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The economic slowdown, which was initially experienced by individual markets, spread across the globe during the second half of 2009 and was also affecting emerging markets such as India. On balance, the entire global economy lost considerable momentum. Nevertheless, demand for Glodyne’s Services remained strong in both the domestic and US market. This was reflected in the pleasing results, which significantly outperformed the IT sector in India. We considerably expanded and strategically strengthened our business activities in the Technology Infrastructure Managed Services (Technology IMS). Enhancement in the strategic direction, business development re-engineering and implementation of the operating programmes enabled us to achieve our goals for the year.
Sound growth despite difficult global economic conditions
We performed significantly better than the rest of the industry, increasing our Revenue by 63 % to INR 5010.23 million. With the realignment of business development we bagged 43 new clients in the entire year despite the increasingly recessionary environment. Operating EBITDA was up by 86% to INR 1050 million, while the operating margin for the entire year rose to 20.96 %. We surpassed our performance target for the year and this success is reflected in both, the top line and bottom line.
Expansion in established business
Glodyne is primarily in the business of Technology IMS Services, focused on optimizing the operational expense of our clients, a core expense they can’t do away with unlike other capex intensive initiatives which could go slow in case of a slowdown. During the reporting year, we significantly improved our position in the Technology IMS segment. Revenue from the segment contributed 78% of the total revenues, up 65% over the previous year IMS revenue. These figures are inline with our strategy to build a Global Technology IMS Company. The two acquisitions we made in FY 08 and FY 07 have shown results and have led to the traction of remote services. Closer home, the opportunity is no less strong. In a study by a leading research agency, more than 60 per cent of Indian companies are looking at Technology IMS to improve cost efficiencies.
As per our strategy, we would continue investing in our Tech Center to deliver Technology IMS services through a hybrid Onsite / Remote model. With our remote services, we are able to offer faster resolution at reduced cost, in most of the cases it is 30-40% reduction creating a win-win situation for the client as well as for us. We have experienced acceptance of the services within the US clients and have been able to expand our services base; however it’s just the beginning and we have a long way to go. As per the FY 09 results 25% of our business comes from US clients, we believe we would successfully expand our Technology IMS services in US through a hybrid Onsite- Remote delivery in this downturn when cost optimization is the need of the hour. We see the slowdown as an opportunity as we believe that Companies will do more of outsourcing of their Infrastructure management to optimize their operational costs.
E-Shakti project – NREGS implementation in Bihar
Glodyne, through its subsidiary Smaarftech Technologies has partnered with the Rural Development Department of the Government of Bihar for implementing and managing the National Rural Employment Guarantee Scheme (NREGS) project in Bihar, named ‘E-shakti’. It was launched on 24th February 2009, at the hands of the Hon. Chief Minister of Bihar, Mr. Nitish Kumar at Patna. The NREGS scheme, an initiative of Govt of India, guarantees 100 days of employment in a financial year to below the poverty line household. ‘E-shakti’ is a 5 year BOOT project which would generate more than Rs 284 crore in revenues for the Company and has the potential not only to generate more employment directly and indirectly, but also to transform rural economic and social relations at many levels. Glodyne is responsible for the project implementation, management and maintenance. The Company is focusing on similar initiatives in the e-governance space in other states.
Committed to “Client First” Approach
Glodyne’s focus is on total quality while delivering IT services to its customers which is reflective in its stringent adherence to various quality and security standards for its operations. In continuation with our process and quality driven approach, we have been accredited with the ISO 27001 and CMMi Level 3 Certification this year. The ISO 27001 certification proves our operational maturity and unrelenting commitment to safeguarding the trust that our clients and other stakeholders place on us. With the security certification the robustness of our information security practices is proved, which would boost customer confidence.
The Company was named winner in the Deloitte Technology Fast 500 Asia Pacific 2008 Program and Deloitte Technology Fast 50 India 2008 Program. The Company has earlier bagged these awards in 2007, 2006 and 2005, on basis of a strong growth performance year on year. The Company was super ranked 32 among the Top 1000 Corporate Giants in India, by Business Standard.
Outlook for 2010
Our business is now driven by strong and evolving technology practices, client focus and efficiency. And as a result of measures to increase productivity and profitability as part of our business operating system, we have been successful in enhancing our operating margins year on year. To meet the growth and profitability targets, our employees work in line with clearly defined corporate values. These form the basis for our corporate culture which fosters a profit and client-oriented approach.
Information Technology Services have traditionally played a critical role in the growth of the Indian economy- the fundamentals of which remains structurally strong even amid the current international economic crisis. The very high level of volatility in the currency markets and a challenging economic environment posed new challenges in 2009. We have therefore enhanced the effectiveness of our risk management strategy. Glodyne is committed to deliver its clients quality services enabling them to improve their business efficiencies and productivities.
We continue to pursue our expansion strategy through inorganic growth and are strategically looking out for acquisition of companies related to our core Technology IMS business. These must offer leading-edge technology and be in a position to benefit from our hybrid Onsite / Remote delivery strengths. Glodyne is able to use its strengths, such as its extensive expertise in technology infrastructure management, remote delivery capabilities, skilled and specialized manpower, to maximise the growth potential offered by such companies.
I am very grateful to all our shareholders, for their loyalty and confidence in our company and its management team. We will make every effort to continue justifying this loyalty and confidence.
Sincerely,
Chairman and Managing Director
Glodyne Technoserve Limited |
