Q1 2027 All e Technologies Ltd Earnings Call

August 17, 2026

Speaker #1: This meeting is being recorded.

Speaker #2: You didn't, gentlemen. On behalf of the Captify Consulting Investor Relations team, I welcome you all to the Q1 FY27 post-earnings conference call of All e Technologies Limited.

[Company Representative] (KAPTIFY Consulting): Ladies and gentlemen, on behalf of KAPTIFY Consulting Investor Relations team, I welcome you all to the Q1 FY27 post-earnings conference call of All e Technologies Limited. Today on the call from the management, we have with us Dr. Ajay Mian, Managing Director, Mr. Rajiv Tyagi, Executive Director, Ms. Ritu Sood, Executive Director, Mr. Sandeep Jain, Chief Financial Officer, and Mr. Sandeep Salman, Head of Cloud & Managed Services. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements which may involve risks and uncertainties. Also, this is a reminder that this call is being recorded. I would now require the management to detail us about the business and performance highlights for the period ending June 2026, the growth perspective and the vision for the coming years, post which we will open the floor for Q&A. Over to you, sir.

[Company Representative] (KAPTIFY Consulting): Ladies and gentlemen, on behalf of KAPTIFY Consulting Investor Relations team, I welcome you all to the Q1 FY 2027 post-earnings conference call of All e Technologies Limited. Today on the call from the management, we have with us [audio distortion] Dr. Ajay Mian, Managing Director, Mr. Rajiv Tyagi, Executive Director, Ms. Ritu Sood, Executive Director, Mr. Sandeep Jain, Chief Financial Officer, and Mr. Sandeep Salman, Head of Cloud & Managed Services. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements which may involve risks and uncertainties. Also, this is a reminder that this call is being recorded. I would now require the management to detail us about the business and performance highlights for the period ending June 2026, the growth perspective and the vision for the coming years, post which we will open the floor for Q&A. Over to you, sir.

Speaker #2: Today on the call from the management, we have with us Mr. Dr. Ajay Mia, Managing Director; Mr. Ajay Tyagi, Executive Director; and Ms. Ritu Sood, Executive Director.

Speaker #2: Mr. Sandeep Jain, Chief Financial Officer, and Mr. Sandeep Salman, Head of Cloud and Managed Services. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, this is a reminder that this call is being recorded.

Speaker #2: I would now request the management to detail for us the business and performance highlights for the period ended June 2026, the growth perspective, and the vision for the coming years. After that, we will open the floor for Q&A.

Speaker #2: Over to you, sir.

Speaker #3: Thank you very much, and good afternoon to everyone who has joined the call. We will take the initial few minutes to go over an overview of what's been happening and what the numbers are.

Ajay Mian: Thank you very much and good afternoon, everyone who has joined the call. We will take the initial few minutes to go over an overview of what's been happening, what the numbers are. You might have already looked at this presentation last night or this morning, but let's quickly run through this. We are going to talk about what's happening, what the numbers are, what we are doing. So broadly speaking, we can say this quarter is signaling a return of growth. If you look at that from a numbers point of view, we saw a Y-on-Y total revenue growth of 9.1%. This is INR 37.2 crore in the Q1, which is the first clean Y-on-Y acceleration since the slowdown began. Our product side of the business has grown faster in this quarter. We had 14.7% license revenue growth. The services Y-on-Y have grown 4.8%.

Speaker #3: You might have already looked at this presentation last night or this morning, but let's quickly run through this. We are going to talk about what's happening, what the numbers are, and what we are doing. So, broadly speaking, we can say this quarter is signaling a return of growth.

Speaker #3: And if you look at that from a numbers point of view, we saw a year-on-year total revenue growth of 9.1%. This is ₹37.2 crore in Q1, which is the first clean year-on-year acceleration since the slowdown began.

Speaker #3: Our product side of the business has grown faster. In this quarter, we had 14.7% license revenue growth. The services year-on-year have grown 4.8%. And on the international services side, the growth has been 3.7%.

Ajay Mian: On the international services side, the growth has been 3.7%. However, if you look at the Q-on-Q of the international services, that growth has been 9.1%. So these parameters at least signal very clearly that some of the things which had been bothering for the last over a year seem to be tapering down. We are not completely out of woods, in certain regions, and we will talk a little bit about that. But broadly speaking, the parameters look getting healthier. What has been happening is, over this period of time and last quarter in particular, if we look at the overall customer engagement that we have had, the number of sizable customer engagements that we have, I mean large customers where we have multiple offerings made to them, these number of engagements have grown.

Speaker #3: However, if you look at the Q-on-Q of the international services, that growth has been 9.1%. So these parameters at least signal very clearly that some of the things which had been bothering us for the last over a year seem to be tapering down.

Speaker #3: We are not completely out of goods in certain regions, and we will talk a little bit about that. But broadly speaking, the parameters look to be getting healthier.

Speaker #3: What has been happening is, over this period of time—and last quarter in particular—if we look at the overall customer engagement that we have had, the number of sizable customer engagements that we have, I mean, large customers where we have multiple offerings made to them, these number of engagements have grown.

Ajay Mian: Well, when we spoke last, we spoke of some significant opportunities that we had been working on for a very long time, which we had hoped to close in the last quarter. Well, some did and some again shifted, but at least some important ones have closed in the current quarter that we are talking of. We have also seen demand build up on the data and AI solutions. We continue to invest on this both in IP and skill building. Our international business has accelerated, where we had last time seen some decline. The product business has grown. Ironically, there is a set of products where Microsoft does not have the same level of margins as in the business application space. So we had a fair share or a good healthy share from that side.

Speaker #3: When we spoke last, we talked about some significant opportunities that we had been working on for a very long time, which we had hoped to close in the last quarter.

Speaker #3: Well, some deals shifted and some again shifted, but at least some important ones have closed in the current quarter that we are talking of. We have also seen demand build up in data and AI solutions. We continue to invest in this, both in IP and skill building.

Speaker #3: Our international business has accelerated. Where we last time saw some decline, the product business has grown. Ironically, there is a set of products where Microsoft does not have the same level of margins as in the business application space.

Speaker #3: So we had a fair share, or a good healthy share, from that side. So the overall product margins have declined in this quarter, but the overall numbers have still grown.

Ajay Mian: The overall product margins have declined in this quarter, but the overall numbers have still grown. All this is based on the 10 plus industries where we maintain significant domain depth. We have five industry solutions, five additional accelerators, and of the six Microsoft designations, we have all the six. All of these things help us in customer engagements. If you look at from a customer acquisition point of view, you will see that we have had increase in the percentage of revenue that we get from our top five and then top 10 customers. This is a signal that we have been getting more from the larger customers, which is, up till a certain point, it is a healthy sign. Because we still do not sit at the risk of customer concentration, but then the engagement with these customers are becoming deeper.

Speaker #3: And all this is based on the 10-plus industries where we maintain significant domain depth. We have five industry solutions and five additional accelerators. And of the six Microsoft designations, we have all six.

Speaker #3: All of these things help us in customer engagements. If you look at it from a customer acquisition point of view, you will see that we have had an increase in the percentage of revenue that we get from our top five and then top ten customers.

Speaker #3: So, this is a signal that we have been getting more from the larger customers, which is—up till a certain point—a healthy sign.

Speaker #3: Because we still do not sit at the risk of customer concentration. But then the engagements with these customers are becoming deeper. The chart on the right also shows what kind of revenue we did in this quarter from our top five customers.

Ajay Mian: The chart on the right also shows what kind of revenue we did in this quarter, from our top five customers. So which basically enables you to see that these engagements are nontrivial size. From an accomplishment and recognition point of view, just last week, Microsoft announced us to be, again, the winner of the Inner Circle for Business Applications from India. Barring the global SIs in the partner ecosystem, Microsoft typically picks only one from India, and we are the one again this year. These recognitions, we have picked up some in the last couple of quarters. So we have all the six recognitions, the Inner Circle recognition, and winners this year again. All of these things make our base solid for growing the business. The one thing which many of the investors have been asking about is why are you not moving to the main board?

Speaker #3: So, which basically enables you to see that these engagements are of non-trivial size. From an accomplishment and recognition point of view, just last week, Microsoft announced us to be, again, the winner of the Inner Circle for AI Business Solutions from India.

Speaker #3: Barring the global SIs, in the partner ecosystem, Microsoft typically picks only one from India, and we are the one again this year. We have these recognitions; we have picked up some in the last couple of quarters.

Speaker #3: So, we have all the six recognitions—the Inner Circle recognition and winner this year, again. All of these things make our base solid for growing the business.

Speaker #3: One thing that many investors have been asking about is, why are you not moving to the main board? I am glad to inform you that we did, at the board, take a decision to go ahead with it.

Ajay Mian: Glad to inform you that we did at the board take a decision to go ahead with it. Board approval was obtained on Friday, and we will have the follow-up actions being initiated now. So we see this taking shape in a short couple of months. I am excited to share with you what we are building, giving you a view of what is being done. We have captured a little video of what we are building. So I will just present it to you. This is done specifically for retail industry. So let me give you a view to this video. Just let me know in case you do not hear the sound.

Speaker #3: So, board approval was obtained on Friday, and we will have the follow-up actions initiated now. We see this taking shape in a short couple of months.

Speaker #3: I'm excited to share with you what we are building, giving you a view of what is being done. So, we have captured a little video of what we are building.

Speaker #3: So, I'll just present it to you. This is done specifically for the retail industry. So let me give you a view of this video. Just let me know in case you don't hear the sound.

Speaker #1: Most retailers run on.

[Company Representative] (All e Technologies): Most retailers run on rep-

[Video Narrator]: Most retailers run on rep-

Speaker #3: Do you hear the sound?

Ajay Mian: Do you hear the sound?

Speaker #2: Yes, sir. It's audible.

[Company Representative] (KAPTIFY Consulting): Yes, sir. It's already working.

Speaker #1: Most retailers rely on reports that tell you what happened last month, after the fact. Retail Growth OS tells you why it happened, what is coming, and what to do across every store, channel, and category.

[Company Representative] (All e Technologies): Most retailers run on reports that tell you what happened last month after the fact. Retail Growth OS tells you why it happened, what is coming, and what to do across every store, channel, and category. Let us walk through it. This is the retail head's view for a retail business. One reconciled set of numbers, net sales, margin, basket value, and full price sell-through across all stores and channels.

[Video Narrator]: Most retailers run on reports that tell you what happened last month after the fact. Retail Growth OS tells you why it happened, what is coming, and what to do across every store, channel, and category. Let us walk through it. This is the retail head's view for a retail business. One reconciled set of numbers, net sales, margin, basket value, and full price sell-through across all stores and channels.

Speaker #1: Let us walk through it. This is the retail head's view for a retail business: one reconciled set of numbers—net sales, margin, basket value, and full price sell-through—across all stores and channels.

