3i Infotech Limited, a global Information Technology company, committed to accelerating business transformation, announced their plan to setup COEs (Center of Excellence) across India and global markets in the upcoming quarters.
The company has an upcoming COE and Lab setup planned in collaboration with a leading research park in India focussed on 5G and cognitive computing. They will also look to expand these COEs across Tier-3 cities. The company is investing in insurance COE to offer end-to-end solution on cloud platform and will also build COEs for Credit Union, Mortgage and Capital Markets.
Post the recent strategic alliance signed with MDEC Malaysia to launch the Oracle-powered NuRe 3i+ services for mid-market & SMB, 3i Infotech will further partner with various government bodies to generate employment and work on skill development. One of the other strategic initiatives which is operational, is around creating a Resident Entrepreneur Program in the fields of cognitive computing services and education technology. They also have a white labelled start-up accelerator program that is active with SD WAN/SASE technologies and blockchain powered – video content lifecycle management.
For the period 9M FY22, the India Business Region (IBR) reported a revenue of Rs.153.7 Cr, the Global Business Region (GBR) that includes North America, UK, Europe and MEA reported a revenue of Rs. 333.4 Cr and finally the Emerging Business Region (EBR) that includes ASEAN reported a revenue of Rs. 14.1 Cr.
The debt free company which has a vision to achieve revenue of $1 billion by 2030, is building on its RUN, GROW and BUILD proposition aligned to the new 3i Infotech business strategy. The company aims to repurpose its entire sales cost, onboard the right talent and make investments across key areas. 3i Infotech is working on margin enhancement projects focused on reduction on indirect cost and built proactive competency centre aligned to the regional strategies. They have also hired BUILD and next-gen technology teams.
Thompson Gnanam, Managing Director & Global CEO, 3i Infotech Limited said, “We want to assure all our stakeholders that the company is very much on a growth trajectory and the coming quarters would reflect the same. Post the carve out last year, the company has been steadily solving legacy related issues and trying to build a more robust foundation by proactively provisioning slow moving debtors that will be reduced aggressively by the year-end. With regards to the results which show increase in costs and expenses, it is important to understand that the investments of GROW and BUILD are happening from the same RUN P/L and going forward build projects of capital nature that would be capitalized by year-end as they will be creating products and platforms. The GROW business will be the new services business which will replace RUN and will be tracked as a separate P/L. This will ensure that you see a holistic view of the results, which is not the case presently, and appreciate the growth that we are able to successfully deliver quarter on quarter.”
“We have enlisted the service of one of the Big 4 global consulting firms to help us in the entire global restructuring and achieve a major turnaround for the company, which would also include closing of certain underperforming and old subsidiaries. By end of this year, the company will be totally reorganised with RUN, GROW and BUILD being a separate organisational structure, and each driving their clear mandates and goals,” he further added.
Announced during the call, the company has a string of business updates that spans Indian and international markets, with a strong sales funnel and order book pipeline of Rs.136.3 Cr. The company recently signed a multi-year deal in US, with an industry-leading Multi-Enterprise Product and Supply Chain Platform, for their cloud-first services with a TCV of $20 million. Also, an India PSU deal of $6 million TCV was signed for 3 years. The current revenue mix contains the highest revenue share from Banking Financial Services and Insurance sector. The other sectors in focus are manufacturing, government, and consulting.
On the Q3 FY22 results announced, the EBITDA has seen an improvement by 9.4 Cr, primarily due to cost optimization and the normalized EBIDTA is positive for 9M FY22. A growth outlook of 10% annually is projected with one-time cost of 9.6 Cr being recorded as ‘exceptional item’ as part of FCCB early redemption. There has been an overall interest reduction due to long term debts being paid off and reduction in funded limits utilization. The GA cost optimization/rationalization through digital transformation has led to 10% cost reduction.
For 3i Infotech, Q4 looks bullish as they optimistically look to build projects being identified for capitalization which was in P/L in YTD Dec 21. The GA cost optimization will lead to further improvement in EBITDA. There was an improvement in DSO in Q3 from 109 days to 99 days and this is expected to be improve further in Q4.