I think the last two day’s developments are significant. There was an announcement and two news articles covering sankhya infotech today in business standard and Hindu and these articles gives good indication of future business plans for the company. Clearly the company is trying to get more eyeballs.
1. The entry of sankhya in the most lucrative US markets opens probably the single biggest revenue channel for the company which incidentally is also the biggest
defence spending nation.
2. This entry will be significant because this should decrease the wage cost. The wage cost increased in 2011 when France asked sankhya to create jobs in the
country and not in india (as France was battling around double digit un-employment rate) and those jobs were onshored. Albeit this is expected to come back slowly, but the start in US, though it will also create jobs in US, it would not require significant on-shore jobs and most part of it could be done from india. This could significantly improve the EBITA margins in future.
3. Appointment of ex-Microsoft India chairman and Netapp India’s president as Additional directors brings in further credence to the company in the eyes of not only investors but also potential clients which shall in-turn bring in bigger projects.
Let’s wait and see how this exciting story pans out.
God Bless !!!