Visualsoft to target R&D deals for higher profit

Anshuman Daga

HYDERABAD: Indian software firm Visualsoft Technologies plans to boost its

margins by becoming a strategic research partner for global companies, its

chairman and managing director Raju said.

The company, which specializes in software services linked to geography and

mapping, has already bagged two prized research and development contracts, of

which one is from the global consumer giant Procter & Gamble Co.

Visualsoft earns about 50 per cent of its revenues from product sales when

most other firms in the booming Indian software industry focus on software

services. Its products are targeted at the booming application service provider

market and businesses that provide IT infrastructure including front office

applications and electronic customer relationship management.

Raju said in the long term he expected the value of R&D contracts to make

up about 50 to 60 per cent of the company's software service revenues. The

company's net profit rose sharply to Rs 206.46 million in the three months up to

December 2000 from Rs 75.29 million in the year-ago period. Its income was up at

Rs 416.53 million in the same period against Rs 186.97 million in the

corresponding year-ago period.

"Already known for components, products and high-end solutions, the

company is enhancing value addition by moving to R&D outsourcing contracts

from international clients," UTI Securities said in a recent report on the

company.

Raju and his associates own about 51 per cent of Visualsoft, whose clients

include Intel Corp., Microsoft Corporation and Hewlett Packard. Visualsoft

currently earns about 65 per cent of its revenues from North America while

Europe contributes around 30 per cent.

(C) Reuters Limited 2001.