Intellect Design Arena Limited (INTELLECT) Earnings Call Transcript

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[Audio Gap] Ending 30th 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. Subramaniam, CFO; Mr. Vikash Mistra, Chief 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. [Operator Instructions] On safe harbor, I would like to remind you that anything which we say, which refers to our outlook for the future is a forward-looking statement, which must be read in conjunction with the risks that company faces. With this, I request Manish to give his briefing. Manish?

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 4 growth engines and 5 measures by which we said we should look at judging us. This quarter's presentation shows them as 4 strategic pillars built on the same strategy. But before we go into any more details, I want to go a little deep on to the first one, which is shaping our future on all 4 of them. Let's go back to MSOCK, please. So 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 multilayer system of connected knowledge. Here is the problem it solves. The industry has invested over billions in AI, yet productivity has barely moved. AI tools are brilliant on day 0 and sidelined by day 2. Because AI knows the world, but not the institution, its system, its dependencies, its rules, it's 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 the chain and act under governance before anything else is touched. What you see on your screen are the 5 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. What -- how MSOCK matters to Intellect. 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 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'll show what this means for one of our specific customers. Our 4 pillars for strategic growth, with our 4 pillars on stream, let me start with the evidence first. Our trailing 12-month income is up 17% and has risen in each of the last 7 quarters on an LTM basis. We've recorded 21 wins, including 8. Our Destiny wins are up from 7 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 the 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 U.S. property and casualty insurer chose us in 2 deals for AI-led submission processing and underwriting. An AI-led digital bank in Bahrain, focusing on business clients and digital assets chose eMACH.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. Kuwait's leading retailer chose our AI-driven customer personalization. In total, 7 of our 21 wins in this quarter were AI-led. AI is no longer just a feature of our proposal. It's the reason customers choose us in banking and beyond. The choice since FY '27 -- the second pillar is market drive. Stay on to the pillar slide, please, go back. Yes. Pillar 2 was to focus on strategic markets and driving global growth. This has been our 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 the Mexico's largest bank came back to buy eMACH trade finance. One of the Nordics region leading banks selected eMACH payments for its U.K. operation, a leading U.S. paint financial services provider selected payments for its U.S. business. 9 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. Our Pillar 3 is around strategic platforms and innovation. The choice was to build platform that turn into domain expertise and proposition that's sell repeatedly. Our credit union business is a classic example where we had acquired from Central 1, and we're continuing to win more from there. A transaction banking platform, which has been chosen in UAE and Jordan for repeated. A composable co-banking in 5 countries, a payments modernization across U.K. and U.S. 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's been proven that. I just want to add one specific item over here, which we will look through our numbers later. We'd 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. So it's important to call out that as you will see through our results. Go forward, go to the recognition. Our platforms are also earning independent recognition. At the ET Enterprise AI Awards, Arun 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 if you go back to Page 7, where we have got the deals. I shared the largest Mexico deal. 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's 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. And 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 2 quarters, 3 other significant programs went live ahead of plan. A wealth platform for a major -- global major in its first country in Asia, 4 months early on a 15-month program; a cash management platform for Middle East regional powerhouse, 3 months early on an 11-month program. A lending platform transformation in Europe was advanced by 3 months. So across markets, across product platforms, we have seen early deliveries for our success. Delivering early and first time right is what turns 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 the relationship. A new channel for U.K. wealth through a joint venture was 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. And a new product category, Islamic Bank was launched, and we got our first win in Shariah-compliant Bank in Maldives. So 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. Slides 8 and 9 show what our 21 wins are, and you would have had a chance to look at them. At this stage. Our pipeline stands at INR 13,125 crores, up 9% Y-on-Y and close to 4x our trailing income. It holds 103 Destiny deals, 29 above INR 50 crores, 35 between INR 30 crores to INR 50 crores and 39 between INR 20 crores and INR 30 crores. Pipeline growth has moderated because our focus is now building the pipeline to converting it and the pillars are converting. We closed 8 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 new wins combine an upfront license and an alternate model of a multiyear annual subscription fees. 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. We're 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 changed from Q1 and -- 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 5 measures we have explicitly and deliberately defined out. First one is AI adoption. 7 of our 21 wins were AI-led. Priority market growth, 9 of the 21 wins and more than half of the new signing came from Americas and Europe, including 3 Tier 1 platform decisions. Destiny conversions, 8 new against 7 in the last quarter, 15 in the first half. License-linked revenue is growing faster and operating leverage more go-lives from a flat cost base. I'll now hand over to Vasudha, who will explain this momentum is translating into revenue quality, profitability, working capital and cash. Thank you.

