All E Technologies Ltd Management Discussions

Overview

In this age of relentless transformation powered by digital, Alletec is enabling organizations do more by helping them succeed in their digital transformation initiatives, and getting them ready for AI transformation.

Advances of the past few years in digital technologies has brought organizations face to face with challenges and opportunities that are causing paradigm shift in what the customers expect from businesses, the competition landscape, and how the businesses need to transform. Getting businesses ready for this paradigm shift requires an understanding of the new technologies, the modern workplaces, collaboration models, domain specific business processes and the modern suite of worldclass applications.

Leveraging Microsoft Business Applications, Intelligent Cloud, Automation, Data Engineering & AI - we are enabling these organizations enhance operational efficiencies, redefine customer experiences, bring up new products & services, and innovate business models. Our industry specific solutions bring to customers opportunities for jump starting their digital transformation journeys quickly, finetuning and adapting the solutions as the business needs.

Over the past more than 2 decades of our journey, Alletec offerings have evolved from ERP and CRM implementations to a consulting led suite of offerings that cover - Digital Core Modernization, Enterprise Applications, Process Optimizations, System Integration, Data & AI Solutions, and Change Management.

Global Economy

Most of the global markets experienced decline in inflation during the fiscal 2024. The global GDP is estimated to have grown at 3.2%, and expected to strengthen next year. Worldwide IT spending on software and IT services was ~US$2.3 trillion, of which ~US$1.4 trillion was services. By 2029, the global IT Services market is projected to grow at an annual rate of 5.76%, reaching over USD 1.8 trillion. This growth can be attributed to increasing adoption of cloud computing and the rise of digital transformation.

Businesses are increasingly seeking technology solutions that can help them improve their operations and increase efficiency. Cloud computing, Artificial Intelligence, and Cybersecurity, besides the enterprise applications of ERP, CRM, Business Intelligence, and Automation, are among the most popular transformation drivers that businesses are seeking and investing in. Additionally, businesses are also looking for IT and consulting services that can help them adapt to the changing business environment and stay competitive in the market.

Given the push of globalization over the past several years, particularly since Covid, businesses are reimagining their cost structures and exploring global procurement and consulting options even for their IT applications and services. Small and mid-sized organizations are opening up to explore these options more than ever before. Technology developments of the last few years have made remote and hybrid work, while ensuring effective collaboration, a reality and the new normal for most businesses. With our international clientele, we believe Alletec is well-positioned to take advantage of these global changes.

Indian Economy

Indias economy continues to be one of the fastest- growing in the world. The country ended FY24 on a high, surpassing all market estimates of GDP, with 8.2% YoY growth. For three consecutive years, Indias economy has exceeded growth expectations (averaging 8.3% annual growth over this period) despite global uncertainties, driven by strong domestic demand and continuous government efforts toward reforms and capital expenditure.

Indias GDP grew by 8.2% in FY24, exceeding the 8% mark in 3 out of 4 quarters in FY24.

With prevalent signs of the rural economy rebounding, strong growth in manufacturing, various economic reforms, digital infrastructural development and stronger exports in services & high-value manufacturing, there is confidence that Indias economy is poised for a significant growth outpacing the rest of the world.

Further, the Indian economy is projected to overtake both Japan and Germany in 2027 (FY28 for India) to become the 3rd largest economy. At this point, the US economy would still be nearly six times as large as the Indian economy.

In Purchasing Power Parity terms, India is already the third-largest economy, well above Japan and Germany. Further, at the end of 2027 (FY28 for India), the US economy would be only about 1.7 times that of India in PPP terms.

Indias exports of services reaches a new high of USD 341.1 Billon FY24.

