Dear Shareholders,
I have pleasure in sharing with you on our progress in FY24, the first
year in Intellect 3.0.
FY24, in Reflection
While summarising the Intellect 2.0 journey last year, I had outlined
the progress in the agenda of Industrialisation, Customer centricity and Monetisation -
the themes that we set out with, in that journey. We had achieved the twin objectives of
delivering profitable growth, while laying a robust foundation for the future.
FY24 built further on those initiatives - demonstrating solid growth in
revenue and profits and more importantly, establishing the launchpad that would propel us
into larger opportunity spaces with eMACH.ai, powered by the twin engines of iTurmeric
composable technology and Purple Fabric - contextual technology.
In the charter for Intellect 3.0, we had identified a few key drivers
for growth - Expanding into new geographies, Incubating more platforms, Establishing a
strong partner network, Leveraging existing IP and Customer assets - that would guide our
Business design for the next few years. It is gratifying to note that we have made
significant progress on each of the above aspects in FY24.
The eMACH.ai Phenomenon
FY24 commenced soon after the launch of eMACH.ai in February 2023.
eMACH.ai is the culmination of our relentless architecture focused R&D initiatives for
over a decade - 16 mn person hours! - that seek to constantly calibrate ourselves against
the future and retain us ahead of the Technology curve.
Applying first principles thinking, we succeeded in elementalising the
seemingly complex Banking space to finite number of Events, Microservices and Application
Programming Interfaces - APIs that act as connectors and successfully deployed them in
live Cloud hosted installations for our customers, giving them the flexibility to design
and compose their experience layers as well, while simultaneously equipping them with the
power of 8 AI technologies that deliver connected Enterprise Intelligence.
From AI to Enterprise Connected Intelligence (CI)
Purple Fabric, Intellect's AI Platform is unique in o_ering Enterprise
grade AI that is secure, robust, accurate, explainable and traceable. As the adoption of
AI proliferates to be all pervasive, we di_erentiate ourselves by the multiplier e_ect
that the synthesis of the 8 technologies brings with a deep vertical context to the
Banking & Financial Services space. In contrast to horizontal AI technologies that
address parts of the Information value chain with selective, one-o_ deployments of Bots
and Agents, Intellect's holistic, Design thinking led approach ensures input quality
through validated and enriched information using the first 4 technologies and subsequently
attempts a close match of the consultative, self managed human decisioning process with a
network of self learning Expert agents to deliver insights and recommendations. I have
found a strong endorsement of this uniqueness in my meetings with Customers, Consultants
and Partners over the last few months. The Industry trend is to move to more e_cient
vertical focused Language Models, where we have a headway.
We commenced FY25 with a global summit of our leadership team across
Technology, Domain, Business Development and Enablement roles to align and converge on a
shared vision for leveraging the power of this technology, translating it into Customer
Impact in the areas of transformation of Enterprise, Operations, Experience or in
expanding capabilities and in driving e_ciencies within for greater monetisation and
benefits. During the course of FY24, we had completed multiple cohorts of technology
certification in the Composability platform and AI platform as well as trained our
Leadership and mid Management in refresher Leadership skills.
The Market Impact
The response from our Customers, Prospects and Partner Ecosystem has
been very encouraging. We won a landmark Core Banking transformation deal with OTP Bank in
Hungary amongst competition from both traditional, domain led vendors as well as new age
technology vendors after rigorous evaluation of architecture, technology and
functionality. This significant win opened a new geography and soon enough, we won a
second transformation in the same country.
Our ability to deliver Core Banking transformation both as a large,
complex modernisation initiative or as a templatised implementation - based on the
Customer's geography, stage of journey and appetite/ bandwidth, led us to more Wins in the
Digital Core space in Asia and Pacific geographies.
Across Lines of Business, Products and Platforms, our qualified
opportunity pipeline has moved up by Rs 1,000 Crs over the last four quarters, with the
number of destiny deals under evaluation increasing by 20%.
We concluded the year with 25% more Wins - 52 against 42 in the
previous year. signifying acceleration of our conversion success. The Wins span across all
continents and lines of Business, a testimony to the Global Markets endorsing us. As we
imagine and discover more possibilities with eMACH.ai along with our Partners, we are
confident of further acceleration of opportunities in FY25. The increasing number of Boot
camps and Proof of Impact sessions with our customers in the recent months is a validation
of this belief.
