Cyient Q4FY18 Concall Summary



  • Revenues have grown to $607 million. It is a very strong growth, 12.9% in dollar terms and 11.7% growth in constant currency terms and this would be observed across all the eight business units of the company.
  • The operating profit for the year stood at Rs.594.2 Crores, which is a growth of 13.3% compared to the previous year.
  • The net profit for the year was at Rs.429.6 Crores, a growth of 16.1% over the last year.
  • A final dividend of Rs.4 per share is declared in this quarter, which takes the total dividend for this financial year or the financial year 2017-2018 to Rs.13 per share for the full year.
  • In terms of the cash, Cyient has a good cash of about 10,937 million. This is after paying the dividends at the enhanced payout of about 40% for this year.
  • Cyient  has made 408 million of other income and for the year 1,489.


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  • Revenue is $164.6 million, the highest ever in a single quarter, signifying a growth of 16.8% year-on-year, 8.3% quarter-on-quarter in dollar terms.
  • All the eight based business units have witnessed a similar growth year-on-year basis. The services revenue came up at $142.7 million signifying a strong growth 14.3% in year-on-year term.
  • Operating profit for the quarter stood at Rs.149.2 Crores, which is 19.6% growth on a year-on-year basis.
  • DLM/Design Led Manufacturing witnessed the highest ever-quarterly revenue and the operating margins in the recent years.
  • Net profit for the quarter stood at Rs.121.5 Crores with the growth of 16.2% year-on-year terms over the last financial year.
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Tax Rates

  • The tax rate for the exit quarter is about 25% 
  • With the focus on SEZ, they are looking at the full year benefit of US taxation, so definitely there is good possibility of much reduced tax rate in the next year.

DLM (Design Led Manufacturing)

  • The total pipeline in DLM is about quarter billion dollar, and the adjusted figure will be about 50%, 60% of that.
  • DLM had extraordinary growth in between the two quarters and because of that the working capitals had been consumed, so the free cash flow has been negative, but management is working on generating the free cash flow in case of DLM.


  • Cyient continue to support 25 government schools for education of the underprivileged children.
  • As a part of initiative to increase IT literacy, they have added one more Cyient Digital Learning Center, which now takes the total to 57.
  • Cyient was recently recognized by the Telangana Government for the green initiative wherein 6000 sampling have been planted in our facility.

Business updates 

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  • Cyient is planning to expand their Pune facility to about 100 FTE.


  • On the operation front, Cyient and Bluebird Aero Systems Limited of Israel signed a MoU to address the opportunities in the Indian UAV space and subsequently have entered into a joint venture on April 11, 2018. The joint venture is 51% owned by Cyient and 49% by Bluebird.
  • Bluebird brings 3 technologies: SpyLite, ThunderB, MicroB which are quite unique, and some of the things applications that they can be used in are very relevant for India, for example high attitude or the varied conditions that exists across the country or rather long coastline that we have in the country.
  • Therefore, the JV after the transfer of technology will indigenize, manufacture, integrate, test, support UAV systems and Cyient is in the process of building up a factory for this in Hyderabad with 100 systems a year.
  • The investments will be relatively minimal because the factory for example to produce UAV is quite it is not very capital intense. Payback is quite attractive.


  • Cyient created the initiative called New Business Accelerator (NBA) to facilitate innovations within Cyient to really focus on developing new products service and solution.
  • Cyient are committing this year that is about 100 basis points of revenue or margin, so about $7 million plus will go towards the NBA initiative.
  • $7 million is a combination of opex and capex and some of these will also be quite Capex intensive because how the technology is being developed.
  • There is pretty clear revenue plan because for something to get funded through the NBA there is process that is followed and one of the key elements that the processes or business case wherein management have clear anticipation of what is the revenue that it is going to generate out of particular business.
  • Cyient would see a lot of investments in newer and emerging technologies because the focus is now not just on building a better asset that maintaining it and running it more effectively, which means that people are embedding a lot more in terms of IoT and distributed computing and so on and so forth into the train itself. 
  • The utilities and geospatial market is also seeing some good traction.
  • Aerospace  and defense is expected to grow by 10%.
  • Cyient also became the founding member of Xynteo India, 2022 consortium; this is the government of India initiative to enable affordable medical facility to widest section of the society.
  • Their IRIS certification was extended to comply with ISO TS22163:2017 after its successful audit.
  • In terms of services business, they continue to have a good conversion of about 45%.

Growth in Services

  • There is no particular that is going to stand out. The medical business will grow at a fairly good way just because it is a small business unit, similarly with semiconductors.
  • Although there was a dip in terms of the aerospace customer, but going forward there will be sustaining of revenue because of new opportunities coming up in this area.
  • Services sector order intake for this quarter was a bit soft but forward-looking revenue targets is in place that there is no such decline if looked at full-year and also the overall pipeline is the highest ever and have more than billion dollar of pipeline.
  • Service sector margins is about 16% for next 2 to 3 years which can be moved up by 100 or 200 basis points but then investments have to be cut which are done for FY2020.
  • Cyient is confident with the operational improvements are going to be such that they will improve despite the wage hike, the services margins by 100-basis points and after making the investments, service margin will be flat.


  • There are two buckets into which the investments are going. The one is complete subsystems and the second is emerging technology:
  • There is a lot of work that is being done in machine learning in areas of interest for example the geospatial business machine learning from extrapolating features from a map, etc.
  • Second bucket of investment is developing products where subsystem level or assembly or sports system level and Cyient are able to actually completely design and own a subsystem.
  • Cyient have five customers in transportation unit given that it is concentrated industry and four out of that five grew in double-digit, so that was beneficial.
  • The free cash flow for services business typically targeted about 40% to 50%.
  • After generating the positive EBITDA and then over a period of time, a conversion like 40% of EBITDA to free cash flow in DLM can be achieved.
  • Breakeven is targeted for the next year for DLM, so next year also negative cash flow for DLM can be anticipated.

Cash Flows

  • Cyient have seen very handsome growth in this particular year. They have also seen that year-on-year our DSO has reduced.
  • There is no headwind on capex. There was a slight headwind on the tax this year but not anymore.
  • The impact of the foreign exchange fluctuation on March 31 wherever receivables are restated to the extent of about Rs.20 to Rs.23 Crores. Internally management is not at all worried on free cash flow, they are on the right track, having delivered a good conversion of about 50%.
  • 3 Subscale segments: semiconductor, off-highway and medical
  • Each one of the businesses different strategies; medical is quite bullish on design to build, so Cyient do designing, build manufacturing is a part of it, so which means very strong transaction is being witnessed there.
  • Semiconductor is also in a similar situation. So the semiconductor is also trying to beef up both internally and externally.
  • According to management, Off-highway equipment will be done internally.
  • Both semiconductor and medical especially are very, very important for the long-term growth because those are emerging areas and some very strong traction is witnessed.

Future margin

  • The business is transforming more into design led manufacturing. A lot of onsite centers have been put up in for aerospace as well as other verticals.
  • Now with business moving more to end-to-end, 14% margin would be the new near normal.