Thank you, Manish. Good evening, everyone. I will now take you through Intellect's flagship 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 revenues. LTM total income reached INR 3,388 crores, representing a 17 percentage year-on-year growth. License linked revenue comprising license platform, and AMC increased to INR 1,768 crores from INR 1,497 crores, representing 18 percentage growth and contributing to 52% of the total income. Platform revenue increased to INR 591 crores from INR 392 crores, representing 51 percentage growth, while AMC revenue increased by 12 percentage 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 percentage of the revenue despite over INR 100 crores of investments made in AI. Our non-GAAP adjusted EBITDA, excluding stock compensation cost stood at INR 802 crores. Profit before tax stood at INR 503 crores and after tax before exceptional items stood at INR 378 crores. Importantly, collections increased by 26 percentage 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 revenues reported INR 160 crores. License revenue 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 [ 22.57% ] of the revenue. PBT stood at INR 137 crores and PAT was INR 104 crores. 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 30th September compared with INR 927 crores in the corresponding period last year. This represents an increase of 31 percentage 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 amount stood at 111 days. We continue to closely monitor receivables and collections with a focus on improving working capital efficiency and maintaining collection discipline. So before I conclude, I would also like to share a leadership announcement. The Board has approved the appointment of Mr. Suresh Eshwara Prabhala as an additional Director designated as an Independent Director for a term of 5 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 JPMorgan, 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'll be happy to take your questions.

Thank you, Vasudha. Now the platform is open for Q&A, in case you want to ask any question. [Operator Instructions]

[Operator Instructions] First we have Mr.[indiscernible] from AK Investments.

Good set of numbers, sir, firstly. I have one question regarding the revenues. I just wanted to understand that we have implementation revenue, right, and where we also take some customizations also there. So there we can sell license also. So how do we accrue in our revenue, license revenue, the license plus implementation with customization? I wanted to understand because...

We lost you. So can you repeat your question, please?

Yes. What I'm saying is if you have -- if you have won some project in the implementation part where you are also selling the license with customization. So I'm asking that 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'm understanding that once implementation is done, whether that revenue will be stable or not. So I'm just trying to understand that piece once you have customization in the...

Yes, implementation [indiscernible] in the company, the company model today is license that's a A1 revenue [indiscernible] revenue, A2 revenue is implementation revenue. Within implementation, there is customization, A2.1; A2.2, implementation revenue plus customization revenue and A3 revenue is the AMC revenue. AMC revenue is a percentage of that's 20% on the license revenue is the AMC revenue. So that's the 3 categories of revenue. And when implementation revenue gets finished, that's revenue goes away and AMC starts. So that's the right understanding you have.

Okay. So we are not accruing anywhere, if you are selling a license and if we are doing customization, it sits in the license revenue, only, right?

No, no. It sits in the implementation revenues. Customization is a -- it will be included in the customization revenue, which is -- approximately 48% of the revenue is in customization phase. So that portion of A1 will include license revenue, A2 will include...

Yes. So what I'm saying is suppose we are doing customization in A2, okay? And we 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?

See, how the customization will come to the AMC. It will not -- okay, so I think we'll -- Adhi will take this question separately. CFO will take your question on this. [indiscernible]

Okay. The next question I have is are we confident that we'll reach in Q4 INR 900 crores plus revenue and next year guidance of PBT of INR 1,000 crores. Are we confident on achieving these 2 numbers?

Yes. So if you look at our other numbers, that's why we are confident explaining in a structured manner, [indiscernible] INR 720 crores, INR 730 crore number for the year. Then Q4, we got a figure. As an investor, you had a doubt in the mind after [indiscernible] when publishing, the question was whether we are able to maintain above INR 800 crores or not. From last 2 quarters, Q1 and Q2, both the numbers are close to INR 850 crores. So we are able to manage Q4 numbers. In Q1 and Q2, both sustained revenue. So that's a new baseline, which is INR 850 crores. Now INR 900 crores between next 2 quarters definitely, we are confident that we'll will cross INR 900 crores. Next year number will take next year.

