In an exclusive interview with Meena Konar of Myiris.com, Rahul L Kanodia, vice chairman and chief executive officer, Datamatics Global Services, says ``We are confident to maintain our earnings level in line with the current level, which in-turn would grow in line with our revenues.``

What is the outlook for your industry in 2012?

As per a recent NASSCOM report, aggregate revenue for Indian IT & BPO industry is estimated to cross USD 100 billion mark in 2011-12 itself. I feel, that amidst economic uncertainties in two of the most important consumer geographies USA and Europe, the IT & BPO industry in India has emerged stronger. Going forward, I expect the industry to continue with a near 15% growth, largely led by the domestic opportunities.

Datamatics has posted a revenue growth of 6.6% in Q3FY12. How do you see revenue growth going forward?

The company recorded a q-o-q growth of 6.6% and a y-o-y growth of 62.1% in Q3FY12. In the first nine months of the current financial year, we have clocked a growth of 59.4% over 9MFY11 in terms of revenues and 68% growth in terms of net profit. We are confident of posting growth in similar lines for the full financial year 2011-12. In the next financial year, we expect the company to grow in line with the industry.

Consolidated PAT witnessed a rise of 38.3% in Q3FY12. Do you think such earnings growth sustainable going forward?

Going forward, our growth will be propelled by improved topline from domestic market as well as improved margins from exports markets. The domestic operations currently constitute about 10% of our revenues and we expect the domestic operations to strengthen going forward. In the recent years, we have also expanded our presence to new markets globally, through organic as well as inorganic expansion. We command presence in USA as well as Europe, both continents are in midst of economic slowdown. This is entailing all companies sans size, to look critically into their processes and functions. This is also a huge opportunity for us. Besides the huge influx of data from multiple source points, analytics also is gaining traction in terms of demand, in both established and developing markets. In light of the above initiatives, we are confident to maintain our earnings level in line with the current level, which in-turn would grow in line with our revenues.

EBITDA margins in Q3FY12 improved by 183 bps to 11.8%. Going forward, do you expect any improvement in margins?

The EBIDTA margins are expected to piggyback on the increasing realizations emanating from improving share of value added services. Being a practically zero-debt company, we have been able to steer clear of the rising finance cost. However, we expect an incremental improvement in EBIDTA margin based on expected growth in domestic as well as international operations.

Could you brief us about your expansion plans?

In 2011-12, we expanded our operations to new geographies (Bosnia), acquired companies (Vista, Bengaluru and CIGNEX, USA), established delivery centre in Punducherry and expanded our state-of-the-art global delivery centre in Nashik. The impact of these initiatives has started to trickle in to our financial statements. Going forward, we would focus on the existing operations across geographies and ensure full stability, before we embark on another expansion programme.

How do you see impact on rupee-dollar movement on your business?

In the recent months, when the dollar depreciated against Indian Rupee, we were marginally benefited. And owing to our balanced hedging policy, we did not face any adverse impact even when the USD slowly returned to the present levels of Rs. 49. Furthermore, the impact is also less for us because some of our expenses are in foreign currency.

Recently Datamatics Global Services has acquired Vista Info system. Tell us how this acquisition would support your operations?

In the recent years, we have been extensively focusing on Enterprise Mobility and Smart Device Solutions. Being an exciting company with proven expertise and established client base in embedded-systems space, Vista emerged as a seamless and strategic fit to our core vision. Through this acquisition, we will further consolidate our presence in the Consumer electronics, Aeronautics and Automotive industries.

Would you like to convey any message to the shareholders of the company?

Datamatics is well poised to take advantage of the current trends in the market.  Our focus on leveraging the latest technology trends in Cloud based solutions, and our revised positioning of providing integrated solutions spanning IT services, Platform solutions and BPO services has helped de-commoditize our offerings and win several new customers.  This gives us the confidence of being more competitive and having a healthy growth in the coming years.