MPS Limited (MPSLTD) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q4 FY '23 Earnings Conference Call of MPS Limited. [Operator Instructions]. Please note, this conference is being recorded. I now hand the conference over to Mr. Rahul Arora, Chairman and CEO. Thank you, and over to you, sir.

Thanks, Vikram. Good morning from New York, and welcome to our Q4 and FY '23 earnings call. Today on the call, I have with me Sunit Malhotra, who is our CFO, and joining us from Noida; Sukhwant Singh who has recently been promoted to Chief Operating Officer of our India operation, and also joining us from Noida; Tony Alves, Senior Vice President and Head of Product Management, who joined us from Boston; Rajesh Jumani, popularly known as Jums, who is our Chief Revenue Officer of our eLearning practice and joining us from Kingston, New Jersey. Sunit will kick things off in our opening segment today by discussing our financial performance. Then Sukhwant will update us on the new momentum we have developed in our Content business. Tony will then update us on how our Platform business is performing and entering an exciting phase. Jums will then discuss our robust performance in the eLearning business. And finally, I will summarize the outcomes of the Board meeting and describe what has enabled us to achieve an accelerated trajectory towards Vision 2027. Let's get going. Over to you, Sunit.

Thanks, Rahul. On a quarterly basis, Q4 was better than expected and the solid results for an excellent way to wrap up an impressive FY '23 after a soft start in Q1 FY '23. FX-adjusted revenues were higher by as much as 15.7% in Q4 FY '23 compared to the last financial year. PBT grew even faster at 41.5% in Q4 compared to the same period in FY '22. MPS achieved a new milestone with FX-adjusted revenue at INR 500 crores in FY '23. We also surpassed our publicly stated goal of INR 100 crores in PAT and ended up much ahead at INR 109.19 crores in FY '23. And while revenue grew 10.8% over the previous year, PBT grew 25% over previous year. Reflecting on the FY, here are my top 3 favorite themes. All business segments and lines of business are performing. We have returned to our roots as a high-margin business. Our top 15 customers now contribute towards 60% of our revenue, a much lower customer concentration than when we started this journey in 2012. I want to hand it over now to Sukhwant to discuss Content Solutions' performance in FY '23.

Thank you, Sunit, and Rahul. So the post-pandemic momentum in our Content Solutions business continued in Q4 and for the whole of FY '23. Given the significant operating leverage in our Content Solutions business, as our revenues grew, our PBT grew by as much as 34% in FY '23 and 47% in Q4. The scholarly line of business led growth in the content solution in Q4 and FY '23 business. Some early signs of success in this business segment with the Going Gestalt growth strategy include a revised go-to-market strategy, which is basically a new market-based approach, which enabled unlocking growth synergies between scholarly content and platforms and educational content and e-learning. We did step up our efforts on cross-selling and upselling with a specific focus on STAR accounts. which led to a robust growth in all top 10 content solution customers and a double-digit growth in 3 out of our top 10 accounts. In terms of launching new capabilities, we launched a new peer review solution that is proving to be highly successful with a significant multiyear win in quarter 4 of FY '23. This was with a prestigious new customer. We also significantly invested in new AI/ML-based image and research integrity solutions and saw noteworthy demand for these services as well. I would like to now hand it over to Tony to discuss Platform Solutions' performance in FY '23. Over to you, Tony. Thank you.

Thank you very much, Sukhwant. In quarter 4 of fiscal year 2023, the revenue in the Platforms business grew by [ 2.4% ] over the same period in fiscal year 2022. The performance in the second half of FY '23 was our first signal of growth in this business segment in our third year of ownership of HighWire, and it has laid a strong foundation for fiscal year 2024 and also for the years ahead. I can confidently state that our Platform business has now transitioned into a healthy and growing phase for the following reasons. One is that our mission has now transitioned from a support and delivery to product development. This includes new product launches, active product road maps and upgrades. Another reason is our new customer acquisition strategy that has involved product and service bundling, price warrior-ship is gaining traction and is helping us to develop a new customer base. And the feedback from the industry and the scholarly community is highly encouraging. HighWire and MPS offer the only serious independent choice since 2 of our larger competitors have been acquired by publishers. I now want to hand it over to Rajesh to discuss the eLearning Solutions performance in FY '23.