Other Concall Summaries of Cyient



HCL Technologies Q1FY19 Concall Summary



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  • Over the last 12 months HCL performed consistently and cross the revenue milestone of $8 billion.
  • HCL’s revenue per employee is the highest among its peers in industry and global competitors.
  • HCL is among top 3 revenue per employee firm in the world.
  • HCL’s EBIT per  employee is also highest and better than some of the largest consulting firms in the world. 

Transformational Deals

  • HCL recorded Highest ever bookings in Q1FY19, led by next-gen infrastructure services and a variety of its Mode-2 services primarily Cloud-Native and digital offerings.
  • HCL had 27 transformational deals in Q1, Nokia networks was the largest programs greater than $0.5 billion in TCV that it won. 

Industrial Verticals

Its bookings were broad based covering various industrial verticals:

  • Telecom sector: Nokia
  • Financial services: 4 large deals
  • Retails, Co nsumer Packaging Goods (CPG) and Utilities

Performance Overview

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  • HCL was very Effective in cross selling and up selling in its existing clients to deliver the better metrics.
  • Reduction of $12 million in its India SI business and it has come down to 0.5% of HCL’s revenues.


  • HCL successfully integrated the C3i acquisition which it started early in the last quarter.
  • It announced new acquisition with H&D international in Germany. Geographic expansion is one of HCL’s inorganic strategies in addition to IP and digital or Mode-2.
  • This will be helpful to HCL in automotive sector where there were some disruptive infrastructure transformation programs to enable autonomous vehicles.

Mode wise revenue Analysis

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  • Mode 1 revenues continues to be stable and Mode 2 & 3 combined revenue stand for 26.6% of total revenue.
  • Mode 2 business has grown 8% QoQ. HCL has built several innovation labs across the world for Digital, Analytics, IoT Works and Cloud-Native. It has invested significantly in the pivotal Cloud-Native partnership.
  • Cloud a doption and digital transformation is need of the business, primarily because of innovation, some agility and quick delivery of services

Focus on Mode 3

  • Mode 3 business is 11% of its revenues. The margins are 25.2% at an EBIT level, significantly higher than company level margins.
  • Mode 3 consist of two sets of products, one set of products are enabling Mode 1 products and these are mature products in mid or late stage of their lifecycle, these are 60% of total products.
  • Other set of products are automation, AI, lot of things that they built in DryICE as well as some of the IP partnerships, these constitute 40% of Mode 3 products

HCL Performance Improvement

  • Revenue: +5.3% QoQ , +14.2% YoY
  • EBITDA Margin: +0.2% QoQ, +1.1% over the year
  • Operating margin:+0.1% QoQ
  • Net Income Margin:+0.4% QoQ
  • EPS: +8% over the last Quarter

Trends in Infrastructure Market

  • Customers spend a lot on shifting from one platform to another, with target of making foundation as “Digital Enterprise”, shift towards more consolidation and hybrid model
  • Cloud is a means to drive innovation, new capability, drive modernization of applications, help, build more digital applications. They leverage all the new capabilities on AI, Cognitive, Cloud-Native.
  • Infrastructure shifting from core infrastructure to application infrastructure platform and data infrastructure.
  • Hyper integration between infrastructure and make it more agile to serve the digital needs of an enterprise.
  • Chang  e in Operating Model - driving autonomics at the center, significant AI machine learning and those capabilities.

Capabilities Improvement by HCL

  • Product and platform market is growing CAGR 10% - 15 % in the industry. HCL is improving its capabilities in this field by leveraging IP partnership, expanding engineering functional team.
  • Integration of Mode 1 and Mode 2 products to enhance capabilities to supplement HCL’s managed service and outsourcing offerings to customers.
  • Transformation of the products in mature life cycle or having single digit growth into next generation products.
  • Cross  market digital footprint of HCL with upsurge in retail, CPG and healthcare.

Organic Growth of HCL

  • HCL helps industry replacing their old IoT systems or traditional application service because of rising demand of next generation technology.
  • Growth in Life sciences enabled by CPI and Public services is very organic. HCL has very promising Organic growth rates.
  • He alth and financial services had grown 9% LTM YoY, Retails and CPG has grown 7% YoY, Life Sciences has grown by 10% YoY.

HCL’s Segmental Margins

  • Mode 1 margin is very consistent with company level margin.
  • Mode 2 margin is little lower than company level margin due to heavy investment in that area.
  • Mode 3 margin is very much higher than company margin.

Segments based on Product’s Lifecycle

  • More decent business split of HCL would be 60% of businesses in mature products and 40% in high growth. Its IP partnership is also decent mix of mature and high growth products.
  • HCL has imbedded  IP partnership and products into its outsourcing businesses.  
  • Its regular Mode 1 businesses consisting of infrastructure business and engineering business have a lot of opportunities to re-innovate and differentiate and thereby create higher growth opportunities.
  • HCL’s EBIT margin YoY has been declined due to renewal and structure reduction happened at the beginning of the year.
  • Most part of the segmental earning has been invested in cloud and security.

Advanced Technology

  • Within Mode-3, 40% revenues are new technology and 15.5% are Mode-2.
  • Cloud services Private cloud and utility services are classified as Mode 2 service has a lot of scope for investment and improvement.
  • 130 bps of guidance is built through acquisitions. Ci3 acquisition which had single digit EBIT margin has impact on gross margin decline.
  • Tax assumption for FY 2019 is 22-23%. Net investment is 177 million , however the number look small (125 million) on financial statement due to currency effects.


Other Concall Summaries of HCL Technologies

Tata Elxsi Q4FY18 Concall Summary

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Financial Highlights

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4th Quarter

  • PBT for the quarter exceeded Rs. 100 crores for the first time.
  • Offshore revenues are about 60% and onsite revenues are about 40%. IP based revenue is about 5%.
  • Automotive segment contributes 60% of revenue, Service segment 30% and Medical & Hospital 10%.
  • The full year constant currency growth is 15% and the Q4 constant currency growth is about 5%.
  • Total odd income for the quarter breakup is not available but for the whole year, it is about 43 crores.
  • Cash in hand is about 390 crores.

Business Growth

  • The revenue share of top 5 customers is 44% and top 10 is 57%.
  • All the key segments delivered reasonably good growth in the quarter.
  • There have been challenges in the year, with some of major engagements flattening out, some even declining a bit, but new engagements came in to compensate and provided growth. E.g. EPD segment as well as IDV segment saw some setbacks but what is really pleasing is that the setbacks were handled reasonably well.
  • Tata Elxsi is not looking for further expansion in EBITDA margins as they exceeded internal targets in the current year, so they are happy to maintain it in this range.
  • The industrial design has recovered marginally this quarter, but it is flat in FY18 basis overall. However, Management has figured out what caused the problem last year and most of that is now sorted out. This segment should show strong growth in FY19.
  • Jaguar Land Rover sales contribute about 22% of sales revenue. Engineering budgets will not be altered because the market is not picking up their existing cars, so the urgency with which Elxsi need to introduce new technologies only increased.
  • Utilization rate was the same as at the end of December, about 82%.

