Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hinduja Global Solutions Ltd (BOM:532859, Financial) reported a strong performance in its digital and media business, with revenues up by about 10% year-on-year.
- The company has successfully entered the cybersecurity services market with seven new AI-led solution offerings, indicating a promising growth area.
- Hinduja Global Solutions Ltd (BOM:532859) has secured significant wins in the UK public sector, opening up opportunities for technology services.
- The company is focusing on expanding its geographical presence, with promising pipelines in new markets like Colombia and South Africa.
- Hinduja Global Solutions Ltd (BOM:532859) is investing in employee skill development, particularly in AI and technology skills, to support its digital transformation initiatives.
Negative Points
- The company experienced an 8% year-on-year drop in overall revenues, primarily due to a reduction in revenues from the UK business.
- Hinduja Global Solutions Ltd (BOM:532859) is facing challenges in revenue growth and profitability, with muted revenue growth and economic pressures.
- There is a decline in EBITDA margins from 15.9% a year ago to 12.8% in the current quarter.
- The media division continues to incur losses, raising concerns about its profitability and impact on the company's overall financial performance.
- The company is dealing with ongoing search and survey assessments, which could potentially impact its financial standing.
Q & A Highlights
Q: What is the current revenue contribution from the cybersecurity services and the "One Business, One Star" initiative, and what are the future projections?
A: (Unidentified_5, Global CFO) Cybersecurity services have just started this financial year, so current revenues are not significant, but it is a promising area expected to grow in the future. (Unidentified_4, Whole Time Director) The "One Business, One Star" initiative is more strategic than financial, aimed at reducing acquisition costs rather than immediate revenue generation. The initiative is still in the proof of concept stage, and more concrete numbers will be available by the end of Q4.
Q: Why does the company have borrowings when there is significant cash flow on the balance sheet?
A: (Unidentified_5, Global CFO) The cash is largely from the sale of the healthcare business and is held outside India to avoid tax inefficiencies. Bringing the money back to India would incur a large tax on dividends. The funds are being used for buybacks, transaction costs, and growth initiatives.
Q: What are the plans for the cash reserves from the healthcare business sale? Are there any plans for acquisitions or expansions?
A: (Unidentified_5, Global CFO) The company is actively looking for growth opportunities, including acquisitions and expansions. Recent acquisitions include Diversify and Tech Link, which align with the company's strategy to grow digital operations and enter new markets like Australia.
Q: How does the company plan to address the continuing losses in the media division?
A: (Unidentified_4, Whole Time Director) The media division faces industry-wide challenges, but the company is focusing on integrating broadband and digital television to improve profitability. The company is also leveraging its strong infrastructure and rural connectivity to partner with major players in the satellite broadband space.
Q: What is the status of the broadband over satellite offering, and does it require further R&D?
A: (Unidentified_4, Whole Time Director) The company has already started providing broadband over satellite solutions using geostationary satellites. The larger scale rollout with low earth orbit satellites is expected next year, pending regulatory developments and partnerships with major players like Amazon and Starlink.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
