Chairman's Remarks

Chairman's Remarks

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Dear Analyst,

It is my pleasure to highlight the business performance of the Sasken Group for the financial year (FY  2016-17), ending 31st March 2017.

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 Fiscal 2017. In Fiscal ‘17 the consolidated revenues for the Sasken Group declined by 2.9 % over the previous fiscal to Rs. 468.94 crores. Consolidated Earnings before Interest, Depreciation, Taxes and Amortization cost for fiscal ‘17 were 43.15 crores, a decline of 8.5% sequential. Consolidated PAT for fiscal ‘17 was at Rs. 73.69 crores, down by 64.30% over the previous fiscal. PAT margins for this fiscal were 15.70%. Software Services revenue were at Rs. 454.27 crores, a decline of 1.3% over the previous fiscal. Software product revenues were Rs. 13.00 crores, a decrease of 35.2% over the previous fiscal. Services EBITDA margin was at 8.20 %. Product EBITDA margin was at 50.10%. Consolidated earnings per share, including exceptional item, was     Rs. 41.92 for the full year. Cash and cash equivalents were approximately Rs.384.51 crores as of March 31st, 2017.

People

On the people front, the headcount for the Sasken Group stood at 1963 as of March 31, 2017. The ability to attract and retain talent continues to be of primal importance to us. We are making concerted efforts to engage and retain our talent to contain attrition, which currently stands at 17.70 % for trailing twelve months. We stand committed to ensuring that our talent pool is best equipped with knowledge of standards, technologies & platforms and is the best in class.

Utilization for the quarter averaged 78.60% and is expected to marginally improve in the coming quarters/ remain similar.

Customers

We have successfully added 8 new customers during the quarter taking the total number of active customers to 133.

I will provide key highlights in the Business Lines we operate in. 

In both the Product Engineering and Digital Transformation Services arenas, there is considerable velocity in engineering/development spends. In keeping with our position of being a ‘Chip to Cognitive’ company, we are building several solutions that harness our unique expertise in silicon, embedded systems, connectivity, smart devices and analytics. Additionally, we are encouraged to bring to your attention that the verticals which we service; Automotive, Semiconductors, Industrial, Consumer & Communication, are among the highest investors in creating technology led solutions.   

In the Automotive segment, disruption is driven by the increased need for Autonomous Driving, Smart Infotainment, and Telematics. We continue to sharpen our focus in this segment and building on our portfolio of In-Vehicle Infotainment (IVI) solutions. Our expanded portfolio of Automotive offerings now addresses the need for autonomous driving. We have achieved a breakthrough in this area and are engaged with a Tier 1 OEM and provide services for their V2X platform, which is a core component of autonomous driving.

We have built a platform that aggregates data from multiple sources in an automobile and provides interesting insights through mobile apps and IVI.  Our solution enables actionable insights from the petabytes of data generated in the connected automobile.

Industrial automation is a relatively new opportunity space identified by us. This sector has promising growth prospects for us, especially in the white spaces created by the collision of Infrastructure, Mobility, Analytics & Cloud. This then opens up the opportunity to provide solutions for industrial OEMS to target several verticals.

Our heritage in the Semiconductors segment has enabled us to build strategic and longstanding relationships with all leading semiconductor vendors. This unique strength places us at a position of advantage to work with market leaders in enabling the design and product conceptualization of platforms and derivatives targeting both existing and emerging segments. An example of this is our enhancement of an IoT platform on which we integrated speech recognition to support a rich set of new services. 

The Communication segment continues to be dominated by smart devices. We are building on our leadership position as a provider of Product Engineering Services for the Android ecosystem. We have enabled several Smartphone OEMs as well as Rugged Industrial Device OEMs launch new devices as well as upgrade their existing devices to “Marshmallow” and “Nougat” releases of Android.

Our combined strength in hardware engineering and embedded software places us uniquely as one of the few organizations capable of providing turnkey full product design services for niche and differentiated communication devices. In the Satellite segment, with the gradual shift and adoption of LTE-based communication systems, we are seeing an increased demand for turnkey product development programs. 

In the Consumer segment (Retail), despite the proliferation of e-commerce platforms, and their ability to offer a host of conveniences, consumers still enjoy the ‘shopping experience.' In response to this trend, Sasken is investing in solutions that are targeted for fashion, apparel retailers that leverage our pedigree in connectivity technologies to build compelling solutions for traditional retailers.

We are working on a number of development projects focussing on automotive and other related domains. We have helped an IoT platform vendor manage and control multiple devices by enhancing the protocols they can support. Our proven audio sub-systems have helped a Japanese/ European auto solution provider build state-of-the-art product.

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 Technologies Limited
(formerly Sasken Communication Technologies Limited)