You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Draft Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.
Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factors.
BUSINESS OVERVIEW
We are engaged in the business of digital consulting and IT engineering offering end-to-end software development solutions to enterprises, and startups worldwide. Our company provides services in technological advancement, offering a comprehensive suite of services include Digital Engineering, Data Analytics, Artificial Intelligence/Machine Learning (AI/ML), Cloud Engineering, UI/UX Design and advanced technologies such as Blockchain and Augmented Reality/Virtual Reality (AR/VR). Our company have more than 500 IT professionals and consultants to serve more than 250 clients worldwide, delivering full-time services from various locations of India. And with ISO:9001 ,ISO:27001 & SOC 2 certifications, this ensures exceptional quality and adherence to international standards, guaranteeing the highest level of excellence and quality in our work. Our team excels in Cloud, Mobile, DevOps, Data Engineering and Application Development using React, Angular, .NET, Python, Node, PHP, Java, etc. We were able to develop a customer-centric focus that aims to fulfil their immediate business requirements and to provide them strategically viable, futuristic and transformative digital solutions. We also design, develop and maintain software systems and solutions, create new applications and enhance the functionality of our customers existing and new software products.
We were conferred with various awards and recognition with Clutch Global Leaders Spring 2024, Clutch Champion Awards Spring 2024, Clutch Top 1000 B2B Companies 2023 & 2022, Financial Times High-Growth Companies- Asia Pacific 2024 & 2023, The Economic Times Indias Growth Champions 2023, Promising Brands 2022, Dun & Bradstreet Leading SMEs of India 2023 & 2022, Manifest Global Awards 2024 & 2023 and G2 Best Software Development Company in 2022. We believe that these recognitions and accolades obtained by our Company are the outcome of our diligent approach.
Mr. Mukul Gupta, our Chief Executive Officer is the founder and promoter of our Company and he have several years of experience in the IT industry. Prior to founding our Company, Mr. Mukul Gupta have several years of experience of leading global operations for major IT projects. Our Promoter and CEO, Mr. Mukul Gupta has been conferred with "Economic Times-Promising Entrepreneur" in the year 2021. Along with Mr. Mukul Gupta, Mr. Vipul Gupta is also the Promoter and Director of our Company, he looks after the finance, and strategy of our Company.
Our Board of Directors includes a combination of management executives and directors who bring in significant business and management expertise. We are led by professional management team with extensive experience in the IT Services industry, in-depth understanding of managing complex projects and proven performance track record.
We have consistently grown in terms of our revenues over the past years. In the recent periods our revenues from operation were Rs. 4,70,411.25 thousand in F.Y. 2020-21, Rs. 6,90,717.82 thousand in F.Y. 2021-22, Rs. 9,25,722.48 thousand in F.Y. 2022-23 and Rs. 8,27,918.19 thousand for the period ended January 31, 2024. Our Net Profit before Minority Interest for the above-mentioned periods were Rs. 1,25,359.18 thousand, Rs. 1,58,381.58 thousand, Rs. 1,73,528.66 thousand and Rs. 2,16,441.61 thousand respectively.
Factors contributing to the growth of our Revenue:
Our revenue from operations surged from ?4,70,411.25 Thousands in FY 2020-21 to ?6,90,717.82 Thousands in FY 2021-22, reflecting an impressive growth of almost 46.83%. This substantial increase was primarily attributed to the heightened growth traction observed in our existing client base.
The COVID-19 pandemic, while challenging for many industries, has played a pivotal role in the growth of CapitalNumbers. As businesses worldwide shifted to remote work and digital solutions, the demand for our IT services and products surged. Our ability to quickly adapt and provide essential digital solutions allowed us to capitalize on this increased demand. The pandemic accelerated the digital transformation of many organizations, prompting them to seek advanced technological solutions to maintain operations and ensure business continuity. Our expertise in digital engineering, cloud services, and data analytics positioned us as a valuable partner for companies navigating this transition. Additionally, the pandemic highlighted the importance of robust and scalable IT infrastructure. As a result, many businesses invested in upgrading their systems and integrating new technologies, further driving demand for our services. Our proactive approach in addressing these needs enabled us to expand our client base and strengthen existing relationships. Moreover, the shift to remote work opened up new opportunities for global collaboration. We leveraged our diverse geographical presence to provide seamless support to clients across different time zones, enhancing our service delivery and client satisfaction. Overall, the COVID-19 pandemic acted as a catalyst for our growth, accelerating the adoption of digital solutions and increasing the reliance on IT services, thereby contributing significantly to our success during this period.
