Analytics: Financial Performance Review
ValueNotes has conducted a study of the financial performance of 12 pure-play analytics service providers (their size, operating margins, solvency, and efficiency), principally in the Indian analytics industry. The study, which covers fiscal years 2007 through 2011, found that since 2007, the companies in the sample achieved an aggregated compounded annual growth rate (CAGR) of 39%. Revenue of the population of companies in 2011 was INR 2,445 mn, with an increasing dominance of large sized companies (INR 200+ mn), though other companies have seen a slow but steady growth in revenue since 2007.
ValueNotes has found that the aggregated revenue per employee of companies in the sample was INR 1,117k in 2011, and has been steadily increasing at a CAGR of 8% from 2007 to 2011. A key finding is that although the pure-play analytics companies in India have successfully controlled their operating costs since 2010, employee costs as a percentage of revenue remain high, at 50%. Furthermore, medium sized companies (INR 50 - 200 mn) have taken on debt since 2008 to improve their financial performance, and currently their debt to equity ratio is the highest amongst their peers. The report includes service provider profiles of 12 analytics firms, along with their service offerings, key financial ratios, shareholding patterns, and names of directors.
ValueNotes has found that the aggregated revenue per employee of companies in the sample was INR 1,117k in 2011, and has been steadily increasing at a CAGR of 8% from 2007 to 2011. A key finding is that although the pure-play analytics companies in India have successfully controlled their operating costs since 2010, employee costs as a percentage of revenue remain high, at 50%. Furthermore, medium sized companies (INR 50 - 200 mn) have taken on debt since 2008 to improve their financial performance, and currently their debt to equity ratio is the highest amongst their peers. The report includes service provider profiles of 12 analytics firms, along with their service offerings, key financial ratios, shareholding patterns, and names of directors.
RESEARCH METHODOLOGY
EXECUTIVE SUMMARY
1 MACROECONOMICS
11 Global economy
12 Major economic regions
13 National economic performance of select countries
14 Currency movements
15 Global capital markets
2 INDUSTRY INSIGHTS
21 Indian IT-BPO industry revenue
22 IT-BPO contribution towards India’s GDP
23 IT-BPO contribution towards India’s exports
3 OPERATING EARNINGS
31 Total income
32 Revenue per Employee
4 EXPENSES
41 Operating cost
42 Employee cost
43 Total cost per employee
5 PROFITABILITY
51 EBITDA Margin
52 EBIT Margin
53 Net Profit Margin
54 Net profit per employee
6 OPERATING EFFICIENCY
61 Debtor Days
62 Creditor Days
63 Debtor days versus creditor days
64 Net Operating Cycle
7 SOLVENCY
71 Quick Ratio
72 Debt Ratio
73 Debt/Equity Ratio
74 Interest coverage
8 CAPITAL EFFICIENCY
81 Return on Capital Employed
82 Return on Equity
83 Return on Assets
9 SERVICE PROVIDER EVALUATION
10 COMPANY PROFILES
101 ActiveCubes
102 Chainalytics
103 DenuoSource
104 Fractal Analytics
105 Glyph
105 HansaCequity
106 ITCube
107 Manthan
108 Modelytics
109 MuSigma
1010 Nabler
1011 TEG Analytics
1012 Vehere
11 APPENDIX
EXECUTIVE SUMMARY
1 MACROECONOMICS
11 Global economy
12 Major economic regions
13 National economic performance of select countries
14 Currency movements
15 Global capital markets
2 INDUSTRY INSIGHTS
21 Indian IT-BPO industry revenue
22 IT-BPO contribution towards India’s GDP
23 IT-BPO contribution towards India’s exports
3 OPERATING EARNINGS
31 Total income
32 Revenue per Employee
4 EXPENSES
41 Operating cost
42 Employee cost
43 Total cost per employee
5 PROFITABILITY
51 EBITDA Margin
52 EBIT Margin
53 Net Profit Margin
54 Net profit per employee
6 OPERATING EFFICIENCY
61 Debtor Days
62 Creditor Days
63 Debtor days versus creditor days
64 Net Operating Cycle
7 SOLVENCY
71 Quick Ratio
72 Debt Ratio
73 Debt/Equity Ratio
74 Interest coverage
8 CAPITAL EFFICIENCY
81 Return on Capital Employed
82 Return on Equity
83 Return on Assets
9 SERVICE PROVIDER EVALUATION
