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Ladies and gentlemen, good day, and welcome to Saksoft Limited Q4 FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Diwakar Pingle from Christensen IR. Thank you, and over to you, sir.
Thanks, Steve. Good morning to all participants on this call. Warm welcome, and welcome to the Q4 and full year FY '21 earnings call of Saksoft Limited. The results and investor presentation have been made to you and is also available on the website at www.saksoft.com. In case anyone does not have a copy of the press release and the presentation, please do write to us, and we'll be happy to send the same to you. To take us through the results today and answer your questions, we have the top management of the company, represented by Aditya Krishna, Chairman and Managing Director; and Niraj Ganeriwala, Chief Operating Officer and Chief Finance Officer. Aditya will start the call with a brief overview the quarter and the year gone by, which will -- which will be then followed by Niraj giving a detailed highlights of the financials for the full year. We will then open the floor for the Q&A session. I would like to remind you that anything that is said in this call which gives any outlook for the future or which can be construed as forward-looking statement must be viewed in conjunction with risks and uncertainties what we face. These risks and uncertainties include, but not limited to, what we mentioned in the past [Indiscernible] and the subsequent annual report you can find on our website. With that introduction, I'll now hand over the call to Aditya. Over to you, sir.
Thank you, Diwakar. Hello, and good morning, everyone. Welcome, and thank you for joining us today. At the outset, I trust all of you, along with your families, are safe. While in the first phase, we heard of fatalities from afar, the second wave seems to have impacted us much closer. I don't think there's even a single family that has not felt the pain of this pandemic. Saksoft as a company has kept health and wellness for the employees paramount, and we still continue to work from home as we deal with the pandemic. As an industry, we are very fortunate. In fact, I would say, we're blessed that we can actually work from home. There are many organizations where working from home is not possible, and employees are at considerable risk to go to work every day. Vaccination is probably the only key weapon and only real weapon that we have with us to fight this disease, and I would urge all of you to get yourself vaccinated at the first available opportunity. We have initiated a vaccination drive for all our employees and their families. You would be also pleased to know that we have decided to continue paying salaries for all of our colleagues that we have lost in this pandemic indefinitely until we can stabilize their families. I'm sure a lot of you are regular listeners to our earnings calls, but I would like to take this opportunity to introduce Saksoft to some of our new investors who may have logged on to this call. Saksoft is a digital transformation partner that helps our clients automate, modernize and manage IT systems through a combination of domain-specific technology solutions and solution accelerators from consulting to support. We have been in business for a little over 2 decades now with offices across 14 locations covering U.S.A., U.K., Asia Pacific and Europe and associate strength of over 1,250. The key verticals that are our focus include fintech, transportation and logistics, retail and e-commerce and health care. The interconnected nature of the verticals allows us to cross sell and upsell service offerings to our clients. And we believe that the target addressable market in these verticals would only grow in the future, and we are uniquely positioned to address the same. Telecommunications and public sector are the other verticals where Saksoft has been at the forefront of some transformative and cutting-edge solutions to our partners. The verticals are supported by horizontal service offerings, spanning analytics, cloud solutions, legacy modernization, testing and application development. Our offerings are predominantly in the Americas at 47% of our revenue, Europe contributing 31% and the balance in Asia Pacific and other geographies. Saksoft has used a string of bold strategy in the past, the growth of some tuck-in acquisitions that has enabled us to add to our service offerings. We will continue with the strategy in the future, too, if we come across any opportunities that would fit Saksoft's business model. While Niraj will delve into the detailed financials, I would like to say that Saksoft has been consistent with its performance, and our focus on cost efficiency and optimization has ensured that our profitability margins has seen an increase over the years. This has translated into a healthy cash flow. Our dividend record over the last 5 years is a testament to our policy of rewarding the shareholders. I'm pleased to announce that the company has declared a final dividend of INR 2.5 per share. That's 25% on equity shares of INR 10 each for FY '21. This, along with the interim dividend, will add up to INR 5 per share for the full year, that is 50%. Where do we go from here is the question on everyone's side. Is there a space for another mid-tier IT company to hold its own against large players? We believe in the adage that change is a constant, there is definitely an opportunity for companies like us. A few factors that could play for us include Saksoft's focus on emerging sectors, mainly fintech, transportation, logistics, retail and e-commerce and health care, which are definitely the verticals of the future; number two, being nimble and agile is a feature that has won us a lot of business and will continue to do so; thirdly, our Inch Wide Mile Deep strategy where we focus on [Indiscernible] global offerings is one another reason which we believe we'll win as profitable business; fourthly, Saksoft is consolidating its front end to ensure that we have more hunters that can source opportunities for us. We realize that we have not grown as fast as we should have, and this is an area of focus for us. Lastly, focus on acquisitions will continue, and our track record of successful integration with over 5 acquisitions gives us confidence to go around this path to [indiscernible]. As I conclude, I would like to say that FY '21 has been a rather unique year in our history as we battled a pandemic and totally disrupted businesses across the world but left a lot of mental and physical scars around countless people. Despite the headwinds, we believe resilience is at the core of our existence. And it is my earnest belief that with the commitment and support of the entire [Indiscernible] at Saksoft and our esteemed shareholders, we'll be able to charter a growth path in the current fiscal.I would now like to hand over the floor to Niraj to take us through the financials.
