This post has been written by Srivarun Nitish for FinMedium Research Desk.
IT and Pharma companies have been the talk of the town lately. We will talk about one such Company today – Majesco Limited.
I am guessing most people’s dream is to get their hands on a multi-bagger. Majesco Ltd has risen multiple folds after the march lows.
While it is easy to call it a multi-bagger in retrospect and forget about the Company, we will instead try looking at what the Company is all about in its core.
Majesco Limited – Company Overview
Majesco is a global leader of cloud-based solutions that enable P&C, L&A, and Group insurance businesses to meet the demands of today’s digital customers.
Over 200 insurance companies worldwide in P&C, L&A, and Group Benefits are transforming their businesses by modernizing, optimizing, or creating new business models with Majesco solutions.
The Company offers proprietary solutions for software, IT consulting, application development, integration of systems, outsourcing of application management, testing, data warehousing, and services for business intelligence.
To be more specific, Majesco Ltd offers cloud-native microservices-based and open API-enabled core insurance platforms to the Property & Casualty, Life & Annuity (types of insurances).
Strengths of Majesco Limited
- Cloud-native solutions: Innovative capabilities built to launch new cloud solutions rapidly
- Diversified business model: Leader across P&C and L&A markets
- Speed: Speed to implementation, speed to market, speed to value
- Next-gen digital platform: Modern cloud, API, and microservices-based digital platform
- Price: Lower cost of entry and a cost model aligned with new business growth
- Expertise: Technical industry expertise and leadership
Majesco MD’s Message:
On FY 2019-20:
“Against a backdrop of a volatile global and Indian economy, the strong growth in topline, sustainable profitability, and healthy margins, validate Majesco’s strong business model. Our Cloud-based product strategy was well received by our clients.
Our Cloud-based subscription revenue continued its onward march, witnessing an overall growth of 35.6% y-o-y. With the total number of Cloud-based clients touching 65, Cloud deployment has experienced an increase, and project implementation timelines have decreased.
Our subscription business model allows us to rapidly generate Cloud services revenue during the implementation phase itself.
Overall, our recurring product business now represents over 40% of the total revenue. The product business growth has more than offset the decrease in on-premises services.
Using products and swifter technology, our SaaS-based model has brought about stability, increased volumes, and an increase in the number of users.”
On becoming Debt-free:
“Our products, in various geographies, have also been performing well. During the year, we bagged new deals, carried out product upgradations and explored expansion opportunities.
Our continuous efforts, strong execution, timely payoffs, and strong financial prowess has led us to become a debt-free company.”
On the near future business opportunities:
“With a record-breaking year behind us, our Cloud product-based strategy showcased tremendous success.
An increasing number of companies are turning to partner with us on their journey to digital transformation. I am more excited than ever about the opportunities ahead, the future of Majesco and the largely untapped potential of the insurance industry.
Our persistent focus on delivering innovation and customer success has fueled our growth and solidified our leadership positioning.
Also, we are anticipating higher revenues from our Cloud offerings, while growing at a faster pace, as compared to other areas of the business.”
- Majesco P&C Core Suite
A powerful core systems suite is empowering business growth and innovation for P&C personal, commercial, workers’ compensation and speciality insurance.
Majesco P&C Core Suite provides core system capabilities, including policy, billing, and claims.
It gives insurers the power, flexibility, and speed to innovate and create profitable growth.
- Majesco L&A and Group Core Suite
Majesco L&A and Group Core Suite uniquely support individual, group, and voluntary benefits on a single platform, recognizing that nurturing and retaining customers, regardless of where they originate, is critical to insurers’ growth strategies.
The suite provides essential core insurance capabilities for policy, billing, and claims.
The robust design allows for rapid adaptation for new, innovative products or benefit plans, giving insurers the power, flexibility, and speed needed to capture opportunities and create profitable growth.
- Majesco LifePlus Solutions
Majesco LifePlus Solutions are in use for individual life, pensions, and wealth management in Europe.
Majesco LifePlus Solutions empower providers to consolidate existing systems, improve flexibility, make their business digital-ready, optimize and improve business processes, and increase operational efficiencies.
