Dev Information Technology Ltd (NSE: DEVIT) Q3 2025 Earnings Call dated Feb. 24, 2025
Corporate Participants:
Jaimin Shah — Managing Director & Chief Executive Officer
Unidentified Speaker
Analysts:
Navneet Singh — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Dev Information Technology Limited Q3 FY25 results virtual conference call the management team. We have Mr. Jamin Shah, Managing Director and CEO. Now I hand over the call to Mr. Chairman Shah to provide brief on the recent quarter.
Over to you sir.
Jaimin Shah — Managing Director & Chief Executive Officer
Thank you. Thanks shy dear all. Good evening.
On behalf of Dev Information Technology all ladies and gentlemen, I welcome you all. I extend my warm welcome to all of you who have joined us today.
Before discussing the company’s performance for Q3 third quarter for FY24 25, I would like to provide a brief background and brief overview of the Information Technology Devit as we popularly known as established in 1987, we are ISO certified as well as CMI level 3 compliant company. Devit has grown grown into one of the key players in the IT service sector and we proudly say that we are end to end IT Service company.
The Company is listed on both the exchanges NSC and BSC in India and company do have our presence in Canada through the Infotech North America Ltd. We offer comprehensive suites of services including cloud services, digital transformation, enterprise applications, managed IT services and application development including blockchain dev. IT has also developed innovative solutions such as Teligence, which is an AI powered analytics platform and by Signer, a digital signing solution which has been designed to enhance operational efficiencies.
With a strong focus on cyber security, the company has continue to expand its services offering in threat management, security operation centers and Cloud Securities. During Q3FY25, a company continued to strengthen its business operations and expand its market presence. DEVIT secured key enterprise contracts from US based clients not only in digital transformation but also into cyber security, reinforcing its global reach by way of acquiring these orders in addition to acquisition of 100% stake in their consulting services, a company specialized in Microsoft Dynamics 365 and Power Platform Solution which will strengthen the company’s capability on extremely growing and demanding ERP and CRM market in India as well as in North America and other country market.
BYT has also recognized with the Best MSP award in the IT as a Service category. At Star Award Night 2024 hosted by VAR India in New Delhi, the company secured approximately 1 crore worth of orders from Bal Municipal Corporation and received multiple contracts across industry including IT infrastructure enhancement, public sector modernization, Data analytics and digital transformation. Dave it holds more than 25% stake in its promoted company called Dev Accelerator Ltd. Popularly known as DevX, which is a currently valued 400 crores.
The company’s financial performance in Q3 and third quarter FY25 demonstrated steady growth on a consolidated basis. As I also mentioned my in my previous result calls, we are focusing more on growing our bottom line and that is also appearing in our Q3 results. The company stood Q3FY25 total income stood at 48.15 crore reflecting 50.61% year on year growth. EBITDA increased to rupees INR3.44 crores, reflecting 28.56% year on year growth while the net profit grew to rupees 1.82 crore marking a 6.19% year on year growth.
Earning per share improved to 0.79 rupee in third quarter for FY25 third quarter. Total income increased to rupees 132.13 crore compared to rupees 121.15 crore in FY third quarter last year. EBITDA rose from rupees INR8.58 crore to 20.73 crore and the net profit increased from 5.19 crore to 13.65 crore in this current third quarter which shows that we are leading towards what we have targeted for.
On a standalone basis, Q3 FY25 total income stood at rupees 42.85 crore, registering 38.32% year on year growth. EBITDA increased to rupees 3.72 crore, marking a 44.04% year on year growth while net profit stood at rupees 2.06 crore, reflecting a 24.95% year on year increase. EPS for the quarter improved to 95 rupees. We are looking ahead the company’s remaining focus. We are looking forward our focus which remains spatially to expand our service portfolio, strengthening our global footprint and also strengthening our India market footprint as well.
