Speaking on the results, Partha DeSarkar, CEO of HGS said: “HGS posted a robust revenue growth in Q2 FY2020, driven by demand across Healthcare and CES (Consumer Engagement Services) verticals. Overall revenues for Q2 stood at Rs. 12,906 million, an increase of 11.4% YoY. From a margin perspective, Q2 EBITDA margins improved to 13.3% as per expectations. Led by growth from existing clients and increased operational efficiencies, all our major geographies have shown strong revenue growth and improved profitability. Healthcare vertical posted strong growth, with higher volumes and new clients going live.
We continue to invest significantly in technology-led BPM services. In Q2, we launched HGS Digital, a new practice focused on providing high-end digital strategy and transformative digital-first solutions to clients. With seven wins in the quarter, we expect HGS Digital to open up big opportunities for us going forward.
The sales pipeline for H2 looks encouraging, and with Open Enrollment and Holiday Season coming up in Q3, HGS is well-positioned to deliver a better second half.”
Financial Highlight for Q2 FY2020
HGS reported a YoY revenue growth of 11.4% to Rs. 12,906 million
Revenue growth in constant currency terms was 11.5%
EBITDA was Rs. 1,711 million, up by 120.5% YoY; EBITDA margins stood at 13.3%
Net profit was Rs. 491 million, a YoY increase of 9.7%; Net margins stood at 3.8% %
Capital expenditure for the quarter was Rs. 310 million
Generated 179% of the Q2 FY2020 EBITDA into Free Cash due to collections of receivables
Reduction in gross debt of Rs. 270 million in H1 FY2020; As on 30th September, 2019 gross debt was Rs 5,726 million and net cash was Rs 298mn.
Second Interim Dividend of Rs 2.50 /share.
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