Big bang acquisition pays off for Subex
Telecom software products’ firm Subex Azure has started reaping the benefits of its acquisition of Azure Solutions earlier this fiscal.
By Ranjit Shinde & Johan Mundat, TNN |
Telecom software products��� firm Subex Azure has started reaping the benefits of its acquisition of Azure Solutions earlier this fiscal. In Q3 2006, the company���s consolidated revenue more than doubled to Rs 106.2 crore from the year-ago level, backed by an equally-impressive growth in product revenue, which stood at Rs 75.8 crore.
PAT rose 65% to Rs 11.6 crore. PAT margin, though, dipped from 23.8% to 18% following the acquisition. This is expected to recover over the next few quarters. Acquisition of Azure, UK-based firm providing revenue assurance solutions has strengthened the product portfolio of Subex, which enjoys a significant presence in telecom fraud management solutions.
This has also helped the new entity, Subex Azure, to reduce its dependence on a single client, British Telecom (BT), to a certain extent. BT���s contribution in total revenue dropped from 31% in the prior quarter to 25% in Q3 2006. Share of non-BT income from revenue assurance solutions rose to 36% from 28% in the previous quarter.
The company reported an increase in European and Middle East operations in Q3 2006. These contributed to 43% of non-BT revenue, much higher than 29% in the previous quarter. Share of American operations remained at 30%, while that of Asia Pacific declined from 41% to 27%.
The company added seven new clients during Q3 2006. Its order book stands at $16 million for Q4 2007. The company has retained its forecast of Rs 240 crore in product revenue and Rs 65 crore in PAT for FY07. The recent acquisition of Syndesis has paved way for Subex Azure in the fulfilment and assurance space. This is expected to render a positive effect on the latter���s financials in FY08.
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