Kavveri signs contract manufacturing deals

The contracts, which were won in the first quarter of 2008-09, will be executed through fiscal 2009, Kavveri Telecom managing director Shivakumar Reddy said on Thursday.

The Bangalore-based company is looking at making a few more strategic acquisitions in the year ahead to widen its product portfolio and maximise geographical reach, Reddy said.

The company will commence contract manufacturing for overseas customers and subsidiaries out of a 150,000-square feet plant at Jigani, 25 km from Bangalore.

Kavveri Telecom runs three manufacturing facilities in Bangalore and had earlier announced plans to enhance capacity at the Jigani plant at an outlay of Rs 15 crore to cater to new orders. Reddy did not specify the company's R&D investments for fiscal 2009.

"There is a growing market for high-performance, cost-effective antennae which has helped grow turnover substantially in 2008," he added.

The company saw consolidated revenues as of March 31, 2008 tripling to Rs 157.91 crore, shooting up 195 per cent from Rs 53.57 crore a year earlier. Profit after tax also tripled in fiscal 2008 to Rs 12.35 crore from Rs 4.61 crore a year ago.

Revenues from India at Rs 140.72 crore, constituted 89 per cent of revenues in fiscal 2008. In India, 60 per cent of Kavveri's sales by volume were fetched from contracts with Vodafone, while service providers like Idea, BSNL, Reliance Communications and Spice Telecom accounted for the rest.

The company's global customer list includes OEMs and GSM/CDMA operators like Ericsson, Nokia-Siemens, and Alcatel-Lucent, among others. Kavveri also makes antennas for use by the defence sector and WiMax-enabled antennas.

Over the past two years, Kavveri Telecom has carried out two aquisitions in Canada to consolidate its Canadian operations.

In January last year, Kavveri acquired Canadian company DCI Digital Communications, specialising in RF interference products in an all-cash deal of Canadian $1.8 million.

Earlier, in April 2006, it purchased Til-Tek Antennae Inc, a manufacturer of base stations antennas for GSM, CDMA, Wi-Fi and Wi-Max applications for Canadian $2.5 million.

Both acquisitions were made through Kavveri Technologies, Kavveri's wholly-owned subsidiary in Canada.

The Canadian operations currently employ 75 people, out of a total employee strength of 225, and contributed $6.5 million to the company's topline in fiscal 2008.