In conversation with Sanjay Chauhan, Chief Financial Officer, Magellanic Cloud

By diversifying its offerings and adding profitable companies to its portfolio, MCloud is positioning itself for long-term success, affirms Sanjay Chauhan, Chief Financial Officer, Magellanic Cloud.

In Q1FY24, the net sales of the company surged more than 57 per cent from last year’s same quarter to Rs 137.78 crore, while the net profit of the company zoomed more than 87 per cent. What were the contributing factors and main growth drivers for this performance? 

Our Q1FY24 results have exceeded our expectations, and we are thrilled with our performance. Our IT and e-surveillance division was the driving force behind our success. Our impressive order book is a testament to the hard work put in by our team. The IT division witnessed a significant surge in both local and export sales, while our E-Surveillance division secured additional orders from various banks, increasing our order book by 25 per cent. We are confident that we will continue to grow and expand our reach in the future, especially with a major order in the Drone segment on the horizon.

What is the company’s revenue growth target for FY24? Additionally, could you give any guidance on margin and net profit for FY24?

MCloud has set an ambitious goal to increase its revenue target for FY24 by approximately 30-40 per cent as compared to FY23, which is a positive sign of growth for the company. The company is committed to maintaining a robust net profit margin, which will remain steady at 15-20 per cent of revenue from operations. This demonstrates MCloud's confidence in its business model and strategic direction, and its ability to execute its growth plans.

What efforts are you taking to maintain current growth. Are you looking for growth organically or via mergers and acquisitions?

MCloud is well-positioned to achieve and maintain strong growth in the coming years. The company has a strategic plan in place that leverages both organic growth and smart acquisitions. With an impressive order book that is expected to deliver 30-40 per cent growth in FY24, MCloud is already on track to achieve its goals. The company is also actively seeking out new acquisition opportunities in the IT and e-surveillance segments, and it is confident that it will be able to close deals in a way that benefits both parties. By diversifying its offerings and adding profitable companies to its portfolio, MCloud is positioning itself for long-term success. Overall, MCloud's leadership team is confident in its ability to execute its strategy and achieve its growth targets.

At the moment, what are your top 3 strategic priorities? 

We have identified three key priorities that will help us achieve sustainable growth across all segments. 

1. Organic - Firstly, we plan to expand our current order book and focus on organic growth. We are reaching newer markets in India and Overseas. We want to concentrate on scaling up our drone division more efficiently to capitalize on the immense potential of this emerging technology.
2. Through Mergers and Acquisitions - we aim to acquire 2-3 companies each year, providing us with the necessary resources to drive growth. We are proud to have been included in four segments of BSE S&P, including IT Index, All Cap, Small Cap, and Mid-Small Cap.
3. Through Innovations - At Magellanic Cloud, we are committed to achieving excellence through innovations, which is at the core of our business. By prioritizing innovative technologies like drones, we aim to inspire greater confidence among our investors. We will work towards innovations that will indigenise our present capabilities to help us deliver greater value to our stakeholders.This will not only lead to better results but also increase the trust of our investors in our company.

Can you elucidate on the company’s plans to scale up the drone manufacturing and allied services segment for the next few quarters?

Magellanic Cloud (MCloud) has accomplished a significant milestone with its subsidiary Scandron Pvt Ltd completing the research and development of Agri & Cargo drones, designed and modelled to perfection ranging from 5kg-80kg, with materials ready for production. MCloud anticipates the DCGA license this quarter, which will pave the way to sell hundreds of commercial logistics drones.

MCloud through its subsidiary Scandron has already validated the products at high altitudes for army and defence tenders and has created many designs to cater to different products in the public sector. On allied services, our subsidiary company Scandron has also agreed with big players to provide inspection services. In the next few quarters, MCloud will progressively look to secure significant orders and provide allied services, which will significantly boost results as the margins are decently high in this segment.