Thanks, Aditya. We will now go over the financial performance for quarter 4 and FY '21. First, on the revenue side. Quarter 4 FY '21 revenues are at INR 97.45 crores vis-a-vis INR 92.9 crores in the quarter 4 FY '20, which is a growth of 4% on a year-on-year basis and a flat quarter-on-quarter basis. The FY '21 revenues are at INR 385.81 crores vis-a-vis INR 358.78 crores in FY '20, registering a growth of 7.5%. If we now look at the EBITDA. For quarter 4, FY '21 EBITDA is at INR 15.55 crores versus INR 13.85 crores in quarter 4 FY '20, which is a growth of 12.3% year-on-year and a degrowth of around 11.2% from the previous quarter. The quarter 4 FY '21 EBITDA margin is at 16% as against 14.9% in quarter 4 FY '20 and 18% in quarter 3 FY '21. The full year FY '21 EBITDA stood at INR 64.42 crores as against INR 61.03 crores in FY '20 with the margin at 16.7% versus 17% in the last year. Despite the challenging environment, the margins of the company have been stable as a result of strengthening of our niche capabilities in the selling industry verticals. Now taking you through the profit after tax. The quarter 4 FY '21 profit after tax is INR 12.51 crores as against INR 9.80 crores in FY Q4 '20, which is a growth of 27.7% year-on-year and a growth of 3.6% on a quarter-on-quarter basis. The full year FY '21 PAT stood at INR 45.44 crores as against INR 38 point. [Technical Difficulty]
Participants are requested to please stay connected while we reconnect Mr. Ganeriwala. Mr. Ganeriwala?
Yes. Yes. Did I just drop off?
Yes, sir. You may proceed.
From which part did I drop off?
Just 5 seconds back, sir.
Okay. Niraj, you were at FY '21 PAT.
Okay. perfect. Okay. Sorry. Coming to profit after tax. The Q4 FY '21 PAT is at INR 12.51 crores versus INR 9.8 crores in quarter 4 FY '20, a growth of 27.7% year-on-year and 3.6% growth on a quarter-on-quarter basis. For full year FY '21, PAT is at INR 45.44 crores versus INR 38.65 crores in FY '20, which is a growth of 17.6% over the previous year. The decrease in finance costs for FY '21 led to a further improvement in net profit. This has resulted in our earnings per share being at INR 45.68 during FY '21 versus INR 38.67 per share in FY '20. This is an increase of 18% in the EPS on a year-on-year basis. The impact of currency movement on our revenues for the current year is about 3%. Based on this, the pure volume-driven growth in revenues is about 4.5% as compared to the previous year. Now taking you through the results by geography. Americas contributed about 47% of our revenues, Europe contributed around 31% while the remaining 22% came from Asia Pacific and other regions. In terms of mix of revenues between on-site and offshore, the on-site and offshore revenue mix is 48% on-site and 52% offshore for the full year. We do expect this mix to be inclined towards the offshore in the longer term. The revenue split across verticals is as follows. Fintech and telecom contributed about 27% and 23%, respectively, while transportation and logistics, retail, health care and public sector contributed 9%, 11% and 10%, respectively. Now taking you through the customer metrics. Saksoft has about 6 customers of $1 million-plus segment and 9 customers who are in the USD 0.5 million-plus segment as of financial year 2021. The total employee count stands at 1,260, out of which 1,127 are technical, and the remaining 133 are support staff. The utilization level of employees, excluding trainees, stands at 82% for the full year FY '21. Moving to the balance sheet. As of 31st March 2021, our debt position stood at INR 26.5 crores, and cash cushion stood at approximately INR 90 crores, which makes us a net cash company. The improvement in cash position was mainly led by the improved EBITDA and margins; greater focus on the data collection, resulting in better AR collection period; and cost efficiencies. For FY '21, our return on equity stood at 17.5%, and the return on capital employed stood at 22.1%. This concludes the update on the financials, and we will now open the discussion for Q&A.
