Bangladesh IT Sector

Transforming into a growth driver of the future economy

July 2018

LankaBangla Asset Management Company Limited

Praasad Trade Center (4th Floor)
6 Kemal Ataturk Avenue
Banani-1213, Dhaka
Contents
Executive Summary 3
Industry Overview 4
Industry Structure 4
Strengths and Weaknesses 4
Mobile Services Penetration 6
Internet Penetration 6
Mobile Financial Services & Agent Banking 7
ATM, POS and Card Penetration 8
IT/ITeS Outsourcing 9
Digital Bangladesh 9
Skill Development 9
Taxation and Regulatory Changes 10
Software Technology Parks 10
Snapshot of Listed Companies in the IT Sector 11
Company Profiles 12

2 | Bangladesh IT Sector – July 2018

Executive Summary

The Bangladesh IT sector has been growing steadily in the last decade. With steady economic growth, crossing
the 7% level for the last three fiscal years running, has boosted demand for IT and IT-related products
throughout the nation and is set to continue to boost demand for the foreseeable future. The number of
people enjoying mobile and internet connectivity continue to set new records each year, POS and Card
transactions are taking off as financial inclusion expands, and the rise of e-commerce is creating an entirely
new business niche.

The effects of the worldwide financial crisis has dissipated, with the world economy experiencing robust
output growth, consequently boosting demand for global outsourcing of IT services, with cost optimization
being the primary driver for offshoring services. The increasing cost pressures, with new service delivery
paradigms like cloud computing and multiple sourcing, is set to transform the outsourcing industry globally.
Bangladesh, having one of the most competitive cost structures in the entire world, is well placed to capitalize
on this opportunity.

Over recent years, Bangladesh has made major strides in laying the groundwork for a diverse and successful
outsourcing market. The IT services industry within Bangladesh has been growing serving international clients
and domestic clients in banking and telecom sectors. The industry now employs over 300,000 people, and is
exporting services to European, North American and East Asian clients. Bangladesh’s emerging outsourcing
players already have strong credentials, having earned more than USD 700 million in 2017, and is set to meet
the USD 1 billion export target by 2019. Bangladeshi freelancer community has further supplemented the IT
exports by close to US$7 million in 2010 - with Bangladesh appearing consistently in top freelance work
locations on sites like Upwork, Freelancer.com, vWorker and others.

Bangladesh offers a vast pool of young, trained and English speaking resources – available at costs almost 40%
lower than established destinations like India and Philippines. Government authorities have demonstrated a
determination to promote IT services industry in the country – providing cheaper bandwidth and redundant
international submarine cables, setting up Software Technology parks throughout the country, implementing a
number of IT-based Skill Development Programs and providing tax holidays and cash subsidies for export
oriented industries. The “Digital Bangladesh” initiative of the government is helping setup infrastructure for
enhanced connectivity, ICT based citizen service delivery and ICT based Education system. There is evidence of
many global players, like Samsung R&D, Therap, NewsCred and Reve Systems – setting up operations in
Bangladesh.

For all the progress that has been made, there are a number of challenges that still lie ahead. One of the key
weaknesses is that the Bangladeshi IT industry could better market its strengths to the international
community. Negative perception about the security situation, especially after the 2016 Holey Artisan terrorist
attack has seriously damaged the perception of Bangladesh abroad and needs to be countered. Government
needs to take a holistic approach towards promoting the IT industry – including investment climate, taxation,
remittances, legal framework and flexible working hours.

With today’s challenging economic conditions, more companies are looking at effective use of external
providers to help them support and expand their operations. Bangladesh has positioned itself as a key location
for consideration by enhancing delivery capability and skill availability, lower costs of operations, making
focused investments in telecom and IT infrastructure, and highlighting success stories.

3 | Bangladesh IT Sector – July 2018

 Industry Overview

A transformative change in the Bangladesh IT

sector was initiated when the government created
the strategic “Vision 2021” plan for wide-scale
transformation of the country into a developed
one by 2021, which will mark 50 years as an
independent nation. One of the integral parts of
Vision 2021 is “Digital Bangladesh”, or the will to
emphasize focus on the IT sector to drive equitable
development across the country and to generate
employment for the next generation of the young
workforce of the country. In addition, the 7th Five
Year Plan has targeted strengthening the
Knowledge Economy as a main thrust of its focus.
The unprecedented focus on development of the
IT sector, taken at the highest levels of
government, combined with the human resources
available in the country of 160+ million people, is a
strong signal that the IT sector in Bangladesh will
play a large role in the country’s economy going
forward.
Industry Structure
Bangladesh Association of Software and
Information Services (BASIS) is the national trade
body for Software & IT Enabled Service industry of
Bangladesh. It started its journey in 1997, and
since then has been working to develop a vibrant
software & IT service industry in the country. It
started its journey with only 17 charter members.
Today the membership stands more than 1,100.
BASIS members account for the lion’s share of the
total software & IT services revenue of the
country. BASIS is the primary source for the
Bangladesh IT industry data
1200
BASIS Membership Growth
1000
According to the 2017 BASIS survey, there are an
estimated 4500+ IT firms in Bangladesh, earning
revenues of USD 700 million. There were an
estimated 300,000 professionals working in the IT
sector as of 2017. 44% of the industry revenue
came from software development while 56% of
the revenue came from IT Enabled Services (ITeS).
IT Enabled Services are a term for performing tasks
with the help of information technology. This
enables
The majority of IT companies in Bangladesh
specialize in Customized Software Development,
with 56% of BASIS members reporting it as their
speciality. The next most common specialization IT
Enabled Services (ITeS), with 17% of BASIS
members reporting it as their speciality, and E-
commerce/Web site development, with 12.45% of
BASIS members reporting it as their speciality.
The 2017 BASIS survey also found that 43% of
Bangladeshi IT companies had a presence in both
local and foreign IT markets, while 48% of
Bangladeshi IT companies catered to the local
market exclusively leaving 9% of Bangladeshi
companies which cater exclusively to foreign
clients. The total new investment in IT/ITeS firms
show a strong growth pattern, increasing by 58%
in 2016 to reach USD 150 million.

800 Members Strengths and Weaknesses

600
Strengths: The main strength of the Bangladeshi IT
sector is its young, motivated and educated
workforce that can be trained to fit any IT roles.
400
The median age of Bangladesh is only 26, which is
one of the lowest in the world, and English is
200 widely understood by young professionals. This
enables access to a huge pool of workforce who
are eager for employment and who can take any IT
0
venture forward. There is already a huge pool of
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

young Bangladeshi IT workers who work for online

freelancing sites such as freelancer.com and
Source: BASIS Survey, 2017 oDesk. These workers can easily be trained up to