Over the past years, our company has consistently demonstrated strong revenue growth, significantly driven by our operations in the United States. This market has played a crucial role in enhancing our overall financial performance. The steady increase in revenues underscores our successful expansion and increasing market penetration in the United States. Our profitability has also seen a consistent upward trend, reflecting our ability to grow revenues while maintaining operational efficiencies. The factors contributing to this growth include focused market expansion efforts, maintaining high service quality, leveraging technological innovations, and forming strategic partnerships. These initiatives have enabled us to capture new market segments, strengthen client relationships, and access new business opportunities, solidifying our position and ensuring continued success in the United States market.
Our company has consistently increased its marketing spending as part of our strategic efforts to expand our market presence and drive growth. We have significantly bolstered our marketing initiatives by hiring dedicated outbound teams, enhancing our focus on digital marketing, and sponsoring advertisements on leading industry websites. These efforts have been complemented by our active participation in prominent local events such as GITEX, LEAP, MWC, and Collision, among others. By expanding our marketing efforts, we aim to reach a broader audience, strengthen our brand recognition, and generate more leads. The investment in outbound teams has allowed us to proactively engage with potential clients, while our intensified social media presence has helped us connect with a wider and more diverse audience. Sponsoring adverts on leading industry sites has further amplified our visibility in the market, positioning us as a key player in the industry. Participation in high-profile events has not only enhanced our visibility but also provided valuable opportunities for networking, learning, and showcasing our innovative solutions. These strategic marketing investments have been instrumental in driving our growth and ensuring our continued success in a competitive market.
At CapitalNumbers, we continuously innovate and expand our service offerings to meet the evolving needs of our clients. Recently, we have introduced new services in Data Engineering & Analytics, AI/ML/GenAI, Cloud Engineering, UI/UX, and emerging technologies such as Blockchain. These additions enable us to provide robust data management solutions, implement intelligent automation, offer scalable cloud services, create user-centric designs, and deliver secure Blockchain applications. By adopting these advanced technologies, we ensure that our clients benefit from cutting-edge solutions that drive business success.
Our revenue from operations experienced a positive trajectory, escalating from ?6,90,717.82 Thousands in FY 2021-22 to ?9,25,722.48 Thousands in FY 2022-23, marking a substantial growth of almost 34.02%. This noteworthy increase was primarily a result of strategic expansions in our business operations.
Impact of Disturbance in Europe:
While the Russia-Ukraine War has had tragic consequences and caused immense suffering, it has indirectly contributed to increased revenue for our company and the Indian IT industry. Our hearts go out to all those affected by this conflict, and we sincerely hope for a peaceful resolution. Amidst these challenging times, the war has led to a surge in cyber threats and attacks, prompting organizations worldwide to prioritize cybersecurity and seek out our robust services, driving revenue growth from both existing and new clients. Geopolitical uncertainties have also led companies to reconsider their IT spending and outsourcing strategies, creating opportunities for Indian IT firms like ours, as businesses seek reliable, cost-effective, and politically stable partners. The war has further emphasized the importance of digital resilience and agility, leading to increased investments in digital transformation initiatives. Our expertise in delivering innovative digital solutions, coupled with our access to a large pool of skilled IT professionals and cost- effective services, has positioned us well to capitalize on these trends and meet the evolving needs of clients during this difficult period. While we are grateful for the increased revenue and strengthened market position, our thoughts remain with those impacted by the conflict, and we hope for a swift and peaceful resolution.
Exploration of UK Market Customer-Centric Approach:
Our customer-centric approach and robust account management skills have been pivotal in driving revenue growth from existing customers. By prioritizing personalized solutions, we ensure that each clients unique needs are met through tailored services, fostering higher satisfaction and effectiveness. Proactive communication and comprehensive customer support, available 24/7 through multiple channels, build trust and long-term relationships. Dedicated account managers develop strategic account plans and maintain regular performance reviews, aligning our services with clients evolving business objectives. This deep understanding allows for effective cross- selling and upselling of additional services, providing integrated solutions that enhance operational efficiency. Value-added services such as training, workshops, and consultancy sessions ensure clients maximize the benefits of our technologies. These efforts not only enhance client satisfaction but also create sustained opportunities for revenue growth, as satisfied clients are more likely to expand their engagement with our offerings. By consistently delivering value and aligning our solutions with client needs, we significantly increase our revenue generation from the existing customer base.
