Computer Age Management Services Limited (543232) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Computer Age Management Services Limited Q1 FY '23 Results Conference Call hosted by Orient Capital. Today, we have with us on the call Mr. Anuj Kumar, Managing Director; Mr. Ram Charan, CFO; Mr. Anish Sawlani, Head, Investor Relations. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Kumar, Managing Director, for his opening remarks. Thank you, and over to you, sir.

Hi. Thank you, Seema, and good morning, everyone. Welcome to this earnings call of CAMS. I will quickly give you a broad overview of how the quarter panned out, and then we will take you through a more structured presentation. Some of you may have downloaded it already. But just in terms of the background and how the overall quarter went, as you know, it's been a slightly tough quarter. And why do I say that? That's because stock market indices saw some sustained headwinds. And therefore, valuation of equity assets did see an impact. Also because of certain circumstances in the background, new fund offerings, as you're aware, did not happen almost throughout the quarter. And this did impact build-out of equity assets as well as slowed some of the activity we see in the KRA company. Despite these two things in the backdrop, there are consistent positives which played out through the quarter at the foundational level. And I will speak about the key ones, and they do give an impression that foundationally, it's a strong market and the right things are happening. The first, of course, is that in terms of equity inflows, that's perhaps the most important metric here. Gross and net equity inflows for us remain buoyant. Our net equity inflows showed up at INR 37,000 crores, so which is a remarkable number given the quarter. Given this, equity assets actually grew despite the headwinds in the stock markets, equity AAUM actually grew and grew by 2.6%. SIP inflows remained consistent in the quarter, remained over INR 20,000 crores. And you know that, that number has perhaps been expanding for the last five or six trailing quarters. This was the highest number that we have recorded. So we grew over all the previous trailing quarters. SIP registrations when seen in the context of the previous quarter, in context of 4Q FY '20 was slightly muted. There were 36.5 lakh compared to 43 lakhs in 4Q. But if you see a year-on-year trajectory, we grew handsomely. This number was 28 lakh in 1Q last year and grew to 36.5 lakh during the quarter. So year-on-year, a strong increase. Overall AAUM, despite the growth in equity AAUM, contracted a little, contracted by 1.6%, largely led by what was happening to bond prices, interest rates and therefore, debt and liquid assets. Amongst the other businesses, our AIF business grew 30% year-on-year on the back of sustained signings, and we expect it is poised to have a similar run over the next 12 months, too, so grew 30% year-on-year in revenue. We continue to invest in new businesses, especially in NPS, CRA and account aggregator. And we do continue to focus our energies and push the agenda forward on MFCentral, as you're aware. Our payments business also grew revenue year-to-year 20%, riding on the back of new customer acquisition. So that is the overall commentary on how the key metrics related to our businesses panned out. I will just get into a little more detail. Like I said, talking about the core business about the mutual funds business, saw a 2.6% increase in equity AAUM despite the headwinds. Overall assets, like I said, saw a marginal decline of 1.6%. The other important thing is that our share in key metrics, and I will talk of net sales and SIP registrations improved quarter-on-quarter, and we retained market leadership with a 69% share. In the alternative services market, we continued the growth trajectory, like I said, recording 30% year-on-year growth in revenues. Specifically, CAMS WealthServ, which is our digital onboarding platform, has been well received and that momentum continued. We now have 40-plus clients who've signed up on this platform. Nobody was expecting the digital penetration of the AIF and PMS market to be so quick. All this has happened within one year. So we're expecting this trajectory to continue. On NPS, CRA, we, as you are aware, had launched the first CRA platform on the cloud in March '22. eNPS is now live. POP sales and corporate business are in pilot phase. I think the important thing is that within a short span of time, we've achieved over 10% share in eNPS sales. Like, this is direct-to-consumer purchase mostly by people by paying monies from the bank accounts, no employer contribution kind of architecture there. So we got a #2 position in eNPS at over 10% market share. Similarly, in account aggregator, we recorded 10 new wins took our overall tally to almost 20 sign-ups. We now have 12,000 downloads of the mobile app, the