4 | Bangladesh IT Sector – July 2018

work in more complicated roles in software
development.
The employment laws in Bangladesh are also
relatively flexible compared to many developed
countries which makes a compelling case for
offshoring IT operations to Bangladesh.
Finally, the average cost for IT workers in
Bangladesh is one of the lowest in the entire
world, and estimated to be around 40% lower than
India or the Philippines, which are considered low-
cost destinations by themselves in the
international IT outsourcing market.
Weaknesses: The most significant weakness is the
lack of higher-level skills and know-how. While it is
easy to obtain human resources skilled in the low-
end IT tasks, it is very difficult to obtain
experienced senior-level managers who have
capabilities in the software architecture role. The
tendency of skilled professionals to migrate to
developed countries further contributes to a brain
drain which stunts the growth of large IT
companies.
Another set of roadblocks is the physical
infrastructure of the country. Bangladesh used to
suffer from serious lack of power in the past,
resulting in unpredictable rolling blackouts
throughout the country in addition to problems in
voltage with the electricity actually supplied, and
this caused problems in setting up any IT offices.
While the situation has improved a lot in the past
few years due to massive investment in the power
sector, any hiccups in power project
implementation, combined with a spiralling
demand could cause a return of the dreaded
blackouts. The internet bandwidth has also seen
massive growth with the connection of a second
submarine cable in addition to drops in bandwidth
prices. However, average broadband speed in
Bangladesh remains one of the lowest in the
world, and leaves much to be desired, which
hampers the operations of IT companies.
The transport infrastructure has steadily
deteriorated and is now one of the worst in the
world. Average traffic speeds in Dhaka are now
equal to walking speeds. The lack of adequate
transportation infrastructure acts as a roadblock
for any company’s plans to open offices in
Bangladesh.
The Bangladesh IT industry, in contrast to the
Indian IT industry, has hardly any brand
recognition in foreign markets. Bangladesh is
5 | Bangladesh IT Sector – July 2018
primarily known as an exporter of basic
readymade garments. There is also a lack of
international offices for Bangladeshi IT firms which
may liaise with foreign companies to bring more
business into Bangladesh. The Bangladeshi
diaspora in countries such as the US are also lower
in numbers than India and also is not as
concentrated in the IT sector of the US as the
Indian diaspora are. This leads to a disadvantage
when convincing US clients to source their IT
products from Bangladesh.
Opportunities: The continued economic growth of
Bangladesh will drive greater demand for IT
enabled services at all levels of the economy. The
government’s identification of ICT as a major
thrust sector of the economy and the granting of
tax-free status to all IT companies are an attractive
proposition for any IT company to earn attractive
returns from a fast growing domestic market.
Rising labour costs in India and the Philippines give
rise to a window of opportunity for Bangladesh to
grab some of the ITeS and BPO market as these are
highly cost-sensitive industries. There is already a
significant population of Bangladesh freelancers
who work at online freelancing sites such as ODesk
and Freelancer.com. This means that a ready
population of skilled workers are already available
who can take advantage of labour cost arbitrate to
establish a foothold in the BPO/ITeS market.
The geopolitical tensions risks of concentration
and global trade wars have led to countries looking
for alternative sources to their traditional
suppliers. Bangladesh, as a neutral country not
beholden to any regional alliance is well positioned
to demonstrate itself as an alternative sourcing
destination that will avoid any trade restrictions
placed as a result of any global trade wars.
The government’s thrust to set up software parks
throughout the country, implement various IT skill
building programs, increase broadband access to
the rural areas and decision to provide services
online through the a2i project will enable a new
generation of youth in rural and peri-urban areas
to gain skills in IT, which can be translated in the
future to a workforce skilled in IT-related tasks.
Threats: The 2016 terrorist attack on a restaurant
oriented by foreigners caused the security-related
perception of Bangladesh to plummet to historical
lows. This perception will be very hard to
overcome, and any future terrorist activity will
further reduce the perception of the country as a
safe place to do business.
The capability of the government to successfully Grameenphone, the sole listed mobile phone
implement its IT-related projects, such as software operator remains secure in its leading position in
parks and outcome of IT skill-building programs is the mobile phone operator market, with 46%
still uncertain. Failure to obtain successful market share. Robi, having freshly merged with
outcomes from the government IT related Airtel is in second place with 30% of the subscriber
programs will damage the credibility of the market while Banglalink comes third with 22% of
government to successfully implement IT-related the market share. State owned Teletalk comes in
projects. last with a mere 2% of the mobile phone operator
market.
The continued trend of migration of skilled IT
personnel to developed countries will continue to
post a threat to the development of capable Internet Penetration
domestic IT firms, as senior level IT personnel are
required in the higher-level software architecture
Chart: Internet Subscribers (mn)
roles.
100 30%
Mobile Services Penetration 80 25%
20%
60
Chart: Mobile Subscriber Growth (mn) 15%
40
10%
200 20%
20 5%

36
26

30

44

54

67

80

88
15% 0 0%
150
10% 2011 2013 2015 2017

100 5% Subscribers (mn) Growth

0%
50 Source: BTRC
-5% Internet connectivity has seen a similar growth
151
114

120

134

126

145
87

97

0 -10% trend. The internet penetration in 2003 was only

2011 2013 2015 2017 0.1% in 2003. In 2018 the penetration had grown
to 54.19%. While there were only 100,000 internet
Subscribers (mn) Growth
subscribers in 2003, the number of internet
Source: BTRC
subscribers in 2018 had grown to 87.8 million by
Mobile phone penetration increased in Bangladesh
June 2018.
from less than 4% in 2004 to 78% in 2014.
Whereas there were only 500,000 mobile
Table: Bandwidth Price evolution
subscribers in the entire country in 2003, that
Year Bandwidth Price (BDT/Mbps/month)
number now stands at more than 151 million. This
2003 127,000
robust growth in mobile phone penetration has
2014 3,200
had a transformative impact on the country and
society as a whole, comparable to the impact of 2015 2,700
the RMG industry and remittances from foreign 2016 625
countries, increasing the quality of life and 2017 560
stimulating economic activity for millions of 2018 310
Source: BSCCL
people.
Chart: Mobile Phone Operator Share One of the prime reasons for the prodigious
Teletalk
growth of internet penetration is the reduction of
Banglalink 2% bandwidth price. Bangladesh got connected to its
22% first submarine fiber optic cable, SEA-ME-WE4 in
2006, operated by the state-owned Bangladesh
GP Submarine Cable Company Limited (BSCCL). The
46% SEA-ME-WE4 cable originally had a capacity of xx
Gbps, but has since been upgraded to supply 200
Gpbs. This massive injection of bandwidth to the
Robi
30%
market first allowed bandwidth prices to decrease,
which in turn allowed for Bangladeshi people to
access affordable broadband internet for the first
Source: BTRC

6 | Bangladesh IT Sector – July 2018

time. The subsequent launching of the SEA-ME- Mobile Financial Services & Agent Banking
WE5 cable in 2017, which has 1,500 Gpbs
bandwidth capacity has allowed the bandwidth
Chart: Growth of Mobile Banking
price to remain on its decreasing trend, which will
Agents
in turn keep up the massive growth in internet 1,000 200%

Thousands
penetration and bandwidth usage. From the
demand side, the increasing penetration of 3G 800 150%

services and handsets, coupled with the

600 100%
introduction and growth of 4G services and
handsets is expected to exponentially drive 400 50%
demand for internet bandwidth in the future,
keeping in sync with trends observed in peer 200 0%

189

541

561

710

786

countries.
Bangladesh consumed around 565 Gbps
bandwidth as of March 2018, compared to 380
Gpbs in 2017. This rapid growth of bandwidth
consumption, along with the first submarine cable
SEA-ME-WE4 approaching the end of its useful life
has prompted the government to take steps to
connect to the nation’s third submarine cable. The
BSCCL is currently seeking an opportunity to join
any new consortium which seeks to lay another
submarine fibre optic cable for internet
connectivity.
Chart: Internet Subscribers by type
ISP + PSTN
7%
WiMAX
0%
Mobile
Internet
93%
Source: BTRC
820
0 -50%
2013 2014 2015 2016 2017 2018
(May)
Agents Growth(%)
Source: Bangladesh Bank
The recent introduction of Mobile Financial
Services, spearheaded by bKash and Rocket –
subsidiaries of BRAC Bank and Dutch Bangla Bank
respectively, are also having a similar
transformative impact. Whereas the daily
transaction value was only BDT 2.21 billion in
2013, the daily transaction value reached 10.58
billion in May 2018, representing a 37% compound
average growth year-on-year. While there were
only 188 thousand mobile banking agents and 65
thousand active mobile banking accounts in 2013,
the number of agents had risen to 820 thousand
and the number of active accounts had risen to
22.9 million by May 2018. This represented a 5
year compound average growth rate of 34% for
mobile banking agents and a staggering 223%
growth for active mobile banking accounts.