Talent Acquisition and Development:
Our focus on continuous talent acquisition and development has been instrumental in increasing our revenue. By recruiting top talent and continuously upskilling our workforce, we ensure that our team possesses cutting-edge skills and expertise across a broad range of technologies. This
enables us to deliver high-quality, innovative solutions that meet and exceed client expectations. Our commitment to employee development fosters a culture of continuous improvement and innovation, leading to more efficient project execution and higher client satisfaction. Additionally, the upskilling of existing employees and the hiring of experienced professionals allow us to command higher billing rates due to the advanced capabilities and value we bring to our clients. By developing a skilled and adaptable workforce, we enhance our service offerings, attract new clients, and expand our engagements with existing ones, driving significant revenue growth.
FINANCIAL KPIs OF THE COMPANY:
Particulars |
For the period ended January 31, 2024 |
For the year ended March 31 | ||
2023 |
2022 |
2021 |
||
| Revenue from Operations (? in Thousands) | 8,27,918.19 | 9,25,722.48 | 6,90,717.82 | 4,70,411.25 |
| Growth in Revenue from Operations (%) | 34.02% | 46.83% | 59.84% | |
| Other Income | 13,368.83 | 4,087.30 | 5,604.50 | 8,058.80 |
| Total Income (? in Thousands) | 8,41,287.02 | 9,29,809.78 | 6,96,322.32 | 4,78,470.05 |
| EBITDA (? in Thousands) | 3,02,593.20 | 2,52,713.77 | 2,26,740.53 | 1,81,942.34 |
| EBITDA Margin (%) | 35.97% | 27.18% | 32.56% | 38.03% |
| Profit After Tax (? in Thousands) | 2,16,441.61 | 1,73,528.66 | 1,58,381.58 | 1,25,359.18 |
| PAT Margin (%) | 26.14% | 18.75% | 22.93% | 26.65% |
| ROE (%) | 34.24% | 28.92% | 37.22% | 47.29% |
* EBITDA margin is calculated as EBITDA as a percentage of total income and PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.
FACTORS AFFECTING OUR RESULT OF OPERATIONS
Except as otherwise stated in this Draft Red Herring Prospectus and the Risk Factors given in the Draft Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:
Significant Developments after January 31, 2023 that may affect our Future Results of Operations
The Directors confirm that there have been no other events or circumstances since the date of the last financial statements as disclosed in the Draft Red Herring Prospectus which materially or adversely affect or is likely to affect the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next twelve months.
SIGNIFICANT ACCOUNTING POLICY
BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
The restated consolidated summary statement of assets and liabilities of the Company as at January 31, 2024, March 31, 2023, 2022 and 2021 and the related restated consolidated summary statement of profits and loss and cash flows for the year/period ended January 31, 2024, March 31, 2023, 2022 and 2021 (herein collectively referred to as ("Restated consolidated summary Statements") have been compiled by the management from the audited Consolidated Financial Statements for the year/period ended on January 31, 2024, March 31, 2023, 2022 and 2021. Restated consolidated summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the "Act") read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 ("ICDR Regulations") issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note"). Restated consolidated summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the BSE in connection with its proposed IPO. The Companys management has recast the Consolidated Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated consolidated summary Statements.
The Restated Consolidated Financial Statements are prepared and presented under the historical cost convention and evaluated on a going-concern basis using the accrual system of accounting in accordance with the accounting principles generally accepted in India (Indian GAAP) and the requirements of the Companies Act, including the Accounting Standards as prescribed by the Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of Companies (Accounts) Rules, 2014.
The financial statements of the Company and its subsidiary companies have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses as per Accounting Standard 21 – "Consolidated Financial Statements" notified by Companies (Accounting Standards) Rules, 2021.
Minority Interest in the net assets of consolidated subsidiaries is identified and presented in the Consolidated Balance Sheet separately from liabilities and equity of the Companys shareholders.
Minority interest in the net assets of consolidated subsidiaries consists of:
Minoritys share of net profit for the year of consolidated subsidiaries is identified and adjusted against the Profit After Tax of the Group.
All assets and liabilities have been classified as current and non-current as per normal operating cycle of the Company and other criteria set out in the Schedule III of the Companies Act, 2013.
USE OF ESTIMATES
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.
PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS
All Property, Plant & Equipment are recorded at cost including taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the asset to its intended use.
Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.
DEPRECIATION / AMORTISATION
Depreciation on fixed assets is calculated on a Written - Down value method using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013. Individual assets cost of which doesnt exceed Rs. 5,000/- each are depreciated in full in the year of purchase.
Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the benefits to accrue. Intangible assets are amortized on straight line method basis over 10 years in pursuance of provisions of AS-26.
IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.
INVESTMENTS:
Non-current investments are carried at cost less any other-than-temporary diminution in value, determined on the specific identification basis. Current Investments are carried at cost or fair value whichever is lower. The Company has followed category-wise evaluation of cost vs fair value of investments. Provision for diminution in the value of investments has been recorded wherever there is a decline in fair-value of investments.
Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually for each investment. Cost of investments sold is arrived using average method.
DERIVATIVE CONTRACTS
The Company has entered into derivative contracts i.e. currency futures and options to hedge cash flows of the company specifically to hedge the exposure to variability in cash flows of future probable forecasted inflows and that could affect the statement of profit and loss. The
derivatives are measured at fair value and any gain or loss that is determined to be an effective hedge is recognised in equity as cash flow hedge reserve. The changes in fair value of the hedging instrument recognised in equity must be recycled from equity and recognised in the statement of profit and loss at the same time that the impact from the hedged item is recognised (recycled) in the statement of profit and loss.
FOREIGN CURRENCY TRANSLATIONS
Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account in the year in which it arises.
BORROWING COSTS
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.
PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
REVENUE RECOGNITION
Revenue is primarily recognised from IT services rendered on Time and Material contract basis. Revenue from fixed price contracts is recognised using the proportionate completion method, which is detemined relating the actual project cost of work performed to date to the estimated total project cost for each period.
OTHER INCOME
Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right to receive such income is established.
TAXES ON INCOME
Income taxes are accounted for in accordance with Accounting Standard (AS-22) – "Accounting for taxes on income", notified under Companies (Accounting Standard) Rules, 2021. Income tax comprises of both current and deferred tax.
Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.
The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred
tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.
Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.
CASH AND BANK BALANCES
Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Other Bank Balances are short-term balance ( with original maturity is more than three months but less than twelve months).
EARNINGS PER SHARE
Basic earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
EMPLOYEE BENEFITS
Defined Contribution Plan:
Contributions payable to the recognised provident fund, which is a defined contribution scheme, are charged to the statement of profit and loss.
Defined Benefit Plan:
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has been made in the books as per actuarial valuation done as at the end of the year.
The Company has an obligation towards leave encashment. The Company has a leave policy of accumulating maxinum 8 leaves per year including accumulated leaves for previous years. Therefore, liability related to leave encashment are recognised as current liabilities and hence, it is recorded based on the liability as computed by the management.
SEGMENT REPORTING
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.
Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".
RESULTS OF OUR OPERATIONS
(Amount ? in Thousands)
Particulars |
For the Period ended January 31, 2024 |
% of Total** | For the year ended March 31, 2023 |
% of Total** | For the year ended March 31, 2022 |
% of Total** | For the year ended March 31, 2021 |
% of Total** |
| INCOME | ||||||||
| Revenue from Operations | 8,27,918.19 | 99.19% | 9,25,722.48 | 99.56% | 6,90,717.82 | 99.20% | 4,70,411.25 | 98.32% |
