Four Soft Limited, a Hyderabad-based provider of software solutions for transportation and logistics industry, is shifting its focus to the manufacturing sector to have the right mix of revenues, according to chief operating and chief financial officer Biju S Nair.
“We are tilting towards supply chain execution to increase our margins, as the price that we get from the manufacturing segment is much more than the logistic segment. So, our global focus is now on supply chain management and execution where margins are higher,” he told Business Standard.
The 11-year-old company currently gets 88 per cent of its revenues from transportation execution and 12 per cent from supply chain. With the new focus and new products in the pipeline, this revenue mix would change to 82 per cent and 18 per cent respectively by the end of this fiscal, he said.
“We are also looking at the manufacturing segment in India. We have introduced 4S eCustoms, a web-centric customs compliance solution, in India and there are already six clients live on that. Though India is expected to contribute Rs 2.5 crore to our top line this year, we are aiming at doubling it by next year,” Nair said.
Four Soft, which offers its products on a SaaS (software-as-a-service) model, has 400 customers globally, including around 14 freight-forwarding and logistics companies in India. While Europe accounts for 69 per cent of its revenues, the US contributes 21 per cent and the rest from Asia (mainly Japan and India).
Nair said the company was trying to strengthen its presence in geographies like West Asia and Australia, which primarily are manufacturing markets, during this year. “The future of Four Soft is in the supply chain segment, where manufacturing companies or 4PL (fourth-party logistics) companies use our products as an ERP or a visibility tool,” he added.
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Four Soft reported a net profit of Rs 2.76 crore for the first quarter ended June 2012, as against Rs 1.61 crore in the corresponding quarter last year, reflecting a growth of 71.42 per cent. Its revenues grew 8.37 per cent to Rs 32.49 crore, as against Rs 29.98 crore during the same period a year ago.
“Of out total top line of $28 million in FY12, $20 million is annuities (existing repeat business, including annual maintenance revenue). We now have an order book worth $6 million, and our plan is to get $3 million of new sales during this year,” Nair said.
Four Soft Limited’s scrip ended the trade at Rs 7.74 on the BSE on Thursday, up 0.26 per cent, over the previous close of Rs 7.72.