Thank you so much, Tony. eLearning is now the second largest business segment. Revenues were at INR 127 crores in FY '23, which is 25% of our total revenue. Profitability improved by more than double during the financial year '23 and more than 50% in Q4. By Q4, all 4 entities were performing, including the Swiss entity, which has finally recovered from the decline during the pandemic. The acquisition of EI Design confirmed the validity of a new acquisition playbook of acquiring growing assets and compelling valuations. In addition to substantial financial indicators, including significant margin improvements, operational indicators were also highly positive. We are now market-leading in service delivery and quality in the eLearning practice, reflected in high CSAT scores across the portfolio. Growth operations in eLearning practice have matured and are setting the benchmark for other business segments. The soft launch of Magineu, which is our Experience Center business, was highly successful. We completed a marquee project at India Energy Week earlier this year, and the Honorable Prime Minister also appreciated our work. The business did exceptionally well in its first year as an independent business unit and performed in richer margins than the eLearning business. My team and I are committed to scaling Magineu to a sizable business segment for marketing communications by FY '25. Back to you, Rahul.

Thank you for the rich update, team. Our new growth strategy has started to deliver strong business results. A 5-pronged approach has powered the recent momentum, with what we refer to internally as Going Gestalt, which includes the revised go-to-market strategy that Sukhwant mentioned, a stronger emphasis on cross-selling and upselling in STAR accounts, the addition of new customers across business segments, the launch of new capabilities and an unprecedented pace of integration of EI design into MPS. Now to go over a couple of Board outcomes. In the previous Board meeting in April, the Board approved raising of funds for the issuance of equity shares of the company or any other equity-linked securities of the company or other securities convertible into or exchangeable for equity share by way of qualified institutional placement, QIP, in one or more of the tranches for an aggregate amount up to INR 250 crores. Subsequently, this matter was also approved by the shareholders. This is an enabling approval for a period of 12 months. Today, we have a healthy deal pipeline and are in active discussions with multiple targets and have taken these approvals to keep momentum if large opportunities become available. Based on experience, we will not raise these funds unless we are extremely confident they can be deployed within 2 quarters. This approach allows us to progress efficiently if and when large opportunities do present themselves. I'm pleased to share that based on the unprecedented earnings growth in FY '23 and an EPS of INR 63.87, the Board of Directors has recommended a final dividend of INR 20 per equity share for INR 10 each of the company. Given the upcoming acquisitions, our Board has taken a balanced view on return to shareholders. This approach allows us to go ahead and acquire healthy and growing assets, albeit at compelling valuations and significantly enhance shareholder value. It was also discussed at the Board that once this phase of acquisition is complete, we would return to previous high levels of distribution. Additionally, this form of distribution need not be at the end of our financial year and could be sooner if the acquisitive phase is completed more shortly and surplus funds become available. Let us now open the call to questions.

[Operator Instructions] We'll take our first question from the line of Ravi Naredi from Naredi Investments.

Rahul, really indeed a very good result, but I would like to advise something, do not take it as a criticism. You are doing good things but we did QIP in past maybe 8 to 10 years back when our company shares didn't rise any thereafter, you are again doing QIP for INR 250 crores, but your decision fell down the market cap of company more than INR 250 crores, so please, request, you reduce the dividend, raise the debt instead of QIP, because raise of equity is always costly incidence. So please do not raise any equity now, please, which is my decision, which I am seeing since the company last 10 years, that's why I had given this decision to you -- advise to you.

We'll take our next question from the line of Keshav Garg from Counter Cyclical PMS.

Sir, I'm also on the same line as the previous speaker. Sir, we distributed INR 357 crore during the past 5 years, sir. Thank you for that. Sir, but you would appreciate that 23% to 25% of that payout got leaked in the form of taxes to the government from the shareholders. So now we -- this year, again, we have distributed INR 50 crore dividend, and we are raising INR 250 crore of QIP. So instead, we could -- we can just cancel the dividend and raise INR 200 crore if need be. So what are your comments on this?