By far, the largest number of subscribers (93%) Chart: Active Mobile Banking
accesses the Internet through mobile internet. 7% Accounts
of subscribers accesses the Internet through 250 100%
Millions

broadband and dial-up, while the number of

200 80%
subscribers accessing the internet through WiMAX
is almost zero. There are three main WiMAX 150 60%
operators in Bangladesh: Qubee, Banglalion and
Ollo. Due to the lack of adoption of WiMAX 100 40%

technology around the world, WiMAX has not 50 20%

122

132

159

210

229

been able to gather market share and its future in

65

Bangladesh is highly uncertain. 0 0%

2013 2014 2015 2016 2017 2018
(May)

Active Accounts Growth

Source: Bangladesh Bank

7 | Bangladesh IT Sector – July 2018

 The rise of Agent banking represents another
golden opportunity to utilize IT services to increase
financial inclusion throughout the country,
especially in areas which are currently
underserved. Agent banking was pioneered by
Bank Asia, which had more than 1,000 agents in
December 2016, followed by Dutch Bangla Bank
with 392 agents. There were a total of 1,646
agents and 544,000 agent banking accounts in
December 2016. By March 2018, the number of
agents had grown to 3,216 and number of agent
banking accounts had grown to 1.468 million. This
represented a growth rate of 71% in number of
agents and 121% for number of agent banking
As the country continues on its path of economic
growth, ATM penetration is projected to increase.
Bangladesh has one of the lowest ATM
penetration rates in the world, standing at only
7.767 ATMs per 100,000 people as of 2016. In
contrast, the value for India stands at 21.24 and
Vietnam stands at 24.5. The rate of growth of ATM
machines in Bangladesh is very high, with annual
growth rates regularly being in the 15-25% range.
Given the high growth rates and low ATM
penetration, it is likely that the ATM market will
see strong growth for the foreseeable future.
12000 Trends of interbank ATM Transaction 1400

accounts. Given that agent banking requires a 10000 1200

much lower capital outlay and operating expenses 1000
compared to the existing branch model, we can 8000

expect to see a similar prodigious growth in agent 800

6000
banking for the near future. The growth of agent 600
banking will also drive social transformation by 4000
400
bringing formal financial products into the
4714.3

5857.1

6428.6

5714.3

5571.4

6285.7

6142.9

6000.0

6857.1

6714.3

7571.4

9714.3
2000 200
mainstream of rural life.
0 0

Jan-17

Mar-17

May-17
Sep-16

Feb-17
Jul-16

Nov-16

Dec-16

Apr-17
Aug-16

Oct-16

Jun-17
The rise of e-commerce, growth in the software
outsourcing industry and the construction and
operation of software parks will drive the next
Transaction Amount (BDT bn)
stage of transformation in the IT sector.
Number of Transactions (Thousands)

ATM, POS and Card Penetration

Source: Bangladesh Bank
A number of exciting new opportunities await on
As per data from the Payment Systems
the horizon in the payments sector. Bangladesh
Department of Bangladesh Bank, the number of
Bank has instructed all scheduled banks to connect
cards (both debit and credit), the amount of
their online fund transfer channels to National
transactions and the number of ATMs and POS’s
Payments Switch Bangladesh (NPSB) – of which ITC
are all growing at high rates. In 2017, the number
is a technical partner. The new technology will
of cards registered a 16.9% growth over the
allow instant fund transfers between any two bank
previous year, while ATMs grew by 10.2% and POS
accounts in Bangladesh. It will also be possible to
terminals grew by 14.9%.
transfer funds from and to cards through NPSB.
Year 2011 2012 2013 2014 2015 2016 1400 300
No. of Trends of interbank POS transaction
5547 6112 7585 8936 11037 12656 1200 250
ATMs
Growth 78% 10% 24% 18% 24% 15% 1000
200
* Source: World Bank 800
150
600
100
400
Number of Card, ATM and POS in Bangladesh 200 50

As on As on Growth 0 0
Terminal
Oct-16

Mar-17

May-17
Jun-17
Sep-16

Feb-17
Dec-16
Jan-17

Apr-17
Aug-16

Nov-16
Jul-16

4/30/2016 4/30/2017 (%)

Card 9852.4 11513.6 16.9

Transaction Amount (BDT bn)
ATMs 8.3 9.2 10.2 No. of Transactions (Thousands)

POS 30.4 34.9 14.9

Source: Bangladesh Bank
New methods of financial inclusion are being
Source: Bangladesh Bank introduced in Bangladesh. Mobile financial services
have already established themselves as an

