Author - Ramakrishna Rallapalli

Oct 27^th 2022, Dallas: Cigniti Technologies, the world’s leading AI & IP-led Digital Assurance and Digital Engineering services company, has been identified as a “Contender” in ISG’s Provider Lens™ evaluation for Power & Utilities Next-Gen IT Services, 2022.

“With deep-domain expertise and a strong technology solutions portfolio, Cigniti is well-positioned to cater to industry-specific challenges, which is further testified by this recognition. We have an in-house Smart Meter and IoT lab that we leverage to deliver successful digital transformation acceleration projects for our customers in the Power & Utilities industry. We work with some of the largest global organizations in the industry, including a multi-national energy & utilities conglomerate, the largest water utilities corporations, and a major oil & gas company,”, said Srikanth Chakkilam, CEO of Cigniti.

Sairam Vedam, CMO at Cigniti, said, “Energy consumption patterns are disrupting leading to increasing use of AI for predicting demand, managing supply, and optimizing smart meter grid management. Being an IP-led company, we are at the forefront of innovation having expertise across digital assurance and spectrum of next-gen technologies like AI/ML, Cloud, Blockchain, and IoT. Our partnerships with leading testing tool vendors, hyperscalers and platform providers help us to be at the forefront of innovation. As we propel into the digital orbit, empowering global organizations to accelerate their digital transformation, we are proud to demonstrate our domain-centric prowess with this recognition from ISG.”

In an interview with CNBC TV18, Krishnan Venkatachary, CFO at Cigniti Technologies discusses the strong Q2 & H1 FY23 financial results and Cigniti's future outlook.

In an interview with CNBC Bajar, Krishnan Venkatachary, CFO at Cigniti Technologies discusses the strong Q2 & H1 FY23 financial results and Cigniti's future outlook.

Hyderabad, October 20, 2022: Cigniti Technologies Limited, world’s leading AI & IP-led Digital Assurance and Digital Engineering services company, announced the consolidated financial results for the quarter ended September 30, 2022.

The company’s reported Net Profit for Q2FY23 stood at Rs 41.53 crore as against Net Profit of Rs 31.00 crore in Q1FY23.

The Company’s Consolidated Revenue from operations for the quarter under consideration increased by 10% to Rs. 416.65 crore as against Rs. 377.97 crore in Q1FY23.

EBIDTA reported for the quarter ended September 30, 2022, stood at Rs. 60.76 crore up by 36% compared to Q1FY23.

Hyderabad, 24^th  September 2022: Mr. C V Subramanyam, Chairman & MD at Cigniti Technologies, received the award for ‘Outstanding Contributor to the Indo-US Corridor’ at the ‘18^th Indo-American Corporate Excellence Awards 2022’ held by the Indo-American Chamber of Commerce (IACC) on 23^rd September in Mumbai. The award was presented to Mr. C V Subramanyam by Mr. Suresh Kotak, Chairman, Kotak Commodities and Mr. Rahul Narwekar, Speaker of Maharashtra Legislative Assembly.

Cigniti is the world’s leading AI & IP-led Digital Assurance and Digital Engineering services company that helps Fortune 500 & Global 2000 companies accelerate their digital transformation journey. The IACC recognizes organizations and individuals that embody the promotion of Indo-US trade and have made outstanding contributions to boosting all spheres of the corporate ecosystem - business, industry, and the overall community between the two nations. In line with this, the award recognizes Mr. C V Subramanyam’s leadership and direction that helped Cigniti quickly grow to develop specialized high-tech capabilities and acquire firms in the US and India.

On receiving the award, Mr. C V Subramanyam said “I am honored to receive this award and grateful to the IACC for the recognition. This award is extremely special as Cigniti leapfrogs into the digital orbit and continuous its journey to accelerate the digital transformation of some of the leading and largest companies in the USA. This award further inspires the collective endeavor to realize our vision of ‘Together, we build a better future through technology-led transformation’. The U.S. is the front runner in digital adoption, and we strive to better Indo-U.S. relations through technology-driven trade in the corridor. 80% of Cigniti’s 4100+ workforce contribute towards the work we do in the Indo-US corridor.”

Dallas, TX, 8^th September 2022: Cigniti Technologies, the world’s leading AI and IP-led Digital Assurance and Digital Engineering services company has further strengthened its partnership with a leading American retailer by ensuring superior digital experience to their customers and by accelerating their digital ambitions. The Fortune 500 American retailer and Cigniti recently celebrated their 1st anniversary of the partnership, and they see tremendous scope for growth via digitalization that will assure the retailer’s business outcomes at an accelerated pace.

