Interview recorded on 13th January, 2025.
From its inception in 2012 to its recent IPO, Capital Numbers Infotech has charted an impressive growth path. CMD and CEO, Mukul Gupta sheds light on the company’s global footprint, investment in cutting-edge technologies, and long-term vision. Tune in to hear how the firm is staying ahead in a competitive market while ensuring top-tier service and corporate governance.
Capital Numbers Infotech was born with the idea of providing digital solutions to businesses. This includes mobile, web and e-commerce. Recently listed. Let’s talk to the management to understand more about the company, its businesses and what its vision is. I have with me local group that the promoter, CMD and CEO of Capital Numbers Infotech. Hi Mukul, and let’s start off by getting you to introduce the company to all of our viewers. If you had to describe the services that Capital Numbers offers and a little bit about the genesis of the company.
Mukul Gupta: I’m guessing, first and foremost, that would be now. And your viewers, thank you so much for having capital members, on this platform. My name is local. Good time. The founder and CEO of the company, to briefly introduce capital members. So we basically help companies become faster, more efficient and more profitable by leveraging technologies such as cloud and artificial intelligence.
Our company basically started in 2012. We are a bootstrapped company. We have grown every year on an error year basis in the past 12 years, since we came in to be, we have also remained profitable since inception. So we there has never been any year where we have not posted decent profits. And we are also litigation free company.
So to date, we do not have any government or non-government litigation pending on us, going on, on the company. We are 100% expert driven companies, about 70% of the revenue basically comes from the UK and US, markets. We also have the few companies in SMEs space to have the ISO 9001, which is around quality management, ISO 27,001, which is around information security and Soc2 type two compliant company.
The reason it is important is when, companies are looking for providers based in India, development partners based in India, it is very important for them to be able to trust and operate and know that their intellectual property and data is going to be safe with GDPR and all that is very critical for them to be able to trust their partners.
And we have we are one of the few companies in India which has invested in the infrastructure and the processes to prove to our clients that we are committed to the information security and data protection. We have also won around 20 plus national and international awards. So the Financial Times has continuously awarded us since past four years for of its performance.
This this this last calendar year, we have won awards from the Economic Times, from the Times of India. I personally have been received the award from the Economic Times in 2021, from one of the most promising entrepreneurs of India. Clutch, which is a leading B2B directory. For finding IoT providers as ranked best or the top thousand I.T providers globally.
So, what we are most proud of is you have one of the highest rated development companies in India as well. What I mean by that is whenever prospective clients are going on to platform such as pilot data and good firms and looking for vendors, we ranked number one across this platform based on 300 plus five star reviews that we have received across this platforms.
We also rank very high on Glassdoor, which is an employee review portal. And Ambition Works, which is led by.com where we have, 4.5 plus rating, which is unheard of in I.T industry, which basically goes on to prove that not only we are a company, which is which is highly qualified version of certifications, which has the right clientele based on our reviews, but we are loved by our employees as well.
Mubina Kapasi: Now you’re the founder. So tell us that along your career journey and along your career path. How did capital numbers come to be and what were the early beginnings like?
Mukul Gupta: So I started my journey in 2000 to, basically, I was working with another I.T services company in 2008 to 2012. I spent most of my time in the UK, where digital marketing was just becoming a buzzword. Like AI is a buzzword today. In 2012, digital marketing was a buzzword, and I realized staying in London, that, the marketing teams who have the mandate for doing digital marketing do not have the tech skills to require the digital assets required by them to do marketing activities all.
So with that mindset, I saw as a market gap that all of these agencies, all of these marketing teams want to go digital, but they do not know how. And I saw a gap in the particular market and the thought that, okay, might be a good idea to get into, services business where I can support, marketing teams to create digital assets for them.
With that idea in mind, we were researching several brand names of how what should we call our companies? And obviously we wanted to create something that didn’t existed. And we thought, okay, capital numbers is something that doesn’t exist. A capital, so, like, capital letters exists, but capital numbers don’t exist. So I cannot create something that doesn’t exist.
So we just chose capital numbers as our brand name. In fact, one of the first clients that we signed up was Harvard Health Policy Review. They came on to our website and submitted an inquiry for creation of a website through which they can do their, the magazine subscription and content behind a paywall. It’s very common tech now.
Back then in 20 1213, it was not so common. I knew it would be a very competitive contract. So I basically told the Harvard guys that, okay, I will do this project for free. But what I want you to do is if you like the work that we have done, why don’t you go ahead and endorse us on your website so that people know that you do a good job?