| Other Income | 13,368.83 | 1.59% | 4,087.30 | 0.44% | 5,604.50 | 0.80% | 8,058.80 | 1.68% |
| Total Income (A) | 8,41,287.02 | 100.00
% |
9,29,809.78 | 100.00
% |
6,96,322.32 | 100.00
% |
4,78,470.05 | 100.00% |
| EXPENDITURE | ||||||||
| Employee benefits expense | 3,60,663.61 | 42.87% | 4,15,111.93 | 44.64% | 2,83,230.51 | 40.68% | 1,98,418.24 | 41.47% |
| Finance costs | 983.64 | 0.12% | 2,641.10 | 0.28% | 3,563.43 | 0.51% | 6,175.35 | 1.29% |
| Depreciation and amortization expense | 12,083.87 | 1.44% | 16,856.62 | 1.81% | 11,367.33 | 1.63% | 10,345.54 | 2.16% |
| Other expenses | 1,77,790.60 | 21.13% | 2,61,315.80 | 28.10% | 1,85,402.63 | 26.63% | 95,994.99 | 20.06% |
| Total Expenses (B) | 5,51,521.72 | 65.56% | 6,95,925.45 | 74.85% | 4,83,563.90 | 69.45% | 3,10,934.12 | 64.99% |
| Profit before tax (A-B) | 2,89,765.30 | 34.44% | 2,33,884.33 | 25.15% | 2,12,758.42 | 30.55% | 1,67,535.93 | 35.01% |
| Tax Expense/ (benefit) | ||||||||
| (i) Current tax | 74,440.51 | 8.85% | 61,613.72 | 6.63% | 55,524.81 | 7.97% | 42,904.13 | 8.97% |
| (ii) Deferred tax expenses/(credit) | (1,116.82) | -0.13% | (1,258.05) | -0.14% | (1,147.97) | -0.16% | (727.38) | -0.15% |
| Net tax expense / (benefit) | 73,323.69 | 8.72% | 60,355.67 | 6.49% | 54,376.84 | 7.81% | 42,176.75 | 8.81% |
| Profit/(Loss) for the Year before Minority Interest | 2,16,441.61 | 25.73% | 1,73,528.66 | 18.66% | 1,58,381.58 | 22.75% | 1,25,359.18 | 26.20% |
| Minoritys share of interest | 2.53 | 0.0003% | 24.17 | 0.0026% | 1.60 | 0.0002% | (2.53) | - 0.0005% |
| Profit/(Loss) for the Period | 2,16,439.08 | 25.73% | 1,73,504.49 | 18.66% | 1,58,379.98 | 22.75% | 1,25,361.71 | 26.20% |
**Total refers to Total Revenue
Components of our Profit and Loss Account Income
Our total income comprises of revenue from operations and other income.
Revenue from Operations
Our revenue from operations as a percentage of our total income was 98.41%, 99.56%, 99.20% and 98.32% for the period ended January 31, 2024 and Financial Years ended March 31, 2023, March 31, 2022 and March 31,
2021 respectively.
(? In Thousands)
| Particulars | For the Period ended Dec 30, 2023 |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
For the year ended March 31, 2021 |
| Sale of Services | 8,27,918.19 | 9,25,722.48 | 6,90,717.82 | 4,70,411.25 |
| Total | 8,27,918.19 | 9,25,722.48 | 6,90,717.82 | 4,70,411.25 |
Other Income
Our Other Income primarily consists of Dividend on Investments, Interest Income, Net Foreign Exchange Gain, Profit on Sale of Investments, Profit / Loss on Sale of Assets, Miscellaneous Income, Sundry Balance Written Back, Refund Income etc.
(? In Thousands)
Particulars |
For the Period ended January 31, 2024 |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
For the year ended March 31, 2021 |
| Dividend Received on Investments | 586.76 | 1,220.83 | 427.61 | 434.20 |
| Forex Exchange Loss/Gain | - | - | 1,609.67 | - |
| Interest received on deposits with banks | 3,008.69 | 490.22 | 148.65 | 127.19 |
| Profit on Sale of Investments | 4,813.31 | 384.78 | 3,340.76 | 5,975.54 |
| Profit / Loss on Sale of Assets | 1,701.26 | 1,496.98 | - | 954.48 |
| Miscellaneous Income | 2,046.89 | 475.62 | - | 157.91 |
| Other Interest Income | 1.29 | 0.02 | - | 12.80 |
| Sundry Balance Written Back | 266.95 | 18.85 | 77.81 | 396.68 |
| Refund Income | 943.68 | - | - | - |
| Total | 13,368.83 | 4,087.30 | 5,604.50 | 8,058.80 |
Expenditure
Our total expenditure primarily consists of Employee benefit expenses, Finance costs, Depreciation & Amortization Expenses and Other Expenses.
Employee Benefit Expenses
Our employee benefits expense comprises of Salaries & Wages, Employers Contribution to Provident fund and ESI, Provision for Gratuity & Leave encashment, Staff Welfare.
Finance costs
Our Finance cost expenses comprises of Bank Charges and Interest on Borrowings, Interest on delayed payment of taxes.
Other Expenses
Other expenses primarily include Technical & Consultancy Services, Marketing & Marketing Support Services, Corporate Social Responsibilities Expenses, Foreign Exchange Fluctuation Loss adjusted with Derivative Gain, Hosting & Domain Charges.
