Table of content
SA Tech Software Introduction
S A Tech Software India Limited, founded in 2012, is an IT consulting subsidiary of SA Technologies Inc., USA. The company is headquartered in Pune and Bengaluru, India. They offer a wide range of services including application development, mobile app development, cloud infrastructure, software quality assurance, generative AI, machine learning, IoT solutions, data science, and analytics.
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Brief about SA Tech Software
Summary of the business of SA Tech Software
S A Tech Software India Limited (“SAT”) centered in Pune and Bengaluru, is an IT consulting Company promoted by our diligent promoters who have more than two decades of experience in Information Technology. Our Company has experience of catering to global as well as domestic customers since more than a decade through our promoter and holding Company SA Technologies Inc., USA. We service to a diverse portfolio of clients ranging from small to enterprise ones, offering products and digital solutions. With the benefit of global presence, we bring together diverse teams from different parts of the world with multiple skills to collaborate in real time and solve complex technological problems for our clients.
History of SA Tech Software
Company was originally incorporated and registered as a private limited company under the Companies Act, 1956 in the name and style of ‘S A Tech Software India Private Limited’ vide certificate of incorporation dated November 01, 2012 bearing Corporate Identification Number U72900PN2012FTC145261 issued by the Registrar of Companies, Maharashtra, Pune (“RoC”). Thereafter, company was converted into a public limited company pursuant to a special resolution passed by the members at the Extra Ordinary General Meeting held on October 16, 2023 and consequently the name of our company was changed to ‘S A Tech Software India Limited’, and a fresh certificate of incorporation consequent to change of name was issued by the RoC dated November 03, 2023 bearing Corporate Identity Number is U72900PN2012FLC145261.
SA Tech Software company was incorporated by our Promoter – S A Technologies Inc., USA with an aim of running the outsourced technological services and digital transformation services Business. As a part of business growth, the Company registered with the Registrar of Companies, Pune on 01st November, 2012 as S A Tech Software India Private Limited.
| Calendar Year | Details |
| 2012 | S A Tech Software India Private Limited was incorporated in India as a subsidiary of USA based parent company SA Technologies Inc., USA and started the IT Consulting business in India (Pune) |
| 2014 | Extended new business operation in Bangalore. |
| 2016 | Became Microsoft Gold Partner and started offshore business from Pune development center. |
| 2020 | Became Google Cloud Partner |
| 2021 | Marked 50 cr revenue and Become Great Place to work certified company. Also awarded with Top 50 Best Place for Women by GWTW. |
| 2022 | Became Great place to work certified company |
| 2023 | Became CMMI Level 5 and awarded Top 50 best place for women by GWTW |
| 2023 | Conversion of company from private limited to public limited |
Promoters & Board of Directors of SA Tech Software
Promoters of SA Tech Software company are
- M/s SA Technologies Inc., USA
- Mr Manoj Joshi
- Mrs Priyanka Joshi
- M/s Mindpool Technologies Limited
- Mr. Ritesh Sharma
- Mrs. Poonam Sharma.
Board of directors of SA Tech Software
| Name of director | Designation |
| Mr. Manoj Joshi | Chief Executive Officer |
| Mrs. Priyanka Joshi | Non-Executive Director |
| Mr. Ritesh Sharma | Non-Executive Director |
| Mr. Kaustubh Karwe | Non-Executive Independent Director |
| Ms. Sarika Sharma | Non-Executive Independent Director |
Share Holding pattern of SA Tech Software
| Name of the Shareholders | % of total holding |
| Promoters | |
| SA Technologies Inc., USA | 78.28 |
| Mindpool Technologies Limited | 19.3 |
| Ritesh Sharma | 0.46 |
| Poonam Sharma | Negligible |
| Total | 98.03 |
| Promoter Group | |
| Opal Force Software India Limited | 0.99 |
| Public | 0.98 |
Qualitative Factors
- Experienced Promoter and Qualified Senior Management Team
- Global presence of our Company
- Scalable Business Model
- Strategy to build capacity and capabilities necessary to develop and increase the value of the business by growth across multiple dimensions, including strengthening our relationships with our existing clients, expansion of our digital engineering and embedded capabilities.
