Company Update: Infotech Enterprises

Company Update: Infotech Enterprises
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First Published: Tue, Sep 09 2008. 09 42 AM IST
Updated: Tue, Sep 09 2008. 09 42 AM IST
Infotech Enterprises, a mid-sized IT service provider, has acquired California-based design service provider Time to Market (TTM), a provider of ASIC design and embedded software solutions.
TTM started its India operations in 2000 as a VLSI training center, the first in India to offer an industry-oriented course in IC Layout Engineering.
The company has 40 engineers in San Jose, CA, USA and another 80 in Hyderabad and Bangalore.
TTM will now become part of the newly created Hi-tech vertical at Infotech and will be consolidated with effect from 1 October, 2008. The vertical will focus on US markets and leverage its recent entry into Japan in the near-term.
The deal size has not been disclosed, though around 80% of the transaction value will be a front-ended payment, with the balance 20% payable as earn-outs over the next two years.
TTM recorded a consolidated total income of $7.5 million in FY08 and had PBT margins of around 10%. According to company sources, the Hi-tech Sector is an important growth market for it.
A NASSCOM BAH report on design engineering services finds that the global engineering spend on Hi-tech design services stood at $170 billion in 2004 and is estimated to reach $300 billion by 2020.
The potential for offshoring in the Hi-tech industry is estimated in excess of $15bn by 2020, thus signifying the huge potential for growth. We maintain a BUY on the stock, with a target price of Rs283.
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First Published: Tue, Sep 09 2008. 09 42 AM IST
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