Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased from INR94 crores to INR100 crores YoY.
- EBITDA grew from INR15 crores to INR19 crores YoY.
- PAT improved from INR3 crores to INR8 crores YoY.
- Strong partnerships with Salesforce, ServiceNow, Agineo, and Microsoft.
- Significant cash reserves of INR138 crores for potential acquisitions.
Negative Points
- Net headcount is in negative due to 16% attrition rate.
- Slight dip in EBITDA and PAT compared to the previous quarter.
- CloudTech revenue has declined from 19-20% to 16% of total revenue.
- Challenges in the US market with some clients reducing business.
- High tax incidence due to SEZ sunset for two units.
Q & A Highlights
Q: Can you provide details on the net headcount addition and capacity utilization?
A: The net headcount is negative with a 16% attrition rate, which is healthy for an IT company. We are rebalancing by hiring necessary skills and letting go of those we don't need. Our utilization rate is around 76%-77%, aiming to cross 82%.
Q: What is the total contract value or order book, and how do you see the environment for this year?
A: We don't publish contracted revenue numbers, but contracts typically range from 6 to 12 months with renewals often happening via email or phone. We have a strong repeat business, and the environment shows mixed feelings but generally positive trends.
Q: Europe and UAE are showing strong growth. Will they grow faster than the company average?
A: Yes, due to the small base effect, Europe and UAE are expected to grow faster than the company average. Partnerships like Agineo are contributing to this growth.
Q: Can you elaborate on the partnership with Agineo and its impact?
A: Agineo is a ServiceNow vendor in Germany, and we are their only offshore partner. We are jointly pitching and delivering projects, focusing on ServiceNow capabilities. This partnership is expected to generate significant revenue.
Q: What is the current market sentiment in the US, and how is it affecting your business?
A: The market sentiment in the US is generally positive with decent demand. However, as a smaller company, the impact of losing one or two clients can significantly affect our momentum. Overall, we see green shoots and optimism.
Q: What is the percentage of repeat business, and which region has the biggest customer exposure?
A: Repeat business is usually over 90%. The US has the biggest customer exposure, with two clients from Germany and the US running neck-to-neck in terms of revenue contribution.
Q: What is the mix of projects between support and new developments?
A: About 80% of our projects are new developments, and 20% are support work.
Q: Are there any plans to increase presence in Japan?
A: Currently, we have zero presence in Japan and no plans to expand there.
Q: How much investment is being made in Gen-AI, and are there any successful implementations?
A: We have three or four people working on Gen-AI, focusing on creating the ability to deploy and implement AI tools for clients. We have demoed AI products to several customers but face challenges related to data security and deployment.
Q: What is the current cash position, and are there any plans to raise funds?
A: We have INR 214 crore in cash, minus receivables. There are no immediate plans to raise funds, but we are open to it if a significant opportunity arises.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
