Hinduja Global Solutions Limited — Investor Meet, 19-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** HGS reported Q2 FY2025 total income of ₹1,207.6 Cr, down 6.2% YoY, with operating revenue slightly lower at ₹1,087.2 Cr, reflecting a 7.9% decline from the previous year. EBITDA amounted to ₹154.8 Cr, yielding a margin of 12.8%. However, profit after tax (PAT) experienced a significant downturn, recording a loss of ₹50.5 Cr compared to a profit of ₹18.4 Cr in Q2 FY2024. For H1 FY2025, total income was ₹2,426.2 Cr (down 4.3% YoY) with operating revenue at ₹2,179.1 Cr and a PAT of ₹111 Cr, showing a strong recovery compared to ₹35.1 Cr last year despite a reduction in EBITDA.

**Future Outlook and Growth Drivers:** Management highlighted challenges, including macroeconomic conditions affecting revenue growth and contract awards, particularly in the UK. However, expansion initiatives in North America and Australia-New Zealand (ANZ), alongside a growing pipeline in Colombia and South Africa, were emphasized as key growth drivers. The recent entry into the cybersecurity market also presents new opportunities.

**Order Book and Operational Updates:** HGS secured two major contracts in North America covering core technology services. The firm is optimistic about a healthy pipeline despite experiencing project delays.

**Analyst Q&A Insights:** Analysts inquired about HGS's revenue outlook and profitability drivers, particularly in light of falling UK revenues. Management cited a focus on enhancing existing client engagements and offshoring trends benefitting their operations.

**Market or Regulatory Updates:** No significant regulatory updates were discussed; however, the company's qualification for the UK G-Cloud framework is a notable achievement that could facilitate access to government projects.

**Strategic Focus Areas:** Emphasis was placed on leveraging AI for process improvements, enhancing customer service, and expanding their digital transformation capabilities.

**Investor Insight:** Given the operational challenges and declining PAT alongside a steady recovery in H1, current metrics suggest a cautious 'hold' position as the company navigates growth avenues while addressing profitability concerns.