Q3FY17 Concall Notes:
Any impact on the wage bill due to the change in H1B Bill will be passed on to the customers.
Sales and operations staff in Ireland has been built up. Expect orders from Europe from the next quarter. Hope to achieve 20% revenue from Europe in the future to reduce dependence on US.
Pledging of shares by promoters for working capital requirements of the company. Don't expect further pledging.
A Project is classified as digital when a minimum of 3 of the 5 technologies in the ISMAC stack are being used for project execution. If not, then it's classified as an enterprise project. Also foraying into blockchain and AI.
Our digital txfn solutions are Industry agnostic - A vertical play, not horizontal.
80% of orders from repeat customers. Hope to partner with clients on the digital side for a long time.
Acquisitions will be funded through debt because it's cheaper ~ 5%. Aim to keep the D/E ratio at around 0.5.
There will be a $15-20 Million QIP in the future, but the timing depends on when the headwinds for IT goes away.
The target company should have a revenue between $5-50 million. We don't look at companies which have a revenue greater than $50 million. An acquired company is completely integrated within 180 days.
Target a conservative 20% Organic growth because of the higher base.
Margins on enterprise work is lower, but agree to those projects if there is a potential of larger digital work from the client & their industry peers.
Further implementation of mSehat depends on the UP Election results. WHO is interested in taking it to other places.
Billing rate depends on the type of work. Average billing rate is around $88/hr for onsite work. Digital transformation billing rate is $180/hr, but the expenses are also higher.
No currency hedging has been done - a significant expense in US is also in USD. Also, the debt raised in India in USD becomes a natural hedge.
New client - a large bank with presence in 23 US states: Could turn out to be a multi-million contract over the next few years. Presently, on average it tends to be a $800k-900k contract.
Globally, majority of the IT budget of companies being assigned for their digtal txfn. Digital Txfn results in significant savings for the clients. e.g, No need to spend millions to set up a data center, just put it in the cloud by using Amazon and pay as you go.
Spending by Govt & the Private Sector in India on the digital side is growing exponentially.
Dividends might be given out only in 2020-2021 because that's when the company is expected to be in a steady state growth state.