On the Growth Track

Zylog Systems is a technology solutions provider to clients across verticals like banking, insurance, telecom, manufacturing, retail and pharmaceuticals. The company provides a portfolio of IT products and services, which it has expanded through a combination of organic and inorganic growth. It offers both onsite and offshore services depending on the client’s requirements and the nature of the project. Strengths Niche player. The company is a niche player with specialisation in field service automation, mobile solutions, inventory management, radio frequency identification (RFID) applications, banking, insurance solutions and replacement technologies. Zylog derives around 65 per cent of its revenue from IT services and the balance 35 per cent from products and solutions. It executes most of its projects onsite. It earns 85.3 per cent of its revenue through onsite work and 14.7 per cent through work done offshore. Profitable acquisitions. Between FY08 and FY10, the company made a few acquisitions that have helped it achieve growth and also widened its portfolio of service offerings. In the past, most of the acquisitions made by the company were small-sized (except the Brainhunter acquisition in FY10). These acquisitions were in the IT solutions and products space. And they were financed mostly through internal accruals with only a small proportion of debt funding. While some of these acquisitions have opened up opportunities in new markets and verticals, others have strengthened the company’s position in certain business lines. For instance, the acquisition of UK-based Anados Software in FY08 gave Zylog an end-to-end insurance solution. The acquisition of Ducont in FY09 marked its foray