Praveen Malik: 2026-27, ending 30 September 2026. The investor presentation and press release has been sent to you and is also available on our website. Our leadership team is present on this call to discuss the results. We have with us today Mr. Arun Jain, Chairman and Managing Director, Mr. Manish Maakan, Executive President, Group Chief Revenue Officer, and CEO of Wholesale Banking, Mr. Rajesh Saxena, CEO of Consumer Banking, Mr. Banesh Prabhu, CEO of Intellect AI, Ms. Vasudha Subramaniam, CFO, Mr. Vikas Misra, Chief Sales Strategy Officer. Besides, some other senior members of the Intellect management team are present on the call. Now, I hand it over to Manish to give his comments on the results. This will be followed by the comments of Vasudha. Thereafter, there will be a Q&A session where your questions will be replied by the senior members of the management team.
Praveen Malik: Once the Q&A starts, you can ask the question by clicking on raise hand, and we would unmute you so that everyone is able to listen it. One safe harbor. I would like to remind you that anything which we say with reference to our outlook for the future is a forward-looking statement, which must be read in conjunction with the risk that company faces. With this, I request Manish to give his briefing. Manish? Manish?
Manish Maakan: Yeah. Good afternoon, everyone. Praveen, thanks for giving the introduction, and thanks, everyone, for joining us. Our theme remains growth by design, which we shared beginning of the last quarter. Last quarter, we had set out four growth engines and five measures by which we said we should look at judging us. This quarter's presentation shows them as four strategic pillars built on the same strategy. Before we go into any more details, I want to go a little deep onto the first one, which is shaping our future on all four of them. Go back to MSOCK, please. MSOCK, which is making enterprise knowledge computable. This was a massive innovation which we have brought out to market in September. We launched MSOCK, a multidimensional, multilayered system of connected knowledge. Here is the problem it solves.
Manish Maakan: The industry has invested over billions in AI, yet productivity has barely moved. AI tools are brilliant on day zero and sidelined by day 2, because AI knows the world, but not the institution, its system, its dependencies, its rules, its connected knowledge. MSOCK closes that gap. Just as the relational database made data queryable, MSOCK makes enterprise knowledge connected and computable. AI can then understand a mission-critical system, see the blast radius for achieving, and act under governance before anything else is touched. What you see on your screen are the five engines around which we have built these capabilities. It coexists with our customers of what already they have, and our message is very simple. Keep your agents, keep your AI tools, add MSOCK to make your knowledge computable. How MSOCK matters to Intellect.
Manish Maakan: It opens a new market segment for us where every bank, insurer, or capital market firm with a complex legacy estate must understand it before it can modernize it. Our challenge to the market, bring one complex module, give us 3 weeks, and we will map it, govern it, and prove it to blast radius. Second, it strengthens everything we sell. eMACH.ai and Purple Fabric are now engineered using MSOCK. It changes our own economics, and Q2 already shows it. MSOCK is now validated across 141 internal projects with 39 patents filed. In this quarter, we took 25 institutions live from 16 in Q1, yet our total cost stayed flat on Q1, including higher marketing cost. More output from the same cost base is exactly what MSOCK is built to deliver, and in a moment, we will show what this means for one of our specific customers.
Manish Maakan: Our four pillars for strategic growth. With our four pillars on screen, let me start with the evidence first. Our trailing 12-month income is up 17% and has risen in each of the last seven quarters on an LTM basis. We have recorded 21 wins, including eight. Our destiny wins are up from seven in Q1, and 25 financial institutions went live in our platform, up from 16 in Q1, and we delivered at a lower delivery cost in Q1. Let me show how this trace back to the choices made. First one on the AI-led transformation. The choice was to invest in proprietary AI ahead of demand. The output is AI now winning deals on its merit. A large US property and casualty insurer chose us in two deals for AI-led submission processing and underwriting.
Manish Maakan: An AI-led digital bank in Bahrain, focusing on business clients and digital assets, chose eMACH.ai AI as its digital core. One of the Mexico's largest banks will use AI-led document processing in its new trade finance platform. A global contract research organization and Indian precision manufacturer chose iAPX, which is a procurement platform for AI-led accounts payable automation outside banking altogether. A Kuwait's leading retailer chose our AI-driven customer personalization. In total, seven of our 21 wins in this quarter were AI-led. AI is no longer just a feature of our proposal. It is a reason customer choose us in banking and beyond. The choice since FY2027, the second pillar is market drive. Stay onto the pillar slide, please. Go back. Yep. A pillar two was to focus on strategic markets and driving global growth.
Manish Maakan: This has been a focus, and most of our investment in the last couple of years has gone around Americas and Europe, and the output is platform scale decision by major banks. Like I shared, one of Mexico's largest bank came back to buy eMACH.ai trade finance. One of the Nordics region leading bank selected eMACH.ai payments for its UK operation. A leading US payment financial services provider selected payments for its US business. Nine of our 21 wins in this quarter have come from Americas and Europe, which is more than half of its value, and more than half of its value in our new signings. A pillar 3 is around strategic platforms and innovation. The choice was to build platform that turn into domain expertise and proposition that sell repeatedly.
Manish Maakan: A credit union business is a classic example where we had acquired from Central 1, and we are continuing to win more from there. A transaction banking platform which has been chosen in UAE and Jordan for repeated, a composable core banking in five countries, a payments modernization across UK and US. Repeatability is what lets intellectual property scale without custom development, growing at the same rate. A repeat proposition sells faster, implements faster, and needs less customization. It has been proven that. I just want to add one specific item over here, which we will look through our numbers later. We would like to share that one of our large credit unions who had made a decision on an alternative platform prior to our acquisition of Central 1 completed its migration to an alternate platform, thereby creating a reduction in our SaaS revenue this quarter.
Manish Maakan: It is important to call out that, as you will see through our result. Go forward. Go to the recognition. Our platforms are also earning independent recognition. At the ET Enterprise AI Awards. Go forward. Arun Jain was recognized as an Indian CEO driving AI innovation, and Purple Fabric was named Best AI Development Platform. These are market recognitions of what we have done. Our pillar 4 is strategic deal wins and go-live. The choice was to use delivery success and to deepen relationships with more than 500 customers in 62 countries, and MSOCK now embedded in our implementation teams. Every go-live adds to an installed base that is one of our largest growth assets. Now, to go back to page 7, where we have got the deals. I shared Previous one. I shared the largest Mexico deal.
Manish Maakan: Earlier, we had won CBX to modernize the cash management platform, and an immaculate execution using MSOCK saw the bank migrate the delivery with precision and control. That has now resulted in bank extending their platform on eMACH trade and finance, supply chain finance, front to back. This is one of our strategic deals. A program of that scale typically takes 18 to 24 months, but with MSOCK, we are designing to deliver it in 12 to 14 months. This is not one-off success which we have. In the last two quarters, three other significant programs went live ahead of plan. A wealth platform for a global major in its first country in Asia, four months early on a 15-month program. A cash management platform for Middle East regional powerhouse, three months early on an 11-month program. A lending platform transformation in Europe was advanced by three months.
