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JS Securities Limited – JS Research Beep (October 31, 2022)

Karachi, October 31, 2022 (PPI-OT): SYS: Corporate Briefing key takeaways

Systems Limited (SYS) recently announced 9MCY22 financial results wherein the company posted consolidated profit of Rs5,116mn (EPS: Rs18.4), +97% YoY. SYS held its corporate briefing today to discuss the nine-month results and outlook. We present key takeaways from the session:

Company posted revenue growth of 118% YoY in 3QCY22, whereas in dollar terms, the revenue grew 60% YoY. 10-12% of revenue contribution came from recently acquired business NDC Tech.

Management shared that around 750 new IT professionals joined SYS during 9MCY22, bringing total employees to 6,024. The average annual revenue contribution/employee stood at US$30,000.

According to the management, around 80% revenue of the company is dollar based, 5% Euro denominated while 15% is rupee based. On the other hand, 76% of the cost is rupee based.

Middle East was the main contributor to 9MCY22 revenue having a share of 45% in topline, followed by North America with 29% share, while 23% share came from local business.

Management shared that 94% of the revenue is of a recurring nature, whereas the total number of clients contributing in excess of US$100k expanded to 161 in 9MCY22 compared to 109 in the SPLY. Top 20 clients contributed about 47% to the overall revenue.

Management apprised that its portfolio of investments is also doing well. Its associates, Jomo and Jugnu are involved in the e-commerce business. Its wholly owned subsidiary, NDC Tech, has presence in 17+ countries and has 110+ financial institutions as clients. The company has 22+ years of experience in the segment. Exports contribute 66% of the total revenue of NDC Tech. SYS has also recently acquired a 100% stake in Treehouse consultancy which is in a similar business line as Systems Ltd.

According to the management, SYS has constituted a research team of highly skilled professionals to explore opportunities in the NFTs, metaverse and web-3.0 space.

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