[Company Representative] (KAPTIFY Consulting): Sir, audio is interrupted. I think audio got disconnected.

Speaker #2: Sir, the audio is interrupted. I think the audio device has disconnected.

[Company Representative] (All e Technologies): Dashboard would never raise its hand like this. Here is the moment that matters. Instead of exporting a spreadsheet, the retail head simply asks, in plain English, why full price sell-through is below target. In seconds, it gives a grounded answer. The drag is ethnic wear, strong footfall but weak conversion, so units are moving only on markdown, running nearly half a crore over plan. It cites the exact mart and measure, so the number is defensible and the same every time. It does not stop at the answer, it acts. It opens the markdown optimizer, gated on a human confirmation and fully audited. Intelligence that actually closes the loop. Now the same platform, a different person. The store manager gets a mobile playbook, open a fourth till before the evening queue breaches.

[Video Narrator]: Dashboard would never raise its hand like this. Here is the moment that matters. Instead of exporting a spreadsheet, the retail head simply asks, in plain English, why full price sell-through is below target. In seconds, it gives a grounded answer. The drag is ethnic wear, strong footfall but weak conversion, so units are moving only on markdown, running nearly half a crore over plan. It cites the exact mart and measure, so the number is defensible and the same every time. It does not stop at the answer, it acts. It opens the markdown optimizer, gated on a human confirmation and fully audited. Intelligence that actually closes the loop. Now the same platform, a different person. The store manager gets a mobile playbook, open a fourth till before the evening queue breaches.

Speaker #1: Dashboard would never raise its hand like this. Here is the moment that matters. Instead of exporting a spreadsheet, the retail head simply asks, in plain English, why full-price sell-through is below target.

Speaker #1: In seconds, it gives a grounded answer. The drag is ethnic wear—strong footfall but weak conversion. So, units are moving only on markdown, running nearly ₹50 lakh over plan.

Speaker #1: It cites the exact mark and measure, so the number is defensible and the same every time. And it does not stop at the answer—it acts.

Speaker #1: It opens the Markdown optimizer, gated by a human confirmation and fully audited—intelligence that actually closes the loop. Now, the same platform, a different person.

Speaker #1: The store manager gets a mobile playbook, opens a fourth till before the evening queue breaches, refills the top end cap, and moves staff to the right zone.

[Company Representative] (All e Technologies): Refill the top-end cap, move staff to the right zone, and they see only their own store. The category manager sees assortment, pricing, and markdown and can simulate a markdown depth before committing, trading clearance against margin. Row-level security means each role sees only what it should. The app hides nothing. The data simply stays in its lane. Here is what makes this an offering, not a one-off. The very same platform switches to FMCG. Now it is quick commerce fill rate, expiry, and replenishment with the agents and models repointed to that industry's data. One canonical model, many industries. Again, for building materials, dealer schemes, scheme outflow, and depot transfers. Retail, FMCG, and building materials all on the same medallion architecture, the same semantic model, the same agents. The same engine also runs procurement. Same medallion architecture, same agent pattern.

[Video Narrator]: Refill the top-end cap, move staff to the right zone, and they see only their own store. The category manager sees assortment, pricing, and markdown and can simulate a markdown depth before committing, trading clearance against margin. Row-level security means each role sees only what it should. The app hides nothing. The data simply stays in its lane. Here is what makes this an offering, not a one-off. The very same platform switches to FMCG. Now it is quick commerce fill rate, expiry, and replenishment with the agents and models repointed to that industry's data. One canonical model, many industries. Again, for building materials, dealer schemes, scheme outflow, and depot transfers. Retail, FMCG, and building materials all on the same medallion architecture, the same semantic model, the same agents. The same engine also runs procurement. Same medallion architecture, same agent pattern.

Speaker #1: And they see only their own store. The category manager sees assortment, pricing, and markdown, and can simulate a markdown depth before committing, trading clearance against margin.

Speaker #1: Row-level security means each role sees only what it should. The app hides nothing; the data simply stays in its lane. Here is what makes this an offering, not a one-off.

Speaker #1: The very same platform switches to FMCG; now it is quick commerce, fill rate, expiry, and replenishment, with the agents and models repointed to that industry's data.

Speaker #1: One canonical model, many industries. And again, for building materials: dealer schemes, scheme outflow, and depot transfers. Retail, FMCG, and building materials—all on the same Fabric Medallion, the same semantic model, the same agents.

Speaker #1: The same engine also runs procurement. Same fabric medallion, same agent pattern; now it is spend, supplier risk, contract compliance, and cash, grounded in the procurement gold semantic model.

[Company Representative] (All e Technologies): Now it is spend, supplier risk, contract compliance, and cash grounded in the procurement gold semantic model. Manufacturing inquiry to quote, drawing intelligence, production, and quality built for make-to-order and engineer-to-order businesses. One canonical model, three intelligence layers. Trustworthy data, defensible answers, and real action for every role across sales, procurement, and manufacturing every day. That is the difference between a reporting solution and Retail Growth OS.

[Video Narrator]: Now it is spend, supplier risk, contract compliance, and cash grounded in the procurement gold semantic model. Manufacturing inquiry to quote, drawing intelligence, production, and quality built for make-to-order and engineer-to-order businesses. One canonical model, three intelligence layers. Trustworthy data, defensible answers, and real action for every role across sales, procurement, and manufacturing every day. That is the difference between a reporting solution and Retail Growth OS.

Speaker #1: And manufacturing inquiry to quote, drawing intelligence, production, and quality built for make-to-order and engineer-to-order businesses. One canonical model, three intelligence layers. Trustworthy data, defensible answers, and real action for every role across sales, procurement, and manufacturing, every day.

Speaker #1: That is the difference between a reporting solution and Retail Growth OS.

Speaker #3: Okay, let me close this. So, this is just to give you a view of what is being built. Not everything that you have seen is ready.

Ajay Mian: Okay. Let me close this. This is just to give you a view of what has been built. Not everything that you have seen is ready right now, but initial parts of the Retail OS, they are. We already have a couple of customers who are signing up, so we should be seeing this getting rolled out during this year. Looking at the key numbers, the total revenue in this quarter was INR 37.18 crores. Total income was INR 39.5. The EBITDA margin stood at INR 6.98 crores, which is 17.7%. Repeat and recurring, 90.3%. We added 8 customers. The team size continues to be approximately 350. The industries and the percentage revenue breakup that we have from these industries. You have seen this chart before. Just the numbers are from this quarter.

Speaker #3: Right now, the initial parts of the retail OS are already there. We already have a couple of customers who are signing up, so we should be seeing this getting rolled out during this year.

Speaker #3: Looking at the key numbers, the total revenue for this quarter was ₹37.18 crore. Total income was ₹39.5 crore. The EBITDA for the quarter stood at ₹6.98 crore.

Speaker #3: Which is 17.7%. Repeat and recurring, 90.3%. We added eight customers. The team size continues to be approximately 350. The industries, and the percentage revenue breakup that we have from these industries—you have seen this chart before, just the numbers are from this quarter.

Speaker #3: These things you have known, though some of our offerings have slightly changed. There is now more focus on data and AI, which was one box earlier.

Ajay Mian: These things you have known, though some of our offerings have slightly changed. There is more focus on the data, and AI was one box earlier. Now they are 2 separate boxes. We still have the same 6 offerings. But some pieces have expanded to take their own space. Working with the full Microsoft stack across their all cloud offerings, the business applications, data and AI offerings. The board of directors, the lead managers, the annexures, you probably know them or can look up them. There is not specific that I have to. On the CSR side. There is all standard stuff. I will just stop presenting here and open for any conversation.

Speaker #3: Now, they are two separate boxes. We still have the same six offerings, but some pieces have expanded to take their own space. We're working with the full Microsoft stack, across all their cloud offerings, as well as the business applications, data, and AI offerings.

Speaker #3: The board of directors, the lead managers, the annexures—you probably know them, or can look them up. There is nothing specific that I have to add on the CSR side.

Speaker #3: So that's all the standard stuff. I'll just stop presenting here and open it up for any conversation.

Speaker #2: Thank you, sir, for the presentation. All those who wish to ask a question may use the option to raise hand. In case you are unable to do so, just drop your question in the Q&A box.

[Company Representative] (KAPTIFY Consulting): Thank you, sir, for the presentation. All those who wish to ask a question may use the option of raise hand. In case you are unable to raise hand, just drop your question in the Q&A box, and we will ask on your behalf. Sir, we will take the first question from Rishabh Tripathi. Rishabh, you can go ahead.

Speaker #2: And we'll ask on your behalf. Sir, we'll take the first question from Rishabh Tripati. Rishabh, you can go ahead.

Speaker #4: Hey, hi. Am I audible?

Rishabh Tripathi: Hey. Hi. Am I audible?

[Analyst 1]: Hey. Hi. Am I audible?

Speaker #3: Yes, Rishabh. Very much.

Ajay Mian: Yes, Rishabh, very much.

Rishabh Tripathi: Thanks, sir, for taking my question. My first question is, the demo, the prototype, which you just showed. I just wanted to understand in terms of client conversation, where it is. Is it like we are in that stage where we are vibe coding and showing what can be done, or we have a clear visibility and go ahead from a client to develop this thing? So that it can move to prod. What is the visibility of this thing being a vibe coded prototype or to move into prod?

Speaker #4: Yeah, thanks. Thanks, sir, for taking my question. So, my first question is about the demo, the prototype which you just showed. I just wanted to understand, in terms of client conversation, where it is.

[Analyst 1]: Thanks, sir, for taking my question. My first question is, the demo, the prototype, which you just showed. I just wanted to understand in terms of client conversation, where it is. Is it like we are in that stage where we are vibe coding and showing what can be done, or we have a clear visibility and go ahead from a client to develop this thing? So that it can move to prod. What is the visibility of this thing being a vibe coded prototype or to move into prod?

Speaker #4: Like, is it that we are at the stage where we have vibe coding and are showing what can be done, or do we have clear visibility and a go-ahead from the client to develop this thing?

Speaker #4: So that it can move to prod. So what is the visibility of this thing being a vibe-coded prototype, or moving to prod?

Ajay Mian: Let me first explain what this is. This is not a solution that we are developing on the order of a customer. This is a product. This product has obviously. We have taken this to a few customers who have all shown tremendous interest in this. We should be starting some of these implementations of the solutions in the next couple of weeks. I am talking of situations where we either already have the order or will be signing this up in the next few days. Rajiv, you want to add something?

Speaker #3: So let me first—yeah, let me first explain what they say. So, this is not a solution that we are developing on the order of a customer.

Speaker #3: This is a product, and this product has—obviously, we've taken this to a few customers, who have all shown tremendous interest in this.

Speaker #3: So we should be starting some of these implementations of the solution in the next couple of weeks. And I’m talking about situations where we either already have the order or will be signing this up in the next few days.

Speaker #3: Rajiv, do you want to add something?

