KaarTech Reports Strong Revenue Growth in FY23, Profit Remains Flat

Digital Transformation Firm Sees Revenue Surge

KaarTech, a leading digital transformation consultancy, reported a significant increase in revenue for the fiscal year ending March 2023 (FY23). The company secured $30 million in funding in July 2023, which significantly contributed to a 56% growth in its topline. However, a substantial rise in employee benefit costs resulted in stagnant profit margins.

Revenue Soars Despite Flat Profits

KaarTech’s financial statements, filed with the Registrar of Companies, reveal a jump in revenue from operations to Rs 359 crore in FY23, compared to Rs 230 crore in FY22. This represents a notable gain of 56%.

Company Background and Expertise

Founded in 2006, KaarTech specializes in the implementation and support of SAP and S/4 HANA solutions. Their core services include consulting, implementation, and ongoing support for enterprise-level software solutions based on the SAP platform.

Revenue Breakdown

KaarTech derives its primary income from IT services, encompassing software development, customer support, and maintenance activities. Notably, 97% of the company’s revenue originates from exports, with key markets being Saudi Arabia, Qatar, Oman, the United Arab Emirates (UAE), and other international locations.

Employee Costs Eat into Profits

Similar to other technology firms that rely heavily on skilled personnel, KaarTech’s employee benefits account for a significant portion of its overall expenditure. This expense category witnessed a substantial increase of 81.3%, reaching Rs 243 crore in FY23 compared to Rs 134 crore in FY22.

Overall Expenditure Rises

KaarTech’s total operating expenses rose by 65% in FY23, reaching Rs 340 crore from Rs 206 crore in FY22. This increase can be attributed to factors such as rising legal fees, rent, website maintenance and development costs, marketing expenses, and other operational overheads.