EPD Segment

  • 3 segments within EPD are the automotive, broadcast and medical segments
  • The big one is the automotive segment and that is maintaining the growth rate that had been for the last several quarters.
  • The second one is broadcast which again is fairly stable, despite the fact that the offerings there are going through a churn because of new technologies
  • Management is fairly optimistic about the future of the medical business which is right now a very small part of revenue.
  • Automotive is the fastest growing segment and it is about 60% of the total revenue.


  • Autonomous vehickle program has been enhanced to a full-fledged autonomous driving platform which have branded as Autonomai, and this was licensed to major OEM during FY18.
  • The company is in discussion with a number of people who have interest in the entire Autonomai as a full-fledged solution which would require some time to materialize and some time to execute. But the progress is fairly encouraging.
  • Services revenue would still be far more than the Autonomai revenue in the next 3-4 years.

Next gen Technologies

  • The new capabilities that have been built over the last 12-15 months have been relating to AR, VR, AI, analytics etc.
  • The progress so far has been mixed, off and on Elxsi seem to have good engagements in AR more than VR.
  • In the future, management intend in increasing  investment in the AI and analytics part of the business.

Problems solved using AI platform

  • In a car company, the application of AI is helping the car company get better organized for providing service or using predictive failure rates and so on.
  • In the broadcast business, they are trying using AI to predict subscriber churns and therefore what proactive action can customers take to prevent subscriber churn and so on.

Drivers of growth in Automotive segment

  • The two areas which are propelling business in the automotive industry.
    • Moving towards electrics and hybrids
    • Movin g towards enhanced assistance with the ultimate destination i.e. autonomous driving.
  • In terms of growth for the next year, Elxsi do not have guidance but in general terms, things are looking quite promising at the moment.


  • The company  sanctions budgets for in-house R&D depending on the effort. So it is very difficult to have a monetary value there, but the company certainly provides resources for doing in-house R&D.
  • Autonomai, requires a substantial amount of manpower, time and resources which Elxi allocated a couple of years back because without that, they couldn’t be a serious player in the automotive market.
  • They have also developed IP in the video world known as FalconEye when they saw existing solutions in the market were severely limited using in-house R&D.

What is stopping Tata Elxsi to be a 30% growth company

  • The market opportunity is big enough for Elxi to look at a 30% growth.
  • It is a question of matching the available skills to the available opportunity, and that requires a certain amount of anticipation and a certain amount of pre-planning.
  • Sometimes they get it spot on, sometimes they struggle a bit, but that is what is holding them back and they need to improve their planning process.

Business Development

  • The company looking to reduce the number of clients and want to deepen the relationship with existing clients.

Battery Management solutions:

  • In the future, multiple battery strategies are coming in, multiple power train strategies coming in, and more the variety the greater the opportunity for a company like Elxsi.

Airports and metro and highway:

  • Whenever the customer is sending out an RFP or a tender just for design services, Elxsi might very often win, but if it is clubbed with execution which means running an operation or fabricating something, they have to partner with people who can do that, and then Elxsi’s fortune depends on the fortune of the partners that they go with.

IP based revenues:

  • Currently it is not as profitable as services, because for every successful IP chances are that there is at least one other IP initiative which has not had that kind of success in the market, so that effort has not yielded results.
  • Potentially IP is very, very important for them not just for augmenting their margins but for survival itself.
  • In future Elxsi will win business demonstrating their IP which can be integrated into customer solutions and that is why the IP programs of the company are very important.


  • On an annualized basis, the company has 12% attrition. Typically, in 3-7 year the attrition is higher.
  • There are two drivers for attrition:
    • One is the desire of the people to study more - so whether it is the master’s in technology or even a business degree, typically they look at those at the end of the first three years.
    • The other driver is the product companies which have captives or setting up captives in India. They look at service companies as a hunting ground because they do not have any P&L responsibilities; they are able to throw a lot more money than a service company can, even if the work is less interesting.
  • So the company's effort is to make sure that all employees realize that the work that they are doing is far more interesting here and in a matter of a few years they end up working with customers in different parts of world and often in different businesses. And the overall value to their CV is much higher in a company like Elxsi than in a product company.


  • Work with Unity is slower than expected but these are skills which will be useful in many areas in the future, so Elxsi is staying invested and partnership with Unity continues to be strong.
  • Partnership with National Instruments is for automotive test and simulation and Elxsi is recognized as probably India's leading hardware-in-loop-simulation service provider for auto companies and that is in part, thanks to alliance with NI.

IP on block-chain

  • One of the IPs that was built, and which should be getting deployed pretty soon is V2X emulator. It is a vehicle to vehicle, vehicle to infrastructure simulator.
  • Block chain will get integrated with anything to do with V2X and it will be the company's endeavor to build block chain capability into their simulator.
  • Elxsi is not looking at block chain in areas outside of our current business, and in the current business, the vehicle-to-vehicle, a vehicle-to-infra is where block chain should have a play.


  • It is different in different geographies but in the automotive space, the company that is encountered most often is KPIT.
  • Cyient is also a competitor but what Elxsi bring to the customer is unique set of capabilities and the combination of design and technology is something that they have built up over the last 10-12 years. So, this combination is very potent and therefore is a key differentiator for Tata Elxsi.
  • A lot of international product companies have opened centers in India and whenever they open a new center, it is a bit of a challenge to Elxsi.


Other Concall Summaries of Tata Elxsi

HCL Tech Q1FY18 Concall Summary


HCL’s overall performance in Q1 FY18

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  • Fifth consecutive quarter of industry-leading performance
  • HCL Tech is emerging as one of the most reliable performers in the IT sector Q-o-Q
  • HCL’s success is due to their consistent focus driven by our Mode-1-2-3 strategy
  • Phil Fersht – the CEO of a leading industry analyst firm Horses for Sources described HCL’s reputation as “consisted of a rolled the sleeves up attitude' and a no-nonsense approach to business, determined, humbled, focused, quite but aggressive”

Prestigious company level recognitions

  • Ranked the “Number One IT Services Company” and “Sixth Overall” in LinkedIn “India's Most Sought After Companies List”
  • Included in the “Most Honoured Companies List” for Asia by Institutional Investors
  • Emerged as “No. 2 in Nikkei Asia's 300 Companies List”, which is a compilation of high-performing listed companies in Asia
  • HCL was no. 1 among the India listed companies in the Nikkei Asia’s 300 list

Financial Highlights

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  • In dollar terms HCL did 3.7% quarter-on-quarter and 11.4% on year-on-year at an EBIT of 20.1%, and from a constant currency point of view it is 2.6% and about 12% for the year-on-year
  • EBIT has enhanced, in-spite of currency headwinds due to accelerated execution of integration of acquired entities and assimilation of the IP investments made in the last few quarters
  • HCL bought home 13 transformational deals which represented a well-balanced mix across service lines, industry verticals and geographies
  • HCL delivered industry-leading revenue per employee of $63.5K, which is a 6% increase YoY
  • HCL had a pretty healthy mix of contribution from organic and inorganic
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Net income  

