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Our view

Overall strong result with organic revenue growth above expectation and deal booking remains robust. The revenue growth outlook remains strong as it is well on track to deliver 19%+ organic revenue growth for FY22. Overall EBITDA margin (including cost of RSUs) is expected to remain at around 17%   for FY22, led by positive operating leverage on higher growth. Employee Attrition at 12.6% is well in control.  It trades at PER  of 36x on FY23 earnings, given its robust growth outlook. We maintain BUY on the stock with revised target price of Rs 5,475

Result Highlights

* Reported 15% QoQ revenue growth in USD terms aided by the inorganic component as it completed the acquisition of SLK Global in the quarter. Organic growth was 7.6% QoQ in USD terms, well above the estimate.  

* EBITDA margin include RSU cost was down 210 bps QoQ to 15.1%(slightly below estimate) led by wage hike, cost involved in ramping up large deals and other transitionary cost on account of SLK global acquisition.  

* Deal booking was strong at $318 mn for the quarter( up 59% QoQ)  Added 11 new clients in the quarter same as Q4FY21.

* Added 1,138 employees and along with 6,962 employees from SLK led total headcount reaching 20,491. Utilisation dropped 400 bps QoQ to 77%, on account of more hiring in the quarter . Attrition increased by 210 bps QoQ to 12.6%  for the quarter  

* Offshore revenue mix grew 1 pp QoQ to 40% as per the industry trend. Revenue contribution from Fixed price projects increased by 100 bps QoQ to 55%.

* DSO increased by 1 days QoQ to 71 Days

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