DC INFOTECH & COMMUNICATION CONCALL NOTES - JUN 2024
Company Overview:
DC Infotech & Communication Limited specializes in providing innovative networking, unified communication, and data security products and solutions.
Established in 1998, the company has positioned itself as a leading provider in the sales and support of networking, UC, and security products and services.
The company's core competency lies in understanding existing network needs and deploying effective functional networks.
They have received recognition for their growth and achievements, including being featured among the top 500 fastest-growing companies in Asia Pacific.
Financial Performance Q4 & FY24:
Revenue for Q4 FY24 was Rs. 154.59 crores, showing a 60.74% year-on-year growth driven by large orders in the enterprise and UC segments.
EBITDA for Q4 FY24 was Rs. 6.74 crores, a 78.16% year-on-year increase, with EBITDA margins at 4.36%.
Net profit for Q4 FY24 was Rs. 4.21 crores, compared to Rs. 2.15 crore in the same quarter of FY23.
For FY24, revenue was Rs. 459.63 crores, a 27.81% year-on-year rise, driven by strong demand in products like Samsung, NETSCOUT, Netgear, etc.
EBITDA for FY24 was Rs. 20.04 crores, a 57.53% year-on-year increase.
Net profit for FY24 was Rs. 11.61 crore, up from Rs. 7.08 crore in FY23.
Future Plans:
The company aims to maintain a growth trajectory of 15% to 20% year-on-year for the next 2 to 3 years.
Focus will remain on securing more segments and expanding presence in those areas to deliver sustained value to stakeholders.
Simplifying segmental revenue reporting into networking, unified communication, and enterprise security businesses.
Plan to continue aligning products with services, optimizing product mix, and improving operational efficiency to enhance margins.
Key Drivers of Growth:
Growth in revenue was contributed by all business segments, with a significant spike in the security software and services segment in the JFM quarter.
Orders that were supposed to be executed in OND got pushed to JFM, leading to the spike in revenue.
Expansion plans include tapping into the Southern India market and exploring opportunities in the overseas market.
Challenges and Opportunities:
The company faces challenges related to working capital cycle elongation due to post-COVID normalization.
Working on expanding regions like Southern India and considering international market expansion.
Top customers contribute around 40%-50% of the business, with a focus on maintaining and growing these relationships.
Margin Guidance:
Margins in the networking segment are around 5% to 7%, in the UC segment approximately 7% to 9%, and in the security segment, margins are in double digits.
Expectation to maintain or improve margins through product mix optimization, efficiency improvements, and service bundling.
Employee and Operations:
The company has a team of approximately 70+ employees, including sales, sales support, engineers, technicians, finance, and admin staff.
Conclusion:
The company remains committed to growth and innovation, focusing on maintaining strong customer relationships, expanding into new markets, and enhancing operational efficiency to drive future success.
No in-house development, but expertise lies in configuring existing products and solutions for customers.
