Sasken to maintain revenues at 1.8 to 2 million per quarter: CEO

In an interview with ET Now, Rajiv Mody, Chairman & CEO, Sasken Communications Ltd, talks about the company's plans and strategies. Excerpts:

ET Now: Could you run us through the top line as well as bottom line growth numbers?

Rajiv Mody: Yes, we have grown in our services business by about 2.6% sequentially quarter on quarter. On a product side we have drop by about 5% so overall there is a growth of about 1.6% overall, so we have seen good growth coming in the services side overall.

ET Now: In terms of future growth outlook particularly for services do you feel you will maintain it or it will be on the upside going forward?

Rajiv Mody: If we look at our Q1 numbers we have the utilisation numbers little lower than we had anticipated and expected because it took us a little longer for our people to get trained in certain areas. However, going forward we are tightening and seeing how we increase our utilisation. So on the backdrop of that and also whatever activities and whatever opportunities that we see particularly in the Android segment we definitely see that we will see better results and better growth in the second half of this fiscal.

ET Now: Just to highlight for our viewers in quarter two while this time around you have seen a dip in quarter one would you be able to substantially cover up for what quarter one has missed out?

Rajiv Mody: If you are referring to the EBITDA margins then definitely we were working to see and we can improve from there, however, if I compare from quarter one to quarter two there is going to be some impact on the EBITDA because of the salary increases that becomes effective starting July. All efforts are on to see that we improve out utilisation and at least cover up on our EBITDA margins to maintain them and then going forward improve up on them, as we go forward into the fiscal year.

ET Now: On the product side could you give us an update as to any new products?

Rajiv Mody: As far as we continue to sell component technologies both on the audio and the video side into very different verticals as of today and we continue to see licensing revenues coming in, royalties is a function of frankly how many volume shipments and that is not necessarily in our control. However, having said that we see that we will maintain and sustain our revenues at 1.8 to 2 million per quarter and deliver the EBITDA margins that we have delivered so far on our product side of the business.
ET Now: Could you also give us some more clarity in terms of the while you said that there has been an impact due to salary hikes, how much of an impact has been there and will this continue over the next few quarters as well?

Rajiv Mody: Overall we have given about 11% to 12% increase in salaries globally excepting for Finland where the salary increases happen in the month of November. So on an average in India it is about 11% to 12%, abroad it is about 5%. For the full year it has an impact of about 5% on the EBITDA but we expect that we will be able to cover it up by pulling other levers utilisation being one of them, bill rates being the other to ensure that we bring up our EBITDA margins on a full year basis.

ET Now: Are you hoping to increase bill rates in the coming few quarters and also if you could highlight in terms of the overall hiring cost that you had, have you had a substantial hike a hiring cost this time?

Rajiv Mody: As far as the bill rates are concerned we definitely expect the bill rates to increase going forward. As a matter of fact in the last few quarters whenever we have seen increase in bill rates which we have seen with most of our customers we have informed the market about it. Similarly there were revisions also for bill rate increases during this quarter and we have gotten increases, however, most of the increases now should happen only starting 1st of January in the new calendar year. So we expect the bill rates to definitely improve from where they are, so this is the trend that we see.