Intelligent engineering solutions firm Cyient is actively considering a few acquisitions as part of an inorganic scale-up strategy within a year to sharpen focus on new competencies, especially in the digital and AI technology space, verticals such as automotive and new markets, including the U.S. defence sector.
The aggregate valuation of the firms would be more than $100 million, Executive Director and CEO Sukamal Banerjee said in a select media interaction here on Wednesday.
“The idea is not to build up numbers, but to make sure we get competencies which are in high growth areas so that we can adopt them, in terms of growth they bring in as an asset… also cross-leverage them across our customer base,” he said. On the number of acquisitions and the likely timing, he said it could be three and happen within six months to a year.
To queries, he said Cyient wanted to grow its presence in engineering research and development area, particularly in the automotive space. “Automotive is an area where Cyient presence is not significant compared to where it should be…” he said. Likewise, software is another area.
“We have all the competencies to work in U.S. defence, but we do not have the physical legal infrastructure in place,” he said on how acquisitions in such cases would help pave the way and accelerate the process that through an organic route will take 2-3 years. An acquisition can help get there in nine months and shorten the cycle, he added.
“Anything and everything we can do about filling some of the market gaps or industry gaps, we will definitely not shy away from looking at it,” Mr .Banerjee said, seeking to highlight how Cyient’s debt-free balance sheet and cash generation are bound to aid the process.
The intent is very clearly to do as quickly as possible. “Our board is also supportive…” he said.
On the impact of Artificial Intelligence, he said AI is fundamentally changing a lot of engineering processes. Software is the most evident. In this backdrop, the emphasis is trying to be ahead of the curve. “We are investing heavily in terms of making sure that these areas are well thought out, well structured, so we can go and talk to our customers before customers come and ask us adopt,” he said.
To queries around hiring plans, Mr. Banerjee said as a group Cyient’s headcount is about 16,300. The Digital, Engineering and Technology business hiring is around 1,000 people a quarter, while net additions will be lesser than. In the longer term, the focus would be on hiring more freshers, from around 10-15% of the total to 25-30%.