The buy-and-never-sell type of investor
Broadly, there are two types of participants in the stock market – long-term investors and traders.
06 Jul, 2023
3 min read
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In Q4FY23, net sales surged by 11.34% from last year’s same quarter while the net profit dipped by 15.6% from the corresponding quarter last year to Rs 112.17 crore. What were the contributing factors which led to this performance?
Birlasoft experienced robust revenue growth during the previous fiscal year, with overall revenues increasing by 16.1%. Our top 10 accounts demonstrated remarkable growth at a rate of 17%, while our Top-20 accounts also clocked a healthy growth at 11.6% YoY.
Throughout the financial, we achieved an adjusted EBITDA of USD 84 million, representing a margin of 14%. Our cash flows from operations were strong, reaching 100% of adjusted EBITDA, driven by our sustained focus on collections and achieving a best-in-class DSO of 53 days.
We have remained dedicated to improving our operational metrics and driving significant transformation within our organization, resulting in notable progress in areas such as utilization, pyramid structure, and attrition rates. The net profit in Q4'23 reflects an operational improvement, however, it’s not visible in the year-over-year growth due to a temporary client-specific situation.
These results reaffirm our confidence in delivering strong quarter-on-quarter performance and underscore the solid underlying strength of our business.
The company signed deals of TCV USD 286 million during the quarter. Which industries or sectors were involved in the deals signed, and how does this align with the company's strategic focus?
Birlasoft achieved a record-breaking Total Contract Value (TCV) of USD 286 million in new deal signings, showcasing our continued success in the market. Our deal wins exhibited a healthy balance between new signings and renewals, with 40% representing new deals and 60% comprising renewals. Among the new deals, we secured our largest deal of the quarter worth USD 50 million from a valued customer.
These wins spanned across diverse sectors and industries, highlighting our ability to cater to varied client needs. Notable achievements include securing a Master Data Management engagement with a prominent Lifesciences company in Europe; Receiving a substantial renewal from a BFSI customer in the US payments space; Winning a Business Applications and Infra support contract from a key BFSI customer and securing the renewal of an Enterprise Solutions engagement with a renowned Fortune 500 organization in the BFSI vertical.
These industry alignments reaffirm our commitment to being a trusted partner in driving digital transformation. We remain dedicated to investing in our capabilities, expanding our domain expertise, and fostering innovation to effectively meet the evolving needs of our clients in these strategic sectors.
Last month, the company's wholly-owned subsidiary Birlasoft Solutions Inc. (BSI) entered into a Settlement and Mutual Release Agreement with its customer, Invacare Corp (Invacare). Can you shed some light on this settlement and its significance?
The agreement reached with Invacare represents a positive milestone for our company. It enables us to fully focus on executing our growth plan without being held back by the Invacare situation that impacted us in the previous quarter. The settlement amount agreed upon with Invacare is USD 2 million and we successfully completed the disengagement services with Invacare on May 31.
This settlement holds great importance for us as it allows us to redirect our attention and resources towards delivering exceptional value to our clients. With the Invacare matter resolved, we can now pursue new opportunities, strengthen our position in the market, and fully concentrate on achieving our growth objectives.
At the moment, what are your top 3 strategic priorities?
Our current focus is on three key strategic priorities that drive our cultural and organizational transformation, enabling us to strengthen our market position. The first priority is to foster agility and execution-oriented practices within our organization, with a strong emphasis on customer engagement. We are actively restructuring our organizational framework to enhance synergies, improve efficiency, and deepen customer relationships. Our cultural transformation is guided by six principles: maintaining a high 'Say-Do' ratio, embracing boldness, prioritizing customer-centricity, enabling swift decision-making, prioritizing employee satisfaction, and putting the organization first.
The second priority entails concentrating on specific verticals that align with our strengths and market opportunities. We have identified Manufacturing, BFSI, Energy and Utilities, and Life Sciences as the four primary industry verticals where we will concentrate our efforts and allocate resources.
Our third priority centres around strategic service lines that play a pivotal role in delivering value to our clients. We have identified Digital & Cloud, Data Analytics, Infrastructure, and ERP as the four strategic service lines where we will focus our investments and prioritize development.
Through these strategic priorities, our aim is to enhance our capabilities, expand our domain expertise, and consistently deliver exceptional value to our clients.
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