Allied Digital Services Limited — Q3 FY26

Allied Digital Services Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=CFicuutJRWk Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Alli Digital Services Limited's Q3 FY26 earnings conference call. 0:11 11 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:20 20 seconds Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the 0:27 27 seconds conference over to Mr. Mayangaswani from CDR India. Thank you and over to you Mr. Vaswani. 0:37 37 seconds Thank you Rio. Good afternoon and thank you for joining us on Alli Digital Services Limited's earnings call for the third quarter of financial year 202526. 0:48 48 seconds We have with [clears throat] us on the call today Mr. Nitan Sha founder and CMD. Mr. Ramanandan Ramman global head 0:56 56 seconds of strategy for growth innovation and partnerships Mr. Nihal Sha wholetime director Mr. Paris Sha global chief 1:05 1 minute, 5 seconds executive officer and Mr. Gopal Tari chief financial officer we will begin with comments from Mr. 1:12 1 minute, 12 seconds Nihal Sha who will cover recent developments across the business Mr. 1:16 1 minute, 16 seconds Paris Sha will then discuss the operational performance and order wins followed by Mr. Gopal Tari who will walk us through the financial highlights. 1:24 1 minute, 24 seconds Thereafter, we will open the call for the Q&A session. 1:29 1 minute, 29 seconds Before we begin, I would like to point out that some of the statements made in today's call may be forward-looking in nature and a disclaimer to this effect 1:36 1 minute, 36 seconds has been included in the earnings documents that have been shared with all of you earlier. I would now like to hand over the call to Mr. Nihal Sha for his opening remarks. Over to you Nhal. 1:48 1 minute, 48 seconds Thank you ma'am. Good afternoon everyone and thank you for joining us today. I trust you have had the opportunity to review the earnings materials that we shared earlier. 1:56 1 minute, 56 seconds The third quarter of FI26 unfolded against a complex and evolving global operating environment. 2:04 2 minutes, 4 seconds Though though geoph though geopolitical uncertainties remain high, we saw gradual stabilization enterprise segments across key markets. This has 2:13 2 minutes, 13 seconds led to improved visibility in technology spending decisions with continued emphasis on value efficiency and execution certaintity. 2:21 2 minutes, 21 seconds Against this backdrop, we are pleased to report a resilient and well balanced performance in quarter 3 FI26 driven by disciplined execution, steady order flows and sustained engagement across both domestic and international markets. 2:32 2 minutes, 32 seconds We have reported consolidated revenues of rupees 4 477 447 cr in quarter 3 fi26 higher by 12% on a year-on-year basis. 2:43 2 minutes, 43 seconds IATA has increased by 11% year-over-year to rupees 26 cr and PBT has increased by 13% yearonear to rupees 22 cr. As a 2:52 2 minutes, 52 seconds master system integrator operating at the intersection of IT communication and security infrastructure, we are seeing customers increasingly prioritizing 3:00 3 minutes integrated outcomedriven solutions over fragmented deployments. This structure shift continues to play to our core strengths. 3:08 3 minutes, 8 seconds From a geographic standpoint, our international operations continue to demonstrate improving momentum as the rest of the world operations reported a year-on-year growth of about 26% in quarter 3 FY26. 3:19 3 minutes, 19 seconds In the US, enterprise clients are moving from prolonged evaluation cycles to more decisive and activity particularly in areas such as network modernization, 3:27 3 minutes, 27 seconds digital workplace, cyber security, manage services. While budget sim under scrutiny, there is greater willingness to commit to multi-year transformation programs where there is clear ROI and 3:35 3 minutes, 35 seconds delivery confidence. Europe remains selective but stable with clients focusing on vendor consolidation, operational resilience while the Middle 3:43 3 minutes, 43 seconds East continues to offer opportunities driven by infrastructure, digital transformation, governmentbacked investments. [clears throat] India operations regroup has reported a 3:52 3 minutes, 52 seconds decline to schedule revenues by 5% year-on-year in quarter 3 FI26 as there were no significant project milestones during which which were to be achieved 4:00 4 minutes during quarter 3. Activity remains strong and the next quarter we will see renewed billing as project milestones are completed. The domestic market 4:08 4 minutes, 8 seconds continues to benefit from benefit from the structural tailwinds and sustain government spendings on digital public infrastructure. 4:15 4 minutes, 15 seconds From a broader perspective, recent policy developments provide a supportive backdrop as you look ahead. The union budgets have reiterated the government's 4:23 4 minutes, 23 seconds continued emphasis on strengthening India's digital infrastructure. 4:26 4 minutes, 26 seconds Incentivization of key areas such as data centers, artificial intelligence and data security has emerged as a central theme of this year. This 4:33 4 minutes, 33 seconds priority is aligned closely with our business model and reinforce the long-term reence, relevance and growth potential of offerings. 4:42 4 minutes, 42 seconds Enterprise customers in India are also showing increasing maturity in their technology adoption with a sharper focus on scalable architecture, cyber security 4:51 4 minutes, 51 seconds managed solutions rather than standalone capex deployments. This has resulted in a steady flow of opportunity across both government and non-government segments. 5:00 5 minutes From a segment perspective, our services business grew 16% year-on-year while solutions revenue remained flat. Segment 5:08 5 minutes, 8 seconds wise, both our service and solutions business continue to contribute in a complimentary manner. As we have highlighted in the past, solutions often 5:15 5 minutes, 15 seconds act as an entry point enabling deeper nutled service engagements over time. 5:20 5 minutes, 20 seconds This integrated model not only enhances revenue visibility but also improves customer stickiness and margin sustainability across cycles. 5:28 5 minutes, 28 seconds Reflecting that renewed enterprise sentiments, revenue from non-government customers increased 13% year-on-year outpost outpacing growth on the 5:37 5 minutes, 37 seconds government segments which reported 12% year-on-year growth. This shift highlights a strengthening engagement investment appetite among the enterprise 5:44 5 minutes, 44 seconds clients as we revive their digital transformation plans. 5:48 5 minutes, 48 seconds Order flows during the quarter remain healthy with over 250 cr support supported by a mix of new wins, renewals and follow on orders from existing customers. 5:56 5 minutes, 56 seconds Importantly, we see an improvement in the quality of the pipeline with larger larger deal sizes, longer tenurs, and 6:04 6 minutes, 4 seconds broader scopes that span multiple technologies and service layers. 6:09 6 minutes, 9 seconds While we remain disciplined on margin thresholds, we continue to evaluate strategically important opportunities where scale, long-term energy potential or account expansion can create superior value over the life of the contract. 6:20 6 minutes, 20 seconds From a customer behavior standpoint, one of the defining trends this quarter has been heightened heightened scrutiny on pricing and contracting structures. Even 6:29 6 minutes, 29 seconds as deal activity improves, customers are increasingly seeking outcome link commercial models, tighter SLAs, and faster implementation timelines. 6:38 6 minutes, 38 seconds Our cycles remain competitive with sharper negotiations, but there is also clear preference for partners who can assume end-to-end responsibility from 6:46 6 minutes, 46 seconds design integration to long-term operation and support. Our track record, domain expertise and ability to deliver at scale continue to differentiate us meaningfully in this environment. 