Strong cash flow generation, DSO improves further to 53 days
Q4FY23 revenues (ex Invacare) up 3.1% Q-on-Q in constant currency terms
Board recommends final dividend of Rs 2 per share
Birlasoft, a part of the USD 2.8 billion diversified CK Birla Group, reported its audited consolidated financial results for the fourth quarter and year ended March 31, 2023.
Mr. Angan Guha, Chief Executive Officer and Managing Director, Birlasoft, said, “We are pleased to report a strong operating quarter with robust revenue and EBITDA margin performances in continuing business. Deal signings during the quarter at $286 million TCV have been the best during the year under review. The solid fundamentals of our business, the investments being made in enhancing our capabilities, and the momentum with which we are entering the new financial year positions us well to meet the challenges of an increasingly uncertain macro-economic environment and shifts in customer priorities going forward.”
“Revenues for the financial year FY’23 have grown 16.1% to Rs 47,948 million, and cash flow from operations were 100% of adjusted EBITDA on the back of sustained focus on collections resulting in best-in-class DSO of 53 days. We have ended the year with a robust balance sheet and believe that a restructured organisation, sharper focus, and disciplined execution should position us well to successfully navigate through the prevalent macroeconomic environment,” said Ms Kamini Shah, Chief Financial Officer, Birlasoft.
Key Financial highlights for Q4 FY23
Key Financial highlights for the full financial year FY’23
Note: EBITDA and EBITDA margin comparisons exclude one-time provision created in Q3FY23.
EBITDA and PAT reported for FY’23 reflect the impact of a one-time provision amounting to INR 1,510.14 million created in Q3FY’23 against the outstanding receivables and contract assets pertaining to Invacare Corporation, a customer in the US that had filed a petition for relief under Chapter 11 of Bankruptcy Code in the United States Bankruptcy Court on Feb. 01, 2023.
Dividend
- The Board of Directors recommended a final dividend of Rs 2 per share
- This follows an interim dividend of Rs 1.50 per share paid out in November 2022
- The company had also concluded a share buyback during the year under review amounting to approx. Rs 4750 million (incl. taxes).
Inititiatives to build a growth-oriented organisation
- Organisation structure re-vamped for greater synergies, efficiencies, and predictability
- Operations aligned by Verticals
- Single unified delivery organization for the company
- Horizontals/Service Lines to focus on go-to-market, large deals, capability & capacity building, technology excellence, pre-sales, and solutions building, with incremental investments to be centred on focus segments/areas
- Reinforcement of front-end team and back-end leadership with a judicious mix of external hires and internal promotions
- Organizational re-design to optimize for greater accountability and swifter action, entailing culture transformation initiatives around six tenets: High “Say-Do” Ratio, Be Bold, Customer Centricity, Quick Decision-making, Employee Centricity, and Organization First
Other operating highlights
- Growth during the year under review (FY’23) driven by a healthy mix of revenues from both emerging tech and enterprise solutions engagements
- Business & Technology Transformation (which includes Digital) up 19.2% YoY
- Top 10 customers grew by 17.0%, Top 20 grew by 11.6%
- Signed deals of TCV $ 286 M during the quarter
- TCV new deal wins of $ 114 M and renewals of $ 172 M
- Active Client Count at 288 in Q4, reflecting intent to rationalise ‘tail’
- > $ 1 M customers at 83, up by 3 YoY
- > $ 5 M customers at 26, up by 1 YoY
- Top clients led growth in Q4FY23: Revenue from Top 5, Top 10 and Top 20 clients grew YoY by 11.6%, 8.6% and 6.1% respectively
- Cash & Cash equivalents of $ 137.3 M in Q4 FY23 versus $ 121.1 M in Q3 FY23
- In rupee terms, cash and cash equivalents increased to ₹ 11,278 M at the end of Q4FY’23 from ₹ 10,015 M at the end of the preceding quarter
- DSO continues to be best-in-class at 53 days, reflecting the quality of services being delivered to customers
- Workforce strength of 12,193 as at 31st March 2023, attrition improves further to 22.1% during Q4FY’23 (from 25.5% a quarter ago and 29.4% a year ago)
- A new Delivery Centre in Coimbatore with 250 seating capacity operationalized during the quarter, enabling access to an emerging lower-cost tech talent hub, as part of ongoing investments in enhancing emerging technologies capability.
