Management Discussion and Analysis Report
This section lists forward looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these statements as a result of certain factors. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.
Established in 1996, SoftTech empowers business transformation through software products and solutions that are built on deep domain expertise. Over the years, we have leveraged our leading industry practices in the architecture, engineering and construction (AEC) domains to create value for businesses. We have created comprehensive solutions spanning every stage of the construction lifecycle – Plan, Build, and Sustain. From initial planning to project completion and ongoing building operations, our solutions are meticulously built to streamline processes, accelerate project completion, foster collaboration, and ensure project success. We built solutions for government agencies,
builders, developers, contractors, architects, and sustainability-focused enterprises. Our Civit Suite and expert services deliver speed, accuracy, efficiency, and cost savings for the entire construction ecosystem.
Our solutions offer an integrated approach, combining the strengths of Civit Suite and our expert services. By leveraging technology and expertise together, we provide a comprehensive solution tailored to your projects needs. From start to finish, SoftTech Engineers is committed to driving innovation, efficiency, and excellence in construction project management.
Global Economic Outlook:
The global economy remains remarkably resilient, with growth holding steady as inflation returns to target. The journey has been eventful, starting with supply-chain disruptions in the aftermath of the pandemic, a Russian-initiated war on Ukraine that triggered a global energy and food crisis, and a considerable surge in inflation, followed by a globally synchronized monetary policy tightening. Yet, despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops.
Global growth, estimated at 3.2 percent in 2023, is projected to continue at the same pace in 2024 and 2025. The forecast for 2024 is revised up by 0.1 percentage point from the January 2024 World Economic Outlook
(WEO) Update, and by 0.3 percentage point from the October 2023 WEO. The pace of expansion is low by historical standards, owing to both near-term factors, such as still-high borrowing costs and withdrawal of fiscal support, and longer-term effects from the COVID-19 pandemic and Russias invasion of Ukraine; weak growth in productivity; and increasing geo-economics fragmentation. Global headline inflation is expected to fall from an annual average of 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. The latest forecast for global growth five years from now––at
3.1 percent––is at its lowest in decades. The pace of convergence toward higher living standards for middle- and lower-income countries has slowed, implying a persistence in global economic disparities.
Risks to the outlook have become somewhat more balanced since January, with the global economy thus far proving resilient to high financing costs. However, the balance of risks remains tilted to the downside amid elevated uncertainty. Heightened geopolitical tensions could sharply depress sentiment, disrupt trade and commodity markets, push up inflation, and hurt economic activity; in particular, a conflict-related disruption to global oil supply could push oil prices markedly higher and undermine the disinflation process.
Worldwide IT spending is expected to total $5.06 trillion in 2024, an increase of 8% from 2023, according to the latest forecast by Gartner, Inc. This is an increase from the previous quarters forecast of 6.8% growth and puts worldwide IT spending on track to surpass $8 trillion well before the end of the decade.
Spending on data center systems is expected to see a notable jump in growth from 2023 (4%) to 2024 (10%), in large part due to planning for generative AI (GenAI)
Indian Economy Overview
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The International Monetary Fund (IMF) has upgraded Indias gross domestic product (GDP) in the FY2024-25 by 20 basis points to 7 percent. The IMF has revised upward its forecast from the previous estimate of 6.8 percent in April.The IMFs latest ‘World Economic Outlook report indicates that Indias
economic growth forecast for the current year has also been raised to
7.0 percent. The development has come in the backdrop of notable rise in consumption prospects, especially in rural areas. With this, India continues to maintain its position as the fastest-growing economy among emerging markets and developing economies.
For the year 2025, the IMF projected Indias growth rate at 6.5 per cent. It attributed robustness and strength in domestic demand and a rising working-age population behind its growth projections.
Notably, Indias GDP expanded at 8.2 percent in 2023-24. That was higher than the 7 per cent in 2022-23, aided by a greater than expected expansion of 7.8 per cent in the fourth quarter, according to the provisional estimates of GDP growth released by the National Statistical Office (NSO). FY24 indicators such as buoyant GST collections, rising electricity demand, and steady credit growth reflect strong domestic demand, although some indicators showed moderation at the start of FY25.
Manufacturing and construction sectors surged, with manufacturing growing at 9.9% and significant growth
in steel and cement sectors due to infrastructure spending.
The Indian economy exhibits robust fundamental policies by Reserve Bank of India (RBI), which plays a key role in maintaining stability through its adept monetary policy framework. By carefully managing interest rates and liquidity, the RBI aims to control inflation while fostering sustainable economic growth. It ensures a resilient financial sector, contributing to overall economic stability. The resilience of Indian economy has navigated into the stock market to all time high. The record spiked stock market reflects investor confidence in Indias long-term growth prospects, driven by reforms, demographic dividends, and technological advancements.
Higher economic growth typically correlates with increased job creation and improved social security measures. When a countrys GDP grows faster, businesses tend to expand and invest more, which leads to higher demand for labor across various sectors.
In FY 23-24 GDP growth in the third quarter was aided by a strong uptick in private investment spending, which grew by 10.6% YoY. Investment growth remained above 8% YoY in the last four quarters, which indicates that India is on the cusp of a strong boost to the private capital expenditure cycle. High capital expenditure spending by the government over the past few years is now expected to crowd in private investments.
