ALLDIGINSENovember 02, 2023

Alldigi Tech Limited

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Management on call

Naozer Dalal

CHIEF EXECUTIVE OFFICER – ALLSEC TECHNOLOGIES LIMITED

Gaurav Mehra

CHIEF FINANCIAL OFFICER – ALLSEC TECHNOLOGIES LIMITED

Kushal Maheswari

INVESTOR RELATIONS – ALLSEC TECHNOLOGIES LIMITED

Balaji Subramanian

IIFL SECURITIES LIMITED

Key numbers — 40 extracted

INR45.7 crore

ves. At the start, I am happy to announce that your company has declared an interim dividend of INR45.7 crores,that is INR30 per share for the current financial year. Another key highlight for this quarter i

INR30

am happy to announce that your company has declared an interim dividend of INR45.7 crores,that is INR30 per share for the current financial year. Another key highlight for this quarter is that, we have

INR112 crore

r questions. So to start with some banner headlines. Q2 FY '24 revenues from operations stands at INR112 crores, up 4.5% quarter-on-quarter and 19.3% year-on-year, driven by growth in both the verticals. CXM

4.5%

start with some banner headlines. Q2 FY '24 revenues from operations stands at INR112 crores, up 4.5% quarter-on-quarter and 19.3% year-on-year, driven by growth in both the verticals. CXM grew by 3.

19.3%

lines. Q2 FY '24 revenues from operations stands at INR112 crores, up 4.5% quarter-on-quarter and 19.3% year-on-year, driven by growth in both the verticals. CXM grew by 3.9% and 18.3%, respectively an

3.9%

5% quarter-on-quarter and 19.3% year-on-year, driven by growth in both the verticals. CXM grew by 3.9% and 18.3%, respectively and EXM by 5.8% and 21.2%, respectively. Our PAT at INR16.2 crores for th

18.3%

r-on-quarter and 19.3% year-on-year, driven by growth in both the verticals. CXM grew by 3.9% and 18.3%, respectively and EXM by 5.8% and 21.2%, respectively. Our PAT at INR16.2 crores for the quarter

5.8%

year, driven by growth in both the verticals. CXM grew by 3.9% and 18.3%, respectively and EXM by 5.8% and 21.2%, respectively. Our PAT at INR16.2 crores for the quarter is up 3% year-on-year and 2.3%

21.2%

ven by growth in both the verticals. CXM grew by 3.9% and 18.3%, respectively and EXM by 5.8% and 21.2%, respectively. Our PAT at INR16.2 crores for the quarter is up 3% year-on-year and 2.3% quarter-

INR16.2 crore

als. CXM grew by 3.9% and 18.3%, respectively and EXM by 5.8% and 21.2%, respectively. Our PAT at INR16.2 crores for the quarter is up 3% year-on-year and 2.3% quarter- on-quarter. We added new employee recor

ectively and EXM by 5.8% and 21.2%, respectively. Our PAT at INR16.2 crores for the quarter is up 3% year-on-year and 2.3% quarter- on-quarter. We added new employee records in excess of 1.3 lakhs

2.3%

5.8% and 21.2%, respectively. Our PAT at INR16.2 crores for the quarter is up 3% year-on-year and 2.3% quarter- on-quarter. We added new employee records in excess of 1.3 lakhs in H1 and now process

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Guidance — 7 items

Naozer Dalal

opening

“Post that, we will be happy to take your questions.”

Naozer Dalal

“Gunit, as you'd appreciate, we do not release precise financial numbers in terms of future guidance.”

Raghuram N S

“So if you can give us some guidance on the -- how the depreciation numbers will look forward in the next couple of quarters?”

Raghuram N S

“And what will be the kind of increase that we will have to provide for in our workings?”

Raghuram N S

“So is this something that you believe is something that you will be able to carry it forward, going forward?”

Raghuram N S

“I asked that because obviously, when you bring that back, there will be tax -- withholding tax impact.”

Raghuram N S

“So that is something that will be a bit of a onetime phenomenon that happens.”

Risks & concerns — 4 flagged

Is that something that was cooking and we had some risk mitigation that we had done before.

— Raghuram N S

And so therefore, there should be no residuary impact of this account in the coming or future quarters.

— Naozer Dalal

Raghuram, on your two questions that whether we have factored the delinquencies full risk or whether there is anything to come.

— Gaurav Mehra

We continue to monitor our risk closely and also before closing, I would like to wish each of you and your dear ones best wishes for the festive season, which will soon be upon us, starting with Diwali and leading up to Christmas and New Year.

— Naozer Dalal

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Q&A — 4 exchanges

Yes. Hi, Naozer and Gaurav. This is Raghuram here. Just had a three, four questions. First one, obviously, on the Chapter 11 that has happened this quarter. So is that -- if you can just give us some color on that? Is that something that was cooking and we had some risk mitigation that we had done before. So that this was -- at least the financial impact was minimal. And if you can also just tell us whether there are any further risks on that count in the coming quarters? Or is this is something, which has already been completely provided for? That was the first question. Second on, there are

Naozer Dalal

Sure. Thanks Raghu. Yes, so the Chapter 11 proceedings, it links to one of the midsized fintech companies we are working with. And thanks for bringing this out, I would have stated in my concluding statement anyway. To recollect my concluding statements in the last call in May was that, we continue to be a little mindful of the headwinds, particularly in the US economy and the potential impact on BFSI because that's where the largest vertical contribution for Allsec is. And, we did see that risk crystalizing. To that question of whether there is anything proactive? Yes, the moment we sort of c

Hi, sir. So what is the outlook for H2 FY '24 in terms of top line and bottom line? I mean, will we will able to improve significantly overall performance in this quarter. What do we expect? And also, what kind of growth are we looking at in FY '25 and what are the main growth drivers in the future?