[Operator Instructions] The first question is from the line of Vaibhav Badjatya from HNI Investment.
Yes. So if I look at your revenue growth buildup and try to look at verticals and plant-wise, everything, so it seems to me that it is largely coming again from telecom -- in telecom vertical in Europe. And if I also look at your top 5 clients, they have proportional decline. So does it mean that we have added more clients -- telecom clients in the European market and that is what is providing us growth during the year?
Vaibhav, that's actually not correct. What has happened is that last year has been a very challenging year to add clients because of the pandemic. Our sales have not been able to do any face-to-face meetings with prospects. So the growth has mainly come from growing existing customers and growing our share of business with these customers. So the growth in telecom that you are referring to is actually the revenues from our top telecom client has increased. So that's what's happened. We have added some customers, but the growth has been not as much as we would have expected because of the pandemic.
Okay. So -- but it means that the nontelecom top 4 clients have declined. That's what it seems, sir. If telecom has grown that much, I think around 23%, 20%, 24% growth would be general telecom vertical where the top client has grown, and rest of the clients have declined.
Some of the -- our top fintech clients declined because they started a [Indiscernible] in India. Some of the business moved, it has been moved. So that -- it's a long tail. So that continues to, if I can use the word [indiscernible], but it's been over a hump.
Okay. And secondly, you mentioned about consolidating the front end. Can you elaborate more on that, what exactly you are doing and how it will impact either on the revenue or other costs up, what exactly you're doing in -- when you say consolidating the front end?
If you compare our business and our company to any large IT player in the industry, you will see that in most of the metrics, utilization, on-site/offshore mix, we are very comparable, return on capital, return on equity. We're very comfortable. The only place where we're lagging is revenue growth, top line growth. Now if that is something that we can overcome, and believe me, there is a lot of focus on that to overcome that, and 8% is not a great growth by any standard, and we are not happy with it. So if we can just get over this growth issue, then there is nothing which will stop us from really leapfrogging our numbers. Unfortunately, the pandemic, the situation, the size of the business makes it difficult for us to grow business. And if you would have -- you are a regular participant to our calls. And you would have seen that every time this question comes up, and I answer it by saying we are continuing to focus on it. But I have to say that there is no silver bullet. There is no magic wand. It will require a lot of effort. We are making progress. Progress will be small, but you can see, over the years, the progress has been there, and it's still consistent. We are hoping we can accelerate that.
Right. Right. So does it mean that you are kind of reorganizing your front end or reducing it or you are hiring more? I mean that's what I meant to say then. What does it mean, consolidating content? What exactly are you doing in the front end?
What we're doing when we say front end, it's a sales engine. So we are continuing to invest in the sales engine. We're not going to reduce spend in the sales engine because revenue growth will come from the sales engine. So we will continue to spend sales engine. We use the optimal mix of on-site sales and offshore sales to try and get more business into the company, more new customers [Indiscernible] something. That's really what it means.
So you will be hiring more people or it is just [indiscernible]
No. No. We will definitely hire more salespeople. We're continuing to do that every year. The only thing is because of the cost, we have to sort of stagger the costs in line with revenue growth. So we can't obviously hire too many at one go because it will have an impact on the quarterly numbers. So we have to be careful.
The next question is from the line of [ Sani Ahuja ], an individual investor.
Actually, you had alluded in the previous con call also that you were looking at the overall liquidity situation in terms of the number of shares, the free float of the shares. So any particular strategy or something that we can expect in terms of boosting the overall liquidity or the number of shares that are there in the market to probably attract maybe slightly bigger investors in the company?
[ Sani ], one of the things that we are doing is you would have noticed that as part of our shareholding, we have about 5% of our shareholding in the ESOP Trust. That's about 5 lakh shares. Now the ESOP Trust was formed at a time when the company was formed. And over the years, the relevance of that has lost -- has been lost. And it is no longer classified as -- promoter shareholding is classified as other shareholders. So what we would like to do is with the proper governance and the proper approvals, we would like to, over time, offer that in the market. And the plan is that a part of that will be bought by the promoters, and the balance, depending on the interest, will be sold in the market. So that hopefully will bring some more floating stock to go into the market. [ Sani ], does that answer your question?
Mr. [ Ahuja ], you have any more questions?
Yes. Actually, that does. So again, just a follow-up question on that. When you say a part of it will be bought by the promoters, would you -- are you alluding to some kind of a buyback? Or I mean would it be like a market on -- in-market purchase? Or can you just elaborate on that a little bit more?