Speaker #4: I'd just like to say that, Rishabh, this intelligence layer we are going to provide as a SaaS product to our customers, who will subscribe to this intelligence layer.

Rajiv Tyagi: I would just like to say that, Rishabh, this intelligence layer, we are going to provide as a SaaS product to our customers who will subscribe to this intelligence layer, and this is kind of a pre-baked solution for them, where we just connect with their data sources. We have identified 20 lighthouse customers with three we are with, where they are in the stage of issuing the PO and then we roll them out. In the first one quarter, we expect to roll it out to at least 10 customers, mature it more, and then scale it to the remaining customer base.

Speaker #4: And this is kind of a pre-baked solution for them, where we just connect with their data sources. We have identified 20 lighthouse customers where with three we have reached where they have they are in the stage of issuing the PO and then we roll them out.

Speaker #4: So, in the worst one quarter, we expect to roll it out to at least 10 customers, mature it more, and then scale it to the remaining customer base.

Speaker #4: Okay. So when we say "roll it out," we mean put it in production. Correct?

Rishabh Tripathi: Okay. When we say roll it out, we mean put it in production, correct?

[Analyst 1]: Okay. When we say roll it out, we mean put it in production, correct?

Speaker #3: Correct. Absolutely.

Rajiv Tyagi: Correct. Absolutely.

Rishabh Tripathi: Okay. Okay, thanks. That gives me some clarity. My second question is on the lines of. There is a lot of conversation when we talk to client is happening. Sometimes it look like a delayed decision-making, but actually what is happening, clients are moving towards whether doing things in-house, they are considering or decoding. You understand a lot of tools are available. We can do it in-house. At the same time, just taking proof of concept from the vendor, but then developing it in-house. What type of evidence is giving us the confidence during our interaction with clients that what seems to be a delayed deal conversion is actually a delayed deal conversion, not something which is getting lost and client is doing it on own or getting it done from someplace somewhere else?

[Analyst 1]: Okay. Okay, thanks. That gives me some clarity. My second question is on the lines of. There is a lot of conversation when we talk to client is happening. Sometimes it look like a delayed decision-making, but actually what is happening, clients are moving towards whether doing things in-house, they are considering or decoding. You understand a lot of tools are available. We can do it in-house. At the same time, just taking proof of concept from the vendor, but then developing it in-house. What type of evidence is giving us the confidence during our interaction with clients that what seems to be a delayed deal conversion is actually a delayed deal conversion, not something which is getting lost and client is doing it on own or getting it done from someplace somewhere else?

Speaker #4: Okay. Okay. Okay. Thanks. Thanks. That gives me some clarity. My second question is along the lines of, see, there is a lot of conversation happening when we talk to clients.

Speaker #4: Sometimes it looks like delayed decision-making, but actually what is happening is clients are moving towards doing things in-house; they are considering the coding.

Speaker #4: You understand a lot of tools are available. We can do it in-house. At the same time, just taking proof of concept from the vendor.

Speaker #4: But then developing it in-house. Okay. So what type of evidence is giving us confidence? Do you need our interaction with the client?

Speaker #4: That what seems to be a delayed deal conversion is actually a delayed deal conversion, not something that is getting lost. And the client is doing it on their own, or getting it done from somewhere else.

Speaker #4: Okay. So this is the trend which I am seeing a lot during my interactions as well, where we are getting POCs that McKinsey or someone developed, and then they are getting it developed either internally or by some cheaper vendor.

Rishabh Tripathi: Okay, this is the trend which I am seeing a lot via my interaction as well, where we are getting POCs which McKinsey or someone developed, and then they are getting it developed by some, whether internally or some cheap vendor. I just wanted to understand, when you interact, what sort of evidence you are getting that you are getting confident all these things will get converted rather than this just getting delayed and we might be losing time here as well. Yeah.

[Analyst 1]: Okay, this is the trend which I am seeing a lot via my interaction as well, where we are getting POCs which McKinsey or someone developed, and then they are getting it developed by some, whether internally or some cheap vendor. I just wanted to understand, when you interact, what sort of evidence you are getting that you are getting confident all these things will get converted rather than this just getting delayed and we might be losing time here as well. Yeah.

Speaker #4: So I just wanted to understand, when you interact, what sort of evidence are you getting that makes you confident all these things will get converted, rather than this just getting delayed and we might be losing time here as well?

Speaker #4: Yeah.

Speaker #3: So Rishabh, before Rajiv, you know, comments on that, I also want to share—look, we are not talking of, like, million-dollar solutions. Every investment has to have an ROI.

Ajay Mian: Rishabh, before Rajiv comments on that, I also want to share. Look, we are not talking of million-dollar solutions. Every investment has to have an ROI. We are talking of bringing a solution which brings together the experiences that have been gained from multiple customers. That is not something that a company can do on its own. The other important thing is there is also a platform which just keeps maturing. Then you will have all types of customers. There are customers who find doing this valuable, and there are customers who find it valuable to use something which is already available, and focus on their own business. Rajiv?

Speaker #3: So we are talking of bringing a solution which brings together the experiences that have been gained from multiple customers. That's not somebody that's not something that a company can do on its own.

Speaker #3: The other important thing is, there's also a platform which just keeps maturing. And then you will have all types of customers. There are customers who find doing this valuable, and there are customers who find it valuable to use something which is already available.

Speaker #3: And focus on their own business. Rajiv?

Speaker #4: Sir, what I'll add to this is that this has been our experience in all the sales and pre-sales engagements that we have been having. As of now, customers are not looking to build their own ERP, at least.

Rajiv Tyagi: Yeah. What I will add to this is that based on our interaction in all the sales and pre-sales engagement that we have been having. As of now, customers are not looking to build their own ERP, at least. In some cases, point solutions, they will obviously be open to use AI and build on its own. But at least the core business apps, they are very much focused. They are not building on their own. As far as this intelligence layer and AI, we are. Obviously, it contains a lot of business metrics and other stuff, which for them to get to that level to define all that scope will take a lot of time for them to mature. That is why they seem to be very keen to start because they can get going with their existing data, whether it is an ERP, Excel or wherever distributed situation.

Speaker #4: In some cases, point solutions—they will obviously be open to, you know, using AI and building on their own. But at least for the core business apps, they are very much focused; they are not building on their own.

Speaker #4: And as far as this intelligence layer and AI, obviously it contains a lot of business metrics and other elements, which— for them to get to that level, to define all that scope, it will take a lot of time for them to mature.

Speaker #4: That is why they seem to be very keen to start, because they can get going with their existing data, whether it is in an ERP, Excel, or wherever, in a distributed situation.

Speaker #4: So that is the experience thus far. Point solutions, yes, people are doing a lot of, you know, trial with whatever they can do. Okay.

Rajiv Tyagi: That is the experience thus far. Point solutions, yes, people are doing a lot of trial with whatever they can do.

Rishabh Tripathi: Okay, thanks. One last question. Can either sir you or Rajiv sir you. Can you help us understand that give us confidence going at, let us say, over next 4 quarters. What are the 3 things internally that you will be tracking that gives you confidence that we are going in the right direction? It can be anything like number of prod deployments.

[Analyst 1]: Okay, thanks. One last question. Can either sir you or Rajiv sir you. Can you help us understand that give us confidence going at, let us say, over next 4 quarters. What are the 3 things internally that you will be tracking that gives you confidence that we are going in the right direction? It can be anything like number of prod deployments.

Speaker #4: Thanks. One last question. So can can either sir, you or Rajiv sir, you can you help us understand that give us confidence going at let's say over next four quarters, what are the three things internally that you will be tracking that gives you confidence that we are going in the right direction?

Speaker #4: So, it can be anything, like the number of prod deployments, number of client conversions. Yeah.

Ajay Mian: Yeah, sure.

Rishabh Tripathi: number of client conversions. Yeah.

[Analyst 1]: number of client conversions. Yeah.

Speaker #3: Absolutely. Absolutely. So the one thing that we are tracking is, of course, the number of customers who adopt our AI offerings.

Ajay Mian: Absolutely. The one thing that we are tracking is, of course, the number of customers who adopt our AI offerings. Both data and AI offerings. In some cases, they just require a solution like this. In some other cases, we also have to prepare a modern data platform for them. It is a combination of these two things. This is one thing. The second thing that we are tracking is the number of customer engagements where the customers are large-sized. When I say large-sized, these are customers who have the ability to consume not one, but multiple services from us. Okay. This is the other part of it. Then the third part, of course, is we always track how much of business we are doing from different geographies. There are geographies which are, at the moment, showing significant momentum.

Speaker #3: So, both data and AI offerings—in some cases, clients just require a solution like this. In other cases, we also have to prepare a modern data platform for them.

Speaker #3: So it's a combination of these two things. So this is one thing. The second thing that we are tracking is the number of customer engagements where the customers are large-sized.

Speaker #3: When I say large size, these are customers who have the ability to consume not one, but multiple services from us. Okay? So, this is the other part of it.

Speaker #3: And then the third part, of course, is we always track how much of our business we are doing from different geographies. There are geographies which are, at the moment, showing significant momentum.

Speaker #3: I would name Africa particularly as one where we have a lot of engagement and a lot of interest from the community. In fact, within the Microsoft internal, you know, reckoning, we are already one of the top three for them in the business application space in Africa.

Ajay Mian: I would name Africa particularly as one, where we have a lot of engagement and a lot of interest from the community. In fact, within the Microsoft internal reckoning, we are already one of the top three for them in the business application space in Africa. We track businesses from these regions, and we also then make sure that none of these is done at the cost of what is our bread and butter business which will keep maturing because the products keep maturing. I would say these are the three top things that stay in our mind that we monitor.

Speaker #3: So we track businesses from these regions, and we also then, you know, make sure that none of this is done, you know, at the cost of what is our bread and butter business.

Speaker #3: Which will, you know, keep maturing because the products keep maturing. So, I would say these are the three top things that stay in our mind that we monitor.

Speaker #4: Thank you, sir. Thank you. I will join back. Thank you.

Rishabh Tripathi: Thank you, sir. Thank you. I will join back the queue.

[Analyst 1]: Thank you, sir. Thank you. I will join back the queue.

Speaker #3: Sure.

Ajay Mian: Sure.

Speaker #2: Thank you, Rishabh. Sir, we'll take the next question from Kumar Saurabh. Kumar, you can go ahead. Saurabh, you can go ahead.

[Company Representative] (KAPTIFY Consulting): Thank you, Rishabh. Sir, we will take the next question from Kumar Saurabh. Saurabh, you can go ahead.

Speaker #3: We don't hear you, Saurabh.

Ajay Mian: We do not hear you, Saurabh.

Speaker #2: Sir, yeah. We'll move on to Sid. Sid, you can go ahead, please.

[Company Representative] (KAPTIFY Consulting): Sir, we will move on to Sid. Sid, you can go ahead, please.

Sid: Hello.

[Analyst 2]: Hello.