most downloaded account aggregator app now. MFCentral did well. It kind of solidifies our role in the MF ecosystem. And we are seeing significant interest from fintechs in particular, for the CAS APIs and for various other transaction kind of APIs. We'll talk a little about that further. And amongst our other digital assets, myCAMS crossed 5.25 million user base and continues to retain its position as the largest MF only app in the country. In insurance, the PolicyGenie deep contact tracing solution, we've spoken a little about this in the last two quarters. We assisted insurance companies in closing out almost INR 31 crore of unclaimed benefits in 1Q, as you're all aware, this is an important metric for insurance companies. And then overall, I think from a digital solutions perspective, we continue to improve our relationships with insurance companies and improve our delivery capability to the insurance policyholders across the board. As you're aware, we continue to build out the nature, the character of the company to be a full stack and intelligent platform for capital markets. So if you see what do we have there today across eKYC, e-signing, digital onboarding, and we have digital onboarding platforms almost across the board, anti-money laundering checks, validation services. All of these, together with the core MF and the core AIF platform, create a 360-degree digital stack for the capital market ecosystem. And then outside of those, you know that we've been assisting banks, NBFCs and our AMCs in ensuring there is a simplified accelerated architecture for loan against mutual funds. Our reconciliation product continues to find acceptance, both with mutual funds and outside, especially with insurance companies. And like I said, MFCentral has now continued to improve its relevance amongst the consumers certainly. But from a business enablement perspective, we see the fintech stepping forward and showing sustained interest. Overall, our stack of APIs in terms of how we service customers, intermediaries and AMCs, that continues to grow. From a CAMSPay perspective, UPI has been a very smart addition. And like you've read, we've been the first in the industry offering UPI autopay as a solution to the marketplace. Next I will talk a little about our share in overall AUM, net sales and SIP registrations. I spoke about this, but just to get into a little more detail. Year-on-year, we saw a strong 35% increase in equity AUM grew from about INR 8.38 lakh crores to INR 11.32 lakh crores. Our share in industry's equity assets, and that's, I think, a strong redeeming factor that has increased by 3% year-on-year from 62.7% in this quarter last year to 65.7% in 1Q FY '23. So if we see, I mean, despite the fact that it was a slightly tough quarter, when you see the fact that equity inflows remain sustained and very strong, and these are net inflows, not gross, SIP inflows were at the highest ever. SIP registrations improved handsomely over last year. And our share in industries equity assets have grown almost 3% when you club all of these four facts together, it points to a strong foundational trend. Like I said, our new SIP registrations grew from 28 lakh last year, 1Q to 37 lakh this year. Our share in new SIP registrations again moved up significantly, 61% now to 55% last year. These are numbers that you've been seeing over the quarters, so you can see the contrast. And then I think from an SIP inflow perspective, if you see the various numbers, October to December '22, which was 3Q last year, just under INR 19,000 crores January to March 4Q over INR 20,000 crores, and then 1Q at INR 20,953 crores just under INR 21,000 crores. So that machine continues to grow in the last two quarters, almost clocking INR 1,000 crores more than the previous quarter. The underpinning to that and a leading metric to that is the SIP registration count. And we believe that this juggernaut will continue to remain intact in terms of momentum. And like I said, CAMS serviced funds continue to clock over 10 lakh new SIP registrations all this while for the last many months. In terms of client base, therefore, we continue to service each of the top 5 AMCs as you are aware. 10 of the top 15 AMCs. We just seen basis equity assets, which is a carve-out of the market, but an important carveout. 