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July 21, 2011 at 1:55 am | Posted in Additional business | Comments Off on Moneycontrol » News » Business » Business News Mastek empanelled for UIDAI, keen on PDS deals of Rs7-15cr
 Mastek empanelled for UIDAI, keen on PDS deals of Rs7-15cr Published on Thu, May 12, 2011 at 11:05 | Source : CNBC-TV18 Updated at Thu, May 12, 2011 at 16:59 Post Office® Savings www.PostOffice.co.uk/Savings New Inflation Linked BondApply before September 2nd Ads by Google
If media reports are to be believed, the Unique Identification Authority of India (UIDAI) project is likely to introduce one of the largest IT contractsworth many a crore. As one of the IT firms that have qualified and empanelled for the UIDAI,Mastek says that the project is big, but not as large as reported, however, it sees a lot of scope “over a period of time.” The company’s chairman, managing director and CEO, Sudhakar Ram says, the firm’s empanelment need not guarantee them winning an order, nevertheless, Mastek is “interested in the public distribution deals (PDS) that have been of the size of Rs 5 crore to Rs 10 crore.” Ram also says that the margins made in government projects are lower than those in the international deals. “In India, we would operate at between 55% and 75% of our international margins,” he adds. Below is a verbatim transcript of Sudhakar Ram’s interview with CNBC-TV18’s Udayan Mukherjee and Mitlai Mukherjee. Also watch the accompanying video. Q: Can you start off by confirming for us whether indeed there is a UIDAI deal? Is it open in the market, what is the size and what is the tenure that is being talked about? A: There have been set of companies empanelled and Mastek is one of the companies that qualified. We need to go through a full process before the empanelment is complete. Having been empanelled, it allows us to play in deals where there is an interface to UIDAI either at the state level or at a central level. Though it is not as large as reported but things will mature over a period of time. Q: Can you give us any sense of the nature of work involved in these kinds of projects? What are your estimates of these individual order sizes that you would be bidding for? A: We have been involved in the public distribution system and we have our own IP built there. Now, public distribution system will have a UID interface and therefore, it will clearly be something that is in our sweet part. Typically, the public distribution deals would be about Rs 7 crore to Rs 15 crore of applications, which is an area that we are interested in. While the overall deal, in terms of the entire hardware and the systems could be much larger, however, for someone like Mastek, it is about Rs 10 crore kind of a deal. We do a lot of work around social justice, things like e-scholarships and looking at tribal welfare and so on, where UIDAI could play a role. There are a number of areas where Mastek has expertise which will benefit UID because the basic identity integration needs to be done. The projects could vary from a few – it could be under a crore to maybe Rs 10 crore to Rs 15 crore kind of an application for us. Q: In projects ranging of the size of Rs 1 crore to 10 crore, are your margins for government projects comparable with what you would get from an international vendor? Or do you operate on slightly lower margins for this government businesses? A: In India, we do operate on lower margins. We cannot get the same margins as we get from – the insurance sector globally or a UK government engagement because of the dynamics of this market place. We, therefore, target a lower margin for our Indian operations. Q: What kind of tenure does it work in if you were to bag a Rs 10 crore contract over? Over how many quarters does that go through for you? A: Rs 10 crore will be implemented in a timeframe of over six to eight quarters. Q: How many other companies have been empanelled at this point? What is the list that sits along with Mastek? A: The list runs to almost eight companies, as per my knowledge. It is not an exclusive list by any means and each company would obviously be bidding for each of this engagements. The most competitive and most technologically attractive will probably be winning the deal. Hence, all this gives us the license to play; it does not guarantee any deals for us Q: What is the nature of the UIDAI project? How much of the eventual IT outlay will be hardware oriented and how much will it be software centric? Where do companies like yours come in? A: Software is a one time cost while hardware is going to be required at each level in the chain. Hence, some of these deals tend to have only about 10% to 15% play for application software and 80% to 90% is hardware networking and other infrastructure elements. Q: Would it surprise you if the software part of it is more than Rs 1000 crore to Rs 1500 crore? A: The applications in over 4-5 years should add up to Rs 1000 crore to Rs 1500 crore. Hence, the number would not surprise me. Q: What is the usual gap between margins of a contract of this nature versus your own margins? A: In India, we would operate at between 55% and 75% of our international margins. Q: When do you expect to hear a final confirmation, in terms of deals being put out and locked with IT companies? Do you think it is going to happen within this calendar year or it is probably going to get pushed back to the second half of FY12? A: As of now, we have no indication when could these deals happen. |
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