On the other hand, private consumption improved to 3.5% YoY from the third quarter of fiscal year 2024. The index of industrial production of consumer durables and improved passenger and two-wheeler sales indicated a revival in private consumption over this period. Data from the past three quarters points to Indias resilient domestic demand, which has aided its strong growth despite modest global growth and continuing geopolitical crises.
The biggest drag on GDP growth in the third quarter was government consumption, which contracted by 3.2% YoY, compared with growth of 13.8% YoY in the second quarter of the year. While growth in exports slowed in the third quarter (3.4% YoY), a faster decline in imports (8.3% YoY) due to falling crude oil prices helped net exports improve overall.
From the production side, gross value added (GVA)3 grew 6.5% YoY, which was in line with market expectations. Robust growth in manufacturing (11.6% YoY) and construction activities (9.5% YoY), along with a steady positive performance in services (7% YoY) kept economic activity strong. The contraction of 0.8% YoY in agriculture, however, weighed on the economy, with the sector contracting for the first time since 2019, which was partly expected as temporal rains impacted kharif crop production.
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According to the National Association of Software and Service Companies (NASSCOM), the Indian IT industrys revenue touched US$ 227 billion in FY22, a 15.5% YoY growth and was estimated to have touched US$ 245 billion in FY23.The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totaling US$ 138.6 billion up from US$ 124.7 billion past year. The Indian software product industry is expected to reach US$ 100 billion by 2025. Indian companies are focusing on investing internationally to expand their global footprint and enhance their global delivery Centres.
The data annotation market in India stood at US$ 250 million in FY20, of which the US market contributed 60% to the overall value. The market is expected to reach US$ 7 billion by 2030 due to accelerated domestic demand for AI. Indias IT industry is likely to hit the US$ 350 billion mark by 2026 and contribute 10% towards the countrys gross domestic product (GDP), Infomerics Ratings said in a report.
As an estimate, Indias IT export revenue rose by 9% in constant currency terms to US$ 194 billion in FY23. Exports from the Indian IT services industry stood at US$ 199 billion in FY24. The export of IT services has been the major contributor, accounting for more than 53% of total IT exports (including hardware). BPM and engineering and R&D (ER&D) and software products exports accounted for 22% and 25%, respectively of total IT exports during FY23. Exports from the Indian IT industry stood at US$ 194 billion in FY23. The export of IT services was the major contributor, accounting for more than 51% of total IT exports (including hardware). BPM, and Software products and engineering services accounted for 19.3% and 22.1% each of total IT exports during FY23. The IT industry added 2.9 lakh new jobs taking the industrys workforce tally to 5.4 million people in FY23.
Indian Construction Industry
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In Interim Budget 2024-25, capital investment outlay for infrastructure has been increased by 11.1% to Rs.11.11 lakh crore (US$ 133.86 billion), which would be 3.4 % of GDP. As per the Interim Budget 2023-24, a capital outlay of Rs. 2.55 lakh crore (US$ 30.72 billion) has been made for the Railways, an increase of 5.8% over the previous year.
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By 2040, the real estate market will grow to Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$1.72 billion) in 2019. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs. Indias real estate sector is expected to expand to US$ 5.8 trillion by 2047, contributing 15.5% to the GDP from an existing share of 7.3%.
In FY23, Indias residential property market witnessed with the value of home sales reaching an all-time high of Rs. 3.47 lakh crore (US$ 42 billion), marking a robust 48% year-on-year increase. The volume of sales also exhibited a strong growth trajectory, with a 36% rise to 379,095 units sold.
Indian real estate developers operating in the countrys major urban centers are poised to achieve a significant feat in 2023, with the completion of approximately 558,000 homes. In 2023, demand for residential properties surged in the top 8 Indian cities, driven by mid-income, premium, and luxury segments despite challenges like high mortgage rates and property prices.
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The construction Industry in India is expected to reach $1.4 Tn by 2025.sectors.
quality of life through modernized/ technology driven urban planning.
U to start a new era in Indian construction technology sector.
Union Budget 2023 Highlights:
will be addressed with an investment of INR 10 Lakh Cr. This will include the central assistance of INR
2.2 Lakh Cr in the next 5 years.
formulated, along with an implementation and financing strategy.
Growth Drivers:
The Government of India has launched following schemes and reforms, which will have a positive impact on AEC (Architectural, Engineering & Construction) vertical in India:
Smart Cities Mission
6:Launched in 2015, the objective of the Smart Cities Mission is to promote cities providing core infrastructure, clean and sustainable environment and decent quality of life to citizens by applying smart solutions. The mission of this centrally sponsored scheme is to drive economic growth and improve quality of life by focusing on the social, economic, physical and institutional pillars of cities.