Sure. So the focus for all of us at MPS is our Vision 2027, which basically is tripling our revenue to take us from INR 500 crores to INR 1,500 crores by FY '28. In terms of -- there's an organic growth strategy that is going to help us unlock that. And there's also an inorganic strategy. We expect 60% of the scale-up to come from acquisitions and 40% of the scale-up to come from organic growth. With respect to the QIP, I think as I shared in the opening remarks, this is an enabling approval for a period of 12 months. It is for a raise for up to INR 250 crores, so it need not be INR 250 crores, for example. Additionally, like I mentioned, this is only if large opportunities present themselves, and we are confident that those large transactions can be completed in 1 or maybe 2 quarters post the raise. So that is kind of the background on the QIP process. In terms of -- there was also a comment on -- a question on debt earlier as well. So on that, I think we've basically taken a view that if -- we are open to debt, so we're not completely averse to that. But overall, we do not want to raise any debt beyond the annual cash flow from the operations or the annual profit after tax, which is INR 100 crores, INR 110 crores. So from our perspective, while that may not sound very exceptional to the astute financial minds, we are with covers on that. And the primary reason for that is we've diligently worked to scale the business, and we don't want to do anything to risk and derail the business. With respect to redistribution, as you've seen, we have historically executed a much higher distribution than what you've seen in FY '23 in terms of percentage of earnings or percentage of cash flow. So yes, given the upcoming acquisitions, we have made a more modest distribution this time because we plan to invest that towards the acquisitions. Having said that, in terms of the shareholder base, we must respect that we -- while we do have large institutional investors, we also have individual investors who potentially would prefer dividend over buyback. So we're trying to create a balance that basically make sure that capital is redistributed efficiently. We continue to invest, given the high ROC available in the business today, which is in the early-30s. There are lots of opportunities to reinvest the capital. And finally, how we distribute dividend versus buyback, that's something that we take a balanced view on at the Board level whenever we do distribute the capital.

Sure, sir. Sir, also, sir, last call also, this matter was raised about ChatGPT and AI. So the apprehension is that since our basic competitive advantage comes from our low-cost operations in India, et cetera. Sir, but going forward, sir, this might neutralize the edge that we have in terms of -- I mean, if ChatGPT or other AI instruments, so they can flatten the field. I mean instead of 10 people hired in U.S., if we have 15 people in India, so currently, 15 people in India are more cost effective versus 10 people in U.S., so -- but maybe ChatGPT will cause -- will basically change the dynamics to 1 person in India versus 1 person in U.S. So can you just explain to your layman shareholders how we are basically -- our businesses impact despite developments in AI?

Yes, sure. Good question. So we see this as a positive. We operate in a highly fragmented market, $300 billion market growing at 15%, the largest player is only $300 million. So this market has -- is ripe for consolidation. And whenever there's shocks to the market, that consolidation gets accelerated and MPS has and will continue to play the role of a consolidator. In terms of the cost arbitrage, I think one of the key things we must understand is that our customers need partners like MPS that are intelligent and scaled to execute on new technologies. A lot of the know-how and the innovation, when it comes to produce production of their work, normally sits on the supplier side. So currently, for example, we are running many pilots and programs in collaboration with our customers, where we are actually executing on these frameworks. These frameworks are difficult to execute independently for customers. They need partners like us and the cost arbitrage continues to be important because what we are seeing is what these frameworks are providing is a start to the work, not a complete production of the work because there still needs to be a public matter review or some kind of formal review before the content or the learning module is released. So we see it as a huge positive. We are embracing AI and ML into various parts of our business. And we see on the content side, helping us with speed, efficiency, also therefore, improving our margins -- continued improvement in margin in the Content business. On the Platform side, it has enabled us to create some very exciting new products because a lot of our competitors are not as adaptable as MPS. So we are growing much faster than that. And then on the eLearning side, we have integrated with a lot of third-party solutions, again, to improve speed and efficiency. So I think we have to view this in context of our space in our industry, which is, on the customer side, they need support to understand what all of this is and execute on it. On the competitive side, given that the market is highly fragmented, there are only a few handful of scale players like MPS, it gives us, as scale players, an opportunity to consolidate the marketplace. So from a competitive situation, we are thinking of this as a huge positive. There's a lot of investments that is taking place within MPS. We set up a unit called MPS Labs based out of Bangalore to pursue this very actively. So there's a strong investment in product development, in R&D at MPS to execute on AI and ML. So we see this as a huge positive and, going forward, a differentiator for MPS.

[Operator Instructions] We'll take the next question from the line of Dipesh Mehta from Emkay Global.

