Group Finance Director, told Business Line .

Turnaround strategy

As part of its turnaround strategy, the company has embarked on providing services such as ERP implementation. Traditionally, Melstar has been a company focused on the resource augmentation business. Now, the company aims to increase services-based revenues to 50 per cent from 10 per cent. The BSE-listed Melstar, which was heavily dependent on its anchor customer, IBM, has now got another 20 in the bag, said Mr Murthy.

Along the way, the Yash Birla group looked at back office companies for acquisitions, but shied away because of high valuations. Its target this year is to complete the restructuring of Melstar.

Going forward, the company plans to get into areas such as enterprise content management, business intelligence and legal process outsourcing. However, the primary target market would continue to be India, added Mr Murthy.

Net profit

For the quarter ended December 2010, it reported a net profit of Rs 68 lakh.

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