Speaker #4: Come on.

Speaker #3: Yes. Hi, sir.

Ajay Mian: Yes. Hi, Sid.

Sid: Hello.

[Analyst 2]: Hello.

Speaker #4: Hello.

Speaker #3: Yes, hello. We do hear you.

Ajay Mian: Yes, hello. We do hear you.

Speaker #4: Okay, sir. My question was: you mentioned that we've increased our product licenses revenue by 14%. So, does that mean that license revenue is a precursor to implementing services?

Sid: Okay. Sir, my question was, you mentioned that we have increased our product licenses revenue by 14%. Does that mean that license revenue is a precursor to implementing services? How is the billing done? First we get the license revenue and then we do the AI services. Can you explain how do we bill our customers? If that means that we first bill the licenses, then we are implementing the services of them, then the margins can also increase because services have higher margin.

[Analyst 2]: Okay. Sir, my question was, you mentioned that we have increased our product licenses revenue by 14%. Does that mean that license revenue is a precursor to implementing services? How is the billing done? First we get the license revenue and then we do the AI services. Can you explain how do we bill our customers? If that means that we first bill the licenses, then we are implementing the services of them, then the margins can also increase because services have higher margin.

Speaker #4: So, how is the billing done? First, we get the license revenue and then we do the AI services. Can you explain how we bill our customers?

Speaker #4: And if that means that we first bill the licenses, then we are implementing the services for them, then the margins can also increase because services have higher margins.

Speaker #3: Sure. So, there are different types of solutions that we bring to our customers. In some cases, we always have a product going together with a significant size of services.

Ajay Mian: Sure. There are different types of solutions that we bring to our customers. In some cases, we always have a product going together with a significant size of services. The typical ERP, CRM, data and AI offerings, they fall in that category. You also have then the other very important side of our offerings, which include, let us say, the Azure infrastructure, security solutions, and everything that goes around with that. They may not necessarily have that big a piece of services, though invariably they will have at least a managed services piece, which is recurring and goes along with the overall product license. But the value of the license there is significantly higher than the value of the services.

Speaker #3: The typical ERP, CRM, data, and AI offerings—they fall in that category. But you also have, then, the other very important side of our offerings, which include, let's say, the Azure infrastructure security solutions.

Speaker #3: And everything that goes along with that, they may not necessarily have that big a piece of services, though invariably they will have at least a managed services piece, which is recurring and goes along.

Speaker #3: You know, with the overall product license. But the value of the license there is significantly higher than the value of the services.

Speaker #2: Sid, do you have any other questions?

[Company Representative] (KAPTIFY Consulting): Sid, do you have any other question?

Speaker #4: Yeah. My second question was, how are you seeing the landscape now? Is it better than the last quarter in terms of US deal closures and all?

Sid: My second question was, how are you seeing the landscape now? Is it better than the last quarter in terms of the US deal closures and all?

[Analyst 2]: My second question was, how are you seeing the landscape now? Is it better than the last quarter in terms of the US deal closures and all?

Speaker #3: Yeah, absolutely. So, the US has been better for sure. Just to give you an idea, from our services revenue point of view, in this quarter, we had nearly 60% of the services revenue coming from the US.

Ajay Mian: Absolutely. So US have been better, for sure. Just to give you an idea, from our services revenue point of view, in this quarter, we had nearly 60% of the services revenue coming from the US. Everything taken together. When I say US, I am talking of Americas. There is US and Canada.

Speaker #3: All, everything taken together. And when I say US, I'm talking about America. There's US and Canada.

Speaker #4: Got it. Thank you. One more thing—what about cybersecurity? Can we have some KPIs on how our cybersecurity is doing, how our solutions are performing?

Sid: Got it. Thank you. One more thing. What about cybersecurity? Can we have some KPIs on how our cybersecurity solutions are doing?

[Analyst 2]: Got it. Thank you. One more thing. What about cybersecurity? Can we have some KPIs on how our cybersecurity solutions are doing?

Speaker #3: Yeah, absolutely. So, we already have security solutions provided to some key customers. But I would ask Sandeep.

Ajay Mian: Yeah, absolutely. We have security solutions now already provided to some key customers, but I would ask Sandeep to comment on that.

Speaker #4: Yeah.

Speaker #3: To comment on that.

Sandeep Salman: Yeah. Am I audible?

Speaker #1: Yeah. Am I audible?

Speaker #3: Yeah. Yeah, you are.

Ajay Mian: Yeah.

[Company Representative] (KAPTIFY Consulting): Yeah, you are audible, sir.

Speaker #2: Yes, you are audible, sir.

Sandeep Salman: Yeah. This particular vertical has grown significantly in last quarter. We have sort of closed some of the large deals for email security, and we have also started VAPT, and then we acquired a couple of customers in that area. The traction has started. Probably we are expecting a few more large deals to close in this particular sector, in the security. Email, web security, and VAPT are the three things that we are focusing on, and that is what we are gaining customers and business.

Speaker #1: Yeah. So so this particular vertical has grown significantly in last quarter. We we have there's a lot of closed some of the large deals for email security.

Speaker #1: And we have also started VAPT, and we have acquired a couple of customers in that area, and the traction has started. So, probably, we are expecting a few more large deals to close in this particular sector, in the security area.

Speaker #1: So, email, web security, and VAPTs are the three things that we are focusing on. And that's where we are gaining, you know, customers and experience.

Speaker #4: So, is the nature of the cybersecurity revenue recurring? Because email security has to be done every year. Like, okay.

Sid: Is the nature of the cybersecurity revenue recurring? Because email security have to be done every year.

[Analyst 2]: Is the nature of the cybersecurity revenue recurring? Because email security have to be done every year.

Speaker #1: Some of the areas, for example in terms of email security, you know, there are certain solutions that you provide to the customer.

Sandeep Salman: Some of the areas, for example, in terms of the email security, for example, there are certain solutions that you provide to the customer. That is recurring. However, VAPT, initially you will have to sort of get the customer, but later on there is always every quarter you do

Speaker #1: That is recurring. However, VAPT, you know, initially you will have to, you know, sort of get the customer. Later on, you know, there is—there's always every quarter you do at least one VA, if not the penetration test.

Ajay Mian: At least when it VA, if not the penetration test. Both are sort of recurring groups.

Sandeep Salman: At least when it VA, if not the penetration test. Both are sort of recurring groups.

Speaker #1: Both are sort of recurring returns.

Speaker #4: Thank you. That's all from my side.

Sid: Thank you. That is all from my side.

[Analyst 2]: Thank you. That is all from my side.

Speaker #2: Sir, we'll take the next question from Kumar Saurabh. Saurabh, you can go ahead, please.

[Company Representative] (KAPTIFY Consulting): Sir, we will take the next question from Kumar Saurabh. Saurabh, you can go ahead, please.

Speaker #3: Saurabh, you are on mute.

Ajay Mian: Saurabh, you are on mute.

Speaker #2: Anybody wishes to ask a question? Please use the option to raise your hand. Sir, we'll move on to the first bid, Mutha. Sparsh, you can go ahead.

[Company Representative] (KAPTIFY Consulting): Anybody wishes to ask a question, please use the option of raise hand. Sir, we will move on to Sparsh Bedmutha. Sparsh, you can go ahead.

Speaker #5: Hi. Am I audible?

Sparsh Bedmutha: Hi. Am I audible?

[Analyst 3]: Hi. Am I audible?

Speaker #3: Yes, very much.

Ajay Mian: Yes, Sparsh.

Sparsh Bedmutha: Sir, thank you for this opportunity. I wanted to ask, our this year's revenue and last year's revenue have been quite flattish, even though we have added quite new customers and having a 90% repeat revenue. What is actually constraining the growth right now? Is it demand, sales cycle, deal size, delivery capacity, or pricing? When should we realistically expect this to translate into meaningful revenue growth?

[Analyst 3]: Sir, thank you for this opportunity. I wanted to ask, our this year's revenue and last year's revenue have been quite flattish, even though we have added quite new customers and having a 90% repeat revenue. What is actually constraining the growth right now? Is it demand, sales cycle, deal size, delivery capacity, or pricing? When should we realistically expect this to translate into meaningful revenue growth?

Speaker #5: Sir, thank you for this opportunity. I wanted to ask, our FY, or this year's revenue and last year's revenue, have been quite flattish, even though we have added quite a few new customers and have a 90% repeat revenue.

Speaker #5: What is actually constraining the growth right now? Is it demand, sales cycle, deal size, delivery capacity, or pricing? And when should we realistically expect this to translate into meaningful revenue growth?

Speaker #3: Well, if you look at a why on why quarter one, the revenue has grown 9%. So that's not exactly flat. It's obviously not possible for anyone to say that how will the next quarter be or the next three quarters be.

Ajay Mian: Well, if you look at a Y-on-Y Q1, the revenue has grown 9%. That is not exactly flat. It is obviously not possible for anyone to say that how will the next quarter be or the next three quarters be. But overall, we see good business momentum. We are currently quite busy. As I mentioned earlier, we continue to work with more larger-sized customers. So we are seeing a good momentum in the overall engagement. How much this converts into actual revenue and profit is to be seen. But the momentum at the moment is certainly more than we had last year. The revenue in this quarter are about 9% higher than we had the same quarter last year.

Speaker #3: But overall, we see good business momentum. We are currently quite busy. We have we are we are as as I mentioned earlier, we continue to work with more larger sized customers.

Speaker #3: So, we are seeing good momentum in the overall engagement. How this converts into actual revenue and profit is yet to be seen.

Speaker #3: But the momentum at the moment is certainly more than we had last year. And the revenue in this quarter is about 9% higher than we had in the same quarter last year.

[Company Representative] (KAPTIFY Consulting): Sparsh, do you have any other question?

Speaker #2: Sir, do you have any other questions?

Sparsh Bedmutha: Any revenue guidance you could give for this year?

[Analyst 3]: Any revenue guidance you could give for this year?

Speaker #5: Any revenue guidance you could give for this year?

Speaker #3: I don't think it's meaningful at the moment. I think we are coming out of a period which was flattish, of course. But it was also turbulent—not only from a geopolitical point of view, but also because of the impact of AI and everything.

Ajay Mian: I don't think it's meaningful at the moment. I think we are coming out from a period which was flattish, of course, but it was also turbulent, not only from a geopolitical point of view, but also the impact of AI and everything. Things are stabilizing, but giving a guidance at this time will just be a theoretical exercise.

Speaker #3: Things are stabilizing. But, you know, giving guidance at this time would just be a theoretical exercise.

Speaker #5: Okay, got it. Thank you so much.

Sparsh Bedmutha: Okay. Got it. Thank you so much.

[Analyst 3]: Okay. Got it. Thank you so much.

Speaker #3: Thank you.

Ajay Mian: Thank you.

Speaker #2: Anybody wishes to ask a question? Please use the option to raise your hand, or you can put your question in the Q&A box. Sir, we'll take the next question from Praneeth Jakhadi.

