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The Value Angle

| 4/4/2013 9:02 PM Thursday

While engineering software solutions provider Geometric Ltd. is a part of the Indian IT cluster, it stands out quite distinctly by virtue of its niche and differentiated products and solutions, says Sagar Lele

  • The premium for solutions is increasing and the pricing for vanilla services may be slightly under pressure. Customers are now looking at linking the value and not the cost associated with these solutions to how much they are willing to pay for them.
  • I believe that in every adverse situation, there is an opportunity. Over the last quarter, we have thought through our approach to the market and we have concluded that ‘Less is More’.

Manu Parpia

MD & CEO, Geometric Ltd

Remember high-school mathematics, which told you that the sum of the angles of any triangle would invariably be 180 degrees – no less, no more. Later, some of us may have come to a key differentiator – the dimension in which that triangle exists. Now, you could actually conceive of a triangle on the surface of a sphere. This is a completely different figure with more dimensions, a triangle indeed, but one whose angles sum up to more than 180 degrees! The factors that go into understanding this unique entity called a ‘spherical triangle’ – the calculation of angles, lengths, area and the theorems associated with it – all lend you a different standpoint of looking at it.

Similar is the case with the IT industry. Companies are looked at as in the same basket and are judged using the same metrics. Global technological spending patterns, the effects of Hurricane Sandy, the December holidays, pricing dynamics and hiring are among the typical factors that are looked at while judging any IT company. Add a dimension, look deeper and you might see something different! Geometric is an IT company, true. But how congruent is it with generic IT companies?

An interesting fact is that the correlation coefficient between the daily returns of Geometric and the BSE IT Index for the last one year is -0.06. The correlation coefficient varies between -1 and 1, representing perfect negative correlation and perfect positive correlation respectively. This makes 0 signify no correlation between the movements of two particular sets of numbers, which means that in the case of Geometric, it has hardly any correlation with the BSE IT index. This further validates the fact that we need to look at the company in greater detail and understand its operations and functions to a larger extent, rather than the usual criteria used to judge the IT pack.

 

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