- Revenue: INR412.7 crore for Q4 FY24, up 11.8% sequentially, down 0.9% YoY.
- EBITDA: INR64.7 crore for Q4 FY24, up 22.8% sequentially, with a margin of 15.7%.
- EBIT: INR55.9 crore for Q4 FY24, up 27.8% sequentially, with a margin of 13%.
- Other Income: INR15.9 crore for Q4 FY24, up 49.7% sequentially.
- PAT: INR52.5 crore for Q4 FY24, up 27.2% sequentially, down 12% YoY.
- EPS: INR8.9 per share for Q4 FY24, up from INR7.01 last quarter, down from INR10.13 YoY.
- Digital Operations Revenue: INR202.4 crore for Q4 FY24, up 26.2% sequentially, 8.1% YoY, with an EBIT margin of 23.5%.
- Digital Experience Revenue: INR51.8 crore for Q4 FY24, up 7.4% sequentially, 3.8% YoY, with an EBIT margin of 11.8%.
- Digital Technologies Revenue: INR148.5 crore for Q4 FY24, down 1.9% sequentially, 12.4% YoY, with an EBIT margin of 20.7%.
- Full Year Revenue: INR1,549.9 crore for FY24, up 6.2% YoY.
- Full Year EBITDA: INR244 crore for FY24, with a margin of 15.7%.
- Full Year EBIT: INR207.7 crore for FY24, with a margin of 13.4%.
- Full Year PAT: INR198.2 crore for FY24, up from INR188.9 crore last year.
- Cash and Investments: INR653 crore as of March 31, 2024, with zero debt.
- DSO: 67 days as of March 2024, unchanged from March 2023.
- Geographical Revenue Distribution: US 54%, UK and Europe 13%, Rest of the World including India 33%.
- Industry Revenue Distribution: Technology and Consulting 27%, BFSI 25%, Education and Publishing 12%, Manufacturing, Infra and Logistics 12%, Nonprofit/NGO 11%, Retail 9%, Other Segments 4%.
Release Date: May 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 11.8% and EBITDA increased by 27.8% on a quarter-on-quarter basis.
- For the financial year '24, revenue growth was 6.2% over FY23, maintaining double-digit EBITDA margins at 15.7%.
- Added 10 new customers during Q4 FY24.
- Recommended a total dividend of INR5 per share for the year ended March 2024.
- Acquired Dextara Digital, aligning with growth strategy focusing on hyperscalers and the US market.
Negative Points
- Digital experiences margin took a hit during the year.
- Digital technologies revenue declined by 1.9% on a sequential basis and 12.4% on a YoY basis.
- PAT after NCI was down by 12% on a YoY basis.
- EPS for the quarter was lower than the same quarter last year.
- Western world slowing down on technology and outsourcing spend due to uncertain macroeconomic environment.
Q & A Highlights
Q: Why did the Digital Technologies division see a sharp drop in margins in Q4?
A: The drop in margins was primarily due to heavy investments in the AI space, including building small language models and copilots. These investments were not capitalized, leading to a direct impact on margins. (Rahul Kanodia, CEO)
Q: Will Dextara be included in the financials from Q1?
A: Yes, Dextara will be incorporated into our numbers starting from Q1. (Rahul Kanodia, CEO)
Q: What is the expected additional payout for the Dextara acquisition?
A: The balance payout depends on performance parameters and could range between INR60 crore to INR70 crore. (Rahul Kanodia, CEO)
Q: What is the current pipeline status compared to the previous quarter?
A: The pipeline has slowed down and currently stands at about EUR200 million, down from EUR245 million in the previous quarter. (Rahul Kanodia, CEO)
Q: How is the company targeting the rebuilding infrastructure in the US?
A: We are targeting metro and road transport segments, focusing on deals between $10 million to $40 million. We have a decent pipeline in this area. (Rahul Kanodia, CEO)
Q: Can you elaborate on the AI developments and their impact?
A: We have built small language models on top of large language models for more precise responses, integrated with Microsoft, OpenAI, and Google Gemini. We have also developed copilots for legacy systems and are collecting positive feedback from 30 customers. (Rahul Kanodia, CEO)
Q: What is the strategy for improving margins in Digital Technologies?
A: We are focusing on larger deals, hyperscalers, and cost control measures. We expect to see margin improvements from these initiatives. (Rahul Kanodia, CEO)
Q: What is the expected tax rate for the next year?
A: The tax rate is expected to remain between 20% to 22%, similar to last year. (Sandeep Mantri, CFO)
Q: How will the Dextara acquisition impact growth and margins?
A: Dextara will be margin accretive, contributing around 30 to 40 basis points. The primary focus will be on growth rather than cost optimization. (Sandeep Mantri, CFO)
Q: What are the annual hikes for FY25?
A: The average annual hike is around 9%, varying based on individual performance. (Rahul Kanodia, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