[Company Representative] (KAPTIFY Consulting): Anybody wishes to ask a question, please use the option of raise hand, or you can put your question in the Q&A box. Sir, we will take the next question from Praneet Jakharidi. Praneet.

Speaker #2: Praneeth, you can go ahead, please.

Ajay Mian: Yes.

[Company Representative] (KAPTIFY Consulting): You can go ahead, please.

Speaker #3: Praneeth, you are on mute. Yeah. Yes, Praneeth.

Ajay Mian: Praneet, you are on mute. Yeah.

Praneet Jakharidi: Hello, am I audible?

[Analyst 4]: Hello, am I audible?

Ajay Mian: Yes, Praneet.

Speaker #6: Sir, you have highlighted strong demand buildup in data and AI, and AI agentic transformation. How much AI and data revenue is already signed today?

Praneet Jakharidi: Sir, you have highlighted strong demand build-up in data and AI, and AI agentic transformation. How much AI and data revenue is already signed today, and how much is currently pipeline or opportunity?

[Analyst 4]: Sir, you have highlighted strong demand build-up in data and AI, and AI agentic transformation. How much AI and data revenue is already signed today, and how much is currently pipeline or opportunity?

Speaker #6: And how much is currently in the pipeline or opportunity?

Speaker #3: So you know, data and AI for us in our business influences almost everything that we are doing today. All our ERPs, for example—these engagements are AI-led.

Ajay Mian: Data and AI for us in our business, it influences almost everything that we are doing today. All our ERPs, for example, these engagements are AI-led. Our CRM engagements are AI-led. There are some engagements which are pure data and AI. But I don't think there is anything at all that we are currently doing which is not being done because we have an embedded AI offering. It is therefore a little bit of. We can, of course, talk how much revenue are we likely to make from our IPs and so on. And Rajiv already kind of said that we are looking to engage at least a certain number of customers. These revenues will build up.

Speaker #3: Our CRM engagements are AI-led. There are some engagements which are pure data and AI. But I don't think there is anything at all that we are currently doing which is not being done because we have an embedded AI offering.

Speaker #3: It is, therefore, a little bit of—I mean, we can, of course, talk about how much revenue we are likely to make from our IPs, and so on.

Speaker #3: And Rajiv already kind of said that, you know, we are looking to engage at least a certain number of customers. These revenues will build up.

Speaker #3: But trying to identify just how much data and AI will give will probably not be, you know, any accurate assessment of that. Because there is nothing at all that we do today which is not, you know, influenced by or supported by or enhanced by AI.

Ajay Mian: But trying to identify just how much data and AI will give will probably be not any accurate assessment of that, because there is nothing at all that we do today which is not influenced by or supported by or enhanced by AI.

Speaker #2: Sir, we'll take the next question from Surbhi Mishra. Surbhi, you can go ahead.

[Company Representative] (KAPTIFY Consulting): Sir, we will take the next question from Surbhi Misra. Surbhi, you can go ahead.

Speaker #7: Hello. Hi, sir. Thank you for the opportunity. I wanted to understand why your margins have declined compared to last year, and what led to this?

Surbhi Misra: Hello.

[Analyst 5]: Hello.

Ajay Mian: Yes.

Surbhi Misra: Hi, sir.

[Analyst 5]: Hi, sir.

Ajay Mian: Hello.

Surbhi Misra: Thank you for the opportunity. I wanted to understand why your margins have declined compared to last year, and what led to this. When can we expect the margins to get normal?

[Analyst 5]: Thank you for the opportunity. I wanted to understand why your margins have declined compared to last year, and what led to this. When can we expect the margins to get normal?

Speaker #7: And when can we expect the margins to get back to normal?

Speaker #3: Sure. So, the margins have declined because, as I mentioned, we have had significant growth on the product side of the revenue, and some of those products are lower-margin products.

Ajay Mian: Sure. The margins have declined because, as I mentioned, we have had significant growth on the product side of the revenue, and some of those products are lower margin products. That has been one reason. The other reason is that there is obviously a continued investment that we keep doing in terms of the product development work that we are doing. That takes some cash out. If you still see from a percentage point of view, yes, they have declined. If you look at an absolute point of view, our earnings before tax, they are a little bit higher than what they were in the last quarter. But we have had this impact of this deferment, which reduced our tax burden in the last quarter, because of which, from a percentage point of view, the PAT appears lower this time.

Speaker #3: So, that has been one reason. The other reason is that there is obviously a continued investment that we keep doing in terms of, you know, the product development work that we are doing.

Speaker #3: So that takes, you know, some cash out. If you still see from a percentage point of view, yes, they have declined. If you look at it from an absolute point of view, our earnings, you know, before tax, they are a little bit higher than what they were in the last quarter.

Speaker #3: But we have had this impact of this deferment, which reduced our tax burden in the last quarter. Because of this, from a percentage point of view, the PAT appears lower this time.

Speaker #3: So it's a combination of things. But there is absolutely nothing alarming. It's all, you know, what's been there. And if our product business continues to grow, and if the component of the relatively lower margin products is larger, the margin will be a little bit lower.

Ajay Mian: It is a combination of things, but there is absolutely nothing alarming. It is all what has been there. If our product business continues to grow, and if the component of the relatively lower margin product there is larger, the margin will be a little bit lower.

Speaker #7: One more question about the split between product revenue and service revenue for the last quarter?

Surbhi Misra: One more question, sir. Can you tell me about the split for product revenue and service revenue for the last quarter?

[Analyst 5]: One more question, sir. Can you tell me about the split for product revenue and service revenue for the last quarter?

Speaker #3: Yeah, absolutely. So, we had 46% coming from the product and 54% coming from services. This proportion was, you know, more tilted towards the product in the last quarter.

Ajay Mian: Yeah, absolutely. We had 46% coming from the product and 54% coming from services. This proportion was more tilted towards the product in the last quarter. In the past, over the last so many quarters, you will see that our product revenues have been in the range of 42%, 43%, 44%. So a little bit higher this quarter.

Speaker #3: In the past, over the last so many quarters, you will see that our product revenues have been in the range of, you know, 42%, 43%, 44%.

Speaker #3: So, a little bit higher this quarter.

Speaker #7: Okay. Thank you so much, sir.

Surbhi Misra: Okay. Thank you so much, sir.

[Analyst 5]: Okay. Thank you so much, sir.

Speaker #3: Sure.

Ajay Mian: Sure.

Speaker #2: Sir, Saurabhesh put his question in the chat, in the Q&A box. I'll ask on his behalf. At current margins, we are back to pre-2024 operating profit, which means zero profit growth on a three-year basis.

[Company Representative] (KAPTIFY Consulting): Sir, Saurabh has put his question in the chat Q&A box. I will ask on his behalf. At current margin, we are back to pre-2024 operating profit, which means zero profit growth on 3-year basis. Do you think next 1 to 2 years can be different and we can go back to profitable growth and not just sales growth?

Speaker #2: Do you think the next one to two years can be different and we can go back to profitable growth, and not just sales growth?

Speaker #3: Well, we are growing profitably. I mean, the engagements that we are in—they are all profitable engagements. And as we get into larger engagements, we certainly have a larger profit.

Ajay Mian: Well, we are growing profitably. The engagements that we are in, they are all profitable engagements and as we get into larger engagements, we certainly have a larger profit. Now on the overall, from a percentage point of view, whether we will have PAT in the range of 20 plus or not, I think there are too many parameters and factors that play a role there. For some of you, as we are looking to grow aggressively, we are also adding more people, and some of those people cost. When we are bringing in a few people who are at a significant cost, the PAT may significantly get impacted for some period of time. But if you shy away from doing that, we will have an impact on the long-term growth, but we may see fascinating short-term numbers.

Speaker #3: Now, on the overall, from a percentage point of view—whether we will have PAT in the range of 20-plus or not—I think there are too many parameters and factors that play a role there.

Speaker #3: You know, and for some of you, as we are looking to grow aggressively, we are also adding more people. And some of those people cost.

Speaker #3: And when we are bringing in a few people who are at a significant cost, the PAT may significantly get impacted for some period of time.

Speaker #3: But if you shy away from doing that, we will have an impact on the long term growth. But we may see you know, fascinating short time you know, short term numbers.

Speaker #3: So that's not a trap that we want to get into. As long as we ensure that our project engagements are healthy, as long as we are growing in the direction that we want to grow—in the direction in which the world is moving—I think a little bit of fluctuation here or there will happen.

Ajay Mian: That is not a trap that we want to get into. As long as we ensure that our project engagements are healthy, as long as we are growing in the direction that we want to grow, in the direction in which the world is moving, I think a little bit of fluctuation here or there will happen, and we do not want to be in that trap of trying to forecast 1 or 2 percentage points here or there.

Speaker #3: And we don't want to be in that trap of trying to forecast one or two percentage points here or there.

Speaker #2: Okay, sir, we'll take the next question from Siddharth Mathew. Siddharth, you can go ahead, please.

[Company Representative] (KAPTIFY Consulting): Okay. Sir, will take the next question from Siddharth Mehta. Siddharth, you can go ahead, please.

Siddharth Mehta: Hi. Am I audible?

Speaker #8: Hi. Am I audible?

Speaker #3: Yes Siddharth.

Ajay Mian: Yes, Siddharth.

Speaker #8: Thank you for taking my question. I think, in your opening remarks, you had mentioned that some of the engagements you had completed in this current month or current quarter—can you talk a little bit more about that?

Siddharth Mehta: Thank you for taking my question. I think in your opening remarks, you had mentioned that some of the engagements you had completed in this current month or current quarter. Can you talk a little bit more about that? I think maybe with a potential acquisition or a partnership or something like that.

Speaker #8: I think, with the potential, maybe with the potential acquisition or partnership or something like that.

Ajay Mian: I am not sure if I get you correctly. I certainly did not give any indications of any potential acquisitions. I don't think I spoke of any specific partnerships. Maybe I wasn't clear enough for you. But if you can just leave aside what you think I said, if you could just elaborate. If your question is that are we working on an acquisition, well, that's something that we always look for. We did evaluate two very closely in the last quarter. Unfortunately, it didn't work out. It's not because we didn't want to spend money, but we have to be sure of the quality of acquisition that we do. So that is the answer to that part of the question, which I understood. But if there is something that I have missed out, please repeat for me.

Speaker #3: I'm not sure if I get you correctly. I certainly did not give any indications of any potential acquisitions. I don't think I spoke of any specific partnerships.

Speaker #3: Maybe I I I wasn't clear enough for you. But if you can just leave aside what you think I said, but just if you could just elaborate if your question is that are we working on an acquisition?

Speaker #3: Well, that's something that we always look for. We did evaluate two very closely in the last quarter; unfortunately, they didn't work out. And it's not because we didn't want to spend money, but, you know, we have to be sure of the quality of acquisition that we do.

