Cms Info Systems Ltd — Q3 FY26

Cms Info Systems Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=SLiZWFYfD7c Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to CMS Infosystem Limited's conference call hosted by MK Global 0:09 9 seconds Financial Services Limited. As a reminder, all participant lines will be in the listenon only mode and there will be an opportunity for you to ask 0:16 16 seconds questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:24 24 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:31 31 seconds Vin Singh from MK Global Financial Services Limited. Thank you and over to you sir. 0:38 38 seconds Good afternoon everyone. I would like to welcome the management and thank them for this opportunity. We have with us 0:45 45 seconds today Mr. Rajiv Call, executive vice chairman and CEO, Mr. Frank Chandelwal, CFO and Mr. Anush Ragawan 0:55 55 seconds CBO. I shall now hand over the call to the management for their opening remarks. Over to you gentlemen. 1:04 1 minute, 4 seconds Good afternoon and welcome. Uh this is Rajie. Uh let me start by with an opening. This has been a very hectic 1:11 1 minute, 11 seconds quarter. Before we dive in, I want to remind rewind back and to set some quick context for those of you who may be uh 1:19 1 minute, 19 seconds recent participants on our calls. In FI22 to 24, we had successfully achieved our three key operating goals and 1:26 1 minute, 26 seconds metrics on revenue growth, margin expansion, and market share gains. FI 24 and 25 saw an increase in comparative 1:34 1 minute, 34 seconds intensity, and we sat out on most uh most transaction BLA RFPs where the pricing was pretty low. We in line 1:42 1 minute, 42 seconds reduce our capex sp expense from average of 200 crores a year to 100 cr level levels to preserve capital and to avoid lowquality growth. At the beginning of 1:51 1 minute, 51 seconds this year in FI26 we were quite optimistic and positive. ATM interchange increase had been approved and announced. A key competitor was winding 2:01 2 minutes, 1 second down operations and we were almost certain to be awarded a large cash RFP which was fairly unique from the 2:08 2 minutes, 8 seconds country's largest bank for almost 10,000 ATMs as the sole eligible bidder. This itself would have been 100 to 125 cr of 2:16 2 minutes, 16 seconds incremental revenue for FI26 of which would have been a 4% growth from one contract and for this we invested in 2:23 2 minutes, 23 seconds network expansion ahead ahead of the contract. 2:27 2 minutes, 27 seconds The tides certainly turned in May with severe impact from both external and internal factors. We updated you on 2:34 2 minutes, 34 seconds these in detail in our September 30th analyst meeting. 2:39 2 minutes, 39 seconds In hindsight, we invested ahead of this contract and our anticipation on things becoming normal was very aggressive given the subsequent delays to that RFP. 2:51 2 minutes, 51 seconds This has been a big learning for us and since then we have tightened our deployment norms to align strictly with contracted milestone with key customers. 3:00 3 minutes But in this volatility we have retained our long-term focus and doing the things which we think are right and investing in them. We restructured the company 3:09 3 minutes, 9 seconds into three platforms. ATM management solutions, retail and currency logistics and tech and payment solutions. All of 3:17 3 minutes, 17 seconds these are now at good scale, have market leadership and a strong margin profile with ability to generate free cash flows 3:24 3 minutes, 24 seconds to drive their growth. We also invested in broadening and diversifying our customer base. We invested for growth in 3:32 3 minutes, 32 seconds retail and tech segments. In the ATM business, our focus has been on higher value and yield and more fixed price contracts. 3:42 3 minutes, 42 seconds FI's 26 year to date, we have very strong 1,600 crores plus of high quality orans. 3:51 3 minutes, 51 seconds As we enter calendar year 26, things are beginning to turn. GSC2 has had a strong positive impact on consumption in the 4:00 4 minutes retail segment and we see the segment starting to grow again. Order wins and execution of the order book is strong 4:06 4 minutes, 6 seconds and cost optimiz optimization efforts are also bearing results. I would now like Anush our CBO to share more details on the business and these initiatives. 