(? In Thousands)
Particulars |
For the Period ended January 31, 2024 |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
For the year ended March 31, 2021 |
| Marketing & Marketing Support Services | 60,646.50 | 66,727.16 | 55,104.87 | 36,928.50 |
| Technical & Consultancy Services | 88,636.74 | 1,46,061.24 | 1,00,735.23 | 34,958.82 |
| License & Fees | 26.84 | 33.67 | 402.42 | 18.10 |
| Auditors Remuneration | 600.00 | 225.00 | 150.00 | 150.00 |
| Asset Disposed off | - | 199.41 | 401.82 | 226.32 |
| Business Development & Promotion expenses | 1,126.35 | 541.42 | 992.62 | 1,020.98 |
| Bad Debts | - | - | - | 40.38 |
| Conveyance expenses | 100.94 | 103.44 | 72.12 | 48.12 |
| Corporate Social Responsibilities Expenses | 2,058.84 | 3,000.00 | 1,945.69 | 1,000.00 |
| Courier Charges | 338.02 | 331.08 | 50.85 | 3.47 |
| Donations | 506.37 | 160.60 | 3.80 | 40.00 |
| Electricity Expenses | 255.63 | 291.60 | 164.08 | 89.82 |
| Foreign Exchange Fluctuation Loss adjusted with Derivative Gain | 172.89 | 13,265.09 | 86.83 | 933.80 |
| Hosting & Domain Charges | 4,857.53 | 4,971.04 | 5,435.38 | 3,066.08 |
| HV AC Charges | 362.38 | 461.75 | 309.59 | 228.20 |
| Insurance charges | 439.43 | 1,735.69 | 2,025.72 | 1,473.86 |
| Internet charges | 960.06 | 1,256.50 | 1,327.11 | 1,582.99 |
| Legal & Professional Fees | 2,125.87 | 1,473.32 | 1,337.17 | 645.27 |
| Motor Car Running & Maintenance Expenses | 725.67 | 647.22 | 482.36 | 213.81 |
| Printing & Stationery | 285.40 | 333.36 | 181.02 | 103.15 |
| Rates & Taxes | 112.70 | 107.34 | 963.04 | 277.41 |
| Recruitment Expenses | 553.31 | 1,931.56 | 1,145.88 | 1,784.72 |
| Rent Charges | 518.25 | 992.99 | 1,402.00 | 802.29 |
| Repair & Maintenance Expenses | 2,372.44 | 4,048.18 | 1,781.27 | 2,803.37 |
| Software & Other Charges | 2,917.56 | 5,179.07 | 6,495.56 | 5,728.12 |
| Telephone Expenses | 1,057.78 | 1,130.72 | 1,073.86 | 1,027.71 |
| Travelling Expenses | 2,681.43 | 3,991.41 | 617.80 | 14.09 |
| Office Expenses | 459.46 | 1,046.19 | 320.00 | 487.57 |
| Brokerage & Commission | 2,892.21 | 1,069.75 | 394.54 | 298.04 |
| Total | 1,77,790.60 | 2,61,315.80 | 1,85,402.63 | 95,994.99 |
Provision for Tax
The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.
For the period ended January 31, 2024 Revenue from Operations
The revenue from operations of our company for the period ended January 31, 2024 was ? 8,27,918.19 thousands.
Other Income
The Other Income of our company for the period ended January 31, 2024 was ? 13,368.83 thousands.
Total Revenue
The Total Income of our company for the period ended January 31, 2024 was ? 8,41,287.02 thousands.
Expenditure
Employee Benefit Expenses
For the period ended January 31, 2024 our Company incurred for employee benefits expense ? 3,60,663.61 thousands.
Finance Costs
The finance costs for the period ended January 31, 2024 was ? 983.64 thousands.
Depreciation & Amortization Expense
The depreciation and amortization expense for the period ended January 31, 2024 was ? 12,083.87 thousands.
Other Expenses
For the period ended January 31, 2024 our other expenses were ? 1,77,790.60 thousands.
Profit/ (Loss) before Tax
Our Company had reported a profit before tax for the period ended January 31, 2024 of ? 2,89,765.30 thousands.
Profit/ (Loss) after Tax
Our Company had reported a profit after tax for the period ended January 31, 2024 was at ? 2,16,441.61 thousands.
Fiscal 2023 compared with fiscal 2022 Revenue from Operations
The revenue from operations of our company for Fiscal 2023 was ? 9,25,722.48 thousands against ? 6,90,717.82 thousands revenue from operations for Fiscal 2022. An increase of 34.02% in revenue from operations. This increase was mainly due to increase in customer base in USA and UK.