Manish Maakan: Across markets, across product platforms, we have seen early deliveries for our success. Delivering early and first time right is what earns the next decision. This is what we mean by implementation certainty, and MSOCK is what lets us deliver it repeatedly. Mexico has shown how we deepen our relationship. A new channel for UK wealth through a joint venture was got established to expand our TAM. A new segment of AI native digital banking, Bahrain Digital Bank, is an example of how modern new AI banks are leveraging Intellect as a platform. A new product category, Islamic Bank, was launched, and we got our first win in a Sharia-compliant bank in Maldives. Each of these expanded our addressable market on the same platform without a matching increase in custom development. This is what I really wanted to demonstrate, means what growth by design.
Manish Maakan: Slides 8 and 9 show what our 21 wins are, and you would have had a chance to look at them. At this stage, go to the pipeline. Our pipeline stands at INR 13,125 crores, up 9% year-on-year, and close to four times our trailing income. It holds 103 destiny deals, 29 above INR 50 crores, 35 between INR 30 to 50 crores, and 39 between INR 20 and 30 crores. Pipeline growth has moderated because our focus is now building the pipeline to converting it, and the pillars are converting. We closed eight destiny deals in this quarter. Among our high-value pursuits, we added 18 new ones, while 16 decisions and half of them wins came for us. Our deals are getting now larger, and the shape of deals is changing. Our newer wins combine an upfront license and an alternate model of a multi-year annual subscription fees.
Manish Maakan: Each of them builds forward revenue for us. Go forward on page 12. Page 12 shows the awards which we have won, and page 13 shows how we are deepening our leadership talent. Go forward. We are deepening our leaderships at scale. Vijay Anand joined us as a Senior Executive Vice President and Chief Operating Officer for Wholesale Banking. Leadership depth and MSOCK together answer the question investors ask us most: Can you deliver what are you winning? Q2 says yes, more go-lives from a flat cost base. Our priorities are unchanged from Q1 and in the same order, led by commercializing AI and MSOCK and converting the higher-value pipeline. We continue to ask you to judge us on the same five measures we have explicitly and deliberately defined out. First one is AI adoption. Seven of our 21 wins were AI-led.
Manish Maakan: Priority market growth, nine of the 21 wins, and more than half of the new signing came from Americas and Europe, including three tier 1 platform decisions. Destiny conversions, eight new against seven in the last quarter, 15 in the H1. License-linked revenue is growing faster, and operating leverage, more go-lives from a flat cost base. I will now hand over to Vasudha Subramaniam, who will explain this momentum is translating into revenue quality, profitability, working capital, and cash. Thank you.
Vasudha Subramaniam: Thank you, Manish. Good evening, everyone. I will now take you through Intellect's financial performance for Q2, beginning with our last 12 months' performance, followed by quarterly results, profitability, cash collections, and working capital. Our LTM performance reflects continued growth in revenue with an increasing contribution from license-linked revenue. LTM total income reached INR 3,388 crores, representing a 17% year-on-year growth. License-linked revenue comprising license, platform, and AMC increased to INR 1,716 crores from INR 1,497 crores, representing 18% growth and contributing to 52% of the total income. Platform revenue increased to INR 591 crores from INR 392 crores, representing 51% growth, while AMC revenue increased by 12% to INR 603 crores. Moving to profitability, gross margin as a percentage of total income stood at 56.7%. LTM EBITDA stood at INR 736 crores, representing 21.7% of the revenue, despite over INR 100 crore of investments made in AI.
Vasudha Subramaniam: While our non-GAAP adjusted EBITDA, excluding stock compensation cost, stood at INR 802 crores. Profit before tax stood at INR 503 crore, and profit after tax before exceptional items stood at INR 378 crores. Importantly, collections increased by 26% to INR 3,282 crores, and cash and cash equivalents stood at INR 1,216 crores. Improving the conversion of revenue growth into earnings growth remains an important financial priority for us. Coming to the second quarter performance, total income for Q2 stood at INR 878 crores. Turning to our revenue composition, license-linked revenue stood at INR 457 crores, platform revenue stood at INR 133 crores, and AMC revenue recorded INR 116 crores. License-linked revenue accounted for approximately 52% of the total income. Gross margin percentage improved to 57.2%, and EBITDA stood at INR 199 crores, representing 22.7% of the revenue. PBT stood at INR 137 crores, and PAT was INR 104 crores.
Vasudha Subramaniam: We remain focused on strengthening this operating performance through disciplined cost management and improved productivity. Let me now turn to cash collections and liquidity. For Q2, collections stood at INR 815 crores. Our cash and cash equivalents stood at INR 1,216 crores as of 30 September, compared with INR 927 crores in the corresponding period last year. This represents an increase of 31%, strengthening our liquidity position. The growth in collections and our cash balance provides financial flexibility to support operating requirements and ongoing investments. On the working capital, our days sales outstanding, excluding the contractually not due amounts, stood at 111 days. We continue to closely monitor receivables and collections with a focus on improving working capital efficiency and maintaining collections discipline. Before I conclude, I would also like to share a leadership announcement.
Vasudha Subramaniam: The board has approved the appointment of Mr. Suresh Easwaraprasanna as an additional director, designated as an independent director for a term of five years, subject to shareholder approval through a special resolution. Suresh brings 28 years of experience in financial services, including 22 years in private equity investments. He has held senior leadership positions at JP Morgan, Mount Kellett Capital Management, and ADV Partners, and currently serves as a CIO at 2380 Capital. His extensive experience in investment, financial markets, and corporate governance will bring valuable perspectives to the board as Intellect continues its global growth journey. With that, I conclude the financial review and thank you. We will be happy to take your questions.
Praveen Malik: Thank you, Vasudha. Now the platform is open for Q&A. In case you want to ask any question, please click on it. We will open it for you, and management will reply to it. Please ask your questions.
Arun Jain: I think there are eight participants who are there signed.
[Company Representative] (Intellect Design Arena): Praveen, there are eight participants who have already raised their hands. You can allow them to ask their questions.
Praveen Malik: First, we have Adi Jamwal from AK Investment. Adi Jamwal. Adi, please ask your question.
Aditya Jhawar: Thanks for the opportunity. Good set of numbers, sir, firstly. I have one question regarding the revenues. I just wanted to understand that we have implementation revenue, right? We would also take some customizations there. There we can sell license also. How do we accrue in our revenue, license revenue, the license plus implementation with customization? I wanted to understand because they
Arun Jain: We lost him.
Aditya Jhawar: It means he also will increase. How
[Company Representative] (Intellect Design Arena): Adi, we lost you. Can you repeat your question, please?
Aditya Jhawar: Yeah. What I am saying is, if you have won some project in the implementation part where you are also selling the license with customization, I am asking whether that license revenue will be converted to AMC, and how are we accruing that in our accounting? I mean, we are recognizing in the license part or purely implementation that will go to AMC? Because I am understanding that once implementation is done, whether that revenue will be stable or not. I am just trying to understand that piece once you have customization in the implementation part.
