About Virtual Galaxy Infotech Limited

Business Overview

Virtual Galaxy Infotech is a SaaS product-focused company specializing in core banking software solutions, customized IT services, ERP implementation, and e-Governance solutions. The company offers end-to-end software services including development, customization, installation, implementation, and post-implementation support, along with consultation, architecture, solution design, monitoring, and managed services.

Founded in 1997 in Nagpur, Virtual Galaxy Infotech has over 26 years of operational experience and a team of 300+ professionals, serving a wide range of clients in the BFSI, ERP, and e-Governance sectors.

The flagship product, E-Banker, is a core banking solution for banks, NBFCs, and cooperative societies, available both on-premises with infrastructure and as a SaaS-based solution. Additional products include:

• IBS-ERP: Tailored ERP for SMEs

• e-APMC: E-governance software for Agricultural Produce Market Committees

• V-Pay: Enterprise digital payment solution

• V-SOC, E-Autopsy Software, VGST, and LOS (Loan Origination System)

Clientele includes commercial banks, state and district cooperative banks, NBFCs, SACCOs, and enterprises from sugar, solvent, textile, fertilizer, seed, and education sectors. Operations span multiple Indian states including Maharashtra, Goa, Uttar Pradesh, Telangana, and more, along with an international presence in Tanzania and Malawi. As on December 31, 2024, the Company have 329 employees on its payroll. The Banker to the Company is Bank of Maharashtra.

Industry Analysis

Indian IT Industry: A Strategic Growth Driver

The Information Technology (IT) and Business Process Management (BPM) sector continues to be a pivotal force in driving India’s economic progress. In FY23, the industry contributed 7.5% to India’s GDP, with projections indicating a rise to 10% by 2025, underlining its growing impact on national development and public welfare.

Digital Transformation and Inclusive Growth

India stands at the forefront of the next wave of digital transformation, supported by a vast Internet user base of over 760 million and the lowest data rates globally. The country’s robust digital infrastructure, strengthened by the Digital India Programme, is enabling the creation of significant economic value and empowering citizens through improved digital access.

India is also recognized for its rapid pace of digital adoption, achieved through a collaborative ecosystem involving government initiatives, private sector innovation, and emerging digital applications that are reshaping work, governance, and daily life. This momentum was reflected in India’s jump to 40th place in the Global Innovation Index (GII) 2022, moving up six ranks.

Market Size and Revenue Growth

According to NASSCOM, the Indian IT industry:

• Reached US$ 227 billion in revenue in FY22, growing 15.5% year-on-year.

• Was estimated to touch US$ 245 billion in FY23.

• Is projected to grow IT spending by 11.1% in 2024, reaching US$ 138.6 billion, up from US$ 124.7 billion.

The Indian software product industry is set to touch US$ 100 billion by 2025, as companies intensify global investments and expand delivery centers abroad.

Exports and Global Reach

India’s IT sector continues to be a global leader in technology services:

• IT exports reached US$ 194 billion in FY23, growing 9% in constant currency terms.

• In FY24, exports rose further to US$ 199 billion.

• IT services remained the dominant contributor, accounting for over 51% of total exports.

• BPM, software products, and engineering R&D services represented 19.3%, 22.1%, and 25% of total exports respectively.

The data annotation market, critical to AI development, was valued at US$ 250 million in FY20, with 60% of demand from the U.S.. It is projected to surge to US$ 7 billion by 2030, driven by increased domestic demand for AI and machine learning applications.

Employment Generation

In FY23, the industry added 290,000 new jobs, increasing the total workforce to 5.4 million. This surge reflects the sector’s ability to generate high-value employment and foster talent across domains.

Future Outlook

According to Infomerics Ratings, India’s IT industry is on track to:

• Reach US$ 350 billion by 2026.

• Contribute 10% to the national GDP.

• Play a central role in transforming India into a global digital hub

Business Strengths

1. One-Stop Solution Provider
Offers an integrated platform for the banking and financial services sector, combining core banking functionalities, regulatory compliance, and enhanced customer experience under one roof.