4:17 4 minutes, 17 seconds Thank you Rajie. Good afternoon everyone. I'll spend a few minutes on the business and operational performance for the quarter. The macro environment 4:26 4 minutes, 26 seconds has been mixed but we are seeing signs of stabilization. On the retail side, cash usage is holding steady which is a 4:33 4 minutes, 33 seconds strong positive. In fact, if you look at our investor deck, we have shared some information on how on the same store basis post GST 2.0, we have seen volumes, you know, rebound meaningfully. 4:46 4 minutes, 46 seconds In our ATM segment, transaction volumes have stabilized and this provides a floor for deployment planning. 4:53 4 minutes, 53 seconds In terms of our key business updates, our SBA cash RFP after intense negotiation was finally awarded and contracted in December. It is now 5:02 5 minutes, 2 seconds getting rolled out in Q4. Our total revenue from this is 1,000 crores over 10 years of which 500 crores would be incremental revenue to CMS. 5:12 5 minutes, 12 seconds In terms of other order book, our execution is on track. We have over 750 crores of order book just with two customers bank and India post payment bank. Both of these are about 75% live. 5:24 5 minutes, 24 seconds Our tech and payments business is growing from 235 crores revenue to 330 cr revenue in one year and is on track 5:31 5 minutes, 31 seconds to hit 400 crores in FI27. This is a 30% KGA. 5:38 5 minutes, 38 seconds I would also like to provide you an update on the higher DSOs from a few midsized MSPs due to credit tightening by lenders post the AGS issue. 5:48 5 minutes, 48 seconds We had alluded to this in our previous call. Since then we have mitigated these risks to a large extent. We had made 5:56 5 minutes, 56 seconds provisions in Q2 and in Q3 we took strong tactical actions which included limiting services to ensure payment 6:04 6 minutes, 4 seconds discipline. This has had a negative revenue impact but was necessary to drive cash flow improvements. DSOs are 6:11 6 minutes, 11 seconds getting streamlined and should be back to normal levels by end of March. 6:17 6 minutes, 17 seconds On improving margins, we have taken the following actions. 6:21 6 minutes, 21 seconds We are optimizing our network and have exited a long tale of unprofitable retail points. This again has had a small impact on revenue, but it ensures 6:29 6 minutes, 29 seconds a healthier revenue base and good profitability going forward. 6:33 6 minutes, 33 seconds The geek operating model for the direct to retail business which was being piloted for most of last year has now 6:41 6 minutes, 41 seconds scaled to a team of 2,000 plus partners who are covering 20% of our retail points and have achieved a certain critical mass. 6:50 6 minutes, 50 seconds We will also get a more agile and flexible network through this model to handle peak periods and convert part of a fixed cost base to a variable structure. 7:00 7 minutes We have strong business momentum building up again. Large customer RFPs are being decided as we speak and this should help deliver a good Q4 and FI27. 7:10 7 minutes, 10 seconds With that I would like to invite our CFO Punkage for a financial update. 7:17 7 minutes, 17 seconds Thanks Anush and good afternoon everyone. 7:21 7 minutes, 21 seconds Let me take you through the Q3 financials. 7:24 7 minutes, 24 seconds I will focus on the underlying operating performance as our reported numbers this quarter includes regulatory and one-off items. 7:33 7 minutes, 33 seconds Our consolidated revenue stood at 618 crential growth of 1.6%. 7:40 7 minutes, 40 seconds While headline growth appears modest, the quality of revenue has improved sharply. 7:46 7 minutes, 46 seconds Service revenue is up 4% on quarteronquarter basis. Managed services and technology is up 18% quarteron 7:53 7 minutes, 53 seconds quarter from 216 cr to 254 cr. 8:00 8 minutes Abita and margin operational efficiencies on track. Uh business AITA grew 9% quarteron quarter to 158 cr 8:08 8 minutes, 8 seconds rupees. Abita margins expanded by 160 basis points moving from 23.9% in Q2 to 25.5% in Q3. 8:22 8 minutes, 22 seconds This margin expansion was driven by the two segments cash logistics AITA up by 6% and margin expanded by 170 basis points. 8:33 8 minutes, 33 seconds Manage services and tax service attack abit up by 12% to 78.5 cr rupees. 8:43 8 minutes, 43 seconds I want to clarify the moment in PBT and PAT to ensure the underlying trend is understood. 8:49 8 minutes, 49 seconds Reported PBT dropped from 95.6 cr to 88.1 cr in Q3. This is due to a specific 8:57 8 minutes, 57 seconds one-off item. In Q2 there is a base effect of one time gain of around 12 cr rupees from the provision reversal of ESOP and performance link incentives. 