Initially, 100 cities have been selected to be developed as smart cities. These cities are from 32 states and union territories of India, and the development is planned through a two-stage competition. he 100 Cities have completed 7,188 projects (90% of total projects) amounting to ? 1,44,237 crore as part of the Mission. The balance 830 projects amounting to ? 19,926 crore are also in advanced stages of completion. On the financial progress, the Mission has an allocated GOI budget of ? 48,000 crore for the 100 Cities. As on date, GOI has released ? 46,585 crore (97% of the allocated GOI budget) to 100 Cities. Out of these funds released to the Cities, 93% have been utilized as on date. The Mission has also released full GOI financial support under the Mission to 74 out of 100 Cities.
Atal Mission for Rejuvenation and Urban Transformation (AMRUT)7:
The Union Budget 2024 allocated Rs. 16,000 crores for the ‘Urban Rejuvenation Mission—Atal Mission for
Rejuvenation and Urban Transformation ‘AMRUT and Smart Cities Mission.
Universal coverage of water supply is the priority sectors under the Mission. At the inception of AMRUT, the water supply coverage was 64%. By the end of the Mission, it aims to cover 100% households. The target is to provide 139 lakh water tap connections to achieve universal coverage. So far 22.89 lakh tap connections have been provided.
Against the total plan size of Rs. 77,640 crores of all the SAAPs, Rs. of Rs. 35,990 crores. So far, States/UTs have taken up 5,873 projects worth Rs. 82,222 crores, of which 4,676 projects worth Rs. 32,793 crores have been completed, and another 1,197 projects worth Rs. 49,430 crores have been grounded which are at various stages of implementation. Further, overall works worth around Rs. 66,313 crores have been physically completed and expenditure of Rs. 59,615 crores have been incurred.
Till date, 134 lakhs water tap connections and 102 lakh sewer connections have been provided through AMRUT & in convergence with other schemes against targeted 139 lakh water connections and 145 lakh sewer connections respectively.
Pradhan Mantri Awas Yojana (PMAY)8:
Pradhan Mantri Awas Yojana – Urban (PMAY-U), a flagship Mission of Government of India being implemented by Ministry of Housing and Urban Affairs (MoHUA), was launched on 25th June 2015. The Mission will provide ease of living to urban migrants/ poor in Industrial Sector as well as in non-formal urban economy to get access to dignified affordable rental housing close to their workplace. According to the government, it has sanctioned
118.64 lakh houses under the urban leg (PMAY-U) of the scheme and completed 85.04 lakh houses so far. The
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Make in India- Construction 7https://pib.gov.in/PressReleasePage.aspx?PRID=1885837#:~:text=AMRUT%20Mission%20has%20been%20subsumed,till%2031st%20March%2C%202023 8PMAY sitegovernment claims that by February 2024, it sanctioned 2.94 crore houses, of which 2.55 crore houses were completed by February 2024.
Under the PM Awas Yojana Urban 2.0, housing needs of one crore urban poor and middle-class families will be addressed with an investment of ?10 lakh crore. This will include the central assistance of ?2.2 lakh crore in the next 5 years. A provision of interest subsidy to facilitate loans at affordable rates is also envisaged. Three crore additional houses under the PM Awas Yojana in rural and urban areas in the country have been announced, for which the necessary allocations are being made,
RERA9:
Government of India has enacted the Real Estate (Regulation and Development) Act 2016 and all the sections of the Act have come into force with effect from May 1, 2017. All commercial and residential real estate projects will have to register (with some exceptions). As per the RERA, details of all the Registered Projects shall be available online for citizens including
Digital India:
Launched in 2015, Digital India encompasses a set of initiatives targeted at transforming India into a digitally empowered society and a knowledge economy. The vision of Digital India programme is to transform India into a digitally empowered society and knowledge economy. The Digital India programme is centered on three key vision areas: 1) Digital Infrastructure as a Core Utility to Every Citizen; 2) Governance & Services on Demand; 3) Digital Empowerment of Citizens
Due to the above mentioned Government initiatives, an overall boost to construction industry in terms of – i)
Automation in management of smart city infrastructure, ii) Increase in housing – higher construction activities,
iii) Increase in construction infrastructure projects, iv) Adoption of technology among private construction companies v) Greater automation in issuing construction permits vi) Digitization and usage of software application for e-Governance, replacing manual operations. Since SoftTechs software products are aimed at fulfilling the market requirements in above areas, we foresee a sustainable increase in demand for our software solutions during next five years.
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IT and Technology Industry OutlookNasscom Annual Enterprise & Tech Services CXO Survey 2024 indicates stronger growth momentum for CY2024 with under-stressed sectors of BFSI, telecom, media and entertainment and hi-tech leading digital spending. Gen Al remains a key priority for over 95% of the organisations over the next 6-12 months.
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https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1910165For technology providers, FY2025 growth expectations look stronger as 79% of the providers expect higher growth compared to last year. Hiring growth is expected to be positive with 80% of the providers planning higher level of hiring compared to FY2024.
Global Technology Trends: Technology industry remained resilient in a year of macroeconomic uncertainties as enterprise software and IT services demand sustained large-scale cost optimization and automation deals. Global tech spending grew slower in CY2023, at 4.4% y-o-y, primarily due to degrowth in hardware and devices. Spending increase was primarily driven by enterprise software and IT services spend that grew nearly 1.1X of the total tech spending.