We are also very committed to leverage technology also to expand our AIML cloud, blockchain based and cyber security services locally and globally. With a strong order book, strategic acquisitions and continued innovation, DEVIT is well well positioned to capitalize an emerging opportunity and also going to become a strong IT player in SMB sector. The management remain committed to operational excellence, customer centric solutions and strategic partnership to enhance companies market position and also to strengthen our philosophy Philosophy people first and business always.
Thank you all for your patience hearing. Now I am open for any questions may you may have. Thank you.
Questions and Answers:
Operator
Thank you. Dear investors, the floor is now open for question and answers. If you have any question kindly raise your hand and I’ll allow you to unmute yourself and you can ask the questions. You can also write your questions in the chat box. Mr. Navneet Singh [Phonetic], you can go ahead.
Navneet Singh
Thank you for the opportunity. Am I audible?
Jaimin Shah
Yes.
Navneet Singh
So actually I also joined the previous con call. So, I will be continuing from my previous queries itself. So last time I had a query related to the guidelines. So there were few new initiatives that were planned for December quarter.
Jaimin Shah
Yeah.
Navneet Singh
Related to Microsoft partnership and all.
Jaimin Shah
Yes.
Navneet Singh
And I asked related to that. Do we have any guidelines pertaining to the new partnership that we are having and how do we see down the line four quarter from now how it will grow.
Jaimin Shah
Thank you Navalji. And as I told you last time that we are committed and we are also planning to have AI a center of excellence on Microsoft technology and that is underway. I think within a couple of months we’ll be announcing and integrating the center of Excellence on AI not only with on Microsoft technology, but as you mentioned in your talk question, that new partnership. So we recently became a IBM Watson which is IBM’s AI platform partner so that in this particular coe we’ll be having a Microsoft technology as well as IBM technology.
Navneet Singh
And do we have any revenue guideline for this financial year in Q4 and next financial year on these two partnerships?
Jaimin Shah
As far as AI is concerned? See we are a Microsoft partner since last 27 years. So and that is how to strengthen our service capability. We have acquired Micro DA Consulting services so that we can add ERP suite as well as we can strengthen our services. So we are already Microsoft partner and that business is already growing especially for AI market is currently new. So, we don’t see any significant AI business by end of this March.
Navneet Singh
Understood? That is all from my end.
Jaimin Shah
Thank you.
Operator
Investors once again. If you have any other further questions, kindly please raise your hand after which I will allow you yourselves to unmute your and you can ask the questions.
So we have a question. We have questions in the Q and A chat box. The first question we have is from Raj Gandhi. He asks can you provide insights into the key Drivers behind the 51% year on year growth in consolidated total income for Q3 FY25?
Jaimin Shah
Yes. So thank you Raj for the very important question. As I mentioned in my previous calls that our focus is to strengthen new age technology and that to not just limit it to AI but also cybersecurity, blockchain and data analytics. So we are strengthening this, these services not only in India market but also in overseas market. And that is how we have closed couple of cyber security deals which we have announced on exchange a couple of last month. So that’s another, that’s one parameter, another one in India market we are also pushing and lots of awareness in India business how to use data analytics, how to use cyber security and how to improve, how to use data for future forecasting.
And for that we have got few orders and last week we got the order from Rajya Sabha and couple of days back we got an order from Lok Sabha as well. These are the marquee customers I’m referring, but these are the, you can say parameters which are growing very fast and which is also giving significant amount of business in our Q3 business which we have already done. And that is what we are also forecasting the same line of business and growth for current quarter which is Q4 as well as for next financial year.
Operator
Okay. So, we have next question from Mr. Lakshman Dubey. He’s asking what is government contribution to revenues reported till date and in order book.
Jaimin Shah
Okay, so let me pull that data first. So government revenue as I told earlier as well, it’s around 60 to 65% of our India market. So in total balance sheet government revenue is less than 60%. And we have really good significant order book for next financial as well and exact amount. Currently I don’t have uh, as far as government order book is concerned but it uh, it is near to 25 to 28 crores.