  • HCL had the benefit of tax reversal of $45.5 million in Q1FY18 which is not available this quarter
  • Net income has come down from $349.9 million to $336.7 million
  • From a Y-o-Y basis, the net income has grown 10.3% against revenue growth in dollar terms of 11.4%
  • Acquisition of the company Urban Fulfilment Services (UFA), whose revenue for calendar year 2016 was $48million, is getting delayed

Profit margins

  • There is an expansion of 10 bps from 20% to 20.1% in EBIT margin
  • There was a negative impact of 40 bps primarily on account of rupee depreciation, without which this would have been 50 bps increase in margins this quarter
  • Factors contributing to increase in EBIT margin are
    • Superior Execution
    • SG&A benefit due to acquisition
    • Increase of utilization
  • Net income to operating cash flows has been at 104% while EBITDA to free cash flow has been healthy at 76%
  • HCL bought back Rs. 3,500 crores in July and declared a dividend of Rs.2 per share

Days sales outstanding (DSO)

  •  DSO continues to be 82 days, both billed and unbilled put together, same level as it was last quarter.

Hedge book

  • Hedge book is at $13.51 million, primarily consisting of cash flow hedges and to some extent balance sheet hedges
  • Hedge gain of $16.5 million recorded this quarter which is reflected below the EBIT line
  • Last year HCL had several mega deals and a large contribution from one of the acquisitions

Margin guidance

  • HCL’s margin guidance is at 65.5 and they are probably at upper end of the range

Share count

  •  Share count has gone up by 1%
  • Buy back was about 2.5%

Revenue from new clients

  • Percentage of revenue of new client compared to existing client is 2.4% and this is the lowest number HCL has had at the beginning of year
  • New client does not show reset every year beginning and is continued on LTM basis
  • In terms of revenue translation new accounts are taking a little bit more time while the quarter two materializes into revenues

IP Amortization

  • HCL does amortization of IP on basis of expected revenue
  • A significant portion of that gets reduced from the revenues directly and other portion is getting shown in the line of amortization
  • In Q1FY18 , close to 12 million got amortized against the revenue, total is 17 million which got amortized and the balance got written-off in the line of amortization

Employee cost

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  • HCL has added 1.6% Employee in IMS QoQ so that costhas gone up only 0.9%
  • Overall HCL had a net addition of 1800 people and a lot of it was offshore
  • HCL had productivity gain (revenue per employee) of 6% on LTM basis
  • Multiple factors like the revenue profile and managed services contracts, fixed price contracts and some of the high-end offerings are contributing to this productivity gain

US protectionism

  • In US market there is slowdown in decision making
  • Traditional headwinds around smaller deal sizes due to automation, new consumption models are part of the slower growth
  • HCL has to factor in some softness in Infrastructure business

Performance in European market

  • Europe weakness has been contributed by two factors
    • One was Financial Services customer whose BPO scope of work was insourced due to regulatory reasons
    • The se  cond is the large Infrastructure deal, which entered in to the second year, there is a structural reduction in revenues
  • HCL has done their bit to make sure our costs are also reducing in line with the committed productivity benefits that HCL is passing on
  • Apart from these two reasons, Europe did very well in terms of generating growth

Industry Sector perspective

  • Four verticals - Financial Services, Manufacturing, Life Sciences and Retail-CPG delivered sequential growth greater than 3%

Financial Services Business

Banking and Insurance

  • HCL relatively had strong growth sequentially in US Banking & Retail
  • In last couple of quarters,HCL had significant new account wins in North America and Europe, especially in the Fortune500 set of financial firms, both Banking and Insurance sector
  • Reason for this win is repositioning of HCL’s offerings which are more engineering-oriented, more technology at core
  • Financial sector is hugely impacted by millennial and buying behaviour is intended towards need for mobile and always connected customers


  • SAP customers now recognize the fact that there is fair amount of bolt-on work for which HCL’s Mode-2 services can be used
  • HCL is doing additional work on top of SAP largely on Supply Chain side, partially also on the way merchandizing was being done and trade promotion in few areas

Retail and digital marketing

  • Driver for change of projects is the integration and onlineprocess in almost individually at each Retail shops
  • For the past three years a lot of the Digital transformation focus was in the frontend transformation on customer facing platforms
  • Now the focus has been around modernization of the back end, using APIsand micro services technologies

Client-partner program

  • Client-partner program “One-HCL” is driving increased revenues from HCL’s Top 150 accounts
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Mode 1 

  •  A large percentage of HCL’s large deal wins comes fromMode-1 Services - focused on gaining market share in HCL’s existing offerings
  • DryICE platform has become an essential and highly differentiating part of HCL’s solution in both Infrastructure and Application Services
  • DryICE focuses on automation, Artificial Intelligence, etc., to help customers reduce cost
  • HCL renewed and enhanced all of the deals that came up for renewal in the past quarter

Infrastructure Management Services

Achievements in Infrastructure Services

  •  HCL’s 360 Degree SDI solution called “Velocity” achieved VMware Validated Design Product Zero Certification globally, and this is a first in HCL’s peer set
  • “Number One IoT” in Everest Peak Matrix for IT Infra Automation in 2017
  • Recognised “Star Performer of the Year” for cloud native and Infrastructure Services by Everest
  • Gartner sighted HCL as a leader in “Gartner Magic Quadrant” for data centre outsourcing and Infrastructure, Utility Services in North America

Margins in IMS

  • IMS margins have improved significantly quarter-on-quarter, about 130 basis points
  • IMS is a very large component of managed services or fixed price kind of revenue construct

Delays in decision making by clients around IMS

  • Some significant component of infrastructure deals comefrom a solution perspective with cloud or little bit of security
  • There is no change in solution or new solution that is causing delay
  • Delay is because clients are taking a very deep look at what they are trying to do from a large-scale outsourcing perspective

Future scope in Infrastructure services

  • IMS is a sub-10% growth business for HCL Tech which is clearly a growth driver
  • IMS pipeline is more or less same and deal sizes are smaller, so the number of deals could be slightly higher
  • In the near-term there is little bit of sluggishness, but the long-term trend is still significantly underpenetrated market segment
  • Infrastructure Services from a global delivery model and India Heritage Provider addressable opportunity perspective, the penetration is in single-digit
  • HCL is very strongly focused in US, UK, Nordics,Australia and it will venture in several other markets where HCL’s presence is small
  • HCL is expecting that the current couple of quarters or may be this year could be an aberration due to US protectionism

Engineering services

  • HCL’s focus was on for the acquired entities – Butler and Geometric, portfolio rationalization initiativesto drive better margins and synergies
  • Butler and Geometric acquisitions reinforced HCL’s Engineering Services position in Aero and Defence Manufacturing and PLM respectively
  • Engineering services had traditional organic growth, some of it could have been subdued in the last quarter because of the ramp downs in the previous large deals
  • HCL’s strategy has been to add more Mode-1 services toEngineering Services in terms of acquisition, so the add different service lines like PLM adds strength into verticals like automotive, industrial and heavy engineering

