Speaking on the results, Partha DeSarkar, CEO of HGS said: “HGS continued its business momentum in the first quarter of FY2019. For the second quarter in a row, overall revenues crossed the Rs. 10,000 million mark to register Rs. 11,008 million, an increase of 18.7 % YoY. Of this, 5% was organic, 4.7% from forex gains and the rest 9% came from the acquisitions of AxisPoint Health and Element Solutions.
During the quarter, we signed nine new logos, expanded our relationships with eight existing clients and won five DigiCX deals, reflecting how our offerings are resonating with the evolving needs of clients. Looking at the sales pipeline, we see big opportunities for our technology-led services including DigiCX, analytics, cloud services, RPA and machine learning, and continue to invest in strengthening our capabilities. The healthcare vertical posted strong growth and accounted for over 50% of the revenues for the third quarter in a row. The two recent acquisitions helped increase share of healthcare vertical revenues from 51% to 54%.
From a margin perspective, the performance of legacy business was as per our expectations. EBITDA margins stood at 9.5%, excluding the acquired businesses. While most of our businesses showed good growth, the India CRM business continues to see twin pressures of drop in volumes from telecom clients and increase in minimum wages.
Element Solutions has done well and we expect this business to play a key role in driving our digital offerings in the social media and cloud segments. AxisPoint Health’s performance was below expectations, with costs higher than anticipated. We have initiated the necessary cost management measures and these are expected to be in place in Q3.”