4 of the top 5 AMCs based on equity assets are with us. So that kind of shows you the strength of the franchise. A little bit about MFCentral. Like I said, we are seeing sustained user interest, which is a great metric to have on our side. This is a property, of course, that the ideas are have built together. So we see about 1,000 new registrations per day. Of course, this number will move up as we do a formal go-to-market. Right now, there is no high decibel promotion happening. But despite that, we get about 1,000 registrations per day per month -- sorry, per day, mobile app downloads at about 75,000, executing between 1,000 to 1,500 requests of all kinds every day, touching almost 10,000 log-in sessions. So it's a differentiated product built as a thin liner on top of the RTA systems. And like I said, for the combined account statement, which is a popular way to keep investors informed of their holdings and how the portfolios are moving. We're seeing a lot of interest from the fintechs and from other market participants, including advisers and brokers for these APIs as well as for the transaction APIs. I've spoken a little about the alternatives business. As you've seen, the number of AIFs now registering, every quarter is reaching a crescendo, and we are seeing accelerated signing performance now almost for four quarters in running, but significantly in the last two. The riding on all of this, we saw a growth trajectory, revenue clocking almost 30% year-on-year growth. And like I said, we could see, although I don't want to make any forward-looking statements here, similar growth numbers in the next 12 months, new business addition with 50 new wins in the AIF and PMS segment. And of course, growth of business in the base drove all of this. On CAMS WealthServ, like I said, the adoption has been rapid. Over 40 funds have signed up for our AIF and PMS digital onboarding. Significant new features like onboarding of NRIs, et cetera, have now been added. And then like we've said, we want to take this count to make it touch at least 100 within the financial year. On Fintuple, which is a transaction we had announced in April of this year, about four months back, Fintuple continues to build momentum with multiple new sign-ups and are now beginning to offer e-Sign and eKYC to their customers. And in the GIFT City, now we have signed up in business now with five clients. On account aggregator, I think all of you are aware that public sector banks were all asked to participate in this market by end of July. So technically, all of them are now part of the architecture coming in to integrate with us. We did our first consumer industry event for the capital markets about two weeks back in Mumbai and saw strong participation. And like I said, we continue to sign up banks, housing finance companies, brokerages, et cetera, for participating with us, both on the AA and TSP platforms. On NPS, like we said, eNPS, which is the segment that we've been live and we've been actively soliciting business and building business, mostly through digital marketing. Of almost the 75,000, 76,000-plus eNPS registrations in the quarter, we got just short of 8,000. So that translates into a 10% share and #2 position. Our government and APY, which is Atal Pension Yojana, those segments are under design and development. And then we are engaging with the ecosystem entities. POP and corporates is really the next segment, which will go live in the short run and we're actively preparing to make things happen there. Our CAMS NPS website logged over 2 lakh visitors. You can see the number there, 220,000 during the quarter. From a market share perspective, overall, 69% market share, so a stable number. Like we said, net flows into equity assets remain positive. Inflows through SIPs increased 4% quarter-on-quarter, but the significant metric is improved over 40% year-on-year. I think that's a significant metric. AAUM serviced by CAMS at over INR 26 lakh crores was INR 26.2 trillion. Overall, assets went up 13.8% year-on-year, contracted 1.6% quarter-on-quarter. The very interesting and compelling story on equity AAUM at INR 11.3 trillion or INR 11.3 lakh crores. Assets grew 35% year-on-year, so significantly ahead of industry and 2.6% quarter-on-quarter, again, significantly ahead of industry. On transaction volumes, again, on a year-on-year basis, you will see between 25% to 40% improvement just across the board. Overall transaction volumes were 115 million last quarter, so contracted a little quarter-on-quarter. Year-on-year transactions went 27% up. SIP book, which is the underpinning of all the collections and net flows that you see, grew 37% year-on-year, about 5% over the last quarter. SIP processed riding on the same metric of registrations went up 3% quarterly, 39% year-on-year. Live investor folios are now over 5 crores, so 5.3 crores, 53.3 million, again, 28% up year-on-year and unique investor service is just short of 2.4 crores, 23.6 million, grew 40% year-on-year. So like I said, if you look at all the foundational metrics, investor participation, SIP book, SIP registrations, net flows into equity, both gross and net equity market share and equity AAUM, all of those are positive numbers. Despite the headwinds will not take away the fact that it was a slightly tough quarter overall, and we are expecting at some time for growth to come back to the industry. But despite all that, I think the underpinnings. I will now hand over to Ram Charan, our CFO, to take us through the financials.