Other Income
The other income of our company for Fiscal 2023 was ? 4,087.30 thousands against ? 5,604.50 thousands other income for Fiscal 2022. A decrease of 27.07% in other income was majorly because of profit on sale of investments in the Fiscal 2022 was Rs.3,340.76 thousands as compared to Rs. 384.78 thousands in Fiscal 2023. This is because the sale of current investment is substantially lower in Fiscal year 2023 as compared to Fiscal 2022. The Company has also booked gain in foreign exchange of Rs 1,609.67 in the Fiscal 2022.
Total Income
The total income of our company for Fiscal 2023 was ? 9,29,809.78 thousands against ? 6,96,322.32 thousands total income for Fiscal 2022. An increase of 33.53% in total income. This increase was due to increase in revenue from operation because of increase in customer base in USA and UK.
Expenditure
Employee Benefit Expenses
In Fiscal 2023, our Company incurred for employee benefits expense ? 4,15,111.93 thousands against ? 2,83,230.51 thousands expenses in Fiscal 2022. An increase of 46.56% was mainly due to recruitment of more employees because of receipt of contracts, general increment in salary and incentive to employees.
Finance Costs
The finance costs for the Fiscal 2023 was ? 2,641.10 thousands while it was ? 3,563.43 thousands for Fiscal 2022. A decrease of 25.88% was due to reduction of long term borrowing and bank charges.
Other Expenses
In Fiscal 2023, our other expenses were ? 2,61,315.80 thousands and ? 1,85,402.63 thousands in Fiscal 2022. This increase of 40.95% was majorly due to increase in marketing and marketing support services and technical and consultancy services because of increase in receipt of contract.
Profit/ (Loss) before Tax
Our Company had reported a profit before tax for the Fiscal 2023 of ? 2,33,884.33 thousands against profit before tax of ? 2,12,758.42 thousands in Fiscal 2022. An increase of 9.93%. This increase was due to increase in proportion of Revenue from Operation is higher then increase in Expenditure during the Period. .
Profit/ (Loss) after Tax
Profit after tax for the Fiscal 2023 was at ? 1,73,504.49 thousands against profit after tax of ? 1,58,379.98 thousands in Fiscal 2022. An increase of 9.55%. This was due to increase in proportion of Revenue from Operation is higher then increase in Expenditure during the Period.
Fiscal 2022 compared with fiscal 2021 Revenue from Operations
The revenue from operations of our company for Fiscal 2022 was ? 6,90,717.82 thousands against ? 4,70,411.25 thousands revenue from operations for Fiscal 2021. An increase of 46.83% in revenue from operations. This increase was mainly due to increase in customer base in USA and UK
Other Income
The other income of our company for Fiscal 2022 was ? 5,604.50 thousands against ? 8,058.80 thousands other income for Fiscal 2021. A decrease of 30.45% in other income. This decrease was majorly because of profit on sale of investments in the Fiscal 2021 was Rs.5,975.54 thousands as compared to Rs. 3,334.76 thousands in Fiscal 2022.There was also Profit on sale of Assets of Rs. 954.48 thousands in the Fiscal 2021 which was not present in Fiscal 2022
Total Income
The total income of our company for Fiscal 2022 was ? 6,96,322.32 thousands against ? 4,78,470.05 thousands total income for Fiscal 2021. An increase of 45.53% in total income. This increase was due to increase in revenue from operation because of increase in customer base in USA and UK
Expenditure
Employee Benefit Expenses
In Fiscal 2022, our Company incurred for employee benefits expense ? 2,83,230.51 thousands against ? 1,98,418.24 thousands expenses in Fiscal 2021. An increase of 42.74% was due to recruitment of more employees because of receipt of contracts, general increment in salary and incentive to employees.
Finance Costs
The finance costs for the Fiscal 2022 was ? 3,563.43 thousands while it was ? 6,175.35 thousands for Fiscal 2021. This decrease of 42.3% was majorly due to closure of long term loans against the motor vehicle and office premises in the Fiscal 2022 .
Other Expenses
In Fiscal 2022, our other expenses were ? 1,85,402.63 thousands and ? 95,994.99 thousands in Fiscal 2021. This increase of 93.14% was majorly due to increase in marketing and marketing support services and technical and consultancy services because of increase in receipt of contract.
Profit/ (Loss) before Tax
Our Company had reported a profit before tax for the Fiscal 2022 of ? 2,12,758.42 thousands against profit before tax of ? 1,67,535.93 thousands in Fiscal 2021. An increase of 26.99% was mainly due to increase in proportion of Revenue from Operation is higher then increase in Expenditure during the Period.