Niraj, you want to just clarify this, please?
Yes, I can. Thank you. So [ Samid ] -- we are not alluding on any buyback as such. Anything which would be done would be the proper governance and approval. And any transaction would be done at market price and at the counter.
The next question is from the line of Amit Jain from Monarch Networth Capital.
So most of the questions are centered around growth on the -- growth challenges this company is facing. I think you have answered -- you answered into the previous caller. But still, I would like you -- to those challenges that have been faced by the company. And you mentioned about the Board's direction. I think I was reading your annual report. You mentioned about that Board direction. So if you can just throw some light on that to what exactly company is doing to meet that. And something on the employee -- because employee count remains the same. So that is something -- and about the attrition rate. And some -- I was somewhat concerned about the clients [Indiscernible] rate is still the company deriving 40% of the revenue from top 5 clients to slightly on the higher side. And going forward, are you seeing some change in the offshore mix? Maybe offshore mix is going to rise. There are -- sorry, I have one more question on the line of -- so that company share from the digital and future technology. So that is something I couldn't find. So if you can just share that detail also how much companies deriving from these digital.
So Amit, let me address the growth part first. The growth is the -- is our biggest challenge. If we were growing at 25% year-on-year, we would be in a different space in terms of our stock. You've seen our stock. We are at an earnings per share of INR 45. We are roughly about 10, 11 price earnings. Industry is like 25 to 30. Now if we can solve our growth problem, and it's not an easy problem, but given the long -- the tenure of the company, the foundation that we have built, the management team we have in place, I'm very confident that we will solve this problem. It will not happen overnight, but it will get solved, and that's the opportunity. If we can solve this growth problem, then we get into a different league and a different orbit. And that's the goal. Now how are we going to do it? We're going to do it with the same building blocks that I had over the years highlighted, the inch-wide, mile-deep strategy, focus on certain verticals, focus on select geographies. So a company of our size can't do everything for anybody. It has to be focused. It has to be niche driven. And that is what is allowing us to keep our profitability and our margins at the level where it is. Now when we do that, we sacrifice growth, obviously, because you're now working or getting new business and additional business in a smaller target market than the universe. So growth is a challenge. Having said that, if you noticed the previous year, and I'm talking FY '20, we were flat. This year, we have grown 8%. Now 8% is not a great year -- a great number. But considering what happened last year, it's not bad. We are hopeful that this year, we'll beat that and so on [indiscernible]. And like I mentioned earlier, there's no silver bullet. We have to work at it. We have to claw at it. We have to push at it, and only then it will happen. Now you asked a number of questions. So I hope I remember most of them. Regarding the on-site/offshore mix, we're at 48-52. We will push more towards offshore, but it's going to be a tough grind again because 48-52 is pretty much better than industry standard. Maybe we can get it to 47-53 or something like that, but it's not going to be very significant. What else? Niraj, what else did I miss? Would you like to pick it up?
Yes, Aditya. Actually, one of the questions, Amit, you had asked was on the employee costs and the count, the employee cost being stable. During the previous year, which is FY 2021, we are talking about, yes, the employee costs have been stable because in the pandemic situation and with everyone working from home, we were trying to manage our resources effectively. And rather than doing tremendous increase in the headcount, we have worked with more of the freelancers and the subcontracting and the contracting market trying to get people who are available for short-term basis, which is why you will see that the supported third-party charges line, that cost element has gone up vis-a-vis the employee cost line. Other than that, I think on the attrition, as I'd mentioned, we are at 82%. We've been maintaining that for quite some time. And I think those were the questions.
Actually, you're talking about utilization. So I asked about the employee count remaining same, not about the employee cost. So we have not grown in terms of employee strength. And second is about attrition because we have mentioned about the utilization, but there is no mention of attrition. I couldn't find that [ rate ]. So what is the attrition rate? So these are the 2 questions on the employee front. There is another question on the clients [indiscernible]. So I still want something that -- because this is something slightly [Indiscernible] company, I can understand our company size obviously has [indiscernible], but like if we can -- we are working on that front. And third question is on the digital technologies and emerging technologies the company shared. So what exactly -- how much share is in the overall revenue basket from these technologies?
Niraj, I'll take it. On the attrition side, Amit, we are tracking at about anywhere between 22% to 24% per annum attrition, which is pretty much where the industry is at. Now regarding the concentration of clients, yes, that is an issue, but it's an issue which will go away as we grow. It is not an area of focus for us because wherever I can get revenue today, I want to get revenue even if it is from my largest customer, okay? Now the fact that the largest customer is working with us means we are bringing some value to that customer. So I'm not really concerned. I think it's a thing to keep in mind, but it's not something that will -- is critical for us. Growth at any cost is critical for us.