Indian technology industry overview FY 2024E: Amid global geo-political tension leading to a more cautious approach for investments and delayed decision making, Indias technology industry revenue (including hardware) is estimated to reach $254 Bn (3.8% y-o-y growth) in FY2024, an addition of over $9 Bn over last year. Exports are poised to touch the $200 Bn mark growing at 3.3% y-o-y, and the Domestic technology sector is expected to cross $54 Bn, growing at 5.9% y-o-y.
Despite the tough market conditions, the industry continues to be a net hirer, adding 60K employees, taking the total employee base to 5.43 Mn (1.1% y-o-y growth). Europe, APAC, Manufacturing, Retail and Healthcare emerge as the key growth markets for the industry.
Imperatives to drive Indias tech-led development through 2047:
With these changing market dynamics, and to drive Indias tech-led development through 2047, it is imperative for the industry to focus on the following:
Themes that defined FY 2024:
Global Digital Transformation Market:
Worldwide IT spending is expected to total $5 trillion in 2024, an increase of 6.8% from 2023, according to the latest forecast by Gartner, Inc. This is down from the previous quarters forecast of 8% growth. While generative AI (GenAI) had significant hype in 2023, it will not significantly change the growth of IT spending in the near-term. 11.
IT services will continue to see an increase in growth in 2024, becoming the largest segment of IT spending for the first time. Spending on IT services is expected to grow 8.7% in 2024, reaching $1.5 trillion (see Table 1). This is largely due to enterprises investing in organizational efficiency and optimization projects. These investments will be crucial during this period of economic uncertainty.
As per The Gartner Digital Markets 2022 Global Software Buyer Trends Recent Survey Two-thirds of respondents expressed an interest in growing their software investment, with one in every four businesses planning to increase software spending by 16% to 30%. Businesses will continue to use software to support remote work infrastructure for online meetings, collaboration and data privacy12.
Among the different software categories surveyed, most business users said they plan to temporarily or permanently adopt software related to communication, marketing and project management, closely followed by human resources, IT management, accounting, and business intelligence and analytics. The fastest-growing industry segment is transportation, indicating that companies involved in supply chains plan the highest increase in new software adoption. As digital-driven business models become entrenched, software and software-as-a-service (SaaS) providers can expect more spending on technology in 2022.
According to Gartners, with the new normal work model, IT is no longer limited to support corporate activities as it was traditionally but is now actively involved in delivering business value. Acceleration in digitalization has not only shifted IT from a back-office role to the front of the business, but it has also changed the source of funding from an overhead cost that is maintained, monitored, and sometimes cut to something that generates revenue. All IT spending segments are expected to expand in 2023 and beyond. Even though cost optimization efforts will continue in 2022, organizations are now prioritizing their IT spending in emerging technologies such as Cloud, Automation, Data analytics, Digital ER&D, Artificial Intelligence (AI), Machine Learning (ML) which would add their agility and flexibility and enable them to keep the operations running in unforeseen situations like a pandemic in future. With the increased vaccine rollouts and easing of lockdown restrictions, the strong recovery of IT spending is expected across countries, industries, and markets.
Digitalization in Infrastructure:
The study conducted by Astute Analytica foresees a tremendous growth in revenue of the Global Construction Software Market from US$ 1,753 Mn in 2021 to US$ 3,549 Mn by 2030. The market is estimated to register a CAGR of 8.3% during the forecast period 2022-2030.
and is expected to reach $2.3 billion by 2028 at a CAGR of 6.2% ~McKinsey
end of 2024, a 18%+ CAGR since 2017 ~Market Research Engine
Upcoming Technologies:
India, having proven its capabilities multiple times in delivering both on-shore and off-shore services to global clients, is now exposed to pioneering technologies which are offering a new spectrum of opportunities to IT firms.
Growth Area #1: Internet of Things The potential economic value that the IoT could unlock is large and growing. By 2030, we estimate that it could enable $5.5 trillion to $12.6 trillion in value globally, including the value captured by consumers and customers of IoT products and services. The IoTs economic-value potential is concentrated in certain settings (types of physical environments where IoT is deployed). We found that the factory setting (which includes standardized production environments in manufacturing, hospitals, and other areas) will account for the largest amount of potential economic value from the IoT, around 26 percent, in 2030. The human-health setting is second, representing around 10 to 14 percent of estimated IoT economic value in 2030. B2B applications are where the majority of IoT value can be created, with around 65 percent of the estimated IoT value potential by 2030. But the value of B2C applications is growing quickly, spurred by faster-than-expected adoption of IoT solutions within the home.
