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R Systems plans to expand its India operations

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CIOL Bureau
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Having completed a successful IPO and acquired US based WebConverse, R Systems is now planning to expand its India operations. In an interview with Pragati Simlote of CyberMedia News, R Systems CMD Rekhi Singh talks about his company’s expansion as well its acquisition plans. The company plans to acquire companies outside India, which fit its market and geographical strategies.

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How has the journey been for R Systems and what kind of growth are you looking at going forward?

R Systems International Ltd was founded in 1993. We are a global company with five delivery centers in three countries – India, US and Singapore and provide outsourced product development and customer support services.

Last quarter we grew about 27 per cent YoY and our profit grew by about 98 per cent YoY. It was a good quarter for us and that is because of the validation of the business that we are in i.e. outsourced product development. This year we plan to do close to Rs 200 crore revenue and an EBT of close to Rs 22 crore - Rs 23 crore. We are also planning to up our India headcount to 2000+ by the end of 2007. We currently employ around 1,350 people in our three centers in Noida, Chennai and Pune.

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What advantage does R Systems has as a company?

Most of the big boys are doing application development and we are focusing on product development. We work with software companies in US and outside and we help them develop the product depending on which part of the lifecycle the product is in. And each part of lifecycle has its own strategies attached to it. The second advantage is that the relationship becomes very strong with the customer and as a result in last quarter itself 90 per cent of our business was repeat business.



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What are your plans for expansion?

We had raised money for capacity expansion through our IPO and are growing our Noida, Chennai and Pune centers. We would be adding more seats there. We plan to up our India headcount to 2000+ by the end of 2007. In the next two years we may just expand what we have and then maybe look at Mohali or Chandigarh, but right now we are expanding our three centers.

Please throw some light on the WebConverse acquisition? What is your acquisition strategy going forward?

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We acquired US-based WebConverse, which is in tech support and specializes in mobility application. In the product lifecycle, the last part of the cycle is tech support and so it fits in well with our whole strategy. We are still in the process of integrating it. There are some govt. regulatory approvals, which are needed but all contracts have been signed. By the end of this week we would have those approvals and then we would start the integration process.

We would like to acquire companies in basically two areas. One that fits into our integrated product lifecycle management (iPLM) business. We are also looking at companies that fit into our market or geographical strategy. We are not looking at acquiring any Indian company. We could be looking at an acquisition in market places like Europe, Japan and the Asian marketplace – Singapore, Malaysia.

What are your target segments?

We operate in four major segments: banking and finance, hi-tech – music management software, online music, supply chain and managed manufacturing and public sector undertakings. And recently we added healthcare in the segments we work on. All of the sectors are growing, but I expect major growth to come from product outsourcing.

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