Intense Technologies Limited (532326) Earnings Call Transcript & Summary

You can start the meeting proceedings.

Good afternoon, everyone. Welcome to the 33rd AGM of Intense Technologies Limited. This is our fourth virtual AGM, being held at the registered office of the company. The meeting is being conveyed in a fully virtual manner in accordance with and in compliance with the circulars issued by the Ministry of Corporate Affairs and SEBI. The company has taken all the feasible steps to ensure that the members are provided an opportunity to participate in this annual general meeting through audio and video conferencing or other audio/visual means on first come and first serve basis. All the members have joined this meeting are by default placed on mute to avoid any disturbance arriving from background noise and ensure smooth and seamless conduct of the meeting. The company has appointed NSDL to provide the e-voting facility by way of remote e-voting and voting during the AGM. Since there is no physical attendance of the members, the requirement of appointing proxies is not applicable. Members who have not voted earlier through remote e-voting can cast their vote during the meeting through e-voting facility. And once the question-answer session starts, the names of the members have registered their names as speaker member will be announced one by one. The speaker member will thereafter be unmuted by the host. To start speaking, the member are requested to click the Video On button. While speaking, we would request the speakers to ensure that he or she is clearly audible, minimize any noise in the background and there is proper lighting to have good video and audio experience. If there is a connectivity problem at the speaker's end, we would invite the next speaker to join. We would like to request the members to kindly limit their speech or queries to 2 minutes, so that the opportunity can be given to other members, too. During the AGM, if any member faces any technical issues, he or she may contact the helpline number mentioned in the notice of the AGM. The company has appointed KFIN Technologies Limited as the registrar and share transfer agents. The notice is already circulated to all the members, I take the notice convening the meeting as it is. The auditor's report on the stand-alone and consolidated financial statements and secretarial audit report of the company for the year ended March 31, 2023, does not contain any qualifications, reservation, adverse remark or any disclaimer. Accordingly, the reports are not required to be read out. And with your permission, it is now 1:05 pm, the requisite quorum being present. Now I'm requesting Shastri sir to chair the meeting. Over to you, sir.

Good afternoon, and welcome to the 33rd AGM of Intense Technologies. I'm very, very happy to have all of you participate in this AGM 33. Before I start, commence the thing let me first introduce my co-directors. I have in here with me Jayant Dwarkanath Whole Time Director. I have Anisha Shastri, Whole Time Director; Mr. K.S. Shanker Rao, Independent Director; Madam Sarada Devi, Independent Director; V.S Mallick, Independent Director; and Group Captain, D. Gopala Krishna, also Independent Director. We also have Nitin Sarda, our CFO. Unfortunately, on his way today, he got stuck in the traffic jam and he's joining virtually from home. He had to go back home, to attend to this. And Ms. Pratyusha, our Company Secretary is here, she is one who started this. And we also have the presence of Madhusudhan Voruganti partner, MSPR, who are our statutory auditors and Shri P. Jagannatham, our secretary and auditor, who is also acting as a scrutinizer for e-voting at the meeting to verify and validate the voting results. The notice of 33rd AGM and annual report has been sent to you electronically, hence, those are not being read out with your permission. I would like to take this opportunity to share records on the year gone by and the outlook. As you all know that there has been a growth, but marginal growth in the top line. We have had INR 91.83 crores on the top line with an EBITDA of INR 18.63 crores, a PAT of INR 13.74 crores, averaging an EBITDA of 20%. With this, there was definitely a drop in the profitability we had to make the right investments for scale and growth. And we have launched a very -- 3-year strategic plan to see that we grow in and increase the number of lines of business. I have my colleague, Anisha, she will take you through the presentations on the new initiatives and what all we are and more detailed in depth of what we are -- what we have embarked upon. We are glad to inform all of you that your company has been -- it has been paying dividends for the last 5 years consecutively. This year, we have increased the dividend from 20% to 25%, and we are continuously investing and putting money across the latest technologies like data, AI, low code, et cetera. And we believe that the company is poised to see better days ahead. As such, we have launched a project, Butterfly, which Anisha will take you through. We are focusing on multiyear large projects to see that we take a big lead. We're also looking at SaaS model of our marketing hub reach, which has been recently launched, and we've also proud to let you know that a very reputed analyst company like Gartner has -- it does peer reviews or finds out about the technology we are supplying, the support we are supplying, the value what we provide to our end customers. And globally, we've been recognized as the # 1 in the Peer Insight report. Similarly, we also have been recognized as a leader position in SPARK Matrix and Aspire. So with this, I would leave the floor to -- I will hand it over to Anisha for taking you through a short presentation detailing our future plans and our achievements.

Good afternoon, ladies and gentlemen. My name is Anisha. I'm Executive Whole-Time Director here at Intense Technology. For those of you who don't know us as well, we are an enterprise software services company. We're a tech-enabled services company. And we have presence across 4 continents.

Anisha ma'am, you're not audible ma'am.

All right. Sorry about that, nuances of all taking the call in the same conference room. I hope I'm audible now.

Yes ma'am, you are audible.