- Customer- Centric Approach
- Marque set of clients
- Exclusive Agreement for Certain Domains
- In- House Expertise/Human Resource- Our team comprises of highly skilled professionals with a prudent mix of experienced and young professional with diverse expertise.
Industry Outlook
Indian IT industry
The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 7.4% of India’s GDP in FY22, and it is expected to contribute 10% to India’s GDP by 2025.
As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and the cheapest Internet rates, with 76 crore citizens now having access to the Internet.
The current emphasis is on the production of significant economic value and citizen empowerment, thanks to a solid foundation of digital infrastructure and enhanced digital access provided by the Digital India Programme. India is one of the countries with the quickest pace of digital adoption. This was accomplished through a mix of government action, commercial innovation and investment, and new digital applications that are already improving and permeating a variety of activities and different forms of work, thus having a positive impact on the daily lives of citizens.
India’s rankings improved six places to the 40th position in the 2022 edition of the Global Innovation Index (GII).
Indian IT Market Size
According to the National Association of Software and Service Companies (Nasscom), the Indian IT industry’s revenue touched US$ 227 billion in FY22, a 15.5% YoY growth, and was estimated to have touched US$ 245 billion in FY23. In 2022, the Indian domestic IT & Business Services market was valued at US$ 13.87 billion and recorded a 7.4% year-over-year (YoY) growth as compared to 7.2% in 2021. IT spending in India is expected to increase to US$ 110.3 billion in 2023 from an estimated US$ 81.89 billion in 2021.
The Indian software product industry is expected to reach US$ 100 billion by 2025. Indian companies are focusing on investing internationally to expand their global footprint and enhance their global delivery centers. The data annotation market in India stood at US$ 250 million in FY20, of which the US market contributed 60% to the overall value. The market is expected to reach US$ 7 billion by 2030 due to accelerated domestic demand for AI.
India’s IT industry is likely to hit the US$ 350 billion mark by 2026 and contribute 10% towards the country’s gross domestic product (GDP), Infomerics Ratings said in a report. As an estimate, India’s IT export revenue rose by 9% in constant currency terms to US$ 194 billion in FY23. The export of IT services has been the major contributor, accounting for more than 53% of total IT exports (including hardware).
Indian Advantage
In FY21, India ranked third worldwide with 608,000 cloud experts across all verticals, including technology. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 95.88 billion between April 2000 and June 2023.
Indian IT firms have delivery centers across the world. The IT & BPM industry is well diversified across verticals such as BFSI, telecom, and retail. Increasing strategic alliance between domestic and international players to deliver solutions across the globe.
In FY22, the top three Indian IT companies, TCS, Wipro, and Infosys, were expected to offer 1.05 lakh job opportunities due to the increasing demand for talent and skill. India‘s IT and business services market is projected to reach US$ 19.93 billion by 2025. IT spending in India is expected to increase to US$ 110.3 billion in 2023 from an estimated US$ 81.89 billion in 2021.
Recent Investments/Developments in the IT industry
- Direct employment in the IT services and BPO/ITeS segment was estimated to reach 5.4 million in FY23 with an addition of 290,000 people.
- The revenue of India’s public cloud services market totaled US$ 6.2 billion in 2022, and it is expected to reach US$ 17.8 billion by 2027 growing at a CAGR of 23.4%.
- In November 2022, Amazon Web Services announced the launch of its second AWS infrastructure region in India – the AWS Asia Pacific (Hyderabad) Region. By 2030, it is anticipated that the region will support more than 48,000 full-time jobs annually thanks to investments totaling more than US$ 4.4 billion in India.
- In November 2022, Google established a partnership with local gaming startup Super Gaming through its Google Cloud division. As part of the collaboration, game developers who use Google Cloud to create, host, and distribute their games will have access to Super Gaming’s Super Platform game engine.
- In August 2022, PwC India announced that it was planning to hire 10,000 employees in the cloud and digital technologies space over the next five years.
- The computer software and hardware sector in India attracted cumulative foreign investment (FDI) inflows worth US$ 95.88 billion between April 2000-June 2023. The sector ranked second in FDI inflows as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Computer software and hardware make up 15% of the cumulative FDI inflows.
