Hinduja Global Solutions Limited. Consolidated Financial Performance: Q2 FY2014 vs. Q2 FY2013

Submitted by: Clea PR

2013-11-13 00:01:31

Net Sales increased by 37.9% to Rs. 6,473 million EBITDA increased by 63.0% to Rs. 814 million. Margin of 12.6%, an increase of 193 basis points PAT increased by 287.7% to Rs. 429 million Declared an interim dividend of Rs. 5 per share

(OPENPRESS) Mumbai, India, Hinduja Global Solutions Limited (referred to as "HGS" or the "Company"), a world leader in Business Process Management, announced its Unaudited Second Quarter and Half Year Results for FY2014.

Commenting on the results and performance, Mr. Partha De Sarkar, Chief Executive Officer of Hinduja Global Solutions said:

"We are very pleased to report that we continue to build on our growth momentum. This quarter we have recorded our highest ever revenue of nearly Rs. 6,500 million, EBITDA of over Rs. 800 million and PAT of Rs. 429 million. This robust performance has been driven by a combination of enhanced volumes across our existing clients, addition of new logos and better capacity utilization at all our centers. The favorable exchange rates are also helping our offshore revenues. We are seeing stronger demand from most of our markets. We have also continued our efforts to clean up our portfolio of businesses to rationalize our lower margin clients.

We are very confident of our performance for the remaining part of the year. Our optimism is supported by the strong sales pipeline that we have at the moment. The management expects to continue this growth trajectory along with strong profitability going forward."

Consolidated Q2 FY2014 Financial Highlights:

• Net sales increased by 37.9% to Rs. 6,473 million primarily driven by robust volume growth from existing customers and addition of new clients

• EBITDA increased by 63.0% to Rs. 814 million. Improvement in EBITDA was driven by strong organic growth resulting in optimal capacity utilization levels. Ongoing assessment of profitability across clients and corrective actions have resulted in better margins

• PAT increased by 287.7% to Rs. 429 million. This growth was primarily due to a higher operating profit and lower interest expenses due to repayment of debt coupled with lower working capital requirement due to improved profitability

• As of September 30, 2013, the Company had Net Debt of Rs. 410 million and Net Worth of Rs. 14,364 million

• Declared an interim dividend of Rs. 5 per share

Q2 FY2014 Business Highlights:

• The US continues to perform well and has added 3 new clients in consumer vertical during the quarter

• Canada received a new line of business from an existing telecom client, which is currently ramping up and is expected to reach full capacity by Q4 FY2014. Our first offshoring contract from Canada with Philippines delivery has started

• India Domestic operation received rate increases from their various clients. This is expected to yield better margin contribution in the second half of the fiscal year

• The Philippines operation added new lines of business such as payer data management for a healthcare client, and service centre back office and social media management for a consumer electronics client. A new centre is being opened in Manila with over 800 seats

• European operation's focus on building strong relationships has resulted in a new line of business from an existing telecom customer. It has also added 2 new clients in the consumer goods and the auto sectors

• As of 30th September 2013, we had 133 active clients (excluding payroll processing clients). Clients contributing revenues more than Rs. 100 million for the quarter increased from 11 to 16 compared to Q2 FY2013

• As of September 30, 2013, total headcount was 24,669, of which 60% were based in India, 15% in Philippines, 10% in the US, 11% in Canada and the remaining 4% in Europe

Performance Outlook:

• USA: Focused on broadening client relationships, which is expected to result in strong organic growth

• India: Selective and profitable client acquisitions across sector to improve profitability

• Canada: Focused on acquiring new clients and more offshoring opportunities are anticipated

• Philippines: Focus on acquiring new clients is gathering momentum. Strong offshoring demand

• Europe: Actively pursuing opportunities in the public sector and build upon strong client relationships.

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