Okay, fantastic. So I was saying for those of you who don't know us, we are an enterprise tech-enabled services company. We service marquee customers, Fortune 500 customers across 4 continents. We have customers in the U.K., Middle East, Africa, India, and we are looking to expand our presence globally in the coming years. We have more than 70 implementations across the globe and using all our products and services. Today, we process more than USD 25 billion worth of customer data. We send more than 400 million notifications every single day. We process more than 5 million statements on a daily basis, and this is across all our customers here. And by virtue of dealing with such mission-critical projects, we have strong exposure to a lot of data problems that these large companies face. That data is sitting in silos in legacy systems, et cetera. And we have developed the capability of being able to pull that data from across multiple places, standardize, sanitize that data, and make it more meaningful for our customers, so that they can service their customers better. Today, we're more than 500 people strong and we have a significant market presence in India with respect to the insurance, banking and telecom industries. These are a few of our customers that you can see over here. As you can see, we have marquee names in the Indian space as well as internationally. We started off predominantly serving telecom customers. But over the last 5 years, we've made a very conscious effort to also move into BFSI. And as a result of it, you can see all the large banks and insurance companies and their logos over here. This last 1 year, we also very consciously decided to pivot from just being enterprise products to doing tech-enabled services overall around our products and increasing our -- basically our value proposition horizontally and vertically across, so that we're able to sell a better value proposition holistically to our customers. In the last -- in this last year of launching Project Butterfly, I'm very, very happy to tell you that we have added a lot of significant names even in the government space. Like Mr. Shastri mentioned, our focus is to see how we can add on a lot of multiyear contracts and how we can expand our ability to sell and generate revenue beyond the IP assets that we currently have. And that has resulted in the kind of logos that we have been adding even in the government space. We have been recognized by the who's who of the industry, Gartner, Aspire, Quadrant, Frost & Sullivan. These are all very reputed analysts that do annual surveys and understand who customers should be engaging with, what kind of vendors customers should be engaging with. And I'm happy to tell you that for at least since 2015 onwards, we have been a part of one report or the other consecutively every single year. So that speaks to the credibility of our platform and our IP assets. In fact, Mr. Shastri mentioned this, Gartner conducts an anonymous survey with your customers. where you are not at all involved in the process, they contact your customers and they get an understanding of how your product is, how your services are, how you're support is, et cetera. And I'm really happy to share with you that our customers have rated us above -- on an average above 4.6, 4.7 on each of these parameters. And that actually took us to a global #1 position above all our international competitors as well. So really happy to be sharing this news with you. As part of Project Butterfly, our main focus was to see how do we add additional revenue streams. We have a lot of large marquee names to our credit, but we were only selling 1 product and 1 service around that product. So our fundamental goal was to see how do we increase the number of revenue streams in the organization, not too far away from what we originally are capable of. So everything that we've added, we've added in the domains and in the spaces that they're familiar with and that are very logical vertical extensions and horizontal extensions to our existing offerings. So these are a few of our IP enabled offerings. We have been known very, very popularly in the marketing and communications hub space for more than 2 decades now across the Indian subcontinent and through this -- through these products, what we do is we completely digitize, and we basically significantly improve the digital customer experience that our customers provide to their customers, from a communications and marketing standpoint. The second is our data services capability. So erstwhile we used to -- this data management used to be done by larger system integrators, other partners, et cetera, and then we will consume the feed. Now what we are doing is we are also providing services wherein we are able to help our customers prepare that data before it is handed over to us for us to then communicate to their customers. So we have added significant capabilities in this direction. We already had a lot of IP assets in the past from our process implementations and we have now extended that functionality above and beyond using ML capabilities, AI capabilities so that we are able to significantly cut down the time to implementation and time to service. And then the last, we also have a platform where -- and we have partnered with other organizations as well, where we can provide automation services to our customers. So process automation, forms automation, every single process in a bank or an insurance. For example, today is a physical form, a PDF form, and we are trying to see how we can automate that entire journey for their customers. So that it is better revenue recognition, faster revenue recognition for our customers, lower operations costs and significantly better customer experience. All right. So these are the tech-enabled services that we've added October onwards, actually mid last year. And these are seeing a lot of good traction across our existing customers as well as new customers that we are going and approaching government as well. So the data services is one big piece. Then we also do cloud services. Our customers' data is predominantly sitting on-premise, and they would like to leverage the power of cloud so that there is no downtime for their customers, they're able to access their data of the client. It's just much faster, better service. And once you're able to provide that, then the kind of revenue that you can recognize from your customers is also significantly higher. So we provide these cloud services as well. Cloud migration services, data migration from on-prem to cloud, managed services, also conducting analysis to tell or recommend to a customer, which cloud service provider would be the best fit for them. And we work across all hyperscalers, AWS, Azure, Google, Oracle, et cetera. So we have -- we are very cloud platform agnostic and so are our IP assets. And then we also provide talent workforce augmentation. So we had organizations cut down their costs by providing skilled talent. We have a lot of skilled talent over here. And by virtue of originally starting off as a product company, our talent is also very -- the kind of talent that we possess is very product mindset oriented and the business services. So this provides a much better value proposition to our customers when we are doing managed services for them. And of course, other managed services opportunities like custom-app development, testing services, infra services, et cetera. So this is how we have drastically expanding on our revenue streams, so that it can enable us to bolster better growth than what we were originally achieving. Like Mr. Shastri said, very proud to let you know that for the last 5 years we've been consecutively paying dividends, and that percentage has also gone up. So just putting this out there. And then I'd like to call on my colleague Nitin Sarda. He is our CFO. And Nitin, would you like to take over and give us a glimpse of our financials, please.

