L&T Infotech to double revenues in 3-4 yrs

L&T Infotech today said it is targeting to double its revenues in the next three to four years through acquisitions and organic growth.
"We will be doubling the revenues in the next 3-4 years," L&T Group's Executive Chairman A M Naik told reporters at a roadshow ahead of its IPO.
The company had posted a topline of USD 887 million in 2015-16. Over the last five years, its revenues have grown 17-18 per cent, but dropped to 13-14 per cent during last fiscal due to slowdown in the performance of the oil and gas sector because of depressed commodity prices.

Naik said the over Rs 1,200 crore to be raised through the offering, which will be the third public issue from the diversified Group, will be deployed for acquisitions and working capital requirements.
For acquisitions, the company will focus on the North American and European markets which contribute a bulk of its revenues at present, L&T Infotech Chief Executive and Managing Director Sanjay Jalona told reporters.
He however declined to give any futuristic guidance and answer queries on the size of the acquisitions or the technologies it will focus on.

Jalona said there will be a "negligible impact" from the UK's exit from the European Union as the country contributes only about 2 per cent of the company's revenue.

Europe contributes 17 per cent of its overall revenues, of which 11 per cent comes from the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden, including their associated territories) alone, he said.
Jalona said the Brexit vote, which will entail separation of businesses between the UK and continental Europe for its clients, may well turn out to be a business opportunity for the outsourcing sector.
"...As companies separate from the UK and the EU it would be an opportunity...But only time will tell us," he said.
Kotak attributed the jump in the primary market issuances,
which touched a nine-year high in the quarter to June, to the quality of the issues and the pricing. "Quality IPOs, which are well priced, are best way of expanding the primary markets."

Naik said the company has chosen to offer shares at a lower valuation to increase the retail investors' interest, for whom it is also giving a discount of Rs 10 per share.
He added L&T wants to grow the investor interest in the scrip, which will lead to a better price discovery post-listing as well.
Reminiscing from the days of formation of the IT firm, Naik said the engineering, procurement and construction major spun it off into a separate unit to arrest attrition.
He said between 1985 and 2000, the company lost 10,000 skilled manpower to IT "bodyshops" across the world and it is at this juncture that it decided to branch out and win business as a standalone entity.

Serving external clients, beyond the L&T Group, would entail lucrative career opportunities for the staff who get to work from client locations across the world, he said.
This branching out, and further splitting of the business, has helped the Group have two companies with a combined revenue of over USD 1.5 billion, he said.
L&T Infotech's issue will hit market on July 11 with its initial public offer that can fetch up to Rs 1,243 crore.
The price band for the offer, entailing sale of 1.75 crore shares, has been fixed at Rs 705-710 per scrip.