Thankfully they agreed to that and we did a good job. So they went ahead and endorsed us on their website. And then after that also introduced us to Harvard Science Review. So we did Harvard Health Policy Review, Hired Science Review, and then I used that as my sort of, marketing book as a to approach other bigger companies.
And say that, okay, if a Harvard can trust us and so can you.
That was our marketing hook. And we used that to get bigger and better contract. So fast forward to 2024. We currently serve Global Santal with 500 plus employees working out of India as support team for some of the major brands worldwide.
Mubina Kapasi: So from bootstrapped to now, of course, the IPO and gaining that public status in June 2024. Tell us how does this, process of becoming listed and going public essentially align with your long term vision for the company?
Mukul Gupta: So yeah, as the company has been growing at a particular pace, we now feel that we have the right platform where we have built the right management team, the technology expertise to sort of scale and become a national player.
So obviously with the, the main idea behind transitioning from a private company to a public company is, to sort of, get access to the capital so that we can sort of scale faster and become, like a national player, and obviously also to be transitioning into a public company. What we also want to is a better brand image and credibility among potential clients and employers as well.
So as we want to scale our management team, as we want to target bigger and larger clients, it becomes a more important for us to be able to demonstrate that, hey, we’re a public company. You can trust on our corporate governance. We can trust, what we are doing. And that is the main reason why we transitioned from private to a public company.
Our target is that, really in the next 3 to 5 years, you want we see capital numbers as a nationally recognized player. Number one. We are just being a regional player. So we enjoy quite a good reputation in eastern India, typically in Kolkata region. So we enjoy a good reputation over here. But now we feel that, okay, we have matured enough and we have the capability to be a national player to go to that level and obviously become a firm, mid-cap player in the stock market as well.
Mubina Kapasi: We’re looking at your numbers in the last 4 or 5 odd years, and it’s double the revenue and the profit. Last year, your profit surged quite significantly 50%. So if you could talk to us about the key drivers of the top line and the bottom line and the sustainability as well of these growth figures.
Mukul Gupta: So first, if you look at revenue. So the reason for revenue growth is again, coming back to, our company’s credentials that we have built. So the capability to deliver projects as demonstrated across these platforms, our quality certifications and our ability to represent our sales market ourselves is what is driving the revenue. And obviously consistently investing in technology, bringing new services in front of our clients.
Profitability is basically, basically determinant of several decisions that we have taken. So, we used to do a lot of subcontracting in the sense that post Covid and, and then we, the access to talent was not as available in the Asian part. So we sort of reverse subcontracting. So we cut down all that. We adopted business practices such as having a lean bench.
So bench basically means for those who don’t understand it. And many of your audience might not. So bench basically means employees who are basically sitting and doing nothing or doing the, revenue generating work. So by reducing our bench and adopting a nimble strategy where we are doing just-in-time recruitment, those practices obviously going to higher margin services.
So instead of just doing standard digital engineering, focusing more on artificial intelligence, you cloud engineering and your development on platform system integration with Salesforce and all that. So going higher up in the ladder, along with coupled with the agile practices that we have, is what drove our profitability.
Could you tell us a little bit about your geographic presence? Of course, a big chunk of your, revenue comes from the US. You have a subsidiary that you operate from over there. So could you tell us about, where the pie is coming in from, where the maximum of the revenue chunk is actually coming in from?
And how is it essentially going to change, perhaps.
Yeah. So, if you look at our company’s DNA, my entire career spanning past 21, 22 years, I have always lived and worked abroad. So capital numbers as a company is very finely tuned or more adjusted, but adjusted to working with the Western world. So we are more natural in that environment. Are we are working with international clientele?
I do not see any change in that. Our revenue mix with the classical mix is pretty diversified. So US contributes about, 50% of the revenue. United Kingdom currently contributes about 20% of the revenue, remaining 30% last financial year mainly came from, Western Europe. This year we have not started investing in the Middle Eastern markets as well.
So a lot of revenues also coming from we are seeing good initial response over there. So that’s the kind of, revenue breakdown that we have geography wise.
Mubina Kapasi: So, like you said, US is a big market for you and now Middle East as well. Could you tell us where your focus will be, in terms of expansion?
Mukul Gupta: So, US will definitely remain a very important market for us. One of the key things that we want to do is expansion of our sales and marketing activities in the US. So currently, even though we have a US based subsidiary, but, I mean, we are basically a 100% offshore company, so we do not have any local presence.
By which I mean we do not really have physical presence of manpower sitting there interacting with the client. So one of the first things that we want to do is in the key markets that we are currently operating in, which is again US and UK, we want to set up a local teams. So in the US we want to establish at least three local offices where we will have local personnel around with the personnel in UK as well.
