Aurionpro Solutions To Ramp-up Research And Development Spending In Next Three Years: Global CEO
Commenting on the Ebitda margins being between 20% and 22% in FY25, Ashish Rai said he would “not really count it as a degrowth”.
Software company Aurionpro Solutions is in no mood to cut back on its research and development (R&D) spending in the next few years, the company’s global chief executive officer, Ashish Rai, has said.
Talking to NDTV Profit, Rai said that the company will “try and keep” its Ebitda margins between 20-22% for the next two or three years, and any excess profits will be used to take the company’s R&D budget higher.
“The idea is to keep on expanding into newer markets. I believe the headroom for growth, the size of the opportunity in front of us right now, is so large that we will have to keep spending on R&D to maximise the long-term value for the shareholder,” he said.
Aurionpro Solutions will not think about increasing its profits in the next few years, the company’s global CEO noted.
“As and when we go to a stage where we mature and the growth rates come down, that will be the time to think about it (growing profits). That's not in the next few years,” he said.
Commenting on the Ebitda margins being between 20% and 22% in FY25, Rai said he would “not really count it as a degrowth.”.
“As the software side of the business scales up, as the tech platform side of the business scales up, the profitability in the business improves. We have been stepping up our spending in R&D over the last few years,” he said.
With the company expected to grow its revenues by 30% in FY25, around 10% of it will be used for R&D, Rai explained.
“Three years back it (R&D spend) was at about Rs 60 crore. This year it will be slightly north of Rs 110 crores. So, somewhere in the range of between 9-10% of the topline is going into R&D right now. We do not really capitalise any R&D. All of that is expensed out,” he noted.
With the company putting its excess profits into research and development, the margins may stay flat.
“You will see the R&D expense climbing up year on year. We will have more products coming out. We've got a lot of investments around payments and AI,” Rai mentioned.
Shares of Aurionpro Solutions Ltd. closed 0.88% lower at Rs 1,714.90 apiece on the NSE on Friday. On the other hand, benchmark Nifty 50 ended 0.27% higher at 23,813.40 points.