10 COMPANY PROFILES
101 ActiveCubes
102 Chainalytics
103 DenuoSource
104 Fractal Analytics
105 Glyph
105 HansaCequity
106 ITCube
107 Manthan
108 Modelytics
109 MuSigma
1010 Nabler
1011 TEG Analytics
1012 Vehere
11 APPENDIX
TABLE OF EXHIBITS
Exhibit i: Service Provider Categories and Sample Size
Exhibit ii: Parameters Used for Service Provider Comparison
Exhibit iii: Legend Used for Service Provider Comparison
Exhibit iv: List of Abbreviations
Exhibit v: Top Five Service Providers in the Analytics Segment in 2011
Exhibit 1: Global GDP Growth Rate from 2007 to 2013
Exhibit 2: European Union (EU) GDP Growth Rate from 2007 to 2013
Exhibit 3: BRIC (Brazil, Russia, India, China) GDP Growth Rate from 2007 to 2013
Exhibit 4: India GDP Growth Rate from 2007 to 2013
Exhibit 5: USA GDP Growth Rate from 2007 to 2013
Exhibit 6: UK GDP Growth Rate from 2007 to 2013
Exhibit 7: Indian Currency Movements from 2007 to 2011
Exhibit 8: Capital Market Performance from 2007 to 2011
Exhibit 9: Indian IT-BPO Revenue from 2007 to 2012
Exhibit 10: Indian IT-BPO Contribution to the National GDP
Exhibit 11: Indian IT-BPO Contribution to the National Exports
Exhibit 12: Revenue and Growth Over Five Years
Exhibit 13: Revenue by Service Provider Type
Exhibit 14: Revenue Change (YoY) by Service Provider Type
Exhibit 15: Revenue of Analytics Segment by Service Provider in 2011
Exhibit 16: Revenue Per Employee (RPE) Over Five Years
Exhibit 17: RPE by Service Provider Type
Exhibit 18: RPE Change (YoY) by Service Provider Type
Exhibit 19: Operating Expense as a Percent of Revenue For Five Years
Exhibit 20: Operating Expense Change (YoY) by Service Provider Type
Exhibit 21: Operating Expense as a Percent of Revenue by Service Provider Type
Exhibit 22: Employee Cost as a Percent of Operating Expense Over Five Years
Exhibit 23: Employee Cost as a Percent of Revenue Over Five Years
Exhibit 24: Total Cost Per Employee Over Five Years
Exhibit 25: Total Cost Per Employee by Service Provider Type
Exhibit 26: EBITDA Margin Over Five Years
Exhibit 27: EBITDA Margin by Service Provider Type
Exhibit 28: EBIT Margin Over Five Years
Exhibit 29: EBIT Margin by Service Provider Type
Exhibit 30: NPM Over Five Years
Exhibit 31: NPM by Service Provider Type
Exhibit 32: Net Profit Per Employee Over Five Years
Exhibit 33: Net Profit Per Employee by Service Provider Type
Exhibit 34: Net Profit Per Employee Change (YoY) by Service Provider Type
Exhibit 35: Debtor Days Over Five Years
Exhibit 36: Debtor Days by Service Provider Type
Exhibit 37: Debtor Days Change (YoY) by Service Provider Type
Exhibit 38: Creditor Days Over Five Years
Exhibit 39: Creditor Days by Service Provider Type
Exhibit 40: Debtor Days Versus Creditor Days
Exhibit 41: Net Operating Cycle Over Five Years
Exhibit 42: Net Operating Cycle by Service Provider Type
Exhibit 43: Quick Ratio Over Five Years
Exhibit 44: Quick Ratio by Service Provider Type
Exhibit 45: Quick Ratio Change (YoY) by Service Provider Type
Exhibit 46: Debt Ratio Over Five Years
Exhibit 47: Debt Ratio by Service Provider Type
Exhibit 48: Debt/Equity Ratio Over Five Years
Exhibit 49: Debt/Equity Ratio by Service Provider Type
Exhibit 50: Debt/Equity Ratio Change (YoY) by Service Provider Type
Exhibit 51: Interest Coverage Over Five Years
Exhibit 52: Return On Capital Employed (ROCE) Over Five Years
Exhibit 53: ROCE by Service Provider Type
Exhibit 54: Return On Equity (ROE) Over Five Years
Exhibit 55: ROE by Service Provider Type
Exhibit 56: Return on Assets (ROA) Over Five Years
Exhibit 57: ROA by Service Provider Type
Exhibit 58: Consolidated Ranking of Top Five Service Providers
Exhibit 59: Revenue Ranking of Top Five Service Providers
Exhibit 60: RPE Ranking of Top Five Service Providers
Exhibit 61: Total Cost Per Employee Ranking of Top Five Service Providers
Exhibit 62: EBITDA Margin Ranking of Top Five Service Providers
Exhibit 63: Net Profit Per Employee Ranking of Top Five Service Providers
Exhibit 64: Net Operating Cycle Ranking of Top Five Service Providers
Exhibit 65: Quick Ratio Ranking of Top Five Service Providers
Exhibit 66: Debt/Equity Ratio Ranking of Top Five Service Providers
