Q3FY22 Revenue up by 46.8% Y-o-Y to Rs 1,058 million
PERFORMANCE HIGHLIGHTS
Consolidated Q3FY22 Q-o-Q Review
The operating revenue was Rs 1,058 million in Q3FY22 as compared to Rs 971 million
in Q2FY22, reflecting a growth of 9.0%.
Total income was Rs 1,063 million in Q3FY22 as compared to Rs 977 million in Q2FY22,
reflecting a growth of 8.8%.
EBITDA stood at Rs 187 million with the margin at 17.7% in Q3FY22 as compared to
Rs 191 million with the margin at 19.6% in Q2FY22.
Profit after tax stood at Rs 116 million in Q3FY22 as compared to Rs 115 million in
Q2FY22.
Basic EPS stood at Rs 11.10 as compared to Rs 10.80 for Q2FY22.
The Company’s net cash position stood at Rs 1,633 million in Q3FY22 as compared to
Rs 1,452 million in Q2FY22.
Consolidated Q3FY22 Y-o-Y Review
The operating revenue was Rs 1,058 million in Q3FY22 as compared to Rs 721 million
in Q3FY21, reflecting a growth of 46.8%.
Total income was Rs 1,063 million in Q3FY22 as compared to Rs 768 million in Q3FY21,
reflecting a growth of 38.5%.
EBITDA stood at Rs 187 million with the margin at 17.7% in Q3FY22 as compared to
Rs 137 million with the margin at 19.0% in Q3FY21.
Profit after tax stood at Rs 116 million in Q3FY22 as compared to Rs 125 million in
Q3FY21. Basic EPS stood at Rs 11.10 as compared to Rs 12.30 for Q3FY21.
The Company’s net cash position stood at Rs 1,633 million in Q3FY22 as compared to
Rs 1,415 million in Q3FY21.
Consolidated 9MFY22 Y-o-Y Review
The operating revenue was Rs 2,910 million as compared to Rs 2,216 million in
9MFY21, reflecting a growth of 31.3%.
Total income was Rs 2,936 million as compared to Rs 2,289 million in 9MFY21,
reflecting a growth of 28.3%.
EBITDA stood at Rs 524 million with the margin at 18.0% in 9MFY22 as compared to
Rs 507 million with the margin at 22.9% in 9MFY21.
Profit after tax stood at Rs 361 million as compared to Rs 394 million in 9MFY21.
Basic EPS stood at Rs 34.40 as compared to Rs 38.48 in 9MFY21.
The Company’s net cash position stood at Rs 1,633 million in 9MFY22 as compared to
Rs 1,415 million in 9MFY21.
Firstly Raj has given a summary of financials. Keep up the excellent work.
concall was attended by Ralph gillson, MD & Desikan & by several analysts from Motilal, Sharekhan, Rohit Balakrishnan et al.
Though Revenue has gone up, Ebidta has been impacted by, training costs, third party consultants, salary hikes, forex loss & ₹ 2.1 crore for one time purchase of software. Again in Q2 ,merger (amalgamation) expenses were booked & therefore they are Nil in Q3
Robust demand, Good deal wins, Renewals, Strong growth in specialized testing to drive margins & prospects.
Expect good growth in top line & bottom line, over the next 3 Quarters, for which trainees,third party consultants have been hired, to tap into opportunities.
5)MD says ,see Sequential growth of 10 percent, over the next 3 Quarters, with automotive & aerospace doing well.
Expleo solutions is now a Technology plus engineering services company.Engg business is being ramped with focus on new verticals of Health care, life sciences, utilities,edtech , in addition to, aerospace & automotive which is on uptrend.
Expleo will maintain Ebidta margins at 19% , going forward. Pricing pressure limited to india only & not in overseas markets.
For the year end March 2023, turnover of amalgamated entity, will be ₹ 1000 crore, while for year end March 2022, turnover of amalgamated entity is put around ₹720 crore
current employee strength is 4000 ( December 21) , will be raised to 5000 in 2022 & around 10,000 by 2025.
SEBI has given go ahead for amalgamation & the issue is pending in NCLT , approval is expected in few weeks, after which shareholders meeting, will be convened for approval, with abridged prospectus of financials of unlisted entities , After which again it will go to NCLT, with a waiting period of one month, for final approval from NCLT
Legally amalgamation will be effective from April 1,2022, however due to delays in NCLT, this process is expected to be completed,by end of June 2022.
To sum up, Though there is topline growth, Q2 & Q3 , bottom line has been impacted by training costs, Third party consultants, Coimbatore facility, amalgamation expenses, forex loss & ₹2.1 crore, one time expense for purchase of software in Q3.