The 2030 IoT economic-value potential of the developed world will account for 55 percent of the global total, decreasing from 61 percent in 2020. China is becoming a global IoT force as not only a manufacturing hub and technology supplier but also an end market for value creation.13
Growth Area #2: Integration of Artificial Intelligence & Machine Learning has been one of the most buzzing technologies in recent years. This has led to significant advances in many areas such as speech recognition, natural language processing, robotics, machine learning and computer vision. AI and ML will be used in over 80% of IoT activities in enterprises by 2022. Hyper Automation is one of the major outcomes of AI, and this will be one of the driving forces behind digital transformation in 2022.14
Growth Area #3: Another area that received high demand is Big Data Analytics-the process of examining large & varied data sets to uncover patterns, correlations, market trends &other useful information that can help organizations make more informed business decisions. n India is currently valued at $2 Billion and is expected to grow at a CAGR of 26 percent reaching approximately $16 Billion by 2025, making Indias share approximately 32 percent in the overall global market. India is currently among the top 10 countries in Big Data analytics market and already has around 600 data analytics firms with this number only expected to grow in future. This industry will prove disruptive and lead to a paradigm shift in future. India being amongst the top 5 social media and mobile consumers in the world, generation of vast amount of data is indispensable. In the light of approx. 2.9 zeta bytes of data generation by the year 2020, Big Data analytics would synthesize into a booming market providing abundant opportunities to firms and investors wanting to explore this space.15
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https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/iot-value-set-to-accelerate-through-2030-where-and-how-to-capture-it14
Digital India-2022 Major Technology trends for Indian IT Industry15
https://www.indiainfoline.com/company/ram-info-ltd-share-price/management-discussions/5225Growth Area #4: Product engineering is another field that has received high demand in recent times. It takes care of the entire product life cycle from the innovation phase to deployment & user acceptance phase. Product engineering is also expected to see robust growth in the future. The global product engineering services market is projected to grow at the CAGR of 1–3% to reach $1.50 Tn by 2023, primarily driven by growing investment in transport, industrial, non-residential, and commercial infrastructure sectors in the emerging economies.16
Growth Area #5: Digital Media, a blend of technology & content used to develop various applications. Digital media products are abundant in the world we live in today and has penetrated almost every industry. The worldwide revenue of US$294 billion in 2021 is expected to grow to US$447 billion up to 2026.17
Growth Area #6: Building Information Modelling is a digital representation of physical and functional characteristics of a facility. Building information model is a shared knowledge resource for information about a facility forming a reliable basis for decisions during its life-cycle; defined as existing from earliest conception to demolition. The market is expected to reach an estimated $9 billion by 2025 with a CAGR of 9% to 11% from 2019 to 2025. The major drivers for this market are rapid urbanization, growth in infrastructure projects, and increase adoption of BIM for planning, designing, and managing building projects efficiently.
In last 25+ years, the company is constantly improving, developing and innovating software products to meet the AEC industry requirements. We have a portfolio of 7 products and these products cover entire value chain of the construction industry right from pre-construction to during construction and then to the post construction stage. These products are being used by government authorities, local bodies, municipalities, construction and infrastructure enterprises, real estate developers, architects and other consultants in AEC sector. Company has added an AI enabled platform for AEC vertical in a unique way of offering its products.
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Product Engineering services market worth $1.50 Tn by 202317
Digital media revenue worldwide from 2021 to 2026ESG Vision:
SEL combines its strong sense of purpose with digital Outcomes expertise and innovation to drive not only its own sustainability journey, but also that of its stakeholders. The companys environmental stewardship rests on four pillars: carbon footprint mitigation, water conservation and recycling, waste reduction and recycling, and preserving biodiversity. Climate action has been a key focus area of the company. Today, we incorporate environmental considerations into everything that we do, as we power the journey towards a sustainable world for all. We articulated our ESG Vision, stating our commitment to shape and share solutions that serve the development of businesses and communities. SEL provides a unique combination of services in the area of energy modeling, management and sustainability areas through its multiple product offerings. UN SDG Goals of SEL are as follows:
Products
AutoDCR–Technology to Deliver on The Building Plans
AutoDCR is an innovative solution boosting Smart City projects by automating building and layout plan approvals. AutoDCR reads 2D CAD drawings and checks them for compliance to Development Control Regulations (DCR) of Urban Local Bodies (ULBs), Municipal Corporations, Urban Development Authorities and other such approving authorities. It is integrated with online approval workflow to monitor the approval process with associated document scrutiny. This reduces human intervention and at the same time shortens time required for approvals drastically, which further helps the authorities on improving "Ease of Doing Business" rankings. Further, there is increased transparency and uniformity in the work flow.
PWIMS – Smarter Management for Public Works Organizations
PWIMS is a web based, integrated works and procurement management software which is used for managing the core functional processes of works planning, procurement and maintenance large government as well as private civil infrastructure organizations. The services in this software include Budget and Estimate management, Tenders & Project management, Asset & Inventory management, Finance & Accounts management and HR management. Further, it provides a comprehensive dashboard and generates real-time MIS reports for such organizations.
OPTICON – ERP for Construction Enterprises
OPTICON is Enterprise Resource Planning (ERP) software which combines enterprise technologies with nearly 20 years of construction industry domain experience into an integrated system. The product aims at optimizing construction processes. The services in the product includes detailed tender bid management, cost estimation for the project, managing timeline and schedules, generating MIS reports on real-time basis, managing inventory and purchase records, client billing, Sales & CRM among others. With growing infrastructural and construction activities, it aims at reducing the workload of construction companies and reducing their project completion time saving their overall cost.