Thank you, Anuj. So I will just spend the next five minutes giving a flavor of the numbers, the profits, the revenue numbers and the AAUM numbers. As you heard Anuj say, during the year -- during the quarter, the AAUM for Q1 had grown sequentially -- had grown year-on-year around 13.8% and there is a smart growth in the equity funds at 35%. On a quarter-on-quarter basis, there was a small degrowth of 1.6%, but the equity still grew at around 2.6%. So the impact of this is that from a mix perspective, we are having a favorable impact. As you know, equity is the higher-yielding asset of the entire mix. And hence, you would see from a yield perspective, there is some benefit that we are getting from this. From a revenue for the year -- for the quarter, we actually had a revenue of INR 236 crores, which was up 17.5% year-on-year. The comparable revenue was INR 201 crores in the last year first quarter. And sequentially, it was down 2.8%. If you actually break it down into asset-based and non-asset-based revenue, the asset-based revenue actually grew 16%, 15.9%. If you just compare that with the AAUM growth year-on-year, which was 14%, we generally see the trend where in -- we see that the asset revenue growth always lags the AAUM growth. But because of the favorable impact of the mix, which is the equity has grown around 35% year-on-year, we are seeing that the asset-based revenue is kind of outpacing the growth in AUM for this quarter, which is consistent with the commentary that we have been giving earlier in terms of the mix of -- impact of the mix. On a sequential basis, though, there was a small degrowth in the asset-based revenue. Again, if you see the degrowth from overall AAUM perspective was 1.6%, but the asset-based revenue actually went down only by 0.3%. Again, the favorable impact of mix is playing out here. The comparable number for last year, the same quarter was INR 155 crores versus INR 181 crores for the current quarter from an asset-based revenue perspective. The non-asset-based revenue was up 30% year-on-year, mainly on the back of the transaction revenue. If you remember, the same quarter last year was -- there was this impact of COVID that was playing out in the markets and in terms of front office transactions. So on the back of recovery of transaction-based revenue, the non-asset-based revenue has come up by around 29% year-on-year. On a sequential basis due to drop in transactions and also because of hold in NFOs, which was a regulatory requirement, the number degrew went down by 9.7% quarter-on-quarter. The non-asset-based revenue for the quarter is at INR 33 crores as compared to INR 25.51 crores for the last year same quarter and INR 36.4 crores for the sequential quarter. On the non-MF revenue, for the quarter, we ended the quarter with a INR 22.81 crores non-MF revenue. This was compared to INR 19.7 crores the same quarter last year. Hence, there was a quarter -- year-on-year growth of around 15.3 percentage. This was on the back of what Anuj was mentioning, a smart growth in the AIF business. We are seeing sustained momentum in the AIF business. And there was growth all around in the repository business, in the payments services and other businesses, there was an increase compared year-on-year. On a sequential basis, though, the non-MF revenue, there was a decrease, apart from AIF continued to be the bright spot in this, although even on a sequential basis, the revenue grew for AIF. But from other businesses, there was some impact. The last quarter of the year is generally the busiest quarter from insurance depository perspective. So there will be naturally some degrowth in the first quarter. But because of no NFOs, there was some impact on the KRA revenue. So overall, the revenue actually quarter-on-quarter basis came down 10.7%. The asset mix being favorable, there was a positive impact on the yields. If you -- I think the research reports have already come out. But year-on-year as well as quarter-on-quarter, we are seeing the yields remain stable to actually go up marginally which is again consistent with the commentary that we have given in terms of mix impact and the growth impact. Coming to the profitability numbers. If you