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00:00 Focus on Scient, their numbers have been out. Kartikeyan Natarajan, Executive Director and
00:04 Chief Executive Officer at Scient with us on the show. Mr. Natarajan, very good morning and
00:10 great to have you on. Let's just go through what this quarter has been like. Now, I just want to
00:16 focus on DET and let me get straight to that. Your pipeline has been good, nine large orders,
00:21 but the QOQ revenues have been down about half a percent in constant currency terms.
00:28 The expectation of the street was slightly larger. Can you give us a sense of where that sort of
00:35 choke point is? The orders are coming in, but where do you see the headwinds?
00:40 Good morning, everyone. Thanks for having me on the show. And as we have shared in our investor
00:48 call and some of the deals that we expected to flow in, in the early part of Q4 and did materialize,
00:54 but around the end of the quarter, which didn't come on time and that really did not make us to
01:00 meet our earlier expectation. Okay. Do you expect these to now come in in Q1? Can you sort of give
01:08 us a little more detail on the guidance as far as the DET segment is concerned? And that is
01:13 your big one, isn't it? Yeah, we talked about our guidance being at the high single digit for
01:21 fiscal 25, and which is essentially led by the growth driven from sustainability, aerospace,
01:27 automotive, semiconductor, and we are hopeful that connectivity will come back to growth.
01:33 And this is based on the confidence about the nine large deals you talked about,
01:37 along with the orders that we carry into fiscal 25. What is the level of expectation of the guidance
01:45 on margins going into FY25 estimated Mr. Natarajan, in terms of the sectors that you've
01:53 spoken about these nine large deals, aerospace, etc. All of this sort of gloom that we're seeing
02:00 on the US economy, are you seeing that translating through? Yeah, I think we talked about the macro
02:06 challenges do remain, right? And whether it is about high inflation, interest rates, and
02:11 geopolitical conflicts, and all this is making the environment challenging. And having said that,
02:18 we are very pleased with our performance of fiscal 24, with about 12.6% year on year growth, and 30%
02:24 on earnings growth. This has been something which is phenomenal over the last three years,
02:30 and we are happy with our performance. And we are confident that we will be able to move through
02:34 the challenges that are ahead of us. In terms of your revenue guidance that you've talked about,
02:42 Mr. Natarajan, you've guided for a high single digit revenue growth. I just want to understand
02:48 the basis of this. Have you been a little conservative here looking at the overall sort
02:55 of challenges coming in, etc. And what is the near term growth visibility you see?
03:03 Yeah, we talked about we expect probably Q1 to be soft. And we want to see how H1 pans out.
03:09 And then we'll revise the guidance based on how H1 pans out. And we do expect H2 to be stronger
03:15 than H1 at this point of time. But we just want to see how the macro situation pans out and how
03:21 the customer order is getting converted into executable work. And in some of the cases,
03:26 we do have order book, but the customers want to defer to execute over a period of time. And
03:32 we just want to know how all this would pan out in the next six months and then we'll take
03:36 any revision accordingly. Okay, fair enough. Just give me a sense of the aerospace vertical. That's
03:42 a big one for you. There have been some decent orders and some big ones actually coming out.
03:48 Do you see that bottoming out at this point? What is your outlook for this vertical?
03:53 Yeah, so if you look at last 12-18 months, we have seen that air travel have come back
03:59 and come back stronger than 2019. And we do expect our customers to continue to see challenges on
04:06 supply chain. And they still have more demand than what they can fulfill, be it on manufacturing or
04:12 production, as well as on the aftermarket MRO. So we would see continued growth on the manufacturing
04:18 engineering as well as aftermarket MRO on the back of one of the large deals that we announced,
04:23 which is a digital aftermarket. And this is supposed to map out the customer journeys of
04:29 our customers and expect to bring a lot of digital solutions to help them to manage the
04:34 challenge that they have. And also about digitalized manufacturing solutions, which is
04:39 going to see a significant uptick as everyone wants to increase the ramp up capacity and they
04:44 have the fixed capacity and can they gain more out of every day, every month, and which is going to
04:51 be enabled through a lot of productivity improvements, Industry 4.0, helping them with
04:57 the digital inspections and what can be done through model-based systems. I think a lot of
05:02 them are going to be bringing the productivity up so that they can get more output in the existing
05:07 capacity. Just a couple of last points, Mr. Natarajan. What is your outlook for the ER&D
05:13 segment? You're saying you're expecting a pickup there. It's not been super late of this quarter,
05:19 but what are you expecting to change and which are the verticals you hope to fire?
05:23 I think like in the medium to long term, we do see a good potential of growth coming from
05:29 sustainability and automotive, semiconductor, healthcare and life sciences, and as well as on
05:36 the connectivity side on the back of aerospace. So we do see that in the medium to long term,
05:41 I think the prospects are pretty good. And given the challenges of demographics coming out of
05:47 Europe and the significant growth ahead for many industries over the next five to ten years, led by
05:53 software-defined everything, digitalization and the impact of artificial intelligence and
05:58 automation, I think we do expect the medium to long term prospects to look pretty good.
06:02 Thank you so much, Mr. Natarajan, for joining us today and speaking with us on NDTV Profit. Always
06:10 great to have you here and we hope to speak with you next quarter as well. Thank you.