Profit/ (Loss) after Tax
Profit after tax for the Fiscal 2022 was at ? 1,58,379.98 lacs against profit after tax of ? 1,25,361.71 lacs in fiscal 2021, An Increase of 26.34% was mainly due to increase in proportion of Revenue from operation is higher then increase in Expenditure during the Period.
Cash Flows
(Amount ? in Thousands)
Particulars |
For the Period ended January 31, 2024 |
For the year ended March 31, | ||
| 2023 | 2022 |
2021 |
||
| Net Cash Flow from/(used in) Operating Activities | 1,88,359.22 | 1,58,108.03 | 1,57,321.49 | 1,34,786.84 |
| Net Cash Flow from/(used in) Investing Activities | (1,54,046.46) | (59,051.67) | (47,889.92) | (63,470.22) |
| Net Cash Flow from/(used in) Financing Activities | (1,94,889.36) | (3,546.02) | (10,084.87) | (47,732.84) |
Cash Flows from Operating Activities
442.80 thousands, Dividend Income of ? 586.76 thousands, Interest Income of ? 3,009.98 thousands, Profit on Sale of Investments of ? 4,813.31 thousands, Profit on Sale of Asset of ? 1,701.26 thousands, Unrealised Forex Exchange Loss/(Gain) of ? 181.13 thousands, Depreciation and Amortisation Expense of ? 12,083.87 thousands. The resultant operating profit before working capital changes was ? 2,99,774.64 thousands, which was primarily adjusted for an increase in Trade Receivables of ? 5,482.83 thousands, Other Assets (Including Other Bank balances) of ? 35,232.03 thousands, Other Current Liabilities & Provisions of ? 4,191.57 thousands, and decrease in Loans and Advances of ? 1,945.71 thousands, Trade Payables of ? 6,736.09 thousands.
Cash Generated from Operations was ? 2,58,460.97 thousands which was reduced by direct tax paid for ? 70,101.75 thousands resulting into net cash flow from operating activities of ? 1,88,359.22. thousands.
Cash Generated from Operations was ? 2,25,308.76 thousands which was reduced by direct tax paid for ? 67,200.73 thousands resulting into net cash flow from operating activities of ? 1,58,108.03 thousands.
Cash Generated from/(used in) Operations was ? 2,05,503.91 thousands which was reduced by direct tax paid for
? 48,182.42 thousands resulting into net cash flow from operating activities of ? 1,57,321.49 thousands.
51.14 thousands, Depreciation and Amortisation Expense of ? 10,345.54 thousands. The resultant operating profit before working capital changes was ? 1,82,860.92 thousands, which was primarily adjusted for an increase in Trade Receivables of ? 10,806.69 thousands, Other Current Liabilities & Provisions of ? 4,299.57 thousands, and decrease in Loans and Advances of ? 1,093.56 thousands, Other Assets (Including Other Bank balances) of ?
871.57 thousands, Trade Payables of ? 776.66 thousands,
Cash Generated from/(used in) Operations was ? 1,77,542.27 thousands which was reduced by direct tax paid for
? 42,755.43 thousands resulting into net cash flow from operating activities of ? 1,34,786.84 thousands.
Cash Flows from Investment Activities
? 149.57 thousands, Sale of Investments of ? 1,29,292.19 thousands,
Cash Flows from Financing Activities
? 983.64 thousands and Buy Back of Shares of ? 1,83,192.44 thousands.
OTHER MATTERS
Except COVID-19 or any such kind of pandemic and as described in this Draft Red Herring Prospectus, there have been no other events or transactions to the best of our knowledge which may be described as "unusual" or "infrequent".
Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page no. 26 of the Draft Red Herring
Prospectus. To our knowledge, except as we have described in the Draft Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.
Apart from the risks as disclosed under Chapter titled "Risk Factors" beginning on page no. 26 in this Draft Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.
Our Companys future costs and revenues will be determined by demand/supply situation and government policies.
. Increases in revenues are by and large linked to increases in volume of business.
Our company is operating in IT Industry. Relevant Industry data and , as available, has been included in the chapter titled "Industry Overview" beginning on page no. 87 of this Draft Red Herring Prospectus.
Except as disclosed elsewhere in the Draft Red Herring Prospectus, we have not announced any new products or business segments.
Our Companys business is not seasonal in nature.
As details provided in the DRHP there is no dependency in the single or few suppliers or customers.
We face competition from existing and potential competitors which is common for any business. We have, over a period, developed certain competitors who have been discussed in chapter titles "Business Overview" beginning on page no. 93 of this Draft Red Herring Prospectus.
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