- American-Irish consumer credit reporting company Experian is planning a major expansion of its global innovation centre (GIC) in Hyderabad to about 4,000 employees over the next three to five years. According to sources, GIC will concentrate on employing emerging technologies in the BFSI (banking, financial services, and insurance) sector, including cloud computing, big data analytics, artificial intelligence, and machine learning.
- In 2021, PE investments in the IT sector stood at US$ 23.4 billion.
Global Capability Centres: India’s transition from Global Delivery Centre to Global Capability Centre
Global capability centers, also known as GCCs or GICs, are offshore units of multinational corporations that operate across the globe. These centers are responsible for providing various support services, such as IT, finance, human resources, and analytics, to their parent organizations. Earlier, these units were primarily established to offshore back-office processes, but that is not the case today. GCCs of today handle more complex line items across the organization’s value chain. They have become centers of operational excellence, product development, and innovation hubs.
India is home to more than 1,800 global capability centres, which employ over 1.3 million people. These centers have played a significant role in India’s economic growth, providing high-quality employment opportunities, and contributing to the country’s GDP. These GCCs, which represent global companies in India, are spread across sectors including technology, engineering, consulting, and many more. In fact, the country’s large pool of talented and skilled professionals, cost-effectiveness, and supportive government policies have made India the preferred destination for many such innovation hubs.
Cities like Bengaluru, Hyderabad, Delhi NCR, Mumbai, Pune, and Chennai are the most popular destinations, offering a conducive environment for global capability centres in India, with their robust infrastructure, access to talent, and supportive ecosystem. US-headquartered firms account for the majority of the operational GCC footprint in the top 6 cities of India, followed by European firms (35%). The share of APAC-based GCCs is currently quite less but is ramping up, backed by regional unicorns. In addition, office stock occupied by GCCs across the top six cities has crossed 200 mn sq ft and is growing rapidly with time.
Business Data of SA Tech Software
Verticals
- Artificial Intelligence and Machine Learning
- Software Development and Engineering
- Digital Transformation and Automation
- Cloud and DevOps Services
- Quality Assurance and Testing
- Global Capability Centre (GCC)
Customer dependency
(Amt Rs in Lakhs)
| Fiscal | Revenue Amount | % of Total Revenue |
| 2021-22 | 3,749.36 | 78.00 |
| 2022-23 | 4,104.97 | 74.00 |
| 2023-24 | 5041.20 | 69.98 |
| For the period ended June 30, 2024 | 1830.94 | 84.27 |
Peer companies comparison
| Name of the Company | Face Value (₹) | Current Market Price | EPS (₹) | P/E Ratio | RoNW (%) | Net Asset Value Per Share | Total Income (₹ in Lakhs) | |
| Basic | Diluted | |||||||
| S A Tech Software India Limited(Our company) | 10.00 | 59 | 1.19 | 1.19 | 49.57 | 13.96 | 178.63 | 5673.05 |
| Peer Group | ||||||||
| ASM Technologies Limited | 10.00 | 474.85 | 15.06 | 15.06 | 55.14 | 13.31 | 67.05 | 14,963.50 |
| Moschip Technologies Ltd | 2.00 | 98.82 | 0.32 | 0.30 | 165.18 | 5.46 | 6.8 | 17,565.90 |
| Infobeans Technologies Ltd | 10.00 | 440.55 | 15.18 | 15.09 | 30.34 | 13.24 | 111.98 | 24,835.00 |
| Onward Technologies Ltd | 10.00 | 620.50 | 7.34 | 7.16 | 55.77 | 6.60 | 77.94 | 32,461.84 |
| 3i Infotech Ltd | 10.00 | 53.64 | 3.10 | 3.05 | 343.13 | 0.21 | 38.16 | 39,120.00 |
Group companies
- Mindpool Technologies Limited
- Opalforce Software India Limited
- Opalforce Inc., USA
Business risk factors
- Any IT system failures or lapses on part of any of our employees may lead to operational interruption, liabilities or reputational harm.
- We face intense competition. If we are unable to compete effectively, the results of operations and prospects for our business could be harmed.
- SA Tech Software Company has negative cash flow in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact our business, financial condition and results of operations.