9:10 9 minutes, 10 seconds If you normalize the these exceptional items, our core uh cooperating PBT has actually grown s sequentially reflecting the business and margin improvements. 9:22 9 minutes, 22 seconds In Q3, we have also made one-time provision for new labor code of rupees 11.1 cr resulting in PAT after exceptional items for uh 54.4 cr. 9:36 9 minutes, 36 seconds Now I'll talk about the capex and liquidity. 9:39 9 minutes, 39 seconds The YTD capex is around 275 cr while we have conservative in capex for 24 and 9:47 9 minutes, 47 seconds 25. This current spend is linked to the execution of around 100 1,600 cr rupees order book that Rajiv mentioned. 9:56 9 minutes, 56 seconds This growth cap this is growth capex not maintenance capex and it is primary driver for the revenue visibility in FI27. 10:06 10 minutes, 6 seconds In terms of outlook, business momentum has picked up a pace in FI25 10:15 10 minutes, 15 seconds our AITA AITA margin was 26.1%. 10:20 10 minutes, 20 seconds Which is dropped to 22.8% in this quarter. However, in Q3 we we should see 10:27 10 minutes, 27 seconds that the overall AITA margin expanded by 10 basis points to 25 24.5%. 10:34 10 minutes, 34 seconds This should further improve to 25 to 26% raise for the FI27. 10:40 10 minutes, 40 seconds With that I hand hand it back to the Rajiv. 10:50 10 minutes, 50 seconds Thanks Rankage. Um in our closing I just want to cover three topics. First the revenue mix. Secondly M&A and capital allocation and thirdly the FI27 outlook. 11:00 11 minutes I do want to point out and you can refer this to the slides we have on the investor deck. Um our mix of revenue is substantially changing. It's getting 11:07 11 minutes, 7 seconds much better and broader. Over two years from FI24 to year to date FI26, the contribution from our largest customer has reduced from 22% of revenue to 18%. 11:17 11 minutes, 17 seconds The whole category of private sector banks and the direct to retail revenue that contribution is increasing from 24 to 30%. The PSU bank revenue 11:25 11 minutes, 25 seconds contribution is up from 19 to 22%. and the revenue we earn from our MSP partners is down from 35% to 29% of 11:34 11 minutes, 34 seconds revenue. This mixed change is going to have a positive impact on margins as we broaden and diversify the nature of our business and the nature of our customers. 11:44 11 minutes, 44 seconds Second, on M&A and capital allocation, I will reiterate what we have said always. 11:48 11 minutes, 48 seconds Our capital allocation priority is first fund organic growth and orderbook execution. Second, pursue accredititive M&A where we see either consolidation 11:57 11 minutes, 57 seconds opportunities or a synergistic expansion opportunity. Third, return surplus capital to shareholders through liance. 12:05 12 minutes, 5 seconds We see as of now a very good or I would say better M&A environment than we have seen in the past. Earlier this year on the back of having scaled our vision AI 12:13 12 minutes, 13 seconds platform into a market leader, we were able to make an accreditive acquisition of a leading player. 12:19 12 minutes, 19 seconds This was our first deal in the last four years. The investment here finally is 70 cr rupes. 12:27 12 minutes, 27 seconds On February 11th, a couple of days ago, we signed a term sheet for a business transfer agreement with a leading MSP to acquire their ATM management solutions 12:34 12 minutes, 34 seconds business. The deal value here we estimate to be in the range of 100 to 125 crores and we aim to close this deal by March end. This is going to drive 12:43 12 minutes, 43 seconds consolidation of the market and will also be value accurative to CMS. More details on this once the transaction closes. 12:51 12 minutes, 51 seconds At the same time, we are closely evaluating deeply other opportunities in both the retail and the payment tech infrastructure sectors on buybacks given 12:59 12 minutes, 59 seconds feedback we had both at the analyst column after from shareholders. Given the recent change in taxation which makes it more equitable to all 13:06 13 minutes, 6 seconds shareholders and also keeping in mind the growth opportunity ahead of us. This has been discussed at the board. We will be evaluating this in line with better 13:14 13 minutes, 14 seconds clarity on our balance sheet and the needs of capital by the end of the year and we'll update you accordingly. Let me move to the third item which is uh 13:22 13 minutes, 22 seconds relevant and most important right now is the FI27 outlook. As we have already alluded to, CY Calgary at 26 is is off to a pretty good start and we hope to 13:31 13 minutes, 31 seconds retain and build on that momentum going forward. FI25 and 26 saw us defend our revenue position well even though we 13:39 13 minutes, 39 seconds didn't grow much but we defended our revenue well and we also maintain our market share amidst a lot of volatility in the overall ecosystem. 