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Mumbai-based Silverline Technologies jumped in rankings from #36 to
#18 in financial 2001-02, thanks largely to bringing all its 100% subsidiaries
into the revenue reporting fold. Unlike previous years, the company included the
revenue figures of Silverline Technologies Inc (based in the US), Sky Capital
International (based in Hong Kong), Seranova (based out of India), and the
newly-acquired E-com Server Inc. Revenues grew 10% during the year to Rs 780
crore, but net profit took a beating–down 66% to Rs 41 crore. Silverline’s
operating margins, which have fallen steadily over the last few years, touched a
low of 7%.
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Despite the jump in rankings, it was a tough year for the company. In 2000,
Silverline, which was largely a mainframes and legacy systems maintenance
company, acquired Seranova–a pure play e-biz solution provider–from
Intelligroup. The merger wasn’t an easy one, and was made all the more
difficult by the fact that both entities were roughly equal in size. The long
integration process since has hit overall growth, and last year, the company
laid off 500 of the 2,300 employees of the combined entity–a whopping 22% of
the total workforce.
Also, to rationalize accounting issues for the merged entity, the company
temporarily changed its accounting year from March-April to June-July for just
this one year. The revenues of Silverline’s Hong Kong-based subsidiary, Sky
Capital International–primarily into maintenance, professional services and
old-style body-shopping–crashed by nearly 74%, from Rs 504 crore to Rs 132
crore.
The only good news came in the shape of growing revenues from its US
subsidiary and Seranova. Silverline was listed on the New York Stock Exchange in
June 2000 and recently announced plans to raise equity by $30 million through
either the global depository receipts or ADS route. But with the market looking
the way it does today–tremulous, shaky and still trying to shrug its way out
of the long slowdown–and with Silverline’s numbers looking the way they do
at the moment, perhaps a little patience would pay off greater dividends.