This blog is just for educational purposes only please do your own research before investing
In this fast-paced world, companies need top-notch and cutting-edge IT
solutions to keep up with the pace and get a step ahead of their competitors.
Yet, many of us don't know about the powerhouse that exclusively provides I.T.
Solutions and caters to their high demands. This blog unveils the story of an
elite IT provider,
BlackBox who is
transforming industries with cutting-edge technology and unparalleled
expertise.
About The Company
Founded in 1986 by Tata Telecom Pvt. Ltd., AGC Networks Ltd. (AGC) initially
focused on manufacturing telecommunication equipment. Today, it is owned by
Essar Telecom Ltd. Over time, AGC has transformed into a provider and
integrator of information and communication technology (ICT) solutions,
adopting a unique vertical approach in business communication systems,
applications, and services primarily within India. AGC now operates across
various regions, including the Middle East, Africa, North America, Australia,
New Zealand, Singapore, the Philippines, and the UK, serving over 8,000
customers.
History
The company was founded by Tata Telecom Pvt. Ltd. in 1986 to manufacture
telecommunication equipment and was acquired by Avaya Inc. in 2004. The
Essar Group took over in August 2010. In January 2019, it acquired the
struggling BBX. Since then, the company has focused on debt reduction,
lowering net debt to around Rs 150 Cr by March 2024 from over Rs 468 Cr in
March 2019.
Industry
Since India has the most amount of active internet users across the web the
demand for data servers is highly increasing due to high consumption.
Currently, the Indian Data Centre market is Rs. 50,000 crore ($6.6 billion) in
2024 and is growing rapidly due to the adaptation of Digitalization and
Localization, As a result, the Data center market is to double by the Fiscal
year 2025 with more than Rs. 40,000 crore worth of investments driven by
rising data uptake according to CRISIL. Refer to the attached files below
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Credits:
CRISIL |
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Financials & Business Model
Moving toward the Financial health of the company it can be seen that the
company's financial results are facing too many fluctuations. The co. is
currently focused on decreasing its debt and slowly increasing its CAPEX. The
company has given exceptional ROCE of 30.4% and ROE of 44.1%.
We can see the Net Profits rising from March 2023, Expected Sales for March
2025 are expected to be around Rs. 6,600 to 6,900, and Net Profits around
Rs. 220 to 250 Cr (from Rs. 138 Cr in FY24). For this it is focusing on
the top 250 customers and share of wallet expansion, addition of large new
clients, and inorganic growth opportunities.
The Co. has 8,000+ customers. It caters to 250+ Fortune 500 companies
including Bank of America, Intel, Dell, Infosys, Deloitte, TCS, HCL, IKEA,
Bloomberg, etc. In FY24, the top 10 and top 20 customers contributed to 47%
and 54% of the revenues respectively.
Order Book
Total order booking stood at US $470 million as of March 2024 compared to US
$490 million as of Dec 2023. Order Book Split:
Projects- 37%
Manage Services + T&M- ~31%
Maintenance Contract- ~29%
Products- ~3%
The co. focuses on large deals, in FY24, it bagged a $105 Mn deal for Data
Center and In-Building 5G/OnGo solutions, a $21 Mn deal for On Demand and
Connected Building solutions, and a few more deals worth $5 Mn+.
S.W.O.T. Analysis:
Strengths:
- Strong brand presence
- Diversified solutions portfolio
- Global reach
Weaknesses:
- Fluctuating financial performance
- High debt levels
- Dependence on a few large clients
Opportunities:
- Growing demand for digital solutions
- Increasing adoption of managed services
- Expansion into new markets
Threats:
- Intense competition
- Rapid technological changes
- Economic uncertainty
Industry and Company Future Ahead:
The technology and IT services sector is expected to continue growing,
driven by digital transformation and the need for businesses to stay
competitive. With its diversified solutions portfolio and strong brand
presence, Black Box is well-positioned to benefit from this trend.
For FY25, The co. has guided for a revenue of Rs. 6,600 to 6,900 Cr (from
Rs. ~6,200 Cr in FY24) and a net profit of Rs. 220 to 250 Cr (from Rs. 138
Cr in FY24). For this it is focusing on the top 250 customers and share of
wallet expansion, addition of large new clients, and inorganic growth
opportunities.
Conclusion:
Black Box Corporation has a rich history and a strong presence in the
technology and IT services sector. While the company has faced challenges in
recent years, it is working to improve its financial performance and
capitalize on growth opportunities. With a strong order book and a
diversified solutions portfolio, Black Box is poised for future success.
information is based on publicly available data and may not be
up-to-date or entirely accurate. It's essential to conduct thorough research
and analysis before making any investment decisions.
information is based on publicly available data and may not be up-to-date or entirely accurate. It's essential to conduct thorough research and analysis before making any investment decisions.