13:48 13 minutes, 48 seconds Our Hawkeye business specifically is growing rapidly. We have taken this business from 0 to 100 crore revenue run 13:55 13 minutes, 55 seconds rate ARR in FI 21 to 25 and FI 20 sorry FI 21 to 24 in 3 years and from FI 24 to 14:03 14 minutes, 3 seconds 26 we are seeing this double from 100 CR to 200 CR level range. Um, not more importantly, we have now built a strong 14:10 14 minutes, 10 seconds enterprisegrade product which will be very useful as we bid for some large RFPs coming up in the coming year in new sectors uh for Hawkeye. 14:21 14 minutes, 21 seconds While Q2 and Q3 were adversely impacted and this has affected margins for the year. We have detailed these out in our 14:29 14 minutes, 29 seconds past calls and analyst meeting. With Q3 we have bottomed out with momentum strong from execution of order wins. We 14:38 14 minutes, 38 seconds have we do forecast a strong positive trend going forward. Overall revenue for FI27 should be in the 2800 cr to 2900 cr 14:48 14 minutes, 48 seconds range. The services revenue component of this should be in the range of 2700 or 2,800 crores which was a target we set out when we met you in September 30th. 14:59 14 minutes, 59 seconds The bridge from where we are right now to getting to this is that we are hoping to end Q4 strong. There are some key 15:06 15 minutes, 6 seconds deals under discussion and negotiation which we hope to finish strongly by March which will allow us to end Q4 15:13 15 minutes, 13 seconds strong. Enter FI27 with a services run rate revenue closer to 650 crores. If you if you gross it up 15:21 15 minutes, 21 seconds by four times that'll give you roughly a 2600 cr services revenue for FI27. And then growth in the year should get us closer to the 27 to 2,800 cr services 15:30 15 minutes, 30 seconds revenue growth. At product revenue of roughly about 100 crores, we should be in the ballpark of that 2,800 to 2,900 cr overall revenue. EITA margins. 15:39 15 minutes, 39 seconds Punkage has detailed out the reasons of us going down and our bridge from there. 15:44 15 minutes, 44 seconds I mean if you want to summarize our overall dip in EITA margins would I would just you know uh put them into three factors about roughly about one 15:53 15 minutes, 53 seconds and a half% impact in both wage inflation and the investments we made in building infrastructure for a contract which took time to pan out and then 16:01 16 minutes, 1 second about one one and a half% dip in margins which is linked to both increase in fleet cost um as well as the higher uh 16:10 16 minutes, 10 seconds overall provision ECL provisions and risk provisions. 16:14 16 minutes, 14 seconds we these are improving. I think we'll see improvement of that in Q4 and with the bridge from there to next year we should be able to see IETA margins in 16:21 16 minutes, 21 seconds the 25 to 26 26% range for FI27. Uh thank you and now we can move on to Q&A. 16:30 16 minutes, 30 seconds Thank you very much sir. We will now begin the question and answer session. 16:36 16 minutes, 36 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 16:42 16 minutes, 42 seconds If you wish to withdraw yourself from the question queue, you may press star and two. 16:47 16 minutes, 47 seconds Participants are requested to use handset while asking a question. 16:51 16 minutes, 51 seconds Ladies and gentlemen, we'll wait for a moment while the question cube assembles. 17:01 17 minutes, 1 second First question is from the line of Pravin Kumar from Equitas Capital Advisers. Please proceed. 