Industry Overview

Global Microsoft Business Applications market

The global market for Microsoft Business Applications is substantial and continues to grow on the back of revenue contributions from software licences, subscriptions, and associated services. As more organizations adopt cloud-based solutions and invest in digital transformation and advanced technologies, the market is expected to continue growing. Microsoft is likely to continue integrating AI, machine learning and advanced analytics into its business applications, driving further innovation and value for users. The increasing reliance on AI-driven insights will make Microsoft Business Applications more valuable to businesses seeking to enhance efficiency and decision-making.

Market research shows that the business applications opportunity for software companies in the SMB space is predicted to be USD 51 Billion by 2025. The power platform is projected to significantly grow at a CAGR of over 20% in the coming years. The Microsoft Business Applications market is large and growing, with Dynamics 365 and Power Platform playing central roles in driving this expansion.

Microsofts Vision of AI in the enterprise

AI will continue to change the way the world does business. To succeed, businesses require long-term strategy and partners that are able to help them navigate through the transformation.

Microsoft aims to democratize AI by making it accessible to everyone. Through AI capabilities integrated into the widely used products like Microsoft 365, Azure and Dynamics 365, businesses across various industries and economies are leveraging AI to enhance productivity and creativity.

Global Enterprise Software market

The Global Enterprise Software market is rapidly growing and constantly evolving to meet the needs of businesses worldwide. With the increasing demand for digital transformation, the market has seen significant growth in recent years.

The global enterprise software market was estimated to be around USD 295 Billion in 2024. It is expected to reach approximately USD 401 Billion by 2029, growing at a CAGR of 6.35% from 2024 to 2029.

Cloud-based solutions are becoming increasingly popular, as they offer greater flexibility and scalability compared to the traditional on-premise solutions. Businesses are also looking for software solutions that can help them streamline their operations, reduce costs, and improve their bottom line.

Alletec

Founded in 2000, All E Technologies Limited (Alletec) has emerged as a dominant player in the Microsoft Business Applications and Digital Transformation space. Alletec enables clients stay competitive with Intelligent Business Applications, and is now getting them ready for AI transformation. By leveraging Microsoft Dynamics 365, Power Platform, Data & AI and Azure, along with collaboration platforms - its industry specific solutions empower clients to succeed in a rapidly evolving business environment.

30+ countries where customers serviced : 900+ Project Engagements.

As a Reliable, Affordable and Modern digital transformation partner, Alletec helps businesses navigate through the journey and enable them do more. Our solution offerings and services span through - Digital Core Modernization, Enterprise Applications, Process Optimizations, System Integration, Data & AI Solutions, and Change Management.

D365 Business Central - Implementation and Support

The Company has over 700 successful implementations of NAV : Business Central projects in

30+ countries, showcasing its adeptness in work processes, functional and technical proficiency. It has also developed industry specific solutions for Travel, eCommerce, Education, Green Energy, and Manufacturing.

The Company has created robust extensions of Cyborg and ProActivate to execute Business Central implementations and transition from traditional customisation to more streamlined configurations. The Company has successfully executed upgrade projects, helping clients transition from on premises NAV, GP, and SL to the cloud-based D365 Business Central environment.

D365 Finance : SCM - Implementations and Support

The Company has successfully executed Dynamics 365 Finance and Supply Chain Management solutions across diverse industries. It specialises in aiding clients in the migration of their on-premises AX solutions to the cloud-based D365 Finance and SCM platform. Additionally, the Company extends its expertise by collaborating with prominent global dynamics partners on various projects. These partners entrust specific segments of their projects to the Companys Indian team for proficient execution.

D365 Project Operations

The Company has achieved a series of Project Operations implementations. These include organisations from IT & ITeS segment, and some other enterprises in projects business.

D365 Sales

The Company has implemented D365 Sales for both Indian and international clients.

D365 Customer Service

The Company has a track record of several successful projects with D365 Customer Service. Some of these include Banks and Financial Services organizations.

D365 Field Service

Dynamics 365 Field Service helps organizations manage and optimize their field service operations. It enables companies to deliver on-site service to customer locations, providing tools to improve resource efficiency, enhance customer satisfaction, and reduce operational costs. This includes work order management, scheduling and dispatching, resource management, and inventory management.