Leveraging existing IP and Customer Assets
Our strategy of monetising existing IP assets and building on the
existing Customer relationships also was successful in FY24. Platforms such as Corporate
Treasury Exchange - CTX Liquidity, Digital Transaction Banking - DTB won more deals in the
year, based on successful implementations and increased referenceability in many
Geographies. We significantly enhanced the depth of engagement with our key Customer
Accounts, by adding products / platforms that align with their priorities to the
relationship landscape or upgrading Product installs or by o_ering support for their
Business growth agenda. Our AI business added more customers in the US based on the
referenceability of current installs.
Expanding Distribution through Partnerships
With expanding our reach and Distribution identified as a key priority,
we had put in place a formal structure for Partnerships when FY24 commenced. The focus has
started yielding results with Partner arrangements in place with Global System
Integrators, Big 4 Audit Firms, Global Consultants and Cloud Service Providers. Our AI-led
deployments in the US are with one of the Top 2 Cloud Service Providers, where we won a
record six deals in the last Quarter of the year. We had won a large transformational deal
on our eMACH.ai platform in Asia with a global partner and have a strong funnel with other
Partners that would progress in FY25.
New Platform launches
Post conclusion of our contract with Government eMarketplace in
December and leveraging the a_nities of platforms in the Corporate Banking and AI spaces,
we invested in building a Marketplace of Digital Technologies for Commerce. The platforms
include iGPX - Government Procurement Exchange, iCPX - Corporate Procurement Exchange and
iAPX - Accounts Payable Exchange. While the first two address the Procurement
transformation space, the third builds e_ciencies and transparency in the Accounts Payable
cycle.
FY24 Financial Summary
Having summarised our progress on the "Building for future"
strategic roadmap, let me briefly summarise the Financial Performance of FY24.
Our revenues scaled the Rs 2,500 Cr mark, signifying a 12% growth over
year ago. The growth numbers are partially muted as our contract with the Government
eMarketplace -GeM - concluded by mid December. Excluding GeM, our growth was 13% on a
like-to-like comparison. License revenues that connect to our IP assets grew strongly by
35% and Maintenance revenues grew by 17% as more implementations were successfully
transitioned to Production.
Improved delivery e_ciencies and reduction in Sales costs as a
percentage of revenue resulted in increase of Margins by over 1% and in EBITDA by nearly
2%. As a result, against the revenue growth of 12%, gross margins grew 14% in absolute
terms, while EBITDA and PBT grew 22% and 27% respectively. We successfully enabled 54 of
our customers to complete their Transformation journeys in FY24.
Our year end cash position demonstrated a robust growth from Rs 548 Crs
last year to Rs 776 Crs. The days sales outstandings reduced to 122.
Holistic Sustainable Development
We have published our Sustainability report separately outlining our
progress in the spheres of Environment, Social and Governance and our vision for the
future. The report also summarises Intellect's design thinking led initiatives towards
responsible resource management. Myself and the team at Intellect are equally passionate
about holistic sustainable development of the communities around us as much as we are
about the success of Intellect! To this end, it was both a humbling and gratifying
experience to meet our Development accelerators, micro-level Panchayat leaders, Change
agents and partners in our Mission Samriddhi Summit in February and witness the
transformation stories as also spot opportunities for collaboration, scaling and outreach.
8012, our Design Center continues to scale up and host Visualisation and Design workshops
for a diverse set of communities - Academicians, Students, Social Impact organisations,
Government Bodies, Policy makers and Administrators. I firmly believe that this thinking
process shift will bring a flywheel e_ect to positive change in the days ahead.
Our focus remains on creating a positive impact by simplifying the
Financial lifecycle for the communities around us by applying Intellect. And on amplifying
that impact through holistic sustainable development. Our shareholders, Board, leadership
teams, associates, customers, partners, vendors and Banks continue invest their confidence
in us and support us in realising this vision. To all of them, I express my gratitude. I
can promise - the days ahead will be more exciting, stimulating and equally rewarding!
Arun Jain
Chairman & Managing Director