Sagarsoft Reports Q1 Net Loss and Fund Utilization for Preferential Issue

Sagarsoft (India) Limited , a provider of staffing and information technology services, has reported its financial results for the first quarter, along with an update on the utilization of funds from a recent preferential issue.

Q1 Financial Performance

The company's consolidated financial results for Q1 revealed a net loss of Rs 430.83 lakhs, a significant downturn compared to the profit of Rs 194.30 lakhs in the same quarter of the previous year. The total income for the quarter stood at Rs 4,106.50 lakhs, up from Rs 3,918.08 lakhs in Q1 of the previous year.

Key financial highlights for Q1 include:

Particulars (in lakhs of Rs)	Q1 Current	Q1 Previous
Revenue from operations	4,057.25	3,870.76
Total income	4,106.50	3,918.08
Total expenses	4,526.93	3,647.81
Profit/(Loss) before tax	(420.43)	270.27
Net Profit/(Loss)	(430.83)	194.30

The company's expenses saw a substantial increase, with employee benefits expenses rising to Rs 3,242.10 lakhs from Rs 2,628.38 lakhs in the corresponding quarter of the previous year.

Fund Utilization from Preferential Issue

Sagarsoft also submitted a statement detailing the utilization of funds raised through a preferential issue. The company had issued 2,00,000 equity shares at Rs 254 per share, raising a total of Rs 5.08 crore. The funds were originally allocated for acquisitions and general corporate purposes. However, the current utilization stands as follows:

Rs 1.18 crore utilized for working capital requirements
Rs 3.90 crore kept in fixed deposits

Subsidiary Incorporation

In a strategic move, IT CATS LLC, a wholly-owned subsidiary of Sagarsoft, incorporated Sarral Global, Inc., a majority-owned subsidiary based in Georgia, USA. Sagarsoft has committed to invest $1,357,000 over a year for a 51% interest in this new entity, which will focus on cybersecurity, data, and artificial intelligence services.

Auditor's Review

Walker Chandiok & Co LLP, the statutory auditors, conducted a limited review of both standalone and consolidated financial results. They reported no material misstatements in the financial information prepared in accordance with applicable accounting standards.

The Board of Directors approved these financial results at their meeting, which commenced at 4:45 p.m. and concluded at 6:00 p.m.

Sagarsoft continues to operate primarily in staffing and IT services for customers in India and overseas, maintaining its focus as a single reportable business segment.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+3.04%	-3.17%	-7.07%	-31.13%	-39.28%	+50.80%

Sagarsoft (India) Limited , a provider of staffing and information technology services, has reported a consolidated net loss for the first quarter. The company's financial results, approved by the Board of Directors and reviewed by the Audit Committee, reveal a challenging start to the fiscal year.

Financial Performance

For the quarter, Sagarsoft reported:

Particulars	Q1	Q4	Q1 (Previous Year)
Revenue from operations	4057.25	3476.54	3870.76
Total income	4106.50	3515.19	3918.08
Total expenses	4526.93	3404.27	3647.81
Profit/(Loss) before tax	(420.43)	110.92	270.27
Net Profit/(Loss)	(430.83)	55.53	194.30

All figures in lakhs of rupees

The company witnessed a consolidated net loss of ₹430.83 lakhs for the quarter, a significant downturn compared to a profit of ₹55.53 lakhs in the previous quarter and ₹194.30 lakhs in the same quarter of the previous fiscal year.

Revenue and Expenses

Despite the loss, Sagarsoft's revenue from operations showed growth, increasing to ₹4,057.25 lakhs from ₹3,476.54 lakhs in the previous quarter. However, this was accompanied by a substantial rise in expenses, particularly in employee benefits, which jumped to ₹3,242.10 lakhs from ₹2,396.27 lakhs in the preceding quarter.

Segment Performance

Sagarsoft (India) Limited operates primarily in staffing and information technology services for customers in India and overseas. The company considers this as a single reportable business segment.

Subsidiary Operations

The consolidated results include five subsidiaries based in the USA:

ITCATS LLC
Sapplica Inc.
Elite Computer Consultants L.P.
Elite Infoway LLC
Sarral Global Inc.

Notably, ITCATS LLC, a wholly-owned subsidiary of the company, incorporated Sarral Global, Inc., a majority-owned subsidiary based in Georgia, USA. The Group has agreed to invest $1,357,000 over a year for a 51% interest in this new entity, which will focus on cybersecurity, data, and artificial intelligence services.

Standalone Performance

On a standalone basis, Sagarsoft (India) Limited reported:

Revenue from operations: ₹1,198.75 lakhs
Total income: ₹1,235.20 lakhs
Net loss: ₹63.14 lakhs

The standalone results also show a decline compared to both the previous quarter and the same quarter of the previous fiscal year.

Outlook

While the company has experienced growth in its operational revenue, the significant increase in expenses, particularly in employee benefits, has led to a net loss for the quarter. The expansion of its subsidiary operations in the USA, especially in emerging fields like cybersecurity and AI, indicates Sagarsoft's strategic efforts to diversify and strengthen its service offerings.