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Magnamious Targets over Rs 8 Crore from Services, Cloud

Amit Singh

Mumbai-based systems integrator, Magnamious Systems, is betting big on its services and cloud business. With a focused approach, the company is targeting to double its profits in the current fiscal and to have services revenues exceeding Rs 70 lakh per month over the next 12 months.

Jiten Mehta, Magnamious
Jiten Mehta, Director, Magnamious Systems

The company, which saw revenue of Rs 50 crore in the last fiscal, is looking for a flat growth in the current fiscal with focus on bottom-line. “Roughly a year back, we took a conscious call to pick only those projects offering at least 12-15 percent services revenue. This fiscal, while our revenue growth will be flat, we will surely double our profits. Looking at our performance till now, we are on the right track. And, to further increase profitability, we have started denying projects with low margins,” elaborated Jiten Mehta, Director, Magnamious Systems.

The company is taking calculated steps to ensure at least 5-7 percent margins on products and further 12-15 percent through services in any infrastructure project. This way, it is ensuring healthy margins of 17-22 percent.

In addition, Magnamious has recently started with a practice of mandatory 60-days credit from distributors and vendors, which further increases its profitability by saving at least 1 percent on finance costs. “This way, we are reducing the capital needed for a project, which not only adds to our bottom-line but also gives an opportunity to rotate our capital effectively. Distributors and vendors are allowing extended credits as we command sizable business and confidence of our customers,” shared Mehta. “Practically, 60-days credit allows us to run business with zero-investment.”

The company has executed six large projects this year, including a recent SAP HANA project worth Rs 1.5 crore, of which hardware accounted for Rs 1 crore and services about Rs 12 lakh. In addition, it executed a bandwidth aggregation project for a pharmaceutical company across its 35 plants. It also implemented Web Application Firewall for few BFSI customers. Further, it implemented a DLP project for Sesa Goa Iron Ore, a Vedanta Group company, for services revenue of Rs 40 lakh over 3 years.

Further, the company is focusing on cloud services focused on Azure and Office 365. Magnamious recently became Microsoft Cloud Solution Provider in July 2017. The cloud business contributes Rs 12 lakh per month, which the company is targeting to increase to Rs 50 lakh per month in a year.

“In just 3-4 months, we have converted 11 large customers from on-premise to cloud, and will surely register cloud revenues of Rs 22-25 lakh per month by March 2018. This is a highly profitable business with margins of 20-22 percent. Apart from Azure, we also sell white-labeled IaaS from Netmagic and Web Werks,” informed Mehta.

Moreover, the company has recently established a NOC to offer 24/7 managed services for network and server management. We already have six customers onboard and are targeting Rs 60 lakh from managed services by March 2018.

Further, Magnamious has recently upgraded to become a Platinum partner for Citrix in October 2017. “We have now become a service provider to large SIs like Wipro, HCL and IBM. We are now mandated to manage and implement all the Citrix projects for national SIs, which will be another big source of services revenue,” added Mehta.

Detailing on the customer acquisition strategy, Mehta told that they add at least 15-20 new customers, providing a minimum of Rs 30 lakh business, every year. The incentives of the sales teams are dependent on the addition of at least two new customers each quarter. The company is focusing on verticals like manufacturing, BFSI, pharmaceuticals and real estate with bottom-line-intensive businesses including cloud, managed services, mobility, and security.

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