A couple of questions. I just want to get sense about -- we have seen significant improvement in our margin profile over last few quarters. So how one should look segment-wise margin, because Content and Platform is now already over 40 percentage margin, eLearning already around 25 percentage margin. So from margin versus acceleration in growth by making investment, what would be the thought process of management, whether we reach to some margin level where we aspire to, and now incremental focus would be on accelerating revenue growth? Or you think still we can manage both in terms of revenue growth with margin? Second question is about the -- on Platforms side, we indicated about new product launch and we have a active product road map. So if you can provide some sense about where we are making investment and what is the product road map? eLearning, we highlighted good traction in marketing communications. So if you provide some more detail on.

Sure. I'll take the first question, and I'll defer to Tony on product and Jums on the marketing communication business -- Experience Center business Magineu. So to kick it off, on margins, as we've shared before, our business has tremendous operating leverage through a combination of 2 things. One, we are a tech-enabled business. So anything that we produce is enabled by tech, wherever we can automate, we automate, where we can't automate, we have system-based deliveries. We have some automation and then a manual check comes in predelivery. So -- and the second piece, of course, this is a large percentage of our workforce is present in Tier 2 cities, which gives us a cost arbitrage. So from a margin perspective, as revenues expand, our margins will continue to grow. Unfortunately, unlike previous calls where I gave you very specific guidance, I will not be able to do that because as we've announced a QIP based on semi regulation, we're not able to share that tight forward-looking guidance like I used to share. So we will not be able to share specific guidelines. But on a high level, I can share that we expect margins to expand as revenue grows because of the tremendous operating leverage available in the business. Now in terms of the Platform business, I'd like to set Tony up by -- of course, I wanted to discuss the product launches that we're planning in FY '24. But before that, I also wanted to provide some context on what's changed. What is the perception of HighWire in the marketplace? How has MPS ownership changed things? So Tony, if you can give that color for us and then talk about product launches. Over to you, Tony.

Thank you, Rahul. Sure. So to address the topic of the perception of HighWire in the marketplace, HighWire has been exceptionally visible in the marketplace. And there's been really an increase in outreach through our marketing efforts through client visits and attendance at industry conferences. And it's been really exciting. As I travel around and I visit with clients and I attend these conferences, I'm continuously complemented on HighWire's resurgence. And I get feedback on how happy people are that there are more options, especially in the area of content hosting. This renewed and refreshed perception of HighWire has made our current clients very happy that they've stuck with us. It's made our past customers think about returning. It's put us -- it's put HighWire back on the RFI and RFP list when publishers are looking to change their vendors. So it's been -- the perception has been really, really positive. And the change in perception is, it's really possible because of the MPS acquisition. MPS has unlocked a suppressed potential by investing in the technical staff, allowing us to resume a lot of the stalled projects and platform implementations. It provided -- MPS has provided real marketing muscle, getting the word out about HighWire. MPS has had strong platform products in the past, and we've been able to combine those with the HighWire platform offerings. And this means that HighWire has a well-established and really, really strong end-to-end selection of solutions that are addressing the entire scholarly and academic publishing process. So it's a really, really positive and exciting story. And the result of all of that is that we've been able to move forward with product launches or to move forward with our road maps, which will allow some really exciting product launches coming up. I'm really excited about the upcoming release of the web version of our e-commerce and subscription management system called [ THINK ], [ THINK WEB ]. [ THINK WEB ] is the web platform version of [ THINK ], it provides new revenue opportunities through the upgrading of existing customers as well as an opportunity to expand our customer base. We're also really excited about the launch of our analytics product, Insight Vizor, which provides useful business analytics to publishers. It helps them find new sales opportunities and optimize opportunities with existing clients. And alongside Insight Vizor, we're enhancing our Impact Vizor analytics product with trend data. This will provide predictive analytics to customers who want to upgrade to this premium service. And then this fall, at the Frankfurt Book Fair, where we're going to be launching an MVP of a new modernized workflow platform. This has been -- there's been very little innovation in publishing workflow systems over the past 2 decades. And in fact, our competitors still use a 20-year-old monolithic systems to manage their mission-critical processes. So we've seen an overwhelming call in the marketplace for more flexible, modular micro service-based platforms. And our new platform will help consolidate workflow, reduce time to publication using a single source publishing model. And this will vastly simplify workflows and it will allow for really easy integration of AI and machine learning tools and services. And finally, we're upgrading and consolidating our technology stack for our content hosting systems, and this will help improve margins because it will allow us to operate far more efficiently and onboard more clients more quickly.