Speaker #3: So that is the answer to that part of the question which I understood. But if there is something that I have missed out, please repeat it for me.

Siddharth Mehta: No, apologies. I think maybe I misunderstood. That would have been my next question, considering the cash on our balance sheet. Just wanted to get some clarity on that. Thank you.

Speaker #8: No apologies. I think maybe I maybe I misunderstood. So that that would have been my next question considering the the cash on our on our balance sheet.

Speaker #8: So no, just wanted to get some clarity on that. Thank you.

Speaker #3: Certainly. Certainly.

Ajay Mian: Certainly.

Speaker #2: Thank you, Siddharth. Sir, we'll take the next question from Sid. Sid, you can go ahead.

[Company Representative] (KAPTIFY Consulting): Thank you, Siddharth. Sir, we will take the next question from Sid. Sid, you can go ahead.

Speaker #8: So first of all, I would like to mention that the demo you showed for the intelligence platform looks really good, and I can see how helpful it will be for other enterprises as well.

Sid: First of all, I would like to mention that the demo you showed for the intelligence platform, that looks really good, and I can see how helpful it will be for other enterprises as well. My question is, last time on the con call you mentioned that you created this new GTM to target the upper client segments, and for that you had consultants separately in the team. How is that going on, the GTM for that is going on? When you mentioned in the slide that we are moving up market, is it just existing customers we are taking higher revenue or we are targeting new customers and clients with potential bigger revenue?

[Analyst 2]: First of all, I would like to mention that the demo you showed for the intelligence platform, that looks really good, and I can see how helpful it will be for other enterprises as well. My question is, last time on the con call you mentioned that you created this new GTM to target the upper client segments, and for that you had consultants separately in the team. How is that going on, the GTM for that is going on? When you mentioned in the slide that we are moving up market, is it just existing customers we are taking higher revenue or we are targeting new customers and clients with potential bigger revenue?

Speaker #8: My question is, last time on the on-call, you mentioned that you created a new GTM to target the upper client segments. And for that, you had a consultant separately in the team.

Speaker #8: How is that going on? The new, the other, the GTM for that—how is that going on? And when you mentioned in the slide that we are moving up market, is it just existing customers we are taking to higher revenue, or are we targeting new customers and clients with potential for bigger revenue?

Speaker #3: Yeah. So I think the right way for me to explain this would be that our percentage of time invested in sales and marketing is going more in the direction of larger engagements and larger customers.

Ajay Mian: Well, I think the right way for me to explain this would be that our percentage of time invested in sales and marketing is going more in the direction of larger engagements and larger customers. We are not doing at the cost of our bread and butter business. But from the senior leadership team, and from an investment point of view, our more mind share and time and effort is going in the direction of spending that with larger customers. Which naturally means that we also have a higher ticket size there, and we have more than one offerings that they end up consuming. We also see this, by the way, from a data point of view, you will see, because we work from a business application point of view only with Microsoft.

Speaker #3: We are not doing this at the cost of our, you know, bread and butter business. But from the senior leadership team and from an investment point of view, more of our mindshare, time, and effort is going in the direction of spending that with larger customers.

Speaker #3: Which naturally means that we also have a higher ticket size there, and we have more than one offering that they end up consuming. We also see this, by the way—you know, from a data point of view, you will see, because we work from a business application point of view only with Microsoft.

Speaker #3: So our engagement there in the last quarter with the larger of the two ERPs that Microsoft has, you know, has grown. You know, and that's an indication of how things are moving.

Ajay Mian: Our engagements there in the last quarter with the larger of the two ERPs that Microsoft has grown. That is an indication of how things are moving.

Speaker #2: Yeah. Siddharth, do you have any follow-up? Sir, we'll move on to the next question from Sameet Singh in the Q&A box. Sir, he is asking, we have ₹140 crore in cash, earning roughly 7% in fixed deposits.

[Company Representative] (KAPTIFY Consulting): Yeah. Siddharth, do you have any follow-up? Sir, we will move on to the next question from Sameet Singh on the Q&A box. Sir, he is asking: We have INR 140 crore in cash earnings, roughly 7% in fixed deposits. Any timeline when we will deploy this cash pile?

Speaker #2: Is there any timeline for when we will deploy this cache file?

Speaker #3: Yeah. I think by the by the end of this year, mid next year, you know, we look to utilize you know, at least part of this cash which way will that will be done you know, you know, it's not appropriate for me to make any you know, guesses on that.

Ajay Mian: Yeah, I think by the end of this year, mid next year, we look to utilize at least part of this cash. Which way that will be done, it is not appropriate for me to make any guesses on that. Our first preference always will be in making that investment in acquiring a business. If that does not happen, then we will find alternate ways of appropriately utilizing that cash.

Speaker #3: Our first preference always will be making that investment in acquiring a business. If that doesn't happen, then we'll find alternate ways of appropriately utilizing that cash.

Speaker #2: There is another question in the Q&A box. This question was asked by Uma Sankar: Are you still seeing any pricing pressure from large firms?

[Company Representative] (KAPTIFY Consulting): There is another question in Q&A box. This question was asked by Uma Sankar. Are you still seeing any pricing pressure from large firms?

Speaker #3: Well, pricing pressure is, is, is always there because when you are in a competitive scenario, you know, you have to work on multiple dimensions.

Ajay Mian: Well, pricing pressure is always there because when you are in a compete scenario, you have to work on multiple dimensions. You clearly have to come up and say why you are the best to do something, and then you also have to be attractive enough to the customer from a commercial point of view. So there is and there will never be a situation when you don't have pricing pressure. Is that pricing pressure pushing us to take up things which are unviable? The answer is no. We still get a premium when compared to several other players in the market. But this is how the businesses are. We are not in a situation which I would say is unfair or unreasonable.

Speaker #3: You clearly have to come up and say why you are the best to do something. And then you also have to be attractive enough to the customer from a commercial point of view.

Speaker #3: So, there is—there is, there is, and there will never be a situation when you don't have pricing pressure. If that pricing pressure is pushing us to take up things which are unviable, the answer is no.

Speaker #3: We are probably still, you know, we still get a premium when compared to, you know, several other players in the market. But this is how the businesses are.

Speaker #3: We are not in a situation which I would say is unfair or unreasonable.

Speaker #2: Yeah. And sir, there is one more question in the Q&A box. This question was asked by Rishabh Tripathi: What is our year-on-year constant currency growth for this quarter?

[Company Representative] (KAPTIFY Consulting): Yeah. And sir, there is one more question in the Q&A box. This question was asked by Rishabh Tripathi. What is our Y-on-Y constant currency growth for this quarter?

Speaker #3: Sure. Sandeep, do you want to take that? You're on mute.

Ajay Mian: Sure. Sandeep, you want to take that? You're on mute.

Speaker #4: The constant currency growth Y of one Y of Y is about 3%. If we normalize all the currencies across the subsidiaries. The top line.

Sandeep Jain: The constant currency growth Y-on-Y is about 3%, if we normalize all the currencies across the subsidiaries. The top line.

Speaker #2: Sir, we'll move to the next question. This question was asked by Chinmay Khadke: Do the margins depend on the product versus service split? Are the products sold mostly to the same customers for whom the services are provided?

[Company Representative] (KAPTIFY Consulting): Sir, we will move to the next question. This question was asked by Chinmay Khadke. Do the margins depend on product versus service split? Are the products sold mostly to the same customers for which the services are provided? Along with employees with advanced skills or AI, are you also hiring on marketing side?

Speaker #2: Along with employees with advanced skills or AI, are you also hiring on the marketing side?

Speaker #3: So, we do have a fairly strong marketing team. We definitely make investments on that front; it's a very important part of the organization.

Ajay Mian: We do have a fairly strong marketing team. We definitely make investments on that front. It is a very important part of the organization and we are very focused on doing that. So that is one. Do our margins depend on the combination of product and services? For sure. Products have one type of a margin, services have another type margin. This also depends on which geography the customer is in. Our prices do have some variation dependent on the geography of the customer, and also the location of our people. What other question was here? I answered these two.

Speaker #3: And we are very focused on doing that, so that's one. Do our margins depend on the combination of products and services? For sure. You know, products have one type of margin, services have another type of margin.

Speaker #3: This also depends on which geography the customer is in. Our prices do have some variation depending on the geography of the customer, and also the location of our people.

Speaker #3: What other question was here? I answered these two.

Speaker #2: Yeah. I think along with employees with advanced skills or AI, are you also hiring on the marketing side?

[Company Representative] (KAPTIFY Consulting): They are asking, along with employees with advanced skills or AI, are you also hiring on marketing side?

Speaker #3: I already answered that. The answer is yes. We have we keep looking at people in the marketing team you know, sometime as the placement, sometime as new hires.

Ajay Mian: I already answered that. The answer is yes. We keep looking at people in the marketing team. Sometimes as replacements, sometimes as new hires. You need to maintain a certain size of the marketing team. This is not something which has to scale linearly with your revenue. But we do have a fairly decent and stable marketing team.

Speaker #3: You need to maintain a certain size of the marketing team. This is not something that has to, you know, scale linearly with your revenue.

Speaker #3: But we do have a fairly decent and stable marketing team.

[Company Representative] (KAPTIFY Consulting): His follow-up question is, while considering acquisition, are you looking for Microsoft only or are you looking beyond Microsoft or no such bias?

Speaker #2: His follow-up question is: while considering acquisition, are you looking at Microsoft only, or are you looking beyond Microsoft, or is there no such bias?

Speaker #3: Well, there are some things where we look for Microsoft. So, if it is, you know, for ERP, CRM, and these kinds of solutions, I think Microsoft is pretty much, you know, among the leaders.

Ajay Mian: Well, there are some things where we look for Microsoft. So if it is for ERP, CRM, and these kind of solutions, I think Microsoft is pretty much amongst the leaders. So there is no point in venturing into somebody who is just doing ERP. ERPs are needed. But when it comes to the data and AI side, we are not stuck only on somebody who is doing Microsoft. Really, we look at other options as well.

Speaker #3: So there is no point in venturing into somebody with the, you know, who's just doing ERP. ERPs are needed, but when it comes to the data and AI side, we are not stuck only on somebody who is doing Microsoft.

Speaker #3: Really, we are—we look at other options as well.

Speaker #2: Sir, we'll take the next question from Sid. Sid, you can go ahead.

[Company Representative] (KAPTIFY Consulting): I will read the next question from Sid. Sid, you can go ahead.

Speaker #5: My question was: Where do we see the next growth coming from? Is it just increasing the wallet share of the existing customers, apart from any acquisition?

Sid: My question was, where do we see the next growth coming from? Is it just increasing the wallet share of the existing customers, apart from any acquisition? What are the growth drivers you are seeing in the next 2 to 3 years?

[Analyst 2]: My question was, where do we see the next growth coming from? Is it just increasing the wallet share of the existing customers, apart from any acquisition? What are the growth drivers you are seeing in the next 2 to 3 years?

