HRH Next Services Ltd Management Discussions

Annexure - IV

• OVERVIEW:

HRH Next Services Limited (Company) is a public company listed on NSE SME EMERGE Platform, incorporated on 2nd February 2007 as a private company. The registered office of the Company is situated at 4-1-976, Abid Road, Hyderabad, Hyderabad-500001, Telangana, India.

The Company is primarily engaged in the business of Business Process Outsourcing (BPO) offering a comprehensive suite of Call Centre Services, covering Inbound Services, Outbound Services, Backend Support, Chat Support, Email Support and more. We customise our top-notch solutions to meet specific business needs, helping our clients achieve their objectives.

Our primary aim is to develop a sustainable organization that remains responsive to our clients priorities, while also creating avenues for growth among our employees, delivering profitable returns to our investors, and making meaningful contributions to the communities in which we operate.

Purpose and people are our top priorities in everything we do as a top provider of domestic vernacular contact centre services. With more than 100 well-known Indian brands as clients, we have a wealth of experience in a variety of industries, including Foodtech, Telecom, E-commerce, Healthcare, Banking and Financial Services, and Autotech.

• INDUSTRY OVERVIEW - WORLDWIDE:

Revenue in the Business Process Outsourcing market is projected to reach US$ 0.39 TN in 2024. Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 4.67%, resulting in a market volume of US$ 0.49 TN by 2029. The average Spend per Employee in the Business Process Outsourcing market is projected to reach US$ 110.50 in 2024.

• INDUSTRY OVERVIEW - INDIA:

Revenue in the Business Process Outsourcing market is projected to reach US$ 7.19 BN in 2024. Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.76%, resulting in a market volume of US$ 10.94 BN by 2029. The average Spend per Employee in the Business Process Outsourcing market is projected to reach US$ 13.19 in 2024.

• ABOUT BPO INDUSTRY:

The Business Process Outsourcing (BPO) sector stands out as the fastest-growing segment within the Information Technology Enabled Services (ITES) industry. This growth is underpinned by several critical factors including economies of scale, which allow companies to achieve cost efficiencies through large-scale operations. Moreover, BPO offers businesses a robust framework for mitigating risks associated with specific operational functions, thereby enhancing overall business resilience.

Furthermore, BPO facilitates significant improvements in resource utilization by enabling organizations to focus on core competencies while delegating non-core tasks to specialized service providers. These providers, particularly within the Contact Centre domain, play a crucial role in managing and optimizing specific business processes for their clients.

Innovative applications of technology are also driving growth in the Contact Centre industry, where providers leverage cutting-edge technologies to streamline operations and enhance customer interactions. This technological advancement not only improves efficiency but also enhances service delivery, thereby meeting the evolving needs of modern businesses.

The Contact Centre industry is currently experiencing a substantial surge in demand, fuelled by the anticipated growth in the service sector. This trend presents a lucrative opportunity for HRH Next to capitalize on, potentially securing numerous project orders and expanding its market presence in this burgeoning industry.

Indias surge in Contact Centre growth is driven by its competitive advantage in low labour costs and abundant pool of skilled professionals proficient in English and various regional languages. This favourable combination presents significant growth prospects for our company.

• SWOT ANALYSIS

STRENGTHS	WEAKNESSESS
• Quality Services	• Strict policies of clients and Audit controls may pose real hurdle.
• Cordial Relationship with Customers	• Low bargaining power with customers.
• Ability to Control Cost
• Strong Network in existing business

 

OPPORTUNTITES	THREATS
• Huge Growth Potential in our service segment	• Increased Competition from Local & Big Players
• Possibility of providing associated Services along with main service offering	• Change in Government Policies
• Reaching out to the regional consumers (Tier-2/ Tier-3 cities) and to be part of Bharat growth story

• FINANCIAL PERFORMANCE:

The Company continued on its growth trajectory in Financial Year 2023-24. During the financial year under review, your Company recorded revenue from operations amounted to Rs. 4537.08 Lakhs and profit after tax amounted to Rs. 184.27 Lakhs. The Company can capitalize on the market conditions through its operational excellence, higher efficiency and well executed strategies.

• INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate internal controls system commensurate with its size. The Company complies with all applicable statutes, policies, procedures, listing requirements and management guidelines. It adheres to applicable Accounting Standards and Polices. The systems are subjected to supervision by the Board of Directors and the Audit Committee, duly supported by Corporate Governance.

• HUMAN RESOURCE:

Human resources are the principal drivers of change and have always been one of the most valued stakeholders of the Company. The Company aims to develop the potential of every individual associated with the Company as a part of its business goal. During the period under review, the total number of people on permanent rolls of the Company were 637, who look after our day-to-day business operations, administrative, secretarial, legal, marketing and accounting functions in accordance with their respective designated goals. Our manpower is a prudent mix of the experienced and youth which gives us the dual advantage of stability and growth.

• STRATEGIC GRWOTH

Central to our strategy is the expansion into diverse sectors unaffected by specific industries. HRH Next accomplishes this by enhancing our capacities in adjacent Tier 2 and Tier 3 markets, ensuring proactive adaptation to meet our clients evolving demands. We strategically attract new clients while fostering existing strategic partnerships, fostering sustainable growth and securing a robust market presence.

We look forward to the future with enthusiasm and uphold our dedication to excellence across all facets of our operations.

• FUTURE PROSPECTS AND STRATEGY:

The outlook for the Business Process Outsourcing Sector in India is promising with several factors contributing to its growth potential. BPO has been identified as an important sector for growth by the Indian Government. Many new business models and collaborations are emerging, which are likely to provide new opportunities for this industry.

Given the capacity and the current available technology, the Company will continue to perform on the same lines and will continue to strive to improve and boost the performance.

The Directors are actively exploring opportunities for future expansion. The company has established a robust internal control system that aligns with the scale of our operations, overseen by a dedicated committee. This committee regularly assesses the implementation of management policies to ensure accurate and timely recording and reporting of transactions.

The Contact Centre industry is expected to experience substantial demand, driven by planned extensive investments from both the government and private sectors in the upcoming years. HRH Next has maintained positive and cooperative relations with the government of Telangana, delivering effective service. We are now broadening our partnerships with other state governments, pursuing growth opportunities and employment prospects for young people.

Our ongoing focus on human resource development through training and amicable resolution of employee matters underscores our commitment to our workforce.

CAUTIONARY STATEMENT: The statement and views expressed by the management in the above-said report are on the basis of best judgment, but the actual results might differ from whatever stated in the report. The Company takes no responsibility for any consequence of decisions made based on such statements and holds no obligation to update these in future. Readers are cautioned not to place undue reliance on these forward-looking statements.

For and on behalf of the Board	Sd/-	Sd/-
HRH NEXT SERVICES LIMITED	ANKIT SANJAY SHAH	TRISHLA SHAH
	Managing Director	Whole time Director
Place: Hyderabad	DIN: 00218044	DIN:02299110
Date: 10th July 2024	Add: H. No. 1-2-385/3, Domalguda Himayatnagar, Hyderabad – 500029, Telangana, India	Add: H. No.1-2-385/3, Gagan Mahal, Beside BSG Model School, Domalguda, Gagan Mahal, Himayathnagar, Hyderabad-500029, Telangana, India