3i Infotech to shift focus on IT solutions

Written by Rachana Khanzode | Mumbai | Updated: May 7 2010, 03:45am hrs
ICICI-backed 3i Infotech said it is laying stress on the IT solutions and transaction services business, a change from its earlier strategy which revolved around the products business. Currently, the three segments contribute almost equally to revenues, but going ahead, product services will contribute just around 20%.

V Srinivasan, managing director & CEO, 3i Infotech, said: We will focus on IT solutions and transaction services business as we see pick up in demand in these areas, though, we are not doing away with products. At the end of the Q4FY10, the firm said the order book was at Rs 1,654 crore for a tenure of about seven months. We expect a growth of 10% in the transaction services and about 25% in IT solutions business from emerging geographies like the West Asia, Far East and Europe, said Srinivasan.

Though the firm hasnt set a timeline, analysts are concerned about the focus on services business since peers like Polaris, Hexaware Technologies, HCL and Infosys Technologies are doing well in that business. At the same time,

ICICIs intention to move out of the firm has added to concerns about 3i-infotech being left without a promoter. The combined holding of ICICI Bank and a fund managed by ICICI Venture in 3i Infotech has been reduced from about 39% to about 23% over the last year.

3i Infotech, which had about Rs 1,779 crore of debt at the end of March 2010, said it has restructured its foreign loans and can pay them off over a longer period. Amar Chintopanth, ED &CFO, said, We do not see problems with repayment as it is now spread across 5-6 years...