SSI to close debts by Sept, align as Services Company

SSI, providers of consulting and software solutions, which has a debt of nearly 200 crore million (Q4 FY03) intends to close all its debts by September this year. Meanwhile the company is aligning as a software services company and is consolidating along two lines - size and domain capabilities. 

Announcing its Q4 results for the year 2003, Kalpathi Suresh, Chairman and CEO of SSI Ltd denied recent reports on SSI selling off its software division and quoted it as a misreport. "SSI is in a restructuring process where we intend to align ourselves as a services company and focus on verticals. The restructuring is expected to go for yet another six months following which the profitability is expected to grow 3-5 times starting from September." They are looking at acquisitions and have already identified 3-4 companies with whom talks are going on. "One companies happens to be in the BFSI space and another company is focussing in the same area where we are into, but bigger than us with significance presence in US. We are concentrating more on the bottom lines and these acquisitions are also aimed at adding to our bottom lines even if it's a company as large as ours is. " The acquisitions will not happen through debts but through equity. 

SSI has added four clients and let go off eight clients to concentrate more in their focus areas - BFSI and government segment. 

Talking about debts, SSI is optimistic of making a cash of Rs 7-8 million ones they close in their debts of Rs 200 crore million, which is to happen by the end of September. "We had a significant asset which we leased out to TCS. Secondly there are people who are ready to come with significant premiums and invest in our company. We hope to ramp up profitability by the next quarter," said
Kalpathi.

Compared with last quarter nearly 53 people left the organization, of which 10-15 left naturally and the others had to be terminated. "We had to terminate some of our employees following our focussing on verticals like BFSI, government, security solutions etc, where we don't need certain people."

As part of the consolidation process, SSI intends to bring out curriculum where they intend to reach out beyond IT. With SSI's education and training division business being integrated with Aptech Ltd, there is no contribution from this line of business to SSI's revenues. 

The consolidated operating profit margin (EBITDA/revenue) in the consulting and software services business was 3.9 percent in Q4FY03 compared to 3.6 percent a quarter ago and 10.1 percent a year ago. At the end of the quarter, SSI had 90 clients, including four added during the quarter. 

Cyber News Service