Speaking on the results, Partha DeSarkar, CEO of HGS said: “HGS posted a robust revenue growth in Q2 FY2019, driven by demand across Healthcare and CET (Consumer, eCommerce, Telecom & Technology) verticals. Overall revenues stood at Rs. 11,586 million, an increase of 22.9% YoY. Of this, 7.4% was organic, 7.9% from forex gains and the rest 7.6% came from the acquisitions of AxisPoint Health (APH) and Element Solutions. From a margin perspective, Q2 EBITDA margins (excluding acquisitions) improved by 66 bps sequentially to 10.2% as per expectations.
Our Canadian, US and UK businesses have shown strong revenue growth and improved profitability. A large part of the growth was led by some big logos that we signed toward the end of last fiscal. Healthcare vertical continued to ramp up, with the Provider segment registering 52.9% growth YoY in dollar terms. While the India CRM business continued to face challenges from the drop in telecom volumes, we are seeing strong growth in verticals like financial services.
As in Q1, the performance of APH business has had an adverse effect on overall HGS Profitability. Looking ahead, we expect APH’s performance to improve as the cost saving initiatives are completed and start bearing results. Element Solutions, our digital solutions business, is expected to post significant revenue growth, led by the cloud migration segment from Q3 onwards.
Our continued focus on technology-led solutions and domain expertise is helping us open up opportunities in new segments and markets, as evinced by the recent wins for HGS’ RPA and social care services. We continue to invest in strengthening our capabilities to make our clients more competitive.