Operator
Okay, once again investors, if you have any further questions, please kindly raise your hand after which I’ll allow you to unmute yourselves and you can ask the questions. You can also write your questions in the chat box.
So we have a question from Ananya Swaminathan [Phonetic]. So she’s asking the company recently expanded cybersecurity services with advanced solution. How do you see the vertical contributive to future revenue?
Jaimin Shah
Thanks Ms. Swaminathan. As I mentioned in my speech that one of the key service component is cybersecurity. And we have established SOC security operational center for India market as well as overseas market. And as soon as we announced that deal, that business line within 60 days we got a significant order from one of the data centers provider company in USA to manage their SOC from India. And we see really a great outcome recently. Last week I was along with my team attended one of the leading managed service partner event called MSP Expo in Florida. Now trend is, trend is changed.
So instead of MSP now people are talking about MSSP which is managed security service provider. And we see a really good traction and we are really going towards where industry is going. So I’m fortunate that my shareholders and my company, they have allowed us to introduce the cyber security and invest into SOC so that we can expand that market significantly. Our forecast for next year is really high as far as cyber security business is concerned. If in terms of manpower, if I say we have around 20 odd people, we are expecting that this 20 odd people will be multiplied four to five times in next financial year. And our focus is to have more and more strategic collaboration in North America market so that the cyber security where need is extremely high and there are not that much crowded service segment will be really doing good.
I am also very excited about India market as well because as we all know that India market and India Enterprise and SMB segment is also growing very high in terms of their ID penetration. And we get really good response from our domestic market customers, which are enterprise as well as SMB segment but also government PSUs. They are also implementing cyber security and we are expecting really more than double growth in next financial year.
Operator
Mr. Jagur Bhav [Phonetic], you can go ahead and ask your question.
Unidentified Participant
Any stock split date finalized or not?
Jaimin Shah
Yes, stock split date is finalized and for that we are going to have board, our board meeting all those backend formalities for stock split because issue is regarding fractional stock, what to do about those fractional stock and for that agency and everything has been finalized. So our expectation and our target is to complete that process before March end.
Unidentified Participant
Thank you.
Operator
Thank you for the question. So the next question we have is from Mr. Dhaval Shah. He’s asking what is the contribution of cyber security and cloud services to the company’s overall revenue mix?
Jaimin Shah
Okay. As far as cloud and cyber security is concerned it’s total portion is around, you can say 55 to 60%. And as far as only cyber security is concerned as it has been introduced in last quarter, in December itself. So that is not significant as far as contribution is concerned. But roughly we can say it’s around 3 to 5% of our total revenue.
Operator
Thank you so much for answering that sir. So the next question we have is from Mr. Raj Gandhi [Phonetic]. He’s asking the EBITDA margin expanded both on a consolidated and a standalone basis. What were the major contributing factors to this improvement?
Jaimin Shah
So that is EBITDA and net profit. That’s our main focus for at least next two years where we want to increase our profitability and EBITDA as compared 4to what we have earned last in last few years. So in terms of contribution what we have decided we are focusing more on cutting edge technologies like AIBI Cyber Security Cloud where we can get really good margins. We have also cut down our bench resources so that our profitability increase. And we have started focusing more as far as India market is concerned where we have a good profit margins.
Operator
Thank you sir. The next question is from Mr. Ajay Gupta [Phonetic]. He’s asking an international client edition in this quarter on planning in upcoming quarter.
Jaimin Shah
Yes, international business is one of our core focus if you all recall our we have set our goal for next couple of years and one of the goals was to increase our international market and our physical presence. So by way of acquiring Day consulting we have also have our on site presence by way of the having DA’s subsidiary company in Texas. So we’ll be having our physical people under Dynamic Star which is a US based entity of DA. And also increase our cyber security and AIML AIBI businesses. So that two things will be achieved by having our physical presence. One is profitability and second one is we want to remain near to our customers.