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...

[Operator Instructions]

[Operator Instructions] Next we have Dev Mehta from Relic PMS.

So I just wanted 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.

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.

So this is on an LTM basis, right?

Yes.

And for the quarter?

For the quarter, it is like INR 54 crores, which is expensed of. About INR 42 crores to INR 43 crores was capitalized.

And the second question is, so FY '21 was one of the period in which we can call it as an inflection point for our company, after which our margin shot up to 24%, 25%. Even in the annual report, it is mentioned that FY '27 is one such inflection point. So are we consistent with that guidance of FY '27 being the inflection point for our company.

Yes. So '27 is an inflection point from 2 perspective, as Manish has put it. We invented a technology called [indiscernible]. I think as an investor, if it is a Silicon Valley investor, it's a technology invention of its kind where first time in the world, we connected financial services industry, entire knowledge in business capability, product, user journey, [indiscernible], into a single system of connected knowledge. Now that is a product which we launched on 9th September could be of very different order. In last 6 weeks of time after 9th September, I met close to 30 different CIOs in U.S., in India, in Europe there. And all our senior management team has gone and met the customer. Today, we have 30 active conversations happening on 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 is people are doing abroad, is not cascading into the actual savings. 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 is a proof of the point of this technology, which is very, very dramatic in nature and our winnability of the new deals go multiply because of the capability which Intellect has built for delivering the existing pipeline, which is there, INR 30,000 crore pipeline. So that will be having a positive tailwind because of MSOCK. So 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 crores last quarter and this quarter. Very rarely we are able to manage the same cost structure [indiscernible] 2 quarters. In which any future revenue which will be going up. So current number of INR 850 crores goes to INR 900 crores. Out of INR 50 crore additional revenue, INR 40 crores will come into the margin. And that's where the value will be there for the investors. [indiscernible] margin after that.

Fair enough. And we are -- gone with the guidance of INR 4,000 crores by FY '28 with respect to top line...?

That is right. INR 4,000 crores in FY '28.

Pradeep, yes, ask the next question, please. We have Vivek Turaga as a next question.

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 ingredients we are using because of MSOCK. and if at all we think that's a tail 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 -- like you also said in one of the interviews that this MSOCK will help us crack the mainframe modernization. So if you can lay down like how is it -- is it already -- are you very confident -- or are you seeing the deals turn faster? And will the cost structure of INR 680 crores will be same till what kind of revenue? Like is it INR 1,000 or even INR 1,100 crores, INR 1,200 crores, can you maintain because if you see at other AI companies, like I don't know how to ask this question, but there's huge savings that are coming, if you keep mentioning Silicon Valley. If you look at product companies, they're growing north of 30%, 40% because of this AI gain. So are we going to see that kind of a growth because of this MSOCK gaining a lot of tailwinds?

Yes. I think beautiful question. I think that's the right question for this conversation. 1% margin here and 1% margin is not going to make your investment decisions in this company. What your company is doing is MSOCK where -- you're asking the right question, mainframe to cloud migration. There's a big shift happening right now as the market tailwinds are there in the U.S. and Europe where these projects are there. After launching MSOCK, we have now in active conversation with 7 banks on mainframe migration. Before MSOCK, we were only with the eMACH, we were in contention. But now if you look at the whole company strategy, we have eMACH as a protection, which is a layer 1. So let's say this layer 1, we have 8 different product lines which are there from GCB to core banking to lending to wealth to payments, to trade finance, supply chain finance, so they are 8 product lines, which are there. second layer is Purple Fabric, which is making the operations of the bank and create efficiency. So we are working with 15 RFPs in Purple Fabric. We have 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 the Purple Fabric, which we launched last year. That's the layer 2. So the first layer is for business, second layer is for operation and third layer is for technology. Our promise to the industry is we can bring down the 20% cost to the bank O&P cost by applying all the 3 pieces together if bank chooses. The 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 paring company. So technology you want to understand the many companies are parsing the code and bringing the past knowledge and giving the cloud to the forward engineering. The gap there is it doesn't have a context engineering and it doesn't have a knowledge -- connected knowledge piece, which is we call it multidimensional, multilayer system of connected knowledge. So now that is what is missing in a mainframe business. So when we are talking to existing player whom my competitor like AWS is positioning or other player like [indiscernible] positioning, I'm working on the top of it and then giving them 3 opportunities. First is to make their knowledge as a to part 1, then to make forward engineering using MSOCK and third is applying eMACH architecture on the top of it. So there are 3 options are available in mainframe. The mainframe to cloud migration sales will be upward of double-digit millions, almost half the upper side of the double-digit millions. So this is the new space will help us. So what you're talking about whether INR 850 crores will go to INR 1,100 crores per quarter? Yes, that's what the hope we are looking for, whether that will happen in 12 months' time or that will happen in 24 months' time. But definitely, that visibility this MSOCK has given us. We are now visible what I mentioned about INR 4,000 crores. I mentioned 2 years back that will be INR 4,000 crores based on Purple fabric and other initiatives. Now I'm saying I have visibility of INR 5,000 crores as a revenue of the company. And that will be at a very decent margin because my cost structures are not changing.

