Cigniti Technologies Ltd — Interim / Quarterly Report 2021

Jan 29, 2021

Cigniti Technologies Ltd. Investor Update

Q3 & 9M FY21

Q3FY21 Highlights

• Cigniti Technologies appoints Ganesh Ramamoorthy as Chief Revenue Officer (CRO). Responsible to drive strategy and scale overall revenues of the organization. Cigniti positioned as a 'Niche player' in Gartner 2020 Magic Quadrant for Application Testing Services, Worldwide. This is the 6th consecutive year Cigniti has been positioned in this Magic Quadrant. The Dubai Gold and Commodities Exchange (DGCX), has selected Cigniti Technologies Assurance service provider as the Exchange seeks to upgrade its technology platform. • It will enable the DGCX Group to 'acceptance test' the applications – covering both functional and non-functional testing – and reduce the amount of overall time and effort expended on testing. • Toyota Motor Corporation Australia Selects Cigniti Technologies as a Strategic Quality Engineering Partner. • To help accelerate its Quality & Digital transformation journey over the next 3 years. • London based BABB partners with Cigniti Technologies for software testing of their cryptocurrency platform. • Cigniti is working with leading banks across the globe.

Cigniti: Business Overview & Key Metrics

Cigniti is a globally recognized player in Specialized Quality Engineering Services and an emerging leader with Digital offerings

Cigniti: A Global Leader in Specialized Quality Engineering Services

	Financial Overview
Business Metrics Q3FY21	Business Metrics 9MFY21
Revenues: 223.90 Cr	Revenues: 663.50 Cr
EBITDA: 31.94 Cr	EBITDA: 112.21 Cr
PBT: 31.97 Cr	PBT: 110.78 Cr
PAT: 26.35 Cr	PAT: 80.68 Cr

Headquartered in Hyderabad, India, Cigniti is North America's largest Independent Quality Engineering Services company with operations in 13 countries. It offers wide variety of QA testing services including Testing Advisory & consulting leveraging IP (BlueSwan) for Digital transformation. Company Overview

Awards & Recognitions

Q3 & 9M-FY21 Operational Highlights

• The Company's Consolidated Revenue from operations for the quarter under consideration stood at Rs 223.90 crore as against Rs 221.20 crore in Q2FY20, up by 1%
• EBIDTA for the December quarter was at Rs 31.94 crore and EBIDTA margin stood at 14.3%. Reduction is mainly on account of rollback of payroll cut which was in force for the H1'FY 2020-21.
• Reported Net Profit for Q3FY21 stood at Rs 26.35 crore as against Net Profit of Rs 25.22 crore in Q2FY21
• 9M'FY21 PAT is after onetime tax adjustment of Rs 8.95 crores on account of tax assessment for earlier years of US subsidiary Cigniti Technologies Inc.; Net profit before taxes for earlier years stood at Rs 110.78 crores.

Cigniti's Core Service Offerings for Large Enterprise Clients

• Performance Engineering
• Service Virtualization
• Test Data Management
• Tools Streamlining
• End to End Automation
• DevOps Enablement
• Test Environment Management
• Resiliency and Reliability Testing

Quality Assurance and Traditional Offerings

• Security Testing
• Functional Testing
• Test Automation
• Globalization Testing
• Performance Testing
• Compatibility Testing
• Regression Testing

• IoT Assurance Digital and Next Generation Offerings

• Cloud Assurance
• Omni and Multi-Channel Testing
• AI testing
• Blockchain Testin
• Robotics Automation
• Mobile Testing
• Customer Experience Testing

Board Members

Led by Dedicated Promoters & Managed by Professional Leadership Team • In 1998, Mr. Subramanyam founded Chakkilam Infotech Pvt. Ltd.

C V Subramanyam, Chairman and Managing Director

• as an IT services company providing IT solutions
• Successfully took the company public in 2004
• Holds a Bachelors in Commerce and Law and Post Graduate Diploma in Business Management

Srikanth Chakkilam, Chief Executive Officer, Cigniti Technologies Inc.

• Drives client acquisition strategies, provides oversight to Sales, sets business targets, and maintains the P&L and related activities • Key decision maker in the vision and growth of Cigniti & plays a vital role in
• evaluating, analyzing & deciding Cigniti's pursuits related to inorganic growth
• Focused to build a highly successful, impactful and ethical business in all forms
• Has an MS from the University of Southern California

Diversified Client base Leading to Better Stability

Marquee Clients Across Industry Verticals

In high-spend Industry verticals, Cigniti has marquee clients.

