Chennai: French software maker Dassault Systemes’ India revenues are unlikely to surpass last year’s 55% growth amid a lacklustre business environment, a top executive said on Wednesday.
“The Indian economy isn’t doing well and so we will be happy with last year’s level of growth,” Andy Kalambi, chief executive officer of Dassault Systemes’ Enovia brand, said in an interview. “We have moderate expectations.”
India’s gross domestic product growth had dropped to a nine-year low of 5.3% in the quarter ended March, stoking worries about a prolonged slump. Earlier this week, the Reserve Bank of India (RBI) retained its key rates as inflation concerns outweighed growth fears.
The Dassault Systemes logo is seen at the company’s headquarters in Velizy, near Paris, France. Bloomberg.
India, which is the third-largest Asian market behind Japan and China for the three-dimensional modeling software maker, saw a 55% growth in 2011 revenue. The Asia region brought in 27% of Dassault Systemes’ €1.78 billion revenue last year. The French company doesn’t provide a national breakdown of revenue figures.
In India, aerospace and automotive companies comprise more than 45% of their client base in the country.
“Inflation is one part and salaries aren’t growing any faster, and so it will hit demand and cars won’t get purchased,” said Kumar Kandaswami, senior director and country leader for manufacturing at consultancy Deloitte Touche Tohmatsu in India, pointing to woes dogging the country’s automotive sector that could impact technology investments.
Still, the French company’ expectation for 2012 revenue growth in India is higher than the 5-7% growth outlook for global sales this year.
In India, Kalambi expects Dassault Systemes to tie up with 250-300 additional educational institutions to offer training in the company’s modeling software. It provides software and academic support to 800 technical engineering institutions in India.
The Enovia chief executive didn’t dismiss the possibility of acquiring a suitable Indian company that has a technological edge.
“We are an extremely acquisitive company and have cash in our bank,” Kalambi said. “India has some interesting companies.”
In April, Dassault Systemes announced its intent to buy geological modeling and simulation company Gemcom Software International (Gemcom) for approximately $360 million.
Reuters contributed to this report.