- The current business environment is facing slower decision-making and longer decision cycles, particularly for large deals (>$2 million).
- Many customers have postponed larger decision engagements, but existing customers are showing growth in their transformation journey.
- The company is focusing on digital assurance and digital transformation, primarily in DevOps automation and key technology solutions in banking, payment, and ERP.
- They are building capabilities and partnerships in this area to increase their digital footprint and expand their customer base.
- The engineering services are divided into mechanical engineering, digital engineering services, and electronic and embedded services.
- Mechanical and embedded engineering have both group and direct business, while digital engineering services are primarily driven by the group.
- The company is working on selling mechanical and production-based engineering services to direct customers in India and Asian markets.
- MDRT business (Digital Transformation) is being sold in direct markets, especially in Southeast Asia and India, with some success.
- The number of clients in the $0.5 million to $1 million range decreased from 29 to 15 in Q1, but this is more related to billing fluctuations than losing clients.
- The group business is relatively stable and follows a transfer pricing model, contributing approximately one-third of the total revenue.
- Direct business is where fluctuations in client engagement occur, and they are working on managing costs and increasing profitability.
- There is a focus on achieving the target of hiring 10,000 people, although the timeline might extend beyond December 2025 due to demand fluctuations.
- The company aims to balance the group and direct businesses, with the group business offering
- The target revenue mix is expected to be 45% from the Group business and 55% from the Direct business. The company aims to maintain this ratio.
- The company plans to maintain its 16% to 18% EBITDA guidance. Achieving this will involve focusing on digital businesses within the direct business.
- A margin decline in Q1 was attributed to one-time revenue items and slightly increased travel expenses. However, the merger-related expenses didn't significantly impact the margins.
- The increase in headcount in Q1 is due to hiring trainees who will become part of the employee workforce after completing six months. The company is preparing for future growth and avoiding past challenges where they lacked resources during periods of growth.
- The company expects a turnaround in FY '24-'25, possibly in the beginning of '24 or by Q2 '24. They anticipate market conditions to improve.
- The private equity promoter may contemplate exiting its investment, but this won't change the business strategy, and they remain focused on driving synergies within the group.
- The group business's contribution has been steadily increasing, from around 18% to approximately 33%. The focus is on growing the group business, which is viewed as a more stable and growing segment.
- The challenge is in the direct business, and the company is working on turning it around. They aim to stabilize and improve it.
- The company aims to maintain a balanced revenue mix and grow both the group and direct businesses.