i am sharing my concall notes…
Punjab…
- Out of 202cr of topline punjab was 50cr…
2.Total 50cr was received from the gov till date…
3.In dec 10cr has been received and in jan 5cr received form the gov
4.present receivabes stands at 145cr
5.the punjab project is operational till next six months, that is july and all 2147cr kendras are operating
6.now total services offered is 169 …
7.the gov is obligated to release receivables before ending the contract and they are hopeful
8.the employees have not got their full compensation as of yet…
9.145cr of receivables is inclusive of gst, that is at 18%, gst part is 70cr (citation needed due to poor connection)…true receivables is 75cr (there was a huge confusion about the gst part in concall, the management concluded the gst portion wil not be received, still why they are booking it as receivables is not making sense)… this receivables are to be paid at 1percent interest cost per month
10.they have the approach to talk with the gov to continue the project on a reduced scale and the terms of contract will be different , else they will continue to provide services in punjab in terms of non government application, which they are not providing a of now… - after this experience they will focus on international egov space rather than domestic but mentions that domestic tenders are also under consideration and this is a totally new concept to the gov so initially these problems do occur in business and to be ignored
I missed noting the spain contracts … will update once the tape is available in researchbytes…
other aspects…
1.I asked about evisa being a disruption risk to the current business to which they replied that govs are taking initiatives in evisa but svice providers like bls will process them only and margins can be even higher in evisa…
2. the current debt is 100cr from 98cr in nov ppt… the long term debt has been reduced but there is some uptake of short term debt also so the finance cost has increased…
3.10percent of the current visa contracts are expiring and will be up for renewal, but they mention they are gong to add new contracts fast than expiring ones (hopefully not face saving)…
4.the afgan contract has generated 5 million usd as revenue in total
5.they presently have 6 new offices and 2 mobile units in UAE for the afgan project and this is just a start… the afgan gov has made it mandatory for all afgan nationals in UAE to enroll in the program
6.algeria is still a start and revenue cannot be quantified
7.They also mentioned they are currently in talks with a lot of government internationally for egov projects, but cannot give disclosures due to sensitive information…
8. 1.5 million Spanish applications have been processed in q3…
9.coming to the big question of margins…
cost of services have increased as a employee conpensation hike due to both new recruits and hikes as they need better servic providers and prevent attrition … this should be the new normal in cost of services if not increasing…
also the other expenses have increased as they have travelled and took services of lot of experts and diplomats regarding the new upcoming visa tenders and processes…
10.They are still expecting a big win this calendar year and next year too, but did not specify visa or egov segment , but did mention schengen space is one of them…
11. 115cr is the present cash balance from 101.6cr last q end
please add or correct if possible , the connection at the company side was very bad…
But thats the outlook, so post july we are definitely losing 25percent of the topline + 10percent of the contracts are expiring(no estimate how much this 10percent contributes to topline)
as the debt is lesser than the recivables and cash balance individually i have no worries
Longer term view is still attractive in both egov and visa space , they have improved their service quality both technologically and by man power, we they maintain a clear edge over compititors …
In the short term after 2 quarters there is serious threat to the topline …
Disclaimers… Invested and trippled stake compared to q2, will add more if comes down to 150 to 160s