Couple of interesting snippets from the transcript:
Operating leverage and the scope for margin expansion:
“
So, only one question I have, so the margins have really improved the EBITDA margin, is it
something that is sustainable in future quarters or in upcoming years?
Tarun Dua: Ours is a platform business so, the overall team size, the platform size doesn’t need to really
increase with the amount of cloud business that we do. So, we can potentially scale up the
business 10x where the platform remains practically the same in terms of the size of the dev
team and the size of the operations team, it needs to grow very organically compared to,
whatever the growth on the side of the content revenue. So that way, there is always any
platform business, the scope for growth of margins is always there
“
On what they perceive as their USP:
“
Aman: My question is, what is our USP over the, if we are in a competition with the largest player or
an emerging domestic player, somewhere what we see the competition that makes us different
from the competitor, which is infrastructure heavy player and what add on’s we provide in
terms of cloud services to our clients?
Tarun Dua: So there is a long list of cloud services that we have been providing from last many years. And
typically, what happens with software usage is that software usage is a habits, so whether it’s
a larger player with like a bigger piece of software, whether it is like a player which is more
infra heavy, less software, ultimately the differentiator would become the stickiness of the
software that we eventually produced, with the help of like understanding from our customers,
that we build from our customers. So ultimately the differentiator is going to be the software
platform that we are building.
Aman: So are you trying to convince me that we are.
Tarun Dua: I am not trying to convince you of anything.
Aman: No, are we at better.
*Tarun Dua: I only want to convince our customers to use our product, I don’t need to convince anyone *
else.
“
Management sees Op margins over the medium term to be around 60%:
“
Pankaj Kumar: Okay. So, can we say that we have moved from +50 percent kind of margin to +60 percent kind
of margins, is that a reasonable estimate or reasonable understanding?
Tarun Dua: I already answered this question, in the medium term and the long term the trend should
sustain.
“
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