Revenue from operations slipped 11.59% to Rs 1,064.05 in Q3 FY25 as against Rs 1,203.67 crore posted in the third quarter of FY24.
However, profit before tax surged 154.69% to Rs 41.26 crore in Q3 FY25 as against Rs 16.20 crore posted in Q3 FY24.
Total expenses stood at Rs 1,193.61 crore in Q3 FY25, down 6.65% year on year. Purchases of stock in trade were at Rs 16.92 crore (up 33.22% YoY), employee benefits expenses stood at Rs 55.58 crore (up 14.59% YoY), and finance costs stood at Rs 137.53 crore (down 3.06% YoY) during the period under review.
Partha DeSarkar, whole-time director and group CEO of HGS, said, “HGS continues to strengthen its position as the preferred Digital Experience (DX) transformation partner for clients with our differentiated Applied AI and CX services. Our innovative solutions, such as HGS Agent X, cloud, social care, and analytics & planning, have helped us win significant contracts this quarter; the full benefits of the revenue will be realized in the next fiscal year.
In January 2025, HGS launched a new technology services delivery center in Bengaluru, further expanding our capabilities in the digital space. We are seeing growing demand for offshore delivery services from our existing clients. Our CX hub in Cape Town in South Africa went live in July 2024. In view of the growing demand for South Africa-based delivery from clients in the US and UK, we are more than doubling our delivery capability in South Africa over the next few months.
As mentioned earlier, decision-making and signing of new contracts have been slow for most of FY2025. We expect contract awards and signings to gather pace during FY2026. While the increase in offshoring is expected to improve margins in the future, revenue growth may appear muted due to a change in billing rates.”
Vynsley Fernandes, whole-time director of HGS and CEO of the Media Business, said, “HGS' media business, especially across our flagship broadband and digital television verticals, continued to show resilience and achieve challenging objectives—several of which were based on initiatives drawn from H1 of this fiscal. Take the case of broadband: revenue contribution from the high ARPU enterprise segment continues to account for 10% of our top-line for the nine-month period of FY2025, and we’re also seeing traction at OneBusiness, the recently launched commercial broadband business addressing the MSME and SOHO segments.
On the retail front, the renewed drive of our integrated product offering of broadband plus digital TV is helping push up ARPUs whilst reducing churn across both segments of DTV & broadband. The recently announced Union Budget also bodes well for the broadband industry and the entire digital connectivity ecosystem.
The government’s objective of providing broadband connectivity to all government secondary schools and PHCs (primary health centers) will benefit the industry as a whole. For us, as a media group with a significant presence in semi-urban and rural markets in India, we see this as another opportunity to leverage our vast footprint, technology solutions, and innovation to continue to participate in bridging the digital divide.”
Meanwhile, the company’s board has designated Mahesh Kumar Nutalapati, currently serving as deputy chief financial officer, as senior management personnel, effective from 14 February 2025.
Further, the company has appointed Virendra G. Bhatt, practicing company secretary, as the secretarial auditor for the financial year 2024-25.
HGS provides solutions in digital consumer experience (CX), business process management (BPM), and digital media services.