Tata Elxsi Q1FY19 Concall Summary

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Financial Highlights

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  • Q1 has been a weak quarter for the company historically
  • Still the operating revenue grew by 18% compared to Q1FY18 and so did the bottom-line
  • Pursuing annual average growth of 20% 
  • Top account revenue was 24% odd for this quarter
  • Constant currency growth is 14% compared to Q1FY18

Verticals

  • Four verticals include automotive, media and broadcast, communications and medical.
  • Automotive
    • Primarily focus on connecting cars, autonomous cars and electrification
    • Generated significant opportunities with few closures
    • Expected to grow the fastest among all verticals
    • Media and broadcast
    • Operations with MSO’s, telecom operators and CPE vendors (set top box and gateway makers) 
    • Decent quarter ii this vertical
    • Lot of opportunities and some good deals in Android space and OTT space
  • Communications
    • Primarily focus on Cloud and SDN initiative
    • Focus on SDN technology for the past 18 months and have good traction in this space
  • Medical
    • Investment in this segment for the last 4 years
    • Won significant deals in the last quarter and is expected to bring good revenue in the future

Wage hike

  • Wage hike for about 90% of employee will be effective from 1st July

Revenue Breakup and contributions

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  • T&M vs Fixed is 55:45
  • Offshore vs Onsite is 60:40
  • Geography wise breakup is 50% Europe, 30% USA and 20% from rest of the world
  • Vertical breakup is 60% automotive, 25% media & broadcast and the rest 15% from communication and medical
  • Utilization is 81% this quarter with top 5 contributing 40% and top 10 contributing 55% roughly
  • JLR contributes about 24% of the total revenue
  • IPR and patients accounted for 3-3.5% of the total revenue compared to less than 1% in the same quarter last year

Patents

  • Filed 68 patents to date out of which 2 was granted in the last quarter
  • Created drug delivery pen through in-house R&D
  • In talks with companies to patent its design

Tie ups

  • Setup an ODC with Panasonic for home appliances like AC and refrigerators
  • Partnership with Unity to build AR and VR for gaming, automotive and other fields

Growth strategy

  • Company focusing on IOT, AI and Robotics across these market verticals and investments have been done in these areas for the last 12 months
  • Expanding the market beyond India and Japan. Participated in a computex in Taiwan and presentations at the Broadcast Asia Conference in Singapore at the beginning of the quarter
  • Design segment has grown in line with EPD business and has started showing synergies with technology like multi modal interface and machine interface in automotive space
  • Focus on smart home technologies and electric vehicle related products

Downloads

Other Concall Summaries of Tata Elxsi