8 | Bangladesh IT Sector – July 2018

essential part of the banking system. In addition,
agent banking has been established as an
alternative delivery channel. These developments
are expected to greatly boost the growth of the
financial transaction processing industry.
IT/ITeS Outsourcing
The global IT outsourcing industry has been
growing steadily in the last decade. Over recent
years, Bangladesh has made major strides in laying
the groundwork for a diverse and successful
outsourcing market. The IT services industry within
Bangladesh has been growing serving international
clients and domestic clients in all sectors. The
industry is exporting services to European, North
American and East Asian clients. Bangladesh’s
emerging outsourcing players already have strong
credentials. Bangladesh offers a vast pool of
young, trained and English speaking resources –
available at costs almost 40% lower than
established destinations like India and Philippines.
Bangladesh has been successful in attracting
several global players in the IT space to set up
operations in Bangladesh. Some examples are
Samsung R&D, Therap, REVE Systems, NewsCred
and Rocket Internet. The current IT/ITeS industry
profile of Bangladesh positions the country as a
fast emerging services outsourcing destination,
currently capable of providing a comprehensive
set of IT/ITeS services exports.
The IT sector of Bangladesh has grown
considerably in recent years. The total IT sector
revenue generated by the country reached
approximately US$700 million in 2017, with export
revenue accounting for more than US$250 million,
including the freelance outsourcing segment. The
Bangladesh government has targeted USD 1 billion
revenue from the IT sector by 2019. The
internationally renowned management
consultancy firm Gartner has included Bangladesh
in top 30 outsourcing destination in 2015.
Bangladesh is also progressing in the A.T. Kearney
Global Services Index, moving four positions up in
the 2016 ranking. Bangladesh ranked 22nd in top
25 of the 2016 A.T. Kearney Global Services Index
(GSLI). Bangladesh has secured 21nd place in the
GSLI Index. Bangladesh had been ranked 22nd in
the same list for 2016. The improvement in
rankings indicate that the reforms and government
measures to increase the IT and ITeS industry are
having effect.
Having gained experience and credibility in the
international market for services, Bangladeshi
9 | Bangladesh IT Sector – July 2018
companies are now graduating from low value
added tasks to higher end engineering and product
development assignments:
● Bangladesh-based Eyeball Technologies
has developed the Blackberry Playbook's
Video chat for BBM, for Research in
Motion (RIM).
● SSD Tech have been developing mobile
platforms for VAS for companies across
two continents
● GraphicPeople has been creating
promotional material in multiple
languages for Dell, the technology
powerhouse.
Digital Bangladesh
The “Digital Bangladesh” initiative consists of four
key priorities:
1) Developing human resources ready for the 21st
century
2) Connecting citizens in ways most meaningful to
them.
3) Taking services to citizens’ doorsteps.
4) Making the private sector and market more
productive and competitive through the use of
digital technology.
Bangladesh has climbed up 24 places in United
Nations E-Government Development Index. The
country has secured an impression leap upward to
the 124th position in 2016 from 148th in 2014.
More than 200 services are available through
5,275 digital centres established all over the
country. Over 25,000 web sites including those of
upazilas, districts, divisions, departments and
directorates have been added to national web
portal. National Enterprise Architecture (NEA) is
being built by the Government to facilitate
interoperability and operation of e-governance
activities.
Skill Development
Bangladesh government has taken a number of
projects aimed at creating a skilled workforce who
will take the ICT industry forward.
Under the Leveraging ICT for Growth, Employment
& Governance (LICT) Project, a plan has been
undertaken to train more than 75,000 youth over
next three years. The numbers are to be divided as
follows:
● 10,000 Top-up Training
● 20,000 Foundation Skills Training Program
 ● 20,000 Online Outsourcing Training
Under the Skills for Employment Investment
Program (SEIP), a total 1.25 million youth are to be
trained by 2021. Under the Support to
Development of Kaliakair Hi tech Park project,
4,981 youths have received ICT training. To
increase self-dependency, Learning and Earning
project is working on creating 55,000 freelancers.
Under the Bari Boshe Borolok (Getting Rich At
Home) project, 14,750 youths have been trained
as freelancers of whom 70 percent are women.
Bangladesh Hi-Tech Park Authority (BHTPA) has
imparted trainings to around 6,500 youths in
different areas of Information and Communication
Technology (ICT) to enable them to get
employment capitalizing on their skills in the field
of ICT. Of them, around 4,700 trainees have
already got jobs under Employment Incentive
Program.
Taxation and Regulatory Changes
Bangladesh has identified ICT as a “thrust sector”
and has enacted several measures to encourage
this sector, among which are:
● Income from Software and ITeS has been
exempt from income tax until 2024.
● 10% cash incentive is available for
software exports.
● Productivity and Database Software
enjoy 5% VAT rate instead of the
previous 15%
● Sylhet Hi-Tech Park
● Mohakhali IT Village
● Janata Tower Software Technology Park
● Barendra Silicon Valley, Rajshahi.
Bangladesh’s first university based incubator is
being established at the campus of Chittagong
University of Engineering and Technology (CUET).
The government has also initiated plan to establish
“Sheikh Kamal IT Training and Incubation Centre”
at the divisional level. Ministry of Science and
Information & Communication Technology
(MOSICT) set up an ICT Incubator in BSRS Bhaban,
12 Kawran Bazar, Dhaka-1215 for the development
of ICT sector in Bangladesh. It was setup under the
direction and budgetary allocation of the
(MOSICT). The first software technology park of
the country and the under-construction park in
Janata Tower, which is also at Karwan Bazar, will
be the second. Sheikh Hasina Software Park,
opened in Jashore on Sunday, December 10, 2017.
These software parks and incubators all offer
space at subsidized rates to young startup IT
companies founded by Bangladeshi entrepreneurs,
as well as all the hardware and connectivity
infrastructure required by IT companies. The plan
is to support the development of technology
companies to help them mature and drive the next
stage of growth of the IT sector in the country.
With the government fully behind them, it is quite
realistic to expect a new generation of IT firms to
start emerging from these parks soon.

The exemption of IT companies from taxation is a

huge boost to the sector, since non-IT private
companies are subject to a 35% corporate tax.
Although the tax exemption is set to expire in
2024, the deadline has been extended in the past,
and there is a very good chance that the
exemption will continue, at least until there is a
thriving IT sector in the country.

Software Technology Parks

To support the development of the ICT industry,

Bangladesh Hi-Tech Park Act was passed in 2010.
Subsequently, Bangladesh Hi-Tech Park Authority
(BHTPA) was established in 2010 for creation,
management, operation and development of hi-
tech parks across the country.

The most prominent Software Technology Parks

are:
● Kaliakoir Hi-Tech Park
● Jessore Software Technology (IT) Park

10 | Bangladesh IT Sector – July 2018

Snapshot of Listed Companies in the IT Sector

AAMRANET AAMRATECH AGNISYSL BDCOM DAFODILCOM INTECH ISNLTD ITC

Price (BDT) 84.2 30 21.6 26.8 43.3 20.7 23.3 51.4
Mkt. Cap (BDT
4222.08 1,600.18 1,382.02 1,256.10 2,091.32 550.24 266.45 5,618.81
mn)
Paid Up Capital
530.41 553.69 691.01 465.22 499.12 282.17 109.2 1040.52
(BDT mn)
EPS (2017) 2.31 1.52 1.02 1.45 18.92 1.09 -0.52 1.00
EPS (9M 2018) 4.8 1.23 0.82 1.14 2.01 0.22 -0.05 0.96
5y EPS Growth 19.90% 3.40% 7.80% 8.30% 26.40% NM NM 36.10%
NAV (2017) 29.86 22.62 15.07 15.29 13.19 11.2 13.88 15.6
P/E (Forward) 13.16 18.29 19.76 17.63 16.16 70.57 NM 40.16
P/NAV 2.82 1.33 1.43 1.75 3.28 1.85 1.68 3.29
52 Weeks Price 18.50- 24.70- 16.20- 16.70- 28.20-
71-156.6 27.20-40.80 31.50-58.20
Range 29.20 47.50 24.30 29.50 55.70
Latest Dividend 10%C 10%C 5%C, 5%B 5%C, 5%B 18%C 10%B - 6%C, 4%B

11 | Bangladesh IT Sector – July 2018

Company Profiles

AAMRA NETWORKS LIMITED (DSE: AAMRANET)

Particulars Aamra Networks Limited (ANL) is a telecommunication &

Price (BDT) 84.2 technology company involved in Leased Bandwidth distribution,
Mkt. Cap (BDT mn) 4222.08 IAAS, SAAS and IP enabled value added services. ANL is one of
Paid Up Capital (BDT mn) 530.41 the first private sector licensed Internet Service Provider (ISP) in
EPS (2017) 2.31 Bangladesh. It was incorporated in January 10, 2001 and
EPS (9M 2018) 4.8 commenced operations from that date. It was originally formerly
5y EPS Growth (%) 19.90% known as Global Online Services Limited was incorporated and
NAV (2017) 29.86 commenced its business in Bangladesh under the Companies Act,
P/E (Forward) 13.16 1994 on 10 January, 2001 as a Private Limited Company by
shares. The Company changed its name from Global Online
P/NAV 2.82
Services Limited to aamra networks limited on December 31,
52 Weeks Price Range 71-156.6
2007. Subsequently, the Company was converted into a Public
Latest Dividend 10%C
Limited Company by shares on May 08, 2013. ANL has its
registered office at Safura Tower (12th Floor), 20, Kemal Ataturk Avenue Banani, Dhaka - 1213. The corporate
office of the company situated at Faruque Rupayan Tower (17th Floor), 32, Kemal Ataturk Avenue Banani,
Dhaka – 1213. Also the Company has a liaison office in SFA Tower (3rd floor) 132, Panchlaish Chattogram –
4203, Bangladesh. Aamra Networks Limited (ANL) is a leading IT and IT Enabled Services (ITeS) service
providers in Bangladesh. It is currently a leading system integrator, Infrastructure as a Service (IAAS) and
Internet Service Provider (ISP) in Bangladesh. It is one of the largest purchasers of NTTN capacity in the country
with a capacity exceeding 85 Gbps.