In this financial year, we have already set up an office in the Netherlands and we have already appointed a director in Netherlands region to basically look at the Western European business. So that will be one of the key things we are doing is establishing a local presence. What it will do for the company is two things. First and foremost is we will be able to do a lot, many more events.
Currently, all our business basically comes through digital in the sense of the digital marketing work that we are able to do to bring business in. We do not do a lot more locally. Events or doing local conferences is something that we are very keen on doing in terms of expansion of our marketing. That will make us a revenue increase, the widen the net and we will have a lot more customer interaction, customer interactions.
The second thing that will happen is, we currently are a pure offshore provider, so we do not get a 100% volunteer of our customers, our customers who are in the banking and health, that they are very cautious and they want to sort of, adjust their bets and have multiple vendors open a contract because, again, they want to make sure that they are there.
They want to do it. They risk their development as well. So by having the local presence as well, we believe we will have much larger wallet share as well. We will also be able to command a little bit higher prices. Again when we are a pure offshore player. Our prices are a little bit, sort of not muted I would say, but let’s say standard by being a hybrid player where we have a local presence, you will would command slightly higher pricing as well.
So that is what we are able to we are seeing. And again, what we are also considering is expansion of service lines as well. So this year already we are expanded into Salesforce partnerships into Adobe Partnerships. So we are getting more into system integration business. So we’ll continue to pursue those ideas as well.
Mubina Kapasi: You mentioned that you work on just in time hiring. Would you say that finding skilled workers could be a bit of a challenge for you? Or if not that, then are there any other challenges that you face while running the business on a day to day basis?
Mukul Gupta: So Just-In-Time hiring is a strategy we adopted based on the current market conditions. So definitely it was not there during Covid times when demand for tech talent was its as its peak. And such as we are commanding 1015 lakh rupees as salaries right now we are seeing that okay, there is a demand, so there is availability of manpower.
So if it is to sort of adopt an approach where instead of having a large bench, we just go ahead and find talent who are just available within the short notice. A short notice is the one month or less. So whereas as soon as a particular contract, gets into a stage where we are about 90% confident that, okay, this contract might get fixed, we start the sourcing portion of that.
So we have very, well integrated operations process where as soon as a sales process is about reaching a maturity and a deal reaches a maturity, the operations teams are notified and we start the sourcing. So as soon as the client is onboarded, we have 30 days gap to sort of find the resources. Well, that policy at process, we have been a fine tuning for the past year or so.
A lot more than a year. So I am sorry this post Covid and it has worked well for us. So in the sense that we don’t see, any challenge with that, which is actually what has led to implemented margins as the market dynamics change, we will definitely adopt. We do maintain a bench in the sense that we always have a bench of about, let’s say, 25 people or always on the bench, but it is still not like a big bench number in terms of what you would expect from what you see in the generating companies.
Mubina Kapasi: Could you share a little bit about your capital allocation plans? I think one of the purposes of raising money for the IPO was to, you know, look at inorganic growth. The target has not been identified, of course, but could you just share how and where you’re planning to allocate your capital over the next couple of years?
Mukul Gupta: So in terms of capital allocation plans, we have earmarked around 20 carrots for our inorganic acquisition. Now, the inorganic additions strategy, we haven’t identified any particular company yet. The two ideas that we are pursuing behind, inorganic acquisition would be either talent or technology. So we realize that every year, we would be adding around 250 employer to the company.
And we also set up a development center in Gurgaon, which is currently at around 5060 Suter. If I am not wrong, so we are currently thinking of looking at sort of building the capacity from ground up. Why not sort of go ahead and acquire a smaller company. So this is something that again, we haven’t the play behind that would be ideal to access to talent a bit higher a bit.
So sorry. By a company out which already has manpower available or to acquire a company which has a technology available which you can then take to market. So that’s the kind of a, thinking that we have around acquisition as well. We’ll be doing multiple acquisitions. Alphabetical order is just the initial that we have, sort of your mark for it.
Any excess that is required will be funded from our cash surplus that we currently have. We have also sort of, your math, around 18 crores for technological advancement. So we have identified, ten key strategic initiatives where you want to sort of expand our development capabilities is that this can be thought of as ten additional service line that would be adding over in the next two years to cater to a bigger, market bracket as well.
We have earmarked around 15 crore as business development expenses. So these are basically, expenses that we will incur to market our current services that we currently have. So to this local events are blocking about and all those things. And then we have earmarked around five crores for investment in our subsidiary in the US.