Arun Jain: Yeah. You may be new investor in the company. The company model today is license, let us say A1 revenue is license revenue, A2 revenue is implementation revenue. Within implementation, there is a customization, A2.1, A2.2, implementation revenue plus customization revenue. A3 revenue is the AMC revenue. AMC revenue is a percentage of, let us say, 20% on the license revenue is the AMC revenue. So that is the three category of revenue. When implementation revenue gets finished, that revenue goes away, and AMC starts. So that is the right understanding you have.
Aditya Jhawar: Okay. So, we are not occurring anywhere if you are selling a license and if you are doing customization, it sits in the license revenue only, right?
Arun Jain: No, no. It fits into implementation revenue. If customization is there, it will fit into the customization revenue, which is approximately 40% of the revenue is in customization space. So that portion of A1 will go to license revenue, portion of A2 will go to-
Aditya Jhawar: For that, we will get whether we not show.
Arun Jain: Please go ahead.
Aditya Jhawar: Yeah. What I am saying is, if suppose we are doing customization in A2, okay, and they are selling license also, then to maintain that product, that revenue shouldn't go away, right? It should come to A3, right, for us, in AMC.
Arun Jain: See, how the customization will come to A3 if you are not Okay, so I think we will take this question separately. Adi Jamwal will take this question separately. CFO will take your question on this.
Aditya Jhawar: Okay.
Arun Jain: Let's have a somewhat other conversation.
Aditya Jhawar: Okay. The next question I have is, are we
Arun Jain: Adi, we are breaking you a few times, so I think we can
Aditya Jhawar: confident that in Q4, we'll reach that. Hello?
Arun Jain: Yeah, go ahead.
Aditya Jhawar: Are we confident that we will reach in Q4, INR 900 crore plus revenue, and next year guidance of PBT of INR 1,000 crore? Are we confident on achieving these two numbers?
Arun Jain: Yeah. If you look at all the numbers, that is why we are confident it is going in a structured manner. Four quarters, INR 750, INR 700, INR 720, INR 730 crore numbers were there. Then Q4, we got INR 850 crore. As an investor, you had a doubt in the mind of the Q4, even when I was publishing, your question was whether we are able to maintain above INR 800 crore or not. From last two quarters, Q1 and Q2, both our numbers are close to INR 850 crore. So we are able to manage Q4 numbers. In Q1 and Q2, both sustained revenue. So that is a new baseline, which is INR 850 crore. Now, INR 900 crore between next two quarters, definitely we are confident that it will cross the INR 900 crore. Next year numbers, we will take next year.
Aditya Jhawar: Okay. Lastly, I have one more question that, do you see any risk of, I mean, because we are dealing with a lot of projects, a lot of license and
Arun Jain: Keep one question each time because there are 240 people participating. So, Praveen, if it is one question per participant, we will do it.
Aditya Jhawar: Do you see any risk to our execution?
Praveen Malik: Sure. Request to everybody, please ask only one question, and still if you want to ask another one, then you be there in the queue once again.
Arun Jain: Yeah, sure. Praveen, we can move to the next.
Praveen Malik: Thanks, Adi. Next, we have Dev Mehta from Unique PMS. Dev Mehta, please unmute yourself.
Dev Mehta: Yes, am I audible?
Praveen Malik: Yeah.
Arun Jain: Yes, please.
Dev Mehta: Yeah. I just want you to give a bifurcation of the R&D expense this quarter, and on an LTM basis, how much was expensed and how much was capitalized?
Vasudha Subramaniam: Adi, this is a senior. R&D expenses that was expensed should be about INR 230 crores, and more than, I mean, around INR 170 crores would have been capitalized.
Dev Mehta: This is on an LTM basis, right?
Vasudha Subramaniam: Yes.
Dev Mehta: For the quarter?
Vasudha Subramaniam: For the quarter, it is like INR 54 crores, which is expensed off. About INR 42 to 43 crores was capitalized.
Dev Mehta: Okay. The second question is, FY21 was one of the periods in which we can call it as an inflection point for our company, after which our margin shot up to 24% and 25%. Even in the annual report, it is mentioned that FY27 is one such inflection point. Are we consistent with that guidance of FY27 being the inflection point for our company?
Arun Jain: Yeah. So, 2027 is an inflection point from two perspectives, as Manish has put it. We invented a technology called MSOCK. I think as an investor, if you are a Silicon Valley investor, it is a technology invention of its kind where first time in the world, we connected a financial services industry, entire knowledge in business capability, product, user journey, call chains, Kafka, into one single System of Connected Knowledge. That is a product which we launched on 9 September, could be of very different order. In last 6 weeks of time after 9 September, I met close to 30 different CIOs in US, in India, in Europe, some calls are there. All our senior management team has gone and met the customer.
Arun Jain: Today, we have 30 active conversations happening, how MSOCK can be applied on top of Anthropic to drive the right business outcome results and accurate results, where huge amount of investment which these people are doing on Claude is not translating into the actual saving. What Manish was mentioning that 141 projects have gone live on MSOCK, and we have demonstrated that a project can be delivered instead of 12 months, in 8 months. It is proof of the point of this technology, which is very, very dramatic in nature, and our winnability of the new deals go up multiplied because of the capability which Intellect has built for delivering the existing pipeline, which is their INR 30,000 crore pipeline. That will be having a positive tailwind because of MSOCK.
Arun Jain: This is one area where the margins and the cost structures are. The other important point Manish has highlighted, our cost structure is INR 680 crore last quarter and this quarter. Very rarely we are able to manage the same cost structure across the two quarters. In which any future revenue which will be going up, so current number of INR 850 crore, if it goes to INR 900 crore, out of INR 50 crore additional revenue, INR 40 crore will come into the margin. That is where the value will be there for the investors.
Dev Mehta: Yes, sir.
Arun Jain: You can calculate the margins after that.
Dev Mehta: Fair enough. We are on with the guidance of INR 4,000 crore by FY28 with respect to top line?
Arun Jain: That is right. That is right. There is an expected top line of INR 4,000 crore in FY28.
Dev Mehta: Okay. Thank you.
Arun Jain: Next.
[Company Representative] (Intellect Design Arena): Praveen, you can ask next question.
[Company Representative] (Intellect Design Arena): Praveen, you are on mute.
[Company Representative] (Intellect Design Arena): Praveen, ask the next question, please. We have Vivek Dwivedi as the next question. Vivek, can you unmute yourself, please? Vivek, you can ask your question.
[Analyst]: Sir, am I audible?
[Company Representative] (Intellect Design Arena): Yes, you are.
[Analyst]: Sir, thank you for the opportunity. My question was regarding MSOCK. Arun Jain sir was explaining in most of the interviews that we have both efforts, reduction and also the kind of token maximization, like also in terms of intelligence we are using because of MSOCK. If at all we think that that's a tailwind, how and you have had conversation, I know it's too soon, but how is it looking in terms of because where I'm just trying to make, like you also said in one of the interviews that this MSOCK will help us crack the mainframe modernization. If you can lay down, like, how is it? Is it already, are you very confident or are you seeing the deals turn faster? Will the cost structure of 680 will be same till what kind of revenue?