see the operating EBITDA, on a non-Ind AS basis was INR 91.5 crores, which is up 5.1% year-on-year and down 13% quarter-on-quarter. If -- from an Ind AS perspective, though, although this margin was around 39% from a non-Ind AS perspective, from an Ind AS perspective, capitalization of leases, the margin is 41.5%, which is compared to 46%, both on the sequential basis as well as the last year. So the reduction in the margin is mainly on account of the investments that we are making. There are two, three aspects that contribute to this. One is on the spend that we do on the technology. Because of the AUM growing or not growing on a quarterly basis, our investments in technology resources and in technology, in platforms is not going to slow down for one quarter. So we continue to invest in technology. Just to give you a perspective, all the incremental spend that we have done on salaries and other software expenses, more than 35 percentage will be the amount that we have spent only on technology resources, only on platform building out. So this is something that we are continuing. Part of it is a function of the market where we will have to retain people, and we are getting high-cost resources from a technology perspective to ensure that our cutting edge technology remains same. And also from a platform build-out perspective, there will be some costs that we incur upfront and Anuj spoke about the various platforms that we are building out in the earlier slides, where there is this MFCentral, there is AA, TSP, which actually will have a good revenue potential going forward, but this is upfront investments that we continue to make by getting high-cost technology resources. So this is contributing to a large part of the increase in salary cost. There is also a noncash expense of ESOP, which I've indicated also in the presentation. On a year-on-year basis, the ESOP cost is almost like a INR 7 crore increase of the INR 20 crore increase in salary that you see, almost INR 7 crores is because of the ESOP. And the remaining things, most of it is because of the technology and other increments that we have to give and the investments that we do in platforms. So that's the explanation for why your EBITDA margin growth and your sales growth, there was a lag between the two. This is something that we continue to invest in, and we're not going to take any short-term decisions to discontinue any investments in resources or technology because of one quarter where we see the assets not growing. That's consistent with our earlier commentary where we said that in the event of the assets not growing too much, we expect our EBITDA to be just below 40 percentage. And in the event of the assets growing, we are going to be much more than 40%. I think that commentary, which we have been consistent over the last few years has played out in the current quarter, where on an Ind AS perspective, we see a 41.5% EBITDA, but a non-Ind AS perspective, probably a 39% EBITDA. From a PBT perspective and from a PAT perspective, this kind of mirroring the growth in profits and EBITDA. So we are up 2.5% year-on-year from both PBT and PAT perspective and down around 12% quarter-on-quarter. we ended the quarter with a PAT of around INR 64.78 crores as opposed to INR 63.24 crores in the same quarter last year and INR 73.8 crores in the Q4 of FY '22. Our return on net worth continues to be impressive at around 39 percentage, and we ended the quarter with a healthy cash and cash equivalent around INR 437 crores. We have declared -- the Board has declared an interim dividend of INR 6.75 per share, which you would have read in the press release that we have done. So overall, the revenue tracks the increase or decrease in the AAUM. The non-MF revenue had a small dip because of some factors which we have explained. But the investments in technology resources in platform building out and in the noncash charge as well as the increment that is a function of the market to retain these resources is kind of having a little drag on the profitability, and that's the overall commentary on the profit. So with this, I'll kind of hand you -- hand over to the moderator for any questions that the participants may have.

