Stability, revenue enhancement top target for tech firm Axiscades in FY20

Axiscades Engineering Technologies, a product engineering services company, is targeting an improvement in both revenue and margin performance this financial year. A leadership transition and acquisition had hit the company on these parameters in the last financial year.

According to David Bradley, who took over as chairman of Axiscades in June, business stability and synergy from its recent acquisition of Mistral Solutions will complement growth. The Bengaluru-based company is hopeful of clocking revenue growth of 15-18 per cent. 

“Last (financial) year was a challenge for Axiscades, given it has seen quite a lot of managerial change. So, we are now trying to focus on stability,” said Bradley. 

“In case of Mistral, we have completed the process of transfer of control from its previous shareholders and the next step it to fully integrate the company to get the synergy,” he added.

The firm had acquired Mistral, a defence electronics entity, for Rs 175 crore in 2017 to boost offerings in the defence vertical. Axiscades, which reported revenue of Rs 617 crore in March 2019, has seen some leadership transition over the last one year. 

Former CEO Mritunjay Singh resigned in January. In June Vivek Mansingh stepped down as chairman of the board. 

“All ingredients of growth are there, we just need to capitalise on our talent base and derive synergy from the integration of Mistral to complement our growth numbers,” Bradley said. He added that the company was trying to cut duplication of functions across divisions, with focus on cross-selling of products to top clients.

Axiscades, which competes with Cyient, L&T Technology Services, QuEST Global, and Tech Mahindra , has 2,300 employees globally, including 1,400 in India and 400 in the US. The firm draws around 31 per cent of its revenues from aerospace, while the heavy engineering vertical accounts for more than 41 per cent and defence 21 per cent. 

“We don’t see any demand slowdown in our key verticals. The aerospace sector is quite vibrant, as is defence. Even though our exposure to automotive is minimal, we see good demand in the electric vehicles space,” Bradley said. 

Axiscades is owned majorly by Jupiter Capital, an investment company run by Rajeev Chandrasekhar, and entrepreneur and Member of Parliament. “We have the backing of a strong parent entity. Capital will not be an issue for any of our future acquisitions,” Bradley said.