[Analyst]: Is it till INR 1,000 or even INR 1,100, INR 1,200 can you maintain? Because if you see at other AI companies, I don't know how to ask this question, but there's huge savings that are coming in. If you keep mentioning Silicon Valley, if you look at product companies there, they're growing north of 30%, 40% because of this AI gain. Are we going to see that kind of a growth because of this MSOCK giving a lot of tailwinds?
Arun Jain: Yeah. I think beautiful question. I think that is what is the right question for this conversation. The 1% margin here and 1% margin is not going to make your investment decisions in this company. What your company is doing is that MSOCK, we are You are asking the right question, mainframe to cloud migration. There is a big shift happening right now in the market. Tailwinds are there in the US and Europe, where these projects are there. After launching MSOCK, we have now in active conversations 7 banks on mainframe migration. Before MSOCK, we were only with eMACH, we were in contention. Now if you look at the whole company strategy, we have eMACH as a product line, which is a layer 1.
Arun Jain: Let us say this layer 1, we have 8 different product lines which are there, from iGTB to core banking, to lending, to wealth, to payments, to trade finance, supply chain finance. There are 8 product lines which are there. Second layer is Purple Fabric, which is making the operations of the bank and create efficiency. We are working with our at least 15 RFPs in Purple Fabric. Where Purple Fabric as a platform bank is choosing, 2 banks have gone live on the Purple Fabric as a platform, which is a significant milestone that they are consuming the platform as a secure platform and that they have gone live. Now this traction will happen in a Purple Fabric which we launched last year. That is a layer 2. First layer is for business, second layer is for operation, and third layer is for technology.
Arun Jain: Our promise to the industry is we can bring down the 20% cost to the bank OPEX cost by applying all the 3 pieces together if bank chooses. In mainframe to cloud area, we are able to harness the knowledge. Most of the competitor in this space, in mainframe to cloud area, is a parsing company. Technology you want to understand, the many companies are parsing the code and bringing the past knowledge and giving to cloud to build a forward engineering. The gap there is, it does not have a context engineering and it does not have a knowledge, connected knowledge piece which is, we call it multi-dimensional, multi-layer System of Connected Knowledge. Now that is what is missing in a mainframe business.
Arun Jain: When we are talking to existing players whom my competitor like Amdocs is positioning or other player like CAST is positioning, I am working on the top of it and then giving you 3 opportunities. First is to make their knowledge as a part 1, then to make it forward engineering using MSOCK, and third is applying eMACH architecture on the top of it. There are 3 options are available in mainframe. The mainframe to cloud migration deals will be upward of double-digit millions, almost half the upper side of the double-digit millions. This is the new space will help us. What you are talking about, whether INR 850 will go to INR 1,100 crore per quarter, yes, that is what the hope we are looking for.
Arun Jain: Whether that will happen in 12 months' time or that will happen in 24 months' time, but definitely that visibility this MSaaS has given us is, we are now visible what I mentioned about INR 4,000 crore. I mentioned 2 years back that we will be INR 4,000 crore based on AI, Purple Fabric, and other initiatives. Now I am saying I have visibility of INR 5,000 crore as a revenue of the company, and that will be at a very decent margin because my cost structures are not changing.
[Analyst]: Sir, my question was, should we look at growth rates going up now that we have intelligence layer and knowledge layer, and you have eMACH.ai, and then you are also one of the few people who have done this of mixing the ontology with the core products, and all products are on the same platform called eMACH.ai. Should we not be so confident of growing at 25%, 30%? Because if you see many product companies, I understand I am not comparing you with other kind of products. Even if you compare with banking product companies, should we see a higher growth rate than what we had in the last 10 years?
Arun Jain: Yeah.
[Analyst]: Because we have mostly done lots of our investments, right? You have developed all the products, we have platformized products, we have also come with knowledge layer, and we are also in 8 markets, so I am coming from that context.
Arun Jain: Sure. You can look at it, and as and when it will happen, we are not able to see because decision-making cycle time still is slow. The when actually will happen, 30% growth rate or 25% growth rate, to me, 20% growth rate is good number. We have calibrated the company at 20% because now 20% growth rate will bring 40% growth rate in margin or 50% growth rate in margin. That is what, as an investor, is a great opportunity right now.
[Analyst]: Sir, that's my question, sir. Next year should be better than INR 4,000 crore, right? If we are growing 20%, it will be INR 4,300 to 400.
Arun Jain: Don't pinpoint me. I am not a forecaster here. Move to the next question.
[Analyst]: Okay. Sir, last bookkeeping question, sir. Bookkeeping question. Sir, Manish Makhija mentioned the Central 1, we have lost one SaaS thing. How should we look at that, sir? How should we look at it? Is it a structural thing, or why did we, somebody shift? How should we look at it? Because Manish Makhija has mentioned.
Arun Jain: No, no. I think again, no, I think Vikas is the right thing. It's a term getting over. When we acquired the Central 1, we knew that 80% customer will retain because that's where we forecasted 80% customer. That's why we didn't pay any money to the Central 1. We knew that their term will get over on force, and they will move, some 20% customer will move to the other player. In this quarter.
[Analyst]: Okay
Arun Jain: one or two, three customer whose terms get expired because we are given a one-year time that they can move after one year, and they moved out of that. It is a natural progression which has happened in SaaS division.
Vasudha Subramaniam: Despite that, we have achieved 51% CAGR growth on LTM basis.
[Analyst]: Yeah. Sir, you are seeing sales growth quarter-on-quarter across your products.
Praveen Malik: Vivek, can you please finish because lots of other people are there too after Vivek.
[Analyst]: Thank you.
Praveen Malik: You can be again in the queue. Okay? Thank you. Thank you, Vivek. Next, we have Nandu from Edelweiss Public Alternatives. Nandu? Please unmute yourself, Nandu.
[Analyst] (Edelweiss Public Alternatives): Am I audible, Arun?
Arun Jain: Yeah.
Praveen Malik: Yes, Nandu.
[Analyst] (Edelweiss Public Alternatives): Yeah. Yeah, Arun, thank you so much for giving me the opportunity. I just wanted to understand, we have been talking about increasing margins for quite some time now. If I look at some of your old transcripts, you have highlighted that our margins can reach 25%, 30%, right, in the past as well. We have invested in eMACH.ai, Purple Fabric, and now the wrapper around Claude as well, or Anthropic as well. I just wanted to understand why is this time different, and why are you confident on the margins coming in right now and base not increasing, right? Because, Arun, where I am coming from is that in one of the interviews you mentioned, maybe Indian investors are too much worried about the margin part, right, in some sense. But for last five years, our profitability has been flat, right?