Thanks, Tony. Thank you for that rich update. All the best in FY '24 and looking forward to that platform business now entering an exciting growth phase. Jums, over to you, if you can talk about what is an Experience Center business? What is Magineu and why it could become our fourth business segment called Marketing Communications?

Sure, Rahul. Thank you so much for the opportunity. To just put it in a layman's language, the Experience Center business, Magineu as a new business line, focuses on creating physical and digital immersive experiences. What it means is we create -- we take physical spaces and we convert it into very high-end technology-enabled digital spaces. So imagine yourself walking into a museum and the museum has lots of technology like you saw in movies like Star Trek or in Star Wars and places like these. So these are typically created for large corporates who want to create what they call brand museum. As some visitors walk into a large company headquarters, instead of taking them through the regular PowerPoint or somebody talking about the business, they're actually taken around an entire brand museum on the past, present and future of the group. Similarly, lots of B2B organizations are creating what they call executive briefing centers or strategic briefing centers. So when they invite customers to come into their offices to showcase futuristic products, instead of sitting them -- putting them into a room and taking them through PowerPoint, they're again walked around into a museum kind of an environment where they are shown what the company is going to do in the future and how it benefits the customers. This is becoming a very, very new trend, not just globally but also in India currently. We've done some very exciting projects for large corporates and the market is looking extremely bullish for us. A few differentiations over here from a regular business, this business allows us, obviously because the values of the deals are really large, you are selling directly to the CXOs, the Chairman, the CEO, but also your main point of contact becomes the Chief Marketing Officer and Chief of Corporate Communications, which is all marketing-oriented. And obviously, we all know marketing budgets are much higher than in typical training budgets. So these are typically high-value projects. They have a lot of annuity business linked to it because once you create an Experience Center, there's lots of updates that happens to the Experience Center year-on-year. There's lots of maintenance activities and lot's of support activities that happen over there. Similarly, this is clearly a new need for us to focus on. There are not many players in the market who are right now organized into creating turnkey projects for customers. We, for example, do everything from space design to creating all the visitor choreography to the content, the interiors, software, hardware, support, all the AV that goes in. Very, very few players do this, so there's a clear niche for us that we can create in this marketplace. Thank you, Rahul.

Thanks, Jums. Thank you for the update. Again, very excited about the future of Magineu and a new business segment getting created by MPS. Thank you for the update. Back to the questions.

We'll take the next question from the line of Rahul Jain from Dolat Capital.

Congratulations to the team on wonderful year. Just want to understand your thought in terms of what kind of growth you expect across the segment? I mean bulk of the growth right now is led by this traction, which we have now found in the eLearning space. But from a steady-state basis, what should be the objective that we should be chasing here on an organic basis? And any more input you would like to share on the Content and platform side? Content side, what could be the base for this business a couple of years from now? And also a similar thing, if you could share on the Platform business.

