I heard their concall for the 1st time today. Honestly not impressed. Few observations:
- Touch of arrogance
- Indirect response to few direct questions (such as what are the sales channel for international mkts, blended billing rate, products vs svcs revenue mix).
- With ~1000 clients for a approx annual svcs revenue base of ~75 cr gives a sense that they are one among crowd serving their customers (& not really niche/ strategic), hence easily replaceable.
- On a like-to like-basis, avg annual svcs realization per employee is ~20 lakhs, which again looks low (hence does not give a sense of any niche kind of work).
- They have grown from 0-100 cr in 24 yrs. For growing 10x in next 10 yrs, could not get a sense of any strategy/ plan to achieve it. what is new that will help them deliver such a performance in future.
- Video on HR that CEO showed is basic chatbot that any IT company would have even without Gen AI. What’s so unique about All-e-tech here was missing.
- Product margin seems to be 16-19%. usually industry operates at ~10% margin. Hence as they will grow, this component may deflate the overall margins.
May be reading too much for a microcap but not convinced about the company somehow…
| Subscribe To Our Free Newsletter |