[Analyst] (Edelweiss Public Alternatives): We haven't increased in terms of overall PAT. We haven't seen an increase in PAT for the last five years, right? So, I am not sure which kind of patient investors you want, right, in some sense, to wait for five years for the increase in PAT, right? On the margin part as well, right, in the past also you have commented that the margins will increase. So, what is it that we investors, apart from some of the other stuff that you have mentioned that you should evaluate us on deal wins, so on and so forth, on financial metric, don't you think financial metric should also be part of that in which we should evaluate you on? Why are you so confident right now that this cost-
Arun Jain: I got the question. So your question typically is that margin is not growing. We mentioned last year, and we are investing INR 100 crore in AI. That was a clear self-identified number that we are investing instead of keeping the cash for investor, we are investing back in AI business. Your company has come to the MSOCK and Purple Fabric on internal investment. If anybody else would have been there, they would have required INR 500 crore investment to INR 1,000 crore investment to what MSOCK and Purple Fabric has built in. Now, if as a leading investor, the AI company, AI company are not making profit in the world. AI companies are making only products right now, and they are not making profit.
Arun Jain: Today, with the balance of eMACH plus AI together is helping us to retain the margin at 20%, which is, to me, a great celebration point that we have transformed the company to AI company without taking any third-party investment, without diluting your equity. We have taken it, all done internal research has been done in the same kind of investment of just INR 100 crore. INR 100 crore, which is a company which can make AI company. Any AI company raising the fund is not less than $100 million. So that's where you have to measure it. Now, the second measurement you want is data and cost coming down at Intellect. During the phase of investment, our cost went up from INR 600 crore to INR 680 crore. Now it's in the range of INR 680 crore per quarter. Last two quarters, the cost has remained constant.
Arun Jain: What we are saying is the next few quarters, my cost will not go in a proportion what it was doing earlier. It will remain between INR 680 crore to INR 700 crore. Now, in that scenario, if my revenue goes to INR 950 crore, that's the margin improvement will happen.
[Analyst] (Edelweiss Public Alternatives): Thank you, Arun. Looking forward.
Arun Jain: Yes.
Praveen Malik: The next question is from.
Praveen Malik: Thanks, Pulin. Next, we have Dhruvesh Sanghvi from Prospero Tree Asset Management. Dhruvesh? Dhruvesh Sanghvi? Are you there?
Arun Jain: Dhruvesh, you can unmute yourself.
Praveen Malik: He's not there? We will take the next. We have Kunal Shah from Hornbill Capital Services.
Dhruvesh Sanghvi: Hello, am I audible now? I think the
Praveen Malik: Kunal?
Dhruvesh Sanghvi: taking time.
Praveen Malik: We can hear you, Dhruvesh. You can go ahead with your question.
Dhruvesh Sanghvi: Yeah. Very quickly, just one question, sir. This is the first time I am asking a question on the town call. I have been an investor for almost four to five years now. Sir, just one question that when we I mean, as a smaller company in comparison to the leagues of Oracle Financial Services, while we see their LTM growth recently, they have certainly shot up substantially. Even Temenos has been able to grow 5% to 7%, and it seems that the entire industry has been able to grow well. Of course, we have also done very well. But if we are in the innovation side versus the leagues of OFSS, how have they been able to grow so well? My question is a very naive one, and if there is a sensible thing or some insight that you can throw, it would be great, sir. Thank you.
Dhruvesh Sanghvi: That is my only question.
Arun Jain: As it is nature of the product industry, there are certain deals are there. So if some company in some period of time get a very large deal, then suddenly that period becomes extremely good period. Like Q3 revenue for us was INR 720 crore, and Q4 revenue was INR 850 crore. Now, in one quarter, in no other business you can get a INR 120 crore in incremental revenue in just three months' time. OFSS has won some good deal in America, which is we are appreciating. Temenos has also done a good job in acquiring some customer in Africa, one large deal what they announced. So now, this is the deal-based growth. But when I am saying we are on a cutting edge of innovation, we are fighting the head-on battle with Temenos and head-on battle with OFSS.
Arun Jain: It's a great credit to all of us as an investor to trust that we are fighting better. With MSOCK, we'll still fight much better because if I can deliver the project 4 months before time, I don't think I have a visible customer. That will demonstration of the 4-month early deliveries will take 6 months for us to demonstrate in a physical manner, and client will be agreeing to write a case study with me that I delivered 4 months before time. Once the client will go to me in the market that I can deliver the 4 months before, I can do the transformation in 8 months, that story will be selling in a market. As a product company, we just need a small, more patience, and we'll. One thing is that product market has not gone.
Arun Jain: There's lot of fear in the market of investors that product companies are not in space. People are building the solution, and lot of service companies are saying, "We've built a solution of the AI-based solution. We can build the product using Claude." I think those are misnomer that a service company can build a product where microservice architecture, eMACH architecture, which requires close to 800, 900 small, small security issue, microservices issues. It's a complex business of financial services, but as of now, lot of investors are getting carried away with the myth that service company will take over and product company may not have a possibility of license revenue. I just want to clarify what this myth is going in Europe and America that service company can take over product company file.
Praveen Malik: Thank you, sir. Thanks, Dhruvesh. Next we have Mr. Paresh Sangani from Club Millionaire. Paresh. Mr. Paresh Sangani?
Paresh Sangani: Is my voice audible, sir?
Praveen Malik: Yeah, Paresh. Please go on.
Paresh Sangani: Okay. Good evening, Arun Jain, and good evening to all as well. The question I had was that we are likely to have about INR 1,300 crores of cash by FY27, right? And we are producing about INR 350, 400 crores of cash annually as well. So what would it take us to kind of consider a buyback when peers like Temenos, Oracle, for example, Oracle parent globally has done almost a 40% buyback. The company that we admire most, Apple, they have done 40% of their equity as buyback over last 10, 12 years. Temenos is undergoing a buyback. When I compare our valuation with our VR valuations, right?
Paresh Sangani: At current valuations of EV to sales of less than 2 times, and our margins also on a trough, I was wondering what would it take us to consider doing a buyback in this company, especially when it is far more tax efficient than, let's say, giving out a dividend as well, right? When we get dividends, we pay 40% almost as marginal rate of tax. Thank you.
Arun Jain: Thank you for asking this question, buyback. This is an option we have dialogued in board. It is not that discussions are not being dialogued in your board. We are giving this feedback on buyback. With MSOCK being launched now, we are looking to invest this money in an acquisition. We are planning to acquire companies to have access to the client. MSOCK is a good tool to acquire client and upgrade the legacy players in their market. So we want to go to LATAM market, we want to go to Europe market, Eastern Europe market, and looking for acquisitions. My strategy team, Vikas Misra, who is running the Chief Strategy Office, is now evaluating 3 to 4 acquisitions of a size where customer what we want to acquire is the customer.
Arun Jain: We want to acquire specifically who has 20 financial accounts in a new market where we do not have access to. I do not have to go to the procurement office of MSA. I will short-circuit the MSA part and then go to MSOCK to deliver him the value of MSOCK. That is what our strategy is. Based on that, we will be able to take a decision on buyback at appropriate time.
Paresh Sangani: Okay. Thank you, Arun Jain.