Particulars (BDT mn) 2014 2015 2016 2017 3Q’2018

Sales 595.09 662.95 763.28 795.52 764.78
Gross Profit 238.60 264.20 294.02 311.03 337.42
Operating Profit 120.87 141.41 155.55 151.51 214.93
Net Profit 84.89 120.08 128.00 122.27 202.52
Assets 858.82 943.15 1,080.43 1,336.63 1,850.30
Debt 289.02 108.00 181.27 315.20 151.28
Retained Earnings 175.94 296.02 360.03 482.30 626.13
Equity 569.81 835.16 899.16 1,021.43 1,699.03
Gross Profit Margin 40.10% 39.85% 38.52% 39.10% 44.12%
Operating Profit Margin 20.31% 21.33% 20.38% 19.05% 28.10%
Net Profit Margin 14.26% 18.11% 16.77% 15.37% 26.48%
Total Asset Turnover 0.20 0.18 0.19 0.16 0.10
ROA 2.9% 3.3% 3.2% 2.5% 1.33%
Leverage 1.51 1.13 1.20 1.31 1.09
ROE 4.6% 4.3% 3.7% 3.2% 1.47%
EPS 2.23 3.16 3.36 3.22 5.33
NAV 14.99 21.98 23.66 26.88 48.69
Growth:
Sales 15.53% 11.40% 15.13% 4.22% 24.24%
Retained Earnings 84.67% 68.25% 21.62% 33.96% 36.27%
Assets 42.84% 9.82% 14.56% 23.71% 38.51%
Liabilities 42.84% 9.82% 14.56% 23.71% -55.14%

12 | Bangladesh IT Sector – July 2018

AAMRA TECHNOLOGIES LIMITED (DSE: AAMRATECH)

aamra technologies limited (ATL) was incorporated and started

Particulars its commercial operation in Bangladesh as a Private Limited
Price (BDT) 30 Company registered under Registrar of Joint Stock Companies &
Mkt. Cap (BDT mn) 1,600.18 Firms; having head office at Faruk Rupayan Tower (9th Floor), 32,
Paid Up Capital (BDT mn) 553.69 Kemal Ataturk Avenue, Banani, Dhak-1213, Bangladesh on March
EPS (2017) 1.52 14, 1990 in the name of Texas Electronics Limited. The
EPS (9M 2018) 1.23 Company’s name has been changed from Texas Electronics
Limited to aamra technologies limited with effect from December
5y EPS Growth (%) 3.40%
31, 2007. ATL has been converted to a Public Limited Company
NAV (2017) 22.62
with effect from November 30, 2009. aamra technologies limited
P/E (Forward) 18.29
provides comprehensive IT solutions and services including
P/NAV 1.33
Systems Integration, Information Systems Outsourcing, Core
52 Weeks Price Range 27.20-40.80
Banking Software & Switching Solution supply, implementation &
Latest Dividend 10%C maintenance.

aamra technologies limited (ATL) is a technology company that is focused towards providing the banking
market with the most advanced and revolutionary hardware, software and connectivity solutions for close to
three decades. ATL has throughout the years continued to provide comprehensive IT solutions and services
that include Systems Integration, Information System Outsourcing, Core Banking Software, Switching and
Network and Solutions, supply, implementation and maintenance. As a major player in the IT sector of
Bangladesh, ATL has developed its business model over the time through carefully analyzing the emerging
market trends of the Asia-Pacific region. The company is investing in capacity and technology that will lead to
sustainable, long-term growth and profitability based on the value offered to clients. aamra’s core focus is to
consistently introduce the latest products while maintaining outstanding customer services as it continues to
explore newer horizons to deliver newer and better IT solutions to its most valued premium asset – its
customers.

Particulars (BDT mn) 2014 2015 2016 2017 3Q’2018

Sales 1016.52 1201.53 1114.78 1171.44 1436.90
Gross Profit 206.13 205.42 193.34 198.46 300.16
Operating Profit 105.49 116.01 103.82 111.53 184.39
Net Profit 83.94 91.28 82.03 83.95 125.93
Assets 1,764.96 1,959.60 1,918.64 1,960.52 2118.43
Debt 603.62 762.35 694.74 708.04 853.28
Retained Earnings 105.03 140.94 167.60 196.18 208.85
Equity 1,161.33 1,197.25 1,223.90 1,252.48 1265.16
Gross Profit Margin 20.28% 17.10% 17.34% 16.94% 20.89%
Operating Profit Margin 10.38% 9.66% 9.31% 9.52% 12.83%
Net Profit Margin 9.63% 8.60% 8.25% 7.73% 8.76%
Total Asset Turnover 0.15 0.16 0.14 0.15 0.15
ROA 1.23% 1.23% 1.06% 1.08% 0.91%
Leverage 1.52 1.64 1.57 1.57 1.67
ROE 1.85% 1.94% 1.69% 1.69% 1.50%
EPS 1.52 1.65 1.48 1.52 1.23
NAV 20.97 21.62 22.10 22.62 22.85
Growth:
Sales 41.60% 18.20% -7.22% 5.08% -0.53%
Retained Earnings 8.74% 34.19% 18.91% 17.05% 21.18%
Assets 8.00% 11.03% -2.09% 2.18% 4.49%
Liabilities 13.54% 26.30% -8.87% 1.91% 6.83%

13 | Bangladesh IT Sector – July 2018

AGNI SYSTEMS LIMITED (DSE: AGNISYSL)

Agni Systems Ltd. is a pioneering ISP in Bangladesh. It was

Particulars incorporated on November 4, 1995 and commenced commercial
Price (BDT) 21.6 operations on the same date. Its registered and corporate office
Mkt. Cap (BDT mn) 1,382.02 is in Suite A, 11th Floor, Navana Tower, 45 Gulshan Avenue. Its
Paid Up Capital (BDT mn) 691.01 authorized capital is BDT 1,000 million. Agni Systems started its
EPS (2017) 1.02 operation by offering UUCP and dial up services. Later it
EPS (9M 2018) 0.82 introduced DSL services in 2001. The company was converted to
5y EPS Growth (%) 7.80% a public listed firm in 2003 and was subsequently listed on Dhaka
NAV (2017) 15.07 and Chittagong stock exchanges under the symbol AGNISYSL. The
P/E (Forward) 19.76 company's main office is located in Dhaka.. It was listed in DSE
P/NAV 1.43 and CSE in 2003, and started offering wireless internet in 2004.
52 Weeks Price Range 18.50-29.20 From 2006 it started offering fiber optic internet connectivity.
Latest Dividend 5%C, 5%B
Agni Systems offers a wide range of products and services,
centring on internet connectivity. It offers Enterprise Fibre Broadband, Enterprise Wireless Broadband,
Residential Fibre Broadband and Residential Wireless Broadband. It also provides a wide range of Voice
services, ranging from IP Phones to Soft phones, in addition to other telephony solutions. It also offers web
hosting services, managed overseas email services, managed local email hosting services and managed servers.
In the web development space, it offers web development services, domain registration services and a domain
control panel. It also sells hardware directly, including WiFi routers, Bandwidth Managers, P2P radios and IP
Phones.