Technology disruption in engineering services

  • Technology disruption is more positive for HCL, because they end up in participating in making those technologies so that they can be applied in rest of the IT
  • Some services in online an ISP space have marked to new services, but in traditional space which are more hardware engineering and mechanical engineering oriented, that disruption is not as high as in the rest of the IT services

Application Services

  •  At Sapphire 2017, HCL launched SAP S/4HANA solutions tailored specifically for the aerospace and defence industry
  • HCL's “Base90 Aerospace Company Solution” solution has been validated by SAP's A&D business unit
  • HCL focusses more on the margin as a whole of the business
  • Also IPDs are only positively impacting the margins

Mode 2

  • Mode 2 services consists of Digital and Analytics, IoT Works, Cloud Native Services and Cyber Security
  • Digital we won several deals, some notable engagements are in the “Investor Release”
  • HCL was featured in IDC's report on Design Thinking in European Digital transformation
  • HCL’s collaborative and ecosystem based approach to Digitalization was recognized as a strong differentiator


  •  Positioned in the “Winner Circle” and “Number 1 IOP” in HFS Blueprint Guide on industry 4.0 Services
  • HCL signing a deal to operationalize and run a dedicated remote operations centre for a global 2000 European consumer electronics major

Cloud Native Services

  • HCL achieved Amazon Web Services Storage Competency status
  • This status recognizes that HCL provides design implementation and managed services to help successfully clients achieve their storage goals on the AWS platform

 Cloud SaaS

  • HCL PowerObjects was placed in the “Winner Circle” of HFS' FIRST BLUEPRINT GUIDE on MS dynamics
  • HCL PowerObjects also won “2017 Microsoft Worldwide Partner of the Year Award” for Dynamics365, Consulting and System Integration Services

 Pharma solutions

  •  HCL launched Next Generation Research platform, which will reimagine the new drug discovery process in the pharma industry

 Cyber Security

  • HCL launched GDPR services to enable organizations to comply with EU GDPR regulations

 Mode 3

  • Under Mode-3 Products & Platform business HCL focusseson both in-house IPs and strategic IP partnerships
  • This quarter HCL filed 35 patents in next generation Engineering, Products & Platform in various domains like IoT, Machine Learning, Analytics, Automobile Engineering, Wireless Devices and machine to machine communications
  • Announced new solutions like “DryICE Cognitive Orchestrated Process Autonomics” (COPA Platform)
  • This solution extends HCL’s capacity to provide an end-to-end AI powered automation work flow for the business processes
  • Future investments on IP strategy depend upon opportunities in Mode 2 and Mode 3 services
  • Margins due to IP strategy are better than the company level margins seen so far
  • HCL intends, over a period of next couple of years to build a good portfolio across multiple technology providers

 IP partnership with IBM

  • HCL invested nearly $780 million (10% of HCL revenue) in IBM partnership and expect $200 million value from the deal
  • Partnership help Built HCL's expertise through solutions, innovation labs and Centers of Excellence across multiple product segments such as DevOps, Automation, Legacy Modernization and Data Transformation solutions
  • Partnership enabled expansion in marketing automation space
  • HCL has invested $140 million in this extended partnership
  • HCL has a revenue share relationship with IBM from the existing install base and the new product sales
  • HCL also has the permission to renovate these products based on the IP license
  • HCL had an annual impact of $35-30 million due to this deal
  • The very first investment that HCL did as part of IBM partnership has finished four quarters and HCL is above plan on that program

Go-To-Market strategy for Mode 3

  • HCL intends to launch several products on top of some of the IPs acquired
  • HCL has an independent go-to-market team within Mode-3 organizations to reach out to clients and build a HCL generated pipeline and sales for the Mode-3 services
  • HCL is also looking forward to in-house development of IPs which is really an offshoot of their DryICE proposition


  • 12 months back three to four quarters were muted where the company had its share of in-sourcing
  • They are happening now more on the margin rather than impacting the revenue. So, growth is kind of compensating for that at this point of time


 Training HCLites

  • Focus remains on training HCLites on Next Gen Technologies, “Skill Lease Academy”
  • HCL has built a Proprietary Automated Assessment Platform for next gen full stack technology skills to ensure rapid and upscale, employee upskilling and employee acquisition processes

Women advancement initiatives

  • Hired more than 10 senior women leaders, including our New Risk and Compliance Lead and the top leader for Digital workplace SI business


  • Under the “Power of One program”, 2400 HCL employees volunteered in community activities, contributing 14000 hours, reaching out to 32,000 beneficiaries
  • HCL is working very closely with “Women Connect Groups” in Global Development or Delivery Centers” in North Carolina
  • In Frisco, Texas HCL was recognized as a “Trustee Partner” in the “Frisco Chamber of Commerce”
  • The centre is very powerful showcase for positioning and convincing customers on HCL’s onshore presence and solution that need onshore collaboration

 Future outlook

  • HCL is putting lot of leadership and attention in bandwidth to be very successful in Mode-2 and Mode-3 services
  • HCL is also trying to continue to strengthen their sweet spot in Mode-1 services
  • The company believes that it is best positioned in the industry to really emerge as the next generation services firm


Cyient Q3FY18 Concall Summary


 Financial Highlights

Cyient Revenue Q3FY18.png
  • Q3FY18 has highest-ever quarterly revenue of US $152 million witha strong QOQ growth of 1.3% and a YOY growth of 11.9% in US Dollar terms despite the lower working days
  • For services business, the revenues stood at US $139.9 million, the highest ever with a robust QOQ growth of 4.2% and a YOY of 15.6% in US Dollar terms and a 4.4% in constant currency terms
  • Geography wise, America has grown 10%; Europe, 16% and Asia Pacific 10%
  • Operating margins for Q3FY18 sustained at 14.6% despite the headwinds of higher paydaysand the expansion is 116 basis points YOY
  • Operating profit for the quarter stood at Rs.143.1 Crores, which is also the highest ever, with a QOQ growth of 1.6% and a YOY growth of 16.5%
  • Cyient got a headwind of about 130 basis pointsbecause of mismatch between billdays and the payday
  • In services business the margin is about 16%
  • Net profit for the quarter stood at Rs.87.8 Croreswith a one-off event which led to loss on two grounds
  • Two months of operating losses due to Hurricane in Puerto Rico, and some marginal loss on divestment
  • Adjusting for the one-off, the normalized profit for the quarter would stand at Rs.108.8 Crores, with a YOY growth of 15.5%
  • Cyient’s other income QOQ has moved from 406 to 273
  • Adjusting the impact of unrealized FX loss/gain that moment of 93 to minus 50, which is a swing of about Rs.14 Crores, then Cyient is doing well on realized forward contract as well as on the treasury income
  • The total coverage is set at about $123 million.
  • Cyient declared a second interim dividend of Rs.4 per share, in line with revised dividend policy of payout of 40% from the current payout of 30% barring unusual situations

