Management provided guidance about asset turnover during the conference call
Pankaj Shah: Okay, got it. And sir how should one look at the asset turn, so earlier we used to get a 0.7x over a year. So does this increase with time or how should we look at?
Tarun Dua: See, it’s very, very difficult to kind of, these are all averages, in the sense that like the asset turn also relies on a number of things, the period for which the customers are using the services,so, then there is more scarcity in the market, people want like longer contract period, when there are less scarcity, then obviously people want like shorter periods, but that doesn’t mean that they are going away tomorrow, day after or next month. But they also tend to end up paying a certain percentage more for shorter periods. Now, that being said, like there is also the nature of SKUs, so for the same underlying hardware, assets, like there are a number of
ways in which the assets get monetized due to the nature of the software capabilities as well.
So over there, for each different SKU, the asset terms could vary from all the way from point
0.5 to even like 2. So what is the final blend we are able to achieve like, is again something w
can look back into the past and say that, okay this was what was achieved but, there is a lower bound for that which we can predict, which is like somewhere, anywhere between say 0.55 to 0.6. But that’s the lower bound. But, on the other hand, like there is no upper bound in a software driven cloud, like where, what sort of capability you can bring to the table to achieve like an asset turn. So normally, if you ask me, that was not how we look at our business, we look at our business as a technology business, very focused on figuring out the various industry solutions. And over there eventually like, the asset turn doesn’t matter, because it’s like, very,very capability and technology and software driven business and it’s not about being the cheapest on the market. It’s about creating enough value for the customers.
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