And I guess, sir, last thing on the digital. So...
In terms of digital, I say most of our business, I would say at least 80% to 85% of our business is digital. We are only in the new technologies. We are not in the -- so much in the run-the-business. We're mostly in the change-the-business technology. So I would say almost 80% to 85% of our revenues are digital. So -- because what is digital? It's a very loosely used word. Everybody -- because of the pandemic, everybody is looking at digital. But what does digital really mean? I think digital, to me, the simple definition is something that can allow a company or a business to operate with the actions of people. Now most technology allows you to do that. So using that terminology and definition, let's say, 80% to 85% of our revenues are digital.
The next question is from the line of V.P. Rajesh from Banyan Capital.
So I'm new to the company, so my question may be a little [Indiscernible] in some respects. So first thing on the dividend side, what is your capital allocation policy? Because with INR 90 crores of cash, INR 5 per share seems a very small amount. And so, yes, that's the first question.
I know it's a small amount, Rajesh, but we need to keep the money to grow the business. And we're always looking for opportunities to acquire businesses. And so it's a tough balance between rewarding shareholders via dividend and also growing the business. So I know more is better, but consistently, we have been increasing dividends. Last year, it was 45%, which was INR 4.5 per share. This year, it's going to be INR 5 a share. And hopefully, the trend will continue. And you would have seen our share price between last March or last April and this March. So I think shareholders have had a good run. and dividend is one part of it.
Right. Okay. Second question on the business, your BFSI revenues. So I'm just wondering if you are 80%, 85% digital, and that particular vertical seems to be going for most of the IT companies out there. What was peculiar about XXAditya's reviewXX?
Could you just repeat that question, Rajesh?
Yes. So if I look at your contribution from the BFSI vertical, it seems to have degrown, whereas most of the other IT companies are growing in that particular vertical on the digital side. And I heard you say that 80%, 85% of your business is digital. So I'm just wondering why did we degrew in that particular vertical.
Okay. I think it's important to clarify, Rajesh, that for us, there is no BFSI. It's fintech. So we don't work for the large banks. So we don't work for the JPMorgan. We don't work for the Citibanks. We work for companies which are fintech, so companies which are in the compliance space with a product for anti-money laundering, companies which are in the credit management space, companies that are in the identity theft business. Those are companies which are in the payment business. For example, cashless card withdrawal application. So those are the places where we work. And that is termed as fintech. So -- and all that business is digital. There is no -- nothing which is nondigital if I was to use the earlier definition of digital. So please keep that in mind when you compare us with companies which are focusing on the BFSI domain.
Okay. So -- but why did we degrew in that business? Because fintech seems to be doing quite well from what I understand at least in the U.S.
Yes. So the only reason we have degrown is that our largest customer in this space, which is one of the largest credit bureaus in the world, has opened a captive in India. So we have had to transition some of the work from America to India, and they have taken some of the work in-house. So that is what has hit us in terms of degrowing in that segment.
I see. Okay. And in terms of growth, you obviously made some comments in response to earlier questions. But I'm just curious that are you looking to acquire something which is of substantial nature that can really get you to some sort of scale because be -- around $50 million, $55 million [indiscernible]. I'm not sure if you are being able to bid for a lot of deals also, which are slightly on the larger side. So I'm just curious how, let's say, 2, 3 years, for like this year, but [Indiscernible] where do you see this business to be both organically close to [indiscernible] ?
Okay. So organically, it's important to understand that our target market is companies which are -- which has revenues of $100 million to approximately $2 billion or $2.5 billion themselves. So except for the upper end, companies which are $100 million, $150 million in revenue, don't have a very formal procurement process. So they will not have a bidding process or an RFP or a procurement organization. So we don't get business through that route. And if you remember from my earlier comments, we stay away from the very large organizations, the Fortune 100, the Fortune 500 companies because they tend to be more formal in the procurement process, and we're at a handicap vis-a-vis the large players because of our size. So we don't play that game. So automatically, organically, that makes us -- that challenges us in terms of growth. Now as far as inorganic growth is concerned, over the years, since 2014, if you would have noticed, every year, we have made some payout of the other for acquisitions. But our acquisitions have been more for capability than they have been for revenue because we've always been strapped for cash. We have funded it partly through internal accruals and partly through debt. This is the first time that the company is sitting on some cash, and we want to conserve that cash, grow that cash and do a reasonably large acquisition. At this time, we want to do an acquisition for size. So your point is well taken. If you can get an acquisition of a reasonable size, it will leapfrog us into a larger revenue space.
