Overall macro trends in IT industry - Software development firms offering IT services while transitioning from old technologies to new technologies/offerings such as Big Data, AI/ML, Blockchain, Cloud, Edge computing, IOT, SaaS/PaaS/IaaS, RPA, BPM etc. All of which come under one big umbrella of digitization.
As per Gartner, " Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business."
Traditionally, Indian pure play software services firms hold office spaces (real estate) on their books while MNC hold office spaces on lease basis that keeps them nimble. The advent of Covid
has only helped accelerate the trend towards being asset light if the transition from CAPEX to OPEX at customers end (due to cloud/saas) was not enough. While this transition in large IT firms will be a gradual shift, the hybrid model works best today for companies of all sizes.
Having said the above, there are companies today that truly operate with a global delivery model with no/very small office space (sales office). Needless to say that being asset light, helps companies command a higher OPM.
Ksolves seems to be just there offering services in software development and software products. Below in an excerpt from the annual report of FY21: -
While, at one hand, the company has partnered with some of the most prominent and largely used software products across the globe such as Salesforce CRM, Magento, Drupal CMS and Odoo that helps stay relevant and garner a constant source of income, on the other hand, it has its own product “Dashboard Ninja” and a few other products/themes on its webstore and on Odoo store that have earned good traction globally. Moreover, the company has also partnered with some of the prominent online marketplaces to attract talent. Furthernore, the projects/services offered to clients seems solely on T&M basis.
The main promoters of the company are Mr. Ratan Srivastava (around 15 years of IT experience) and Mrs. Deepali Verma (around 7 years of IT experience) with the board getting reconstituted in the last couple of years. The CEO, Mr. Ratan seems to strive towards being industry relevant and nimble footed to the changing dynamics with underlying risk protection, which gets corroborated by the below details from the AR and investor presentation: -
Top 5 clients contribute 45% of the revenue. 85% customer stickiness
Link to the investor presentation deck: -
How the story unfolds and whether the management walks the talk is to be seen in the coming years.
opinions/comments/questions/additions invited.
P.S. This is not to be treated/construed as buy/sell recommendation.
1 post - 1 participant