The harder embedded software company Sasken tried to cope with its snowballing misfortunes, the swifter it fell.
At the start of the current decade, it changed, chopped and tinkered with its moorings for the lure of mega bucks it saw from venturing into IT services, even as its top four clients either filed for bankruptcy, exited some businesses or pivoted focus.
And then founder and CMD Rajiv Mody decided to go back to doing what it knows best, with a diversified portfolio, including digital transformation solutions. Today, Sasken is confident enough to set an ambitious target to more than triple its revenue base of $72 million to $250 million by 2021.
To achieve this, the BSE and NSE-listed company has fortified its senior leadership team with five new additions in the last 12 months and added 20 new customers in the last three quarters, taking its total customer base to 142.Revenue target
The revenue target seems overly ambitious given that the company’s second-quarter results for FY2017 were discouraging. While Sasken reported a 1.3 per cent increase in YoY revenue at ₹240.17 crore in the first half of FY 2017 compared to the same period in the previous fiscal, the consolidated revenue for Q2 of FY2017 at ₹118.40 crore dipped 2.8 sequentially over the previous quarter.
Attributing the poor performance to a customer defaulting on payment, Mody told BusinessLine : “I can’t remember the last time a customer defaulted. While achieving $250 million in five years is challenging, it is possible. We have our senior leadership team in place, a solutions portfolio for nine verticals, including automotive, industrial, retail, semiconductor, smart devices & wearables, satellite communications etc. And we are seeing good client traction for fixed-price projects vs time and materials projects, giving us more visibility into revenues.”Key clients
Some of Sasken’s customers are Intel, Qualcomm, Intel, British Telecom, Honeywell, Sony, Inmarsat, Harman, Motorola Solutions, Texas Instruments, GE, Kroger and Lebara, among others. The top 10 customers contribute to 66 per cent of the company’s revenue.
Mody says Sasken’s rough times, weathering heavy “body blows” since its inception in 1989, is now history. The 2008-09 economic downturn hit Sasken’s key customers hard. Nortel filed for bankruptcy, Motorola decided to refocus on the Android space and Texas Instruments decided to exit the wireless chipset business, taking Sasken’s revenue into a downward spiral from ₹574 crore in 2010 to ₹520 crore in 2012.
Revenues fell further when Nokia, another big customer struggled, losing market share to Apple and Samsung.
Left with an eroding revenue stream from its global customers, Mody was forced to drastically downsize the company’s workforce from 3,623 in 2009, when revenues were at ₹570 crore.
The cuts started at the top, wit two of the five senior leaders asked to step down.
A failed attempt to diversify into traditional IT services followed in 2013 when Sasken hired Mindtree co-founder Anjan Lahiri as CEO to turn the ailing company’s fortunes around. Lahiri quit a year later when Mody realised diversifying into IT services was the wrong decision for an IP-led product engineering company with 70 patents.The inflection point
The turnaround for Sasken, according to Mody, happened in 2014, when he spotted an inflection point to take the company’s capabilities into the world of automotive, industrial and retail, backed by deep domain knowledge in the mobile space. The company hired 700 last year, taking its headcount to 2,000.
Today, Sasken’s IP (protocol stack) is present in over a billion devices between Spreadtrum and Mediatek and its IP is a part of 200 plus commercially shipped unique products of global OEMs.
“We are proud to say that 2 million cars in the world have our In-vehicle Infotainment systems and we have designed and developed satellite phones for UK based Inmarsat, which has sold 500,000 units to date,” says Mody, who is in no doubt that the company’s fortunes are on the upswing.