Manoj Kumar, CEO and Managing Director, Ricoh India, sees huge opportunity in the Govt to Citizen Services, IT Infrastructure Services, System Integration, Digitization and Document processing.
In an interview with Sourabh Pandhare, Manoj Kumar said, 'We are working on several large projects in various central and state departments and expecting large part of revenue from the Govt sector.'
Interview Excerpts: 1. Recently Ricoh India declared the March 2015 quarter results. The company has recorded a 77% growth in revenues led by four-fold jump in IT services revenues. Do you think such high growth rate will be maintained going forward? Will IT services segment remain key driver?
Ricoh closed last financial year ended March 31, 2015, with a turnover of Rs 1,637 crore. We have grown at a compounded annual growth rate of about 60 per cent over the last few years and we expect to continue with this growth. IT services is one of our key growth engines which contributes to 45% to our total revenue. It not only complements the core business but also enable us to grow IT services business in its own right. Recently Ricoh witnessed an increase in the traction of its IT services business in the domestic market. Further to this, in the coming years we would like to expand our business and increase its contribution to 60% of our total revenue.
2. Ricoh India is one of the providers of IT services to the government. Do you think e-governance projects are next big opportunity for the company?
Ricoh has been working very closely with various Govt departments both in the fields of Office Automation and IT Services. With Digital India campaign gaining momentum, we see a huge opportunity in the Govt to Citizen Services, IT Infrastructure Services, System Integration, Digitization and Document processing. We are working on several large projects in various central and state departments and expecting large part of revenue from the Govt sector.
3. Could you share the progress on the government projects that are in hand?
Ricoh India has won more than Rs 150 crores projects in collaboration with Uttar Pradesh Government. Recently won projects are:
> Ricoh India has recently implemented e-District project of order value over Rs. 100 crores in the State of Uttar Pradesh which is State Wide Roll-out of e-District MMP. The project has provided a comprehensive solution towards Supply, Installation, Integration, Commissioning, and Management & Maintenance of Computing Infrastructure. The e-District MMP is to be implemented in all 69 districts of Uttar Pradesh, out of which 35 district implementation in Phase I has been completed.
> Ricoh has also executed UP Irrigation project of order value Rs 17 crores for Supply, Installation and Maintenance of IT infra i.e. Desktops, Laptops, Printers, UPS, Microsoft Licenses, Plotters, etc. at 900 Plus locations to all the Jr. Engineers and Regional Offices spread across UP state. The project was funded by World Bank and was successfully completed in the month of Sep 2014.
> Another big win which has come in a few days ago is the Rs. 200 Crs project for Department of Education, Delhi Govt for implementation and maintenance of ICT solutions in 1,110 school of Delhi. This prestigious project includes supply, implementation and maintenance of ICT hardware and education content along with teaching staff to Govt schools in Delhi.
> The company was also responsible for some large e-governance projects like e-District in Uttar Pradesh, Tamil Nadu Health project, Karnataka Panchayati Raj project and Chhattisgarh's cloud-based tablet solution.
4. How many new government projects you expect to win in fiscal 2016?
It is difficult to put a number to this. But what we can say is that we see a huge opportunity for us in the Govt to Citizen Services projects.
5. How do you see demand for office automation products in India over next couple of years? What is your current market share? How much increase you anticipate in market share by end of current fiscal?
Office automation industry had flat growth for few years, however, last fiscal year witnessed a decent growth in this sector. This happened primarily due to steady central government projects and customers willing to upgrade to innovative products along with higher adaption of managed services. According to a recent report by IDC, the copier based printers devices is expected to grow by 15% in CY 15, whereas A4 printers are only to grow by 5%. Ricoh is currently market leader in copier based printing devices with 23.85% market share. We intend to further strengthen this segment and maintain our market leadership.
Other office automation products such as digital duplicators and projectors are expected to have a flat growth.
6. What is your target for new office automation product launch in current financial year?
Ricoh offers a number of office automation solutions, ranging from software tools to fully managed document and information automation solutions. These solutions helps companies manage their documents efficiently and streamline & automate business Processes.
In the coming fiscal, we plan to come up with more innovative products that will help companies and governments to manage their documentation requirements more effectively.
7. Could you throw some light on capex and investment plans for the financial year 2016?
Ricoh has plans to invest in various sectors like healthcare, manufacturing, BFSI etc in the coming year. The company has recently announced their plans to invest up to Rs 500 crore in expansion and adding new products and services. Ricoh is very active in the space of digitization and in mission mode projects. With India planning to invest billions in the digital India campaign, a number of opportunities are likely to unfold where Ricoh is aiming to work as a partner.
8. What is your overall revenue target for the financial year 2016 and 2017?
Ricoh India is targeting a turnover of Rs 4,000 crore by March 2017.
9. The company's profit has tripled for the March quarter on year-on-year basis. Do you think, the triple digit growth would be sustainable over next couple of years?
Achieving an excellent growth of 3 times in 3 years with 50%+ CAGR, IT services continue to be one of our key growth engines in company's contribution in the coming years. Our strong capabilities in the domains of Imaging, Communication and IT Services have enabled Ricoh to emerge as a one-stop business solutions provider, which is known as Ricoh's 360 degree framework. This framework will help in maintaining the company's growth. We see no reasons why we won't be able to maintain 3 times growth in coming years.