(Rs in Lakhs)
| Particulars | For the three months period ended June 30,2024 | As on March 31 | ||
| 2024 | 2023 | 2022 | ||
| Net Cash from Operating Activities | (416.39) | 61.05 | 1,334.66 | 36.07 |
| Net Cash used in Investing Activities | (161.54) | (138.58) | (79.41) | (248.46) |
| Net Cash used in Financing Activities | 758.06 | (472.63) | (766.34) | 203.05 |
| Net Cash Flow | 180.13 | (550.16) | 488.91 | (9.34) |
- SA Tech Software have not entered into any longterm contracts with any of customers and typically operate on the basis of purchase orders, which could adversely impact our revenues and profitability.
- SA Tech Software revenue from operations concentrated to a few top 10 customers are aggregating to:
(Amt Rs in Lakhs)
| Fiscal | Revenue Amount | % of Total Revenue |
| 2021-22 | 3,749.36 | 78.00 |
| 2022-23 | 4,104.97 | 74.00 |
| 2023-24 | 5041.20 | 69.98 |
| For the period ended June 30, 2024 | 1830.94 | 84.27 |
Financials
Key Financial Ratios
| Particulars | 30 June 2024 | 31 March 2024 | 31 March 2023 | 31 March 2021 |
| Current Ratio | 1.59 | 1.69 | 1.19 | 1.42 |
| Debt-Equity Ratio | 1.49 | 1.10 | 1.89 | 2.95 |
| Debt Service Coverage Ratio | 0.19 | 0.19 | 0.26 | 0.24 |
| Return on Equity Ratio | 19.22% | 19.22% | 15.12% | -58.45% |
| Trade Receivables Turnover Ratio | 1.33 | 6.60 | 7.12 | 4.17 |
| Trade Payables Turnover Ratio | 1.65 | 3.73 | 1.80 | 5.81 |
| Net Capital Turnover Ratio | 1.99 | 9.87 | 11.57 | 4.40 |
| Net Profit Ratio | 10.38% | 5.13% | 1.93% | -13.35% |
| Return on Capital Employed | 10.95% | 32.24% | 19.66% | -17.35% |
| Return on Equity | 1.50% | 5.82% | 2.35% | 2.23% |
Key Performance Indicators
(Amount in Lakhs, except EPS, % and ratios)
| Key Performance Indicator | For the period ended June 30, 2024 | For the year ended March 31, 2024 | For the year ended March 31, 2023 | For the year ended March 31, 2022 |
| Revenue from Operations | 2,388.87 | 7,188.22 | 5,639.31 | 4,106.11 |
| Growth in revenue from operations (%) | N.A. | 27.47% | 37.34% | -24.48% |
| Total Income | 2,397.18 | 7,238.12 | 5,673.05 | 4,154.37 |
| EBITDA | 413.93 | 875.32 | 520.1 | -399 |
| EBITDA Margin (%) | 17.33% | 12.18% | 9.22% | -9.72% |
| Restated profit for the period/year | 248.07 | 368.86 | 108.59 | -548.25 |
| Restated profit for the period/year Margin (%) | 10.38% | 5.13% | 1.93% | -13.35% |
| Return on Net worth | 17.54% | 31.63% | 14.06% | -82.58% |
| Return on Average Equity (“RoAE”) (%) | 19.22% | 38.05% | 15.12% | -58.45% |
| Return on Capital Employed(“RoCE”)(%) | 10.95% | 32.24% | 19.66% | -17.35% |
| Debt-Equity Ratio | 1.49 | 1.1 | 1.89 | 2.95 |
Balance Sheet
(Amount in Lakhs)
| Particulars | June 30, 2024 | March 31, 2024 | March 31, 2023 |
| EQUITY AND LIABILITIES | |||
| Shareholders’ funds | 1414.43 | 1166.35 | 772.48 |
| Non-current liabilities | 1075.58 | 966.40 | 795.08 |
| Current liabilities | 2213.22 | 1573.31 | 1898.39 |
| Total Equity and Liabilities | 4703.23 | 3706.06 | 3465.95 |
| ASSETS | |||
| Non-current assets | 1179.51 | 1045.70 | 1198.64 |
| Current assets | 3523.72 | 2660.36 | 2267.31 |
| Total Assets | 4703.23 | 3706.06 | 3465.95 |
Profit & Loss
(Amount in Lakhs, except EPS, % and ratios)
| Key Performance Indicator | For the period ended June 30, 2024 | For the year ended March 31, 2024 | For the year ended March 31, 2023 | For the year ended March 31, 2022 |
| Revenue from Operations | 2,388.87 | 7,188.22 | 5,639.31 | 4,106.11 |
| Growth in revenue from operations (%) | N.A. | 27.47% | 37.34% | -24.48% |
| Total Income | 2,397.18 | 7,238.12 | 5,673.05 | 4,154.37 |
| EBITDA | 413.93 | 875.32 | 520.1 | -399 |