Next 3 Quarters will be excellent as 350 trainees are to be deployed ,& all expenses have been booked. Further another batch of trainees will be inducted to tap into demand & digital revenues are expected to be 50% of the turnover, this year. As trainees , will be absorbed, headcount will go up to 5000, this year & to 10,000 by 2025.
On the 11th of February, Phani Tangirala sold around 1k shares on-market at roughly ₹1,408 per share. In the last 3 months, there was an even bigger sale from another insider worth ₹2.0m. Insiders have been net sellers, collectively disposing of ₹4.8m more than they bought in the last 12 months.
Expleo amalgamation ,is awaiting NCLT clearance, after which shareholders meeting will be called, & abridged financials of unlisted entities will be disclosed . Due to delay at NCLT levels, amalgamation is likely in June 2022.
Good numbers declared by expleo sol. Client addition for the whole year has gone up from 68 to 100 in such competitive advantage. consecutive quarter above 100 cr for the company.
EPS gone up from 10.72 vs 11.11 to 18.18 YOY and QOQ. A rise of 75 %. This year will be an happening year for the company as merger would be completed.
In reply to itsnitin , specifically asking me, for info
concall was well attended by several analysts, including sharekhan, Trustline as well as HNIs
MD says , Expleo to grow topline at 8 percent plus Q on Q for the next few quarters, due to Robust demand, digital push & Robust order pipeline.
Q4 EPS consolidated is ₹ 18.18 ,new clients mined,
50% of revenue (both direct & indirect) sourced thru parent. Unlisted entities are growing at 30% Q on Q ,in topline, however profit margins are few points, less, in comparison to the listed entity.
Attrition rate around 13% ,is expected to stabilize this Q & is not a matter of concern.
Acquisition of Lucid technologies ,at 3.5 million USD, payable over 18 months. Lucid is likely to generate a turnover of 5 million USD, this calendar year. Another acquisition is likely to be completed in few days.
Headcount has been doubled over the past year & have been deployed.
Amalgamation is awaiting NCLT clearance & is likely to be completed in 3 months, thereafter parents stake will get to 71.05 % .
I decipher that another buyback is likely, post amalgamation, after which dividends will flow seamlessly .
@Balki , please can u guide what will be financial of merged entity . is it their in new notice submitted in exchange ? i couldnt find . thanks in advance
On perusal of the e mail received by you, from Expleo,on clicking the blue colour sentences will take you to the pages, giving all details, including the audited financials of unlisted entities as on March 31,2022 .
In fact all details are given, running into several pages & i need time to go thru & assimilate.
After a quick glimpse of several pages, all I can say at this point of time is, parent holding with get to 71.05%, with consolidated EPS in the vicinity of ₹72.
However, the prospects seems to be bright, going ahead, with turnover as well as profits of the amalgamated entity,set to rise from the current levels.
March 22 np for listed entity is 54 crores & unlisted i am assuming not more then 46 crore since last yr it was 37 crore…this yr unlisted grew at 25% but with lower ebitda so assuming 46 crore + listed 54 crore = 100 crore total np will give an eps of about 65 for fy21-22.
Most of the IT sector companies will take a hit on margins & profits , for the next 2 quarters , but will sharply bounce back, thereafter.
Expleo seems to be an exception to the above & likely to do extremely well on topline & bottom line, especially for the next 2 quarters.
Further Rupee at 80 vis-a-vis the dollar, will be the icing on the cake. After gathering info, I see a sharp rise in Expleo topline & bottom line, for the coming year, I estimate consolidated EPS of amalgamated entity, around ₹70, , can see sharp upside in consolidated EPS in the vicinity of ₹93 to ₹125 , over the coming 5 years, depending on deals execution.
Hi Balki, any specific reason to have that view? Since Expleo has majority of exposure to Europe and it is expected Europe to have a much higher reccessionary impact than USA.
IT sector is expected to do well for the next 5 years,on digitalisation , Automation, Data analytics, cloud & IOT applications etc.
Last year,was a bumper year for IT firms , current quarter & the next will take a hit, due to wage hike, attrition & inability to pass on the hike to the end consumer. Another cycle of Rebound bumper quarters for IT firms are ahead, after the current lull.
Since Expleo is into project based testing & QA , the fruits for Expleo ,do not coincide with upswing in IT sector, but occur after a lag, typically at the middle or the end of the project, even though testing occurs , simultaneously in few cases, from start to end of the project cycle, though in majority of projects, testing & QA occurs in the middle, to end of the project causing a lag period for Expleo solutions.
So I say, while majority of IT firms will take a hit for the current Quarter & the next, it will be a harvesting for bumper topline and bottom line for Expleo.
Another good quarter for expleo solution. Management has delivered as per the guidance. If we exclude foreign exchange loss then the number would be similar to 4q of 2022. Great set of continuous addition of new clients deal. The Next triggered is the closure of merger.
