Sasken Communication – Lacks Revenue Growth

Sasken Communication Technologies held a conference call to discuss quarterly and nine months ended results and future growth plans. Rajiv Mody, Chairman and Managing Director addressed the call.

Key Highlights for the quarter: Q3 FY 09

  • Consolidated Revenues for Q3 FY’09 at Rs 185.1 crore, was higher by 5% sequentially over the previous quarter and was higher by 31% on a Y-o-Y comparison from Q3 FY 08 figures.
  • Consolidated EBIDTA for Q3 FY’09 at Rs 42.1 crore, was higher by 2% sequentially over the previous quarter and was higher by 164% on a Y-o-Y basis comparison from Q3 FY’08.
  • Consolidated PAT for Q3 FY 09 at Rs 14.4 crore was higher by 38% sequentially over the previous quarter and was higher by 272% on a Y-o-Y comparison from Q3 FY 08. PAT Margins are at 7.8%
  • Software services revenues for Q3 FY 09 at Rs 173.2 crore
    • Up 11% sequentially over the previous quarter
    • Up 32% Y-o-Y from Q3 FY 08
  • Products group revenues for Q3 FY 09 at Rs 11.7 crore
    • Down 44% sequentially over the previous quarter
    • Up 23% Y-o-Y from Q3 FY 08
  • Consolidated EBIDTA margins were at 22.7%.
    • Services EBIDTA margins for the quarter was at 24.4%.
    • Products EBIDTA margins were at 23.6%.
  • Revenue contribution from
    • the Top five customers stood at 70.6%
    • from Top 10 customers at 84.1%

Other Highlights of the call

  • For the quarter ended Dec’08, in terms of the Geography wise revenue break up, North America contributed 16%, EMEA contributed 54%, India contributed 23% and APAC contributed 7%.
  • For Q3FY’09 in terms of the Services Revenue mix- delivery, offshore contributed 61% and onshore contributed 39%.
  • The Services utilization for Q3 FY’09 was 71.9%, for Q2 FY’09 was 74.9% and for Q3 FY’08 was 79.2%
  • Average realized rate for the quarter Rs 49.02 per US$
  • 4 new customers added during the quarter taking the total of active customers to 99
  • The total number of employees stood at 3555. Gross addition during the quarter under review was 239, while on the net level there was reduction of 82 employees.
  • The company may not be able to meet its 10% revenue growth guidance for the FY’09.
  • The company has about US$ 65 million of hedges at an average exchange rate of Rs 44.52.
  • Pricing pressures to the tune of 5% has been seen since Jan’09 from some of the customers.
  • Business volumes from Nortel would be continuing at similar levels for the near term.
  • The exposure as far as receivables are concerned from Nortel is to the extent of Rs 7 crore as on date and most of that is also covered by credit insurance.