Praveen Malik: Thanks, Paresh. Next we have Yash Sidani. Yash Sidani from Antigravity. Mr. Yash Sidani?
Arun Jain: Can you tell us one by three so they can keep an
Yash Sedani: Hello, am I audible?
Arun Jain: Yeah.
Praveen Malik: Yeah. Please go on, Yash.
Yash Sedani: Sir, there was one transaction with JV this quarter. Can you just tell us the amount of the transaction? I think if we exclude that transaction, we have seen some degrowth in profits as well. How are we looking at this figure going forward and clarity on this JV transaction?
Arun Jain: The JV is on the license we sold to JV. It is not a value which is excluding that, because this JV has come with a value of wealth management license to be sold to the JV. JV will be now operating 50/50 in UK market. We are exploring the market. This is one of the monetization strategy of a particular market when either I acquire them or I do the partnership with them, both the strategies are there. This strategy with Fintel is a joint for the market in UK, where they have more than 100 customers. There, we will be accessing that, and that will be the value-add doing to us.
Yash Sedani: Okay.
Arun Jain: Yeah.
Yash Sedani: Okay, thank you.
Praveen Malik: Thanks, Yash. Next we have Mayank Babla from Carnelian Capital. Mr. Mayank Babla. Mayank?
Mayank Babla: Yeah, am I audible?
Praveen Malik: Yeah, Mayank. Please go on.
Mayank Babla: Thank you for taking my question. First question is, if you could quantify the impact from the client, the Central 1 client, which migrated out of our platform in the quarter, and how much more of an impact can we see in the forthcoming quarters? Because you said 20% you were expecting to churn out. So if you could quantify this, please, for us.
Arun Jain: We can quantify later on. So maybe we will quantify, we will have to work it out which quarter somebody is going out, because they do not promise when their term is ending. So they keep on extending the term till the time new vendor is ready for Equitas putting them on a platform. That is the current uncertainty we have on when the particular client goes, because when this new vendor to whom they are going DEP, that cycle time is next to three quarters. We will tell you later on.
Mayank Babla: For the current quarter, if you can quantify that would be known, right?
Arun Jain: Yeah, current quarter, Rajesh, anything is there in the current quarter?
Rajesh Saxena: Are you talking about Q3 or Q2?
Arun Jain: Q3.
Rajesh Saxena: I think Q3, we should be looking at about 400,000, 300 to 400,000 USD.
Mayank Babla: Yeah. Thank you. Second, Arun sir, if you could help us explain, in the MSOCK platform, the fourth pillar, which is four machines, if you could help us explain in simple terms what that bit means. I could not quite capture it. That is my simple question.
Arun Jain: Yeah, you could. I was asking. It is good that you asked that question. I think many investors will not understand. If you look at it, any software system, like a knowledge tower of the bank. Let me explain you that, like, you have a physical building of HDFC Bank or physical building of ICICI Bank. Assume there is a knowledge building of 21 floors. There are 2 floors on business product and business capability which bank bring to the table. There are 5 operation floors, there are 3 technology floors, there are 2 risk floors, and there is 1 compliance floor, and then there is a governance and strategy floor. Now, all of this knowledge is sitting in 21 floors. We are connecting them together. Now, when this knowledge connected, then I created a machine called build machine.
Arun Jain: If I have to build a new application, I will use a build machine where I will build the entire new application. Like, if I have to build CRM to replace Salesforce in Indian banking system, then I can build CRM application for the bank, which is integrated with their customer onboarding application. Both of them I can combine and build up a customer operating system. That is what our approach is to launch a new product in India, customer operating system, which will have a CRM plus has a customer onboarding. Now, this is possible in the build machine. Then there is a change machine. If a bank wants a change, like RBI wants a change, and last month, there was a situation when RBI requested us on Wednesday that Sunday they want to make it open. All of you must be knowing about it.
Arun Jain: Now, MSOCK has gone into the details of change machine and say that if we have to make Sunday working, then you need 22 different changes to be done in a system within 24 hours. In absence of MSOCK, this work would have taken at least 3 to 4 weeks to find out what is the impact of a Sunday working day in an application, and that could have been significantly painful later on for making Sunday working in that area. So, that is a change machine. Then there is a run machine, which is about when there is a defect in a bank, how quickly we can fix that defect. That is a run machine when you are running the system. And then there is a modernize machine where you want to modernize legacy application to an eMACH.ai application or a new generation application. I hope this clarifies.
Mayank Babla: Yeah. Thank you for your explanation. That was helpful. Just last question. Who would you consider as the biggest competitor for your Purple Fabric platform?
Arun Jain: Purple Fabric, the competition are C3.ai, Kore.ai are the two player in US. Palantir on a higher-end of platform, but they are in defense sector more than financial sector. That is the Purple Fabric. MSOCK, the competition is CAST, nearest competition is CAST in mainframe area. That is not a complete competition. That is a parsing-based company. That is a competitor in MSOCK area.
Mayank Babla: Sure. Thank you for your answer and best of luck.
Praveen Malik: Thanks, Mayank. Next, we have Rishabh Aggarwal from Suraag Capital. Mr. Rishabh Aggarwal.
Rishabh Aggarwal: Hello. Thank you, sir, for the opportunity. The first question, just touching upon the revenue again. If exclude the JV investment, it seems like our year-on-year this quarter was around 8% growth, and the pipeline growth has also been 9%, though in the initial address you did mention that now you are looking to convert pipeline faster. Just wanted to get to it whether there has been any surprises, negative surprises on the license part or even on the product platform revenue, it seems like there was a decline in revenue. Is that because most of the revenues is consumption-based rather than subscription?
Arun Jain: We mentioned just before somebody else that there is Central 1 account which is dumbed out completely. That is why the reason for the platform revenue fall. Our revenue in LTM is 17% growth, not 8% to 9%. I do not know. We are looking quarter-on-quarter growth. We do not measure quarter-on-quarter revenue measure on.
Rishabh Aggarwal: Year-on-year, just excluding the JV license.
Arun Jain: That is, we do not. For product company, I think take one indicator, LTM. That will be the single point which should be there, because there is fluctuating quarters, and there is no point taking quarter-on-quarter. We are not service industry. Please stay with the one course, which is 17% what we are talking.
Rishabh Aggarwal: Got it. Just the second question, sir. MSOCK, is it an extension of Enterprise Knowledge Garden? Because I completely understand that you are using a bank's complete context, building it into your better understanding of how the mainframe is working, then deciding whether a change or a run, how that can impact a conversion from mainframe to Claude. But is that essentially an extension of the work you have done with EKG, or it would be helpful to understand that?
Arun Jain: So, while I should give you a reward that you are remembering EKG and connecting the EKG to SOCK, definitely these are the two generation of knowledge management. EKG was first generation of knowledge management. This is second generation knowledge management, but this is a completely different set of technology which is there. But principle is, if knowledge is right, intelligence is right. Principle is same, but there are two generation of technologies. One is EKG technology, which is vectorization-based, and SOCK is where we have 39 patents which is filed on knowledge, accuracy of the knowledge.
