Allsec Technologies Q4 FY '24 Earnings Conference Call Summary
Announcement Details
• Date of Call: May 7, 2024
• Transcript Availability: Announced on May 14, 2024
• Key Executives: CEO Naozer Dalal, CFO Gaurav Mehra
Financial Performance Highlights
• Q4 Revenue: INR 129.7 crores
• 20.1% year-on-year increase
• 8.3% quarter-on-quarter increase
• Sector Growth:
• Customer Experience Management (CXM): 29.3% growth
• Employee Experience Management (EXM): 4% growth
• Full Fiscal Year Revenue: INR 469 crores
• 20.2% increase
• EBITDA:
• Q4: INR 35.2 crores (43.3% year-on-year increase)
• Full Year: INR 116 crores (30.7% increase)
• Profit After Tax (PAT):
• Q4: INR 20.7 crores (84.1% quarter-on-quarter increase)
• Full Year: INR 64 crores (31% increase)
• Dividend Payout: Rs. 68.6 crores for the year
Operational Performance
• Strong KPIs for CXM and EXM
• Recognition as a top partner by clients
• Focus on automation solutions and employee engagement
• Positive feedback on employee platforms
Growth Projections
• CXM Growth Expectation: High teens to early 20% growth
• EXM Growth Expectation: 20-25% growth
• Anticipated ramp-up in new CXM business from Q2
Strategic Insights
• Focus on payroll and HR outsourcing demand
• Ongoing evaluations for potential acquisitions
• Near-full capacity in Manila, indicating need for expansion
• Emphasis on maintaining margins while investing in growth
Future Outlook
• Confidence in sustaining growth in CXM and EXM
• Strategies include new sales, cost efficiency, and customer satisfaction
• Revenue split: 57% international clients, 43% domestic clients
• Average headcount: Just under 6,000 by end of FY '24
Conclusion
• Management expressed confidence in future performance and market opportunities despite challenges in the IT sector.

Notification and Access
• Allsec Technologies Limited notified BSE and NSE on November 2, 2023.
• Transcript of Q2 FY '24 Earnings Conference Call (October 27, 2023) available on the company website.
Key Executives
• Featured executives:
• CEO Naozer Dalal
• CFO Gaurav Mehra
• Moderator: Balaji Subramanian (IIFL Securities)
Company Performance Highlights
• Interim dividend announced: INR 45.7 crores (INR 30 per share).
• Rebranding to Customer Experience Management (CXM) and Employee Experience Management (EXM).
• Q2 FY '24 revenues: INR 112 crores (4.5% QoQ, 19.3% YoY increase).
• Strong cash position and low staff attrition at 8.1%.
• Key projects: SmartPay 4 payroll engine and new HRMS platform.
Financial Results
• H1 FY '24 revenue growth: 20.6% YoY.
• Margin improvements across business segments despite challenges from a US customer’s Chapter 11 filing.
Q&A Session Insights
• Clarification on Chapter 11 linked to a fintech client; proactive workforce downsizing and provisions made.
• Trade receivables increase due to international business growth; stable Days Sales Outstanding (DSO).
• Manila operations: operational seats increased to just under 1,200.
Future Outlook
• Focus on international sales and operational efficiencies for H2 FY '24 and FY '25.
• International sales surpassing 50% of new sales; continued strategic focus on this area.
• Evaluation of niche vertical acquisitions and geographic expansion in the US.
Cash Management
• Significant cash reserves post-dividend payout; optimizing cash use for growth.
• Portion of cash invested in mutual funds for reasonable returns.
• Acknowledgment of potential tax implications for repatriating funds from Manila.
Closing Remarks
• Naozer expressed gratitude to participants and optimism for the company's future, wishing well for the festive season.

Notification of Transcript Availability
• Transcript from Q4 FY23 Earnings Conference Call available on company website.
• Call held on May 9, 2023, featuring CEO Naozer Dalal and CFO Gaurav Mehra.
Leadership Introductions
• Naozer Dalal: CEO since February 16, 2023, with a background in banking and process outsourcing.
• Gaurav Mehra: CFO since January 2023, with a technology background.
Financial Performance Highlights
• 23% year-on-year revenue growth to INR 391 crores.
• Profit after tax (PAT) increased by 37% to INR 49 crores.
• Digital Business Services (DBS) and Human Resources Outsourcing (HRO) segments grew by 26% and 18%, respectively.
• HRO business processed 1.2 million pay slips monthly, becoming a market leader.
• Nearly 100 new clients added; full occupancy in Manila center.
Ongoing Projects and Contracts
• Development of SmartPay version 4 and a new HR management system.
• New sales contracts worth approximately INR 45 crores, a 33% increase from the previous year.
• Strong operational performance despite margin compression due to rising costs.
Q&A Session Insights
• Strategy for HRO business: Commitment to investing in people and technology.
• Service agreements typically last 2-3 years; no key accounts lost in FY23.
• Digital initiatives aimed at enhancing capabilities and reducing costs.
• Well-capitalized for potential acquisitions.
Margin and Cost Concerns
• Headcount growth of 17% but slight dip in EBITDA margins due to increased employee costs.
• One-time factors and elongated onboarding timelines contributing to margin pressure.
• Clarification on annual contract values (ACVs) and expense classifications.
Market Opportunities and Competitive Positioning
• Positive outlook on HRO market growth potential.
• 121 new logos acquired in HRO domain, contributing to ACV.
• HRO revenue realization closely aligns with ACV; DBS may experience lower conversion rates.
Industry Insights
• Significant growth potential in the HRO sector as the economy formalizes.
• Competition from both large and mid-sized firms in the IT-ITeS space.
• Largest industry verticals for DBS: BFSI and Fintech; HRO serves diverse sectors.
Conclusion
• Confidence in Allsec's ability to capitalize on market opportunities.
• Ongoing investments in growth strategies emphasized.
• Call concluded with gratitude from the moderator.