Hinduja Global Solutions Results: Latest Quarterly Results & Analysis

BPO/KPO company Hinduja Global Solutions announced Q4FY24 & FY24 results:

Q4FY24 Financial Highlights:

• Total income stood at Rs 1,257.9 crore, a YoY growth of 7.7%.
• Revenue from operations stood at Rs 1,098.7 crore, a YoY growth of 2.7%.
• Operating EBITDA was Rs 66.2 crore, up 82.5% YoY; EBITDA margins for the quarter were 6.0%.
• PAT stood at Rs 87.9 crore.
• As on March 31, 2024, Net Cash and Treasury Surplus stood at Rs 5,012.6 crore

FY24 Financial Highlights:

• Total income stood at Rs 5,087.8 crore, a YoY growth of 1.6%.
• Revenue from operations stood at Rs 4,615.7 crore, a YoY growth of 2.5%.
• Operating EBITDA was Rs 355.9 crore, a 45.8% growth YoY; EBITDA margins were 7.7%.
• PAT stood at Rs 131.2 crore.
• Total dividend for the year is Rs 7 per share.

Speaking on the results, Partha DeSarkar, Whole-time Director and Group CEO of HGS said: “HGS ended the year with a solid performance in Q4FY24 across both our BPM and media divisions. On YoY basis, HGS’ operating EBITDA has increased by 82.5% while operating EBITDA margins expanded by 260 basis points to 6.0%. The recently acquired entities TekLink and Diversify have done very well. HGS also signed 11 new CX clients in Q4, taking the fiscal count to 41, showcasing strong demand for our technology-led CX services.

The highlight of the full-year performance has been our operating EBITDA growing by 45.8% YoY and our Operating EBITDA expanding by 230 basis points to 7.7%. In March 2024, we incorporated a subsidiary in South Africa to service clients from the UK, US and Australia, and expect to start operations in July 2024.

In the BPM business, we continue to focus aggressively on customizing horizontal services such as AI, automation and cloud etc., to develop industry-specific solutions and drive more value in the key verticals we support. An important part of this approach has been to engage with partners such as Cranium and Form1 Partners to crossleverage our capabilities for the market.

FY2024 was the first full year since the merger with NXTDIGITAL. We are pleased with how the synergies between the two businesses are panning out – including collaborating to develop the NetX application under the recentlylaunched B2B brand CelerityX and co-working on automating various processes to enhance productivity and speed. We are excited about creating more collaborative opportunities between the two entities going ahead.”

Commenting on the Digital Media division’s performance, Vynsley Fernandes, Whole-time Director of HGS and Head of the Digital Media business said, “Our focus in FY2024 was to build on our strong pan-India digital distribution expertise and technology innovation – by driving our retail, commercial and enterprise broadband ventures. Those initiatives, setting the foundation for future growth, are seeing traction. Whilst CelerityX, our enterprise business, continues to make gains on the back of the recently launched OneX unified network-as-aservice solution, our OIL retail broadband customer base has surged by more than 23% over the previous fiscal. That focus on digital inclusion is also reflected in our corporate actions over the last few months – first acquiring a majority stake in leading Mumbai-based ISP Seven Star Broadband and then signing on Triple Play Broadband, a Delhi-based premier ISP as an alliance partner.”

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BPO/KPO company Hinduja Global Solutions announced Q3FY24 & 9MFY24 results:

• 12 new logos were added for digital-enabled CX solutions, and eight for HRO/Payroll Processing.
• The Digital Media business's new enterprise solutions brand, CelerityX, experienced good traction.
• NetX, a solution jointly developed by the digital teams of the BPM and Digital Media businesses, was launched.
• Q3FY24 operating revenue reached Rs 1,203.7 crore, marking a 7.6% YoY increase.
• Operating EBITDA for Q3FY24 amounted to Rs 115.1 crore, reflecting a substantial growth of 39.9% YoY.
• 9MFY24 operating revenue stood at Rs 3,517 crore.
• Operating EBITDA for 9MFY24 reached Rs 289.5 crore, representing a significant 39.3% YoY increase.
• A one-time cost of Rs 6.53 crore related to property exits was incurred in Q3FY24.
• Digital Services (comprising Technology Services and Digital Media) contributed 38.4% of 9MFY24 operating revenue.

Speaking on the performance, Partha DeSarkar, Whole-time Director and Group CEO of HGS said: “Despite a challenging global macro-environment, HGS posted a resilient performance in Q3FY24, continuing to build on our efforts to improve our topline and margins. We saw a strong total revenue increase of 11.2% YoY, led by growth in Canada, TekLink and offshore businesses. Operating EBITDA (excluding other income) grew significantly at 39.9% YoY and 18.1% on sequential basis.

During the third quarter, we added 12 new logos and signed multiple opportunities with 22 existing clients for our digital-led CX services. Our engagements reflect the changes in the market toward more complex, technology arbitrage driven deals for both large and mid-market clients. We are aggressively investing in people and technology to support this demand, including in areas such as Cloud, analytics, generative AI, social care, etc.”

