Macro headwinds hit Zoho’s overall growth
MUMBAI : Zoho Corp. is experiencing a revenue growth slowdown due to macroeconomic challenges in its key North American market. Chief executive Sridhar Vembu said the company has turned cautious regarding spending and hiring, as many of the problems are unlikely to be resolved quickly.
“We will have temporary fluctuations. But, you also have to take into account the long-term backdrop. That is why we turned very cautious over a year ago, and we remain cautious in terms of hiring and other expenses," Vembu said.
Founded in 1996, Zoho reported $1 billion in annual operating revenue in November last year. While revenue for the company is still growing at a slower pace, the company is hiring “very cautiously". Vembu, however, is optimistic about long-term tech outsourcing spending, and added that company remains bullish on IT spending growth in India.
Zoho is also in talks to invest in manufacturing advanced chemistry cells—the key component of batteries. “We are looking at this space and are in talks with some stakeholders. It’s too early to announce, but we need to build deep tech and manufacturing capabilities in our nation.
There is scope here, too, with advanced cell chemistry production-linked incentive (PLI) schemes. We need good people with experience in cell R&D, and we’re talking to some right now," he said. However, this initiative can be run via subsidiaries and integrated later on.
“For instance, we have a medical equipment subsidiary where battery technology can be integrated," Vembu added. Zoho is also developing “domain-specific" artificial intelligence (AI) models to cater to specific sectors. This, Vembu said, is also helping the company optimize its long-term capital expenditure.
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