Pune, India | February 10, 2025
HOV Services Limited (NSE: HOVS, BSE: 532761) has announced its financial results for Q3 FY25 and the nine-month period ended December 31, 2024. The Board also approved the restructuring of its wholly owned subsidiary, HOVS LLC, under applicable statutes.Key Financial Highlights (Standalone)
(₹ in Lakhs)
| Particulars | Q3 FY25 | Q2 FY25 | Q3 FY24 | 9M FY25 | 9M FY24 | FY24 (Audited) |
|---|---|---|---|---|---|---|
| Revenue from Operations | 579.53 | 558.34 | 399.09 | 1,695.35 | 1,185.49 | 1,612.36 |
| Other Income | 91.83 | 48.05 | 41.62 | 183.88 | 123.73 | 172.39 |
| Total Income | 671.36 | 606.39 | 440.71 | 1,879.23 | 1,309.22 | 1,784.75 |
| Employee Benefits Expense | 451.50 | 427.92 | 303.89 | 1,305.85 | 889.06 | 1,209.35 |
| Finance Costs | 4.16 | 4.56 | 3.10 | 13.42 | 10.03 | 12.87 |
| Depreciation & Amortization | 25.21 | 24.82 | 15.77 | 74.66 | 47.31 | 63.08 |
| Other Expenses | 43.26 | 41.27 | 30.39 | 123.63 | 106.38 | 133.63 |
| Total Expenses | 524.13 | 498.57 | 353.15 | 1,517.56 | 1,052.78 | 1,418.93 |
| Profit Before Tax | 147.23 | 107.82 | 87.56 | 361.67 | 256.44 | 365.82 |
| Net Profit | 132.60 | 79.68 | 63.52 | 290.06 | 391.07 | 472.04 |
| EPS (₹) Before Exceptionals | 0.63 | 1.05 | 0.50 | 2.30 | 1.46 | 2.10 |
| EPS (₹) After Exceptionals | 0.63 | 1.05 | 0.50 | 2.30 | 3.11 | 3.75 |
Revenue Growth: Q3 revenue grew 45.2% YoY and 3.8% QoQ, while 9M revenue surged 42.9% YoY. Profitability Improvement: Net profit increased 108.8% YoY, with margins improving significantly.Key Financial Highlights (Consolidated)
(₹ in Lakhs)
| Particulars | Q3 FY25 | Q2 FY25 | Q3 FY24 | 9M FY25 | 9M FY24 | FY24 (Audited) |
|---|---|---|---|---|---|---|
| Revenue from Operations | 579.53 | 558.34 | 399.09 | 1,695.35 | 1,185.49 | 1,612.36 |
| Other Income | 91.83 | 48.05 | 41.62 | 183.88 | 125.67 | 172.39 |
| Total Income | 671.36 | 606.39 | 440.71 | 1,879.23 | 1,311.16 | 1,784.75 |
| Net Profit (Continuing Ops) | 132.56 | 79.65 | 63.49 | 289.96 | 183.90 | 264.85 |
| Net Profit (Incl. Discontinued Ops) | 132.29 | 79.54 | 63.42 | 289.45 | 187.77 | 268.62 |
| Total Comprehensive Income | 231.20 | 55.61 | (228.57) | 288.15 | (124.08) | 28.81 |
Impact of Exela Technologies Investment: Fair value of Exela Technologies investment rose to ₹490.2 lakh as of Dec 31, 2024, up from ₹382.9 lakh in Sep 2024. Discontinued Operations: Reported a minor loss of ₹0.51 lakh in 9M FY25, reflecting restructuring impact.Key Corporate Developments
- HOVS LLC Restructuring: The Board approved the restructuring of HOVS LLC (USA) to align with regulatory requirements in the host jurisdiction.
- Exela Technologies Update: HOV's investment in Exela (NASDAQ-OTC) saw an increase in value. However, Exela has filed for voluntary delisting from SEC on January 17, 2025.
- Segment Focus: IT & IT-enabled services continue to be the sole reportable segment.
Management Commentary
Parvinder S Chadha, Chairman & Executive Director, commented:"We have delivered robust revenue growth and profitability despite macroeconomic uncertainties. The Board’s decision to restructure HOVS LLC is a strategic move to strengthen our business foundation. We remain focused on driving sustainable growth and maximizing shareholder value."
Strategic Outlook
- Revenue Expansion: Strengthening IT & IT-enabled services with improved digital transformation offerings.
- Cost Optimization: Focus on efficiency gains to sustain profitability.
- Investment Strategy: Navigating Exela Technologies' delisting implications while optimizing holdings.
Investor Takeaways
Strong Revenue Growth: 45% YoY and 43% 9M YoY increase. Profitability Boost: Net profit grew 108% YoY in Q3. Corporate Restructuring: HOVS LLC to be realigned for efficiency. Exela Technologies Exposure: Fair value gain but SEC delisting risk.HOV Services remains positioned for long-term value creation, with a strong financial performance and a strategic restructuring move. Investors should monitor Exela Technologies' delisting process and the impact of HOVS LLC's restructuring on financials.