[Operator Instructions] The first question from the line of Anand from White Oak.

In terms of the investments that we are making, do you see the entire impact has come in the current quarter? Or we can see incrementally more impact as well in the coming quarters? So for example, the salary increase, INR 20 crores, like is there more salary -- absolute salary increases that are going to come due to additional hiring that might have happened in maybe last month of the quarter or something like that?

So, Anand, to answer your question, it's not expected that, that will happen. If you see the annual increment cycle kicks in from 1st of April. So we have taken the full impact in the quarter. Going forward, we don't see any additional impact because of any salary increases or any such onetime impact that we get. So the impact is there fully in this quarter. There is no part of the month impact that you are seeing. Does that answer your question? Or was there something else you wanted?

No, no. That surely answers. And broadly, on the fixed investments, like our depreciation is also higher. So from fixed investment perspective, can you give us some color? Are there any specific investments needed in the rest of the year?

Sure. So you're right. See, from an investments perspective, there is a lot of requirement from an RTA perspective, from a SEBI regulatory perspective also that there is an investment that we need on assets, on storage, on servers, on compute, et cetera. So if you see the last year was probably a record year in which the amount of investments that we made on CapEx was in excess of INR 60 crores, right? This was to bring us in line with the SEBI requirements of a 2x capacity as well as have a provision for the future. The SEBI norms are that at any point of time, you should have a 2x capacity of your peak transaction processing that happened in the last quarter, which is, for example, if you have, say, 10 today and 20 tomorrow and then come back to 15. But by the next quarter, we will have to get 20 to 40 capacity provisioned in the entire system, which is not only from a storage perspective, it's also from a compute perspective, from a transmission perspective, everything that we will need to invest in CapEx. So we have taken a big decision to actually upgrade our entire infra in the last year so that we are not only in confirmative SEBI norms, we also have a provision for the future growth that we see because it is not something that we can do in a fits and start. So we did a big investment around INR 65 crores -- between INR 60 crores and INR 65 crores last year. We don't see that repeating year-on-year, if that's your question. Although we will continue to make investments as needed to maintain and enhance this capacity to take care of market transactions. But we don't expect the volume of investments in CapEx that we made last year will get repeated every year. If you see, in fact, on a quarter-on-quarter basis, Anand, the depreciation charge would have actually come down when you compare the last quarter to this quarter. So we don't see this level of investments on a year-on-year basis, although there will be significant investments that we continue to make.

Sure. So the depreciation charge falling quarter-on-quarter about INR 1.89 crores. What explains that?

So this is basically the bulk of investments that we did during the COVID phase as well as post this. It's pure function of depend on value method, right? See the bulk of the depreciation gets done around 65% of depreciation gets done in year 1 of the normal that you have to get a 95% depreciation within 3 years. So if you see the bulk of the depreciation gets done in year 1 and part happened in year 2. So as you come to year 3 of the -- or year 2 and year 3 of this is, if you don't make matching investments in terms of quantum, the depreciation will come down, and that's what has happened in this quarter.

Got it. And my last question is on monetization. In the opening remarks, we spoke about monetization of MFCentral and other initiatives also, if you can give us some color, are you expecting any of the initiatives to start contributing in next coming quarters?

Yes, sure. So if you see MFCentral as a stand-alone entity is generating a lot of interest. And we are at a sign-up stage now, but we believe some level of revenue will perhaps start showing up by the end of this quarter or beginning of next as integrations happen. Similarly, you saw that on CAMS WealthServ, which is our digital onboarding platform, we've seen a very strong response in terms of sign-ups. The other two big things then, therefore, are account aggregator, which has been a build-out over the last five or six quarters and CRA NPS, which has also got built out over the last five quarters. So we are in a sign-up stage there, small trickles of revenue already coming in. It will perhaps take up to the end of this year for any, I would say, substantive revenue reporting to happen. But like you know, eNPS, we get paid for every registration and every transaction that happens. So that business is obviously on. So is the account aggregator and TSP business. I think significant revenues worthwhile reporting in a forum like this will perhaps happen in 4Q of this year.

We take the next question from the line of Prayesh Jain from Motilal Oswal.

A few questions from my side. Firstly, could you give us the breakup of the employee cost or the increment whatever you have given from INR 85 crores to INR 93 crores as to how much was accounted by increment, how much by variable pay and how much by the investment in other companies or other subsidiaries?