The American retailer is an established sporting goods recreation retailer in the U.S. with nearly close to 260+ stores across states and a portfolio of 25+ private label brands. It possesses deep consumer connections and growing mobile, omnichannel, and digital capabilities. The company offers a broad assortment of sports and camping equipment, footwear, apparel, and more through its retail and e-commerce platform. The client was looking to accelerate its Digital Transformation initiatives with mobile channel activation, achieve seamless business continuity, elevate its Digital Test CoE, enhance DevOps to integrated DevSecOps, fully automate Data Engineering (Test Data Management) and environment provisioning (Test Environment Management), and set up a real-time dashboard, Verita (Cigniti’s proprietary tool), across small cross-functional teams.

Nalgonda, 2^nd September 2022:  Cigniti Technologies, the world’s leading AI and IP-led Digital Assurance and Digital Engineering services company, launched a NICU/SNCU facility at the Mother and Child Health Center, Nalgonda district, Hyderabad today. The facility was launched as part of the company’s CSR efforts undertaken in the field of "Health" to create a long-term impact by equipping government hospitals with better health infrastructure. The facility was inaugurated by Mr. C V Subramanyam, Chairman and Managing Director at Cigniti Technologies, along with Mr. Sairam Vedam, CMO at Cigniti Technologies, Ms. Urmila Markili, Senior Vice President at Cigniti Technologies and Mr. Midhun Pingili, Senior Director Marketing at Cigniti Technologies. Mr. Kancharla Bhupal Reddy, MLA, Nalgonda, Govt. of Telangana and Mr. Mayur Patnala, Founder and CEO, Nirmaan Organization, graced the occasion at the hospital.

Cigniti joined hands with Nirmaan Organization to address the acute shortage of NICU/SNCU beds and donated medical equipment like Radiant Warmers, Phototherapy machines, Pulse oximeters, Syringe and Infusion pumps, Multipara monitors, HFNC machines, and air conditioners for the ward, which are essential to serve critically ill or premature newborn infants who are at the age of less than 28 days. The supported facility serves a population of 14 lakh people in the district headquarters and rural villages surrounding the district. With this upgrade, the facility would be able to serve about 1,000 infants per year.

"We are passionately focusing on making healthcare accessible and available for all. A lack of infrastructure in rural and remote areas is a major contributor to a high rural infant mortality rate. By equipping the facility with life-critical medical equipment, we’re trying to offer our contribution in improving care quality available to the residents of Nalgonda”, stated C.V. Subramanyam, Chairman and Managing Director of Cigniti Technologies, on the occasion.

Post Covid-19, the ward will be useful in treating infants who require specialized care and highly valued medicines that are very expensive in private set-ups," (Quote from Hospital management)

Hyderabad, India, 9th August 2022 – Cigniti Technologies, the world’s leading AI and IP-led Digital Assurance and Digital Engineering services company, has unveiled a new brand identity reflecting its renewed vision to help its clients in accelerating their digital transformation journeys and achieve market leadership.

In addition to conveying the futuristic vision, the new logo aspires to uphold a contemporary attitude, produce a powerful visual depiction of a shift toward digitalization, and at the same time imbibe the company's software quality-first mindset. Additionally, it aims to exemplify the intense commitment and forward-thinking transformation that the business is embracing through innovation, automation, and artificial intelligence.

The company’s digital thinking and digital avatar are a reflection of its ability to engineer, assure, and technologically transform and accelerate outcomes for global companies, helping them achieve market leadership in their chosen lines of business.

Hyderabad/Mumbai, July 29, 2022: Cigniti Technologies Limited, world’s leading AI & IP-led Digital Assurance and Engineering services company, announced the consolidated financial results for the quarter ended June 30, 2022.

The company’s reported Net Profit for Q1FY23 stood at Rs 31.00 crore as against Net Profit of Rs 22.60 crore in Q4FY22, increased by 37%.

The Company’s Consolidated Revenue from operations for the quarter under consideration increased by 10% to Rs 377.97 crore as against Rs 344.08 crore in Q4FY22.

EBIDTA reported for the quarter ended June 30, 2022, stood at Rs. 44.55 crore for the quarter and year ended June 30, 2022, respectively.

