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 third quarter ended 31st December 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 the Third Quarter for Fiscal 2018. In the Third Quarter of Fiscal ‘18, the consolidated revenues for the Sasken Group increased 5.6% over the previous quarter to ₹131.87 crores. Consolidated Earnings before Interest, Depreciation, Taxes and Amortization cost for the third quarter fiscal ‘18 were ₹16.39 crores, an decrease of 12.5% sequentially. In percentage terms, the consolidated EBIDTA margin stood at 12.4%. Consolidated PAT for Q3 fiscal ‘18 was at ₹20.37 crores, up by 8.5% over the previous quarter. PAT margins for the quarter were 15.4%. Consolidated earnings per share for the 3rd quarter were ₹11.91. Cash and cash equivalents were ₹463.6 crores, as of 31st December 2017.

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

Product Engineering Services

Your company has initiated deliveries of the sizeable new project in the Satellite segment that we won last quarter. We are happy to report that the progress on this global development program is on track. Further, we are actively building a pipeline for more business wins in this segment. This market space continues to evolve and demand innovative solutions that we can fulfill which is a testimony to our acknowledged leadership in providing end-to-end product engineering services.

We are enabling the inflection of Android in the Automobile IVI world.  Your company continues to invest and grow partnerships with leading Semiconductor vendors who are targeting the automotive arena. We continue to both broaden and deepen our relationship with a leading platform provider in the IVI space. We expect this engagement to scale over time. Our leadership in Android gives us a prime position in these projects.

Further, Sasken is working to secure a broader partnership with companies that build V2X solutions. These technologies will play a significant role to enable Autonomous Driving in cars of the future. V2X will allow the creation of novel future experiences for the Automotive market. Sasken’s continued investment in 5G and 4G (C-V2X and NB-IoT) evolution technologies will lead Sasken to a  leadership position in the cellular communication space. Sasken will enrich its points-of-view to help build solutions leveraging these new communication paradigms.

In the Automobile space, Sasken has secured a deal to enable rich media through its vast experience in design and implementing Codecs. These Codecs will power future IVI platform and help deliver a more luxurious audio/visual experience.  A small but significant win in the ADAS space for a Proof of Concept to enable FCW (Forward Collision Warning). This will for the fountainhead for future ADAS based offerings from Sasken.

Finally, we continue to make investments in 5G, AI (Artificial Intelligence) and Machine Learning (ML) are hopeful to see new and exciting solutions emerge over the next year.

Digital Transformation Services

We are making rapid progress in the Digital Transformation Services (DTS) Space. In our engagement with a leading provider of smart tag based solutions. Our engineers are working to improve the usability and performance of Digital Enablement Applications used by operators and factory managers in the factories of a global leader in sports goods.

We are happy to report an exciting and path-breaking win from a United Kingdom-based customer. We will enable our customer to deliver cloud-based analytics and simplify consumer access, by building a suite of intuitive mobile apps.  The ability to combine Product Engineering and Digital Transformation expertise is unique and unparalleled in the industry. Our solution will enable the customer to offer aftermarket automotive products that are digitally smarter, cloud-based and highly differentiated.

We continue to make steady progress in our ongoing engagements and are hopeful to achieve scalable growth in the DTS space in the coming quarters.

People

On the people front, the headcount for the Sasken Group stood at 1,913 as of 31st December 2017. Attrition for Q3 stands at 21.57 % and has seen an increase in the quarter on account of us exiting a business which is non-strategic. We have completed an extensive exercise to map the competency area of all our engineering staff. This activity will yield multifold benefits such as enabling better alignment of compensation, focussed learning initiatives to upskill our already excellent talent pool and will ensure that our engineering team is the best in class in the industry. Utilization has risen from  77.20% to 80.00 %, and we expect to hold the same in this band in the coming quarters.  Our HR team continues to be an able business partner and is well placed to provide the necessary impetus to grow our business.  

Customers

We have successfully added 8 customers during the quarter taking the active number of customers to 123.

We thank you for your interest in Sasken and value your continued support. My team and I are committed to upholding the trust of all stakeholders in an equitable and fair manner.

 

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