Allied Digital Services Ltd: Gaining from Dollar Appreciation!!

While the global slowdown has made things difficult for India IT companies, most firms are able to increase their earnings due to appreciation of the dollar, said Nitin Shah, CMD, Allied Digital. Excerpts of the interview:
Q. What has been the impact of the economic slowdown on the IT industry? How are the Indian IT companies having global operations doing currently?
The economic slowdown has resulted in reduction in discretionary expenditure and capex. Decision making in sales has become slow. Indian IT companies are trying their best to retain existing clients but the acquisition of new clients is slow, due to reduction in expenditure and slowdown in the market. However, the good news is that most of the IT companies are making money, due to dollar appreciation. This is some sort of a "blessing in disguise" as earning from the same business is more (due to dollar appreciation).
Q. What about Allied Digital? How is it beating competition in the changed scenario?
Allied Digital has been foreseeing a paradigm shift in the IT industry- especially as far as IT computing is concerned. More and more people are adopting 'cloud computing' (pay for use model). This therefore, certainly increases the opex-spend of the customers. Allied Digital has the unique advantage of managing the IT infrastructure by having lesser dependency on human resources and by leveraging tools & technology. This automation in service delivery-resulting in huge amount of savings in the cost of services.
Q. What has been the growth strategy of Allied Digital in recent years?
Allied Digital's growth strategy is to focus more on IT infrastructure management services business and focus mainly on large customer base in India as well as in USA, UK and Australia. Allied Digital's business model will be made more outcome based and SLA driven against the practice in IT industry in recent past when the billing was based on time and material model (linear model).
Q. Is your company also looking at fresh acquisitions for growth?
The worldwide slowdown has impacted heavily the smaller companies' operations in the overseas markets like USA, UK & Australia. Because of the sluggish market, sales cycle gets unduly delayed. So our strategy is to buy and acquire such performing companies rather than building on own. In the current scenario, in the overseas market, buying new business is far better alternative than building and at the same time it is more cost-effective.
Q. What are your future growth targets and plans?
As I have stated earlier, I believe in 'small term pain, long term gain'. We see 2011-12 as the year of transformation. Our plans in the transformation process will be vigorous at every level. The growth for the current year may not be high but we will be able to have complete readiness to exploit cloud computing and service business. All this will eventually lead to Allied Digital's substantial growth in the coming future.


News Body: The Economic Times