Speaker #5: What are the growth drivers you are seeing in the next two to three years?

Speaker #3: See, the the one of the most important I would say observation that not just we but industry analysts and also these large companies who have been building these products and leading the AI race they have had is that the systems of record are not going anywhere.

Ajay Mian: See, the one of the most important, I would say, observation that not just we, but industry analysts and also these large companies who have been building these products and leading the AI race they have had, is that the systems of record are not going anywhere. It is not as if AI is coming and replacing everything. No, that is not happening. The momentum on the ERP side has only grown in the last couple of quarters. This momentum continues. Going to larger opportunities with larger ticket size of the projects is going to increase revenue. This will also require new customer acquisitions. We are not in the business where we try to generate more revenue from the same set of customers perpetually and only. If you do that, you run the risk of a customer going down and you getting significantly impacted.

Speaker #3: So it's not as if AI is coming and replacing everything—no, that's not happening. The momentum on the ERP side has only grown in the last couple of quarters.

Speaker #3: And this momentum continues. So, going to larger opportunities with larger ticket sizes for the projects is going to increase revenue. And doing so will also require new customer acquisitions.

Speaker #3: It's we are not in the business where we try to generate more revenue from the same set of customers perpetually and only. Now, if you if you do that, you run the risk of you know, a customer going down and you getting significantly impacted.

Speaker #3: So your revenue drivers are going to be making sure that you are able to take the new developments, new technologies to our customers, and see what is building up.

Ajay Mian: Your revenue drivers are going to be making sure that you are able to take the new developments, new technologies to our customers, see what is building up, and how do our customers gain from that. Taking those things to our customers. We, for example, have maybe a customer who took ERP from us 20 years back or a CRM from us 15 years back and who are engaged with us. It is not that we are engaged only on that one product. There are multiple things that we are doing to them. You have to acquire new customers, take the new solutions to them, and do more for the same existing customers. It is not an either/or.

Speaker #3: And how do our customers gain from that? So, taking those things to our customers—for example, we have customers who took ERP from us 20 years back, or a CRM from us 15 years back, and who are engaged with us.

Speaker #3: It's not that we are engaged only on that one product. There are multiple things that we are doing for them. So you have to acquire new customers, take the new solutions to them, and do more for the same existing customers.

Speaker #3: It's not an either or.

Rajiv Tyagi: Just to add one more thing here. That is said that the current ERP acquisitions that we are doing, if it was previously the deal size was X, now with AI, even in the new deals, you get an X plus at least a 15% thing because we position AI solutions there. To all the existing customers, obviously, we are going to position the AI solution, which will be expanding the base there. AI is going to accelerate. Definitely it will be one of the Trojan horses for the growth.

Speaker #2: Is there anything else to add here? That is what was said.

Speaker #4: As you know, with the current ERP acquisitions that we are doing, if previously the deal size was X, now, even in the new deals, you get X plus at least a 15% increase because you position AI solutions there.

Speaker #4: And to all the existing customers, obviously we are going to position the AI solution, which will be expanding the base there. So AI is going to accelerate; definitely, it will be one of the strong houses for the growth.

[Company Representative] (KAPTIFY Consulting): I will read the next question from Siddharth Mehta. Siddharth, you can go ahead.

Speaker #2: Sir, we'll take the next question from Siddharth. Siddharth, you can go ahead.

Speaker #5: Hello. Thank you for the follow up. In the near term, do you expect I mean, with the product build out and and hiring picking up as well, do you expect margins to maybe stay at these levels of further depth and then rise later on?

Siddharth Mehta: Hello. Thank you for the follow-up. In the near term, do you expect I mean, with the product build-out and hiring picking up as well, do you expect margins to maybe stay at these levels or further dip, and then rise later on? Because you also mentioned that you saw momentum picking up. Just some clarity on that. Maybe where we see margins maybe a couple of years from now.

Speaker #5: Because you also mentioned that you saw momentum picking up, just some clarity on that—maybe where we see margins a couple of years from now.

Speaker #3: Well, first of all, we don't see ourselves doing recruitments linearly with the revenue growth. That won't happen. We also see ourselves getting more revenue from our IP build-up.

Ajay Mian: Well, first of all, we don't see ourselves doing recruitments linearly with the revenue growth. That won't happen. We also see us getting more revenue from our IP build-up. So that side will increase the margins. We do, however, see ourselves hiring at least some, if not several, people for some key roles, and those people are not cheap. So I think there will be this variation that will keep happening. But overall, if I was to look at several years down from now, clearly, our revenue from our IP will be a significantly higher proportion than what it is today, which will make the margins healthier. The cost of people anyway, it actually moves only one way, which is moving up. But we will be able to do the same thing or with the same set of people, we will be able to do more things.

Speaker #3: So that side will increase the margins. We do, however, see ourselves hiring at least some, if not several, people for some key roles, and those people are not cheap.

Speaker #3: So, I think there will be this variation that will keep happening. But overall, if I were to look several years down the line, clearly, our revenue from our IP will be a significantly higher proportion than what it is today.

Speaker #3: Which will make the margins healthier. The cost of people, anyway, you know, it actually moves only one way, which is up. But we may be able to do the same thing, or with the same set of people, we will be able to do more things.

Speaker #3: So those are the things which kind of help you balance out that cost pressure.

Ajay Mian: Those are the things which kind of help you balance out that cost pressure.

Speaker #5: Okay. Okay. Thank you. And that's that's not something that you'd like to quantify at this moment. Maybe what the what the IP product revenue margins would would look like.

Siddharth Mehta: Okay. Thank you. That's not something that you'd like to quantify at this moment, maybe what the IP product margins would look like? Or maybe is that something you're

Speaker #5: Or maybe is that something you're sometimes for some time these things require investment, right? Some of these things are also a factor of how do you capitalize and investment or how much do you expense out in in in in some cases actually some of the investments that we have done in the past.

Ajay Mian: For some time, these things require investment, right? Some of these things are also a factor of how you capitalize an investment or how much you expense out. In some cases, actually, some of the investment that we have done in the past, there is a conversation whether some of that should be expensed out in the next quarter. Some of these things are more you have to do with advice from your consultants and your auditors and accounting people. We see from a business momentum point of view, we see good momentum in the new areas of technology. Our solutions are becoming interesting for more customers. We are looking at the geographic growth. We are looking at larger sized customers. But from your point of view, very clearly, you will view things from the way a financial statement is put out.

Speaker #5: There is a conversation whether some of that should be expensed out in the next quarter. Or so some of these things are more you have to do, you know, with with with advice from your your your consultants and your your auditors and accounting people.

Speaker #5: So, we see from a business momentum point of view, there is good momentum in the new areas of technology. Our solutions are becoming interesting for more customers.

Speaker #5: We are looking at geographic growth. We are looking at larger-sized customers. But from your point of view, very clearly, you will view things from the way the financial statement is put out.

Speaker #5: And sometimes those financial statements, for example, may give a view which is slightly at variance with what's happening on the ground. How this works out, in what time frame these things will happen, is very difficult to say.

Ajay Mian: And sometimes those financial statements, for example, may give a view which is slightly at variance with what is happening on the ground. How this works out and what time frame will these things happen is very difficult to say.

Speaker #5: Okay. Okay. Thank you.

Siddharth Mehta: Okay. Thank you.

Speaker #3: Thank you.

Ajay Mian: Thank you.

Speaker #2: Sir, we'll take the next question from the Q&A box. This question was asked by Saurabh Gupta: Currently, we are seeing a trend in the US where cyber insurance underwriters are increasingly tightening norms for cyber theft.

[Company Representative] (KAPTIFY Consulting): I will take the next question from Q&A box. This question was asked by Saurabh Gupta. Currently, we are seeing a trend in US where cyber insurance underwriters are increasingly tightening norms for cyber gaps for SMBs due to surge in AI-led activities. Plus, large enterprises are increasingly asking SMB vendors for increased security controls, as hackers are using SMB as entry point for breaching into large enterprises. My question is, are we seeing any signs of increased inquiries from SMBs, as many SMBs will have to shift from simple business applications to reliable business software with security compliant implementation partner? How All e Tech is planning to tap this opportunity?

Speaker #2: For SMBs, due to a surge in AI-led activities, plus large enterprises are increasingly asking SMB vendors for increased security controls, as hackers are using SMBs as an entry point.

Speaker #2: For breaching into large enterprises, so my question is: are we seeing any signs of increased inquiries from SMBs? As many SMBs will have to shift from simple business applications to reliable business software with a security-compliant implementation partner.

Speaker #2: How all it takes is planning to tap this opportunity.

Speaker #3: Long question, and you know, unfortunately, I missed parts of it. Sandeep, did you hear everything?

Ajay Mian: Long question, unfortunately, I missed parts of it. Sandeep, did you hear everything?

Speaker #4: I I can read.

Rajiv Tyagi: I can read it in Q&A box.

Speaker #2: It is in the Q&A box.

Ajay Mian: Okay, Rajiv. Okay, go ahead.

Speaker #3: Okay. Rajiv. Okay. Go ahead.

Speaker #4: I can read it. What he's asking is that in the US, the insurance companies are putting pressure on the SMBs to move to more secure ERPs.

Rajiv Tyagi: I can read it. What he is asking is that in US insurance companies are putting pressure on the SMBs to move to more secured ERPs. Are we observing that trend and what would be our strategy? I do not think there is a very visible trend around that, at least in our segment, Saurabh. But irrespective of the insurance pressure, at least in India and other geographies, I can say that the customers themselves are becoming more aware, and they want to go for the switch for the secure options. But at least we have not seen the trend where it is getting triggered through the insurance pressure.

Speaker #4: Are we, you know, observing that trend, and what would be our strategy? I don't think there is a very visible trend around that, at least in our segment, Saurabh.

Speaker #4: But irrespective of the insurance pressure, at least in India and other geographies, I can say that the customers themselves are becoming more aware. And they want to go for the switch to the secure options.

Speaker #4: But at least we have not seen the trend where it is getting triggered through the insurance pressure.

Speaker #2: Sir, the next question in the Q&A box was asked by Samit Singh. The question is: Microsoft Copilot is now embedded in Dynamics 365 and reduces implementation time.

[Company Representative] (KAPTIFY Consulting): Sir, the next question in Q&A box was asked by Samit Singh. His question is, Microsoft Copilot is now embedded in Dynamics 365 and reduces implementation time. Does AI expand your revenue per customer, or does it shrink your services billing per project?

Speaker #2: Does AI expand your revenue per customer, or does it shrink your services billing per project?

Speaker #3: Rajiv, do you want to take that?

Ajay Mian: Rajiv, you want to take that?

Speaker #4: No, it kind of, you know, there are certain advantages from the time perspective. But then, because of the AI, the kinds of workflows and things can be done.

