Highlights of call
- The management believes that the environment is cautious. Expansions have been put on hold. Domestic India business was down.
- The pricing environment is stable for the Company with only one client asking for volume discount at the moment. The realizations could come down due to shift from onsite to offshore.
- In international business, the company does not have any revenues from outbound services, hence it is not impacted like other IT-BPO players. In India, the revenues were impacted due to dip in outbound services.
- The Company has put an expression of interest to acquire Satyam Computer. However, it will do a complete due diligence before acquiring the Company.
- For the quarter ended December 2008, on sequential basis, Hinduja Global reported 15% growth in operating revenues at Rs 218.60 crore. OPM dipped 180bps at 17.1%. Other Income was Rs 2.71 crore against loss of Rs 8.98 crore in the sequential quarter, Interest cost was up 45%, depreciation charge was up 23% and tax provisioning was up 313%. The resultant PAT was up 34% at Rs 21.52 crore.
- The rupee depreciation benefit in revenues was 4% on sequential quarter.
- OPM for the quarter was down on account of additional capacity addition and additional employee costs of Rs 2.3 crore on payment and recalculation of gratuity.
- Other Income includes forex loss on translation of Rs 6 crore being translation losses whereas treasury yield was 5.03% p.a. for the quarter on approx US$ 111.18 million.
- For the quarter, included in other income, there was MTM gain of Rs 1.46 crore against MTM loss of Rs 15.88 crore in the sequential quarter.
- Depreciation charge for the quarter was up sequentially on the back of addition of 800 seats (net) during the quarter.
- Capex for FY09 is estimated to be Rs 80-90 crore of which 60% has been capitalized in 9MFY09.
- The Company added about 800 seats in the quarter and the total seat capacity at the end of the quarter was 13473 with occupancy of 84%. 225 seats are empty at Mauritius.
- The company reduced 332 employees in the quarter taking the total global headcount to 14186 employees. India headcount was reduced by 662 employees to 10334 on the back of slowdown in domestic India business. Manila headcount was increased by 63 to 1871 employees and North America headcount was increased by 267 employees to 1981.
- Number of clients remained flat in the quarter. Top client contributed 14% (14% in the sequential quarter), top 5 clients contributed 43% (47% in the sequential quarter), top 10 clients contributed 63% (66% in the sequential quarter) and top 20 clients contributed 81% (81% in the sequential quarter).
- The revenues from India grew 2.6% at Rs 78 crore contributing 36% (40% in the sequential quarter), Manila revenues grew 18.8% at Rs 38 crore contributing 17% of the revenues and North America revenues grew 24.1% at Rs 103 crore contributing 47% (43% in the sequential quarter).
- By currency, Local US earnings were 47%, Export in US Dollar was 33% and domestic India earnings was 20%.
- As per industry verticals, Telecom & Technology contributed 26% (28% in the sequential quarter), Consumer Electronics/Products & Services contributed 23% (22% in the sequential quarter), Health Insurance contributed 22% (21% in the sequential quarter), BFSI contributed 8% (8% in the sequential quarter), Pharma contributed 6% (5% in the sequential quarter) and others contributed 16% (15% in the sequential quarter).
- Forex hedges at the end of the quarter were US$ 26 million of which US$ 6 million at Rs 41/US$ for Q4FY09 and US$ 20 million at Rs 45-46/US$ for April – December 2009.
- The voice to non-voice split is 75:25.
- Cash & Cash Equivalents at the end of the quarter was Rs 605.53 crore of which US$ 111.18 million is held outside India being funds received from sale of Shares of Hutch held in Pacific Horizon Limited, Mauritius. The Company has decided not to get the money into India due to tax implications.