D365 Marketing

Dynamics 365 Marketing is designed to help businesses create and manage customer engagement campaigns, nurture leads, and drive sales growth. It offers tools to design multi-channel campaigns, track customer journeys, and analyze the effectiveness of marketing efforts.

Power BI

The Company utilises Power BI, a leading data analysis tool, to help enterprises gain business clarity through data-driven insights. By integrating data from various sources, it transforms data into meaningful insights, conveyed through intuitive infographic formats, directing teams towards actionable solutions.

Power Apps

The low-code : no-code platform of Microsoft Power Apps has redefined the approach to applications development. The versatility of Power Apps allows our business users to take the reins in swiftly fashioning custom apps, offering a transformative tool to digitize and automate operations. These apps harmoniously integrate with existing systems, fostering seamless collaboration across our organization.

Power Automate

The Company assists enterprises in enhancing their operational efficiency by streamlining and automating recurring tasks through the use of Microsoft Power Automate. This not only helps eliminate manual errors but also redirects focus to critical areas where it is most essential.

Additionally, the implementation of Power Automate (and Power Apps) contributes to the transition towards paperless processes, further aligning with modern organisational sustainability practices.

Power Virtual Chatbots

The Company helps businesses implement AI-driven conversational bots, using Microsofts BOT framework and Power Platform Virtual Agents (VA). The Companys expertise extends to the seamless integration of Power Virtual Agents with commonly utilised products and services, accomplished through an array of prebuilt connectors. This integration is further augmented by the creation of tailored workflows utilising Power Automate, or by developing intricate scenarios via the Microsoft BOT framework. Through the utilisation of power automate, the organisation can effectively link these chatbots with other systems within the enterprise. Triggered workflows enable the acquisition of necessary information or the efficient transmission of provided information to pertinent systems, thereby elevating the standards of customer service.

Low-Code No-Code Custom Applications

The Company uses Low-Code No-Code platforms to provide custom applications development to enterprises for point solutions automation, and even function rich applications. The company also undertakes modernisation of existing applications.

The Company possesses extensive technological expertise, utilising Microsoft stack and open-source development tools. While established development platforms like the .NET framework, Flutter, and React Native continue to hold significance, the Company has embraced modern trends by increasingly leveraging platforms such as Power Apps and CodeOnTime

IP Led Solutions

Our IP led offerings, including EdTech365, Travel365, Green Power, Engineer to Order Manufacturing, CEKonnect, ProActivate, Cyborg, and DIMIST, stand as a testament to our commitment to cutting-edge technology and transformative ideas. With these solutions, we empower our clients to embark on a journey of digital evolution, harnessing the power of our intellectual property solutions to minimize risk and reduce time to market. From revolutionizing education and travel experiences to driving sustainable energy solutions and engineering excellence, we weave innovation into every facet of our offerings. Our IP-led solutions encapsulate our vision of a dynamic future, where technology not only meets needs but also anticipates possibilities.

Microsoft Azure - laaS and PaaS

The Company assists clients in seamlessly transitioning to Microsoft Azure to start experiencing the transformative power of cloud. It encourages the use of cloud-based computing resources rather than large upfront investments. Along with its core computing capabilities (Infrastructure as a Service, or IaaS), Azure also provides a plethora of applications and services that are managed effectively via automated processes. Azure infrastructure services include proactive counselling for critical decisions, meticulous planning for cloud migration, experienced administration of application deployment and hosting, expert handling of mixed cloud setups, and smart cost saving approaches.

