Interview conducted on 9th December, 2024.
In this insightful discussion, Manoj Joshi, Promoter of SA Tech Software India Ltd., shares the company’s growth story, its strategic focus on GCC business, and how AI and emerging technologies are shaping the future of digital solutions. Tune in to the conversation below:
Hi, this is Rumela Banerjee. In today’s episode of Small Cap Spotlight, I will be speaking to Manoj Joshi, promoter at SA Tech Software India Limited. SA Tech is a provider of AI and digital services.
It helps clients design, develop, and deliver products. Let us know more about the company’s journey so far and plans ahead. Many thanks for joining us, Mr. Joshi.
Rumela Banerjee: Could you start by telling our viewers about your core offerings, a bit about the foundation of SA Tech and where it stands today?
Manoj Joshi: Yeah, definitely. So, we have been in business for almost 15 years in India. Our core offerings are mostly related to GCC. We are trying to help clients across North America and as well as in Europe to set up their operations in India.
Rumela Banerjee: How is your domestic business growing and what are the plans ahead?
Manoj Joshi: So, if you compare our business from last year, we grew at around 60%. Our domestic business is also growing super fast and most of the time we work with Fortune 500 clients here in India. But our focus going forward is going to be GCC.
Rumela Banerjee: Can you share a little bit about the history of the Indian operations? Did they set up the India business from the beginning as part of the vision or later in their journey when they saw opportunity?
Manoj Joshi: So, India, when we started our India operations, India used to be our support center for the North America business. But as we grew, most of our clients, they wanted more help on technology side in India.
So, we started smaller. We started serving our clients in North America and that’s how we grew our business and that’s where we stand today. So, most of those clients’ relationships came initially from North America. But after that, we had a team here in India and they have developed this business for us.
Rumela Banerjee: What is the revenue mix you are targeting and how margins would look like?
Manoj Joshi: So, the revenue right now is 50-50 between GCC and India business. But as our focus has moved more towards GCC business because that’s more profitable as well as the higher gross profit margins.
So, focus is going to be GCC. So, that’s going to change maybe in a couple of years. It will be more 80% of the GCC business and then 20% of domestic.
Rumela Banerjee: Could you explain your build-operate-transfer model in detail and its typical timeline?
Manoj Joshi: Build-operate-transfer model is very interesting. So, the companies who are trying to set up their operations, to set up their operation, it’s not easy to set up your operations in India. So, what we offer our clients in North America as well as in Europe is we will build your operations, we will build a team for you, we will run the business for a couple of years and then we can transfer the whole business.
Then, we can transfer after operating for a couple of years back to you guys, back to the clients.
Rumela Banerjee: You mentioned expanding into Europe with CS team in the UK and EU. What’s your international expansion strategy and timeline?
Manoj Joshi: So, our parent company is based out of, even I operate from North America, from USA.
So, we have a good presence right now in USA. So, in quarter one, we are planning to open our operations in UK to cater our clients in Europe region and then expand there.
Rumela Banerjee: The presentation shows a shift toward GCC business with better profitability. What gross margins do you target in GCC versus consulting?
Manoj Joshi: So, obviously consulting business is domestic business here in India but when it comes to GCC, our margins are way higher compared to domestic business. That’s why the mix and we are trying to do more and more GCC business.
Rumela Banerjee: How has been your journey so far from the US to India and what led you to start into a GCC business?
Manoj Joshi: So, India is very interesting. Post COVID, the whole thinking about just supporting teams. India is no more just a supporting kind of teams building. Those boundaries are gone.
It’s a flat world now and the skills, the kind of innovation what Indians are doing today is just amazing and that’s helping us in growing the business right now.
Rumela Banerjee: Tell us about the market potential of the GCC industry in India and abroad.
Manoj Joshi: So, GCC outsourcing is not something new here. There are big players like TCS, Cognizant, Accenture, IBMs but the mix is changing. This is going to grow. India is the destination for talent and I’m just seeing lots and lots of opportunities going forward for our business.
Rumela Banerjee: We would like to know how a client gets onboarded in the GCC segment and then how and what all services do you provide to them and when do you hand over the whole setup to them?
Manoj Joshi: Yeah. So, initially, sometimes the engagements are very simple and easy. The client decides that we are setting up a huge operation like they are setting up operations in India but in other cases, we start smaller like we will start with a few projects with the client and then we want our client to visit our facilities and see what is the potential, how we can grow.
So, initially, start with a smaller relationship, then it grows over the period of time. So, apart from just providing the talent which is super important, we provide them the location where exactly you should be like depending on the skill set, what the client is looking for and then the location service and then the operation support from HR to delivery, all those things, those are part of our offerings on GCC.
Rumela Banerjee: You know, if you can throw some light on the cost advantage in India, which is a major factor for GCC growth?
Manoj Joshi: I guess cost advantage is 100% there but the bigger picture is the technology talent what India has got today and it is growing.
So, it’s not just the cost advantage but if you want to scale your business, you have to come to India. If you want to scale your technology talent pool, we have to come to India. So, those are the huge advantages India has today.
Rumela Banerjee: What are your after-sales services in the sense of retention of clients after the handover of the setup?
Manoj Joshi: Yeah, so our retention rate has been very high till now thanks to my team who has been delivering amazing results. We are always in touch with our client after we set up their operations, quarterly reportings that helps us in setting up and then our business is mostly technology first and then the GCC other services. So, our CTO is always in touch with the clients, what they are up to and we continuously update our clients about the new things for whatever is happening in technology.
So, that way and apart from that we have multiple ways to continue to connect with the clients.
Rumela Banerjee: Could you tell us about your clients and how many of them have been with you since inception?
Manoj Joshi: So, our India operations we started back in 2009. They are at least 30% of our clients who have been with us for almost more than five plus years. So, it’s a long-lasting relationship with our clients today.
Rumela Banerjee: You have Microsoft and Google as your tech partners. Could you elaborate on how you work with them?
Manoj Joshi: Our partnership with Google and Microsoft is helping us in bringing more lead generation kind of activities. So, that’s our specialization. We work a lot in these two technologies and that puts us apart from other our competition today.
Rumela Banerjee: Your tech offerings include generative AI and machine learning. How are you incorporating these technologies into your solutions?
Manoj Joshi: So, AI as we all know that is the future and my team like we have been investing a lot on AI technologies. So, after two years of a lot of innovation in AI, the clients are ready to deploy AI agents everywhere and because we have been working on AI for some time proof of concepts and all those things. So, as more and more are asking for AI related services, we are ready to offer those kind of activities services.
Rumela Banerjee: How is the group structured between the US, India and other countries?
Manoj Joshi: Yeah, so I operate as a global CEO and then I have a North America. My North America operations are being managed by our CEO Aditya and then Ritesh Sharma manages my India operations and then we have a team of CTOs and CHROs to help them.
Rumela Banerjee: What is the commercial arrangement between the US parent and the Indian entity?
Manoj Joshi: So, right now Indian entity is more or less independent. They are doing their own stuff. Going forward, American business is going to help us in bringing more GCC related activities. So, in future you can see more help from the parent company in building business in India.
Rumela Banerjee: Okay, that’s all for now. Many thanks for your time. Also, thank you for watching. Subscribe to SmallCap Spotlight for more such videos.