6:56 6 minutes, 56 seconds The the other exciting development this week is the announcement of framework for US India trade agreement. This improves the this removes the over 7:05 7 minutes, 5 seconds overhang for last few months and will draw out a clear path towards incentivizing greater economic cooperation between the two countries 7:13 7 minutes, 13 seconds with our established presence in the US and integrated execution capabilities across cloud sec cloud cyber security and managed services. We believe this 7:21 7 minutes, 21 seconds developments reinforce a long-term opportunity set for digital overall by the overall while the external environment remains dynamic. We 7:30 7 minutes, 30 seconds believe the worst of the de worst of the demand uncertain is behind us. The gradual recovery discretionary spending 7:38 7 minutes, 38 seconds combined with sustained public sector investments and increasing convergence of technology domains position as well 7:46 7 minutes, 46 seconds as we move into final quarter of the financial year. Our focus remains strongly on exe execution excellent 7:53 7 minutes, 53 seconds student capital allocation and building a robust diversified order book that supports sustainable growth. With that I will now invite Paris Sha a global CEO 8:02 8 minutes, 2 seconds to take through the order book strategic initiatives and outlook in greater detail. Over to you Parish. 8:08 8 minutes, 8 seconds Thank you NAL. [clears throat] Good day everyone and thank you for joining us. The quarter reflects yet 8:15 8 minutes, 15 seconds another consistent execution across our global operations with a clear emphasis on delivery scalability and client 8:23 8 minutes, 23 seconds outcomes. We continue to strengthen our delivery engine, improve operational efficiency, and deepen engagement with strategic customers across markets. 8:34 8 minutes, 34 seconds During the quarter, we secured several meaningful order wins and renewals across both international and domestic 8:40 8 minutes, 40 seconds markets. These wins span multiple industry verticals and service lines, including datadriven platforms, AIled 8:48 8 minutes, 48 seconds solutions, infrastructure transformation, and managed services. 8:53 8 minutes, 53 seconds Importantly, the nature of these engagements reinforces our ability to deliver complex large-scale programs 9:01 9 minutes, 1 second while building long-term recurring relationships. 9:06 9 minutes, 6 seconds Alongside new wins, we also saw continued traction in multi-year renewals across existing clients, 9:12 9 minutes, 12 seconds spanning multiple industries, supporting revenue visibility and reinforcing confidence in our execution capabilities. Across these engagements, 9:22 9 minutes, 22 seconds our fiscal our focus remains firmly on discipline delivery, timely execution and value creation for our customers. To 9:30 9 minutes, 30 seconds briefly highlight some of the wins during the quarter in India, we secured an engagement with the leading private sector general insurance company where 9:37 9 minutes, 37 seconds we will support its nationwide retail and corporate insurance operations enabling reliable and scalable IT services across multiple insurance 9:46 9 minutes, 46 seconds lines. We were also awarded a project by a state level healthcare and medical education facility o overseeing a large 9:53 9 minutes, 53 seconds network of medical, dental and nursing instit institution. As part of this engagement, we will deploy agentic AI 10:00 10 minutes based WhatsApp chatbot solution to enhance operational efficiency and improve communication and service delivery for citizens, students and 10:09 10 minutes, 9 seconds stakeholders in the automo part sector and manufacturing sector. A 10:16 10 minutes, 16 seconds globally enterprise of a global enterprise operating across the energy value chain selected Alli digital to implement AI and machine 10:25 10 minutes, 25 seconds learning based intelligent video analytic solution aimed at improving a production efficiency and strengthening 10:32 10 minutes, 32 seconds operational performance across its manufacturing operations in the US. A leading brokerage alcohol 10:39 10 minutes, 39 seconds company appointed Alli Digital to provide end-to-end support user support services across its offices, manufacturing facilities and warehouses, 10:47 10 minutes, 47 seconds ensuring consistent IT support across the distributed footprint. 10:52 10 minutes, 52 seconds We also secured a mandate from a US headquartered global agriculture processing and food ingredients company to deliver their site support services 10:59 10 minutes, 59 seconds along with technology wherein initiatives supporting end-to-end IT life cycle management across its 11:06 11 minutes, 6 seconds operations. Additionally, a Midwest US retail chain selected Alli Digital to end to end IT infrastructure 11:14 11 minutes, 14 seconds transformation and ongoing support. As part of this engagement, we will operate a 24 by7 global service desk in both 11:22 11 minutes, 22 seconds English and Spanish, supporting employees and contractors across North America. Overall, these wins reflect the 11:29 11 minutes, 29 seconds increasing reliance on Alli Digital as its trusted execution partner for missionritical IT environments supported 11:37 11 minutes, 37 seconds by our global delivery model and integrated service offerings. With that I will now hand over to our CFO Mr. 11:46 11 minutes, 46 seconds Gopal Tiwari who will take you through the financial performance of the quarter. 11:52 11 minutes, 52 seconds Thank you Pesh and good afternoon everyone. I'll take you through the financial performance for the third quarter of FI26 and highlight some of the underlying dynamics shaping our 12:00 12 minutes results this quarter particularly in comparison to the trends we witnessed in the earlier part of the year. We are pleased to report continued strong 12:08 12 minutes, 8 seconds momentum in our business as reflected in robust doubledigit growth in topline performance. Revenues for Q3 FI26 stood 12:16 12 minutes, 16 seconds at rupes 247 crores representing a yearon-year growth of 12%. This also marks the highest ever quarterly revenue 12:24 12 minutes, 24 seconds in our history and we are just about 3 crores short of hitting our target set target of rupes 250 cr in quarterly 12:33 12 minutes, 33 seconds revenues and that too a quarter ahead of our estimate on a ytd basis revenue were rupees 700 cr compared to rups 63 crores 12:42 12 minutes, 42 seconds for the 9 months period of fi25 this represents the in an increase of 16% yi and clearly demonstrates the solid 12:49 12 minutes, 49 seconds progress we are speaking and our team remains fully aligned towards achieving the milestone of,000 cr in annualized 12:56 12 minutes, 56 seconds revenue. In Q3 FI26, a bit grew by 4% year-on-year basis to rupees 26 cr. As 13:03 13 minutes, 3 seconds our topline continued to expand, we are seeing a parallel increase in profitability as we reported an improved margin in Q3 over Q2. However, the 13:12 13 minutes, 12 seconds environment remains challenging with a few factors continuing to weigh on margin. 13:18 13 minutes, 18 seconds PBT before excessive items for the quarter improved by 13% year-on-year basis to rupees 23 cr from rupees 20 20 13:25 13 minutes, 25 seconds cr in Q3 last year once again reflecting the upward trajectory in our financial performance. We are pleased to note that 13:32 13 minutes, 32 seconds no material provisions were required in relation to the new level codes during the quarter. Our salary structures which were designed to be employee friendly 13:40 13 minutes, 40 seconds while remaining fully compliant with applicable regulatory requirements are well aligned with the new framework. 13:46 13 minutes, 46 seconds Consequently, the company has recognized a provision of only rupees 1 cr3 lakhs toward certain limited one-time 13:53 13 minutes, 53 seconds adjustments arising from the implementation of the new labor codes with the with the sorry given the non-recording nature of this adjustments 14:01 14 minutes, 1 second and in line with this reporting and governance practices the provision has been presented as an exceptional item. 14:08 14 minutes, 8 seconds While the amount could have been absorbed within employee expenses, we believe this classification provides greater transparency and clarity to stakeholders. During the quarter, we 14:16 14 minutes, 16 seconds have made a provision of 4.8 cr pertaining to prior year taxation. This has served to increase the tax expense for the quarter. We have reported profit 14:25 14 minutes, 25 seconds after tax of rupes 14 cr in py fi26. If you adjust for this tax pertaining to the prior year of 4.8 8 cr and the 14:32 14 minutes, 32 seconds exceptional item of 1 cr to three lakhs 30 lakhs due to their one-time nature the adjusted pad would have been about 14:40 14 minutes, 40 seconds rupees 20 cr which is reflective of the improved scale and progress of our operations in summary Q3 FI26 showcases that we 14:49 14 minutes, 49 seconds continue to build scale and maintain financial discipline in challenging crashing environment with a healthy order book and improving visibility 14:57 14 minutes, 57 seconds improving visibility on execution we remain confident in our ability to deliver sustainable and profitable growth over the coming quarters. With 15:05 15 minutes, 5 seconds that, I'll now hand over the call back to the moderator for question and assist. Thank you. 15:11 15 minutes, 11 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchstone 15:19 15 minutes, 19 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking 15:27 15 minutes, 27 seconds questions. Ladies and gentlemen, we will wait for a moment while the question Q assembles to ask questions. Please press star and one. 15:38 15 minutes, 38 seconds The first question is from Kunal Bajaj from Choice Institutional Equities. Please go ahead. 