Chennai-based Take Solutions has let go nearly 100 clients in South East Asia and Middle East leading to a reduction of about 200 employees in those regions, said its vice chairman and managing director HR Srinivasan.
“The number of clients let go was large but they contributed only 10 per cent operating margin. With such a low margin it was difficult to sustain the business. We decided to focus on high margin business of life science. This realignment was done in the last 18 months,” he told BusinessLine .
Take Solutions was doing supply chain execution (shop floor planning) and supply chain planning for those clients.
The realignment led to higher operating profit of 21.3 per cent for the year ended March 31, 2015 as against 19 per cent a year ago. This was achieved despite a 10 per cent drop in revenue during the year, he said. Net profit for the year ended March 31, 2015 was ₹70 crore on revenue of ₹733 crore as against a net profit of ₹58 crore on revenue of ₹816 crore in the previous year.
Srinivasan said there was a change in revenue earning between the two verticals - supply chain management (SCM) and life sciences – that the company operates in during the year. Revenue from SCM dropped to 28 per cent in financial year 2015 when compared with 39.5 per cent in the previous year. On the contrary, revenue from life sciences increased to 64 per cent as against 52.6 per cent in the previous year, he said.
“We expect annual revenue to grow over 20 per cent after the realignment,” he said.
Nine out of the top ten pharmaceutical companies are clients of Take Solutions, which help them in regulatory compliance. In the last five years, the company has made over two lakh submissions with regulators in 29 countries, including the US and Europe, he said.
On the acquisition strategy, Srinivasan said the company has nearly ₹125 crore cash in hand and has been trying to do one in the last five years but has not found the ‘right target.’ “We will continue to explore an acquisition target,” he said.
He denied that the company is up for sale. “Recently, I denied in a television channel of a rumour that a large information technology wants to buy us. We operate in a niche area and want to build a large company and would never sell our business,” he said.
Srinivasan said that the addressable global market for life science research and development is around $16 billion with equally divided between collection of data, and analytics and solution. Nearly 80 per cent of analytics and solutions are done in-house by global pharma companies. Take Solutions is fighting for the balance 20 per cent with competitors like Medidata, he said.
Take Solutions has an order book position of $70 million at the end of last fiscal for around eight months, he said.
Share price of Take Solutions on the Bombay Stock Exchange closed at ₹110.50, up by ₹2.