So in terms of your [Indiscernible] discuss, could you just talk about [Indiscernible].
Mr. [ Rajesh ], sorry to interrupt, sir. Your voice is breaking up. Can you repeat your question once again?
Sure. Is it clear now?
Yes, sir.
Okay. So my question was that it seems from your comments that you're in the SMB segment, small and medium businesses, your clients. So could you talk about when you are competing for their businesses, who are you competing? Which are the IT vendors that you compete with?
I can't name any particular company that really comes to mind because it is such an unpenetrated space. Most of the times, you're competing with some local companies. So remember that we are competing -- we are only targeting the U.K. geography and the U.S. geography. So most of the places we are competing with a local player and sometimes another offshore company. It could be Eastern European companies. Doesn't have to be an Indian offshore company. So no particular company comes to mind where we compete.
[Operator Instructions] The next question is from the line of Vaibhav Badjatya from HNI Investment.
[Indiscernible]
Mr. Badjatya, if you can speak closer to the handset, please. Your voice is not clearly audible.
Yes. Is it better now?
Yes, sir.
Okay. So if I look at your growth against the vertical which is named as other, that has grown a lot. So can you highlight what has driven that growth? And what is exactly included in that vertical? Which kind of businesses or which kind of segments are there in that Other vertical?
Niraj, you want to address that?
Yes, Aditya. So Vaibhav, when you say that it has grown, I think over the years, it's been coming slightly down. 2 years back, the other vertical was around 23%. Previous year, it came down to 18%, and now it's back at 20%. So there are some customers which don't actually fit within these 5, 6 verticals where we operate, but we've been working with them over a period of time. And so it's not good to just drop them like a hotcake. They could be somewhere in the utility space, some in the manufacturing, which particularly don't fit across within these 5, 6 verticals are the ones which are categorized there. But we don't believe that it will go beyond 20%, 25%. So the major focus is on our top verticals, which would always be around 75% to 80%. And 20%, I'd say, could be the manufacturing or utility and the XXresidualXX sector.
Okay. Got it. And so you have explained about fintech as what has happened in fintech. But similarly, the e-commerce and health care for last year, which is not [Indiscernible] has done well. Just wanted to understand what has happened there.
Could you just repeat that question again?
Yes. So again, if I look at your vertical, which is retail and health care, which I think is mostly the e-commerce and health care vertical, so that vertical has also -- has also degrown a bit. So just wanted to understand what has happened in that -- like you explained in fintech that one of the clients has launched a captive in India. That is the reason. For health care and retail vertical, what has happened which has led to the degrowth?
See, I don't think you should get hung up on the numbers and the percentage too much because at the end of it, it's INR 385 crores. It's not DCS, which is very, very large number where 1% or 2% makes a big difference, okay? So these are just metrics which we are tracking to manage the business. The focus, like I said earlier, is grow revenue, irrespective of where it comes from these 4 verticals, okay? Now if, in the process, fintech grows, transportation logistics falls or health care grows and retail e-commerce falls, it's really not something that we are so concerned about as long as we have growth. For example, if instead of the 8% growth, we could grow by 25%, I really don't care if health care comes down and retail e-commerce goes up. So I appreciate your question, but actually, from managing the business perspective, it's not so important for us given the challenge of growth.
The next question is from the line of Amit Jain from Monarch Networth Capital.
So Aditya, I was -- so just where we left on the digital one. So obviously, I was just referring to those things that are now being commonly used. So my instinct was that's typical to how company is different from a typical IT Indian and IT company where the major revenue still come from application services. So in terms of service mix, so I'm just going through their annual report and the technologies in which you have mentioned about the Saksoft strength and all those verticals. So basically, in those terms I was asking, so where does [Indiscernible] position and those then to face that end of disruptive technology, which is now almost checking the whole IT space? That is where I would -- that my question was referring to that one.
So is your question why -- what is our competitive advantage vis-a-vis other companies in this fintech XXnationXX, is that the question?
Yes. Yes. So in terms of those things, see, I can understand challenges, but at least on the technology front or the skill sets of the employees, where are we positioned with vis-à-vis the competition?
it's -- the analogy would be a specialist versus a generalist. So if I'm an expert in transportation logistics -- okay, put it this way. If I was to look for -- if I'm prospecting for new business, and I go to transportation and logistics clients, and so does my competition, what will the prospects look at? Prospect will look at capability, he would look at references and he would look at case studies, okay? And very importantly, he would look at how much domain knowledge does this company have in my business. Now that said, we are different. We have solution accelerators. We have the domain-led solutions, which give us a competitive advantage against our competition because we only focus on these 4 verticals. So if I was to go to a transportation logistics customer, I will tell them that I'm working with the top 25 companies in this space or the top 20 companies in this space. They will be able to relate to all of them because they're competing with them in the market. So they know that, okay, this company knows my business. And that's the difference between us and the competition.Is there anybody else? Steven? Did we lose our moderator?