15:44 15 minutes, 44 seconds Yeah. Hi, good afternoon. Thank you for the opportunity. So mostly I had two broad questions. Firstly, when we see 15:51 15 minutes, 51 seconds the order book of around 250 K. So when we try to split it up, it is mostly from 15:58 15 minutes, 58 seconds the enterprise side. We don't see any major order wins uh from the government spending side. So how do we see this uh 16:07 16 minutes, 7 seconds going forward? And this is uh mostly are we seeing the fact that the government are bit cautious on spending on uh smart 16:16 16 minutes, 16 seconds cities or is it that that they are delaying uh their expenditure? Any any particular reason for that? So that is 16:23 16 minutes, 23 seconds one and the second uh is around uh the solutions and services mix. Obviously we know that solutions is the first leg of 16:31 16 minutes, 31 seconds the contract we generally get and that is why we see the services revenue is mostly uh growing a bit better as 16:39 16 minutes, 39 seconds compared to solutions because we we see that most of the deals we had is have moved on from the solutions end to the 16:47 16 minutes, 47 seconds services end. So what we see uh how do we see the mix going forward or the next two three quarters? Yeah that are the most uh broad brought two questions I have. Thank you. 17:00 17 minutes Uh thanks uh Kunal for the questions. I think u the government orders are typically are large orders and they take 17:07 17 minutes, 7 seconds time once we have the whole bid process going on. While we're talking uh you are aware that Maharashtra underwent 17:14 17 minutes, 14 seconds elections or different municipal elections and stuff and lot of this uh uh orders that that were in the pipeline 17:21 17 minutes, 21 seconds were delayed for that reason for the last quarter but we are seeing a lot of movement happening uh biddings bidding going going to the next stage of 17:28 17 minutes, 28 seconds financial uh openings and stuff. So we see a lot of progress happening there and the next two months are going to be crucial because while we are talking there are a lot of bids that we have 17:36 17 minutes, 36 seconds submitted and waiting for the bids to open up. Typically in the uh in the rest of India also the case is that wherever 17:44 17 minutes, 44 seconds there is a pipeline which is available and where we are bidding the uh uh the evaluation of those projects 17:51 17 minutes, 51 seconds are on and we are expecting there also some movement to happen but our focus typically for the current quarter and the next quarter is going to be for the 17:59 17 minutes, 59 seconds western railways metros and uh Maharashtra as a state. So we see a very healthy pipeline turning in there and we'll see some kind of announcements 18:06 18 minutes, 6 seconds coming in of order wins if we win uh some of them in the next two months. 18:12 18 minutes, 12 seconds And regarding uh sufficient services split uh the mix is always going to be there. uh uh we would eventually want our services revenue always to be higher 18:21 18 minutes, 21 seconds because that gives a lot a lot of uh stability uh with terms of revenue recognition but solutions gives us that X sector mix where where it also helps 18:29 18 minutes, 29 seconds us uh in uh in getting the top line with also making sure we are working on large projects and then eventually converting 18:36 18 minutes, 36 seconds into services business. So that makes us good to be there. This quarter was a little bit slow because even the project that we are implementing the current project which is being implemented Pune 18:44 18 minutes, 44 seconds also saw some delays with request to the implementation due to the ongoing elections. So permissions for deployments were a bit delayed uh and 18:52 18 minutes, 52 seconds and that's why there was a little slowness for this quarter. However, as you are aware elections are once in five year thing uh and uh uh it's it's not a 19:01 19 minutes, 1 second thing that happens every quarter or every every year. So this was very seasonal one time. Uh you'll see a lot of movements happening. Why we talking? 19:07 19 minutes, 7 seconds I mean there's a lot of progress that is happening on the ground after the elections were done and and and things were moving ahead. So we see a lot of milestones for for Pune project also 19:15 19 minutes, 15 seconds getting um uh closed by by March 30 31st. 19:22 19 minutes, 22 seconds Sure. Got it. So mostly uh yes yes so mostly uh as in we see the majority of the uptick which we see in 19:31 19 minutes, 31 seconds terms of margins. So is it safe to say that this is because of uh the higher exposure of the services mix and it is a 19:39 19 minutes, 39 seconds one-time thing going forward when we have some traction in the solutions business as in solutions part of the business uh the mix might uh cool off. 19:48 19 minutes, 48 seconds Is it safe to say that? 19:50 19 minutes, 50 seconds Oh yeah absolutely. So once once we have this solution business coming in uh we will have that uh mix getting cooled off 19:58 19 minutes, 58 seconds and as you are also aware that we had uh one order about uh two quarters back uh sorry a quarter back uh of the largest 20:06 20 minutes, 6 seconds farmer company in the uh in Europe even that has started getting us revenue being getting recognized. So you see that kind of a jump coming in from the 20:14 20 minutes, 14 seconds services side as well. So that is also helping us uh making sure that you know services revenue keeps on increasing. Sure. 20:23 20 minutes, 23 seconds Sure. 20:24 20 minutes, 24 seconds Uh services revenue will always be higher because solution revenue will be uh only for the year where we deploy 20:33 20 minutes, 33 seconds solution and that terminates into services revenue. So our that pipeline is always going to be very high when it comes to services business. 20:45 20 minutes, 45 seconds Typically it's a multi-year contract that we sign up and solution business is just one year. 20:55 20 minutes, 55 seconds Sure that's helpful. Uh wanted to uh check on the fact that we obviously have given a outlook on the quarterly run 21:02 21 minutes, 2 seconds rate of around 250 KS. So mostly we are there as comp as we see this quarter we are almost 247 KES. So going forward we 21:11 21 minutes, 11 seconds see this uh growth rate to sustain and mostly on the margins front as well. Is there any outlook uh we see going forward on that front? 21:21 21 minutes, 21 seconds If you don't I'll answer that question here. Go ahead. 21:27 21 minutes, 27 seconds Yeah. So you know o overall our our strategy is uh uh is bearing fruit and 21:34 21 minutes, 34 seconds dividends as as we have stated in the earlier uh calls also. Um there is a 21:41 21 minutes, 41 seconds tremendous focus now on AI enabled infrastructure services, smart cities uh 21:48 21 minutes, 48 seconds as well as technology management. There is also a growing need for agentic AI solutions. Uh whether it is in edge AI 21:57 21 minutes, 57 seconds or whether it is in application development or whether it is in the infrastructure management and also uh the Indian government has 22:06 22 minutes, 6 seconds now through all the FDAs and through the renewed focus on India AI mission uh 22:13 22 minutes, 13 seconds GCC's and AI data centers being encouraged to be established in India. 22:20 22 minutes, 20 seconds uh we are in a sweet spot in terms of being in the right area in the right technologies and in the right service 22:27 22 minutes, 27 seconds capabilities. So all of these are going to play an important role in the growth of ADSL going forward. Uh we are 22:37 22 minutes, 37 seconds increasingly getting services businesses from the enterprise sector. uh we are also getting it from the international market and the growing importance of 22:46 22 minutes, 46 seconds cyber security is again another area of our focus for the last several years and now we are seeing increasing demand in 22:54 22 minutes, 54 seconds these services. So with this uh uh you know business trends and technology trends uh accelerating in the 23:02 23 minutes, 2 seconds marketplace uh ADSL is uh well positioned to leverage and capitalize on 23:09 23 minutes, 9 seconds uh the demand from the market and be able to therefore uh grow in a uh in a 23:17 23 minutes, 17 seconds significant manner over the next couple of years. Sure. 23:29 23 minutes, 29 seconds Thank you. And one more last question from my side please if you may. Uh we I 23:36 23 minutes, 36 seconds uh over the press release we see that you you have mentioned about data centers. So what exactly are we doing in the data center space? 