Financial Highlights Q3FY21-		Consolidated
					All values are in INR Million
ParticularsIncome	Q3FY21	Q2FY21	Q3FY20	Q-o-Q	Y-o-Y
Revenue from operations	2,239	2,212	2,167	1%	3%
Revenue from operations ($M)	30.49	30.13	30.91
Expenses
Employee benefit expense	1,332	1,232	1,289	8%	3%
Other expenses	588	538	592	9%	-1%
EBITDA	319	442	286	-28%	12%
% EBITDA	14.3	20.0%	13.2%
Depreciation & Amortization	31	T30	28	3%	12%
EBIT	288	412	258		12%
Other Income(Expense)	8	8	37	-8%	-79%
Finance Income	36	21	19	49%	86%
Finance Costs	12	16	20	-25%	-39%
PBT	320	425	294	-25%	8%
Tax*	56	173	13	-68%	317%
PAT	264	252	281	4%	-6%
EPS (Basic)	9.45	9.06	10.15

Financial Highlights 9MFY21-	Consolidated		All values are in INR Million
Particulars	9MFY21	9MFY20	Y-o-Y
Income
Revenue from operations	6,635	6,398	4%
Revenue from operations ($M)	90	91
Expenses
Employee benefit expense	3,875	3,834	1%
Other expenses	1,638	1,584	3%
EBITDA	1,122	971	16%
% EBITDA	16.9%	15.2%
Depreciation & Amortization	T91	85	8%
EBIT	1,031	886	16%
Other Income(Expense)	39	111	-65%
Finance Income	82	39	113%
Finance Costs	44	60	-26%
PBT	1,108	976	13%
Tax*	301	53	469%
PAT	807	923	-13%
% PAT	12.2%	14.5%
EPS (Basic)	28.96	33.36

Cigniti's Income statement -		Consolidated		All values are in INR Million
Particulars	FY18	FY19	FY20	9MFY21
Income
Revenue from operations	6,933	8,161	8,720	6,635
Revenue from operations ($M)	108	117	124	90
Expenses
Employee benefit expense	4,701	4,754	5,190	3,875
Other expenses	1,715	2,080	2,243	1,638
EBITDA	517	1,327	1,287	1,122
% EBITDA	7.5%	16.2%	14.8%	16.9%
Depreciation & Amort	27	31	115	91
EBIT	490	1,296	1,172	1,031
% EBITOther Income	7.1%7	15.9%264	13.4%158	15.5%39
Finance Income	2	8	58	82
Finance costs	170	146	80	44
PBT	329	1,422	1,308	1,108
% PBT	4.8%	17.4%	15.0%	16.7%
Tax	8	-52	92	301
PAT	322	1,474	1,216	807
% PAT	4.6%	18.1%	13.9%	12.2%
EPS (Basic)	12.1	53.6	43.87	28.96

Cigniti's Balance Sheet H1FY21-			Consolidated	All values are in INR Million
Particulars	H1-FY21	H1-FY20	Particulars	H1-FY21	H1-FY20
Property Plant & equipment	165	141	Equity & Liabilities
Right-to-use asset	258	326	Equity share capital	278	277
Goodwill	549	549	Other equity	2,924	1,819
Capital WIPOther intangible assets	--	--	Sub totalNon-current liabilities	3,202	2,096
Financial assets			Financial liabilities
Investment	-	-	Lease Obligation	250	323
Loans	51	30	Borrowings	-	-
Other non-financial assets	1	-	Long term provisions	109	75
Deferred tax assets net	30	-	Deferred tax liability	-	-
Other non current assets	-	-
Sub total	1,054	1,046	Sub total	359	398
Current assets			Current liabilities
Financial assets			Financial liabilities
Investment	745	171	Short term borrowings	669	741
Loans	6	20	Trade payables	499	539
Trade receivables	1,400	1,276	Lease Obligation	87	76
Cash and cash equivalent	414	173	Other current financial liabilities	4	17
Other Bank balances	868	-	Short term provisions	33	29
Other current financial assets	591	1,118	Current tax liability, net	221	17
Current tax assets net	14	51	Other current liabilities	146	134
Other current assets	128	190
Sub total	4,166	3,000	Subtotal	1,659	1,552
Total	5,220	4,046	Total	5,220	4,046