| EBITDA Margin (%) | 17.33% | 12.18% | 9.22% | -9.72% |
| Restated profit for the period/year | 248.07 | 368.86 | 108.59 | -548.25 |
| Restated profit for the period/year Margin (%) | 10.38% | 5.13% | 1.93% | -13.35% |
Cash Flow
(Rs in Lakhs)
| Particulars | For the three months period ended June 30,2024 | As on March 31 | ||
| 2024 | 2023 | 2022 | ||
| Net Cash from Operating Activities | (416.39) | 61.05 | 1,334.66 | 36.07 |
| Net Cash used in Investing Activities | (161.54) | (138.58) | (79.41) | (248.46) |
| Net Cash used in Financing Activities | 758.06 | (472.63) | (766.34) | 203.05 |
| Net Cash Flow | 180.13 | (550.16) | 488.91 | (9.34) |
Capital structure
(₹ in Lakhs)
| Particulars | Pre-Issue as on June 30,2024(Amount in ₹) |
| Borrowings: | |
| Short term borrowings | 1129.47 |
| Long term borrowings | 975.75 |
| Total Borrowings | 2105.22 |
| Shareholders’ fund (Net worth) | |
| Share capital | 915.73 |
| Other Equity | 498.70 |
| Less: Revaluation Reserves | – |
| Total shareholders’ fund (Net worth) | 1,414.43 |
| Long term borrowings / shareholders’ fund(Net worth) ratio | 0.69 |
| Total borrowings / shareholders’ fund(Net worth) ratio | 1.49 |
SWOT ANALYSIS
- Strengths
- Diverse Service Offerings: The company provides a wide range of services including application development, mobile app development, cloud infrastructure, software quality assurance, generative AI, machine learning, IoT solutions, data science, and analytics.
- Global Presence: Being a subsidiary of SA Technologies Inc., USA, it benefits from a strong international presence and the ability to leverage global resources and expertise.
- Experienced Team: The company has a team of skilled professionals with expertise in various cutting-edge technologies.
- Weaknesses
- Market Competition: The IT consulting and software development market is highly competitive, with numerous players offering similar services.
- Dependency on Parent Company: As a subsidiary, there might be a dependency on the parent company for strategic decisions and financial support.
- Opportunities
- Growing Demand for AI and IoT: With the increasing adoption of AI and IoT technologies, there are significant opportunities for growth and expansion in these areas.
- Expansion into New Markets: There is potential for expanding services into new geographical markets and industries.
- Technological Advancements: Continuous advancements in technology provide opportunities to innovate and offer new solutions to clients.
- Threats
- Rapid Technological Changes: The fast pace of technological change can be a threat if the company fails to keep up with the latest trends and innovations.
- Economic Uncertainty: Economic fluctuations and uncertainties can impact client budgets and spending on IT services.
- Cybersecurity Risks: As with any IT company, there are inherent risks related to cybersecurity threats and data breaches.
IPO Details
SA Tech Software IPO Details
| Field | Details |
|---|---|
| Issue Type | SME IPO |
| Issue Size | ₹23.01 Crore |
| Offer Type | Fresh Issue |
| Price Band | ₹56 – ₹59 per share |
| Face Value | ₹10 per share |
| Lot Size | 2,000 Shares |
| Issue Open Date | July 26, 2024 |
| Issue Close Date | July 30, 2024 |
| Listing Exchange | NSE SME |
Object of the issue
(₹ in lakhs)
| Sr.No. | Particulars | Amount |
| 1. | Prepayment or repayment of all or a portion of certain outstanding borrowings availed by our company | Upto 917.73 |
| 2. | Funding the working capital requirements of our company; and | Upto 1080.00 |
| 3. | General Corporate Purposes |
Litigation involved
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