Managed Services

Operating as a distinguished Tier-I Cloud Solution Provider (CSP), the Company offers expert guidance and comprehensive assistance facilitating the transition of both IT infrastructure and Business Applications to cloud. This specialised role is complemented by our Cloud Managed Services, a vital aspect involving the management of public, private and hybrid cloud models. The Company ensures continuous monitoring of an extensive spectrum of resources, including networks, servers, storage, applications, and data. The Companys cloud management services include a comprehensive suite of offerings like proficient cloud support and monitoring services, meticulous database management, strategic mail management, adept migration services and robust support services.

Cloud Architecture and Consulting Services

Business scenarios vary from organization to organization, and no one solution fits all uniformly. Alletec helps Customers evolve clarity from the maze of confusing acronyms and options - cloud, managed, hosted, public, private, hybrid, SaaS, IaaS, PaaS - to arrive at investment decisions best suited for their organizations.

Our Architecture consulting services engage with customers to define the roadmap of your cloud adoption journey. Our team monitors the entire infrastructure, productivity tools, and business applications you run to evaluate, guide, build, and manage IT infrastructure capable of supporting your business.

Data Engineering

The data engineering solutions, including Data Fabric and other tools on Microsoft Azure, help customers harness the power of data for insightful decisionmaking and innovation. The data engineering team excels in designing and implementing robust data pipelines, aggregating, transforming, and optimizing data from diverse sources. Through cutting edge technologies and best practices, it ensures seamless flow of data, enabling advanced analytics, machine learning, and business intelligence solutions.

Robotic Process Automation

Power Automate and other tools are used for RPA to enable organizations automate repetitive, rule-based tasks by using bots. These bots can mimic human actions, such as data entry, transaction processing, or responding to simple queries, by interacting with various digital systems.

Human Capital Management

Microsoft Dynamics 365 Human Resources helps streamline many routine HCM record keeping tasks and automate a number of processes. It helps simplify leave & absence reporting, create compensation programmes and benefits administration, perform functions to facilitate recruitment and help with payroll & budgets. It enables you to transform employee experiences, optimize HR programmes, increase organizational agility and discover workforce insights.

Alletec uses the Dynamics 365 Human Resource application, as well as some other specialized 3rd party HR software to help customers implement robust HCM applications.

Opportunities

Digital Transformation

Urgency for businesses to embrace digital transformation will result in enhanced momentum for adoption of world class ERP and CRM solutions. Adoption of Microsoft Dynamics 365 is growing faster than the market.

Intelligent Data Platforms

Demand from businesses for Intelligent Data Platforms which enable them bring together operational databases, analytics and governance to integrate the diverse data estate within the enterprise is on the rise. This demand is an opportunity for Alletec to grow business in this segment.

Modernization of Legacy Applications

Legacy systems exist in most organizations, that they cannot easily or quickly replace. Modernization of these applications by leveraging Cloud, Azure Cognitive Services, Analytics and AI is a rising trend.

Strong Microsoft Growth

Microsofts robust suite of products, and its ability to keep these products at the cutting edge of technology, has enabled it to grow faster than the market. This accelerated growth also enables Microsoft Partners to keep growing and taking market share from competition.

Infusion of AI

Microsofts strategic infusion of Artificial Intelligence (AI) across all product lines has marked a transformative era of innovation. With the dedication to harnessing the potential of AI, Microsoft has seamlessly integrated intelligent capabilities into its diverse range of offerings. From productivity tools to business applications and cloud services, AIs presence is palpable, empowering users with enhanced insights, automation, and personalized experiences. The Company can leverage its capabilities in data and AI to develop advanced solutions that enable clients to do more.

Industry Solutions & IP

Industry solutions like EdTech365, Travel365, GreenPower, and the cross-industry solutions of ProActivate, Cyborg, P2P365 and CEKonnect have enabled Alletec to stay at the forefront of competition. The company continues to enrich these solutions and assess market needs to conceptualize other possible IP development.

Alletecians - The Enablers

Our people define who we are. People are the key to organizational success. To maintain a competitive edge, the company continually makes investments in the professional development of its team members. Alletec consistently offers its personnel training to make them future-ready and help them excel in their respective roles. The Companys hiring and retention policies are also aimed at creating a team of experts that can further aid Alletec to stay ahead of the curve.