Cashflow Generation 9M FY21

Cashflow Generation 9M FY21
All Figures in INR Mn.	9M FY21	9M FY20	FY20
Profit before tax	1,108	976	1,308	Cash Generation
(+/-) Non-cash & non operatingItems	65	98	116	Cash and cash equivalents (including fixeddeposits) at a healthy level of 1,327 Mn.
Operating Profit before WC Changes	1,173	1,074	1,424	Company has invested in Mutual Funds, NCDs
(+/-) DSO Movement (Receivables)	284	(74)	(382)	and Bonds to the tune of 716 Mn. and 963 Mn in
(+/-) Other charges	99	(186)	(141)	Bank FDs
Operating CF after WC changes	1,556	813	901	FCF generated during 9M FY21 is exceeding the
Less: Taxes	(206)	(18)	(35)	FCF generated in the FY 20 mainly driven by
	(22)	(54)	(70)	efficiency in collections, reduction in G&A andcapex optimization despite non recurrence of
			796	export incentives
	1,327	741
Less: CapexFree cash flow generatedEBITDA	1,122	971	1,287

• Cash and cash equivalents (including fixed deposits) at a healthy level of 1,327 Mn.
• Company has invested in Mutual Funds, NCDs and Bonds to the tune of 716 Mn. and 963 Mn in Bank FDs
• FCF generated during 9M FY21 is exceeding the FCF generated in the FY 20 mainly driven by efficiency in collections, reduction in G&A and capex optimization despite non recurrence of export incentives

Disclaimer

This presentation is strictly confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by Cigniti Technologies Ltd. (also referred to as 'Company'). By attending a meeting where this presentation is made, or by reading this presentation material, you agree to be bound by following limitations: The information in this presentation has been prepared for use in presentations by Company for information purposes only and does not constitute, or should be regarded as, or form part of any offer, invitation, inducement or advertisement to sell or issue, or any solicitation or any offer to purchase or subscribe for, any securities of the Company in any jurisdiction, including the United States and India, nor shall it, or the fact of its distribution form the basis of, or be relied on in connection with, any investment decision or any contract or commitment to purchase or subscribe for any securities of the Company in any jurisdiction, including the United States and India. This presentation does not constitute a recommendation by the Company or any other party to sell or buy any securities of the Company.

This presentation and its contents are not and should not be construed as a prospectus or an offer document, including as defined under the Companies Act, 2013, to the extent notified and in force) or an offer document under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended). This presentation and its contents are strictly confidential to the recipient and should not be further distributed, re-transmitted, published or reproduced, in whole or in part, or disclosed by recipients directly or indirectly to any other person or press, for any purposes. In particular, this presentation is not for publication or distribution or release in any country where such distribution may lead to a breach of any law or regulatory requirement. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation or and if given or made, such information or representation must not be relied upon as having been authorized by us. Receipt of this presentation constitutes an express agreement to be bound by such confidentiality and the other terms set out herein. Any failure to comply with this restriction may constitute a violation of applicable securities laws. This presentation and the information contained herein does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities of the Company, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither Company nor any of its affiliates, advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information set out herein may be subject to updating, completion, revision, verification and amendment and such

information may change materially. This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this presentation, which neither Company nor its affiliates, advisors or representatives are under an obligation to update, revise or affirm. This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding expansion plans and the benefits there from, fluctuations in our earnings, our ability to manage growth and implement strategies, competition in our business including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, our ability to win new contracts, changes in technology, availability of financing, our ability to successfully complete and integrate our expansion plans, liabilities, political instability and general economic conditions affecting our industry. Unless otherwise indicated, the information contained herein is preliminary and indicative and is based on management information, current plans and estimates. Industry and market-related information is obtained or derived from industry publications and other sources and has not been verified by us. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments. This presentation is not an offer for sale of securities in the UNITED STATES or elsewhere.

India

Hyderabad

Cigniti Technologies Ltd. 6th Floor, ORION Block, "The V" (Ascendas) Plot #17 Software Units Layout Madhapur, Hyderabad-500081 Cigniti Technologies (Australia) Pty

US

Cigniti Technologies Inc. 433 E Las Colinas Blvd, Suite 1300, Irving, TX 75039 UK

Australia

Ltd Level 9, 401 Collins Street VIC 3000 Australia

Canada

Cigniti Technologies Canada Inc Suite 302, Mississauga, Ontario L5N 1W1.

US

630 Freedom Business Center, 3rd

Cigniti Technologies (UK) Limited 30 Churchill Place, London, E14 5RE Ballyclare Place, 14 Ballyclare Drive, Bryanston 2021 Floor, King of Prussia, PA 19406

South Africa

Cigniti Technologies Ltd.

UAE

2000 Argentia Road, Plaza 4, Cigniti Technologies Ltd. 2W 403b PO Box – 54756 Dubai Airport Freezone Dubai, United Arab Emirates