Agni Systems Limited holds a number of licenses from BTRC. It holds a nationwide ISP license, a VSAT operator
license, it has a 3.5GHz Frequency allocation for its wireless broadband services, IPTSP license to operate IP
Phones, ICX, IGW and IIG Licenses. These licenses allow Agni Systems Limited to provide a wide variety of
internet connectivity solutions.

Particulars (BDT mn) 2014 2015 2016 2017 3Q’2018

Sales 286.97 311.98 336.38 326.77 260.38
Gross Profit 144.16 164.81 178.51 157.27 159.29
Operating Profit 89.34 95.78 91.37 89.96 73.74
Net Profit 52.39 63.06 67.38 67.16 63.03
Assets 1250.30 1481.19 1189.09 1213.55 1175.65
Debt 428.14 595.98 236.49 221.88 160.47
Retained Earnings 71.60 82.86 93.26 101.00 91.60
Equity 822.16 885.21 952.60 991.67 1015.18
Gross Profit Margin 50.24% 52.82% 53.07% 48.13% 61.18%
Operating Profit Margin 31.13% 30.70% 27.16% 27.53% 28.32%
Net Profit Margin 18.26% 20.21% 20.03% 20.55% 24.21%
Total Asset Turnover 0.07 0.06 0.06 0.07 0.11
ROA 1.2% 1.2% 1.3% 1.4% 1.43%
Leverage 1.52 1.67 1.25 1.22 1.20
ROE 2.5% 2.7% 2.9% 2.8% 1.74%
EPS 0.76 0.91 0.98 0.97 0.91
NAV 11.90 12.81 13.79 14.35 14.69
Growth:
Sales 46.02% 8.72% 7.82% -2.85% 3.92%
Retained Earnings 7.99% 15.73% 12.56% 8.29% 13.90%
Assets 37.92% 18.47% -19.72% 2.06% -2.91%
Liabilities 213.05% 39.20% -60.32% -6.18% -33.1%

14 | Bangladesh IT Sector – July 2018

BDCOM ONLINE LIMITED (DSE: BDCOM)

Particulars BDCOM Online Limited was incorporated as a private limited

Price (BDT) 26.8 company on 12th February 1997, under the Companies Act,
Mkt. Cap (BDT mn) 1,256.10 1994, and registered with the Registrar of Joint Stock Companies.
Paid Up Capital (BDT mn) 465.22 Subsequently, the Company has converted into a public limited
EPS (2017) 1.45 company in 2001 with a view to float its share to the public. Its
EPS (9M 2018) 1.14 registered office is 5th Floor, Rangs Nilu Square, Satmasjid Road,
5y EPS Growth (%) 8.30% House No. 75, Road-5/A, Dhanmondi R/A, Dhaka. Its authorized
NAV (2017) 15.29 capital is BD 1,000 million, and it is listed in both the DSE and CSE
P/E (Forward) 17.63 under the symbol “BDCOM”.
P/NAV 1.75
52 Weeks Price Range 24.70-47.50 BDCOM is an official licensee of Bangladesh Telecom Regulatory
Latest Dividend 5%C, 5%B Commission (BTRC) to provide nationwide Data Communication
Service, IPTSP (IP Telephony Service), System Integration,
Managed Service, Internet Service, and Consultancy for IT Infrastructure Development. It has obtained ISP
license From BTRC. Up to the present time, the company has focused on building its wireless network utilizing
the 2.4 GHz and 5.8 GHz extended range solutions. The company delivers Layer 2 & Layer 3 connectivity,
wireless services for IP VPN Wide Area Network (WAN), Internet access, and VLANs (Virtual LANs). It also
provides secured WAN communication using standard security devices, for its customers.

BDCOM is present throughout the country, having built its network on 493 Thanas out of 509 of the country.
The company has expansion plans to cover rest of the districts of the country within 2017. BDCOM Online Ltd
utilizes using fiber optic backbone of Banglalink & Fiber@Home as a primary, fiber optic link of Pacific
Bangladesh Telecom Ltd as secondary. BDCOM is also using GP link as a tertiary link to ensure uninterrupted
service.

Particulars (BDT mn) 2014 2015 2016 2017 3Q’2018

Sales 290.94 361.55 444.68 520.96 394.65
Gross Profit 172.34 214.27 260.41 291.07 223.60
Operating Profit 45.22 57.87 65.38 82.66 56.39
Net Profit 48.87 58.58 67.14 73.04 53.12
Assets 582.69 669.83 762.76 863.18 888.48
Debt 55.37 83.94 139.37 185.88 180.14
Retained Earnings 52.86 61.42 84.04 98.64 107.45
Equity 527.32 585.89 623.39 677.30 708.35
Gross Profit Margin 59.24% 59.26% 58.56% 55.87% 56.6%
Operating Profit Margin 15.71% 16.30% 24.04% 16.36% 14.29%
Net Profit Margin 16.80% 16.20% 15.10% 14.02% 13.45%
Total Asset Turnover 0.13 0.14 0.16 0.16 0.16
ROA 2.22% 2.34% 2.34% 2.25% 2.02%
Leverage 1.11 1.14 1.22 1.27 1.25
ROE 2.42% 2.63% 2.78% 2.81% 2.53%
EPS 1.05 1.26 1.44 1.57 1.14
NAV 11.33 12.59 13.40 14.56 15.22
Growth:
Sales 14.28% 24.27% 22.99% 17.15% 3.84%
Retained Earnings 45.57% 16.21% 36.82% 17.38% 8.93%
Assets 12.03% 14.95% 13.87% 13.17% 2.93%
Liabilities 39.68% 51.58% 66.05% 33.37% -3.1%

15 | Bangladesh IT Sector – July 2018

DAFFODIL COMPUTERS LIMITED (DSE: DAFODILCOM)

Particulars Daffodil Computers was established in 1990 as a proprietorship

concern of Mr. Md. Sabur Khan, the former president of Dhaka
Price (BDT) 43.3
Chamber of Commerce and Industries (DCCI) and Bangladesh
Mkt. Cap (BDT mn) 2,091.32
Computer Somity (BCS). In 1998 the Company was incorporated
Paid Up Capital (BDT mn) 499.12
as a Private Limited Company and named Daffodil Computers
EPS (2017) 18.92 Limited (DCL). In 2003 the company become the 1st Public Listed
EPS (9M 2018) 2.01 Company as a Purely IT based Company in Dhaka Stock Exchange
5y EPS Growth (%) 26.40% (DSE) and in 2006 also listed in Chittagong Stock Exchnage (CSE).
NAV (2017) 13.19 Its authorized capital is BDT 2,000 million. DCL has emerged as
P/E (Forward) 16.16 the largest computer assembling, marketing and selling firms of
P/NAV 3.28 Bangladesh. Its corporate office is located in 64/3, Lake Circus,
52 Weeks Price Range 31.50-58.20 Kalabagan, Mirpur Road, Dhanmondi.
Latest Dividend 18%C
Though Daffodil Computers core business was computer Assembling and selling, the Company diversified into
computer training and software development by opening a computer training wing (training operated by sister
concern) in 1997 and a software development wing in 1998. These two wings were subsequently established
as separate entities under the names of Daffodil Institute of Information Technology and Daffodil Software
Limited respectively. The company soon opened another wing for e-commerce and web development in May
2000 to capitalize on the huge opportunity provided by the robust growth of ecommerce in Bangladesh. DCL
stepped ahead while it introduced the 1st local brand PC in Bangladesh naming daffodilPC. It’s all the
components are OEM and specially built for daffodilPC.