Rishabh Aggarwal: Got it. And sir, do you end up then using a frontier model only to basically build out the MSOCK graph, and is the customer okay then in essentially sending out their data for inference to a frontier lab? Because essentially, you don't have your own model, right? You are basically sitting like a harness on top of different frontier models.
Arun Jain: That is right. So we use frontier model, but we use only 30% of the frontier model because we maintain the SOCK within the client environment, and only for a specific case of raising, we go to the frontier model. Not for the knowledge. We don't use knowledge from the frontier model because knowledge of the bank sits in our own bank enterprise.
Rishabh Aggarwal: Understood. And the MSOCK will be considered as a part of your implementation revenue, as in case this starts-
Arun Jain: Not yet, Rishabh. As of now, what we are doing is with MSOCK, we are improving the margin by delivering faster.
Rishabh Aggarwal: Right. Essentially, you are proving that the implementation would take like maybe 3 weeks faster, 4 weeks faster, so the banks get converted better, you win better. Just last question, sir. Sorry. The purpose.
Praveen Malik: Rishabh, we are running out of time.
Rishabh Aggarwal: Okay, maybe I will take it offline.
Arun Jain: Send the question on mail. I will also answer any question on MSOCK.
Rishabh Aggarwal: Sure. Thank you.
Praveen Malik: Thanks, Rishabh. Next, we have Mr. Vikas Chaddha from NTSSA. Mr. Vikas Chaddha from NTSSA. Hello?
Arun Jain: Next.
Praveen Malik: Hello?
Arun Jain: Praveen, next.
Praveen Malik: Hello? Mr. Vikas Chaddha?
Arun Jain: Praveen, you can take the next question.
Praveen Malik: Next question. Next, we have Mr. Anjan Puranik from Enam Securities. Puranik ji?
Arun Jain: Praveen, you can move to the next, please.
Praveen Malik: Puranik ji is also not there?
Arun Jain: Puranik ji is not there. You can move to the next person.
Praveen Malik: Next, we have Rohit Balakrishnan. Mr. Rohit Balakrishnan, if Puranik ji is not there.
Arun Jain: Rohit, you can unmute and ask your question.
Rohit Balakrishnan: Yeah. I think most of the questions have been answered. I just want to understand two things, sir. Manish sir told that half of the deal signings are from the markets like Americas and Europe. I am hoping and assuming that going forward also, we will drive deeper penetration there. From a gross margin point of view, how do you see the gross margins? You have talked a lot about the leverage below gross margin in the call. You said that cost will not increase. This quarter was higher at 56%. Generally, the understanding that we have is that the deal values are much higher, and hence the gross margin could also be higher. Is that something that we should think about?
Rohit Balakrishnan: Not immediately, not next quarter, not next two quarters, but let us say two years out, FY28, 29, do you see that this gross margin can also inch up a couple of percentage points? You see, look at Tavant, et cetera, given despite their cost structures, they are much higher. We anyway have a cost structure advantage, which you have also talked about. If you can maybe talk a bit about that.
Arun Jain: Yeah. You take the margins, right? Say, you take the current book. I have a revenue of INR 845 crore, operational revenue, 845, 847. Cost of 680. That is the EBITDA margin which I have. If 850 become 950 and cost remains at 700, it becomes INR 250 crore on 950. Now, INR 250 crore on 950 EBITDA will be how much margin-wise?
Rohit Balakrishnan: 27%.
Arun Jain: 27%.
Rohit Balakrishnan: Yeah.
Arun Jain: That is the lever which we have available. You need to understand product company levers are different. This goes to INR 1,000 crore, this becomes 30%.
Rohit Balakrishnan: Right.
Arun Jain: I think you are managing the two things from an investor perspective, I will recommend. You should look at the operating cost lever. With MSOCK, our operating cost lever is Manish has highlighted that this operating cost lever is in our hand now. It was not in our hand. When we were winning more contract, we were increasing the cost. MSOCK has given a Brahmastra for us to say our cost will be every country. Even if INR 700 crore becomes INR 725 crore and revenue becomes INR 1,000 crore, still it is 27%.
Rohit Balakrishnan: Right.
Arun Jain: Those are the way to look at it. When it becomes INR 1,100 crore and INR 1,200 crore, then you are reaching to the same level as Temenos, which is 32% or so, which is number. That will reach at the level of when we are revenues are $600 million or $650 million number. That is the time when we reach to that 30% level.
Rohit Balakrishnan: Right. No, so very clear. Just one more question, I think, which I think somebody, I think Vivek was trying to ask also. Sir, like you mentioned, MSOCK is like almost a Brahmastra for you. You also mentioned some of the other companies have been able to win deals, which have accelerated their growth. Sir, I have been tracking and been invested for last six, seven years. I have really seen your journey very closely. My point was, sir, now we have really, like over the last four years, we have incrementally invested into newer platforms to really strengthen our overall offering. In the marketplace today then, from our winnability point of view, of course, we have won 21 deals, which is the highest we have won.
Rohit Balakrishnan: When you go head-to-head with some of these other bigger names in terms of legacy and size, when do we see that acceleration happening from a revenue growth point of view? I am not trying to ask this quarter, that quarter. Because, sir, like if you see, I mean, I want to take you back to 2022, 2023. At that time, we were, especially in consumer banking, we were like directly head-to-head in some of the deal wins with Temenos and nCino and Mambu, et cetera, and others as well. I think somewhere in the last couple of years, our win rates have somewhat come down. I think that is what the growth rate is also suggesting, which is fine. But now that we have really invested in terms of money, effort, and time, now do you see that this growth rate can really accelerate?
Rohit Balakrishnan: Because, as Vivek was also saying in terms of your interviews, et cetera, and also when you try and read, of course, we are outside investors, so we do not know technology the way you do, but it just seems that all the pieces are coming together.
Rohit Balakrishnan: Maybe I am biased because I am invested also.
Arun Jain: I think the point is, I think we are doing okay because we are moving from INR 500 crore quarter to INR 800 crore quarter. So, we are doing our journey three, four quarters, and we are jumping next year, and we are jumping. That we are doing okay, so that is not a concern for me. My concern, your expectation is we should be faster growing. Obviously, we all have all the pieces of the puzzle get over. So, this MSOCK investment is a final investment, I say L5 investment. So, L1 investment, L2 investment, L3 investment was email cost asset. Purple Fabric was L4 investment, and MSOCK is a L5 investment. But Indian stock market, unfortunately, does not like INR 100 crore investment in AI.
Arun Jain: If I would not have done this INR 100 crore investment and I would have demonstrated INR 450 crore profit last year, my stock price would have been, as an investor, you would have been better off. Your stock price would have remained at INR 1,000 or INR 1,200, which was there, because the margin would have been at INR 450 crore instead of INR 350 crore range. So, unfortunately, that is the nature of the business. But when the margin will come back to INR 500 crore, obviously, it will come back to the same price point. So, we do not worry about this as a company, that what the stock market is, that is the nature of the market, how they treat investments in this market. But in INR 100 crore, if you are able to achieve a product of this magnitude, I think it is a big celebration for the company and for the shareholders of the company.