23:46 23 minutes, 46 seconds So the opportunities in data center are multiple. 23:50 23 minutes, 50 seconds uh and while I'll also have uh uh Rohan and uh and Mr. Nithsha respond but the 23:58 23 minutes, 58 seconds data center there are there are three areas that is happening one is uh there is a growth of data centers in India itself there's going to be sovereign 24:06 24 minutes, 6 seconds data centers being set up and therefore data centers will have to be implemented they'll have to be managed and also the cyber security related elements for 24:14 24 minutes, 14 seconds these data centers will have to uh have managed services associated with it is that there is more and more intelligent 24:23 24 minutes, 23 seconds infrastructure being implemented And these are edge AI uh applications 24:30 24 minutes, 30 seconds uh or agentic AI applications that will need to be harnessed in order to manage the infrastructure intelligently and 24:37 24 minutes, 37 seconds give uh and bring automation in in the management of these uh whether it is servers, networks, uh end devices and so 24:45 24 minutes, 45 seconds on. And the third uh aspect is uh of course uh on top of this there will be a number of AI based services that will 24:54 24 minutes, 54 seconds that will come out and that is the opportunity that we are also looking at. 24:59 24 minutes, 59 seconds Um Mr. Natisha if you want to add anything more to this. 25:02 25 minutes, 2 seconds Yeah we had been uh building data center for almost last 30 years for several corporates we have built. So we have got 25:11 25 minutes, 11 seconds uh complete uh capability of designing, architecting, building data center and that's what our switch is. So there is 25:19 25 minutes, 19 seconds there are data centers which which are owned by somebody else large players and they they give uh provisions of uh 25:28 25 minutes, 28 seconds infrastructure to the clients. So we don't do that job but we rather uh operate also on their behalf. So build 25:36 25 minutes, 36 seconds on operate and transfer. So we are into the build of data centers uh operate of data operation of data centers and 25:44 25 minutes, 44 seconds manage data centers that's how our job is. We are not going to be typically compete with the large data centers like 25:52 25 minutes, 52 seconds uh Azani and Amani and all. So Kunal I hope you got the point. 26:01 26 minutes, 1 second Typically our expertise lies in architecting designing and implementing a data center. We've done that for about 15 cities across India. uh and our core 26:08 26 minutes, 8 seconds competence lies in implementing uh data center rather than owning the reality space and making a data center and giving hosting service to our clients. 26:18 26 minutes, 18 seconds Yeah, definitely. So, we do have any uh projects which we are in pipeline for for this space. 26:26 26 minutes, 26 seconds Yes, there are a lot of projects any government or smart city safe city project or any railways project or anything of that sort that we take up are all having data center by default. 26:37 26 minutes, 37 seconds uh inbuilt in in in those RFPs. So there are a lot of government projects that are there which which are there where uh 26:44 26 minutes, 44 seconds data centers need to be built up. Apart from that there are a lot of enterprise customers who have requests either to manage their existing data centers or 26:51 26 minutes, 51 seconds help them in migration of their on-pre data centers to cloud data centers. So, so this kind of requirements keep on uh coming in and and this is our core 27:00 27 minutes competence uh of of I very briefly there are two games one is game of skill the other one is game of 27:07 27 minutes, 7 seconds money so we rather would like to remain uh to play game of skill which is what where we are game of money we are not in 27:16 27 minutes, 16 seconds that that is just on real estate and on data centers but there are I mean lot of 27:23 27 minutes, 23 seconds things that has got to be done after you build the data center in terms of migration, digital transformations. So all that we do for a client. 27:32 27 minutes, 32 seconds So and uh just to add you must be aware of the recent budget policy on cloud services tax holiday. So that's a big 27:39 27 minutes, 39 seconds announcement. We having an international entity uh can bring in the US customers cloud services and manage that out of 27:48 27 minutes, 48 seconds the India based data centers especially GCC's and lot of customers are moving into that. It gives a great opportunity 27:56 27 minutes, 56 seconds for us to deliver managed services through these new data centers. 28:03 28 minutes, 3 seconds Sure. Perfect. Thank you. That helps. All the best. Thank you. Thank you. 28:11 28 minutes, 11 seconds Before we take the next question, a reminder to participants that you may press star and one to join the question queue. 28:19 28 minutes, 19 seconds The next question is from Joti Singh from Ahan Capital Markets. Please go ahead. Yeah, thank you for the opportunity sir. 28:28 28 minutes, 28 seconds So just uh followup uh question from earlier participant uh on the uh you explaining about the data center for the 28:37 28 minutes, 37 seconds smart uh city thing. So but not similar on that but on the smart world city side 28:44 28 minutes, 44 seconds u one big player uh in the IT those who are invested in the smart uh city but 28:51 28 minutes, 51 seconds they're not seeing the kind of margin uh we make in other segment it is a very 28:59 28 minutes, 59 seconds lower margin in these smart city thing so what kind of margin we make in this 29:05 29 minutes, 5 seconds business I I I wanted to understand sir So, so Ji the margins typically whenever 29:14 29 minutes, 14 seconds you are in an implementation phase since there are a lot of products being uh deployed across the safety smart city the margins are pretty pretty lowered 29:22 29 minutes, 22 seconds but when you are in the implementation and the wear phase that's when the margins shoot up so that's why what we call in our parlor a services revenue so 29:30 29 minutes, 30 seconds once you move out from a from a solution space to a services revenue your margins uh keep on improving so yes if somebody 29:37 29 minutes, 37 seconds is A player who is only doing the hardware business, they will have single low digit margins. But a solution provider like ours who who does end to 29:45 29 minutes, 45 seconds end from building uh a smart city to managing it for a period of five years will have improved uh margins overall uh 29:54 29 minutes, 54 seconds to the in the tune of double digits uh uh u upwards of 20% uh overall when we 30:01 30 minutes, 1 second when we complete uh and I'm talking about gross margin when you complete the whole project. 30:08 30 minutes, 8 seconds Okay. And uh another uh Yeah. Yeah. Yes sir. And another on the uh revenue side in 9 months we have given around 700 K. 30:19 30 minutes, 19 seconds So what kind of growth and uh should we expect going forward in FI27 um it will be low teens or mid teens kind of. 30:30 30 minutes, 30 seconds So yeah we are looking at mid- teens to be a little conservative. 30:36 30 minutes, 36 seconds Okay. And this is largely driven by any any project if you can talk about that we are expecting going forward and also 30:43 30 minutes, 43 seconds earlier you've mentioned only government project side. So what kind of uh improvement we are seeing because now DSO has improved to 75 days. So are we 30:53 30 minutes, 53 seconds seeing this will going to sustain on the uh government and large enterprise exposure as it is been increasing or what what your thought sense? 31:06 31 minutes, 6 seconds No. So DSO and other things from a delivery perspective we don't see a challenge. Uh they are pretty decent. 