Cash Generation

  • Cash and cash equivalent stood at Rs.1,077 Crores or US Dollar $168 million, which is again the highest ever
  • Free cash flow generation for the quarter stands at 67% of EBITDA, and that is at Rs.113.6 Crores
  • Adding the proceeds of divestment, the free cash flow stands at Rs.174 Crores for the quarter
  • Cyient has spent money on the dividends that were declared last quarter and another Rs.21 Crores on long-term investments
Cyient Q3FY18 Cash.png


  • The divestment of 49% Joint Venture with Pratt & Whitneyhas been consummated in this quarter, exactly in line with what Cyient hassigned off
  • In terms of the financial returns, it has been a very handsome return, with an IRR of more than 50% on this original investment that Cyient made in 2013
  • Cyient got more than $20 million from the original investment of $250,000
  •  Cyient has got on a gross basis about $11 millionand on a net basis, net of tax, $9 million and highest-ever cash of $167 million
  • In terms of the income statement, the overall impact is about $3.5 million


  • Adjusting the reported ETR of 22.4%, because of the tax adjustment on IASI and also the adjustment for the deferred tax because of the US,and excluding one-off number is 27.9
  • It is estimated that ETR in SEZ stage should go down by about 1%, but some of the further impacts are still being studied, and Cyientcontinues to work on the SEZ ramp-ups, which could further reduce the tax rate in coming years

    Awards & Recognition:

    • Cyient obtained the ICRA rating of CGR 2+ for corporate governance practices of the company
    • Cyient won Pratt & Whitney, also called as the America Supplier Innovation Award for the fifth consecutive time
    • Won Productivity Savings Award, second time in the last five years
    • Won Golden Peacock Award 2017 for Risk Management recently in Singapore
    • Confederation of Indian Industries recognized Cyient as one of the most innovative organizations


    • Cyient established aerospace nearshore engineering center in Portishead, in the United Kingdom
    • Inaugurated the Cyient Defense Services offices in West Palm Beach in Florida
    • Expanded the Center of Excellence for a key customer with additional capacity of 75 seats, strengthening business relationship
    • Inaugurated the Global Tower Operation Center, in Hyderabad which is an IoT-enabled TOC provides 24x7 surveillance and remotely monitors all passive assets in cell towers across multiple locations around the world
    • Cyient’s Telstra delivery center in Blacktown, New South Wales got the coveted ISO 27001:2013 certification
    • Won Cyient’s first grid analytics project in collaboration with the recently concluded partnership

    Aerospace & Defence Industry:

    •  While there are challenges, on the commercial aerospace, the defense is starting to pick up
    • Cyient inaugurated the office in West Palm Beach, Florida, which does a lot of work for defense-related projects with 150 people
    • From a commercial aerospace perspective, design in commercial aerospace has been coming down for the last few years and it is stabilized, but it would not increase at least for the foreseeable future

    Communication Industry:

    • The Communication Industry cuts across a number of industries in the sense that it is an enabler for a lot of disruption that is happening across multiple industries
    • Cyient is seeing some good opportunities around fibre deployment, which essentially helps high-speed broadband connections and, communications is one of star performers at Cyient
    • The business is not going to grow at the same pace as what it has grown

    Utilities & Geospatial Industry:

    • There are some very good opportunities in this industry because there are new technologies like advanced metering, smart meters, etc., while the sort of the historic skills around transmission and distribution and network design are stable
    • There are some very good growth opportunities in the areas like software and analytics
    • From a commercial perspective the TomTom algorithm and the data is significantly more accurate than google maps
    • For FedEx or UPS whether the business depends on the quality of data it is quite a value add that TomTom provides like, accuracy of data, the accuracy of traffic and the algorithm to get from point A to point B including driver scheduling, how did they go up from address A to B to C
    • The second aspect is, maps historically happened to be two dimensional relatively accurate information whereas today with things like autonomous driving, they cannot just be two dimensional they have to be three dimensional

    Rail Transportation:

    • Cyient signed up with another new OEM, which is one of the largest OEMs in the world
    • With this, all the five large OEMs in rail are Cyient’s customers and not just tactical customers, but quite strategic in nature

    Industrial Energy and Natural Resources:

    •  Capex still tends to be at a premium, and the growth is muted for this year

    Semiconductor Industry:

    •  Between the last two years, growth has almost been 25%, which is a significant pickup compared to what it was a few years ago
    • The demand for memory chips, analog chips are looking quite appealing at this point and thedegrowth in this business in Q3, but that is just down to seasonality

    Medical devices industry: 

    • Cyient expects a CAGR of about 5% going forward and the major drivers of these are increasing healthcare expenditure, awareness, aging population, application of technology, etc
    • There was a small de-growth because of seasonality, but Cyient has started a number of relationships and some quite strategic with the top 10 medtech players

    Design Led Manufacturing Companies:

    • From volume perspective, the growth rate of DLM for year is going to be 20%
    • The reported revenue will look little bit lower because of adjustments done for GST
    • The manufacturing capability that Cyient have in Mysore can deliver about $25 million to $28 million of product in any given quarter
    • The margin will expand by about 50 basis pointsand the operational improvements gave 350 BPs, utilization mix, better onsite margin and actually that was a very important aspect because a significant portion of business is onsite
    • The wage hike took away 150 basis points
    • Cyient made about 100 basis points of investments and obviously these are quite strategic in nature be it through the new business accelerator or intellectual property investments, etc
    • There has also been a little bit of pricing pressure in various spaces, but that took away about 50 basis points, and that is where DLM will also end up with a low single-digit number for the year
    • Q4 growth is expected to primarily come from aerospace and defence that is why the order backlog is
    • It takes some time to get the design through to manufacturers
    • First product that Cyient designed has gotten EASA 1st approval, which is the European design authority or certification authority for aerospace
    • The second EASA approval will also happen imminently, and the volume in design is starting to build up
    • DLM has achieved break even at operating profit level, in this quarter and resulted in a positive cashflow


    • The smart way that Cyient can get price increases is really by packaging it as a project where it hasend-to-end responsibility or more comprehensive responsibility

    Make In India:

    • Due to Make in India, now that the first airlines also launched so there will be clear spending in the avionics within India as well
    • Cyient would not counter shake hands before the rooster hatch and nothing has hatched so far
    • Cyient is being very careful on how much it invests at the same time  is not expecting some huge numbers to come in immediately


    •  Cyient continues to support 25 government schools, supporting the education for the underprivileged children
    • As a part of initiative to increase IT literacy, Cyient has also added one more Cyient Digital Center, taking the total to 56
    • Cyient Foundation launched two smart classes, which is the first of such government school in the Telangana State


