Gemini Communications, a Chennai-based technology and networking solutions provider, is looking to acquire niche companies to grow its business.
Earmarks Rs 30 cr, in talks with a few firms
MUMBAI: Gemini Communications, a Chennai-based technology and networking solutions provider, is looking to acquire niche companies to grow its business. It has short-listed a few firms and is expected to take a final call on the
acquisitions in a month. The company has set aside Rs 30 crore for the buyouts.
“Our expansion plan is to grow geometrically and not just arithmetically. We did approach a few companies overseas, but India commands a premium and the valuations quoted were too high. We have short listed some firms which would add about Rs 25-30 crore in revenue,” Gemini chairman and managing director Vijay Kumar said.
Gemini is looking at domestic companies in the security and storage space, as well as WiMax and radio frequency identification companies overseas, he said.
Gemini is also looking to set up three subsidiaries overseas in FY09. It has already planned a subsidiary in Hong Kong, and hopes to tap South East Asian and West Asian markets from this year, he said. It plans to invest Rs 14 crore to setting up the new subsidiaries, Kumar said.
He added that, in the new countries, Gemini will try to partner with local players to position itself as a product company rather than a purely services driven organisation. The company is also planning a capex of around Rs 25 crore in the next financial year. The firm is concentrating on the non-retail space for its radio-frequency identification foray. Internationally, RFID has caught the fancy of retailers as an automatic identification technology which will replace the barcode. Gemini Communications says that there are other applications such as vehicle detection and identification which the company would focus on.
In 2007-08, the company’s revenue was Rs 236 crore, with a net profit of Rs 27.47 crore. Gemini on Monday announced a split in its equity shares from face value of Rs 5 to Rs 1.
Armed with a pending order book of Rs 240 crore that will be executed in 2008-09, Kumar said Gemini would clock a 50% revenue growth this year. He also expects net profit margin to be stable at 12-13% in 2008-09.
The markets reacted negatively to the Gemini fourth quarter numbers.
The scrip closed at Rs 253.45 on Tuesday, down 4.43% from its previous close.
n_john@dnaindia.net
(With inputs from NW18)
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