InfoBeans: InfoBeans expects revenue to continue to double every three years: Mridul Maheshwari

Indore-based smallcap IT company InfoBeans, which reported revenue growth of 47 per cent YoY to Rs 289 crore in FY22, hopes to continue to double its revenue every three years with a good mix of organic and inorganic growth. IT stock, with a market cap of approximately Rs 1,700 crore, has rallied around 250 per cent in the past one year.

In this interview, Mridul MaheshwariSenior Manager – Corporate Development, InfoBeans, also spoke about the deal pipeline, demand outlook and attrition rates.

Edited excerpts:

InfoBeans has doubled revenue every three years since 2010. What’s in your favor?
We would like to attribute our growth to the following factors:

a) Quality engineering team: Our team acts as consultants in solving the complex business problems of our clients. High-quality deliverables build confidence with clients resulting in 90% business repeatability annually.

b) Strong client referrals: Our clients speak highly of us which together with our smart sales team present in all 4 markets in the US, Germany, Dubai, and India, gives us a solid ability to gain new clients and win new opportunities.

c) Client success team: Naturally we build deeper relationships with our customers. It helps in expanding to existing clients by cross-selling our services around digital transformation and product engineering.

So far, we serve six unicorns and have ten Fortune 500 companies as our active clients.

How do you intend to accelerate the growth trajectory in the coming years?
As a simple and long -term strategy, we strive to double ourselves every three years with a good mix of organic and inorganic growth. After the Pandemic, the demand for IT services is global and is likely to remain high over the next five years. We have a strong middle management team led by deep leadership to take advantage of this opportunity.

Our expectation is that organic growth will be in the range of 15-20% annually as we continue to focus on enterprise clients with a solid balance with a long-term need for cloud-based solutions around Salesforce, ServiceNow, and Automation.

An additional 20-25% growth will be accumulated from the inorganic method. We have acquired 2 high quality high growth companies in the past 3 years. That strengthened our capabilities and gave us access to a larger client base.

What does the demand outlook look like in FY23? What do you expect in terms of deal wins?
Worldwide, there is a clear realization by every organization in all industries that digital innovation is the necessity of the hour. This created a stable environment in demand. This is reflected in the ongoing talent that India faces as the capital of the IT offshoring world.

All new projects are implemented in the cloud and the need for automation of business processes is rising.

We don’t offer any guidance on deal wins, but we see the $ 40 million (~ Rs 300 crore) pipeline for this year with fair confidence.

Did your EBITDA margin enter 31 percent in Q4? Does this quarter look sustainable as well?

We see that our steady-state EBITDA margin is approximately 24% and the PAT margin is at 15%. With approximately 70% workforce returning to the office, we are seeing an increase in office operating costs. The trip is back and we meet with our clients in every geography. Thus, margins will be normal at their steady-state level over the next 1-2 years.

How big is the headache now? Has some of the pressure been reduced now?

Both, team retention and talent acquisition is the biggest challenge facing all players across the industry.

Interestingly, one thing that very noticeably came out for us was that people in between 0 to 2 years of tenure, who almost joined us and almost left were the most volatile. They kinda had a bonding with us as a team. They hardly visit our offices in Pune or Indore. And there we see the highest attrition.

But on the flip side, among those of us for more than 5 years, we only see 4% attrition there. So that’s good news.

We hired more than 450 professionals this year. And we added approximately 300 members through our acquisition of Eternus Solutions.

So to answer your question, yes it is a challenge for us as well. We are a people-first company that consistently implements a variety of strategies such as stock options, retention bonuses, people-friendly policies, deep engagement, and engagement plans. career development for most of the team. These strategies benefit in the long run and therefore establish a strong relationship between team members and InfoBeans.

Can you also shed some light on your hiring plans for this financial year?

We continue to take aggressively with our service offers, especially at the bottom of the pyramid.

We also try unique and innovative ideas to attract talent like the 90-minute walk-in ride offer. Candidates can exit from a walk-in drive holding an offer within 90 minutes straight. We made two successful drives in March and April, launching 100 offers to 400 walk-in candidates at our offices in Indore and Pune.

After venturing into the Indian market last year, are there any plans to enter new geographies this year?

Given the accelerated need for digital transformation after the pandemic, we are able to win great opportunities in the geographies where we are present ie US, Germany, UAE, and more recently, India.

So to answer the question, as we think inwardly whether we should enter a new geography or not, we continue to focus on the chances of winning in the USA because it is one of the largest IT markets in the world.

(Disclaimer: The recommendations, suggestions, views, and opinions provided by the experts are their own. They do not represent the views of the Economic Times)

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