R Systems International Limited Q1 FY22 Earnings Conference Call Insights

Key highlights from R Systems International Limited (RSYSTEMS) Q1 FY22 Earnings Concall

Q&A Highlights:

• Sonal Minhas of Prescient Capital enquired about the FY22 outlook. Nand Sardana CFO said last year RSYSTEMS grew 32%, and QonQ, the company grew 38.5%. RSYSTEMS added that it is well on its way to do similar kind of a growth as it did last time.

• Sonal Minhas of Prescient Capital also asked about the US recession and the demand environment. Nand Sardana CFO replied that as of now the demand environment is very good and continue to have demand for resources. Avirag Jain CTO added that demand is high and supply is a challenge, and RSYSTEMS is trying to hire as many as it can.

• Sonal Minhas of Prescient Capital enquired about the senior level hiring on the sales side and how is that ramping up. Nand Sardana CFO answered that RYSTEM has invested a lot on sales and marketing activities in last 2-3 years. And did more than 30% growth last year.

• Sonal Minhas of Prescient Capital asked if there will be any margin improvements given there is some overheads that are there ahead of time. Nand Sardana CFO said the aim is to have margin improvement, which was 14% last year. However, the biggest lever is utilization which is the lowest now. So there is a scope of 1-2% improvement.  RSYSTEMS wants 2% improvement and hopefully it is in the right track.

• Sameer Rathi asked about the dividend distribution policy of the company. Nand Sardana CFO clarified it has a dividend distribution policy, and plans to do up to 50% of distribution.

• Sameer Rathi asked about bonuses, which the company has not given yet despite being listed for a long time. Nand Sardana CFO answered that the company has not given too much thought to this since its share price is not very high. However, said it will be discussed internally.

• Abhay Jain asked if the growth of 40% YonY would continue going forward. Nand Sardana CFO said that considering the demand environment, the growth journey should continue.

• Abhay Jain also asked about US recession and its impact on RSYSTEMS. Nand Sardana CFO answered that as of now, the company is not seeing any impact. On the ground, for IT companies like RSYSTEMS, the demand is high, the company is still looking for people. Getting another 100 people in Noida, there is a scope for projects to be deployed.

• Jagdishwar Toppo from Japa Investment asked about the status of Noida facilities and capex for FY22.   Nand Sardana CFO said the company has hired more than 800 resources in last 1 year. The expansion is done for 600, out of which 400 is already set, might get possession this month. Another 200, the possession is expected in the next 2-3 months. On capex, RSYSTEMS will be spending aggressively on expansion.

• Jagdishwar Toppo from Japa Investment enquired about a ballpark hiring number for the next 1-2 years globally for RSYSTEMS. Nand Sardana CFO said it can’t give the exact number, but 100-150 every quarter.