Exhibit 67: ROCE Ranking of Top Five Service Providers
Exhibit 68: ROE Ranking of Top Five Service Providers
Exhibit i: Service Provider Categories and Sample Size
Exhibit ii: Parameters Used for Service Provider Comparison
Exhibit iii: Legend Used for Service Provider Comparison
Exhibit iv: List of Abbreviations
Exhibit v: Top Five Service Providers in the Analytics Segment in 2011
Exhibit 1: Global GDP Growth Rate from 2007 to 2013
Exhibit 2: European Union (EU) GDP Growth Rate from 2007 to 2013
Exhibit 3: BRIC (Brazil, Russia, India, China) GDP Growth Rate from 2007 to 2013
Exhibit 4: India GDP Growth Rate from 2007 to 2013
Exhibit 5: USA GDP Growth Rate from 2007 to 2013
Exhibit 6: UK GDP Growth Rate from 2007 to 2013
Exhibit 7: Indian Currency Movements from 2007 to 2011
Exhibit 8: Capital Market Performance from 2007 to 2011
Exhibit 9: Indian IT-BPO Revenue from 2007 to 2012
Exhibit 10: Indian IT-BPO Contribution to the National GDP
Exhibit 11: Indian IT-BPO Contribution to the National Exports
Exhibit 12: Revenue and Growth Over Five Years
Exhibit 13: Revenue by Service Provider Type
Exhibit 14: Revenue Change (YoY) by Service Provider Type
Exhibit 15: Revenue of Analytics Segment by Service Provider in 2011
Exhibit 16: Revenue Per Employee (RPE) Over Five Years
Exhibit 17: RPE by Service Provider Type
Exhibit 18: RPE Change (YoY) by Service Provider Type
Exhibit 19: Operating Expense as a Percent of Revenue For Five Years
Exhibit 20: Operating Expense Change (YoY) by Service Provider Type
Exhibit 21: Operating Expense as a Percent of Revenue by Service Provider Type
Exhibit 22: Employee Cost as a Percent of Operating Expense Over Five Years
Exhibit 23: Employee Cost as a Percent of Revenue Over Five Years
Exhibit 24: Total Cost Per Employee Over Five Years
Exhibit 25: Total Cost Per Employee by Service Provider Type
Exhibit 26: EBITDA Margin Over Five Years
Exhibit 27: EBITDA Margin by Service Provider Type
Exhibit 28: EBIT Margin Over Five Years
Exhibit 29: EBIT Margin by Service Provider Type
Exhibit 30: NPM Over Five Years
Exhibit 31: NPM by Service Provider Type
Exhibit 32: Net Profit Per Employee Over Five Years
Exhibit 33: Net Profit Per Employee by Service Provider Type
Exhibit 34: Net Profit Per Employee Change (YoY) by Service Provider Type
Exhibit 35: Debtor Days Over Five Years
Exhibit 36: Debtor Days by Service Provider Type
Exhibit 37: Debtor Days Change (YoY) by Service Provider Type
Exhibit 38: Creditor Days Over Five Years
Exhibit 39: Creditor Days by Service Provider Type
Exhibit 40: Debtor Days Versus Creditor Days
Exhibit 41: Net Operating Cycle Over Five Years
Exhibit 42: Net Operating Cycle by Service Provider Type
Exhibit 43: Quick Ratio Over Five Years
Exhibit 44: Quick Ratio by Service Provider Type
Exhibit 45: Quick Ratio Change (YoY) by Service Provider Type
Exhibit 46: Debt Ratio Over Five Years
Exhibit 47: Debt Ratio by Service Provider Type
Exhibit 48: Debt/Equity Ratio Over Five Years
Exhibit 49: Debt/Equity Ratio by Service Provider Type
Exhibit 50: Debt/Equity Ratio Change (YoY) by Service Provider Type
Exhibit 51: Interest Coverage Over Five Years
Exhibit 52: Return On Capital Employed (ROCE) Over Five Years
Exhibit 53: ROCE by Service Provider Type
Exhibit 54: Return On Equity (ROE) Over Five Years
Exhibit 55: ROE by Service Provider Type
Exhibit 56: Return on Assets (ROA) Over Five Years
Exhibit 57: ROA by Service Provider Type
Exhibit 58: Consolidated Ranking of Top Five Service Providers
Exhibit 59: Revenue Ranking of Top Five Service Providers
Exhibit 60: RPE Ranking of Top Five Service Providers
Exhibit 61: Total Cost Per Employee Ranking of Top Five Service Providers
Exhibit 62: EBITDA Margin Ranking of Top Five Service Providers
Exhibit 63: Net Profit Per Employee Ranking of Top Five Service Providers
Exhibit 64: Net Operating Cycle Ranking of Top Five Service Providers
Exhibit 65: Quick Ratio Ranking of Top Five Service Providers
Exhibit 66: Debt/Equity Ratio Ranking of Top Five Service Providers
Exhibit 67: ROCE Ranking of Top Five Service Providers
Exhibit 68: ROE Ranking of Top Five Service Providers
