Dear Fellow Shareholders,
Fiscal 2017 was a year of transition of business model from on-premise to on-demand cloud driven model. This was the year in which we focused on supporting new and existing customer growth, enhancing our product offerings, and expanding our sales and marketing infrastructure. We continued to invest in expanding our cloud platform that is well positioned to take advantage of the significant changes underway in the insurance technology marketplace. As a result of these business trends, Majesco’s total revenue grew by 9.3% in fiscal 2017. EBITDA margin witnessed substantial improvement and increased by 410 basis points from 1.3% of operating revenue for fiscal 2016 to 5.4% of operating revenue for fiscal 2017. Our cloud-based revenues continued to outperform and increased by 19.7% to Rs 158.9 crore for fiscal 2017. We expect sales of our cloud offerings will continue to grow at a faster pace, compared to other areas of our business, and we are encouraged by this shift as cloud based sales are higher-margin and recurring. The cloud model is not only an attractive business model for us, it is filling a critical need in the industry.
We continue to focus exclusively on serving the global insurance industry with core business solutions and consulting services that help modernize and bring change to Property and Casualty (P&C), Life and Annuity (L&A), and Group insurance carriers. Not unlike other industries, the insurance industry is rapidly evolving and changing. As insurance customer expectations change, so do the carriers’ requirement to respond quickly with lower-risk and speed-to-value business platforms that provide the ability to innovate new products, reach new markets, create new customer experiences, and liberate different business models.
In this rapidly evolving environment, undertaking multi-year, multi-million dollar transformation programs to replace legacy systems no longer serves the need of carriers. As a result, Majesco proactively began realigning its business strategy to this market shift to focus on speed to value using our cloud based platform, Majesco Cloudlnsurer, which we believe will lead the next wave of innovation and investment in insurance. With our Majesco Cloudlnsurer platform, we have successfully partnered with over 164 clients, including existing legacy insurers, new startups or greenfields backed by existing insurers or by venture capital funds to empower their business strategies by helping them innovate, grow and transform their business models to capture the opportunities today and in the future.
During the year, I am proud that 15 clients successfully went into production with Majesco’s solutions. We are delighted with our customers’ success as we help to support their strategic plans for growth, innovation and market expansion. In addition, Majesco made meaningful investments to strengthen its organization, support a growing and diverse customer base, and expand the Majesco Cloudlnsurer platform. R&D expenditures were higher by 7.4% as compared to the prior year period, as we advanced our product roadmap for both the P&C, L&A, and Group and Enterprise solutions. We released new versions of Majesco L&A Policy, Majesco P&C Policy, Majesco Claims, Majesco Billing, and Majesco Distribution Management. We launched new products with Majesco Enterprise Data Model and Majesco Enterprise Data Warehouse.
Majesco also expanded and strengthened the company’s Partner EcoSystem. During the year, we entered into a 5-year global strategic partnership with IBM to jointly offer a new cognitive, cloud-based platform to help insurance carriers worldwide create new services on IBM Cloud. The integration of IBM Cloud and cognitive capabilities with Majesco’s market-leading core system for policy, billing and claims offers new, innovative products and services for insurers.
I am pleased to see that the partnership with IBM has successfully kicked off the inception work with a Tier 1 insurer, specifically on a platform-as-a-service model. Furthermore, we also added 4 new partners as part of our Majesco Partner EcoSystem, including a number of InsurTech startups such as Splice, Elafris and Dropln.
As we move into the new fiscalyear, we are enthused about our strategy, the market potential of our portfolio of solutions, our cloud platform and Partner Ecosystem, and our expanding partnership with IBM around cognitive, core and cloud that help us differentiate our value proposition for current and prospective customers.
We expect momentum in our cloud business will remain strong as we take advantage of the shift underway in insurance software. We also expect to see improvement in non-cloud business as demand increases for Majesco’s data and digital solutions. As a result, I expect Majesco will experience a reacceleration in growth in fiscal 2018.1 am confident that we are on the right track to achieve strong, profitable growth in the years ahead. Majesco’s management team and board of directors have high expectations for the company in fiscal 2018 and beyond, and I look forward to sharing our success with you in the future.
Delivering and delighting our customers today is the foundation for continued growth and success. It requires a fully engaged, highly energized, and knowledgeable staff. I’d like to thank our employees for their customer focus, teamwork and support.
In closing, we sincerely thank our customers for their confidence and trust. We will continue to direct our energy, innovation and effort to proving that their confidence was well placed.
Co-Founder and CEO of Majesco