31:12 31 minutes, 12 seconds There are sometimes certain delays that keep on happening but that is very seasonal and transactional. Um which are which are manageable. we are not seeing 31:19 31 minutes, 19 seconds any kind of uh uneasiness in getting our monies uh from from the government. Uh with respect to uh future projects, I 31:27 31 minutes, 27 seconds think uh the mid teams will will be a conservative growth target that I would want to give out. Uh the reason is beyond the macroeconomic conditions that 31:36 31 minutes, 36 seconds we also have to keep in mind. But having said that the pipeline looks strong. Our strategy of acquiring new customer uh 31:43 31 minutes, 43 seconds looks bang on because there is lot of uh strong pipeline with respect the government orders enterprise customers and global customers as well. It's all 31:51 31 minutes, 51 seconds depending upon the closure and for us at the size that we are if one large contract comes in our growth numbers 31:59 31 minutes, 59 seconds could change from mid- teens to uh mid mid20s you know it's a question of hitting out on large contracts and the 32:06 32 minutes, 6 seconds pipeline I I am assuming in the next two or three quarters we'll see better better uh and larger orders bins uh 32:13 32 minutes, 13 seconds coming in great great sir as now we are getting lot of buzz around AI So I'm going to 32:22 32 minutes, 22 seconds ask some question on that front. So what percentage of 26 revenue are AI influence for us versus AI native and 32:30 32 minutes, 30 seconds how is monetization structured in each cases? So you can explain and are AIE deals margin accative from day one and 32:39 32 minutes, 39 seconds or do they dilute margin initially before scaling. So just wanted to understand your perspective and uh which 32:46 32 minutes, 46 seconds are the segment that we are implementing AI for us. 32:52 32 minutes, 52 seconds Yeah, great question. Uh let me just update you. You know we have adopted AI first strategy. So every services of our 33:00 33 minutes organization will be you know embracing AI and delivering a part of that solution or service as AI enabled. Uh as 33:09 33 minutes, 9 seconds you know we have also developed our agentic AI platform. We are also working on several agent API platforms, 33:16 33 minutes, 16 seconds commercial platforms like Microsoft uh copilot and Google geminy. Uh we already had couple of uh deployments already 33:25 33 minutes, 25 seconds running today with our customers as well as an internal operations. Uh today our knock you know drives AI ops as part of 33:33 33 minutes, 33 seconds building complex solutions and resolving critical issues using our own AI engine. 33:40 33 minutes, 40 seconds So we see tremendous traction in terms of usage of AI uh over time and if I look at it definitely there will be more 33:48 33 minutes, 48 seconds and more percentage of AI getting significantly uh contributing uh in the coming uh months that's what I see I 33:56 33 minutes, 56 seconds cannot exactly give you any percentage but it has become now ingrained into every services so definitely there will 34:03 34 minutes, 3 seconds be a portion of AI and today we have one few deals this quarter also uh you can you know I already talked about it at 34:11 34 minutes, 11 seconds least three deals of them are already leveraging AI and to some or the other extent. So this is what we see that you 34:18 34 minutes, 18 seconds know the AI traction is real. Uh obviously their benefits to the customers is be slowly seen right now 34:26 34 minutes, 26 seconds lot of customers are taking this as proof of concepts but solidifying the use and you know there will be a stage 34:33 34 minutes, 33 seconds where they will see that yes it has also impacted the ROI today. Okay. So once that is uh true we see that you know at 34:42 34 minutes, 42 seconds every kind of sale or every new customer going forward uh definitely there will be use of AI and this will be a 34:50 34 minutes, 50 seconds contributor big factor for us in the revenues and what AI does is basically today you know saves uh employee 34:58 34 minutes, 58 seconds productivity especially uh automation okay you know AI generates an automation opportunity and this is where we are 35:06 35 minutes, 6 seconds moving fast to see how we can kind of give value to the customer as well as you know improve our profit margins. 35:15 35 minutes, 15 seconds Great. Great. 35:16 35 minutes, 16 seconds AI is so much integrated to our existing business. uh it's uh very difficult to 35:22 35 minutes, 22 seconds give a kind of a numbers how much did we get on AI because it is u it is completely integrated with our solutions 35:32 35 minutes, 32 seconds but we try to put AI almost in almost all the solution that we provide and our company is completely ready to face any challenge on AI. 35:44 35 minutes, 44 seconds Okay, great. So, thank you. One last question. Yeah. Uh, how does the net new client contribution in FI26 compared 35:53 35 minutes, 53 seconds with 25 in term of revenue depth and contract duration? If you can uh explain on that side. 36:03 36 minutes, 3 seconds So, so revenue from last year to this year net new revenue has grown gone up. 36:09 36 minutes, 9 seconds You would have seen our order releases that we did. We've announced 1,000 cr worth of just two wins that we had this year. So typically when we go in the in 36:18 36 minutes, 18 seconds the in the coming 2026 2027 we see a lot of this billing happening. So net new order bins are going up. Uh and we are 36:27 36 minutes, 27 seconds we are progressing towards uh renewals as well. So renewals are happening. Uh we have about 90% plus renewals that we 36:34 36 minutes, 34 seconds have been able to do and net new business also gone up. So I don't see that as a challenge and this will continue to make sure that the momentum 36:41 36 minutes, 41 seconds is high and which is also reflecting in our revenues. Our revenues have also grown considerably if you just go two years back what we are at today. 36:51 36 minutes, 51 seconds Okay, thank you so much. 36:54 36 minutes, 54 seconds Thank you. Before we take the next question, a reminder to participants that you may press star and one to ask 37:01 37 minutes, 1 second questions. The next question is from Janice Jeda from Kemin family office. Please go ahead. 37:08 37 minutes, 8 seconds Uh good afternoon sir. Am I audible? Yeah. Yeah. 37:15 37 minutes, 15 seconds Yes sir. Uh sir I want to draw your attention to the audit qualifications that have been made in the uh in the 37:22 37 minutes, 22 seconds audit note. So can you just give us some light on what is happening with respect to inventory receivables and uh the unbuilt revenue part. 37:34 37 minutes, 34 seconds See the I would like to explain that uh in fact these notes the points are not new. In fact last March onwards these similar points are coming continuing. 37:44 37 minutes, 44 seconds These are few things which we have realized we had we have accepted their points and we are seriously working on that to rectify those uh points. So one 37:53 37 minutes, 53 seconds is your physical verification they have pointed out physical verification of fixed assets and inventory that process is on. We are doing it ourselves and we 38:02 38 minutes, 2 seconds have appointed a third party valuer also. So we are contemplating to complete that entire process by 31st March. I mean by year end this financial 38:11 38 minutes, 11 seconds year end. So whatever outcome will be there of that verification and the exercise we are going to take care of that by end of the year. 38:20 38 minutes, 20 seconds Yeah J just to add to this the inventory typically is taking a lot of time. The reason is because we are in in the ENC 38:28 38 minutes, 28 seconds and lot of our inventory is uh put across uh various office locations and also at customer site. So the auditor is 38:37 38 minutes, 37 seconds wanting us to do physical verification of all the assets uh to be done through a third party. Uh so that process is on and I'm pretty sure that we should be 38:44 38 minutes, 44 seconds able to uh complete the process by by 31st of March uh 2026. 38:49 38 minutes, 49 seconds Yes. Yeah. uh remaining and remaining this uh you know yeah the latest part there are few latest uh receivables are 38:58 38 minutes, 58 seconds lying in our books which are three three years more than 3 years old but those are all under consideration and we are constantly in touch with the customers 39:07 39 minutes, 7 seconds and and we are expecting payments out of that but it might take little longer time but however we have ECL provisions we have we are making as per the ACL 39:15 39 minutes, 15 seconds policy so that also we are going to relook into by a and any new policy implemented by the board, we will adhere 39:23 39 minutes, 23 seconds to that and whatever uh impact is required to be taken will be taken in in the books by 31st March. So, so those 39:31 39 minutes, 31 seconds are all under consideration and we are actively working on that to clear those points from the uh highlighted by the auditors. 