Datamatics Global Services stock soars another 10%, gains 32% in 2 days on news of partnership with Microsoft

Shares of Datamatics Global Services surged another 10 percent in early morning trading today, reaching a nine-month high of ₹740 per share. This follows a 20 percent gain in the previous trading session, bringing the cumulative increase to 32 percent.

What triggered the rally?

The recent surge in the stock price was driven by the company's announcement on Tuesday that it had partnered with Microsoft to develop its own copilot solutions focused on process automation aimed at accelerating business transformation.

Datamatics announced the launch of a Partner Onboarding Copilot, now available on the Microsoft Teams store, which integrates Azure OpenAI with the Datamatics Intelligent Automation Platform. With this achievement, Datamatics was recognised as one of the Independent Software Vendors (ISVs) creating custom copilot solutions and was featured at the Microsoft Build 2024 conference in Seattle, USA.

Datamatics advances its copilot innovation by customising solutions for each organisation, with support for Microsoft 365, or by creating custom copilots for each unique client organisation. This approach enables organisations to maximise the potential of copilots through a personalised, consultative approach rather than a one-size-fits-all method, the company said in its regulatory filing.

The company also stated that it is enhancing its technological collaboration with Microsoft by becoming a beta partner for Microsoft's private preview Copilot initiatives, specifically designed for the developer community.

Microsoft has also featured Datamatics in its “AI First Movers” series, which recognises companies for their impactful use of AI at scale.

Datamatics has applied innovative AI solutions across various industries, achieving significant results. These solutions boost productivity by up to 60 percent and reach an accuracy rate of over 90 percent in document processing, setting a new benchmark for precision.

Additionally, the AI-powered platform reduces turnaround time by over 80 percent, significantly speeding up processes. The company stated that by optimising operations with AI tools, Datamatics enables businesses to meet and exceed their operational goals, enhancing both efficiency and competitiveness.  

In the first quarter of FY24, the company reported a slight 0.7 percent year-over-year increase in revenue to ₹394 crore, with Dextara contributing 3.1 percent to this growth. However, organic growth declined by 2.4 percent, primarily due to a market slowdown in the US and Europe and stagnant business growth.

Despite these challenges, the company expects to grow its top line and improve its EBIT margin by 150–200 basis points in the second quarter. The company reported a PAT of ₹43.5 crore, compared to ₹55.1 crore in the previous year.

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