Four Soft Limited, a Hyderabad-based provider of software solutions for transportation and logistics industry, will be entering the business process outsourcing (BPO) vertical to offer services like freight settlement reports, customer service and transaction entry to global freight forwarding companies in the next quarter.
“We are going to continue with our products and services business, which though offers a lot of stability to our topline and bottomline, will not allow us to reach the growth that we really want to have. We have charted a three-year plan with a combination of an aggressive organic growth with specific acquisitions. We looked at various options and BPO is one of them, which we want to get into in an aggressive manner,” Rajasekhar Roy, chief executive of Four Soft, told Business Standard.
Roy said the company’s BPO services would be offered around its own software products and on applications of other companies, with 20 employees in the immediate term at an investment of Rs 5 lakh per seat.
“We will be adding 100-odd professional during next year as we will be getting at least 20 customers by then, and ramp up the headcount to 500 in the next three years. The BPO business will initially be a part of Four Soft and will be hived off into a separate unit once it crosses the 100-employee mark,” he said.
Four Soft expects its BPO business to contribute 10 per cent to its projected revenues of $32 million (close to Rs 148 crore) by this fiscal end and increase its share to 25 per cent in the next three years. The company is looking at 10 new client wins for its products business with a total order book value of $3 million (Rs 14 crore) by March 2010.
The company, Roy said, was in advanced stages of acquiring a couple of enterprises abroad that besides complementing its technology products will bring in new customers to its table.
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“Talks are on with companies in geographies where we are not present – including in Europe, South America and Asia. We are looking at two buyouts with transaction values of between $10 million (Rs 46 crore) and $20 million (Rs 92 crore) each, which we expect to close by the end of this fiscal,” he added.
In FY11, Four Soft hopes to garner revenues of $45 million (Rs 207 crore), with the existing business accounting for $25 million (Rs 115 crore), new business wins $10 million (Rs 46 crore), BPO services $4 million (Rs 19 crore) and the rest from acquisitions.
Four Soft’s scrip plummeted 7.89 per cent to end the trade at Rs 22.75 on the BSE on Thursday, as against the previous close of Rs 24.70