I am pleased to share the progress of Intellect in a defining year of its journey. FY23 marks the culmination of Intellect 2.0 – the second phase of Intellect’s metamorphosis and growth. We had commenced this five year journey in FY19 soon after Lakshya 2018, our organisation wide visioning exercise. We focused on three priorities – Industrialisation of our Products and Processes, Building deep Customer relationships and building monetisation models for our rich IP.
Financial performance in Intellect 2.0 (FY19 – FY23)
As outlined in our Q4FY23 Investor communication, our revenue demonstrated a 16% CAGR during this period, with Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) reporting a strong 49% CAGR and Profit after Tax growing 42% annually during this period. As an IP-driven Co, we also measure ourselves by our Recurring revenues. This has again grown at a CAGR of 34% during this period.
Our roadmap for the future
While the financial performance has been rewarding, the preparedness for the next phase of our journey is of equal importance in creating value for our stakeholders. During the Intellect 2.0 phase, we built a strong repository of IP commencing with Products for each of the Banking verticals and Insurance went on to upgrade some of those to Platforms, launched iTurmeric – our MACH composable platform for the design of Experience, Operations and Integration with the Ecosystem. We stepped up the investment in IP towards the Platformisation of our Products in the last year of Intellect 2.0 – FY23- and launched eMACH.ai – the MACH-compliant, open architecture-based, composable platform that is driven by Contextual Data & Embedded AI to support Flexible extensibility of applications – rich with over 285 Microservices, 200+ Events and 1214 APIs.
The superiority of our architecture and technology was repeatedly recognised by both Analyst accolades as well as in qualifying in rigorous technical evaluation and proofs of value/ concept by Tier 1 Financial Institutions across the globe, competing against both new age Technology startups as well as established players. These eventually led to the acquisition of Logos that are Global/ Regional leaders and the expansion of our footprint in key geographies. FY23 witnessed 42 deal wins. We are now catering to BankTech migration in the Europe & Americas for banks with asset sizes adding up to $200 Bn.
Technology trends and Intellect’s early mover advantage
Externally, two key technologies were significantly impacting the Market – Cloud and Artificial Intelligence / Machine Learning (AI/ML). We had an early mover advantage in both – given our ahead-of-the-curve Technology investments commencing from an SOA-based architecture in the mid-2000s, Digital 360 investments in the mid-2010s that not only focused on the external Experience layer but holistically on the Internal process orchestration as well, a bouquet of low code/ no code platforms, a well-defined Business architecture and frameworks for Delivery Excellence and Product Industrialisation/ Maturity, we were well prepared as an organisation to take advantage of these technology shifts. Our products and Platforms are MACH compliant – ready for deployment on the Cloud and leverage AI/ML for operational eciencies as well as for faster, incisive decisions. We have completed multiple successful implementations across Advanced geographies proving our adoption and deployment of these technologies in our IP portfolio.
Cloud technology also laid the foundation for Platforms and Ecosystems which potentially enhance the value proposition to our customers by being able to blend and choreograph applications and solutions from across vendors seamlessly to create ‘My signature solutions’. As markets adopt these trends, Intellect is uniquely positioned to monetise this opportunity, leveraging the eMACH.ai platform and iTurmeric MACH composable technology.
With the above Market trends and our readiness to capture the opportunity canvas, we hosted Lakshya 2023 earlier this year to envision the Intellect 3.0 journey over the next 3-5 years. We are upbeat and ebullient at the end of this exercise and have summarised the outcomes below.
1. Our current products and platforms are likely to witness accelerated growth over the next 3-5 years
2. The profitability from these would improve during this time frame by leveraging on the investments already made, better referenceability and the advantage of our Architecture
3. We will progressively expand our footprint into new geographies as opportunities unfold based on anities from existing Customer installations
4. We will incubate more platforms as future bets for growth
5. We will build a strong Partner Ecosystem, for which we have laid the foundation in FY23, to expand our footprint as well as collaborate technologically for greater reach
6. We will build on our relationship with our rich Customer base to be their Technology partners in Migrating to BankTech Wave 5 from their current states
I am confident that these, with the appropriate design of organisation, talent, systems & processes, business models, Technology & Infrastructure, Brand building and funding, will further accelerate our growth and profitability in Intellect 3.0.
Let me now review FY23 performance in this backdrop. Our revenues grew 21% over the prior year. This was led by a strong growth in Platform revenues – by 22% over a year ago. As mentioned in our Q1FY23 Investor communication, we foresaw the Market trends outlined above and decided to accelerate our Platform investments by ploughing back up to 5% of revenues in Manufacturing as well as GoTo Market investments. We, therefore, closed the year with 20% EBITDA Margins, with the absolute number being retained at FY22 levels. Our profit after tax was further impacted by a higher eective tax rate for the year, as our accumulated losses were wiped o last year. We added 42 new Customers during the year and helped 43 customers realise their digital transformation vision. As mentioned above, I expect Intellect to leverage the investments of FY23 for higher growth and profitability in the next 3-5 years of the journey.
Live Your Dream – Beyond our associates and customers
As much as we are thrilled about the technologies that we experiment with, the impact that these create for our customers and the opportunities that these provide for our associates, I am equally excited to mention about the impact that Mission Samriddhi and the School of Design Thinking continue to create for holistic development of rural communities across India and in influencing the thinking process in Academia, Industry, Startup Ecosystem and in Governance. It has given us immense satisfaction in celebrating success stories of Rural transformation, connecting stakeholders across States and domains and catalysing the process of realising heir dreams. Yes, ‘Live Your Dreams’ is not just confined to our Customers and associates, but also to the community around us and the larger Ecosystem that we are a part of. I am proud of the passionate contribution of several of our associates in these endeavours.
On a personal note, I complete four decades of working in this Industry this year. With my co-founders, we started with a dream of creating world-class IP in India that Global leaders would adopt. The Intellect journey has been rewarding and gratifying in realising that dream. I look forward to sharing greater stories of success and accomplishments in the years ahead!
“With the appropriate design of organisation, talent, systems & processes, business models, technology & infrastructure, brand building and funding, will further accelerate our growth and profitability in Intellect 3.0”
Chairman and Managing Director
To read more about out journey and our offerings published in the latest annual report, scan this QR code.