Thread by @ValueEducator

#ExpleoSolutions Q3 concall highlights

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Numbers Update -

1. The revenue for the quarter was 120 cr up by 9% QoQ

2. EBITDA stood at Rs 187 million vs Rs 137 million in Q3FY21, up by 36.6%

3. PAT was at Rs 116 million vs Rs 125 million in Q3FY21
The 9M revenue stood at 293 cr up by 31.3% compared to same period last year
The 9M PAT was up by 12.3%

4. Net cash position stood at 163 cr

Business Updates -

1. The company sees demand and traction also on the renewal side
ER&D business did well in the year 2021 and also the Aerospace business did well.

2. Attrition remains the challenge

3. The projects are anywhere between 12 - 18 months the rates are changed during the renewal.

4. The company will not just focus on testing as a solely will be doing testing with automation, testing with DevOps etc

5. BFSI is the strength of the company but the strategy is also to focus on other verticals in healthcare, EdTech etc

6. The company will be back to EBITDA of 18% - 19% after within a few quarters.

7. Engineering business has lower margins, Mechanical engineering runs at lower margins whereas the product and digital runs at higher margins, as of now India business is more towards the mechanical side.

8. The digital business has grown from 9% two years back to 35%, expecting this business to grow faster than the traditional testing services business and this number to be around 50% during the course of CY 2022.

Merger Update-

1. The company has received approval from SEBI, waiting for the court hearing.

2. Expecting to get the first NCLT approval in couple weeks

3. The merger procedure to be completed around July 2022

4. This merger will bring Tech + Engineering capabilities

Margins Dip update -

1. The margins were dipped due to sale of licences from the partnership directly to the customers which is a low margin business than services business.

2. Increase in salaries also put pressures on the margins

Employees Update-
1. Added over 360 people during the Quarter

2. The company Has over 4000 employees across all entities and expects this number to be 5000 before the end of CY 2022.

3. The listed entity has over 2100 employees, the Bangalore entity has over 900 employees and the Pune entity has close to 1100 employees.

4. Expects to reach 10,000 employee mark in 2025