Dear Shareholders,
I am pleased to present the Annual Report for the financial year ending 31st March
2024. Despite a challenging global economic environment, marked by inflation and
geopolitical tensions, your Company has demonstrated resilience and adaptability,
achieving significant milestones and laying a strong foundation for future growth.
The global economy showed remarkable resilience in 2023, with central banks tightening
monetary policy to control inflation. Despite these challenges, employment and income
growth remained steady, supported by favorable demand and supply dynamics. The global
recovery from the Russia-Ukraine conflict, inflation and the cost-of-living crisis has
been formidable, driven by pragmatic monetary policies, easing supply-side constraints and
business moderation. However, the growth outlook for 2024 remains uncertain due to
sluggish economic activity, tight financial conditions, geopolitical tensions and social
strains. Global growth is projected at 3.2% in 2024 and 3.3% in 2025, with inflationary
pressures and rising interest rates posing ongoing risks.
In the technology sector, global spending grew at a slower pace of 4.4% year-over-year
in 2023, with enterprise software and IT services primarily driving growth. Digital
transformation and infrastructure modernization remain key priorities, particularly in
cloud computing and cybersecurity. As technological advancements like automation, AI, 5G
and IoT gain traction, new opportunities for the services industry are emerging. Your
Company is well-positioned to capitalize on these opportunities, with a presence in over
35 countries and a vast, untapped addressable market. We continue to see increasing demand
for our value-added services across digital infrastructure, driven by the growth of AI
data, hybrid productivity needs and ongoing cyber threats. Black Box's offerings span five
key areas: Connectivity Infrastructure, Data Center Solutions, Modern Workplace,
Enterprise Networking and Cybersecurity. Each of these areas offer tremendous growth
opportunities as the world moves forward steadily and surely towards further digitization,
automation and connectivity. To respond to these industry shifts, the management initiated
a strategic transformation of the Global Solutions Integration (GSI) business earlier this
year. This transformation focuses on developing a customer-centric go-to-market strategy,
creating industry-specific solutions and delivering exceptional service quality. We have
reorganized our teams to align with industry-specific verticals and practice-led
solutions, ensuring that our offerings are tailored to meet the unique needs of our
customers.
For FY24, your Company reported revenues of H 6,282 crores, with EBITDA surpassing the
H 400 crore mark, growing by 59% year-over-year to H 428 crores. The emphasis on cost
rationalization and enhanced productivity has resulted in a 250 basis points increase in
EBITDA margins to 6.8%. The team remains focused on further improving margins through
better procurement, subcontractor management, facility optimization and pricing
strategies.
Strong operating performance has led to a 5.8 times year-over-year growth in profit
after tax, despite higher interest costs. Your management is confident that the focus on
profitability will continue to yield positive results in the future.
This success is a testament to the dedication of over 4,000 skilled professionals who
serve more than 1,500 global customers, including 120 of the Fortune 500 companies. Your
Company remains committed to enhancing customer relationships and integrating
Environmental, Social and Governance (ESG) principles into its core strategies,
recognizing the growing importance of ESG in driving sustainable growth and strengthening
brand value.
As I end my term as Chairman of Black Box, I remain extremely confident about the
future prospects of your Company. I am proud of the achievements the team has accomplished
this far and believe, the Company is well-prepared to continue on its path of growth and
innovation. I am sure that the management team will continue to uphold our core values and
remain accountable to all stakeholders as the Company scales new heights.
I extend my thanks to our shareholders, employees and partners for their support during
my tenure. I wish the team continued success as they drive the Company forward into its
next phase of growth – with a strong determination to enhance contributions towards
bolstering the digital infrastructure. Best Wishes,
Sujay R. Sheth