Arun Jain: So, that is what I want to leave a message with you.
Rohit Balakrishnan: No, sure. I mean, of course, that is not The stock price was never my question, sir.
Arun Jain: I understand that, investor.
Rohit Balakrishnan: No, no. Acceleration of growth is what I was trying to understand.
Arun Jain: Sure, sure. We will actually do it. MSOCK will make us have more winnability much higher.
Rohit Balakrishnan: Sir, maybe one request, if I can. I think 2, 3 years back, you have done a technology day where you had talked about each, like one product going into five stages. Maybe at some point, you can maybe try and do that. That was very useful to understand the journey. I mean, it is just a request, if it is possible. I am sure you are very busy, but if at some point that can be arranged, that it was very useful.
Arun Jain: We will do that. I think definitely it is required. Praveen is after me to have the technology day. Let me schedule to have a technology day. I was more in market, so that is why I was postponing it.
Rohit Balakrishnan: Yeah, in-person would be better for, yeah, in person.
Arun Jain: Sure. But in-person is better, but the point is, it is a global investor, so sometime online is also.
Rohit Balakrishnan: Yeah. I mean, yeah, I leave it up to you. Yeah. That is up to you guys. Thank you, sir. Thank you, and all the best.
Praveen Malik: Thanks a lot. Arun, can we take one more question at least?
Arun Jain: Yeah, you can take.
Praveen Malik: Yes. Next we have Mr. Ravi Mehta from OneUp. Ravi?
Ravi Mehta: Hi, am I audible?
Praveen Malik: Yeah, Ravi, please go on.
Arun Jain: Sure.
Ravi Mehta: Thanks for this opportunity. Just couple of questions on MSOCK. It has been a great journey of eMACH.ai to Purple Fabric to MSOCK, the way we evolved. One thing is that, how much of internal operations or implementations are currently going through MSOCK, and is that the reason the cost stickiness we are seeing, or this is yet to even play out fully, like you have just started using and you are yet to reap the benefits, just for some internal working?
Manish Maakan: Ravi, I said 141 implementations we are doing internally on this. That is giving us the confidence, that is helping us manage costs. I gave four examples of where 3 to 4 months of advanced deliveries to customers have happened. Taking any new technology out to the market also is, every customer will ask, "Where have you done it before?" This is an example of 140 implementations having leveraged it. That is why we are looking at it. It is a different scale of disruption we were trying to work upon. It is a technology marvel.
Ravi Mehta: Like, you have already done this implementation, then you are taking the product to the market. Will this be, can be offered as an independent layer, like it need not be bundled with eMACH.ai or Purple Fabric? How are you thinking for go-to-market as it opens up a different market for you where you need not be selling eMACH.ai?
Manish Maakan: Ravi, that is what I said. First proof was delivering eMACH.ai using MSOCK, where the hardening and the confidence and trust got established between us and the customer. Next is the customer to be able to use MSOCK to do any proprietary, any legacy modernization, and the large bucket over there is mainframe to Claude, where we can take it out. We are going to market it as a separate product line, and while we use it for internal operations, it is available for customers to harness their knowledge and move forward.
Ravi Mehta: Incrementally, Purple Fabric and MSOCK both seem to be products independent of the core banking offering we have, and that opens up lot of other industries also. How are you thinking about go-to-market? Because now that, you know, the markets are pretty wide for this offering.
Arun Jain: That is right. I think your point is right. It is on the eMACH.ai offering, Purple Fabric offering, and these three are independent, and independently can go to market. MSOCK, we are looking for a top-down strategy for the large accounts and bottom strategy. That is where the acquisition plan has come in. We did not have acquisition plan. I never shared acquisition plan with you at any time in the past. Now I want to go for acquiring MSOCK customer because I can acquire a Latin America bank by MSOCK much faster than eMACH.ai. eMACH.ai takes longer time to acquire. MSOCK will take shorter time to acquire and grow that revenue. I can go to Japan, which I have not accessed till now. With MSOCK, I can go to Japan. Those markets which are not accessible to me, MSOCK will make me accessible.
Arun Jain: It is a different product line and different go-to-market strategy. My time in last 90 days was totally on MSOCK. eMACH.ai business was run by Rajesh, Manish, and Manish. They were running the eMACH.ai business. They relieved me for the MSOCK positioning. It is a very different positioning which is going to be there. That is why I stayed four weeks in US and understand the market, what MSOCK market should be. It could be completely levered. It should be separate subsidiary, it could be separate. We have to go to market. As of now, we are just evaluating all of it.
Ravi Mehta: Will partnerships be a big lever, like SI partners?
Arun Jain: Obviously, partnership is a low-hanging.
Ravi Mehta: Okay. Because that was also for Purple Fabric. Are you working jointly with the partners on these products?
Arun Jain: We are working, but partners, as of now, in Purple Fabric, they are believing that they can do it. As of now, those are AI is still early stages of implementation. Now, after they fail in providing 64 friction points, they take some time to come back. We are patiently looking at it. Those banks who have tried to implement themselves, and after 12 months they fail, then they come to the platform vendors, and then they float an RFP. That's the trend we are seeing in the market. Purple Fabric will deliver results in 2027, 2028. Definitely. MSOCK is a real fast product to get results.
Ravi Mehta: Are these, again, like one-time license kind of offerings, or these are more of a subscription?
Arun Jain: Subscription.
Ravi Mehta: Okay. If this can accelerate the growth, I'm just wondering that you always say that we have designed the organization for a 20% growth. If Purple Fabric and MSOCK can accelerate that, what will go into the design thinking to make this company design for a higher growth? What are other investments you might have to do if the things are coming together and the growth is inflecting? Just wanted to understand from your perspective of how you design the growth.
Arun Jain: Yeah. Now we are designing the organization on market-led design. Till now, we are product-led design. More market-led design will be done. That is why the acquisition and market structure is required. Monetization, second piece. How do we license MSOCK in partnership mode, royalty mode, exclusive partnership mode? All those options are open. It is a game of strategy. MSOCK can work on the Claude Code. The beauty is, it can work as a plug-in to Claude Code to get a better value. Multiple opportunities are there at a strategic level.
Ravi Mehta: When we launched eMACH.ai, we had partnered with AWS. Here also, are we talking to the Claude hyperscalers also, or just the SI players or how?
Arun Jain: MSOCK, we are not participating with hyperscaler. We want to participate with the boutique consulting companies, so that they have more skin in the game.
Ravi Mehta: Sure. Thank you so much for answering, and good luck.
Arun Jain: Thank you.
Praveen Malik: Thanks, Ravi. Arun, I think our time is-
Arun Jain: Yeah
Praveen Malik: 10 minutes ago. Couple of questions are left. I request those people whose questions could not be taken to send it us or mail it us. We will reply on this. Thank you, everybody, for joining today. Those who have already joined, now you can log off. Thank you. Thank the management team.
Arun Jain: Thank you.
Mayank Babla: Thank you.
Operator: Goodbye.
