Interview with AXISCADES Technologies Ltd

The company has made considerable progress by diversifying our revenue streams from new verticals, expanding our client base and bringing digital and automation to the forefront, says Shashidhar SK, CFO of AXISCADES Technologies Ltd. 

In Q3FY23, net sales of the company surged by 26.1% driven by double-digit growth across the verticals but the company reported a net loss of Rs 10.2 crore. What factors contributed to it in this quarter?

For Q3 of FY '23, our consolidated revenue stands at INR 213.4 crores, the highest ever revenue recorded in any quarter of the financial year in the history of the company. In fact, in the last 5 quarters, the company has recorded upwards of 26% growth year-on-year in every single quarter. During the quarter the company has taken an exceptional charge of Rs 23.6 crore in the consolidated financial results. This is solely related to Mistral acquisition and pertains to the additional consideration and the interest paid to Mistral and the interest accrued on optionally convertible debentures, which is not part of the original purchase consideration of Mistral.

Excluding exceptional charges our Net profit stands at Rs 13.4 crore during the quarter compared to Rs 7.9 crore Q3FY22, a growth of 70% Y-o-Y. 

Your company's automotive vertical experienced a YoY growth of 67.3%. How do you anticipate this business segment performing over the next 2-3 years? 

Our strategy of vertical diversification is getting good traction. This is our new focus area and we are positioning ourselves to be a preferred partner in this space. During the year we have signed up 2 large deals with a global major tier-1 automotive company for whom we will undertake projects in embedded electronics, mechanical and hardware. 

We plan to strategically build domain expertise within the automotive industry and enable our clients to leverage the fast pace technological evolution in the areas of E-vehicles, battery management, software-driven cars, etc, which are fast evolving in this sector. The revenues from this vertical, which are currently in the single digit, will form a significant portion of our revenue in the next 2-3 years.

Currently, what are the top three strategic priorities for your company? 

As has been repeatedly articulated, our strategic focus in the short to medium term is to de-risk the business with a 3-pronged approach of vertical diversification, customer diversification and digital-first, with a singular objective of growth in Revenue and Profitability. The company has made considerable progress on all 3 fronts by diversifying our revenue streams from new verticals, expanding our client base and bringing digital and automation to the forefront. 

We continue to invest in technologies of the future, such as embedded software, AIML, PLM on the Cloud and Industry 4.0. We have strengthened the marketing team, both in India and overseas, who are working towards creating more strategic logos, expanding our customer base as well as leveraging the competencies of Mistral. You are already seeing the results of these initiatives in our quarterly numbers. 

How does the renewal of this contract with Airbus align with the company's long-term strategic goals? 

Aerospace vertical will continue to play a significant role in the Company’s growth strategy in the coming years, of which our relationship with Airbus will be the bulwark. As stated, our relationship with Airbus dates to more than 15 years, resulting in an enhanced scope of deliverables, with each contract renewal. The Company is constantly aligning with Airbus strategy, by deploying our competencies in domains, such as smart factory, Industry 4.0, and digital and manufacturing engineering. The skills and competencies, which we have developed in this sector, are being successfully cross-leveraged and deployed in other verticals as well, in line with our long-term strategic goals.