As constituents of the Company our endeavour always is to make the workplace vibrant, reassuring, and conducive. This helps foster a work culture where every member of the organization feels valued and empowered. Our teamwork and mutual trust have earned the company the recognition of Great Place to Work.

~350 Strength : Great Place to work certified - Feb 2024 - Feb 2025.

Corporate Social Responsibility

The Companys Corporate Social Responsibility (CSR) initiatives are primarily focused on ensuring the wellbeing of underserved communities and the advancement of childrens education.

It has affiliations with esteemed organisations such as The Earth Saviours Foundation, Gurugram, renowned for its commitment to aiding destitute individuals.

Additionally, the Company contributes to the C. R. Kothari Memorial Charitable Trust, an entity that is engaged in making education accessible to students hailing from economically disadvantaged backgrounds. The CRKMC Trust undertakes various initiatives, encompassing mentorship, beneficiary counselling, distribution of essential items such as clothing and stationery, the facilitation of education loans through banking channels, as well as application assistance for government sponsored scholarship programmes and other relevant schemes intended for the betterment of students and their families.

The company sponsored a project in Orissa with Sight Savers India for the restoration of eyesight to hundreds who were visually impaired. The project won rich accolades. The company also assists Books For All organization to facilitate education to the urban poor.

The company contributes to Om Foundation, Noida. This charitable trust was founded in 2002 to provide education and support to underprivileged children in Noidas slums. The foundations mission is to help Indias economically and socially disadvantaged citizens by creating and managing programs that focus on education and employment. The foundations school provides free English-medium education, nutrition, and healthcare to around 375 children. The school has a 1:20 student-to-teacher ratio and teaching standards that are comparable to top public schools.

Financial Highlights

The table summarises the consolidated financial outcomes of the Company.

(Rs. in Lacs)

Particulars	FY24	FY23	Change (%)
Total Revenue	12,365.45	9,149.55	35.15%
EBITDA	2,720.62	1,595.89	70.48%
EBITDA margin (%)	22.00%	17.40%	456 bps
PBT	2,620.82	1,526.72	71.66%
Reported PAT	1,968.56	1,208.16	62.94%
Adjusted PAT (before Extraordinary Costs)	1,968.56	1,159.18	69.82%
Reported EPS (in Rs.)	9.75	7.24	34.55%

Geographical Revenue Break-up

(Rs. in Lacs)

Particulars	FY24	FY23	FY22
India Sales	5,946.83	4,369.67	3,799.67
International Sales	5,686.45	4,398.76	3,205.23
Total	11,633.28	8,768.43	7,004.90

Top Customers Contribution to Revenue

(Rs. in Lacs)

	FY24		FY23
Particulars	Amount (Rs. Lacs)	% Of Revenue from Operations	Amount (Rs. Lacs)	% Of Revenue from Operations
Top 5 customers	2,140.52	18.40%	1,831.07	20.88%
Top 10 customers	3,199.15	27.50%	2,620.54	29.89%

Key Ratios

Particulars	FY24	FY23	Change
Debtors Turnover (x)	8.90	8.00	10.10%
Current Ratio (x)	4.70	5.50	(13.50%)
EBITDA Margin (%)	22.00%	17.00%	+500 BPS
Net Profit Margin (%)	16.00%	13.00%	+300 BPS
Return on Equity (%)*	18.00%	16.00%	+200 BPS
Return on Capital Employeed (%)	21.00%	15.00%	+600 BPS

*Reported PAT is considered for calculation

Risk Management

Alletec has implemented a robust and comprehensive approach to risk management that underscores its operational resilience and strategic decision-making. Recognising the dynamic nature of the digital business landscape, the Company identifies, assesses and mitigates potential risks that could impact its business operations, reputation and stakeholder interests. The Company employs a systematic risk assessment process to evaluate both internal and external factors, taking into account market trends, regulatory changes, technological advancements and potential vulnerabilities.