DCL has been awarded the ISO 9002 certification for its main focus and the 1st and No.1 local brand of
Bangladesh daffodilPC. It has been appointed as the only Hewlett-Packards (HP) authorized Corporate Reseller
and Authorized Service Provider in Bangladesh.

Particulars (BDT mn) 2014 2015 2016 2017 3Q’2018

Sales 439.59 478.58 540.35 651.97 365.22
Gross Profit 106.82 120.42 171.21 221.19 137.35
Operating Profit 40.37 48.78 86.94 128.35 110.71
Net Profit 34.47 46.55 77.86 108.27 99.51
Assets 679.10 737.97 818.36 892.32 844.72
Debt 94.73 106.67 169.20 209.64 152.36
Retained Earnings 85.25 132.18 150.04 183.56 193.23
Equity 584.38 631.30 649.16 682.69 692.35
Gross Profit Margin 24.30% 25.16% 31.68% 33.93% 37.60%
Operating Profit Margin 9.18% 10.19% 16.09% 19.69% 30.3%
Net Profit Margin 7.84% 9.73% 14.41% 16.61% 27.24%
Total Asset Turnover 0.16 0.17 0.17 0.19 0.18
ROA 1.29% 1.64% 2.50% 3.16% 3.9%
Leverage 1.16 1.17 1.26 1.31 1.22
ROE 1.52% 1.91% 3.04% 4.06% 4.76%
EPS 0.69 0.93 1.56 2.17 1.99
NAV 11.71 12.65 13.01 13.68 13.87
Growth:
Sales 9.33% 8.87% 12.91% 20.66% 15.47%
Retained Earnings 73.05% 55.04% 13.51% 22.34% 5.26%
Assets 3.37% 8.67% 10.89% 9.04% -5.3%
Liabilities -12.76% 12.61% 58.61% 23.90% -27.3%

16 | Bangladesh IT Sector – July 2018

IT CONSULTANTS LIMITED (DSE: ITC)

Particulars IT Consultants Limited is a company that is listed under the IT

Price (BDT) 51.4 sector of the Dhaka Stock Exchange. It specializes in ATM and
Mkt. Cap (BDT mn) 5,618.81 POS sales and service, and is also a pioneer in the Electronic
Paid Up Capital (BDT mn) 1040.52 Payment and Transaction Systems sector. ITC provides
Transaction Processing Services to major Banks, Financial
EPS (2017) 1.00
Institutions and Government Organizations. It operates Q-Cash,
EPS (9M 2018) 0.96
one of the largest ATM networks in Bangladesh. Its registered
5y EPS Growth (%) 36.10%
office is located in Evergreen Plaza, 260/B Tejgaon I/A, Dhaka. ITC
NAV (2017) 15.6
is the only Payment Systems Operator (PSO) licensed by
P/E (Forward) 40.16 Bangladesh Bank to provide end-to-end electronic payment
P/NAV 3.29 services for banks and financial institutions. It is the only certified
52 Weeks Price Range 28.20-55.70 third party transaction processor for card transactions. It is the
Latest Dividend 6%C, 4%B first company to achieve PCI-DSS certification in Bangladesh. ITC
is also a technical partner of Bangladesh Bank in implementing the National Payment Switch Bangladesh
(NPSB).

ITCL provides Sales and Support for ATMs, POS terminals, Kiosks, Biometric ATMs, Switching and CMS Solution,
Tailor-made software and IT Infrastructure-Security Solution. It imports ATMs from Wincor Nixdorf (now
Diebold Nixdorf), a leading ATM manufacturer based in Germany. It sells POS terminals from Verifone (USA)
and SAND (China).

Transaction Processing and Maintenance Services are another key business area. ITC provides Transaction
Switching services, ATM & POS Transaction Processing, Online Payment Gateway, Remittance Transaction
Processing, Debit & Credit Card Personalization and Management, Interfacing/Integration and development of
Switching Solutions/Middleware, E-Commerce Solution, Mobile Financial Services Solution, Agent Banking
Solution, Online Tax Payment Solution with cooperation of NBR, Online Passport Fee Collection, Software
Development of catered towards Banks and Financial Institutions, PCI-DSS Certification and Electronic Case
Management Solution in cooperation with Dhaka Metropolitan Police and Chittagong Metropolitan Police

Particulars (BDT mn) 2014 2015 2016 2017 3Q’2018

Sales 670.71 590.23 986.28 1,148.44 614.44
Gross Profit 228.68 212.77 299.82 353.99 283.54
Operating Profit 113.54 89.64 152.15 168.79 150.24
Net Profit 78.25 31.56 83.18 103.75 100.10
Assets 1,889.72 2,011.69 2,346.31 2,532.86 2419.13
Debt 515.33 618.34 759.62 909.68 756.21
Retained Earnings 47.78 83.43 184.66 101.92 101.63
Equity 1,374.38 1,393.35 1,586.69 1,623.18 1662.92
Gross Profit Margin 34.10% 36.05% 30.40% 30.82% 46.15%
Operating Profit Margin 16.93% 15.19% 15.43% 14.70% 24.45%
Net Profit Margin 11.67% 5.35% 8.43% 9.03% 16.29%
Total Asset Turnover 0.38 0.30 0.45 0.47 0.38
ROA 4.44% 1.62% 3.82% 4.25% 5.5%
Leverage 1.30 1.41 1.46 1.52 1.45
ROE 5.78% 2.28% 5.58% 6.46% 7.98%
EPS 0.75 0.30 0.80 1.00 0.96
NAV 13.21 13.39 15.25 15.60 15.98
Growth:
Sales 54.20% -12.00% 67.10% 16.44% -14.4%
Retained Earnings -193% 74.61% 121.34% -44.81% -22.08%
Assets 15.71% 6.45% 16.63% 7.95% -4.56%
Liabilities 70.53% 19.99% 22.85% 19.75% -13.25%

17 | Bangladesh IT Sector – July 2018

Comparative Income Statements

Particulars: AAMRANET AAMRATECH AGNISYSL BDCOM DAFODILCOM ITC

Revenue 795.52 1,171.44 326.77 520.96 651.97 1,148.44
COGS -484.49 -972.98 -169.51 -229.89 -430.77 -794.45
Gross Profit 311.03 198.46 157.27 291.07 221.19 353.99
Operating expenses -159.52 -86.94 -67.31 -208.41 -92.84 -185.20
Operating Profit 151.51 111.53 89.96 85.24 128.35 168.79
Financial expenses -13.18 -21.08 -12.50 -2.58 -11.73 -38.63
Other income -0.04 0.05 1.41 7.32 2.85 0.82
Profit before WPPF 138.29 90.50 78.88 89.98 119.47 130.98
Provision for WPPF -6.59 0.00 -3.76 -4.28 -5.95 -6.24
Profit before income tax 131.71 0.00 75.12 85.70 113.52 124.74
Current tax -9.00 -6.87 -8.78 -14.49 -4.95 -10.38
Deferred tax -0.43 0.32 0.82 -6.91 -0.31 -10.62
Net Profit 122.27 83.95 67.16 64.29 108.27 103.75
No. of Share 38.00 55.37 69.10 46.52 49.91 104.05
Earning Per Share 3.22 1.52 0.97 1.57 2.17 1.00

