homebusiness Newscompanies NewsBirlasoft's new CEO continues to maintain $1 billion revenue aspiration, but conditions apply
Birlasoft's new CEO continues to maintain $1 billion revenue aspiration, but conditions apply
Whether the provisions will edge higher in the future, Guha said that it all depends upon how the Chapter 11 shapes up for Invacare.
Birlasoft's new CEO Angan Guha, who only took charge in December last year, remains hopeful that the company will achieve its aspiration of $1 billion in annual revenue. However, he added that the timeline may change subject to the fate of one of its largest client - Invacare, which has filed for Bankruptcy.
"The billion dollar number - that still stands," Guha told CNBC-TV18 in an interview. "The timing may change a little bit because we have to assess how Invacare goes. But we are committed to that growth," he said.
Birlasoft's shares tanked on Thursday after one of its key clients - the NYSE-listed medical equipment manufacturer and distributor Invacare Corporation announced that the company and two of its subsidiaries have filed for bankruptcy protection and restructuring.
In October 2019, Birlasoft had signed a 10-year IT services deal with Invacare worth $240 million. Guha said that the company was earning $4 million in revenue per quarter from Invacare, though they used to bill a much higher sum. Birlasoft has served Invacare for four years
For the December quarter, Birlasoft reported a US Dollar revenue decline of 0.3 percent compared to the previous quarter. Guha attributed this to some "unusual furloughs" and some projects going on hold during the quarter.
The company's margin nearly went down to zero from 14.8 percent in the September quarter due to a sharp rise in other expenses. This was due to the company creating a provision of Rs 151 crore against outstanding receivables from Invacare. Guha mentioned that the company has provided what it knew it should provide for. They received the Invacare Bankruptcy notice only 36 hours ago.
Whether the provisions will edge higher in the future, Guha said that it all depends upon how the Chapter 11 shapes up for Invacare and that the company is in talks with lawyers over the future course of action.
Shares of Birlasoft are trading 3.2 percent lower at Rs 263.25. The stock is trading close to its 52-week low.
(Edited by : Hormaz Fatakia)
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