Thanks for your question, Rahul. So I think the North Star continues to be Vision 2027, which is to get to INR 1,500 crores in revenue at similar margins by FY '28. As I stated earlier, 60% of this growth will come from acquisitions, 40% of this growth will come from organic growth. As I shared earlier, I would love and I'm in a position to give you more tighter guidance, but unfortunately, because of these -- I'm told the regulations are very restrictive once you enter or once you announce a QIP process, so I'm unable to -- my hands are tied, I mean, unable to share tighter guidance than that. Having said that, I think we got a nice update from Tony on how the Platform business has finally entered a growth phase. We got a nice explanation from Jums on Marketing Communications and which -- and the eLearning business is generally doing very well. So I'll just add to that and talk a little bit about the Content business because that continues to be a large part of our business and what we've basically seen is organic growth in this business over the last couple of years, which we continue to be very bullish about that this growth will continue and margins will continue to expand. And what's kind of changed in terms of this business is a lot of our customers are now moving from -- are now transitioning into becoming subscription businesses. What that has done is when you're a subscription business, your differentiator and your draw for a customer is really your content. So there's a renewed focus on time-to-market. Customers are looking to target unprecedented turnaround times on time-to-market, which basically means players like MPS that has a lot of smart technology that can enable that tend to do better. So MPS, of course, has this MPS Lab, HQ out of Bangalore, which is constantly innovating, has been around for a bit, have seen a significant scale-up in reinvestments in AI and ML over the last couple of years. So that is becoming a strong differentiator for us in the Content business. We are also seeing a new wave of outsourcing in the Content business. We are seeming to be moving upstream. Customers are looking for support on lots of upstream activities, which they previously were not looking at. On the scholarly side of our business, for example, MPS is now starting to get involved in the manuscript submission and peer review phase. On the education side of our business, accessibility is a big trend. In addition to that, our proven track record, especially during disruptions, like I stated before, the Chennai floods, COVID, post-COVID, has given our customers lot of confidence in our ability to execute in not-always-perfect conditions as well. So even when the operating environment is suboptimal, MPS has delivered on time and with excellent quality. Again, that also -- the input to that is, of course, the seamless stacks that we have as IP as well as our low-cost model, which allows us to ramp up quickly. So that has given us a lot of momentum because like I said, customers are transitioning to a subscription business. They need partners that they can depend on, and our proven track record enables that. On the education side of our business as well, we've seen a change in customer profile. So earlier, we were restricted to educational publishers. Today, we work with educational institutions, we work with Ed-Tech companies, learning companies, just scope of market in the education space has expanded, which is also giving us a nice lift in the Content business. We are also seeing, on the education side, a new wave of outsourcing, which is focused on digital. So we've been able to unlock the IP and the synergies between our Content business and our eLearning business and have kind of this new offering called Digital Learning for Education. So that's been an additional kind of tailwind that we've got going. So to summarize, one of the things that was missing, if you look at our history from 2012 to 2020, maybe, we were pretty much growing inorganically. And what's changed for MPS now is we finally have organic growth. Content is growing, eLearning is growing, Platforms is growing. Organically, we are looking to develop a fourth business segment. And then inorganic growth then becomes a kind of -- has a multiplier type of effect where there's obviously -- if you're growing as a business, good double-digit growth organically, and then on top of that, you add more inorganic growth, that then kind of supercharges things, and there's obviously synergies between whatever we will acquire between the current business and the new business. And our updated acquisition playbook is, we are looking only at growing assets, assets that have inherent financial strength. So they are also growing. So overall, very, very optimistic, feel super confident about this goal that is taken for FY '28, INR 1,500 crores for MPS at similar margin is not an aspiration, it's not a dream, it is a conservative goal.

Right. And one bit more, if you could, say, on the Content side, where you said this movement to subscription is something which is driving the momentum, so I'm sure this is happening for quite some time now. So where you see we are in that cycle? You think bulk of it is behind us or you see this as a tailwind at least for the next few years? Or could be more short term than that?

Good question, Rahul. So yes, I think there's been a lot of talk about this for a while. But in terms of action and execution, I think it's been limited. So for example, the big 4 in education publishing, not all of them have transitioned to subscription businesses. They do have subscription products, but they're not really subscription businesses. We've seen more of that on the scholarly side of our business. So I think there's more ahead, left behind. Also from a business model perspective, as our customers become subscription-based businesses on the content side, the exciting part of that is that it also allows us to become subscription-based business on the content side where we are entering into, for example, content-as-a-service agreements with some of our customers. And again, we have one example in our Content business where a customer has transitioned to this model. So there's lot more ahead. And of course, we all know, when you -- with the subscription-based business, you have higher recurring revenue, which helps you to improve your margins, also gives you a lot of predictability in terms of future revenue, which allows you to invest and grow the business. So yes, I think Rahul, there's more ahead and less behind, right now, in this particular transition in the Content business.

Sorry, just I would like to add some -- one more question to the same point, which is, on these -- I know you are tied up on the outlook, but just to understand the basic math. If you see this INR 500 crore revenue purely on an organic basis going to INR 900 crore, this would mean 12%, 13% kind of a CAGR. For this year, FY '24, I'm sure, eLearning would be driving it on a relative basis, given the run rate that we have. But beyond FY '24, you think this would become slightly more balanced with all 3 space contributing, give or take, to that number? Or you think eLearning, given the potential opportunity, would continue to clock much higher pace and will drive the overall growth momentum for the business organically?