Comparative Income Statements (Common Size)

Particulars: AAMRANET AAMRATECH AGNISYSL BDCOM DAFODILCOM ITC

Revenue 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
COGS -60.90% -83.06% -51.87% -44.13% -66.07% -69.18%
Gross Profit 39.10% 16.94% 48.13% 55.87% 33.93% 30.82%
Operating expenses -20.05% -7.42% -20.60% -40.01% -14.24% -16.13%
Operating Profit 19.05% 9.52% 27.53% 16.36% 19.69% 14.70%
Financial expenses -1.66% -1.80% -3.82% -0.50% -1.80% -3.36%
Other income 0.00% 0.00% 0.43% 1.41% 0.44% 0.07%
Profit before WPPF 17.38% 7.73% 24.14% 17.27% 18.33% 11.41%
Provision for WPPF -0.83% 0.00% -1.15% -0.82% -0.91% -0.54%
Profit before income tax 16.56% 0.00% 22.99% 16.45% 17.41% 10.86%
Current tax -1.13% -0.59% -2.69% -2.78% -0.76% -0.90%
Deferred tax -0.05% 0.03% 0.25% -1.33% -0.05% -0.92%
Net Profit 15.37% 7.17% 20.55% 12.34% 16.61% 9.03%

18 | Bangladesh IT Sector – July 2018

Comparative Balance Sheets:

Particulars (2017) (BDT mn) AAMRANET AAMRATECH AGNISYSL BDCOM DAFODILCOM ITC
Property, Plant and Equipment 643.23 153.90 583.28 343.92 120.94 248.84
Capital Work-in-Progress 91.17 0.00 0.00 0.00 0.00 99.18
Intangible Assets 21.40 92.58 34.40 0.00 52.84 717.52
Other Non-Current Assets 9.29 0.00 20.03 3.85 411.84 0.00
Total Non-Current Assets: 765.09 246.48 637.70 347.77 585.62 1,065.54
Inventories 225.37 722.10 23.09 15.82 132.46 328.74
Trade and Others Receivables 127.32 670.37 268.25 142.04 74.69 409.22
Advances, Deposits and Prepayments 179.48 314.71 244.39 12.90 89.31 576.15
Short Term Investments 0.00 0.00 2.07 272.16 0.00 0.00
Cash and Cash Equivalents 39.38 6.85 38.05 40.10 10.24 153.21
Other Current Assets 0.00 0.00 0.00 32.39 0.00 0.00
Total Current Assets: 571.54 1,714.04 575.85 515.41 306.70 1,467.32
Total Assets: 1,336.63 1,960.52 1,213.55 863.18 892.32 2,532.86
Share Capital 380.00 553.69 658.11 443.07 499.12 1,000.50
Share Premium 159.13 502.61 232.57 119.50 0.00 294.58
Retained Earnings 482.30 196.18 101.00 98.64 183.56 101.92
Revaluation Reserve 0.00 0.00 0.00 0.00 0.00 226.19
Other Equity 0.00 0.00 0.00 16.09 0.00 0.00
Total Equity: 1,021.43 1,252.48 991.67 677.30 682.69 1,623.18
Long Term Debt 0.00 130.10 66.07 0.00 0.00 0.00
Deferred Tax Liability 16.25 0.00 8.90 10.94 0.00 77.24
Lease Liabilities 0.00 0.00 0.00 0.00 0.00 0.00
Other non-current Liabilities: 0.00 0.00 0.00 0.00 0.00 25.70
Total Non-Current Liabilities: 16.25 130.10 74.97 10.94 0.00 102.94
Bank Overdraft 0.00 0.00 0.00 0.00 0.00 488.00
Short Term Loans 237.90 282.65 0.00 13.21 144.09 0.00
Trade and others payable 11.96 146.21 0.00 137.29 7.48 40.93
Other Current Liabilities 49.09 149.08 146.91 24.45 58.07 277.81
Total Current Liabilities 298.95 577.94 146.91 174.95 209.64 806.74
Total Liabilities 315.20 708.04 221.88 185.88 209.64 909.68
Total Liabilities + Equity: 1,336.63 1,960.52 1,213.55 863.18 892.32 2,532.86

19 | Bangladesh IT Sector – July 2018

Comparative Balance Sheets (Common Size):

Particulars (2017) AAMRANET AAMRATECH AGNISYSL BDCOM DAFODILCOM ITC

Property, Plant and Equipment 48.12% 7.85% 48.06% 39.84% 13.55% 9.82%
Capital Work-in-Progress 6.82% 0.00% 0.00% 0.00% 0.00% 3.92%
Intangible Assets 1.60% 4.72% 2.83% 0.00% 5.92% 28.33%
Other Non-Current Assets 0.69% 0.00% 1.65% 0.45% 46.15% 0.00%
Total Non-Current Assets: 57.24% 12.57% 52.55% 40.29% 65.63% 42.07%
Inventories 16.86% 36.83% 1.90% 1.83% 14.84% 12.98%
Trade and Others Receivables 9.53% 34.19% 22.10% 16.46% 8.37% 16.16%
Advances, Deposits and Prepayments 13.43% 16.05% 20.14% 1.49% 10.01% 22.75%
Short Term Investments 0.00% 0.00% 0.17% 31.53% 0.00% 0.00%
Cash and Cash Equivalents 2.95% 0.35% 3.14% 4.65% 1.15% 6.05%
Other Current Assets 0.00% 0.00% 0.00% 3.75% 0.00% 0.00%
Total Current Assets: 42.76% 87.43% 47.45% 59.71% 34.37% 57.93%
Total Assets: 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Share Capital 28.43% 28.24% 54.23% 51.33% 55.94% 39.50%
Share Premium 11.91% 25.64% 19.16% 13.84% 0.00% 11.63%
Retained Earnings 36.08% 10.01% 8.32% 11.43% 20.57% 4.02%
Revaluation Reserve 0.00% 0.00% 0.00% 0.00% 0.00% 8.93%
Other Equity 0.00% 0.00% 0.00% 1.86% 0.00% 0.00%
Total Equity: 76.42% 63.89% 81.72% 78.47% 76.51% 64.09%
Long Term Debt 0.00% 6.64% 5.44% 0.00% 0.00% 0.00%
Deferred Tax Liability 1.22% 0.00% 0.73% 1.27% 0.00% 3.05%
Lease Liabilities 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Other non-current Liabilities: 0.00% 0.00% 0.00% 0.00% 0.00% 1.01%
Total Non-Current Liabilities: 1.22% 6.64% 6.18% 1.27% 0.00% 4.06%
Bank Overdraft 0.00% 0.00% 0.00% 0.00% 0.00% 19.27%
Short Term Loans 17.80% 14.42% 0.00% 1.53% 16.15% 0.00%
Trade and others payable 0.89% 7.46% 0.00% 15.90% 0.84% 1.62%
Other Current Liabilities 3.67% 7.60% 12.11% 2.83% 6.51% 10.97%
Total Current Liabilities 22.37% 29.48% 12.11% 20.27% 23.49% 31.85%
Total Liabilities 23.58% 36.11% 18.28% 21.53% 23.49% 35.91%
Total Liabilities + Equity: 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

20 | Bangladesh IT Sector – July 2018

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Azmal Hossain Rafi
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21 | Bangladesh IT Sector – July 2018

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22 | Bangladesh IT Sector – July 2018