I hope not. That's what I was wondering.
The next question is from the line of [ Dave Raman ] from Trident Investment Advisors.
So my -- I've been tracking the company now for a couple of quarters, so not that long. And it strikes me that the growth does seem to underperform what I think the capabilities are. Now you mentioned that because your focus area is smaller to mid-market customers, this business, I guess, is often one in one-to-one negotiation. Given that, my sense would be that you would need a larger sales force because you've got to reach out to customers individually. Now given the focus on growth, why would you not think of compromising margins for a few quarters but invest in growth upfront, especially since you have cash on the balance sheet rather than worry about the quarterly number?
So how would we do that? Give me an idea.
Well, I mean I just think, look, I don't know the problem well enough to recommend a solution. But let's assume that the...
Take a shot.
Yes. Let's assume the problem is footprint of your customer coverage, right, because you've got to have that many salespeople reaching out to that many customers in the mid-market space. And what I thought you said was that you were recruiting the sales team in a modular fashion to manage the quarterly number. Now my submission to you, to borrow a statement you made, is that you're not a DCF. You don't need to worry about that quarterly number that much because your investors, I assume, are not looking at this quarter-to-quarter. But I think if you actually put that sales effort upfront, you will have a margin hit. But I think the revenues will catch up in a couple of quarters. And I think, strategically, especially because you're in spaces that seem to be -- have potential for growth, you miss the bus here, you'll miss it.
Okay. First of all, I have to commend you for summarizing the problem statement very well, okay? You're bang on because we're in the mid-market segment, we need a bigger footprint. Now the challenge is twofold. One is the challenge of cost. The second challenge is getting the right [indiscernible]. See, in the last 20 years -- may I call you [ Dave ]?
Of course. Of course.
Yes. Okay. So in the last 20 years, [ Dave ], the biggest hurdle that I have faced is a recruiting successful sales reps. Now a good sales guy will never leave his company and join a company like us because he will leave a commission stream, and why would he do that? So what you have available is a bunch of rolling stones, and a rolling stone gathers no moss. He just moves from company to company, puts a [ trophy ] on every company that he -- that hires there and moves on. And we have lost so much money over the years with that. So the problem is not only our cost. The problem is of getting the right sales guy. So what we are doing now is we have said, "Okay, we will classify our customers or prospects into ABC category customers." A, category of customers which are very large, which are the target market of the big players, okay? If we get some business on them, we'll just take it, but they are not our focus. Then there are other 3 categories, which are companies which have -- which are small and don't have sufficient IT projects to sustain us. So we're not going to touch them. We're only going to target big customers, big category customers which can give us at least $0.5 million of revenue over a -- after we get them as customers after at least 2 years. So in 2 years, there should be a $0.5 million customer. Now I'm going to target only those. So I've said that what we decided is that rather than keep looking for -- we will keep looking for sales guys, but rather than [ bake ] and hire a bunch of sales guys who will get us nothing, only to take us -- increase our cost, let us, in the meantime, only target big category accounts who we can then grow into $0.5 million, and that's what we do. And I'm very confident that with this, we will see some improvement in our growth trajectory.
Yes. I just -- my -- sorry, if I may just add a follow-on to this. So I just think that if you work the math and you say look for acceptable growth at your side, if you're saying I need to add INR 100 crores a year organically, how many accounts do I need to win? And how many calls would that effort entail? And how many salespeople would that therefore entail? I understand the challenges of managing salespeople, but what choice is there? But I think that given the capability set you have and the direction the ship is pointing in, it seems like a very interesting one. Finding a way around that challenge is worth the battle in a way rather than take a kind of conservative view here.
So point taken. Point taken. We will evaluate in more detail again. It's not that we haven't done it. Maybe we need to look at it a little bit more from an outside-in perspective. So your comment is well taken. We will evaluate again. And if we can, we will do it.
The next question is from the line of [ Sunny Ahuja ], an individual investor.
Yes. Just one question on the projection for the top line and the bottom line. And I know that can be a little bit difficult, so I'm not going to stretch it too far, say, 5 years or so. But say, within the next couple of years, what kind of growth projections do we have in terms of our top line and our bottom line?
Niraj, can I request you?