Yes. I think to recap what our CFO said in his opening remarks, as the most positive indicators is that all lines of business are now growing. So earlier, we had this choppiness where we had one segment grow, the other declined, one was flat. I think the big change, like I said, is we finally have organic growth. And we have -- we finally have organic growth for each of our business segments and each of the lines of business within those business segments. So that's a big change. In terms of math, I won't question your math, Rahul, I think it's fairly straightforward. Goal is to get growth from INR 500 crores to INR 1,500 crores, 60% coming from inorganic, 40% coming from organic. Again, like I said, unable to give you tighter guidance. I am in a position to -- for the first time in many, many years, we are in a position to give that tighter guidance, but unfortunately, the regulations don't allow us to. So hopefully, later on in the year, we can provide tighter guidance and information. All I can say right now is we are optimistic about the future. We've set a conservative goal of INR 1,500 crores. We have a strong track record. Firstly, we don't give much guidance. And when we do give guidance, we tend to be conservative as you saw in our PAT guidance for FY '23, which we beat. So that's all I can -- that's all the intelligence I can provide at this stage, Rahul.

Right. Right. Just congratulations to the entire team for getting the growth back and also to the finance team to get back the margins we used to do earlier. And best wishes for your strong aspirational outlook, we wish you achieve it ahead of the schedule.

Thanks, Rahul.

We'll take the next question from the line of [ Vivek Gautam ] from [ GS Investments ].

Sir, congratulations for a good set of numbers. And I am a recent investee in your company. So don't mind, if you can just sort of -- there would be many more like me because the company seems to be in consolidation for a very long time and not much was happening, but what changed in the recent quarters that the visibility in the business has improved and is it sustainable?

Yes. Thank you for your question. And again, thank you for entering, maybe your luck is rubbing off on us. So do stick around. So from my perspective, I think like I was talking earlier, what has changed is we finally have organic growth. We've always been really good at acquiring distressed companies, spending 5 years to turn them around and then go into the next one. What was missing for us was organic growth. And it's basically been a fair bit a changing strategy. So a couple of years ago, the pandemic gave all of us, including the MPS management team, a lot of time to pause and reflect and think about how do we unlock growth in this business. So 2021, we internally introduced this growth strategy that we call Going Gestalt, which, at this point, we've only executed at a very small scale. So the first element of the strategy is, instead of trying to sell a platform or a content project or an eLearning project, we are approaching the market through a market-based approach. So we have a revised go-to-market strategy. So we are attacking key markets today, the scholarly and research community, the education community and finally the corporate learning marketplace. And what we do in this situation is, we position ourselves as an innovator and the people representing us are representing firm-wide capabilities rather than individual products and services. So that -- this has led to us unlocking synergies across all the IP and the acquisitions that we've created over the years. So a very, very strong leg of our growth strategy. The second piece of this has been also on a stronger emphasis on strategic customers. So we today have over 700 customers. For a INR 500 crore company, B2B in the learning and tech space, it is unparalleled. And what we've done so far is, we picked the top 10 from each -- from each business segments. So we picked the top 10 customers from Content, top 10 for Platforms, top 10 from eLearning and we've kind of made a focus on how do we grow these end customers. And as a result, we started to see that feedback. Of course, as we -- in the next phase, the goal will be to take these 30 STAR accounts and make them 100 as we scale now that we're confident that this strategy works. The third element has been our aggressive pursuit of new customers. So again, this includes customers in new markets, customers in existing markets. And each of the segments have a different strategy of how to unlock these type of customer base. So for example, as Tony was describing, on the scholarly side, it's a price warrior-ship, and product bundling approach. On the eLearning side, it's more positioning ourselves as an immersive technology partner, as Jums was describing. And on the education side, it's about -- we're looking beyond publishing into educational institutions, colleges, learning companies, Ed-Tech companies, as well as a stronger emphasis on digital learning. Then also, one of the things that we've been doing over the last few years has been a constant reinvestment in new capabilities. We had 3 launches last year. So we launched a peer review solution that Sukhwant was talking about. We launched Magineu. We launched Magplus now. Going ahead, we are launching 3 products as Tony described already. So there's a lot of focus on investments in new capabilities, both from a product perspective but also from an efficiency perspective. So embracing AI and ML to produce our work through MPS Labs. And finally, the updated acquisition playbook. We executed that on a very small scale with EI Design. So EI Design was not a very large company. It was our first bite of a healthy company. And we've seen the effects. We've seen margin expansion. We've seen revenue growth. We've seen customer diversity. So it allowed us to be more active in APAC, India, Middle East. So yes, I think what's giving us the confidence is we created a strategy coming out of the pandemic [indiscernible] -- if you think about it, it's a very simple -- there's nothing very complex there, it's a simple organic growth strategy. And it's really been about excellent execution. We've executed on a very small scale over the last couple of years. And now as we go towards FY '28, now that we're feeling confident as a management team that the strategy works, the focus is now how do we supercharge this strategy? How do we throw more gasoline on this momentum? So that's kind of the context on what's giving us so much confidence.