Rajiv Tyagi: There are certain advantages from the time perspective, but because of the AI, the kind of workflows and the things can be done. I think there is no significant trend to see that it is. Because with Copilot, there is also an additional revenue stream related to Copilot, plus the services around it. While we do get some time advantage, not very significant, because there are still activities which are related and very human dependent from a data migration, training and all those aspects. But the marginal advantage that we are getting gets offset by the new revenue stream through Copilot and expanded scope of work.

Speaker #4: So I think there is no significant, you know, trend to see. That is because with Copilot, there is also an additional revenue stream.

Speaker #4: Related to Copilot Plus, you know, the services around it—so while we do get some time advantage, it's not very significant because there are still activities which are related and very, very human-dependent, like data migration, training, and all those aspects.

Speaker #4: But the marginal advantage that we are getting gets offset by the new revenue stream through Copilot and the expanded scope of work.

Speaker #2: Sir, another question in the Q&A box was asked by Satyam Mila. He is saying, "Thank you for holding this call and engaging with shareholders during this time."

[Company Representative] (KAPTIFY Consulting): Sir, another question in Q&A box was asked by Satyam Meena. He is asking: Thank you for holding this call and engaging with shareholders during this time. Considering your size allows us to pivot faster than larger players, what specific steps are we taking to convert current industry challenges into our competitive advantage?

Speaker #2: Considering our size allows us to pivot faster than larger players, what specific steps are we taking to convert current industry challenges into our competitive advantage?

Speaker #3: What steps are we taking to convert the current industry challenges into a competitive advantage? Well, I think one of the most important things being done is that we are doing more with the same headcount.

Ajay Mian: Well, what steps we are taking to convert the current industry challenges to competitive advantage? I think one of the most important things that is being done is we are doing more with the same headcount. We are not a human resource loaded company who has to do something knee-jerk. As a result of which we have not had any big increase in the headcount, but our overall revenues have either been stable or in this quarter have grown a little bit. We are doing this together with making investments into building product. I think the most important aspect of what we are doing is we understand the customer's business closely because we have not been a provider of just technology. We haven't ever been doing resource augmentation type of work to provide coding services. We have always been a provider of solutions.

Speaker #3: So, we are not a human-resource-loaded company who has to do something knee-jerk, you know, as a result of which we have not had any big increase in the headcount.

Speaker #3: But our overall revenues have either been stable or, in this quarter, have grown a little bit. And we are doing this together with making investments into building product.

Speaker #3: So, I think the most important aspect of what we are doing is that we understand the customer's business closely because we have not been a provider of just technology.

Speaker #3: We haven't ever been doing, you know, resource augmentation type of work to provide coding services. We have always been a provider of solutions.

Speaker #3: We understand the customer's business. And AI is available to everybody, so the winner is not somebody who has AI available, because that's what everybody has. The winner is the one who knows what to do with it.

Ajay Mian: We understand the customer's business, and AI is available to everybody. The winner is not somebody who has AI available, because that's with everybody. Winner is the one who knows what to do with it, and how to use that AI to bring impact to the customer, for which you need to understand the business. We have good understanding of several industry areas, the domains. We have dozens of customers for most industries that we work with, and we are leveraging that to build solutions which we say will be where the next set of growth is going to be.

Speaker #3: And how to use that AI to bring impact to the customer. For that, you need to understand the business. So, we have a good understanding of several industry areas—the domains.

Speaker #3: We have dozens of customers for most industries that we work with, and we are leveraging that to build solutions, which we say will be, you know, where the next set of growth is going to be.

Speaker #4: But then I'd like to add Satyam here that I feel because of our size and agility the time to market for our intelligence layer where we can move our customers from system of record to system of intelligence is going to give us that competitive advantage which for the larger companies because of their size it takes much more longer for the you know, product to conceive the product and launch the product.

Rajiv Tyagi: Again, I'd like to add, Satyam, here that I feel because of our size and agility, the time to market for our intelligence layer, where we can move our customers from system of record to system of intelligence, is going to give us that competitive advantage, which for the larger companies, because of their size, it takes much more longer for the product to conceive the product and launch the product. We do have advantage in that area.

Speaker #4: So, we do have an advantage in that area.

[Company Representative] (KAPTIFY Consulting): Sir, we will take the last question for the day from Saurabh Dhodi. Saurabh, you can go ahead, please.

Speaker #2: Sir, we'll take the last question for the day from Saurabh Dholi. Saurabh, you can go ahead, please.

Speaker #5: Hello. Can you hear me?

Saurabh Dhodi: Hello. Can you hear me?

[Analyst 6]: Hello. Can you hear me?

Speaker #3: Yes, Saurabh.

Ajay Mian: Yes, Saurabh.

Speaker #5: Yeah. Sir, good evening. Thank you for this call. I have just one question, especially on the product space. Can you tell us a little bit about how this particular vertical has kind of evolved?

Saurabh Dhodi: Yeah. Sir, good evening. Thank you for this call. I have just one question, especially on the product space. Can you tell us a little bit about how this particular vertical has kind of evolved? I mean, how much more penetrated are you in terms of products with your existing client today versus, let us say, last one year? And how do the margins actually stack up against the overall company margins?

[Analyst 6]: Yeah. Sir, good evening. Thank you for this call. I have just one question, especially on the product space. Can you tell us a little bit about how this particular vertical has kind of evolved? I mean, how much more penetrated are you in terms of products with your existing client today versus, let us say, last one year? And how do the margins actually stack up against the overall company margins?

Speaker #5: Meaning, how much more penetrated are you in terms of products with your existing client today versus, let's say, the last one year? And how do the margins actually stack up against the overall company margins?

Speaker #3: Is there a specific product that you are talking about?

Ajay Mian: Is there a specific product that you are talking about?

Speaker #5: No, I'm just talking about the product vertical, not a specific product.

Saurabh Dhodi: No, I am just talking about the product vertical, not a specific product.

[Analyst 6]: No, I am just talking about the product vertical, not a specific product.

Speaker #3: So there is nothing like a product vertical. So, there are two—you know, let me say—two categories of products, you know, that we talk about.

Ajay Mian: There is nothing like a product vertical. There are two, let me say, two categories of products that we talk about. There are the products which come from Microsoft. The ERP from Microsoft, the CRM from Microsoft or, let us say, the Fabric from Microsoft which we naturally build solutions on top of. Then there are the solutions that we build. You just saw a little demo of one solution. All our industry solutions that we have been talking of, be it the solution for EdTech or EPC 365, travel or BAFINS-CX. These are all solutions that are built on top of the Microsoft solutions. More than one of these are typically used for every customer engagement that we do.

Speaker #3: There are the products which we, which come from Microsoft. So the ERP from Microsoft, the CRM from Microsoft, or, let's say, the Fabric from Microsoft, which we naturally build solutions on top of.

Speaker #3: So then there there are there are the solutions that we build. And you just saw a little demo of one solution. But then all our industry solutions that we have been talking of, be it the solution for EdTech or EPC 365, travel or or BAFINs, these are all solutions that are built on top of the Microsoft solutions.

Speaker #3: And, you know, more than one of these is typically used for every customer engagement that we do.

Speaker #5: Yeah. So for these products only, what kind of margins would you typically have? What is the range exactly? And how does that compare with the overall company margins?

Saurabh Dhodi: Yeah. For these products only, what kind of margins would you typically have? What is the range exactly, and how does that compare with the overall company margins?

[Analyst 6]: Yeah. For these products only, what kind of margins would you typically have? What is the range exactly, and how does that compare with the overall company margins?

Speaker #3: Yeah. See, the product margins are always lower compared to the service margins, particularly if you are talking about providing services to an international customer.

Ajay Mian: Yeah. See, the product margins are always lower compared to the service margins. Particularly if you are talking of providing services to an international customer. When you are talking of providing to a domestic customer, they are still a little bit lower. The gap is less in that sense. Within the Microsoft products also there are different types of product. There are products like the M365 range of solutions, which are more like the customer knows what they are. They do not necessarily need big consulting in adopting some of those solutions. There are products like in the business application space, you talk of the ERP and CRM, which cannot be used by a customer unless there is enough consulting guidance and there is an implementation being done there. So margins range typically from, let us say, the rack rate on the margins is between, let us say, 10% to 30%.

Speaker #3: When you are talking of providing to a domestic customer, they are still a little bit lower. But then the gap is, you know, less in that sense.

Speaker #3: Now, within the Microsoft products also, there are different types of products. There are products like the M365 range of solutions, which are more like, you know, the customer knows what they are.

Speaker #3: They don't necessarily need, you know, big consulting in adopting some of those solutions. But then there are products like, in the business application space, you talk of the ERP and CRM, which cannot be used by a customer.

Speaker #3: Unless there is enough consulting guidance and there's an implementation being done there. So, margins range typically from, let's say, the rack rate on the margins is between, let's say, 10% to 30%. In some deals, you know, you give and take some.

Ajay Mian: In some deals, you give and take some, and the rest of it is all commercial modeling of the business from situation to situation. So there is a range. Similarly on the services side also, different geographies carry different rates, so there is a range there also. So it is a combination. Ultimately, when you go to a customer, you look at the combination of the two to decide how much is a project viable to pick up for. When it is our own product, then clearly all of that revenue comes to us. But whether all of that revenue is seen as a profit, possibly not. Because we need to keep making investments into building these products.

Speaker #3: And all the rest of it is all commercial, you know—modeling of the business from situation to situation. So there's a range. And similarly, on the services side also, different geographies carry different rates.

Speaker #3: So there is a range there also. So, it's a combination. Ultimately, when you go to a customer, you look at the combination of the two.

Speaker #3: To decide how much a project is viable to pick up for. And when it is our own product, then clearly all of that revenue comes to us.

Speaker #3: But whether all of that revenue is seen as profit, possibly not, because we need to keep making investments into building these products.

[Company Representative] (KAPTIFY Consulting): Sir, since there are no further questions, would you like to give any closing comments?

Speaker #2: Sir, since there are no further questions, would you like to give any closing comments?

Speaker #3: Well, yeah. Thank you very much. Everybody who joined this call, I hope you found it at least useful. We look forward to talking to you again.

Ajay Mian: Well, yeah, thank you very much, everybody who joined this call. I hope you found it at least useful. We look forward to talk to you again next quarter. Good luck.

Speaker #3: Next quarter. Good luck.

Speaker #2: Thank you to the management team and for for your valuable time. And thank you to all the participants for joining on the call. This brings us to the end of today's conference call.

[Company Representative] (KAPTIFY Consulting): Thank you to the management team and for your valuable time, and thank you to all the participants for joining on the call. This brings us to the end of today's conference call. You all may disconnect now. Thank you.

Speaker #2: You all may disconnect now. Thank you.

Speaker #3: Thank you.

Ajay Mian: Thank you.

Speaker #4: Thank you.

Rajiv Tyagi: Thank you.

[Analyst]: Goodbye

Operator: Goodbye

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