This article first appeared on GuruFocus .
Release Date: November 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Saksoft Ltd ( BOM:590051 ) reported 16% year-on-year revenue growth and 31% growth in profit after tax in Q2 FY24, despite an IT sector slowdown.
-
The company announced a 40% interim dividend for FY24, rewarding shareholders.
-
Saksoft Ltd ( BOM:590051 ) achieved carbon neutral status for the current year and is setting year-on-year carbon footprint reduction targets.
-
The company has a strong niche focus in fintech, transportation logistics, health tech, and high-tech, with solution accelerators that provide a competitive edge.
-
Saksoft Ltd ( BOM:590051 ) aims to reach $500 million revenue by 2030, requiring 20-25% annual growth, and is strengthening its sales engine to achieve this.
Negative Points
-
The company faces challenges in acquiring new clients, with 90-95% of growth coming from existing customers, indicating a reliance on a narrow customer base.
-
Saksoft Ltd ( BOM:590051 ) operates in a highly competitive market with larger players like Capgemini, Accenture, and Persistent, which could pressure pricing and market share.
-
The IT sector is experiencing a slowdown, leading to delayed decision-making and potential impact on growth.
-
EBITDA margins may be affected by salary increases in the first quarter, as the company continues to invest in talent.
-
The company's sales expansion is paced to protect margins, which may limit the speed of new customer acquisition and revenue growth.
Q & A Highlights
-
Warning! GuruFocus has detected 2 Warning Sign with BOM:590051.
-
Is BOM:590051 fairly valued? Test your thesis with our free DCF calculator.
Q: You have guided for $100 million in revenue by FY25, but now expect to hit it this year. Are you confident of the required run rate in the second half, and when will Solveda's revenue be fully reflected? A: Chairman and Managing Director Aditya Krishna confirmed confidence in reaching $100 million this financial year, a year ahead of the original target. He noted that Solveda, acquired in August, contributed a small portion in Q2, with the full impact visible from Q3 onwards, supporting revenue crossing the INR200 crore mark per quarter.
Q: Given the IT industry slowdown, how is Saksoft growing both top-line and bottom-line, and are 18%19% EBITDA margins sustainable? A: Aditya Krishna attributed the outperformance to operating in specialized niches rather than as a generalist, which ensures business even during headwinds. Being smaller than Tier-1 players also makes it easier to grow faster when market leaders are hit harder. He confirmed that 18%19% EBITDA margins are sustainable on a consistent basis.
Q: What are Saksoft's core strengths and which niches offer the largest growth opportunity over the next few years? A: Aditya Krishna explained the growth engine is built on identifying, protecting, and growing in market nichesfintech, transportation logistics, health tech, and high-tech/media/telecom/utilitiesusing proprietary solution accelerators and frameworks to win against larger players. He singled out fintech (specifically RegTech and payment tech) and transportation logistics as the two largest growth opportunities, with most growth expected from the US geography.
Q: How do you plan to reach the $500 million revenue target, and what is the organic versus inorganic mix? A: Aditya Krishna stated that growing 20%25% year-on-year would get the company to $500 million by 2030, through a combination of organic and inorganic routes depending on opportunities. He noted the company is always evaluating multiple acquisition targets, citing the August acquisition of digital commerce company Solveda, but declined to share specifics on current inorganic plans.
Q: With 90%95% of growth coming from existing customers, is acquiring new clients still a pain point, and how are you addressing it? A: Aditya Krishna acknowledged that new client acquisition remains a challenge and requires a tightrope walkinvesting in salespeople while protecting EBITDA margins as a listed entity. He said the company now attracts better talent due to its larger size, has added a new salesperson on the US west coast, and plans to hire another US salesperson every six months to organically boost new customer acquisition.
Q: What makes Saksoft unique versus competitors, and who do you compete with in your niches? A: Aditya Krishna said customers prefer specialists over generalists, especially those mature in their software development lifecycle, and Saksoft showcases reference customers, case studies, and accelerators to win business. Tier-1 players chase large multi-year RFPs, which Saksoft avoids. Competitors are typically local US consulting players without offshore presence, and occasionally larger firms like Capgemini, Accenture, and Persistent.
Q: How do you view the product engineering space, and how much revenue comes from it? A: Aditya Krishna said more than 50% of revenues come from application services, of which product engineering is a subset. He called product engineering a hot space as SaaS and product development and its offshoring become more common, but stressed Saksoft's differentiation is operating only within its chosen niches. He noted smaller product companies prefer Saksoft over a player like Persistent, which is 1020 times larger.
Q: Is your revenue one-time or recurring, and does it taper after development ends? A: Aditya Krishna said 95% of engagements are time-and-material and ongoing, covering development, testing, infrastructure, and supportmaking the revenue sticky. He explained that while revenue may fluctuate, it never really ends, as customers move from product build to enhancements and next-generation products, describing the relationship as habit-forming.
Q: What is the third-party support expense on the P&L? A: Chief Operating Officer and Group CFO Neeraj Ganeriwal explained that third-party support represents the cost of freelancers and contract manpower used to manage utilization. It is deployed when the company does not want to hire full-time employees or when specific projects require certain people, and it is entirely related to development and delivery costs.
Q: Why is the Asia-Pacific revenue contribution so large, and is pricing under pressure? A: Aditya Krishna explained the high APAC share reflects "following the customer"some US clients built global capability centers in India, so Saksoft now serves them there, shifting business from the US to APAC. On pricing, he said there is no pushback; the only issue is some delayed decision-making due to global economic fragility.
Q: Within fintech, what sub-verticals and customer profiles do you serve? A: Aditya Krishna said Saksoft specializes in RegTech and payment tech, serving disruptors rather than large bankssuch as RegTech companies helping clients manage SEC compliance and product companies supplying banks. Typical customers have $100 million to $23 billion in revenue with technology spend of 8%10%, giving ample runway to grow share of wallet. In payment tech, Saksoft did full product engineering for the first cardless cash withdrawal solution, later sold to Mastercard.
Q: What is the service mix and deal pipeline visibility? A: Aditya Krishna said roughly 90%95% of growth comes from existing customers, with the balance from new ones, so the company tracks a prospect pipeline rather than a deal pipeline, focusing on scaling new customers to $0.5 million and then $1 million-plus. He added that pricing rarely matters in niche deals because the cost of failure on mission-critical applications is high; Saksoft sticks to its rate card with only about 5% flexibility.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