Operator
Thank you sir. We have the next question from Mr. Siddharth Upadhya [Phonetic]. He’s asking are there any new geographic expansions or international client acquisitions planned in the near term?
Jaimin Shah
So a client acquisition is one of our focused business. And I forgot to mention it in a previous question that we are adding clients, international clients, at least two to three clients every month. As majority of clients they are signing NDA and NCA with us so we are not able to announce it to our shareholders. But that that one is our main focus and that is how from management side as well as from our leadership side we are we are going to North America at least once in a quarter so that we can exhibit or we can participate in leading events and also meet our customer physically and acquire more and more customers. And until we don’t have our physical presence in US or in Canada we are talking to few at least two to three companies for strategic collaboration or some kind of acquisition.
Operator
Thank you sir. Mr. Navneet Singh, you can go ahead.
Navneet Singh
Am I audible?
Unidentified Participant
Yes Nomiti.
Navneet Singh
Yes. So I have a follow up question. So in last two quarters there is a dip in promoters shareholder. So is it any specific reason?
Jaimin Shah
Yes. So we have sold a fractional very negligible shareholder two thing that if you all recall that we were supposed to dilute our stake by selling to LT1 and it did not happen because of their inability to fulfill the agreement. And we also wanted to acquire and invest a company as well as invest into future development. So what we have done, we have diluted some amount of our promoter shares and majority of that fund has reinvested in the company from promoter to our group company so that we don’t have to bring money from outside. And we don’t have to rely from other sources.
Navneet Singh
Understood. And as you have said that we have started few new or new age technology services. So what do we see the normal operating margin on this? So even if you could give some colors to it in comparison to the current margin, that would be great.
Jaimin Shah
So a couple of things. It’s not just only margin, but also crowded market. So in normal IT services, now as we all know, that market has become crowded. And if we don’t provide any cutting edge technologies like AI bi, like cyber security, we have to be on toes to retain those clients. And one of our biggest strength is to we have extremely low attrition in terms of clients as well as in terms of employee. So to add more and more cutting edge solutions, our idea is to have at least 30 to 35% gross margin by introducing these at least three services, AI ABI, Cyber Security and Blockchain, so that we can increase our EBITDA as well as our net profit.
Navneet Singh
Understood. So, there has been few new orders that has been declared like a big order on cyber security somewhere around last month and in this month also there are few orders. So when do we see the revenue from these orders? Do we see somewhere around Q1 of the next year or are we expecting it in Q4 of the current financial year?
Jaimin Shah
So this as far as cyber security order is concerned, implementation stage is going on. So we’ll get a portion of the income of that order in Q4 current year itself. As far as new orders are concerned, again that also will reflect in our Q4. So all these orders are not futuristic orders, they are orders to the date where we have to execute those order in 45 days.
Navneet Singh
Understood. Thank you. And all the best for next quarter and down the year.
Jaimin Shah
Thank you. Thank you.
Operator
Okay. Dear investors, once again, if you have any further questions kindly just raise your hand and I’ll allow you to unmute yourselves and you can ask the question.
We have a question from Mr. Ajay Gupta in the chat box. He’s asking will you be expanding into new industries the upcoming quarter.
Jaimin Shah
Okay. So thanks Ajay for the question. What? We have also identified that as far as our strategic focus is concerned on aibi, Microsoft Technologies which is ERP and Cyber security. We have identified few industry vertical in India. As you all know that we are very strong into e governance market. And now we have added that we’ll be focusing more on manufacturing and engineering side, chemical and pharmaceutical side, retail and logistics side.
Operator
Thank you for answering that, sir. So the next question we have in the chat box is from Mr. Soraj Singhania [Phonetic]. He’s asking how do you expect the Devex IPO to impact dev it’s operations or financials given that Devex is a subsidiary company?
