8KMiles plans to list healthcare vertical on Nasdaq by June 2021

Venkatesh Ganesh Mumbai September 27 | Updated on September 27, 2020 Published on September 27, 2020 Chunumunu

Healthcare and pharma vertical accounts for 70% of the group’s income

Mumbai September 27

Expecting a surge in business post Covid-19, IT company 8KMiles Software Services is looking to list its healthcare and lifesciences vertical on Nasdaq by June 2021.

“Our healthcare and pharma business, which was hived off into a separate vertical Healthcare Triangle Inc, we plan to list in Nasdaq next year. The new vertical will also include hospitals, insurance, pharma, and life sciences. This has been our flagship vertical contributing close to 70 per cent of our income,” said Suresh Venkatachari, Chairman and CEO.

The company, which resumed trading in September, after a gap of 10 months is trying to get back on the growth path. SEBI had suspended 8KMiles from trading, after Deloitte had red flagged the company’s accounting practices and alleged fraud by some senior executives. Subsequently, Deloitte resigned, and promoter Director RS Ramani and CFO Gurumurthy Jayaraman followed suit.

Changes in accounting procedure

“Many things went wrong in the past, as we had focused hugely on topline growth at the cost of profitability and there were lapses in the internal process. All the issues brought up in the ‘disclaimer opinion’ given by the auditors in FY19 (nearly 20 audit observations) have been addressed,” said Venkatachari.

Since then, 8KMiles has brought in new executives, and is in the process of tightening governance and internal controls. Venkatachari said that the company has made changes to its accounting and reporting parameters. “In future, all investments in product development will be classified as R&D and expensed to P&L. Also, our business has evolved from a one-time revenue business to a recurring revenue one, which we believe will drive profitability going forward,” said Venkatachari.

Since then it has hired nearly a dozen senior-level management personnel to head delivery, finance, sales, HR and appointed a new auditor Gopal Rao & Company. On the management side, 8KMiles brought in former Capgemini executive Siva Kumar Natarajan as CDO, Thyagarajan R as CFO who has had stints with Airtel and Anand KN was brought in as VP – HR, who was formerly with HCL Technologies.

Back in black

Despite this, Venkatachari pointed out that the company has not lost customers.

“Our customers have continued to partner with us and place their trust in us as is evidenced by the increase in business,” he said. Since resuming trading, in September, the stock has moved to ₹48.80 from ₹24.85 — an almost 100 per cent jump. For the June quarter, 8Kmiles reported a 29 per cent growth in operating income at ₹88 crore, primarily driven by recurring revenue and margins that jumped to 30.4 per cent from 10.9 per cent in Q4 of FY20 and a net income of ₹3.9 crore against a net loss of ₹20 crore a year ago.

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Published on September 27, 2020
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