Smallcap IT company Cigniti Technologies, which has a market capitalization of around Rs 1,100 crore, has laid out a roadmap to become a $500-million (Rs 3,800-crore) company by 2026. Srikanth Chakkilam, CEO & Non- Executive Director, Cigniti Technologies, says the plan includes growing both organically and inorganically. “Considering the blueprint and current scenario, though we do not give guidance, we are confident of growing organically at high teens," he says in an interview with ETMarkets.com. Edited excerpts:

Cigniti mainly drives revenue from 7-8 sectors. Which segment is working the best for you?
While Cigniti is sector agnostic, 75% of our revenues come from five key sectors – BFSI (19.6%), Travel, Transport, Hospitality Entertainment (16.2%), Retail and Ecommerce (14.9%), HCLS (13.4%), and ISV (11.5%). These industries are supporting Cigniti's revenue growth and will continue to do so in the coming years, as seen by the demonstrable expansion of digital transformation in the market landscape in these sectors.

What was your attrition rate during the last 12 months? What is the revenue per employee?
Attrition percentage at the close of FY22 was at 30.31%. The revenue per employee in US dollar terms is $45,378.

The IT industry is seeing high attrition. Should one look at it positively that there is no dearth of jobs in the industry (which is a sign of growth) or negatively that companies have been unable to retain their talent?
Yes, attrition is at an all-time high in the IT industry. Organisations throughout the world have been experimenting to close the gap, which has resulted in a lot more overhead across work levels and a lack of ability to genuinely interact with their environment. Interpreting attrition in recent times is slightly more complicated than usual. The current job market has become highly volatile and costing businesses yet is lucrative for the candidates.

While employee turnover is an expected phenomenon in any organization, today we are battling how to manage prospective candidates to honor the offer and stay warm until their onboarding. The high attrition has not only increased the cost of hiring and training new employees, but has also led to incurring direct and indirect costs that include the costs of advertising available positions, performing background checks, paying out referral bonuses etc. Internal costs include management's time spent reviewing resumes, making calls and conducting interviews, as well as the time spent by dedicated recruiting staff and the HR department.

In order to smooth out these challenges, companies are attempting a multifaceted approach that includes increasing fresh hiring to increase the supply pool, accelerating re-skilling programmes through online learning, deploying adjacent-talent skills for on-the-job learning, and providing employees with a holistic experience, among other things.

Our highest priority in the last year has been to retain top talent and incubate them through robust internal training and certification programmes, creating internal cross-functional opportunities and ensuring frequent communication and engagement initiatives to augment the stickiness and belongingness to the organisation. Our vision to diversify our services into adjacencies is a high priority task that will open more opportunities to attract new talent and invite fresh ideas and perspectives to enter the mix.

Being optimistic and finding new opportunities amidst the most difficult times is a lesson learnt during the pandemic. Putting this into practice, we have embraced the ongoing attrition rampage as a challenge and are continuing to explore ways to deal with it in the most positive way creating a better culture for the in-house talent and opening up opportunities to the new talent that is looking forward to coming onboard.

Your revenue saw a significant jump in Q4 YoY, but that was not reflected in the bottom-line. What were the reasons?
It is a universal phenomenon that aggressive growth derails profitability to a marginal extent.

In our case, we have been growing over 2017-20 at an average of about 8%, and stabilizing EBITDA at 15%. However, the pandemic gave us an opportunity to rethink and rebalance our portfolio to make it more balanced and de-risked. Coupled with this, we also commenced our journey of becoming a $500 million company by 2026 effective 2021. This necessitated investment in both building capabilities and sales and marketing infrastructure. Coupled with this, the labor market has been volatile, which needed investment on a continuous basis for retention and rehiring.

All these factors added up for reduction in margin which we expect to neutralize to a greater extent in the coming year.

What are the biggest challenges for the industry and for you in the short to mid-term? Is inflation and the rising dollar likely to hit your business?

The entire software industry is going through a talent crunch and Cigniti is not an exception. We have mitigated these risks through several strategic interventions such as focusing on boarding more freshers from colleges and training them. We are also investing on upskilling our talent pool through a well-defined L&D roadmap.

Cigniti’s 85% of revenues come from North America and the dollar variation is not a concern as we have a natural hedge by way of expenditure being spent at onsite. Inflation is a nominal worry and constant in any business and we shall deal with this appropriately.

What is the outlook for next one year? What kind of revenue growth are you expecting going ahead?

Cigniti is the world's leading digital assurance and quality engineering services company. The digital assurance market in particular (as per various sources) is witnessing an explosive growth rate. And there is an increased demand from global companies for a specialist in digital assurance solutions.

The board recently approved the acquisition of Aparaa Digital (RoundSqr) a specialist in AI/ML, data and blockchain engineering services. This acquisition would strengthen Cigniti’s digital ambitions and help offer digital engineering services to its clients. We have a journey to be $500-million company by 2026 and this involves both organic and inorganic growth. Considering the blueprint and current scenario, though we do not give guidance, we are confident of growing organically at high teens.