17:07 17 minutes, 7 seconds Yeah, hi. Uh, thanks for the opportunity. I had a couple of questions. The first one was to get more uh clarity on the revenue bridge to FI27 17:15 17 minutes, 15 seconds which you spoke about. Uh so if I look at it from a different perspective of uh how much of this bridge uh to FI27 17:24 17 minutes, 24 seconds revenue are are things which you have already contracted and have in hand versus where you are counting on let's 17:31 17 minutes, 31 seconds say consumption improving or you know some uh other uh improvements in the broader macro. So could you if you could break it break it up into those two kind of components. Thank you. 17:41 17 minutes, 41 seconds Hi again Anisha. Um yeah Q3 if you look at it was about 57 crores as u you know we all shared I think there's a lot of 17:50 17 minutes, 50 seconds work that has happened on the order execution through this year. We also have the large SBI order which is going live in Q4. So that plus a few other 17:59 17 minutes, 59 seconds deals that we're in discussion with. Um the goal for us is right now to just just be relentlessly focused on execution and to enter Q1 with the 18:07 18 minutes, 7 seconds services base of the 577 growing to about 650 crores. So 650 into 4 gets you to 2600 2600 you add about 100 crores of 18:16 18 minutes, 16 seconds incremental growth through FI27 and 100 to 125 crores of product that gets you to that range of about 28 to 2900 that we've alluded to. 18:27 18 minutes, 27 seconds So would you would you say that this 650 which you're talking about is largely what you you have in hand and you have to just execute on that or is there any 18:35 18 minutes, 35 seconds you know assumption built into that saying that you know consumption needs to improve or you know so you know let me try and give this answer in a different manner because you 18:43 18 minutes, 43 seconds know I have to be cognizant of the fact that there's a team which forecasted very well for three years and then I think in the last one month and a half the forecast have not really played out. 18:51 18 minutes, 51 seconds So we will be a little careful right now provin and therefore bear with us as we build confidence and forecast in reality. Um the 650 sort of a number I 18:59 18 minutes, 59 seconds think we have almost 95% certainty on this number. Um but we will want to wait to see where we end with March and u so 19:06 19 minutes, 6 seconds I think the 650 into 4 that 2600 is fairly certain the bridge from 26 to 27 2800 that's something we have to earn 19:15 19 minutes, 15 seconds and work for in the remainder of the year. 19:18 19 minutes, 18 seconds Understood. Understood. uh couple of other questions. One was on uh on the retail cash management part. I think you have uh in your presentation you you 19:26 19 minutes, 26 seconds have referred to rationalizing low yield customers. So I just wanted to understand that earlier you were uh somewhat uh I mean is this is this kind 19:34 19 minutes, 34 seconds of a indication that this is kind of a course correction from your earlier uh kind of uh aggression in this uh part of 19:42 19 minutes, 42 seconds the market or I mean just wanted to get some color on that. 19:47 19 minutes, 47 seconds So uh it's a great question. You know I think we the way I would phrase is in the last two to three years we've been fairly aggressive on this market from a 19:55 19 minutes, 55 seconds market share perspective right as other businesses are scaling very well we are happy to invest with you know aggressive 20:02 20 minutes, 2 seconds pricing network expansion um and also we built up a sales engine in the last 2 three years to attack and address the D2R customers in a year which was 20:11 20 minutes, 11 seconds reasonably tough I think it was very important for us to look back and optimize our network and look at what makes sense we did go and engage And when you when you're growing the network 20:20 20 minutes, 20 seconds there will always be x percentage of network which is not going to be profitable right as you're entering newer markets the smaller locations um 20:27 20 minutes, 27 seconds when I think in Q2 Q3 given the overall trend of the business we wanted to step back and look at how much of this customer will be profitable longer 20:35 20 minutes, 35 seconds period and we took an attempt to see where we can increase prices and where we think the prices just don't make any sense. So I think what Anush and his 20:44 20 minutes, 44 seconds team have done, what Punit have done is sort of um I would say just do a sort of I don't know what the right word is but 20:51 20 minutes, 51 seconds just prune this up in line with making sure that we are building our business and margins um in the right line. Now I 20:59 20 minutes, 59 seconds think this will be a journey we'll go through up and down right when you are in more aggressive and high growth periods you will invest uh invest some investors will make bare fruit some will 21:07 21 minutes, 7 seconds not and then you are post correct understood understood and uh one other question on the provision that you have 