Naozer Dalal

Gunit, as you'd appreciate, we do not release precise financial numbers in terms of future guidance. But what I can state and assure is that, we will continue on the path which we set for ourselves in March/April this year, which is primarily incremental sales, with sales focus on the International business, continue to look at operational efficiencies very closely, continue to look at operational service excellence very closely because that helps us retain and mine existing customers. And the last bit is of course, as we have completed our platform upgrades in September and are ready to sort

Yes. Sorry to be back again. I just had one more question, which I left out. Obviously, Naozer, you mentioned that both SP4 and the HRMS platform has now been capitalized and it's no longer under the WIP kind of thing. So if you can give us some guidance on the -- how the depreciation numbers will look forward in the next couple of quarters? And what will be the kind of increase that we will have to provide for in our workings?

Naozer Dalal

Raghu, we are still going through technical evaluation in terms of both the useful life of the asset and keeping market benchmarks and feedback in mind for similar kind of assets. As I mentioned, we only capitalized it on 30th September. So we have not completed that process. And of course, consultations and consensus with the statutory auditors would be a key part of that process. So unfortunately, not able to give you a precise number at this point. And we'll have to wait it out until we announce the Q3 results in January unfortunately. Okay. So that's something that at some point of time, w

Thank you. Thank you so much. I would like to thank all of you for the time that you have given us today and for supporting us over the years by being invested in our journey. We are at a good trajectory in our journey and are well poised to capitalize on both the market opportunity and also some of the investments we have made in people, process and technology over the past few years. We continue to monitor our risk closely and also before closing, I would like to wish each of you and your dear ones best wishes for the festive season, which will soon be upon us, starting with Diwali and leadi

Gaurav Mehra

Thank you.

Speaking time

Naozer Dalal

Raghuram N S

Moderator

Gaurav Mehra

Gunit Singh

Balaji Subramanian

Kushal Maheshwari

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Opening remarks

Balaji Subramanian

Thank you, Malcolm. Ladies and gentlemen, good day, and thank you for joining us on the post results conference call of Allsec Technologies Limited. It's my pleasure to introduce the senior management team of Allsec, who are here with us today to discuss the results. We have with us Mr. Naozer Dalal, CEO; Mr. Gaurav Mehra, CFO; and Mr. Kushal Maheswari, Investor Relations. We will begin the call with opening remarks by the management team. And after that, we will open the call for a Q&A session. I would now like to hand over the call to Kushal to take the proceedings forward. Thank you, and over to you, Kushal.

Kushal Maheshwari

Thank you, Balaji. Good evening, everyone, and thank you for joining for Allsec Q2 FY '24 Earnings Call. Any information, data and outlook shared by the management during the call which is forward-looking is subject to prevailing business conditions and government policies. All forward-looking statements are subject to economic growth or other risks faced by the company. The results and the presentation have been uploaded on our website. Please refer to slide number two of investor presentation for the safe harbor clause. With that safe harbor, I will now handover the call to our CEO, Mr. Naozer Dalal for his opening statement.

Naozer Dalal

Thank you so much, Balaji and Kushal. Good evening, everyone. Thank you for joining our earnings call today. I'm looking forward to interacting with each one of you. For those who don't know me, here's a quick introduction. It's been a privilege to lead Allsec over the last eight months. Prior to this I have been a part of the banking and process outsourcing industry with experience in excess of 33 years with leading names like Standard Chartered Bank, The Prudential Bank Office in India and the Tata Group. With my immediately just prior role being with our group company, Conneqt Business Solutions as its Deputy CEO.I have with me, Mr. Gaurav Mehra, Chief Financial Officer, who will twin with me in interacting with yourselves. At the start, I am happy to announce that your company has declared an interim dividend of INR45.7 crores,that is INR30 per share for the current financial year. Another key highlight for this quarter is that, we have rebranded our two lines of businesses. The di

Gaurav Mehra

Thank you, Naozer and good evening to you all. It's a pleasure to connect with you all for H1 earning updates. I will share quarterly and half yearly financial results. To start with on the operational revenue, operational revenue for the quarter is INR112.4 crores, a growth of 19.3% year-over-year and 4.5% quarter-over-quarter. We have growth across both the verticals. CXM vertical grew by 18.3% year-over-year and 3.9% quarter-over-quarter. Our EXM business shown a growth of 21.2% year-over-year and 5.8% quarter-over-quarter. In CXM, management focus is more on the international business, which is the higher revenue margin business. International business grew by 21.4% year-over-year and domestic business grew by 11.6% year-over-year. We had a quarterly growth of 4.6% for International business and 2.1% for domestic business. Within the EXM business, our EXM Payroll business grew by 22.5% year- over-year and 8.7% quarter-over-quarter. EXM Compliance business, which is more of a statut

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