Chennai (India), Nov 30, 2015:
Intellect Design plans to double its revenues to USD 200 million in the next two to three years, says S Swaminathan, CFO, Intellect Design. In FY15, the company had delivered on its revenue guidance of USD 100 million.
Intellect also expects an increase in the gross margins over eight to ten quarters to 60 percent. This they plan to do with increased revenue share from developed markets, increasing the licensing share in the total revenue and finally with help of some execution efficiency improvements.
S Swaminathan also tells CNBC TV18, that Intellect intends to mainly invest in its infrastructure, R&D and sales and marketing.
Below is the transcript of S Swaminathan’s interview with Nigel D’souza and Reema Tendulkar on CNBC-TV18.
Nigel: You had raised your full-year revenue growth guidance to around 26-30 percent in the last quarter. Based on your current visibility, are you likely to end up closer towards the top end or in fact the lower end of this guidance?
A: I would like to stay with the guidance we had given you. We had given you a range of 26-30. So, we need to wait. I would like to wait till quarter is over. As of now, we are in line with the range of forecast we have given.
Reema: IN your last interview, you also told us that you will be profit after tax (PAT) positive by Q4 of FY16. Do you maintain that?
A: We stay with the forecast we had given.
Reema: Let us come to your margin picture then. Your gross margins have been inching up higher. Do you see your gross margins rising as growth picks up?
A: We have put in plans in place over the next couple of years. We should take the gross margins further up. There are three major contributors we are working on. One is to increase the revenue share from the advanced markets. Second is to increase the licence in aims share in the total revenue. Third, we are also working on some execution efficiency improvements. All the three should contribute to increase the gross margin which we did at 53 in Q2, take it further. We are on a journey over next two years. We should see hoping towards a 60 percent mark probably over the 8-10 quarters.
Intellect Design stock price
On December 09, 2015, at 10:37 hrs Intellect Design Arena was quoting at Rs 258.00, down Rs 9.75, or 3.64 percent. The 52-week high of the share was Rs 302.65 and the 52-week low was Rs 69.00.
The latest book value of the company is Rs 51.87 per share. At current value, the price-to-book value of the company was 4.97.