Very good reply, sir, and very detailed one, increases the confidence in the company. And sir, one thing we more wanted to know about this QIP plan, do you have an acquisition in mind? And last time it took a long time, it seems. And then what is the business visibility in Q1 FY '24? How is it happening? And by when this QIP plan or this acquisition might materialize, sir?

Yes. So like I said at the top of the call, we have basically got an enabling approval for a period of 12 months. We are looking at multiple targets right now. We have multiple conversations going on. The potential raise is up to INR 200 crores -- up to INR 250 crores. And we learned from our experiences, right, as a business, as a management team, we've gone through many experiences over this journey since 2012 since we bought MPS from Macmillan. And we are committed that we will only execute a raise like this if we can deploy the capital in a quarter, maximum 2 quarters. If we feel if we don't have very, very strong conviction around that, we will not execute on this raise. So again, enabling approval for a period of 2 months, raising up to INR 250 crores, it's very -- it's impossible for us to give you an exact amount of the fundraise. It's impossible for us to give you the timing. Just the regulations are very restrictive. So I humbly would request that, be patient, 12 months is not a long period of time. So once things happen, we will definitely be the first to make an official announcement when we can.

And congratulations here that EI Design, the last acquisition, was really EPS-accretive from day 1 and let's hope more such acquisition will happen and help us in the long term. Keep up the good work, sir.

Thank you.

We'll take the next question from the line of [ Guneet Singh ] from [ CCIPL ].

So as a layman, I just want to understand the kind of product offerings that we have. So our verticals of Content and eLearning, which Content basically is providing Content Solutions and creating content for our customers. So I mean, what kind of content would we be offering to educational institutes like Stanford or other universities when -- I mean, they are the one who drives -- who should be driving content in the first place? So I mean, what kind of products do we offer in the content space to them? And also, how is our eLearning offering -- I mean, what does that eLearning offering entail? And how is it different from creating content for our partners? So I mean, as a layman, I just want to understand the business a bit more.

Sure. So we don't have much time left, so I'll go ahead and quickly answer the complete question. So our customers are -- so just to start with who is our customer. Our customers are scholarly and research customers, people in that community, people in the education community and people in the corporate learning space. So that's our customers. In terms of our segments, we have 3 segments. We have Content, Platform and eLearning. On the Content side, we are possibly the most comprehensive player in terms of capabilities. So we offer everything from content creation to delivery across all media. So within this, we provide content offering, development, learning design, where content has to be sourced, we also provide rights information solutions, we also provide media asset development and creative studio services. All of this production and the content that we do enable for our customers is powered by digital workflows and where a customer has been slow in their digital journey, we also enable a digital transformation. Content is -- the majority of -- content creation is the majority of our business, and our value proposition here is that we enable speed and efficiency for our customers and also we help them create products that are differentiated in their marketplace. On the Platform side, we again have -- we're, again, the only provider that has a complete range of configurable solutions. So we have -- we offer these solutions as Platform-as-a-Service across the entire content life cycle. We were the first to market, and we are leader in the space, we innovate in the space. And we have products in the submission peer review and workflow, say, we have products in the hosting and identity management space. We have products in insights and analytics. And finally, we also have Software-as-a- Service product and customer service and order management. Here, our positioning is slightly different from Content. We are positioned as innovators and thought leaders. And again, this business has now entered a growth trajectory. On the eLearning side, we work with organizations to deliver high-impact learning and performance support solutions, making sure that they deliver a high ROI for the learner and the organization. So within this, we offer learning and development, advisory and consulting. We do custom e-learning, we do more experiential and immersive things like simulation, games. We also help with training delivery, operate in new technologies like AR, VR and XR. And again, we have -- do have learning technology platform that we license and host to our customers. The value proposition here is that we tend to offer more experiential and transformative type of e-learning rather than plain dry e-learning. So that's kind of a summary of who we are as an organization and as I said, our customers are from the research, education and corporate industry.