Rationale

The rating assigned to Sasken Technologies Limited (Sasken) factors in the extensive experience of the promoter group and the company’s established track record in the product engineering and digital transformation services space. The rating also takes cognisance of Sasken’s long relationships with a reputed and geographically diversified customer base, along with its presence across multiple end‑user industries, which lends diversity to its revenue profile and stability to its business operations. Over the last couple of years, Sasken has undertaken inorganic initiatives to strengthen its positioning in select niche engineering domains. In March 2024, the company acquired a 60% equity stake in Anups Silicon Services Private Limited (now Sasken Silicon Technologies Private Limited) for Rs. 33.20 crore, through a combination of equity investment and subscription to compulsorily convertible debentures. Further, in April 2025, Sasken completed the acquisition of 100% stake in BORQS International Holding Corp. and its identified wholly-owned subsidiaries in India, China and Hong Kong, for a total consideration of up to US$40 million, including earn‑out components. These acquisitions have broadened Sasken’s service offerings by adding capabilities in generative AI accelerators, product security frameworks, custom silicon and foundry services, ODM and smart devices. The company’s scale of operations, while moderate, has reported some improvement over recent periods, and is expected to strengthen further over the medium term, supported by the inorganic investments undertaken in recent years. The profit margins have moderated in recent years, primarily on account of investments made towards capacity and capability augmentation to support future growth. While an improvement in margins is expected over the medium term as the revenues from these investments materialise, it is likely to remain at moderate levels, given the change in segment mix, while service segment margins normalise. The rating also factors in the inherent business risks associated with the IT services sector and the vulnerability of earnings to factors such as wage inflation, employee attrition and adverse movements in foreign exchange rates. Nevertheless, Sasken continues to maintain a strong financial risk profile and liquidity position, supported by healthy cash and liquid investments and a debt‑free capital structure.