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Annual Report 2016-17
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Message from the CFO
Dear Shareholders,
Financial Highlights for 2016-17
The year 2016-17 saw continued growth momentum with revenue registering growth of 22% in USD terms and 24.5% in
INR terms. The revenues for the year were
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28,784.39 Million (USD 429.01 Million) as compared to
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23,123.31 Million
(USD 351.65 Million) in the previous year.
In order to address the market opportunities more effectively, your Company reorganized the operations into 4 Business Units
effective from April 1, 2016, viz. Services Unit, Digital Unit, Alliance Unit and Accelerite Unit. The revenue contribution of each
of these units for FY 2016-17 as a percentage of the Company revenue was as follows: Services Unit: 45.5%, Digital Unit: 16.3%,
Alliance Unit: 29.4% and Accelerite Unit: 8.8%.
In terms of the customers served, the revenues from Outsourced Product Development business (also referred to as
Independent Software Vendors business) contributed 43.5% of revenue (as compared to 52.4% in FY 2015-16), Enterprise
customers contributed 28.5% (as compared to 26.5% in FY 2015-16) and IP led revenues contributed 28% (as compared to
21.1% in FY 2015-16). The signiocant increase in IP led business is contributed by the alliance for IBM :atson IoT platform.
Revenue from Enterprise customers also registered signiocant growth led by the growth in digital business with the focus on
platforms and solutions. The share of ISV business as a percentage of total revenue declined, though in absolute terms there
was a marginal growth in revenues. In the ISV business, many large software product companies continued to realign their
business models to address the competition from new players. This resulted in volatility limiting the growth opportunities.
The revenue contribution from the top customer increased to 28.3% as compared to 19.9% in FY 2015-16. Number of clients
with more than USD 1 Million in annual revenues grew from 42 to 55 whereas number of clients with more than USD 3 Million
in annual revenues reduced from 18 to 15, accounted mainly by ISV customers.
Coming to prootability, Earnings before interest, depreciation and amortization, e[ceptional item and ta[ was
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4,653.47 Million
as compared to
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3,915.08 Million in FY 2015-16, registering an increase of 18.9%. In terms of percentage of revenue, the above
works out to 16.2% for FY 2016-17 as compared to 16.9% in FY 2015-16. Depreciation and amortization amounted to
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1,490.17
Million as against
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990.13 Million in FY 2015-16. The increase is mainly attributable to increase in amortization of acquired
intangible rights. Other Income comprising mainly of the income on surplus fund investments amounted to
`
958.45 Million as
compared to
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772.88 Million.
Proot after ta[ amounted to
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3,014.65 Million as compared to
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2,772.99 Million in FY 2015-16, an increase of 8.7%. In terms of
percentage of revenue, PAT was 10.5% of revenue as compared to 12% of revenue in FY 2015-16.
The outstanding hedges at the end of FY 2016-17 stood at USD 90 Million at an average rate of
`
70.67 per USD. Days’ Sales
Outstanding (DSO) stood at 65 days at the end of FY 2016-17 as compared to 62 days at the end of FY 2015-16 primarily due to
increase in business with enterprise customers.
Our dividend payout including the proposed dividend of
`
3 per share will be
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9 per share as compared to
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8 per share in the
earlier year. The dividend payout ratio works out to 28.7% as compared to 27.8% in FY 2015-16.
Your company was conferred with kAsset Platinum Award 2016y in the annual CThe Asset Corporate Awards 2016’ for E[cellence
in *overnance, CSR Investor Relations. This is the ofth year in a row that your company has secured the Asset Corporate
Award.
The Annual Investor Day was held on December 16, 2016 at our Hinjewadi, Pune Campus where we showcased some of our
offerings and solutions. :e thank all our investors for taking time out for participating in this event.
Priorities for 2017-18
:e will leverage our global footprint to address the opportunities in the digital and IoT space which require presence closer
to the customers. :e continue our efforts on the operational e[cellence initiatives to improve the operating metrics as also
improving the sales productivity. Thus, we are committed to increase the enterprise value with focus on efocient allocation of
resources and increasing the share of solutions-led business, while continuing to invest in growth areas.
I am indeed grateful to all our investors for their continued support.
I take this opportunity to thank the outstanding team in our onance and secretarial functions and we will strive to do our best
every day.
Sincerely,
Sunil Sapre
Chief Financial Ofocer