Commenting on the Digital Media division’s performance, Vynsley Fernandes, Whole-time Director of HGS and Head of the Digital Media business said, “Our media division saw robust broadband and digital television growth continuing in Q3 - ending the quarter with a customer base of 5.75 mn connected homes across India. At the same time, we’ve operationalised a primary national long distance network of 4,000 kms, with a resilient back-up of around 2,500 kms in progress. This will further accelerate our broadband growth in Tier 2 & 3 cities whilst providing for a high quality of service. CelerityX, our enterprise business has commenced rolling out innovative solutions and has signed on corporates in the retail, BFSI and manufacturing sectors for NetX, India’s first-of-its-kind platform – connecting enterprises with 18,000 Internet Service Providers pan-India. The NetX solution, jointly developed and deployed by the digital teams of BPM and Digital Media businesses, will significantly change the digital networking landscape.”

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BPO/KPO company Hinduja Global Solutions announced Q1FY24 results:

• Total income stood at Rs 1,247.6 crore, up 6.8% over Q4FY23.
• EBITDA margins (including Other Income) improved from 11.5% in Q4FY23 to 15.3% in Q1FY24.
• Digital Services (Technology Solutions and Digital Media) contributed 37.6% of Q1FY24 operating revenue.
• Buyback offer of 60 lakh shares at Rs 1,700 per share aggregating Rs 1,020 crore through tender offer completed on June 9, 2023.
• PAT stood at Rs 16.6 crore.
• As on June 30, 2023, Net Cash and Treasury Surplus stood at Rs 4,962.0 crore

Speaking on the results, Partha DeSarkar, Executive Director and Group CEO of HGS said, “The results for the first quarter of the fiscal have been solid and reflect our transformative ability to adapt in a fast-changing macro business environment.

The BPM business achieved operating revenue growth of 7.0% over Q4FY23, along with significant improvement in margins. Our Canadian and UK businesses have performed well in Q1FY24 and we are seeing strong demand, especially in Canada and offshore/ nearshore business. In July 2023, we formally launched our CX hub in Barranquilla, Colombia, and would shortly be doubling our delivery capacity. While the operational performance has improved, PAT for Q1FY24 is lower than Q1FY23, primarily due to a reduction in other income.

Teklink, the data and analytics business we acquired in Q4FY23, posted a strong performance and delivered revenues of approx. USD 8.8 million with EBITDA margins of around 22.2%. Our cross-selling efforts have resulted in a robust pipeline, including a couple of wins. The technology solutions business recorded revenues of USD 24.3 million in Q1FY24 and we hope to soon achieve an annual revenue run-rate of USD 100 million.

In June 2023, we completed the buyback offer of 60 lakh equity shares for Rs 1,700/share aggregating to Rs 1,020 crore. The buyback initiative was part of the overall program for sharing the value created from the sale of the erstwhile healthcare business with our shareholders.

Looking ahead, though global economic uncertainties persist, we remain cautiously optimistic for the year. We are confident that we can navigate the challenges and seize our opportunities with our technology-led, people-driven approach. We will also continue with our cost optimization initiatives, including further real estate rationalization.”

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Hinduja Global Solutions announced Q1FY23 Result :

• Strong revenue growth of 14.1% YoY
• Net profit of Rs. 732.7 million, a 9x growth YoY
• Interim Dividend of Rs 5/ share
• Hon’ble NCLT has directed to convene the meeting of Equity Shareholders on September 02, 2022 for considering approval of scheme of arrangement for acquisition of the media & digital business of NXTDIGITAL Limited
• Overall revenues for HGS’ digital-enabled CX solutions and HRO/ payroll business stood at Rs. 9,120.46 million, a growth of 14.1% YoY.
• EBITDA for the quarter was Rs. 384.5 million.
• Net profit increased to Rs. 732.7 million, a growth of 867.9 % YoY.
• Capital expenditure for the quarter was Rs. 263 million.
• As on 30th June, 2022, Net Cash stood at Rs. 33,709 million.
• Interim dividend of Rs. 5 / share.

Speaking on the results, Partha DeSarkar, Executive Director and Group CEO of HGS said: “HGS has begun FY2023 on a strong note. Revenue for Q1 FY2023 grew by 14.1% YoY to Rs. 9,120.46 million, while we significantly improved PAT. In a challenging economic environment, we are witnessing strong demand for our customer experience (CX) business across all our geographies. Our offshore delivery in Philippines and India is ramping up significantly; we also launched a new delivery center in Mysore in July to cater to the growing demand. Diversify, which we acquired in Q4 FY2022, has performed well and delivered EBITDA margins of 22.4%.