BIMDCR
BIMDCR is a recently released product based on cutting edge 3D BIM technology. BIMDCR will update the AutoDCR customers with advanced technology to serve as integrated systems for Smart City projects. BIMDCR is an innovative 3D Building Information Model based Online Single Window Clearance (SWC) system. It enables automatic scrutiny of building proposals by reading 3D Building Models submitted by Applicant. BIMDCR helps in better coordination between different departments providing approvals, NOCs (No Objection Certificates) and ensures comments by different stake holders in a single 3D model thereby detecting or preventing clashes at an earlier stage. The novel BIM model approach will also help development authorities to track unauthorized constructions in due course.
RULEBUDDY
RULEBUDDY is an e-commerce platform which aims to help customers solve their queries prior to commissioning of any construction activities for particular area. By leveraging the current & validated database of DCRs of various authorities and SoftTechs technical expertise in the construction industry, it will analyze and assess the feasibility of any construction project, further validating DC rules, NOC fees and other documentary requirements. The key users for this product will be Project owners, project developers, construction companies, architects, engineers, financial institutions involved in issuing housing loans among others. The product has recently been developed and is ready for commercialization.
The RULEBUDDY ecommerce portal acts as a one-stop application providing right from building by-laws search till the approval plan preparation and compliance check. It enables users to access and analyze the commercial and legal feasibility of any building project and selection of appropriate land parcel in designated city. It lets the user know whether your project will pass through the authority based on selected project parameters. The services offered include: 1) Plan Draft, 2) Plan Check, 3) Plan Assist, 4) Rule Search, 5) Approval Processes, & 6) Project Verification
The AEC technology platform Civit:
After having established independent products in AEC which have delivered significantly with great success stories, we are moving towards providing a platform to connect all the stake holders and application products through a newly design platform named Civit.
Civit is the AI-powered platform transforming AEC landscape. Digitally aligning architecture, engineering and construction (AEC) eco-system to empower smarter planning, easy collaboration, and flawless project execution. Civit is all in one AI powered platform for Government, Architects, Builders & Developers & Contractors.
CivitPLAN is the first AI-powered pre-submission building plan validation tool designed for architects and consultants. The engine reads 2D drawings as well as BIM models and validates for compliance against building codes. Civits Plan Comply engine automatically generates a detailed compliance report to aid building officials in rejecting or approving building plan.
CivitPERMIT is AI-powered building plan compliance validation and automated permitting based on CAD
drawings or BIM models.
CivitINFRA is a web-based application for efficiently managing the lifecycle of public works projects by local and state governments including waterworks, roads, bridges, buildings and infrastructure facilities. From planning and procurement to execution and management, CivitINFRA replaces the existing manual, siloes and paper-based process of managing public infrastructure projects with an automated, intelligent, transparent, and integrated software.
CivitBUILD is the most powerful all-in-one AI-powered ERP software for builders, developers and contractors to transform their construction operations for high efficiency, speed, and agility.
CivitOPERATE is the concept of a digital twin involves creating a real-time digital replica of a physical object, process, or system. In the context of construction, a digital twin encompasses a detailed virtual model of a building or infrastructure project, encompassing its design, construction, operation, and eventual decommissioning. With the global imperative to mitigate climate change and achieve net-zero emissions, the construction industry faces both challenges and opportunities. Integrating digital twin technology into the construction process can significantly contribute to these efforts by enabling better-informed decisions, more efficient resource utilization, and enhanced sustainability.
Digital Twin based Energy Modelling & Management
visualize in terms of dashboards
Life Cycle Analysis
Net Zero Roadmap & Green Building Certification
Microgrid Analysis
Connecting the entire AEC ecosystem
Technology Capabilities
With above products, deep technical expertise, and the experience of over 25 years, we are empowering business transformations in AEC vertical. With deep industry/ domain knowledge, scalable products and robust frameworks, experienced management team, and technical expertise we have ensured a competitive advantage in this market segment.
Civit Positioning
Business Strategy
Company is continuously innovating new products to cater to industry in which it operates. It provides solutions to various government departments, local bodies, corporations etc. and other private enterprises to enable transformation. It is focused on continually offering innovative products in entire value chain of the construction industry. The strategy is to accomplish the Business Potential and Unlock Value.
Actions Initiated under above strategies –
stability.
of SoftTech Products.
of the companys products.
Competition
Currently our business is distributed among two categories- (1) e-Governance projects and (2) Products and
services to Private sector companies.
In e-Governance business, there is low level of competition for our AutoDCR products, as there are only 4 to 5 companies actively involved in Building Permission Management system (BPAS). The projects are awarded normally through a formal tendering & bidding process. Since our Company has created a number of success stories and has established our credentials in the market and since AutoDCR product has a technological edge over the competition, we envisage to continue with our leadership position in the BPAS. There is moderate level of competition for our PWIMS product in e-Governance. However, the growth happening in infrastructure projects and as PWIMS has fully matured and well accepted by customers, we envisage a good growth and increase in our market share during next few years.
In private sector, though there is high level of competition for our OPTICON product as well as for our services, the increasing volume of market size is expected to have a positive impact for our revenue creation. Introduction of new products such as RuleBuddy and IBPS18 will help us acquire more and more customers from private sector and offer products with emerging technology integration.