Jaimin Shah
So as you all know that we are one of the biggest shareholder of Devex and Devit is the promoter of Devex. And I have also announced and briefed all the shareholders and investor during our my previous call that we’ll be diluting small fractional shareholding every year so that my shareholder Devit shareholder can get value recognition of the valuation new valuation of Devex so that remain intact. Only thing that it will be linked with the lock in period of SEBI once dive will be announcing their ipo. So we are extremely vigilant as well as excited about Devex is progressing more and that is also resulting into more and more value addition for to our devit investors as well as devit as a company.
Operator
Thank you so much for answering that sir.
So we have the next question from Mr. Ajay Gupta. He’s asking how are payment terms with government as well as margin on government contracts.
Jaimin Shah
Okay so so thanks for this is the really good thing that government is improving their payment cycle. But still our payment we are getting from 60 days to 100 days of payment cycle. Though we have a payment cycle in our contract is around 45 to 60 days. But this is the normal thing and I’m so happy that since last 27 years we are working with government. Government has also improved a lot in terms of paying their IT vendors and that is significantly reduce their payment cycle. As far as margins are concerned. As I told earlier that we are focusing more on those contracts where our margins are kept. So we keep at least 10% of profit margin in our every service contract from government.
Operator
Thank you sir. So the next question we have in the chat box, chat boxes from Mr. Chaitanya Deshpandi [Phonetic]. He’s asking are you seeing any shifts in customer demands or technological trends that could impact the company’s offerings.
Jaimin Shah
Thanks. And that is how we see really demand as far as India market is concerned. Enterprise and SMB market, they are asking more and more solutions on erp. They are asking more and more solution on bi. Still AI is not that much prominent in industry because their data are not centrally managed. The data is discrete and that is how BI is playing a major role. And we see a significant current demand into ERP and BI side. We are also seeing a really good traction in cyber security side where company, each and every company, they are demanding as far as cyber security is concerned and another one is digital transformation where people wants to move away from the traditional application to latest application which includes BI capability. So, these are all industry trend locally as well as globally. And fortunately, we have a strong team as well as partnership with company like IBM, company like ServiceNow and company like Adobe where we can able to fulfill our clients requirement.
Operator
Thank you so much sir. We have the next question from Mr. Diya. Ms. Diya Patel [Phonetic]. So sorry. How do you see the AI Automation and Cloud computing trends shaping the company’s future offerings?
Jaimin Shah
So cloud computing is need of an hour. People are really positive and as we all know all the IT companies they are moving their services to cloud technology. Cloud is not just on public cloud but private cloud is also increasingly increasing in the public non government businesses. As far as AIML is concerned, this is as far it is really going growing very fast. As I told earlier that people are right now talking about AI and they have a high need and that is how chat GPT kind of application which has been utilizing a few of our solutions to our overseas clients as well as India client and Microsoft’s AI technology as well as IBM AI technology will give a lots of cutting edge growth in coming days.
But currently, if I may say that AI is currently premature, if I can say that that will be a signif that won’t be a significant contributor in our service revenue. Yes, we have to be ready and our expertise has to be there. As soon as companies are through with their data centralization, data standardization. AI demand will be increasing and implementation of AI become very easy. So, this is a journey which has started and this particular journey is really going growing very fast. So that within a year or two AI ML will implement heavily. And that will also contribute heavily into our service revenue.
Operator
Thank you so much sir for answering that. Dear investors, once again, if you have any more further questions, kindly raise your hands. I’ll allow you to unmute yourselves and you can ask the questions. You can also write down your questions in the chat box.
Mr. Ranit Singh, you can go ahead if you have any more further follow up questions?
Unidentified Participant
No, I have already asked so that is also mind. Okay. I forgot to lower my hand. My bad.
Jaimin Shah
Okay, thank you.
Operator
Since we have no more further questions, I think we’ll end the meeting here.
Jaimin Shah
Thank you. Thank you all. Thank you for your participation and thanks team Kirin, Sai and Chandni for your support. Thank you.
Unidentified Speaker
Thank you sir. Further investors, if you have any queries, you can write to us@research advisors.com. once again, thank you for joining the conference.