39:37 39 minutes, 37 seconds Yeah. And even the unbuild revenue that you looked at the number unbuild revenue is is also for a customer who is currently active with us. 39:44 39 minutes, 44 seconds Yeah. And we are slowly progressing towards coming up to a solution. This was a disputed service delivery that we 39:52 39 minutes, 52 seconds had done about couple of years back for which the customer uh says that uh uh it was it was not a part of the contract 40:00 40 minutes but however it was a requirement which needed to be done and there was a dispute regarding this. So so since we had done we had spent money and we had 40:08 40 minutes, 8 seconds accounted uh cost for it we had also had to take ad revenue issue. So we are looking towards the closure on that and 40:15 40 minutes, 15 seconds and hopefully there will be some progress over that also coming in. So we have set an internal target of about 31st March to have most of these things 40:24 40 minutes, 24 seconds cleared uh or at least have a strong conclusion of of how things are going ahead. 40:30 40 minutes, 30 seconds So so will all of these things lead to an impact in the P&L once again for the year end because the same thing happened last year also in Q4 where there were forex related issues. 40:41 40 minutes, 41 seconds So is that same thing going to repeat in this year? 40:46 40 minutes, 46 seconds Not exactly not. Last year was some unusual and and some some legacy items were there and pretty old matters which 40:53 40 minutes, 53 seconds were highlighted by the new auditors. So these are the this is not going to be of that scale but definitely whatever 41:00 41 minutes uh impact will be there it will be it will not be of that level but we'll take corrective measures in this year itself most of the points. 41:09 41 minutes, 9 seconds Okay. And sir in the P also there's previous year taxes which have been charged. So what is that amount? 41:17 41 minutes, 17 seconds Yeah that amount pertains to earlier period. Earlier period provisions were made but actual tax outflow were more than that. So that amount we have to 41:25 41 minutes, 25 seconds take into account when we have taken uh that amount in this quarter pertaining to period. So take out that amount then 41:34 41 minutes, 34 seconds current year would have would have improved by that amount. 41:38 41 minutes, 38 seconds So that is where the challenge is that there's a lot of volatility in net earnings. So that is a bit of a challenge as an investor. Uh one more 41:47 41 minutes, 47 seconds last question from my end. Uh you you're talking about consolidating your US subsidiary into you. So any comments on that? 41:57 41 minutes, 57 seconds So, so uh Y is this typically the subsidiary that we had acquired in the US was run through one of our uh 42:04 42 minutes, 4 seconds companies that we had opened up as a SPV Allied Inc. uh so typically what had happened in that transaction is that we had given a 42:13 42 minutes, 13 seconds a loan a fund was provided from Allied India to Allied Inc. which is a US company and Allied Inc. had acquired 81% 42:20 42 minutes, 20 seconds uh sorry about 30% stake of Allied LLC which was as called as on Global Services. Now this was always in the 42:27 42 minutes, 27 seconds virtue of of an investment. However uh however since it it is shown as a loan in the books. We have to get the money back and the way to get the money back 42:36 42 minutes, 36 seconds is to uh close the SPV and have all the shares transferred of of allied LLC to be transferred back to India. So this uh 42:44 42 minutes, 44 seconds this typically will resolve all uh all our outstanding issues that we have with terms of the first qualification that we have got. 42:51 42 minutes, 51 seconds Yeah. Since it was an investment uh which was done to acquire a company we have never considered it as it was a coy equity 42:59 42 minutes, 59 seconds coy coy equity in fact that's why no interest were charged in last years so we are planning we are working on that to so that this this loan amount can be 43:07 43 minutes, 7 seconds converted into equity finally by 31st March so that this qualification will also be uh removed permanently 43:16 43 minutes, 16 seconds uh this is also expected by end of this year. 43:20 43 minutes, 20 seconds Yeah, yeah, that has to be because then then this point will go forever. That loan amount will be converted into equity. So that non-compliance will not be there. 43:31 43 minutes, 31 seconds Okay. So one more question if I may if I may ask uh uh you are speaking that this uh Q3 has been impacted because of the 43:39 43 minutes, 39 seconds elections. So will that lead to any impact in the top line in the near run or you still maintain your 250 plus for guidance by end of the year? 43:51 43 minutes, 51 seconds No, the impact is already done in Q3. I mean, we were not able to bill out because the permissions were not in place and bill approvals were not there 43:59 43 minutes, 59 seconds since the government elections are going on. Since all of that is is over, we are seeing a lot of progress happening there and a lot of billing uh which is supposed to be happening would happen by 44:07 44 minutes, 7 seconds March 30 31st. So I don't see that uh uh you know impacting any of our top line. 44:14 44 minutes, 14 seconds Okay. So thank you so much. I'll turn back to cube. 44:19 44 minutes, 19 seconds Okay, thank you. 44:22 44 minutes, 22 seconds Participants who wish to ask questions, please press star and one. 44:28 44 minutes, 28 seconds Ladies and gentlemen, to ask questions, please press star and one. The next question is from Disha from Safire Capital. Please go ahead. 44:37 44 minutes, 37 seconds Hello, am I audible, sir? Yeah, please go ahead. 44:45 44 minutes, 45 seconds Yeah. So firstly coming on to the guidance I think this year we're targeting thousand K. So are we on track for that? 44:54 44 minutes, 54 seconds So we should be able to do it uh in the last quarter if not in the first uh and second. So our idea of thousand K is to achieve 250 cr uh 45:02 45 minutes, 2 seconds quarter quarter and I should be 250. So we at 247 we should be able to do 250 from next quarter onwards 45:11 45 minutes, 11 seconds and then keep on improving. So you might not see a thousand cring in the top line for the whole year but we are progressing towards it. So in the next year for sure. 45:21 45 minutes, 21 seconds Okay. Okay. That's very clear. And so based so on the margin items I think last time we spoke you mentioned that uh in the next three four quarters we're 45:28 45 minutes, 28 seconds looking to go to 11 12% and then next two three years move closer to the mid and we've seen the improvement. I think we're around 10.6% this quarter. We expect this momentum to sustain. 45:42 45 minutes, 42 seconds Yes. uh we we would want that to continue uh and and that is possible since as soon as our larger smart city implementation projections move into M 45:50 45 minutes, 50 seconds we'll see better and improved margins coming in uh but but you know Disha the problem is that when when we have large 45:58 45 minutes, 58 seconds customer contracts being closed uh I think you all should look at the ticket size uh of the contracts that we are closing in as well with with a with a 46:07 46 minutes, 7 seconds 700 800 cr revenue top line we announced two large deals worth 500 cr each uh last year. So when we acquire such kind 46:15 46 minutes, 15 seconds of large customers, there are a lot of investments that also go in to make sure that we are having the right kind of team ability and also since most of this 46:23 46 minutes, 23 seconds large contracts are multi- country also lot of investments go in to do uh uh compliance activities there as well. So 46:31 46 minutes, 31 seconds any uh such kind of uh cost will always try to put a little bit burden on ITA. 46:38 46 minutes, 38 seconds But having said that uh our target from our uh internal process is very simple to make sure that we keep on acquiring large customers because give us a lot of 46:47 46 minutes, 47 seconds long-term stability and then keep on improving on our uh operational cost. So while we are constantly improving our operational cost to make sure that our 46:55 46 minutes, 55 seconds margins improve sometimes due to some additional cost uh the margins do get impacted. So our gross margins as you said our gross margins are are pretty much improving quarter over quarter. 47:07 47 minutes, 7 seconds Right. Right. Right. 