Chairman's Remarks

Dear Analyst,

It is my pleasure to highlight the business performance of the Sasken Group for the first quarter ended 30th June 2016.

We must point out that certain statements made here or those we make subsequently in response to your queries concerning our future growth prospects are forward-looking statements. Please read the Safe Harbor clause in the second slide of our presentation for full details.

Let me begin by walking you through our financials for the First Quarter for Fiscal 2017. In the First Quarter of Fiscal ‘17 the consolidated revenues for the Sasken Group increased by 1.6% over the previous quarter to Rs. 121.78 crores. Consolidated Earnings before Interest, Depreciation, Taxes and Amortization cost for the first quarter fiscal ‘17 were Rs. 18.96 crores, an increase of 99% sequential. In percentage terms, the consolidated EBIDTA margin stood at 15.6%. Consolidated PAT for Q1 fiscal ‘17 was at Rs. 15.61 crores, down by 91.10% over the previous quarter. This is due to an exceptional item in the last quarter. PAT margins for the quarter were 12.8%. Software Services revenue for the quarter were at Rs. 118.24 crores, an increase of 2.1% over the previous quarter. Software product revenues for the quarter were Rs. 2.99 crores, a decrease of 6% over the previous quarter. Services EBITDA margin for the quarter was at 15.1%. Product EBITDA margin was at 41.8%. Consolidated earnings per share for the 1st quarter were Rs. 8.81. Cash and cash equivalents were Rs. 376.36 crores as of June 30th, 2016.

People

On the people front, the headcount for the Sasken Group stood at 2,057 as of June 30, 2016. We continue to attract talent comprising both freshers and laterals in keeping with our business needs. We are taking several measures including enhancing employee engagement and development to stem attrition, which currently stands at 22.2%. As a company that prides in its technology prowess, we provide multiple opportunities for our talent pool to retain their edge and be amongst the best in the industry. Utilization for the quarter averaged 79.7% and is expected to be around the same percentage in the coming quarters.

Customers

We have successfully added 15 new customers during the quarter taking the total number of active customers to 146.

I will now provide key highlights related to our services business.

As a leader in providing Engineering R&D services, we invest to keep pace with the rapidly changing technology and business landscape. We have carefully built a reputation of being a dependable partner in providing world class Product Engineering Services. Our customers have relied on us to take up complex and critical engineering problems and solve them. We have contributed significantly to product development, sustenance and testing for several marquee customers. We have made a segue into the realm of digital IT by capitalizing on our unparalleled understanding of silicon platforms, wireless communication and smart devices. We are now well ensconced in this realm and poised to achieve scale.

In the automotive electronics space, we continue to enlarge our footprint and have been entrusted to build an auto grade Linux based In-Vehicle Infotainment on the latest silicon platform of one of the world’s largest semiconductor vendors. We continue to help a tier 1 automotive leader keep pace with the evolution of standards and technologies in connectivity as well as deliver in-vehicle connectivity solutions.

Our work with another leading semiconductor manufacturer entails the provision of comprehensive testing and triaging services for their wireless platforms. We are working with a smart home solution in the IoT space and are engaged with a leading semiconductor vendor to provide a testing lab for products that address this market.

In the smart and rugged devices space, we continue to help leaders keep pace with the evolution of Android. In the rugged device space, we are helping two of the biggest names continue their journey to build products on Android based platforms. These devices serve critical applications such as managing enterprise assets by incorporating multiple technologies that help automate and streamline logistic processes. We are building an automation framework to provide critical testing services to two of the flagship rugged devices of the global leader in the space.

Our deep decade long engagement with a leading Japanese smart device vendor has grown significantly. We now have the responsibility to support their global application suite. The scope also covers applications provided by third parties. This is in addition to providing them with comprehensive field testing services.

In the Digital IT space, we are already engaged in with a large European conglomerate to build a suite of applications addressing the transportation space within the Smart City vision. This quarter, we were chosen as the mobility development partner for this initiative with the objective of building out a suite of mobile applications aimed at the commuter, which will help create an end-to-end value proposition. We also expanded our relationship with a leading European mobile virtual network operator (MVNO) to develop a cloud-based Actionable Insights Platform that will help key stakeholders across the enterprise uncover insights from large volumes of data. We continued to work on developing a variety of solution concepts in the Physical to Digital (P2D) domain, leveraging the power of Internet of Things (IoT) to transform processes and enable better customer engagement for brands.

We are working with one of the leading messaging platforms which has over a hundred million users. Our testing services ensure that the messaging application works flawlessly across all mobile platforms. Our testing and quality assurance team in tandem with their product development team ensures that the messaging platform provides a highly reliable means of communication on extant and new smart devices.

We thank you for your interest in Sasken and your continued support. My team and I are committed to always hold all our stakeholders in trust.

Rajiv C Mody
Chairman, Managing Director and CEO
Sasken Communication Technologies Limited


Submit your query

If you have any queries please fill-in the form or write to us on/before July 25, 2016 to analyst@sasken.com.  We will post our responses on our website where possible.

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