21:15 21 minutes, 15 seconds taken on on in terms of the receivables in Q2 I think Anush referred that uh you know you expect that to stabilize by the 21:23 21 minutes, 23 seconds year end so a couple of uh I mean just wanted some clarity on that one is that what kind revenue hit have you taken on 21:30 21 minutes, 30 seconds you know in terms of having to tighten your receivable norms uh with with these uh kind of customers and uh secondly you 21:38 21 minutes, 38 seconds know given I mean if you are continuing to see stress in the ecosystem uh how much more revenue hit you can expect 21:46 21 minutes, 46 seconds from this kind of a you know stress persisting in the system thank you um we'll answer that question in two 21:53 21 minutes, 53 seconds parts one is I'll I'll take the revenue part and I'll hand over to pankage for the ECL for the provisioning part. Um the Q2 was a you know a specific 22:02 22 minutes, 2 seconds provision that we had to take on account of you know seeing the significant change in the you know external market conditions and what some of our 22:10 22 minutes, 10 seconds customers especially the midsize MSPs were going through post the you know the shock in the ecosystem the tightening of um the liquidity and the credit tabs to 22:19 22 minutes, 19 seconds them. Q3 we took a slightly different u approach as I shared which is we we were really focused on trying improving our 22:28 22 minutes, 28 seconds overall DSO situation that meant that we had to take certain calls in terms of our revenue exposure but more 22:35 22 minutes, 35 seconds importantly how we invested quality and cost in running networks or sometimes you know shutting them down not easy calls to 22:43 22 minutes, 43 seconds take but um the effect of that is visible in the Q3 revenues with respect to the provisions bunkers on that. 22:51 22 minutes, 51 seconds Yeah. 22:53 22 minutes, 53 seconds For risk and ECL provisioning we look into the on an annual basis not on a quarterly basis. The risk provision for 23:00 23 minutes FI23 was around 5% of the revenue which we have reduced to 4% and FI24 and 3.7% FI25. 23:11 23 minutes, 11 seconds However, this year we are expecting the same to be range of around 4.25 25 to 4.5% of the revenue because the ECL 23:19 23 minutes, 19 seconds specifically have a lag effect. So as the DSO increases, ECL increases but as 23:26 23 minutes, 26 seconds Anush has explained to you the DSO reduces over a period will impact the reduction in the DCL provisioning in going forward. 23:36 23 minutes, 36 seconds Uh thanks for the clarification but Anosh could you sorry to interrupt Mr. Pravin maybe we please request you to rejoin the queue for the follow-up question sir. Several participants are waiting for their turn. 23:46 23 minutes, 46 seconds Okay. Thank you. 23:49 23 minutes, 49 seconds Next question is from the line of Abhishek Jawan from Iklavia Capital. Please go ahead. 23:56 23 minutes, 56 seconds Uh yeah, I have two quick questions. Uh so the first one is uh last quarter the 24:04 24 minutes, 4 seconds management had forecasted 9% uh uh growth in the services revenue in H2 compared to H1. So what is the services revenue growth? 24:13 24 minutes, 13 seconds uh for Q3 uh uh as compared to Q2 that is the first question I wanted to ask 4%. 24:25 24 minutes, 25 seconds 4%. All right. And the second is uh there is a uh dramatic increase in the employee benefit expense uh this quarter 24:35 24 minutes, 35 seconds of about 18 crores and that looks pretty big for a quarter where appraisals are generally not due. Uh so what was the 24:43 24 minutes, 43 seconds specific reason uh of this uh increase? 24:50 24 minutes, 50 seconds So uh as I explained to you there there was a last quarter in last quarter there is a one-off item of around 12 cr rupes wherein we have reversed the 24:58 24 minutes, 58 seconds provisioning for the ESO as well as the performance link incentive provisioning. 25:04 25 minutes, 4 seconds So that is impact of around 12 cr reduction in the last quarter. Otherwise the total cost employee cost and service 25:11 25 minutes, 11 seconds and security cost there is a reduction in the overall service and security cost and the employee cost. 25:17 25 minutes, 17 seconds And whenever you look look both the add both the items service and security cost and employee cost add both the things and calculate the number. There is a 25:25 25 minutes, 25 seconds reduction in the in considering adjusting of 12 cr rupes and adding both there is a reduction in the cost of this thing. 