47:09 47 minutes, 9 seconds Apart from that there are there are other things also that we are doing uh in the US. We have also hired a a chief growth officer. We are also hiring more 47:18 47 minutes, 18 seconds sales people to put uh uh more foot on the ground to acquire more direct midsize customers. Uh so that our 47:25 47 minutes, 25 seconds revenues from a midsize customer also keeps on increasing which will also help us to improve our margins because then we are direct to those customers. 47:34 47 minutes, 34 seconds Okay. Yeah. Okay. Makes sense. And so for so currently you mentioned our focus is binning large customer contracts right. So currently with our current 47:43 47 minutes, 43 seconds infrastructure that we have what sort of like the maximum order value we can uh serve right now and where would we want 47:50 47 minutes, 50 seconds to see this number going technically I don't see that as a challenge to even go and uh you know do 47:58 47 minutes, 58 seconds a order worth 2,000 3,000 cr but it has to be a combination of technical and financial capability both. Uh so if we 48:05 48 minutes, 5 seconds have if we see that we have to go and bid for a large contract which is about 2,000 3,000 cr which we did we did bid for the Mumbai city surveillance as well 48:13 48 minutes, 13 seconds we go with a partner and contract sizes which are 500 cr about 700,000 cr we would want to do it uh by ourselves so 48:22 48 minutes, 22 seconds maybe one one to two uh midsize contracts in the range of 400 500 cr is something which we have an app appetite 48:29 48 minutes, 29 seconds to do it by ourselves we will continue to do so other than the smaller ones that we keep on getting you know 50 cr, 70 cr, 100 cr but slowly and steadily we 48:38 48 minutes, 38 seconds are progressing towards more larger deals and this is what our strategy is that in the next two next two to three years you should be able to hear good large deals coming in from us. 48:49 48 minutes, 49 seconds Okay. Okay. Fair enough sir. And so just one more thing uh last time I think we spoke to there also major European 48:56 48 minutes, 56 seconds contracts that are in pipeline. So any update on that and given the India EU FDA what sort of opportunity you see from that market? 49:07 49 minutes, 7 seconds So we we did announce Risha last year the large contract that we spoke of. Uh so there are apart from that there are three four good orders. I wouldn't say 49:16 49 minutes, 16 seconds very large but good orders that we've got with good customer base uh that we've already announced throughout the year in our earning presentations as well. uh and and Kesh has been talking 49:24 49 minutes, 24 seconds about this wins uh consequently uh and we will and while [clears throat] we are talking the pipeline uh that we review 49:32 49 minutes, 32 seconds uh every weekly we also are seeing a lot of uh movement happening on the on the weekly pipeline as well large contracts coming in bidding for them going on the 49:40 49 minutes, 40 seconds only question is sometimes a decision is taken in certain quarters sometimes the decision is postponed so you know if decision goes our way uh uh then then 49:48 49 minutes, 48 seconds then the numbers will improve accordingly yeah just I I just 49:55 49 minutes, 55 seconds just to just to add to what um NHL said uh if you see uh we are steadily growing 50:02 50 minutes, 2 seconds both our international business as well as enterprise sector business. Now both these businesses are heavily service oriented and therefore the margins on 50:10 50 minutes, 10 seconds these business are continuing to uh we are continuing to do well or improve on them. uh the on the smart cities also 50:17 50 minutes, 17 seconds now the type of projects that uh that are coming up and where we also have the ability to get higher margins is in the 50:26 50 minutes, 26 seconds service solutioning part where there are more and more uh AI application oriented solutions that are required for example 50:34 50 minutes, 34 seconds you may have heard in Davos the uh declaration by the marasa state that they're going to create an innovation city in punell and so on now if you are 50:43 50 minutes, 43 seconds talking about an innovation city there's a lot of smart technology which has to go in and also smart solutions which have to go along with that including 50:50 50 minutes, 50 seconds water management or electricity management and so on and so forth. So these are all opportunities where the uh 50:58 50 minutes, 58 seconds margins can improve uh not only because of the infrastructure that is being rolled out but also solutions that we will develop and replicate in many other locations. 51:10 51 minutes, 10 seconds Right. Right. And for this this order that we won uh for this uh pharma company in your what's the revenue 51:17 51 minutes, 17 seconds visibility from that and what's the margins there? 51:22 51 minutes, 22 seconds Uh so uh we are looking at a revenue top line of about uh uh 1 million a month 51:29 51 minutes, 29 seconds about 12 million a year for four years that's close to about 50 odd billion uh margins would be uh in the teams however 51:37 51 minutes, 37 seconds I will have to come back to you with the exact numbers because they keep on changing due to the change request and other things that keep on coming in. Okay. Okay. All right. Fair enough. 51:46 51 minutes, 46 seconds Thank you so much. I'll be my Thank you. 51:52 51 minutes, 52 seconds Participants who wish to ask questions, please press star and one. The next question is from Pratik Dya who's an individual investor. Please go ahead. 52:02 52 minutes, 2 seconds Um are you available? 52:06 52 minutes, 6 seconds Yes. [clears throat] Yeah. Okay. Thanks. Um so I'm on this check you mentioned about a lot of 52:12 52 minutes, 12 seconds agentic um AI um chat bots being uh implemented um across multiple projects. 52:20 52 minutes, 20 seconds um um and new order rings that you want. 52:23 52 minutes, 23 seconds So just wanted to understand from an efficiency perspective uh does it help uh to get uh better 52:30 52 minutes, 30 seconds margins or does it u help to lower your um cost uh while you build the customer with uh those AI implementation? 52:43 52 minutes, 43 seconds Yes, absolutely. So we have successfully deployed uh uh for a large FMCG company 52:49 52 minutes, 49 seconds and also we are also doing our AI ops which makes a big difference for 50 plus customers in our knock. So definitely 52:58 52 minutes, 58 seconds the big plus point on the AI uh there's two areas. One is it improves the productivity of the end user especially 53:05 53 minutes, 5 seconds the gen Z because they are used to you know quickly getting solutions. Uh number two uh over time the AI basically 53:13 53 minutes, 13 seconds becomes autonomous and the automation helps to you know make sure we deploy lesser people. There is a definitely 53:20 53 minutes, 20 seconds cost savings on our operations which will lead to improved profit margins for sure. And the other aspect is you know 53:28 53 minutes, 28 seconds we are also deploying AI uh based solutions especially image analytics computer vision uh in the smart city 53:36 53 minutes, 36 seconds which also gives us you know a lot of visibility in terms of making sure lot of scenarios or use cases get covered in 53:44 53 minutes, 44 seconds that and it it brings a good value both to the end customers and for us to make sure we have a kind of controlled staff 53:51 53 minutes, 51 seconds to deliver the overall SLAs. So definitely indirectly overall you will see a good improvement in the profit margins. 54:01 54 minutes, 1 second Okay, that's very good. And I think uh it was um probably couple of quarters ago that you had mentioned that there 54:08 54 minutes, 8 seconds were a lot of smart city projects that you had bid for um across multiple cities and different states across 54:17 54 minutes, 17 seconds India. So can you give us status of where we stand on that? 54:23 54 minutes, 23 seconds Oh, so Pratik we we were saying that there are a lot of opportunities that are there coming in from different cities and we will pick and choose the ones that we want to bid for and we 54:32 54 minutes, 32 seconds continue to do so. While right now our focus from a state perspective has been Maharashtra because we have good connects and we've done too many 54:39 54 minutes, 39 seconds projects in Maharashtra. Apart from that uh we have also changed our focus towards railways because we are seeing a lot of contracts coming in from railways 54:47 54 minutes, 47 seconds after the Supreme Court order of making sure that all the railway coaches across India have uh CC Davis surveillance uh 54:55 54 minutes, 55 seconds and command and monitored through a command and control center. So a lot of these RFPs for western railway are coming in and we have already close to 55:04 55 minutes, 4 seconds if I'm not wrong we have already bid for about three