Sorry, I could hear part of your question, Prayesh. If your question was what is the breakdown of the INR 20 crores employee cost increase that you have given year-on-year? I'll answer that question. See, as I said, almost INR 7 crores of it -- INR 6.5 crores of it is a noncash increase that's happened because of the ESOP plan that we have given to the top 100, 120 executives in the company on 1st of April. Accounting standards requires us to take a charge -- a noncash charge depending on the vesting schedule. So if you take that away, looking at a INR 14 crore increase year-on-year. Most of it is because of the increments and the hiring that we have done from a tech perspective, almost like 35% of the increase is because of that, which is not only the fresh hiring we are doing from a tech, which we have not slowed down for obvious reasons. We just want to maintain our edge on the tech perspective, but also the higher increment that we would have to give than usual given the red hot market that is there for the tech resources. So that's a major part of it. Apart from that, there is this FT that has come in the current year. If you remember, we did this migration of FT in the -- in July, August of last year. So we actually got in some costs because of that -- we didn't have a corresponding cost in the last year. So some INR 2 crores is increased because of that. And the remaining cost is the increment that we have given to the existing resources. Given the market condition, not only tech, other resources are also to be retained. Last thing we want is a runaway attrition that's happening. So the increment cost, the ESOP cost, the FT cost as well as the tech hiring cost will kind of constitute every of this INR 20 crores increase that we have given.

Sir, what would be the ESOP cost that you would look at?

The first quarter, we took a charge of around INR 9.5 crores in the P&L because of ESOP. And that was around INR 6.5 crores more than what it was in the comparable quarter last year and around INR 2 crores more than the sequential quarter.

For the full year, should we look at INR 40 crores kind of a hit?

For the year, the current year, we expect it to be around INR 28 crores to INR 29 crores because the listing schedule-based amortization. As you go along, the cost decreases in the subsequent quarters. So for the year, we expect the ESOP amortization to be around INR 29 crores.

And from a margin guidance perspective, you guys have been maintaining that in a bad quarter you will have 38% kind of a margin and 30%, 40% kind of a margin and in a good quarter 40%, 42% kind of margin. Do you think this was the worst quarter for some time now and things will only improve from here on with regard to overall margin outlook?

So let me try to answer that. Yes, you know that we've broadly given a guidance of 40% and early 40%. If you see the last quarter, like we said, the revenue build-out was slow. And then for various reasons, we've continued the investments in all the resourcing that we had to do for the new platforms. A lot depends upon asset growth and revenue build-out. As you know, as we have said, that we will continue making the investments. There is absolutely no reason to go slow in the investments. Wherever we invest, you know that when the platform play becomes successful, then the offtake is large and that leads to revenue growth. I think both the MF business and the AIF business are great examples of all the past investments, which are playing out now. So therefore, it's a good question to ask, is this the worst quarter? The way I would answer it is that depending upon the asset play turning positive and the revenue play at least holding, yes, certainly, we believe that this could have been the worst quarter, but we will continue watching in terms of how the markets behave. As you've seen, while flows were very positive and flows are what held everything together, mark-to-market losses did happen even in the equity segment. If that has bottomed out, certainly, margins will start looking up in future, but that's something we're watching closely.

And other part of that equation is the front wherein the mutual fund companies, AMCs, we've seen that there is pressure on, which is mounting every quarter for them. Even in this quarter, all the listed players, except for one of the companies saw a decline in yield. Is there an incremental pressure coming to you guys for reducing your fee?

So how this works is, as you are aware, our scope continues to grow significantly year-on-year as more regulatory and service scope comes in. So the absolute quantum of work that we do becomes bigger and bigger. The only way we get paid for it is through sales and mark-to-market gains. Also, mutual fund companies do get a fee remission every time they grow. Like you're aware, it's a telescopic fee structure. So within that, I will not say that there are no dialogues. Obviously, mutual fund companies will try to find ways to offset whatever they are seeing on the fee front themselves. As far as we are concerned, we are confident that given the value that we deliver in the marketplace, the expanding scope and obviously, the sophistication that we are bringing into the company, we will hold on as much as possible to the yields.

My last question is on the non-mutual fund business. What explains the decline in this [indiscernible] sequentially?

Sorry...?

I'm saying the non-MF business has seen a decline in share as well as in absolute quantum if we back calculate it from the overall revenues. So what explains the sequential decline in the non-MF revenue?