    Kellton Tech Q2FY18 Concall Summary

    Kellton tech.png

     Financial Highlights

    Kellton Tech Q2FY18 Financial Highlights.png
    • Total revenue for the quarter stood at Rs. 185.2 crores, which is 5.4% higher than the preceding quarter
    • EBITDA of the company stood at Rs. 28 crores which is growing by 34.6% year-on-year and 9.6% quarter-on-quarter
    • PAT of the company stood at Rs. 14.96 crores which is 2.4% higher than the preceding quarter
    • EPS of the company increased by 62.3% quarter-on-quarter and stood at Rs.3.17
    • Total revenue for six months stood at Rs. 361.07 crores
    • EBITDA for six months stood at Rs. 53.56 crores which is growing at 34.6 YoY
    • Net profit of the company stood at Rs. 29.58 crores which is 8.2% of the total revenue

    Revenue and Future Prospects

    Kellton Tech Q2FY18 Revenue by Industry.png
    • Revenue of the firm is expected to grow at 5.5% quarter-on-quarter and a little over 20% YoY
    • Acquisition of Lenmar has helped in attracting BFSI customer
    • IoT technology has helped in increasing the business
    • There would be a reduction in the number of pledge shares
    Kellron Tech Q2FY18 Revenue Analysis.png


    • Bank guarantee fees on some contracts of the company has resulted in the escalation of the financial costs
    • Timely renewals of debt limit has also resulted in additional finance costs

    Dividend Policy

    • Dividend payout to the investors would not start before FY2020 because of maintaining a cash reserve for growth prospects


    • Strategy for acquisition would remain the same, i.e., increase capability or expand the customer base
    • Cultural fit has to be taken care of before acquiring any new firm

    Project Information

    •  Almost 80% of the new orders are from repeat customers
    • Majorly the projects time span from six to nine months but they could be multi-year also
    • Kellton take up multi-year projects which is the combination of both building the systems initially and then providing maintenance and support for next few years
    • In one of the projects for the company in oil and gas industry, they can provide real-time data to the company with the help of the sensors installed near the oil wells and with the help of predictive analytics they can predict about the problems and changes that are needed to handle a particular situation
    • It makes IP or Platforms, and because of that they can respond quickly and better to client requirements

    Industry Characteristics

    • Digital transformation industry has a size of more than trillion dollars
    • Nearly 66 % of the total revenue of the Kellton Tech comes from the digital transformation
    • According to Gartner, 20% to 30% of all the companies around the globe have shifted to digital transformation, and by 2020 nearly 70% of the companies would be using this

    Business arena

    • Kellton Tech works with all the industries
    • Highest revenue generating industry for Kellton Tech is Information Services and Technology industry
    • It also works with Media & Entertainment, Manufacturing, Energy & Utilities, Education, BFSI, and Retail
    • Kellton has the capability to completely transform the traditional way of doing business into Digital


    •  Kellton make timely investments in new cutting-edge technologies
    • They claim that by the time large player adopts a technology they move to a new technology


    • Kellton has limited reliance on the H1 visa holders as employees
    • Employees are paid salary according to their experience and at par with US citizens and Green card holders
    • Kellton does not have huge bench strength of employees because it directly places them in projects

    Trade Receivables

    • Kellton claims to have done better than other players in the industry in terms of trade receivables which currently stands at 73 days


    Persistent Systems Q2FY18 Concall Summary

    Persistent Systems.png

    Financial Highlights

    Persistent Systems Q2FY18 Financial Performance.png
    • During the quarter the revenue was $118.10 million, which was a 4.5% QoQ growth and a 12.3% YoY growth
    • In Indian rupee terms the revenue was Rs. 7,612 million with a 4.6% QoQ growth and 8.1% YoY growth
    • The PAT was Rs. 826 million which is a 10% QoQ growth and a 12.4% yearly growth
    • On half yearly basis, revenue for first half is Rs. 231.07 million and in rupee terms is Rs. 14,892.67 million and PAT is Rs. 1,577.12 million
    • The steady growth is supported by strong demand in data, digital and IoT, specifically in healthcare and financial services
    • The revenue of Rs. 118.10 million includes $1.9 miilion from PARX
    • The linear revenue grew by 6.2% QoQ mainly with a volume increase of 5.4% and increase in billing rate by 0.8%
    • The onsite linear revenue grew by 11.4% QoQ mainly with a volume increase of 11.5% and decrease in billing rate by 0.1%
    • The offsite linear revenue grew by 2.7% QoQ mainly with a volume increase of 4.2% and decrease in billing rate by 1.5%
    • EBITDA margin was 15.2% against 14.3% in the previous quarter due to improved operational efficiency
    • Utilization for this quarter was 78.6% against 77.2% in the previous quarter
    • Growth in EBITDA was 10.9% QoQ and 4.5% YoY; YoY growth was mainly impacted by exchange rate movement
    • Depreciation and Amortization was 5% against 5.4% earlier and EBIT was 10.2% against 9% in the previous quarter
    • Treasury income decreased to Rs. 133 million from Rs. 183 million in the previous quarter
    • Gain on foreign exchange was Rs. 203 million against Rs. 184 million in the previous quarter
    • Subcontracting costs is increasing every quarter and is presently 18% of salary cost
    • The company is seeing steady QoQ improvements in two new products Sentient and ShareInsights
    • In FY2017, the company capitalized Rs. 217 crores in intangible assets and the range of amortization is three to six years
    • PBT was Rs. 1,115 million at a margin of 14.6% against 14% earlier
    • Growth in PBT was 9.3% QoQ and 13.2% YoY and ETR was 25.9% for the quarter
    • PAT was Rs. 826 million at 10.9% against 10.3% in the previous quarter and growth in PAT was 10% QoQ and 12.4% YoY
    • The operational CAPEX for the quarter was Rs. 46 million
    • Cash and current investments amounted to RS. 9,992 million at September end against Rs. 8,745 million at the end of June
    • Forward contracts outstanding at quarter end were $100 million with an average forward rate of 67.99
    Persisten Systems H1FY18 Performance.png

    Business Updates

    Persitent Systems Q2FY18 Financial Mix.png
    • The company also launched Smart India Hackathon 2018
    • The services business for the company has grown by 2.7%
    • The digital OU grew to 24.67 million, a growth of 21% QoQ and 60% YoY
    •  There is a difference of few hundred basis points between alliance number and the top client number
    • The customer is now looking at custom built development on the newer technology, and that is where the company is winning
    • The Enterprise business is expanding but the ISV business is shrinking
    •  There is a decline in the headcount of the IP led business as the personnel allocated is lower due to optimization
    • Excluding PARX, the sequential growth in Europe has been good due to a nice deal the company closed as a part of the Accelerite portfolio
    • Alliance shows weakness in current quarter as IBM’s numbers are better in Q4 compared to Q3
    • Service margin fell as onsite numbers have gone up compared to previous year and currency fluctuations also contributed partly
    • The mix of the company is more in favour of solutions side rather than implementation side when it comes to the partners Salesforce, Appian and Oracle
    • The company received Rs. 4 crore more than expected from an insurance claim on an IP infringement case and thus a reversal of RS. 4 crores is done in the release
    • The company is operating at 77% utilization in India and hopes to improve it
    Persistent Systems Q2FY18 Revenue mix.png

