Consulting and enterprise solutions company Take Solutions Ltd. is on the lookout of suitable buy to expand its operations while training its focus on high margin life sciences vertical, said top company official.
The Rs.738.7 crore revenue company is looking to grow its business by 20 percent this fiscal, he added.
"We are looking out for suitable acquisition. In fact, last year we were seriously looking at two but later decided against it. We are interested in players in the life sciences service vertical," Srinivasan H.R., vice chairman and managing director, told IANS.
He also categorically stated that Take Solutions is not available for taking by other corporates nor the company is looking out for additional funds.
According to him the addressable global market for life science industry is around $16 billion of which the analytics and solutions vertical's share is around $8 billion where the company is making its mark.
"Around 80 percent of the analysis and solutions business are done in-house by the global pharma companies and the fight is for the balance 20 percent pie," Srinivasan said.
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He said Take Solutions would ultimately like to be in the entire data management domain for pharma companies.
Meanwhile, the business restructuring exercise taken around 18 months ago to exit low margin business while focussing on high margin life sciences vertical has started paying off, Srinivasan said.
Agreeing that the company's topline has gone down by Rs.83 crore to Rs.738.7 crore last fiscal as compared to 2013-14, Srinivasan said the net profit has gone up to Rs.69.9 crore from Rs.58 crore posted during the corresponding period the previous year.
"We found certain lines in the supply chain management (SCM) vertical are of low margin though the revenue would be around Rs.250 crore. We decided to exit low margin and high value business," Srinivasan said.
He said the earnings before interest, tax, depreciation and amortisation (EBITDA) during the last quarter of 2014-15 went up to 22.8 percent up from 18.5 percent.
Srinivasan said the company's EBITDA started falling three years back as it was not able to pass on the cost hikes in the supply chain management business to its customers.
As business has to give higher returns so as to invest in development of intellectual property rights, Take Solutions decided to shift its focus on high margin business and even willing to take a topline hit.
Queried about the increase in receivables at the end of last fiscal Srinivasan said a couple of global pharma majors increased their payment cycle to 90 days from 60 days.
"Global pharma companies are in acquisitive mode. Even a delay of 30 days in their payment cycle to their vendors would release couple of million dollars to be used for acquisitions," Srinivasan said.
Take Solutions has an order book position of $70 million at the end of last fiscal which has a time horizon of around eight months.