Fact Sheet |
VisualSoft Technologies VisualSoft Towers 6-3-1192/2/1, Kundanbagh Begumpet Hyderabad 500016 Tel: 040 3412266 Fax: 040 3411088 www.visualsoft-tech.com Listing: Bombay Stock Exchange, Hyderabad Stock Exchange, |
The harsh reality of technology slowdown has started to hurt. Having
experienced one of the longest boom times known in history, Indian software
companies are struggling to come to face with the reality. Four companies have
issued profit warnings blaming the slowdown of the US economy, with more slated
to come in the next couple of weeks. The sad part of the slowdown is that in all
probability the companies, which were the most profitable thanks to the dot-com
boom, will be the ones that will be the hardest hit.
Among the companies that have announced a profit warning is Hyderabad-based
VisualSoft Technologies, perhaps the only successful products and services
company. One of the most dynamic of the listed IT companies, VisualSoft
Technologies is now going through a process of redefining its business model, to
ensure it sustains the cent percent growth it has been achieving in the past.
Background: Impressive start
VisualSoft India was formed in December 1995 by DVS Raju, ex-promoter and ex-JMD
of Satyam Computer Services (Satyam). Raju headed the marketing division of
Satyam and resigned in 1992. He worked as a consultant for the next four years
and finally set up VisualSoft India in 1995. Raju has over 16 years of
experience in the software area with stints at Danlaw Inc., USA as well as
teaching assignments at REC Trichy and Ohio University.
To speed up the growth of the company, VisualSoft entered the capital markets
in October 1996 and managed to get subscribed in what was one of the worst times
for the capital markets. The company raised Rs 3.15 crore from the market, which
was used to fund its Rs 6.75 crore project to set up a 5000-Sq ft software
development facility at Hyderabad.
Future: Fears of the slowdown
VisualSoft
has issued a profit warning stating that its products sales would see negative
sequential grow-th in the Q4 ended March 2001 following the slowdown in the US.
Notably, out of the total revenues from products segment, the company achieves
almost 50% from a single product.
While all the listed technology stocks have taken a beating in the past
couple of months, we feel that VisualSoft’s inherent strength in high-end
technologies would make it one of the earliest gainers in a market revival.
Hold.
Sushanto Mitra is the founder
of Technology Capital Partners
The views reflected here are of the author and not of this publication. No
liability is accepted for losses based on the information presented here.