'We expect to post healthy growth for fiscal 2013-14' - The New Indian Express

'We expect to post healthy growth for fiscal 2013-14'

Published: 26th October 2013 08:18 AM

Last Updated: 28th October 2013 11:15 AM

In an interview with Meena Konar of Myiris.com, Vijendra Surana, Chief Financial Officer at RS Software says, ''The company is committed to make investments to meet its strategic and tactical growth objectives.''

RS Software consolidated PAT witnessed a strong growth of 33% in Q2FY14. How do you see your performance for the coming quarter?

Generally Q2 is our best quarter and for Q3 our focus is on continued strategic cost management to maintain/enhance the margins.

The company has posted a revenue growth of 25.15%. How do you see revenue growth going forward?We continue to invest in building our sales engine, and with the exchange rate stabilizing, we expect to post a healthy growth for the fiscal 2013-14. Could you brief us about your capex and expansion plans?The company is committed to make investments to meet its strategic and tactical growth objectives. The investments would be in areas like, technology: hardware & software; expansion of sales engine; automation of business processes; RS school of payments, payments lab (centre of R&D).On an average about 15%- 20% of cash generated during the fiscal year is allocated towards the above investments. The company is investing in its own R&D initiatives as well.

Do you foresee any new major customers or new markets emerging in the future?

For a company of our size we have to be focused to get the best returns for our investors. Our dominant market is North America, followed by Europe. We have significant potential yet to be leveraged in both these markets. As a domain focused organization, we are particular about the prospects that constitute our pipeline building, and while this takes time, it certainly enhances probability of closure. The company is focused on helping to build and maintain core systems for retail electronic payments, and considering that globally 85% of payments are still made in cash or cheque, we have lot of work to do in the coming years. In terms of new areas, Company is focused on emerging areas like mobile payments where it has already got a concept patent registered.

How do you see rupee-dollar movement on your business?Strengthening of dollar against rupee has had favorable impact on the financial performance of the company and we expect this advantage to continue through the current fiscal. This improves our top line and to a limited extent our bottom line.

What is your view on software sector?The global software industry has seen phenomenal growth over last few years and needless to mention that the trends will continue. India has been and will continue to be the largest service provider to the sector. India has had dominant market share in IT outsourcing industry, in the range of 55% to 60%.The Indian Software services industry continues to be well positioned, and as per the Nasscom-Mckinsey report, this industry can double from its current levels by 2020, and become a ISD 200 billion industry. The outlook looks very positive and with improvement in global scenario, this sector is all poised to give boost to the growth of the Indian economy.

Would you like to convey any message to the shareholders of the company?The company has achieved 25%+ YoY growth in its top line, and 64% growth in profit before taxes, and a continuing growth in cash generation. The company has achieved consistent growth for over 30 quarters now, and continues to be confident of its growth prospects. While the company continues to look for strategic avenues of growth, including inorganic options, the board decided to reward the shareholders with an interim dividend of 25%. At RS software, the commitment is to be an investment of choice for our investors.

The company is well on its way to taking leadership in building domain focused business from India, in an industry which otherwise seems to have become a commodity offering in the global market. This strategy is helping to build a long term growth model, as both the electronic payments industry, and the domain focused model are in their early stages, and therefore much of the potential yet to be leveraged.

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