- Last month, the company’s wholly-owned subsidiary Birlasoft Solutions Inc. (BSI) entered into a Settlement and Mutual Release Agreement with its customer, Invacare Corp (Invacare). This Agreement follows consultations after the filing of voluntary Chapter 11 proceedings under the US Bankruptcy Code by Invacare on February 1, 2023. The Bankruptcy & Reorganization proceedings were filed by Invacare Corp in Houston, Texas and a global reorganization plan was filed, wherein Invacare and BSI terminated the Master IT Services Agreement (MITSA) in January 2023. As per the Settlement Agreement approved on April 24, 2023, parties have mutually provided releases and waiver from claims. BSI would receive $2 million for Disengagement Services ending on May 31, 2023.
Deal wins for the quarter
- Signed a Master Data Management engagement for a Europe-based Lifesciences major
- Received a large renewal from an existing BFSI vertical customer in the payments space in the US geo
- Awarded business for Business Applications and Infra support from a key existing BFSI customer
- Secured an Enterprise Solutions engagement renewal from a US-based F500 organisation in the BFSI vertical
- Won a SAP S4 Hana implementation program for an international airport in the APAC region
- Selected by a leading US tech company to displace existing tier 1 competitor for additional business to provide Application Managed Services (AMS)
- Chosen by a US-based manufacturing firm for renewal of ERP Application Support
- Engaged with a UK-based leading payment service provider for the digital asset economy on AML (Anti-money laundering) transaction management
Awards & Recognitions
- Birlasoft is Great Place to Work Certified for the second consecutive year
- Birlasoft recognized in the Leadership Zone in Zinnov Zones’ Intelligent Automation Services H1– 2023
- Birlasoft recognized as a “Product Challenger” and “Contender” in ISG Provider Lens™ study ‘Microsoft Cloud Ecosystem 2023
- Birlasoft recognized in the Booming 15 category globally for 10th time overall and for the Americas region for 12 consecutive quarters according to the 1Q 2023 Global ISG Index™.
- Birlasoft identified as a Leader in the ‘Salesforce Ecosystem Partners 2023’ ISG Provider Lens™ Study for ‘Implementation Services for Core Clouds Midmarket’ and ‘Managed Application Services for Midmarket’ quadrants in the US.
- Birlasoft listed in the Forrester’s Salesforce Consulting Services Landscape, Q1 2023 for the Small $20M-$65M category.
- Birlasoft recognized as an Aspirant in Everest Group Digital Transformation Consulting Services PEAK Matrix® Assessment 2023
- Birlasoft recognized as a ‘Rising Star’ in Life Sciences Digital Services 2022 ISG Provider Lens™ Study- Global for ‘MedTech Digital Transformation’ quadrant.
- Birlasoft recognized as “Challenger” in Avasant’s Intelligent Automation Services 2022-2023 RadarView study.
- Birlasoft positioned as a Rising Star in the ‘Enterprise Service Management 2023’ ISG Provider Lens™ Study – U.S. for ‘ESM Consulting Services’ quadrant.
- Birlasoft has been declared Finalist in the 13th Edition of Aegis Graham Bell Awards under two categories – Innovation in Manufacturing and Innovation in Digital
- Birlasoft’s annual report conferred with Platinum Award at LACP 2021/22 Vision Awards and also won Technical Achievement Award
About Birlasoft
Challenge The Norm
Birlasoft combines the power of domain, enterprise and digital technologies to reimagine business processes for customers and their ecosystem. Its consultative and design thinking approach makes societies more productive by helping customers run businesses. As part of the multibillion dollar diversified The CK Birla Group, Birlasoft, with its 12,000+ professionals, is committed to continuing its 161-year heritage of building sustainable communities. For further information, visit www.birlasoft.com.