Mubina Kapasi: Your FY 24 annual report speaks on diversifying your product and service offerings. So could you share, what are the new products and services you’ll be offering? What’s in the pipeline?
Mukul Gupta: In this financial year. So when we are looking at bigger companies who are not talking about like large cap companies, but mid cap companies who are, double our size and we are kind of doing the competitive mapping of, okay, what is it that they are doing that we are not doing and what how we can grow scale from here, beyond market reach, what we realize that we also have a lot of additional service capabilities that we continue to not have.
So already identified such areas where we think that we can grow in this financial year itself, we have taken up Salesforce partnerships that we became a Salesforce partner. This part of services didn’t exist in our company in the previous financial year. It only became a part of our service offering. In this financial year, we have already signed up for contracts.
In Salesforce, we have again taken up an Adobe Commerce partnership, Adobe Partnership for focusing on Adobe Commerce. So we have taken on, one of the largest gold bullion companies in the US and helping them with the implementation of, their, their e-commerce platform on Adobe powers. We have also taken on Microsoft partnership. So analytics, we are basically focus on focusing on Microsoft driven products of our VA and all that.
So this is all something that we have already taken on for this financial year to grow over there. And I want to keep adding these competencies every year.
Mubina Kapasi: I understand that you’re also facing competition. Or rather, one of the key risks is onshore and offshore. It, services. Could you share how you’re planning to mitigate those risks?
Mukul Gupta: So it is definitely a competitive business. There is no arguing about that. The question is how do we stand apart and what we can do. So again, what we do is we have built, what we currently have is what are the strengths that we currently have is when a company is sort of evaluating us with our peers or a company slightly larger than us, then what they will find is capital numbers is, priced at, let’s say, exactly like them or maybe slightly higher, but it is not.
That is a huge pricing that they will find that capital numbers has a very solid background in terms of its management team. So we are not a promoter and company. We are a very, professionally managed. All of our managers, department heads, have 20 plus years of experience, experts in what they are doing. We have obsessed about IP and quality.
So we have all those companies with all the certifications. We have excellent customer ratings as well. So, when that kind of doing their research and trying to find out vendors and doing an apples to apples comparisons, they will see that, okay, this is a company which has the quality, which has the infrastructure service has the people, which has the right credentials.
So we believe a combination of all these will make us stand apart in the marketplace as compared to our other peers.
Mubina Kapasi: And you’ve appointed, I think, three new independent directors, a CFO, you know, post listing, of course, your life will be significantly different. So could you tell us how your, prepping for, you know, we’ll be managing a publicly listed companies with your new board structure as well.
Mukul Gupta: So I come from a non-finance background. So and then what has happened is as we took on a decision of doing this, become a public company, we started ramping up our management capabilities and the creation of an independent board. It’s very important for me not only for corporate governance, but also as a sounding board, because you kind of get into this loop where you keep getting your own thoughts and you do what you are using as a private company with nobody to can question you as a CEO of the company.
But now that I have a board, I feel responsible to them. I have a way to run ideas through them and they basically sometimes help mentor me. Sometimes point to things that I haven’t thought of, and it has overall led to a much better corporate governance in the company.
Mubina Kapasi: What would you say are your long term goals and vision for, capital numbers, be it the offerings that the company will have or the financials that you would like the company to achieve, in the long term? And also, who are the key personnel in your company who are helping you achieve those goals?
Mukul Gupta: So in the next three years we are looking at least doubling of a company. That’s our short term goal. In the next five years, I want to see capital numbers as a national player and, the strong mid-cap company on the roster in the digital space. So that’s the kind of a goal that I have.
There are several people who are going to play a key role in the company. For example, our director of operations, who has been a part of the companies in the past 12 years, is the founding members to ensuring our clients are happy, ensuring that we are able to take care of our clients is basically a responsibility, ensuring that delivery mechanism is in place.
Our CTO of giving 20 plus years of experience as we are investing in newer technologies, he has he will that I know he’s already stretching himself learning new things. So figuring things out, building teams, helping me create teams around specific areas, as we are doing in global expansion, legal and compliance becomes a very important part.
So our CFO, again, is going to be somebody who’s shoulder I would literally be sitting on, because he would be the one who are doing the heavy lifting when it comes to all the compliance and making sure that, company is not doing anything we shouldn’t do. And then obviously, a lot of things will come from our sales and marketing team as well, who have a tough job, exciting job rather ahead of them to make sure that, they take the name and the brand name of the company far and wide and help us achieve our goal.
Mubina Kapasi: All right. Well, this was a great conversation. Thank you so much for joining us today.
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