three of those western railway contracts. There is another safe city which is happening at NOA for which 55:11 55 minutes, 11 seconds we are waiting for the RFP to come in uh which uh which should be coming in soon and we'll bid for it. Uh Mumbai city services we bided for it. Uh 55:19 55 minutes, 19 seconds unfortunately we couldn't uh win it with a partner. There was another company that that won and got shortlisted. Um uh 55:28 55 minutes, 28 seconds and and apart from that uh there are uh there is one uh that uh uh coming up in Maharashtra MIDC there are three more 55:35 55 minutes, 35 seconds MIDC's that are preparing RFS while we are talking uh for the safe city. So we have done the Taloja safe city which is which was an MIDC Taloja MIDC and 55:44 55 minutes, 44 seconds similar to that there are three more MIDC uh cities that are coming in uh for for uh smart city. So these are all in the different stages. Some are in the 55:52 55 minutes, 52 seconds pre RFP stage, some are in the RFI stage, some are in the RFP and some are post uh um you know bidding stage. So as 56:00 56 minutes and when there is any milestone that we achieve from an order win, we we keep on announcing uh to to the stock stock exchange to make sure that all our 56:07 56 minutes, 7 seconds investors are aware of any material information that needs to be informed. 56:11 56 minutes, 11 seconds So and just to add uh as we have now good insight into smart cities over 10 years now uh in implementing large scale 56:20 56 minutes, 20 seconds solutions close to 16 cities across the country uh we have stretched ourselves into public place technologies as Nihal 56:27 56 minutes, 27 seconds mentioned you know what this means is you know because every government infrastructure is in digitization phase. 56:34 56 minutes, 34 seconds Uh so western railways is one example that he talked about but we now see lot of opportunities on infrastructure 56:42 56 minutes, 42 seconds automation modernization for several government initiatives for so we see that as a big opportunity and as per our 56:51 56 minutes, 51 seconds learnings from the smart cities we become highly eligible for these projects. 56:56 56 minutes, 56 seconds Got it. Okay. And when you speak about the railway project, so in terms of the construct of the contract, it would be 57:04 57 minutes, 4 seconds similar to what you had in the smart facility, right? So you have the solution part being implemented at the start of the 57:12 57 minutes, 12 seconds contract and then you have the services uh part. Um yes, is that understanding correct? 57:18 57 minutes, 18 seconds Absolutely. Yeah. Yeah. are accurate absolutely same only um this time the services could be a little lower than the uh than the ones in the safe city 57:27 57 minutes, 27 seconds margin because railways is pretty straightforward and standard you don't see lot of uh uh changes like like you have in the city uh space so it's going 57:35 57 minutes, 35 seconds to be a little lesser but yes the construct is the same it is uh it is solution designing implementation maintenance so in short we have broadened 57:45 57 minutes, 45 seconds not just smart cities but more of broader public place technologies it can be airports, it can be ports, it can be railway stations, uh several other opportunities. 57:56 57 minutes, 56 seconds Okay, got it. And in terms of uh services, contact duration. Um so say smart city has 10 years, this probably 58:03 58 minutes, 3 seconds would be 5 years, 7 years. Is that correct? 58:08 58 minutes, 8 seconds No. So even safe cities, smart cities are also five years. Typically they are one year implementation and five year ONM and all these contracts are done in 58:15 58 minutes, 15 seconds the same fashion. In some cases if the infrastructure and all is good, we do get extensions for for another five years. 58:22 58 minutes, 22 seconds So ideally the first time that you get the contract is one step always. 58:27 58 minutes, 27 seconds Okay. Got it. And um my another question in terms of gross margins. So uh you mentioned that gross margins have been 58:35 58 minutes, 35 seconds increasing but due to solution implementation we've not seen the translation happening on the AIA level. 58:42 58 minutes, 42 seconds So which probably would come down the quarters. Correct. That's right. 58:49 58 minutes, 49 seconds Okay. Got it. And one uh suggestion. So while you've been mentioning about order wins on the enterprise level, um is 58:57 58 minutes, 57 seconds there a possibility of to making it public uh while you get that order similar to what you probably would get 59:04 59 minutes, 4 seconds at the government level because we've not seen announcements happening for enterprise level on that. 59:12 59 minutes, 12 seconds Yeah. Yeah. You're right. Uh so I think what we've done is that we we've kept a threshold. Unfortunately with the growing top line the threshold for announcements have also gone up. 59:21 59 minutes, 21 seconds Uh we we typically have a threshold of about uh 10% of our of our top line. So any orders now that we are that we get 59:30 59 minutes, 30 seconds about ab about 100 cr or maybe 90 cr will be announced. Uh the smaller size ones are not going to the stock action but we keep on adding and announcing it through the press release uh quarterly. 59:42 59 minutes, 42 seconds uh this year uh due to various elections other things it was a tad slow in uh in in acquiring good uh government 59:49 59 minutes, 49 seconds customers but uh with the RFPs and the uh order bidding that we've done we see that by March 31st you'll see some some 59:56 59 minutes, 56 seconds wins and some announcements coming from our side for sure okay yeah that I understand on the government side um but on the enterprise 1:00:04 1 hour, 4 seconds private enterprise level also if you could make those announcements public then that would be great rather than waiting for the quarterly press release 1:00:12 1 hour, 12 seconds uh we could be informed on a regular basis. 1:00:17 1 hour, 17 seconds Yeah. Yeah. So if if it does meet our threshold guidelines we do announce to the stock exchange uh the value is the value is higher because generally 1:00:25 1 hour, 25 seconds what happens I'll tell you uh uh pratik u the do the government orders are bigger in number enterprise are smaller 1:00:33 1 hour, 33 seconds uh but are very very lucrative and we get a lot of uh farming opportunity inside. So I might enter a customer with a 10 cr or 12 cr kind of an order which 1:00:41 1 hour, 41 seconds I find it uh difficult to announce every order in that scenario. But when we are inside we see through farming those 1:00:48 1 hour, 48 seconds customer revenue is going up and that is I think most the strategy that most of the big big companies also have where you you enter small and then you farm 1:00:57 1 hour, 57 seconds and you grow the customer and the same strategy that we are applying. So any uh wins that we do we make sure that we are announcing quarterly to make sure even 1:01:06 1 hour, 1 minute, 6 seconds if it's a small order but it is very strategic uh to us we we we keep on announcing. Sure. Okay. Fair enough. Got honest. 1:01:14 1 hour, 1 minute, 14 seconds Thanks. Thanks for answering my question. 1:01:18 1 hour, 1 minute, 18 seconds Thank you very much. That was the last question in Q. I would now like to hand the conference back to the management team for closing comments. 1:01:31 1 hour, 1 minute, 31 seconds Thank you for your participate engagement during today's call. In closing, I would like to reiterate that we remain excited about the traction and momentum in the business and are looking 1:01:39 1 hour, 1 minute, 39 seconds forward keenly towards achieving a target of thousand annual revenues in the near future. Over the past few years, we have undertaken a comprehensive transformation across 1:01:47 1 hour, 1 minute, 47 seconds multiple dimension including governance, transparency, human capital, leadership development and our sales and marketing framework. These initiatives are strengthening the foundation of the 1:01:55 1 hour, 1 minute, 55 seconds organization making more agile and resilient and ensuring that our growth remains sustainable well balanced and not defined by financial performance alone. 1:02:04 1 hour, 2 minutes, 4 seconds If you have any additional questions or queries further information about our company, please feel free to reach out to our team or contact CDR India. We 1:02:12 1 hour, 2 minutes, 12 seconds appreciate your continued support and confidence digital. Thank you. Thank you. 1:02:17 1 hour, 2 minutes, 17 seconds Thank you very much. On behalf of Allied Digital Services Limited, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.