Our competitive edge lies in:
18
Under research and design phaseINR Lakhs
| Particulars |
As on March 31st |
|||
|
2024 |
% |
2023 |
% |
|
| Revenue from operations | 7,861.35 |
100% |
6,534.09 |
100% |
| Purchases of stock-in-trade | 1,171.61 |
14.90% |
883.86 |
13.53% |
| Employee benefits expense | 1,937.13 |
24.64% |
1,619.39 |
24.78% |
| Depreciation and amortization expense | 1,343.36 |
17.09% |
1,045.58 |
16.00% |
| Other expenses | 2,279.75 |
29.00% |
1,903.32 |
29.13% |
| Total expenses | 6,731.86 |
85.63% |
5,452.15 |
83.44% |
| Operating profit | 1,129.50 |
14.37% |
1,081.94 |
16.56% |
| Other income |
262.08 |
3.33% |
170.68 |
2.61% |
| Finance costs |
455.61 |
5.80% |
391.77 |
6.00% |
| Profit before tax |
935.97 |
11.91% |
860.85 |
13.17% |
| Net tax expenses |
238.83 |
3.04% |
281.03 |
4.30% |
| Net profit |
697.14 |
8.87% |
579.82 |
8.87% |
Operations has increased from INR 6,534.09 lakhs in FY23 to INR 7,861.35 lakhs in FY24 an increase of 20.3%. Purchases of stock in trade has increased from INR 883.86 lakhs to INR 1,171.61 lakhs during the same period. Employee benefit expenses increased from INR 1,619.39 lakhs to INR 1,937.13 slightly increase as compared to operating revenue from 24.6% in FY 23 to 24.8% in FY 24 respectively. Depreciation and amortization expenses have increased by 28.5% compared to last year. Other expenses have decreased from INR 1,903.32 lakhs to INR 2,279.75 lakhs largely due to increase in professional fees and technical consultants charges which has increased by 46% from FY 23 to FY 24 i.e. from INR 914.16 lakhs to INR 1,338.47 lakhs. Finance cost decreased as % of operating revenue from 6.0% to 5.8% from FY 23 to FY 24 respectively. Profit before tax increased from INR 860.85 lakhs to INR 935.96 lakhs. Net tax expenses has decreased from INR 281.03 lakhs to INR 238.83 lakhs. Net profit of the company has increased from INR 579.82 lakhs in FY 23 to INR
697.13 lakhs in FY24 i.e. Y-o-T increase of 20.2%, and as compare to operating revenue it is at same level of 8.9%.
Factors impacting Current Years Financial Performance
FY 23
changing revenue model plan of the company.
Nature of Revenue Mix
Company has over the past 4 years made considerable progress to achieve a more recurring revenue based business model, and the below table shows the comparative with FY 21 vis-a vis FY 24
INR Lakhs
| Particulars |
FY 21 |
% of Revenue |
FY 24 |
% of Revenue |
| Licensing Business |
2,520.26 |
61% |
4,266.55 |
54% |
| SAAS |
795.35 |
19% |
2,131.90 |
27% |
| Services |
305.76 |
7% |
261.06 |
3% |
| Allied Products |
535.98 |
13% |
1,201.84 |
15% |
| Total |
4,157.35 |
100% |
7,861.35 |
100% |
Per Use (SaaS / Transaction Based revenue) and AMC contracts with all the implementation projects.
Performance of the company (INR Lakhs)
| Particulars |
Year ended March 31st |
|
2024 |
2023 |
|
| Net worth | 13,430.06 |
10,917.47 |
| Gross debt (Long term + short term debt + Unsecured Loan) | 3,136.11 |
3,998.34 |
| Gross debt/net worth | 0.23 |
0.37 |
| Total fixed assets (including intangibles under development) | 5,981.43 |
3,947.88 |
| Current ratio | 1.85 |
2.22 |
Key Financial Ratios
| Particulars |
2023-24 |
2022-23 |
| Operating Profit Margin % |
14.4% |
16.56% |
| Net Profit Margin % |
8.87% |
8.65% |
| Debtors Turnover ratio |
2.17 |
2.37 |
| Interest Coverage Ratio |
3.05 |
3.20 |
| Current Ratio |
1.85 |
2.22 |
| Return on Net Worth |
5.73% |
5.76% |
| Debt Equity Ratio |
0.23 |
0.37 |
Company believes that Human Resources of the Company are its core strength. The Companys Human Resources philosophy is to establish and build a strong performance and competency driven culture with greater sense of accountability and responsibility. The Company has taken pragmatic steps for strengthening organizational competency through involvement and development of employees as well as installing effective systems for improving the productivity, equality and accountability at functional levels. With expanding business, the company has also undertaken initiatives to re-orient the organizational structure for increased efficiency.
With the changing and turbulent business scenario, the Companys basic focus is to enhance the skill and knowledge level of the existing human assets by providing appropriate leadership at all levels, motivating them to face the hard facts of business, inculcating the attitude for speed of action and taking responsibilities.
In order to keep the employees skill, knowledge and business facilities updated, ongoing in house and external training is provided to the employees at all levels. The effort to rationalize and streamline the work force is a continuous process.
