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Cigniti Tech bets on travel, hospitality revival for revenue boost

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Cigniti Technologies expects travel and hospitality, retail and healthcare to be buoyant and contribute to revenues in a big way going forward.

IT services company Cigniti Technologies is on the radar. The stock price is up more than 100 percent in the past one year. The company has exposure to travel and hospitality, retail and e-commerce, and healthcare.
The whole travel and hospitality segment is going through a difficult phase due to the COVID-19 pandemic. Throwing more light on the outlook for this vertical, Krishnan Venkatachary, CFO, Cigniti Tech said though it was one of the worst-hit sectors, the company managed to do things systematically and retain nearly 14 percent revenue contribution.
“In terms of outlook, although the volumes have dropped, the company has not lost out on clients and have done innovative methods to retain them,” said Venkatchary, adding that the sector is now bouncing back mainly because of the US and the UK businesses. For the current year, they expect a contribution of 16 percent to revenues from this vertical, and expect it to bounce back even more in the next couple of years.
Venkatachary said the retail and e-commerce segment, which saw a 17 percent contribution towards revenues last year, should be nearly 20 percent for the current year. “It is a very encouraging and promising sector and that has chipped in for our growth in the last year. We have put a foundation in terms of offering platform-led services in the retail and BFSI segment.”
“Going forward we expect travel and hospitality, retail and healthcare to be buoyant and contribute to revenues in a big way,” said Venkatacharya.
The margins in the fourth quarter were mainly affected due to investments and front-loading of new projects. However going forward with a strong orderbook position, there is good traction for growth and by optimising costs, they expect EBITDA margins to be north of last year’s numbers, said Venkatacharya, adding, “In the next four years we will definitely be north of 20 percent in terms of EBITDA." The FY21 EBITDA margins for the company came in at nearly 16 percent.