Infotech eyes buyouts

Looks at embedded software, smart grid space

Infotech Enterprises Limited, a Hyderabad-based engineering solutions provider, is aggressively looking at acquisition opportunities even as it is cautious on keeping the Rs 609.9-crore cash balance (including liquid investments) as buffer to fund internal initiatives to grow its revenues, according to chief operating office and president Krishna Bodanapu.

“There are a lot of initiatives internally on how to grow our revenues, which will require a lot of investments and high cash. The second is, we will continue to look at acquisitions. We have articulated where our needs are – embedded software, smart grid and networking operations –– and we will look at opportunities within that framework,” he told Business Standard.

Infotech Enterprises has looked at 127 companies in the last 18 months in the first stage of evaluation. While declining to draw any time line or quantify the number of companies that the company is looking at to acquire, Bodanapu said, “We are principally working on it. We can see one or two (acquisition deals this year) or we might see zero.”

Q1 net slips 16% on wage hike

The company today reported a 16% decline in its net profit to Rs 54.31 crore for the first quarter ended June 2013, as compared to Rs 64.71 crore in the corresponding quarter last year. Revenues for the quarter under review stood at Rs 483.93 crore, as against Rs 456.38 crore during the same period a year ago, reflecting a growth of six%.

Attributing the decline in net profit to the 6-7% salary increase across the board, Bodanapu said the company had also seen some challenges in the engineering business in the first quarter from some of its existing customers as some programmes were shifted to the next quarter.

“We have a very big pipeline in the engineering space (both high-end and heavy engineering) for the second quarter (Q2), which will fuel our growth not just in Q2 but also beyond it,” he added.

The company will be shortly initiating an engagement with an MRO (maintenance, repair and overhaul) company in Europe. Besides, a new special economic zone (SEZ) delivery centre in Bangalore has been planned in Q2 to propel growth in Q2 along with the new programmes with existing customers, Infotech said in a release today.

Infotech Enterprises’ scrip ended the trade at Rs 184.10 on the BSE on Thursday, up 0.6%, over the previous close of Rs 183 a share.