The Board of Directors regularly reviews the business risks of the Company and takes appropriate initiatives to mitigate them as early as feasible. The Senior Management Team, led by the Managing Director, is primarily responsible for the management of risks through the proper implementation of mitigation measures.

Internal Control & Adequacy

The Company places a strong emphasis on internal control and adequacy to ensure the efficiency, accuracy and security of its operations. With a commitment to maintaining the highest standards of corporate governance, Alletec has implemented robust internal control mechanisms to safeguard its financial, operational and data-related processes. These controls encompass various aspects of the organisation, including financial transactions, data access and security, compliance with industry regulations and risk management.

By consistently evaluating and enhancing these controls, Alletec strives to mitigate risks, prevent errors and detect any irregularities promptly. This proactive approach not only ensures the reliability of the Companys operations but also instils confidence in clients, stakeholders, and partners by demonstrating Alletecs dedication to maintaining a transparent and well-regulated business environment.

Outlook

Alletecs core business, which comprises of both products and services, has consistent growth inherent in the business model. The solutions we deliver to our customers are mission critical for the businesses of our customers to run, making our customer relationships long term and strong. Alletec will continue to grow through a combination of organic and inorganic initiatives in the short, mid and long term.

Organic

The rapid adoption of cloud is resulting in customers preferring SaaS model over the on-premise model of a onetime product purchase. This results in all SaaS customers paying the product fee in a recurring manner. All enterprise applications (ERP, CRM, and others) require ongoing support and enhancements. This results in Alletec having multi-year relationships with its customers. These engagements increase the opportunities for cross-selling and up-selling. A good number of ERP and CRM customers, for example, are now exploring Data Engineering projects with us.

Alletec is continuing to make investments to increase its global foot print. Investments are increasing in the Americas and African market, as well as in some other geographies. The investments are in strengthening sales, marketing as well as in building partnerships.

Alletec is investing heavily in strengthening the Intellectual Property assets like EdTech365, Travel365, GreenPower and others, and at the same time also working on building new IP. These IP give us tremendous competitive advantage in the market and will also be a constant revenue stream.

Along with the investments to build business opportunities, we also continue to invest in strengthening our delivery capabilities. Our team continues to grow, and the company keeps investing in their training and development. With market focus on Data Engineering and AI building up, our training focus on these areas has also strengthened.

Inorganic

Alletec has a clear inorganic growth strategy in place, supported by a healthy cash position and a strong desire to pursue this track along with the organic growth. The two together will enable us meet the growth goals we have set for ourselves.

We are confident in our ability to stay in a market leadership position for the years to come. Our sharp focus on what we do, our investments in innovation, training & IP, along with the ever-deepening experience with every customer engagement, the geographical spread of our customers will all enable us compete well with the largest and the best in the industry. Alletec will continue to experience a healthy growth and sustain well any possible disruptions caused by challenges like geopolitics, macroeconomic changes, supply chain disruptions and inflation. The coming years are going to experience significant strengthening in the demand for Digital Transformation, eventually leading to AI Transformation. Alletec is well positioned to leverage these opportunities.

Disclaimer

This document contains forward-looking statements regarding anticipated future events and the financial and operating outcomes of the Company. As such, these statements necessitate the Company to make assumptions and are subject to inherent risks and uncertainties. There exists a significant risk that the assumptions, predictions, and other forward-looking statements may not materialise accurately. Readers are advised to exercise caution and avoid placing undue reliance on these forward-looking statements, as various factors could cause actual future results and events to differ significantly from those expressed in such statements. Consequently, this document is subject to a disclaimer and is qualified in its entirety by the assumptions, qualifications, and risk factors outlined in the managements discussion and analysis presented in All E Technologies Ltd.s annual report for FY 2023-24.