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 2017-18), ending 31st March 2018.

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 2018. In Fiscal FY 2018 the consolidated revenues for the Sasken Group up by 7.7 % over the previous fiscal to ₹. 503.03 crores. Consolidated Earnings before Interest, Depreciation, Taxes and Amortization cost for fiscal ‘18 were ₹. 69.45 crores, a growth of 39% sequential. Consolidated PAT for fiscal ‘18 was at ₹. 82.42 crores, down by 2.7 % over the previous fiscal. PAT margins for this fiscal were 16.4% and EBITDA margin was at 13.80%. Consolidated earnings per share, was ₹. 48.17 for the full year. Cash and cash equivalents were approximately Rs.502.66 crores as of March 31st, 2018. 

People 
On the people front, the headcount for the Sasken Group stood at 1867 as of March 31, 2018. We continue to invest in hiring, training and retaining a talent pool that is among the best in the industry. Our internal proficiency assessment and management system has helped to chart out the developmental needs of our engineering talent and ensure that they stay abreast of the continuous change and churn in the industry. While the attrition for the fourth quarter stands at 22.70%, we believe that our multi-pronged efforts to enhance employee engagement, development will pay dividends and the attrition figures will be lower going forward.  

Utilization for the quarter averaged 80.40% and is expected to be in a similar band going forward.

Customers
We have successfully added 2 new customers during the quarter taking the total number of active customers to 114.

I will now provide the key highlights for our Business Lines. 
Through the year we have seen a balanced growth coming from all the verticals we are focused on. Our strategy to extend our core competence to serve the needs of multiple verticals is beginning to pay off. My management team and I firmly believe that we are well on track to achieve the goals we set out for ourselves in our 5x5 vision. The trends playing out in the industry include connected automobiles, machine learning, artificial intelligence and a host of digital technologies.  

The nexus of these vectors of change will create significant business opportunities for product engineering service companies. Additionally, digital services will see a considerable uptake as both digital natives and traditional companies up the ante to strengthen their market position. As stated 
before, our differentiation stems from the ability to combine product engineering and digital services to offer a bouquet of solutions for product development and life-cycle management.

More specifically in the Automotive segment, the focus continues to be on enhancing connectivity, improving diagnostics and prognostics and a move toward safer autonomous modes of driving. In the current year, we have helped Tier-1s & OEMs build sophisticated in-vehicle communication systems which have been incorporated in the latest models of global auto majors. In the automotive electronics arena, we have successfully executed programs to deliver ADAS solutions to Japanese Tier-1s & OEM. We are tasked with providing feasibility analysis and initial design architecture for a next-generation network access device for a European-Japanese automotive conglomerate. The rapid proliferation of Android in the automotive ecosystem augurs well for us as we are well placed to leverage our expertise and help leading automotive vendors build differentiated experiences addressing connected cars, infotainment, autonomous driving, and safety.

We are immensely pleased with the progress we have made by our foray into the Industrial Automation arena. Customers are investing in building software-based features which they believe is the critical differentiator for their product lines. Our solutions range from micro-widget based services for asset management to enhancing the communication efficiency of complex manufacturing systems. We are confident to see greater growth avenues in this space in the following year.

Semiconductor has been the bedrock on which your Company has built its core and foundational competencies. To complement our range of software offerings we have made investments in reigniting our Integrated Circuit Design Services (ICDS) capabilities. In the semiconductor area we are enthused by the progress we have made in expanding the scope of services we extend to our clients who address the automotive market. Additionally, our customers are drawing upon our expertise to help with system integration relating to the CV2X space. We continue to build on our engagements supporting modem and connectivity development for new product lines as well as legacy platforms. In the current quarter, we have won two prestigious contracts in the ICDS space from the world’s largest semiconductor company and one from a leading EDA tool company.

In the Communications & Satellite segment space, we have seen substantial growth. We are making steady progress in executing one of the largest contracts in the history of your Company to build satellite terminals for the Asian market. Our engagements in the area of smart and rugged devices have also grown, and our engineering teams have played a key role in providing critical product development and commercialization support for new platforms and derivatives. Overall it is heartening to note that our engagements in the area of communication networks, notably railway communications have grown steadily through the year. In the smart devices space, we are working with a leading Japanese service provider to automate their application testing across both Android and iOS platforms. We are also delighted to bring to your attention that our engineers have been selected to make contributions to enhance Google’s Android platform.

Through the year we have strengthened our presence in the Digital Services space by successfully executing several projects as well as winning new business from prestigious customers. Our digital strategy is premised on leading with our expertise in embedded product engineering solutions and addressing the needs of customers in verticals such as transportation, industrial, manufacturing and 
automotive. We have made significant progress in helping our Europe based customer to enhance their integrated transport management system which addresses the needs of multimodal transport operators. In other engagements, we have leveraged our expertise in connectivity and built solutions that use NFC / RFID for a leading sports and lifestyle brand. Some of the exciting applications that we have enabled include the ability to enhance digital brand interaction, authenticate products and manage asset utilization & ownership.

Final Dividend 
The Board of Directors have recommended a final dividend of ₹.4.50 per equity share of Rs.10 each for the year ended March 31, 2018. This is subject to approval of shareholders and if so approved, the total dividend for the year will amount to ₹.10 per equity share (including two interim dividend payments of Rs.2.50 and Rs.3.00 per share paid in October 2017 and February 2018 respectively). We thus maintain the uninterrupted record of paying dividend since our inception. 

We thank you for your interest in Sasken and your continued support. My team and I are committed to doing our best to serve the interest of all our stakeholders.  

 

Neeta Revankar 
Chief Financial Officer and Whole time Director 
Sasken Technologies Limited
(formerly Sasken Communication Technologies Limited)