So sir, my question was like so should we look at growth rates going up now that we have Intelligent layer and knowledge layer and we have eMACH.AI and then you are also one of the few people have done this mixing the ontology with the core products and all products are on the same platform called eMACH.ai. So don't we -- should we not be so confident of growing at 25%, 30% because if you see many product companies, I understand I'm 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 because we have mostly [indiscernible] of our investments, right? We have developed all the products. We have platformized products. We have also come with layer. So we should -- and we are also in 8 markets. So I'm coming from that point of view.

Sure. You can look at it and as and when it happens, we are not able to see because decision-making cycle time still is slow. So when, actually, will happen, 30% growth rate or 25% growth rate. To me, 20% growth rate is a good number. We have calibrated the company at 20% because now 20% growth rate, we will be doing 40% growth rate in margin or 50% growth rate in margin. That is what as an investor is a great opportunity right now.

Sir, that's my question, sir. So next year should be better than INR 4,000 crores, right? If we are growing 20%, it will be INR 4,300 crores to INR 4,400 crores.

Don't pinpoint me. I'm not a forecaster here. So next question.

Keeping question. Manish-ji mentioned the Credit 1, we have lost one SaaS thing. How should we look at that, sir? How should we look at it? Is it structural thing or why did somebody shift -- how should we look at it because Manish-ji has mentioned...

No, no. I think that's the right thing. It's a term getting over. When we acquired the Central 1, we knew that 80% customer will [indiscernible] because that's what we forecasted 80% customer. That's why we didn't pay any money to the Central 1. We knew that the their term will get over, of course, and they will move -- some 20% customer will move to the other players. So in this quarter, 2, 3 customers whose terms got expired because we are given a 1-year time that they can move after 1 year, and they have moved out of that. So it's a natural progression which has happened in SaaS revenue.

Despite that we have achieved 51 percentage growth on a year basis -- year-on-year...

Next, we have Nandu from [indiscernible] public alternatives.

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. And we have invested in eMACH, a Purple Fabric and now the wrapper around cloud as well, right, or Anthropic as well. So just wanted to understand why is this time different? And why are you confident on the margins coming in right now and days not increasing, right? Because Arun, where I'm coming from is that in one of the interviews you mentioned maybe Indian investors are too much worried about the margin part, right, in sometimes. But for last 5 years, our profitability has been flat, right? We haven't increased -- in terms of overall PAT, we haven't seen an increase in PAT for the last 5 years, right? So I'm not sure which kind of patient investors you want, right, in some sense to wait for 5 years for the increasing PAT, right? So -- and on the margin part as well, right, in the past also, you have commented that the margins will increase. So what is it that the 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, how should -- don't you think financial metrics should also be part of that in which we should evaluate you on? And why are you so confident...

I've got the question, so your question typically is that margins are not growing. We mentioned last year and we are investing INR 100 crores in AI. That was clear self identified number that we will be investing -- instead of keeping cash for investors, 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 crores investment, INR 2,000 crore investment to what MSOCK and Purple Fabric has built in. Now if as a leading investor, AI companies are not making profit in the world. AI companies are making only products right now and they're not making profit. 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 to just INR 100 crores. INR 100 crores, which is the 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 with that cost coming down at Intellect, during the phase of investment, our costs went up from INR 600 crores to INR 680 crores. Now it's in the range of INR 680 crores per quarter. Last 2 quarters, the cost has remained constant. 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 crores to INR 700 crores. Now in that scenario, if my revenue goes to INR 950 crores, that's the margin improvement will happen.

