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00:00 Welcome to BQ Prime. Joining us today is Mr. Angan Guha, CEO of Binloft Soft. He's speaking
00:05 to us a day after the company's quarterly results where revenue rose 3% quarter on quarter,
00:11 net profit jumped 23% and even the margins expanded to 13.6% from 11.9%. Mr. Guha, welcome
00:19 to BQ Prime.
00:20 Thank you. Thank you for having me on the show.
00:24 Mr. Guha, first off, if I'm looking at your numbers, you're clearly the outlier here.
00:30 Your larger peers have not done well. What has worked for you in this quarter and what
00:35 is the outlook for the rest of the fiscal year?
00:37 So Tushar, one of the things that I had mentioned even in my last call with you is we will be
00:45 focused on execution. And I think the team has really come around and done an incredible
00:50 job on executing on all parameters, whether it was a revenue parameter, whether it was
00:56 the margin parameter, et cetera. So I think the team has come around well and has done
01:02 a good job in execution. Now, as far as going forward is concerned, as you know, we do not
01:08 give guidance neither on revenue nor on margins. We will take one quarter at a time. So now
01:13 we are focused on execution in quarter two and hopefully we are cautiously optimistic
01:19 that the second quarter will also look as good.
01:23 Tushar, I understand we don't, I mean, Billasoft does not give a guidance, but you know, I'm
01:28 talking from, say, for example, from the point of view of the wider industry as well. So
01:32 there have been reports that there'll be longer than expected slowdown for the entire industry.
01:37 There may be also a washout in revenue terms for the industry. So against that backdrop,
01:42 how do you see yourself positioned?
01:43 Yeah. So Tushar, you must look at us from a very different lens because we are not a
01:49 large company with billions of dollars worth of revenue. Our revenue size is roughly about
01:54 150, $154 million a quarter. So we are relatively small. So considering our base, I feel that
02:01 we can continue to show growth. Now the question is how much quantum of growth can we show?
02:07 And that is really uncertain because the uncertainty in the market continues. All I can commit
02:13 to you is as a team, as a management team, we'll be focused on executing for that quarter
02:18 in terms of signing deals, ramping up people, delivering revenue and serving our clients.
02:24 And that is something I will be focused on. Now, like I said, we are cautiously optimistic
02:29 looking at the immediate quarter, but the long-term still remains quite uncertain.
02:35 So you're not seeing any stretchy deal making? I mean, are there any delays in deal making
02:40 that you are witnessing?
02:42 We are, Tushar. If you really look at our results, in the 3Q of last year, we actually
02:49 delivered about $231 million worth of signings. 4Q was an even better quarter. We delivered
02:56 $286 million worth of signings. In our first quarter, the current quarter that just ended,
03:03 our actual deal signings were down. It is down to $145 million. Now the reason for that
03:08 is delayed decision-making. We've not lost any deals. The deals have just got pushed
03:12 out, but our funnel is continuing to improve, which is why there is a little bit of optimism,
03:18 at least for the immediate quarter, which is Q2, but the longer-term situation still
03:23 remains a little uncertain.
03:25 All right. In comparison to your larger IT peers, you have witnessed growth in BFSI
03:34 as well as the manufacturing segments, as well as data analytics and cloud. So some
03:40 of these are essential, some of these are discretionary. So are you witnessing demand
03:44 in both the spheres? Because somebody said, like we have had a conversation so far in
03:49 the quarter, that discretionary is going away, but the essential is staying, but is long-term.
03:55 What is your view on that, sir?
03:56 I agree with that, Tushar. So what is happening is discretionary spends are really getting
04:02 tighter and tighter as you go forward. But to keep the lights on, which is essentially
04:08 deals which help cut costs for our clients, those deals are on the table, though the decision-making
04:14 is taking time. The reason I mentioned about the sizes is because from a pure play statistical
04:21 point of view, we are a small company. So from that perspective, the clients that we
04:26 work with, a little bit of movement can really add a lot of revenue from our standpoint.
04:33 So I don't see the macroeconomic environment affecting us as much as it affects the large
04:38 companies. But like I said, we will have to take one quarter at a time. And we can't really
04:43 give a longer-term view because things are changing so quickly out there.
04:49 Got it, sir. Another place where you actually have differed from your other IT companies
04:53 is the hiring plans. So you have added a net of 12,000-plus employees in the quarter, and
04:59 your attrition has eased to 18.8%. So is it still to do with the execution that you're
05:03 seeing? Because others, the headcount has reduced quarter on quarter for about two quarters
05:08 now, but you are increasing your headcount.
05:10 Yes, Tushar, you're absolutely correct. That's a part of our focused execution strategy that
05:16 we have put in place. So we've added people in the first quarter. We hope to add people
05:22 even in the second quarter in terms of not only people, but the volume of business. So
05:28 we are seeing a little bit of an uptick, which is why I keep saying that we will take one
05:34 quarter at a time. And at least for the immediate quarter, we are cautiously optimistic of our
05:38 performance.
05:39 All right. Finally, you have a new generative AI center of excellence with Microsoft. Take
05:47 us through that, what is happening, and what Birla Soft is doing in terms of AI, and how
05:52 it affects margins or revenue going ahead?
05:55 Yeah, excellent question, Tushar. So look, we are very proud of our partnership with
05:59 Microsoft. We have just created a center of excellence. And to my mind, and Tushar, I'm
06:05 sure you remember our discussion earlier on this topic as well, the AI will create a lot
06:10 of capability for us from a customer perspective. As we speak today, we are working with at
06:15 least 10 clients on use cases where we are participating in our client's AI journey,
06:22 and we are incredibly proud about that. But what we will also do is we will use generative
06:26 AI even internally within our organization to cut costs and up our margins. Now, these
06:32 are early days, as you can imagine, Tushar, and we are just getting started. But we are
06:37 incredibly excited about the partnership.
06:39 All right. You mentioned about 10 clients coming in. So where do you see these clients,
06:44 what sectors do these clients operate in? If you can give us some feel on that.
06:48 Actually, it's interesting, because we are seeing clients coming up in all sectors, whether
06:53 it's healthcare, manufacturing, BFSI, energy utilities, the four sectors that we are focused
06:59 on, we are seeing clients come up with use cases and working with us in all four sectors.
07:05 Okay, so you expect an across the board adoption of AI, not just focus on say a BFSI or a manufacturing?
07:11 I think so. Yeah.
07:12 All right. Thank you, Mr. Guha. It was a great chat with you today. Congratulations on the
07:18 results. It's actually quite an outlier. Thank you so much viewers for tuning in. This is
07:22 Tushar for BQ Prime.
07:25 Thank you.
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