- Insurance Distribution Management Software
Insurance Distribution Management Software is a robust distribution management platform designed to manage multiple channels, complex compensation schemes, high-volume changes, innovative contests, and to offer personalized payment schedules and self- service.
It supports all lines of business for L&A and P&C on a single platform.
- Data and Analytics Platform
A sophisticated platform that helps insurers to use data as a strategic asset, putting information in the hands of the right people at the right time.
It is a robust business intelligence and analytics tool with 300+ standard business reports, dashboards, KPIs for claims, underwriting, policy, and billing functions.
- Majesco Digital1st® Insurance
Majesco Digital1st® Insurance platform is a groundbreaking digital and micro-services-based cloud-only platform solution, designed to enable the next era of new business models, new products and customer engagement.
It can subscribe to third-party services and real-time data sources that traditional core systems may not effectively support and is configurable for different customer segments and user requirements.
Also Watch: How is Majesco Revolutionizing the Insurance Technology
Majesco’s Revenue Break-up Based on Locations
We are now breaking up their revenue based on the regions around the world.
- North America accounts to about 85.7% of their business,
- EMEA region accounts for 7% and
- The rest of the world accounts for 7.3%.
The Future of Majesco
So, to answer that question, there are two aspects. Firstly, we must see how the insurance industry, on the whole, is going to perform and the next one is will Majesco be able to lead and catch up as technology keeps changing quickly.
You may ask why to check the performance of the insurance industry? Like I previously mentioned, Majesco Ltd. Largely caters to customers from the insurance domain.
Macrotrend of the insurance industry:
As per IBEF (India Brand Equity Foundation), the insurance industry in India is expected to touch USD 280 Billion by 2020.
The outlook for the insurance industry is upbeat, due to a variety of factors like the growing middle class, young insurable population, and increasing awareness of the need for retirement planning.
Insurers are using emerging technologies to transform their IT systems and platforms.
The global insurance industry is projected to spend USD 235 Billion on IT products and services in the year 2020 as insurers continue to modernize their systems and deploy emerging technology in pursuit of digital business, according to Gartner’s research report.
Catching up with technological advancements:
So now coming to the technology part. To survive in the tech field, a company must innovate. To do that it must invest in R&D.
Majesco Ltd. had invested Rs 135.48 crores in R&D during the FY 2019-20. And they have been early adopters to cloud-based platforms and services and have built their products understanding how important cloud-based platforms and services is going to be.
Majesco has been making cloud-based products and services from 2016.
The Company’s striving hard to tap into the subscription-based cloud services and says there is still a lot more space to grow. Majesco Ltd. managed to churn out revenue of Rs 157.37 Crores just from cloud subscriptions.
Divestment in Majesco (The US Subsidiary)
In September 2020, the Company divested its stake completely in its US subsidiary, Majesco.
Talking about the divestment, the Company’s MD said “As you’d be aware that the real improvement in our business has given us an opportunity to be able to get the value for shareholders.
In July, we had an offer that came from Thoma Bravo, and we closed the transaction to sell the entire US subsidiary which is the investment that we hold in the US subsidiary, which is roughly about a seventy-odd per cent for a significantly improved valuation of almost around 730 million dollars.
This gives a significant unlocking of value for all shareholders, both in the US and in India.”
Notable Accomplishments of Majesco Ltd:
• Positioned as a ’Visionary’ in Gartner 2019 Magic Quadrant for Life Insurance Policy Administration Systems, North America.
• Named as a ’Leader’ in Gartner 2019 Magic Quadrant for P&C Core Insurance Platforms, North America.
• Denominated by the Aite Group as the top ’Best-in-Class’ Vendor in the P&C Policy Administration and L&A Core Systems.
• Named amongst the ’Dominant Providers’ by Novarica for P&C Insurance Platforms.
• Amongst the top two for Functionality and Technology for L&A in North America.
Hopefully, that gave you an idea about Majesco’s business. Until next time…
This post has been written by Srivarun Nitish for FinMedium Research Desk.