Hinduja Global Solutions Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from Hinduja Global Solutions Ltd (HGS) Q1 FY23 Earnings Concall

Q&A Highlights:

• Saloni Desai with Omkar Investments asked if there are any further M&A deals expected in 2Q23 or any opportunities in process. Partha DeSarkar ED replied that an exact answer cannot be given, however, HGS continues to evaluate M&A deals on a day by day basis.

• Saloni Desai with Omkar Investments also enquired that digital contributes to approx. 14% to total revenue and how much it will contribute by end of FY23. Partha DeSarkar ED answered that the aim is to increase the digital content of HGS revenue significantly.

• Jyoti Singh of Arihant Capital Markets enquired how much growth the company is expecting for revenue and margin going forward. Partha DeSarkar ED answered that the margins in the coming quarters are expected to be much better than today. For growth also there is good demand which should result in good growth.

• Rahul Padalkar asked why the dividend is less when the cash is high with the company. Partha DeSarkar ED clarified that as of now the buyback is the most tax efficient way of rewarding shareholders. Also, dividend has increased from previous year, though it’s not tax efficient.

• Imran Contractor with Quantum Investments asked about the performance of the NXTDIGITAL business that’s coming into the company in June quarter. Partha DeSarkar ED said it’s a company whose results have already come up which are available.

• Navneet Bhaiya enquired about HGS’ plan to turnaround NXTDIGITAL from a loss making company. Partha DeSarkar ED clarified that NXTDIGITAL is PAT positive company and is a business which has existing healthy margins at the EBITDA level. It’s a good business and will add to overall margins of HGS.

• Navneet Bhaiya asked about the investment required for NXTDIGITAL to sustain or grow revenues. Partha DeSarkar ED answered that bulk of the investment goes into set-top boxes, which cost around INR1,000 per box. Plans are finalized and HGS continue to look at what’s best for the company.