HGS Announces Revenue Growth of 14.1% in Q1 FY23 Results

Hinduja Global Solutions (HGS) (listed in BSE & NSE) announced its unaudited first quarter results for FY2023.

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 fast-growing 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.”

• 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.

*Note:  HGS divested its Healthcare Services vertical in January 2022. Hence HGS’ retained business now comprises its digital-enabled customer experience (CX) solutions and HRO/ payroll businesses. All numbers given are for the retained business, unless specified.

 M&A Update: HGS’ Board of Directors in February 2022 had approved the acquisition of the media & digital business of NXTDIGITAL Limited (‘NDL’), a related party, through issuance of shares. The Hon’ble National Company Law Tribunal has vide its Order dated July 29, 2022 directed convening of meeting of the Equity Shareholders of the Company on September 02, 2022.

• Client wins:

-          Added three new logos for digital-enabled CX solutions and seven for HRO/ Payroll Processing

-          Signed 28 engagements with new and existing clients for core digital solutions (RPA, digital engagement, analytics, cloud and social care, etc.)

• Clientele: Overall, HGS had 207 active CX clients and 743 HRO/Payroll processing clients.
• Employee Headcount: 20,804 as of June 30, 2022.
• Delivery Centers: HGS continues to consolidate its real estate as we focus more on a hybrid working model and closed 3 centers in Q1 FY2023. As of June 30, 2022, HGS had 35 global delivery centers across 7 countries.
• Awards & Recognition in Q1 FY2023:

-          HGS named in the Everest Group BPS Top 50 2022

-          HGS recognized as Leaders in SPARK Matrix ™: CX Management Services, 2022

-          HGS recognized as Leaders in SPARK Matrix ™: CX Management Services, 2022

-          Winner at the Customer Fest Leadership Awards 2022 for the Best Use of Data & Insights category

-          Winner in the Best Robotic Process Automation Company category for HGS Agent X at the 2022 AI Breakthrough Awards

-          Business Intelligence Group Awards: Winner in Transformation of the Year category for HGS’ Group Messaging Console solution and in Technology of the Year category for Axle™