Digital Engineering and Technology: 55% of revenue in Q2 vs 54% in Q1.
25 patents filed in Q2- mostly in collaborative and intuitive space in Digital technology.
Q3 has some seasonality because of furloughs.
Revenue growth guidance in FY-22: 19%- 20% in USD terms.
EBIT margin for the quarter is 18.4% which is 5th consecutive quarter for EBIT margin rise. It rose mainly due to operational efficiencies and scale benefits.
Headwinds on the EBIT margin side: Improving economy will lead to more travel expenses, wage hikes due to increased demand, organic and inorganic growth going forward.
FY- 25 target for sustainable EBIT margin is 18%.
Employee Utilization target is 78% to 80% going forward.
FY-25 target for revenue run rate: 1.5 billion USD.
Transportation vertical has 19%+ EBIT margins. Going forward company is looking to expand the margins in the Hi Tech and Telecom vertical.
ER&D (Engineering Research and Development) Industry: In 2020, market size of the industry was 1.5 trillion USD. It is expected to grow to 2.6 trillion USD. In this area, the legacy systems will grow at 2% CAGR whereas digital component will grow at 19% CAGR (Compounded annual return).
In the digital domain in the transportation vertical- there are 3 areas: Connected (60% current investment), Collaborative (35%) and Intuitive (5%). Going forward only 30% investment will be done in the connected field while majority will go to the other areas.
