About CapitalNumbers Infotech Limited

BUSINESS OVERVIEW

CapitalNumbers Infotech Company is a global leader in digital consulting and IT engineering, delivering end-to-end software development solutions to enterprises and startups worldwide. The company specializes in Digital Engineering, Data Analytics, AI/ML, Cloud Engineering, UI/UX Design, and advanced technologies like Blockchain and AR/VR. With over 500 IT professionals serving 250+ clients globally from locations across India, the organization ensures ISO:9001, ISO:27001, and SOC 2 Type II certified quality standards.

Expertise spans Cloud, Mobile, DevOps, Data Engineering, and Application Development using React, Angular, .NET, Python, Node, PHP, and Java. The company provides customer-centric, transformative digital solutions, including software system development, maintenance, and application enhancement.

Recognized with accolades such as Economic Times Best Tech Brands 2024, Times Business Award 2024 – IT Services, Financial Times High-Growth Companies – Asia Pacific 2024 & 2023, and Clutch Top 1000 B2B Companies (2022-2024), among others, these achievements highlight a commitment to excellence and innovation. As of September 30, 2024, the company has 447 employees including senior executives, engineers, developers and administrative staff. The Bankers to the Company are HDFC Bank Limited and ICICI Bank Limited.

INDUSTRY ANALYSIS

Indian IT Industry
The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 7.4% of India’s GDP in FY22, and it is expected to contribute 10% to India’s GDP by 2025. As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and the cheapest Internet rates, with 76 crore citizens now having access to the Internet.

The current emphasis is on the production of significant economic value and citizen empowerment, thanks to a solid foundation of digital infrastructure and enhanced digital access provided by the Digital India Programme. India is one of the countries with the quickest pace of digital adoption. This was accomplished through a mix of government action, commercial innovation and investment, and new digital applications that are already improving and permeating a variety of activities and different forms of work, thus having a positive impact on the daily lives of citizens. India’s rankings improved six places to the 40th position in the 2022 edition of the Global Innovation Index (GII).

India's IT industry is likely to hit the US$ 350 billion mark by 2026 and contribute 10% towards the country's gross domestic product (GDP), Infomerics Ratings said in a report. According to National Association of Software and Service Companies (Nasscom), the Indian IT industry’s revenue touched US$ 227 billion in FY22, a 15.5% YoY growth and was estimated to have touched US$ 245 billion in FY23. As per a survey by AWS (2021), India is expected to have nine times more digitally skilled workers by 2025. This indicates that a total of ~ 3.9 billion digital skill trainings are expected by 2025. India will need 30 million digitally skilled professionals by 2026.

The IT industry added 4.45 lakh new employees in FY22, bringing the total employment in the sector to 50 lakh employees. India’s technology industry is on track to double its revenue to US$ 500 billion by 2030.

Direct employment in the IT services and BPO/ITeS segment is estimated to reach 5.4 million in FY23 with an addition of 290,000 people. The IT-BPM services revenue reached US$ 194 billion in FY21. In 2022, the Indian domestic IT & Business Services market was valued at US$ 13.87 billion and recorded a 7.4% year-over-year (YoY) growth as compared to 7.2% in 2021.

By 2025-26, India is expected to have 60–65 million jobs that require digital skills, according to a Ministry of Electronics & IT report titled "India's trillion-dollar digital opportunity." ▪ In November 2021, Mr. Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, lauded the Indian IT sector for excelling in its competitive strength with zero government interference. He further added that service exports from India had the potential to reach US$ 1 trillion by 2030. Spending on information technology in India is expected to reach US$ 144 billion in 2023. The cloud market in India was expected to grow three-fold to US$ 7.1 billion by 2022 with the help of growing adoption of big data, analytics, artificial intelligence and the Internet of Things (IoT), according to Cloud Next Wave of Growth in India report. India’s digital economy is estimated to reach US$ 1 trillion by 2025. Artificial Intelligence (AI) is expected to boost India's annual growth rate by 1.3% by 2035, according to NITI Aayog. The Karnataka government signed three MoUs worth US$ 13.4 million to help the state's emerging technology sector.

As an estimate, India’s IT export revenue rose by 9% in constant currency terms to US$ 194 billion in FY23. Export of IT services was the major contributor, accounting for more than 53% of total IT exports (including hardware). BPM and engineering and R&D (ER&D) and software products exports accounted for 22% and 25%, respectively of total IT exports during FY23.

BUSINESS STRENGTHS

1. Customer Satisfaction and Long-Term Relationships
Strong, long-standing ties with global clients are driven by the critical role of services and technological expertise in client businesses. Multi-layered collaborations across departments and divisions, combined with diverse offerings, enable cross-selling and client acquisition. Senior management reviews ensure feedback and future opportunities, while tailored solutions cater to varied business needs.

2. Scalable Business Model for Steady Growth
A profitable and scalable order-driven model focuses on resource optimization, client satisfaction, and innovation. Growth is driven by market expansion, advanced offerings, and adherence to quality standards. With 100% export revenue from a robust global presence, the company aligns with technological advancements to drive sustained growth.

3. Diversified Revenue Across Industries
A diverse revenue stream from multiple geographies ensures resilience and adaptability. Export-driven income across industries allows tailored solutions that meet sector-specific needs, keeping services relevant and impactful in a constantly evolving technological landscape

BUSINESS STRATEGIES

1. Acquiring New Accounts and Deepening Key Relationships
Long-standing client relationships are built through deep understanding of customer behavior, preferences, and trends. Research, consultations, and market scans enable integration into clients' growth strategies, fostering multi-project engagement.

2. Attracting and Retaining Highly-Skilled Employees
A high-performing workforce is prioritized through robust recruitment, development, and retention programs. An innovative work environment and competency training ensure employees contribute effectively from day one, enhancing service quality and customer experience.

3. Strategic Investments and Expansions
Planned development centers across India leverage local talent, while a new sales office in the Netherlands strengthens European presence. A dedicated EU client service director enhances growth and service standards in the region.

4. Enhancing Efficiency and Resource Utilization
Custom software solutions and partnerships streamline product delivery and reduce engineering risks. Investments in robust systems and regular policy reviews optimize processes, maximize efficiency, and ensure swift responses to client demands

BUSINESS RISK FACTORS

1. Dependence on US and UK Markets
A significant portion of revenues originates from the United States and United Kingdom, accounting for over 69% of operational revenue in recent years. Adverse developments in these markets, including competition, regulatory changes, and demand fluctuations, could negatively impact business performance.

2. Exposure to Global Regulatory Risks
Operating in multiple countries, including the USA, UK, Switzerland, and Australia, requires compliance with diverse and sometimes conflicting regulations. These include laws related to trade, taxation, data protection, labor relations, and anti-corruption, which pose significant operational challenges.

3. Risks from Open Source Software Usage
The incorporation of third-party open source software into client deliverables may expose the business to intellectual property claims. Customers may face lawsuits, and contractual obligations to indemnify them could create liabilities. Customer consent requirements for open source software usage add further complexity.

NOTE : CapitalNumbers Infotech faces three key risks: heavy dependence on the US and UK markets, challenges in complying with global regulatory frameworks, and potential liabilities from using third-party open source software. Addressing these risks effectively is critical for sustaining business growth and client trust.