As on March 31, 2024, the Company has total head count of 490 manpower resources.
Department wise team members
| Particulars |
As on March 31, 2024 |
As on March 31, 2023 |
| Management |
10 |
15 |
| Implementation |
280 |
283 |
| Development |
122 |
97 |
| QA |
22 |
22 |
| Sales |
20 |
21 |
| Finance and accounts | 9 |
8 |
| Purchase and administration |
19 |
15 |
| Human resource | 8 |
7 |
| Total |
490 |
468 |
Male and female team members count
| Particulars |
Male |
Female |
Male : Female |
| March 31, 2024 |
348 |
142 |
2.45:1 |
| March 31, 2023 |
337 |
137 |
2.41:1 |
Risks Impact on Company Mitigation Plan
Volatile global political and
economic scenario
Rapidly changing business models due to technology
Geo-political disruptions such as the war in Ukraine and resultant volatility in the global economy, or trade wars may adversely affect that outlook resulting in reduced spending which could restrict revenue growth opportunities.
This could also result in steep inflation globally which could impact government spending on infrastructure projects as well as increase SEL cost of doing business
Rapidly evolving technologies are changing technology consumption patterns, creating new classes of buyers within the enterprise, giving rise to entirely new business models. This is resulting in increased demands on the companys agility to keep pace with the rapidly changing customer expectations. Failure to cope may result in loss of market share and impact business growth.
Breach of data privacy
and protection
Inadequate laws in case of Intellectual Property (IP) management
Skilled Human Resource Availability and Retention
Client concentration
risk
Expenditure on
research and development
Another area of increasing concern is the privacy and protection of personal data. In case of any violation or breach of security, non-compliance or inadequacy of privacy, policies might result in substantive penalties and financial impact on profitability.
There is always a risk of violation by 3rd party IPs which may often lead to potential liabilities on the part of the company. It can hamper our reputation and increase legal obligations.
A lack of skilled human resource often prevents the company from staying relevant in the face of rapidly changing technology trends. This often leads to misalignment of business and workforce strategies.
Majority client is government
authorities etc.
Company is making expenditure on research and development of new products which may not be recouped.
A robust technology infrastructure and stringent data security norms help to keep the data secure. There are stringent confidentiality policies with employees in place as a part of the security management process.
Measures to protect IPR through necessary certifications (Copyrights, Trademarks, patents).
Early planning and acquisition of talent in line with the expansion plans and estimated growth.
Increase the business with private sector through new products as well as augmenting existing products.
R&D.
Attrition Our business depends upon the skilled personnel; we may not be able to attract, hire, motivate, retain and train personnel.
Company is providing training and other incentives to attract and retain its employees.
Government Policy change
If government policies relating to Smart cities, digital India, AMRUT, PMAY etc. change, it could result in lower future revenues and profitability
Technology changes Changes in technology may render
current technologies obsolete or may require significant capital investments
Company is investing in R&D to cope up
with current technology changes.
Sustainability Risks Climate change and Environmental aspects
As a result of changing weather and seasonal patterns, there are also increasing cases of seasonal diseases, epidemics and pandemics besides threat to human safety and business disruption.
Market dimension and opportunity: There is also a commercial opportunity to participate in customers climate change mitigation
Market dimension and opportunity:
journey by leveraging SEL core
competencies.
Internal control systems play a crucial role in the health of a Company in every industry. An effective system of internal control is a backbone, necessary for building, maintaining and improving shareholders confidence and value as well as helps to enhance the overall quality of the business and the enterprise.
The Company has an adequate internal control system commensurate with the size of the Company and the nature of its business. The Company also has internal control system for speedy compilation of accounts and Management Information Reports and to comply with applicable laws and regulations. The company has appointed reputed firm as Internal Auditors.
The Company has also formed an Audit Committee. Audit Committee reviews with the management adequacy and effectiveness of the internal control system and internal audit functions. Besides the above, Audit Committee is actively engaged in overseeing financial disclosures.
Government Business Expansion
The measures announced by the Government on Infrastructure spending and other lending reforms should help bring liquidity in the system and increase the flow of orders. Along with the ongoing government initiatives like Smart Cities Mission, AMRUT, RERA, Digital India etc., huge opportunities are presented for technology companies like us to transform and simplify the current business activities. All are facing the challenges of new work style, and the companys product help the Government keep functioning despite physical presence.
SoftTechs major focus shall be on increasing its market share in each of the product category. The Companys strength lies in the vision of experienced management team and innovative products which would pave in for the future. The Company endeavors to enter into ventures and agreements with new business partners and introduce innovative products in newer geographies and is establishing new branch offices to provide direct customer services. The Company recognizes the need of timely and quality delivery of service and is continuously working towards creating and expanding a work platform which is agile and shielded from most uncertainties.
The below developments lead to the management remain confident of a sustained positive outlook for
companys product –
Opportunities
International markets have shaped up well for the company during the year especially USA –
Finalised the team in US and Singapore, which includes 1 C level resource, 2 Senior International Sales resources and other support team, to convert the strong leads generated from India, and set up local organisations there.
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