Next, we have Dhruvesh Sangvi [indiscernible]. Then we'll take the next, we have Kunal Shah from Capital. services.

Very quickly, just one question, sir. This is the first time I'm asking a question on the con call. I've been an investor for almost 4 to 5 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%, 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 OFS, how are they have been able to grow so well? My question is a very [ nice ] one. And if there is a sensible thing or some insight that you can throw, it would be great, sir. That is my only question.

So nature of the product industry, there are certain deals are there. So if some company in some period of time very large deals, then suddenly that period becomes extremely good period. Like Q3 revenue for us was INR 720 crores and Q4 revenue was INR 850 crores. Now in quarter, in other business, you can get a INR 120 crore incremental revenue in just 3 months' time. So OFS 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 a deal-based growth. But when I say we are on a cutting edge of innovation, we are fighting the add-on battle with Temenos and add-on battle with OFS, give a great credit to all of us as investors to trust that we are fighting better. And 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. But that will demonstration of the 4 months early delivery 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 and before time. And once the client will go to me in the market that I can deliver the 4 months before and I can do the transformation in 8 months, that story will be selling in the market. So that is -- so as a product company, we just need more patience and. And one thing is that product market has not gone. So there's a lot of fear in the market of investors that product companies are not in space, people are building the solution and a lot of service companies are saying we build a solution of AI-based solution, we can build the product using cloud. I think those are a misnomer that a service company can build a product where micro service architecture, eMACH architecture, which requires close to 800, 900 small, small, small security issue, micro services issues. So it's a complex business of financial services. But as of now, a lot of investors are getting carried away with the mix that a service company will take over and product company may not have a possibility of license revenue. So I just want to clarify what the mix is going in Europe and America that service company can take over product company ...

Next, we have Mr. Paresh Sangani from Club...

The question I had was that we have -- we are likely to have about INR 1,300 crores of cash by FY '27, right? And we are producing about INR 350 crores, INR 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, let's say, Apple, they have done 40% of their equity as buyback over the last 10, 12 years. Temenos is undergoing a buyback. And when I compare our valuation vis-à-vis with their valuation, right, at current valuations of EV to sales of less than 2x 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, where dividend -- when we get dividends, we pay 40% almost as marginal rate of tax.

Thank you for asking this question. And this is an option we have -- dialogue with Board. It's not that discussions are not being -- [indiscernible] feedback on buyback. With MSOCK being launched now, we Are looking to invest this money in 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 player in the market. So we want to go to LatAm market, we want to go to Europe market, Eastern Europe market and looking for, [indiscernible] my strategy team, Vikas, who is running the Chief Strategy Office, is now evaluating 3 to 4 acquisitions of size where customer -- what we want to acquire is a customer. We want to acquire specific who has 20 financial accounts in a new market where we don't have access to. So I don't have to hold the procurement office of MSA. So I will short circuit the MSA part and then go to MSOck to deliver them the value of MSOCK. So that is what our strategy is. Based on that, we will be able to take a decision on buyback at a [ right ] time.

Next, we have [indiscernible].

There was one transaction with JV this quarter. Can you just tell us the amount of the transaction? And I think if we exclude that transaction, we have seen some degrowth in profits as well. So how are we looking at this figure going forward and clarity on this JV transaction?

JV [indiscernible] so it's 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 and JV will be now operating [indiscernible] in the U.K. market. So we are exploring the market. So this is one of the monetization strategy of a particular market when either they acquire them or do the partnership with them, both strategies are there. [indiscernible] market in U.K. where they have 100-plus customers. So there, we will be accessing that and that will be the value accruing to us.

Next, we have Mr. Mayank Babla from Carnelian Capital.

My 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.

We can quantify it later on, so maybe we'll idn which quarter somebody is going out because they don't [indiscernible] and their term is ending. So they keep on extending the term till the time new vendor is ready for putting them on a platform. That's the current uncertainty we have on the particular client goes because new vendor to whom they are going [indiscernible] that cycle time is next 2, 3 quarters. We'll tell you later on.

And for the current quarter, if you can quantify that, that would be known, right?