Brief Company Introduction
Saksoft is a digital transformation partner that specializes in assisting its customers in automating, modernizing, and managing their IT systems. With almost two decades of experience, Saksoft operates across 16 locations, including the USA, Asia Pacific, UK, and Europe. The company has a strong workforce of over 2000 associates.
Saksoft focuses on various industry verticals, including FinTech, telecom and utilities, transportation and logistics, public sector, retail, and health tech. By serving these interconnected verticals, Saksoft can leverage cross-selling and upselling opportunities to its clients. The company offers a range of horizontal service offerings, including analytics, cloud solutions, legacy modernization, intelligent automation, application development, and testing.
Financial Highlights & Results
- The company achieved an annual revenue of INR 666 crores, representing a growth of 39% year-on-year.
- The Q4 FY23 revenues were INR 182 crores, with a growth of 31% year-on-year.
- The operating EBITDA for Q4 FY23 was INR 33 crores, with a growth of 46% year-on-year.
- The full-year revenues for FY23 were INR 666 crores, with a growth of 39% year-on-year.
- The company has cash reserves of about 195 crores and intends to use it for inorganic opportunities and acquisitions that are EPS accretive and capability-driven.
Investor Conference Call Highlights
- The management stated that their key verticals include FinTech, telecom and utilities, transportation and logistics, public sector, retail, and health tech.
- They acquired Terafast, a Chennai-based company specializing in cloud engineering, networking solutions, and DevOps automation.
- The revenue from offshore business has improved their margins.
- The company has a net debt-free balance sheet and healthy cash and cash equivalents.
- The company expects to be less impacted by the IT slowdown in the US due to their focus on SMEs and niche markets.
- Saksoft has set a target of $100 million in revenue by 2024-2025.
- Saksoft has a significant exposure to the US market, with almost 50% of their revenues coming from there. They also have a sizable presence in the FinTech sector.
- While there may be an impact on revenues due to potential slowdowns in the US market, Saksoft is working to mitigate the impact through their strategy, approach, and target market focus.
- The management stated that the average contract size is not a meaningful measure for Saksoft, as their contracts vary in size, duration, and scope. Instead, it is more relevant to consider customers in different revenue ranges, such as those above $1 million and those between $0.5 million and $1 million.
- Saksoft aims to grow its service offerings in India to support their US customers who are opening global capability centers in India.
- The emergence of generative AI, such as Chat GPT, is expected to impact the IT industry. The lower-end development work may be driven by tools, but Saksoft’s value proposition lies in architecture, code, quality, testing, and implementation.
- Saksoft wants to maintain the same margin, but they are willing to compromise on margins if it enables growth. Their primary focus is on top-line revenue growth.
- The company is open to both organic and inorganic acquisitions. They actively seek inorganic growth opportunities for capabilities and are hopeful about closing one or two acquisitions in the coming months or years.
- Saksoft has around 22% attrition rate and plans to increase employee count in line with the revenue growth, targeting a 20% increase.
Saksoft Ltd is engaged in providing business intelligence and information management solutions predominantly to mid-tier companies based out of the USA and UK. It was established in 1999 by Autar Krishna and his son Mr Aditya Krishna.The company is a leading Digital Transformation Solution Partner for clients across various countries. It provides services like application development, testing & quality control and solutions based on cloud, mobility and Internet of Things (IoT) along with Information Management (IM) and Business Intelligence (BI) solutions.
Saksoft adopts a strategic approach to navigate the competitive landscape of the IT industry. The company’s growth is primarily fueled by its strong presence in key sectors such as FinTech, transportation, logistics, health tech, and utilities. Instead of being a generalist, Saksoft focuses on carving out specific niches within these industries. By aligning their capabilities and efforts with the unique demands and challenges of these sectors, Saksoft has been able to achieve significant success. This targeted approach allows them to create market missions and establish a strong foothold in these competitive markets.