2. Diversified Business Across Verticals
Caters to multiple domains including BFSI, ERP, and E-Governance. Clients include commercial banks, cooperative banks, NBFCs, SACCOs, and government bodies like the Maharashtra Labour Welfare Board and MSAMB.

3. Multiple Revenue Streams
Generates revenue through license fees, subscription charges, development and implementation services, as well as AMC, ATS, and support fees, ensuring a stable and diversified income base.

4. Recurring & Repeat Revenues from Long-Term Clients
Maintains strong client retention through long-standing relationships, leading to cross-selling opportunities, repeat business, and sustained growth across geographies and sectors.

5. Experienced Leadership Team
Led by Avinash Narayanrao Shende and Sachin Purushottam Pande, both with over 26 years of industry experience. Supported by a 300+ member team including experts in development, QA, and project management.

6. Strong Intellectual Property Portfolio
Owns copyrights for proprietary products like E-Banker, LOS, IBS-ERP, VPAY, and E-Autopsy Software. Holds registered trademarks for VirtualGalaxy, eAPMC, and V-Connect, enabling monetization through premium services and international expansion.

7. Commitment to Quality and Certifications
Adheres to rigorous QA processes, ensuring performance and reliability. Certified under ISO 9001:2015, ISO/IEC 27001:2013, ISO/IEC 20000-1:2018, and ISO/IEC 23001-7:2023, demonstrating high standards in information security and IT service management

Business Strategies

1. Expansion at MIHAN SEZ, Nagpur
Development of a dedicated facility at MIHAN SEZ to increase operational space, support software development activities, and establish an export-oriented unit (EOU) for delivering global core banking and IT solutions.

2. Widening Domestic and International Footprint
Plans to expand customer base and geographic reach across India and globally. Africa and Asia-Pacific identified as high-growth markets, with secured orders in Tanzania and Malawi as initial footholds.

3. Transition to a Professional Organization
Focused on building a transparent, professionally managed structure with a blend of experienced and dynamic talent, supported by external technical and financial advisors as needed.

4. Strengthening Product Portfolio and Market Position
Offering a diversified product range including Core Banking Software, IT Solutions, ERP, and Customized Software. Strategy includes broadening service offerings and developing tailored solutions to meet specific client needs.

5. Enhancing Operational Efficiency
Committed to cost reduction and process optimization through technology adoption and continuous workflow improvement, ensuring agility and competitiveness in evolving markets

Business Risk Factors and Concerns

1. Revenue Concentration Risk
A substantial portion of revenue is derived from the Core Banking software product, E-Banker. Loss of any major client using this product could significantly affect business operations and profitability. E-Banker contributed 78.58% (Dec 2024), 68.50% (FY24), 65.00% (FY23), and 64.54% (FY22) to revenue from operations.

2. Client Dependency Risk
The business heavily depends on orders from banks, government agencies, and private sector clients. Any disruption in client relationships or inability to secure future projects may impact financial performance.

3. Geographical Concentration Risk
A major portion of revenue originates from clients located in Maharashtra. Regional disruptions or adverse developments could impact financial stability.

4. Sector Concentration Risk
Operations are heavily concentrated in the BFSI segment, which accounted for over 91% of total revenue during FY22–FY24 and Dec 2024. Any downturn in this sector may adversely affect earnings.

5. Project-Based Revenue Volatility
Revenue generation relies significantly on a limited number of large projects. Variation in client or project base year-over-year may lead to volatility in earnings.

6. Competitive Bidding Risk
Most contracts are awarded through competitive bidding. Failure to qualify or secure bids due to pricing, eligibility criteria, or lack of partnerships may restrict revenue growth and impact financial condition.

Virtual Galaxy Infotech’s revenue is highly dependent on a single product (E-Banker), specific clients, the BFSI sector, and projects concentrated in Maharashtra. Additionally, revenue volatility from project-based work and reliance on competitive bidding processes pose considerable risks to growth and profitability.