[ Sunny ], unfortunately, we don't give guidance, and we've not been -- started giving guidance. But definitely, we are looking to make our growth better than what has been in the past. And in terms of profitability or margins, we've been seeing that they have been improving constantly. We are focusing on ensuring costs are effective and, at the same time, trying to see what we can focus from an offshore/on-site revenue mix perspective. So I'm not sure if that answers your question, but definitely looking at growth which can better what we have done in the past and try and have ways and mechanisms of improving our margins.
Yes. I mean it's kind of -- I guess some sort of an idea from what you've told me. Also, just one more thing, because, as you said, these digital technologies, they entail a lot of different verticals. So any one or 2 areas where you feel that the company can really capitalize on over the next few years, and where you foresee a good part of that revenue growth coming in from some specific sectors within this digital framework?
[ Sunny ], our biggest -- the biggest market for IT is the U.S. And in the U.S., we are strongest in transportation logistics. So today, we work with literally the whole slew of transportation logistics. And we have done some fairly cutting-edge and critical applications for our customers. If I was to bank on one vertical, I would say it's transportation logistics. We all know because of the pandemic, we have seen how Amazon has grown and how that has impacted the logistics business. So I would say, to answer your question, it's that sector.
The next question is from the line of V.P. Rajesh from Banyan Capital.
Yes. Just a follow-up question. How many total customers we have? And secondly, how many salespeople do we have?
Niraj, do you want to address that?
Sure, Aditya. So our customer -- number of customers, the ones with whom we work regularly, they are at least in the 70 to 75 number, which we would take on a constant basis with whom we keep getting revenues regularly. And your second question, sorry, I didn't get that, Rajesh. What was the second question, please?
Yes. Second question was how many salespeople you have.
So salespeople, we have a large sales team, which we have split between, what we call, as on-site which is feet on the ground in their respective geographies, and then they are well supported with a large inside sales team and the marketing team. So in all put together, our sales and marketing engine is at least 65 to 70 people is what we would say.
And people who are actually in the geographic regions, that would be what, 20, 30 people, I assume?
The one on-site, they would at least be 15 to 17 people between the 3 geographies.
Right. Right. So I guess I was just listening to the earlier participant's question. And it seems that, that's probably one area where you need to invest to grow faster. If logistics is your strong area, then getting 10% from that is -- seems to be less than optimal. And again, I'm sorry, I'm just sharing some thoughts as I'm listening to your comments on this call for the first time. And it seems that you probably need more salespeople in the areas where you are stronger, which can perhaps turbocharge your growth or maybe you look for an acquisition in that particular segment to really bolster your revenue growth. Just a comment.
Point taken. Thank you, Rajesh.
The next question is from the line of Vaibhav Badjatya from HNI Investment.
Yes. So have you looked at the cloud implementation as an opportunity? Like there's been a lot of traction on HANA platform of offset and Oracle Cloud platforms. So have you looked at those opportunities? Or -- because I think cloud is being adopted by smaller clients nowadays because of the cost efficiency. So just wanted to understand. Are you doing this kind of growth or not yet?
Most of our work, Vaibhav, is on the cloud. I mean when we talk digital, I don't know of any digital solution which is not on the cloud today. So -- and it is mainly Amazon or Microsoft Azure. It is not HANA and Oracle.
Okay. So it's not a kind of system -- it's not kind of cloud platforms of -- that Oracle has set. It's not that. It's -- you are more towards providing other services on cloud.
Yes. Most of our customers want to either use their applications on the cloud. So if they're building a new application, it could be on the cloud. Or if they have an application, they will migrate it to the cloud. I think the days of on-premise servers and on-premise applications are slowly disappearing. So Oracle, for example, used to be a either on-premise or on the cloud. So if the customer wants to move his Oracle application to the cloud, that is not something that we would do, okay? But if he wants to bring a new application in the cloud, we would do that.
As there are no further questions, I would now like to hand the conference over to Mr. Aditya Krishna for closing comments. Over to you, sir.
It's been a real pleasure talking to all of you, and thank you for taking so much interest in the working of the company and understanding its functioning and its dynamics. I appreciate some of the inputs, especially around sales and what we should consider to accelerate growth. And rest assured if there is one thing that's keeping me awake and my senior team like Niraj and his colleagues, I believe that my [Indiscernible] is how can we accelerate growth. And I'm hopeful that this year, we would have some better news for you in the coming months in terms of growth. So with that, thank you very much for participating. Take care of yourselves. Best wishes to all of you and your families. Stay well. Stay safe. Thank you.
Thank you. Ladies and gentlemen, on behalf of Saksoft Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.