    New Initiatives – PARX & NEURO

    • The company acquired PARX, platinum partner for Salesforce in DACH region in Europe and would be ramping up its business in Europe
    •  In Europe and others parts of the world as well, the company hopes to add more digital enterprise clients
    • There is huge addition of clients due to the 100+ customers added from the PARX portfolio
    • PARX contribution was 0 in this quarter but should come back to 10% by next quarter
    • The company bagged a technology in its deal with USAA about launching risk based solutions and has now built NEURO, and also had first few customers including major names in the financial world
    • The first version of NEURO was released in May end and the price point could be anywhere from 100k to 250k

      Future Guidance

    • Applications based on the build out of the open source platform with Partners Healthcare would soon be out
    • The company hopes CE/CLM business to be lower double digits this year
    • The company expects the digital business to be half a million dollars and expects the growth rate to be near to 50% for the year  
    • The company has opportunities with healthcare providers with use of Ai in drug design, IoT for innovative solutions, blockchain for universal EMR, etc.
    • During Q2 the company added 19 new Enterprise customers of which it expects to convert at least half into multi million dollars accounts in the coming quarters
    • The company expects wage headwinds and has announced wage hikes of 6%-8% for junior category people in Q4, comprising about 75% of staff and would result in 1.5%-2% extra costs
    • Services business is a business with lots of headwinds and would be flattish in the times to come
    • IP led revenue has been flattish for six quarters, close to 30 million but would improve in Q4
    • The company hopes offshore utilization of 80+% and onsite utilization of 90+%
    • The company gave a margin guidance of 200 bps at the start of the year
    • The company would release the CE/CLM product in December quarter and has a six month cycle for product releases 


    Zensar Q2FY18 Concall Summary


    Financial Highlights

    Zensar Q2FY18 Financial Performance.png
    • The total revenue for the quarter was INR 7,626 million, which reflects a sequential growth of 3.5% in rupee terms.
    • In USD terms, the reported revenue is $118.6 million, reflecting a growth of 3.8% sequentially and 3.1% year-on-year
    • The gross margin, EBITDA and PAT growth was 8.2%, 19.2%,and 33.1% respectively in dollar terms.
    • Digital now accounts for 36.8% of our overall revenue, a growth of 5.3% quarter-on-quarter and 36.3% Y-o-Y.
    • The gross margin for the quarter improved by 120 basis points over the previous quarter despite headwinds on the count of compensation revision, which had an impact of close to 1.5%.
    • The effective tax rate for the quarter is at 25.4% as against 29.4% in the previous quarter.
    • The PAT grew by 33% over the previous quarter.
    • DSO for Q2 was 65 days as against 64 days in Q1.
    • The total outstanding hedges as of 30 September was equivalent to $70 million as against $48 million in the previous quarter.
    • The gain on hedges as of 30 September carried forward in the balance sheet is approximately $38 million
    • There was softness in IM business on account of low revenue in the maintenance and product line of businesses.
    • Overall service revenue declined by 3.6% due to lower product revenue.
    • Zensar had introduced a client partner model for key U.S. accounts, largely to accelerate the process of scaling up these accounts.
    • The overall global projects in the pipeline are at $900-plus million.
    • The revenue of Digital Commerce business grew 3.8% sequentially.
    • Utilization has increased to 85.9% from 83.2% on a sequential basis by rigor on optimization.
    • The company has made the investments in Vinci, Digital Workplace, and ICC.
    • The profitability of MVS business is negative because the company has some restructuring issues.
    • The company have invested a lot of money on first becoming a digital company
    • There was an impact of close to a little less than a $2 million per quarter due to awage hike.
    • The impact on the margin due to the wage hike 1.5% from a quarter-on-quarter perspective
    • The number of marketing staff has been reduced from 143 to 78, almost 45% in last two years.
    • Previously, the company used to run a large inside sales team which they now have completely outsourced.
    Zensar Q2FY18 performance other metrics.png

     Tax rate

    • The tax rate of the company is lower because of SEZ profit has increased in this quarter versus the previous quarters.
    • In quarter 1, the tax rate was at 29.4%, this quarter it was at 25.4%.
    • The company believes that for the full year, the tax rate should be between 27.5% to 28%.


    • The company has developed a digital platform called ZenROD, Return on Digital.
    • ZenROD improves the productivity of an enterprise with the help of analytics and alittle bit of artificial intelligence.
    • The company hasalready booked over $1 million of booking from ZenROD platform sales.
    • ZenROD is now available for client deployment. It's a configurable, customizable solution.
    • The company have done over $1 million worth of platform booking on that, roughly about $0.5 million of that already got built

     Foolproof and Keystone

    • The company had initiated introducing the services of Foolproof and Keystone across their client portfolio.
    • There is a positive response from theclient, and they have been very appreciative of anend-to-end suite of services.


    • The company saw good growth across all of their key markets.
    • Africa continued its great performance and grew 8.7% sequentially in constant currency. Europe and U.S. grew 3.3% and 0.5% respect
    • Regarding verticals, financial services, retail, and manufacturing grew sequentially by 5.5%, 5.4%, and 3.4% respectively in constant currency terms
    • Digital Stack business application drove the growth; it grew about 5.2% sequentially
    • Top 5, top 10 and top 20 accounts grew quite well. They grew sequentially by 40 basis point, 60 basis point and 160 basis point.

     Awards and accolades

    • Zensar was mentioned in Gartner's Competitive Landscape partnering for Data Center and Network Maintenance Cost Optimization.
    • Zensar was named as a major contender in Everest Group Workplace Services, Market Trends, and PEAK Matrix Assessment.
    • Zensar was also named in ISG Provider Lens Quadrant Report 2017, ISG Application Development and Maintenance services, as well was included in the new ISG Research Digital Workplace Services Archetype Report.

    Recent wins 

    • The company won multiple deals across experience design, Digital Commerce, analytics, automation and digital testing.
    • The company won deals for designing customer experience for one of the leaders in thehealthcare industry in the U.K., a hi-tech company that focused on thecreation of multimedia software product based out of U.S.
    • They have also won multi-year, multi-million-dollar Digital Commerce deal for one of the largest specialty retailers in apparel, a multi-million analytics deal with the global tech major, a robotics process automation deal for a South African financial services group.

     IMS business

    • IM business has been soft, particularly on account of both product sales as well as the MVS, which is a maintenance business.
    • Core IMS business grew by12.8% in constant currency terms sequentially.
    • Vinci is a very critical part of IMS growth strategy


    • There was a decline in ATG which will get more than compensated by anincrease in digital in general and as well as the increase in this ancillary development.
    • The clients who are on e-commerce are moving away from monolithic-like, say, ATG, Hybris.
    • E-commerce clients are building loosely coupled, highly usable kind of applications which can be redeveloped, repositioned in a matter of days, and this the trend in which the industry is moving completely.