HGS continues to expand our solutions portfolio across RPA, analytics, AI, cloud and social care, etc., to target fastgrowing micro-verticals. Our focus is paying off as we have signed 28 digital-led engagements with clients in the June quarter. Looking ahead, we are focusing on strong revenue growth and improvement in margins. We plan to strengthen our capabilities, set up new centers and hire significantly to support new client wins as we take forward the HGS 2.0 journey.

The proposed buyback of around Rs. 9,750 million, based on the audited results for FY2022, will be announced at a later date upon completion of requisite approvals and in compliance of relevant provisions of the Companies Act, SEBI Listing Regulations and SEBI Buy-back Regulations. We expect this to take place in second half of FY2023.”

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Hinduja Global Solutions declares Q4FY22 result:

• HGS reports Q4 FY2022 results, announces final dividend of Rs. 25/share (On 1:1 post bonus share capital)
• Q4 FY2022 revenues (Retained Business) stood at Rs. 8,654.6 million, a growth of 13.6 % YoY.
• Reduction in gross debt of Rs. 2,045 million in Q4 FY2022; As on March 31, 2022, Net Cash stood at Rs. 35,175 million
• Announces Final Dividend of Rs. 25 /share. (on post 1:1 Bonus Share Capital)
• Total Dividend of effectively Rs. 245/share (on pre 1:1 Bonus Share Capital)
• Total Dividend Outgo of around Rs 5,120 million for FY2022
• Size of Buyback would be around Rs 975 crores. Detailed buyback process shall be announced later.

Speaking on the results, Partha DeSarkar, Executive Director and Group CEO of HGS said: “HGS had an eventful FY2022 – from posting strong revenue growth in all four quarters in an uncertain socio-economic environment, registering our highest-ever quarterly PAT, to divesting the healthcare services business for an almost 3x valuation and enhancing shareholder value.

Our strategy was to continue leveraging the hybrid working model, sustain client win momentum and sell more digital-led services. This focus has helped us achieve significant growth across all business parameters during the year. HGS signed a couple of our biggest deals ever, increased our digital services footprint across clients, ramped up headcount in the UK and launched new solutions such as Cloud Accelerator and HGS Agent X. We also expanded into Australia & New Zealand through the acquisition of Diversify Australia, thus opening up an attractive, highpotential client market.

In Q4, our continuing operations reported robust double-digit revenue growth, led by ramps and new logo wins in the UK and digital businesses. We expect the trend to continue in the coming quarters. HGS completed the acquisition of Diversify Australia in February, and we are pleased with how the integration is shaping up. Since the acquisition, the Diversify team has won 6 new clients while the sales pipeline for FY2023 is looking healthy. We expect good traction in this business.

Looking ahead, we will continue to invest in building HGS 2.0 through proactive customer experience solutioning and acquiring digital capabilities across automation, analytics & AI and cloud even as we explore geographic expansion.”

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Highlights:

• Q2 FY22:
  • Q2 FY2022 revenues stood at Rs. 15,826 million, a growth of 18.8%YoY. 
  • EBITDA for Q2 FY2022 was Rs. 2,269 million, a growth of 21.2% YoY.
  • EBITDA margins stood at 14.3%in Q2 FY2022.
  • Net profit for Q2 FY2022 was Rs. 1,365 million, a growth of 67.9% YoY; Net margins stood at 8.6%.
  • Capital expenditure for the quarter was Rs. 744million. 
  • Reduction in gross debt of Rs.345 million in Q2 FY2022; As on September 30, 2021, Net Cash stood at Rs. 5,008million.
  • Second Interim Dividend of Rs. 10/share.
• H1 FY22:
  • Revenues increased to Rs. 31,331 million, a growth of 22.0% YoY. 
  • EBITDA stood at Rs. 4,590 million, a growth of 37.9%YoY. EBITDA margins was 14.6%.
  • Net profit stood at Rs. 2,535million, a growth of 94.2% YoY. Net margins was 8.1%.

Speaking on the results, Partha DeSarkar, Executive Director and Global CEO of HGS said: “HGS reported an excellent performance in Q2 FY2022. Overall revenue for the quarter stood at Rs. 15,826 million, an increase of 18.8% YoY, while EBITDA grew by 21.2% YoY to Rs 2,269 million and PAT by 67.9% YoY to Rs 1,365 million.

The performance was driven by robust growth in revenues and margins of our UK business, our digital business as well as the healthcare business. Strong revenue growth coupled with savings from the hybrid working model helped us mitigate challenges arising from talent supply constraints to report increased EBITDA margins in Q2.

Today’s market continues to witness a strong demand for high value customer experience services. Our sustained investments in priority verticals, such as the UK public sector, and the 3As (automation, analytics and AI) in a cloud first model are creating newer opportunities for us. Clients want engagements that help them innovate, optimize and grow. The deals we have won in the last few months and our healthy pipeline exemplify this trend. Going forward, our strategy is to continue to invest in intelligently integrating people with technology to design enhanced experiences and position HGS as a preferred growth partner for our clients.”

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