My running notes of the Con call.
General impression, Management looked confident of the growth and the 2018 target.
75.17 Cr from 66 cr. growth momentum expected to build up - New Baseline for the company will be 75cr
The expected margin decline is temporary because of acquisition of loss making technology MAG plugs, Tech transfer to India in next few quarters.
Will expect EBITA margins to high 30s
Reiterated commitment to April 2018 aspiration of 400cr revenue
A: Answer or Management remark
Q: Numbers of Magplus -> A: not eager to share mag+ numbers… wait till its integrated. Mag plug acquired at 25cr
A: MPS integrate quickly, all other companies were integrated fully in an year, Magplus will be sooner.
A: Organically: 3 of the 10 customer have stepped up and are getting new business and services.
A: MPS will plays in SAS based solution, content solution space
Q: number of client builds decreased -> A: not a fair comparison on q-on-q basis look at y-y. Some are short term customers.
Q: Why Increase in cash employee -> A: magplus expenses added to this month.
Q: head count Dehradun. -> 1037
A: 300 customer not inluded in revenue.
A: 24cr paid for magplus
A: 74+ Cr it includes magplus numbers
A: short term pain of magplus, Marketing moving to India.
A: we are considering 75cr is baseline…
Q: 2018 rev target in cr -> A: 400cr by april 2018… -> margin -> higher 30% (target)
A: look out of acquisition continues…
Q: Expected head count increase -> A: No annual headcount growth. , Not trying to increase revenue through head count.
Q: other expenses rise in % topline why? -> A: loss making entity, slightly different(SAS based) … looking at overall expenses.
Q: Sale of land. tax implication -> ???
Q: Hedge polity (UK) -> A: Shaktivel-> we hedge USD and GBP. If GBP had not decreased, revenue would have been higher
A: Now moving to dollar contracts…
Q: Strategy -> A: We have significant capacity in Dehradun -> mature operation-> not doing one step but doing end-to-end
A: we will ensure volume growth… SPS is similar margins, there is de-growth in competitors
A: Mobile dev. markets are growing and digital publishing and will reach 20Billion by 2019. with magplus
A: Yamini-> Top American customer introduced into a new area -EMA-> this is multi-year, multi-service -global project…expanding Services with existing customers
Q: How much time needed to scale , How much time did it took-> A: customer from 2009 -> customer wants to step up… -> started small and now getting bigger
Q: Margin decrease -> one reason is Magplus revenue coming from US. Few step up-> 3 step ups-> Magplus likely to break even-> normally a year -> SAS based product -. easier transition to India-> will integrate sooner than earlier acquisitions.
Q: organic scenario -> A: Had revenue headwinds (60cr) in past quarters but now step up
Q: how Mag+ integration is happening -> A: technology to Noida operations -> new marketing operations. -> more sale of their products by marketing than sales…-> organic building of team-> will be performance based
A: Element/EPS-> now fully integrated with MPS NA, no distinction
Q: Any acquisition pipeline-> A: acquisition is key area. Confident to meet April 2018 aspiration
Q: % from product. -> A: 80 services and 20%-> products… using own products…
A: services will remain but share of SAS based should increase, much more efficient revenue stream.
A: MPS has lasting account strategy-> builds strategic eco system.
Q: lots of opportunity for cross sell -> yes run deeper with our products with existing customers
Q: Owners of Mag+: -> owners no longer … tech team still intact and with MPS
Q: About the QIP 150 cr cash. -> A: April 2018 is not far away. Have a disciplined framework for acquisition. Confident to meet aspiration.
Q: Organic run rate ? -> Noida unit reports into Yamini MPS NA. seamless content, global delivery. All previous acquisitions fully integrated.
Q: Total headcount -> A: 2964 (1037 Dehradun)
Q: any change in Dividend policy?-> A: Not decided yet, will be taken up during annual results.
Q: investments for organically growing Mag+ marketing-> A: same office -> small (4-5) digital marketing performance based ->
Q: ball park figure on investment -> A: current incumbent cost is high in mag+… will be substantially lower than that
A: +ve dev for MPS:
2 education publication houses -> one has expanded to new service 1 has opened up editorial -> content development side for MPS.
-> science/ academic-> workflow divided into two chunk -> one big chunk -> done by 7 vendors and other chunk-> only MPS…
A: MPS can now expect different types of revenue…
Q: any capex -> A: no anticipation
Q: productivity -> A: increase with digicore, use across MPS
A: Publishing business is growing at 4% or 5%. Some publishers have not been taken action for long and publishers will take action. This pressure is good for MPS and its well placed to get into opportunities as they appear.
Q: do we anticipate billing rate changes-> budget covered up to 31 mar 17.
Q: product development + AWS -> digicore platform -> one of customer is very happy and promoting-> two large deliveries -> exeley.com -> hosting is going good…
A: Digicore and products will be contributing -> STEM customer (60 % customers), MAG+ has thrown interesting opportunities in the education publication space…
Q:Most important metrics -> A: manpower cost/ revenue
A: from management side -> how is revenue growing… how customers are using MPS -> growing end to end… or small tasks
Q: What MPS aspire to be ->A: Be the publishing operation of large publishing houses.
Q: How large is Mag+ market? -> A: In terms of market, few statistics -> mobile apps will will CAGR of 30% will reach 7B enterprise app market to grow…
A: Players-> adobe-> big player -> rest others small player.