Sure Anisha and thank you so much for giving us detailed business presentation, helping us understand what -- how Intense is different from what it used to be. Am I audible?

Yes, yes, you are.

Sure. Thank you so much. Dear shareholders, good evening. Welcome to the 33rd Annual General Meeting of Intense Technologies Limited. My name is Nitin Sarda, I have joined Intense earlier January 2023 this year. And we are very glad to present our financial results for the financial year 2022, '23. As you can see, we have kept the underlying growth in the top line. It has continued to grow. And during this financial year, we have registered an increase of about INR 8 crores in our top line from INR 83.95 crores to INR 91.83 crores. And we have presented 3 years here before and you can see that increase in top line. However, as Anisha was mentioning that we are very keen on expanding our set of solutions to our customers, and we have been making investment in data services, cloud services, talent as services, transmission services. So all of these new green shoots that we are working on require a lot of investments in terms of talent and this is where you'll see that our expenses have also gone up. And as a result of which, our operating profit has also come down. Our EBITDA for the current financial year is about 20.3%, which has come down from 30%. But however, it is more -- and it is very important for us to understand the business reasons as we are investing in required talent, which would drive our future businesses. Also, we have also significantly increased our presence -- our team's presence in sales and business development, who will be able to tap in new customers. And also since we have expanded our portfolio offerings, also from our existing customers to see where we can help them create -- get -- derive more value and contribute to their organization while deriving some new sources of revenue to Intense as well. During the financial year, our employee strength has actually -- as of March 2022, our employee strength stood about 500-plus employees, which has gone up to 600 employees as of March 2023. And this speaks about the volume of the talent that we are willing to acquire in the company to drive the future businesses. If you can go to the next slide, please. This is more a graphic representation of our performance during the current financial over the past 3 years. Like I mentioned, because of these investments, profit after tax, the profitability post tax is at a decent 15% with EBITDA of 20%. Also, it is certainly important to note that the company has a much better liquidity position with the bankers, which provides us enough confidence to proceed to make necessary investments in future businesses and also onboard talent, which come at a price to the company, which might necessarily stifle our profitability in the short term, but we are very confident of turning this around and with a broad range of offerings, we will be definitely able to in the long run to definitely pay off. And as a result of this short-term profitability that got stifled, the EPS also improved by 30%. But like I mentioned, it is a more temporary phase where the company is realigning itself. To the next slide, please. Like I mentioned we have about INR 40 crores of liquid -- the assets in -- liquid assets and that gets reflected in our current and quick ratio as well. And we definitely continue to ensure that we make necessary investments, which are -- which keeps the long-term interest of the company endured, in the short run, definitely this might impact us, numbers might not be to our expectation. But yes, we definitely are very confident of being able to drive these businesses, bring in new revenues and customers.

Alright. Thank you so much, Nitin. So just in short, we initiated Project Butterfly with the intention of adding new revenue streams to see how we can bolster growth for the organization. We're focusing on farming as well as focusing on adding revenue -- recurring revenue streams in the government space and focusing on BFSI, telco predominantly. We have added a lot of AI/ML capabilities to our existing IP assets, which will help us deliver more superior value proposition to our customers. And we have also expanded on the services streams, so in data management, in custom app development, testing services, et cetera. And today, in the organization, we have strong skill sets in emerging and growing technologies such as blockchain, cloud, AI data, et cetera. And these are what are helping us deliver better to our customers. With that, I think we have made significant investments in sales, and we will continue to make them. Over the last year, in fact, we hired people dedicatedly focused on building each of those revenue streams as well for some streams and some streams will continue to add. And so what we like to tell you is we are focused on the long term. We are focused on long-term growth, and you will definitely see that reflect soon. Thank you so much. I will hand it back to Mr. Shastri now for questions. The floor is open to you now.

Can we take the questions now. Moderator, can you take the questions from shareholders?

Yes, ma'am. Can you please say the name one by one. I will unmute them.

Moderator, can you hear us.

Yes ma'am, I can hear you.

First shareholder, Mr. Reddappa [indiscernible]

Mr. Reddappa [indiscernible] please unmute yourself.

[Foreign Language]

Can we move on to the next one, Mr. [ Praful Chavda ].

[Foreign Language]

Thank you. Thank you very much. [Foreign Language] best wishes sir, for the future.

Next shareholder Mr. [ Srikanth ]

[Foreign Language]

[Foreign Language]

Thank you.

[Foreign Language]