25:34 25 minutes, 34 seconds Right. Service security is different from employee benefit. I wanted to ask specifically about couple cr. 25:47 25 minutes, 47 seconds Yeah. 12 cr is purely in the employee cost. Mhm. 25:50 25 minutes, 50 seconds When we and we when we add about the total employee employee and the workforce cost. Workforce is either our 25:59 25 minutes, 59 seconds own employee or the third party employees. You have to add both. 26:03 26 minutes, 3 seconds So service and security includes the outsource staff which will be working with us. So therefore that's overall part of our wage cost. 26:11 26 minutes, 11 seconds Okay. Okay. All right. Got it. Thank you. Uh that's all from my side. 26:17 26 minutes, 17 seconds Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all the participant in 26:24 26 minutes, 24 seconds the question queue, please restrict your questions to two per participants. 26:28 26 minutes, 28 seconds Should you have a follow-up question, please rejoin the queue. 26:32 26 minutes, 32 seconds Next question is from the line of Rashid Parik from Bugle Rock PMS. Please go ahead. 26:39 26 minutes, 39 seconds Yeah. Hi team. Uh so I think my question is in continuation to the uh earlier question on the aggression that we had 26:48 26 minutes, 48 seconds shown in the retail side but now we are pruning a little. So uh that I think that part is clear. uh uh can you just 26:55 26 minutes, 55 seconds help me understand uh also uh additionally is that how we are looking 27:01 27 minutes, 1 second to take this up going forward uh and any particular uh areas that we are 27:09 27 minutes, 9 seconds targeting first of all surrounding surrounding this how is the dig strategy deployment uh working out for us the 27:17 27 minutes, 17 seconds challenges that we have overcome and within the growth part any new uh areas for Hawkeye or RMS that we are looking 27:26 27 minutes, 26 seconds to deploy especially when you mentioned that some new sectors we are looking to build the solutions for. So that is my first question. 27:36 27 minutes, 36 seconds Hi Rash let me answer both your questions. As far as the retail is concerned I think our in terms of our sales focus our aggression continues to 27:45 27 minutes, 45 seconds be you know what it was simply because we think this is an important part of our future growth. Retail is a very 27:52 27 minutes, 52 seconds large opportunity and you know we think of it more in terms of decadal um you know opportunity because the formalized 28:01 28 minutes, 1 second and outsourced as part of what is broader in India is still so small. 28:06 28 minutes, 6 seconds I think the way to think of it is it is our responsibility to do what we can to create this addressible market. Now as 28:14 28 minutes, 14 seconds part of that it will always take a little bit of time for us to figure out the parts of the business which have been onboarded. You 28:22 28 minutes, 22 seconds need to give them some time 6 months one year one and a half years for them to sort of achieve full revenue status in terms of translation into what is the 28:30 28 minutes, 30 seconds estimated realizations and throughput in Q3 post GST 2.0 Z and as we have 28:37 28 minutes, 37 seconds shared for us to start looking at the sector by sector along with the consumption report that we have it gave us a lot more clarity on the parts of 28:45 28 minutes, 45 seconds the sector which are seeing you know more vibrancy versus some you know deals that we had which probably didn't. Given 28:53 28 minutes, 53 seconds that we were getting into the whole network optimization stage, it made a lot of sense to sort of take start taking some calls right which is you know every business every operations 29:02 29 minutes, 2 seconds will have some churn that we would like to impose. It may be 2% of the long tail it may be 5% of the long tail that is what we have alluded to. 29:11 29 minutes, 11 seconds Um coming into Hawkeye um I think we've spoken about how you know within Hawkeye itself you know we the goal for us is in 29:19 29 minutes, 19 seconds the longer term to think about productizing this the experience that we've had and the amount of investments that we made in the technology and the 29:26 29 minutes, 26 seconds R&D in building a lot of advanced AI use cases will serve very well when we think about translating this into the broader 29:35 29 minutes, 35 seconds retail. So in a way when I think about retail I think the combination of both what we have as a Hawkeye product and the retail cache along with a lot more 29:43 29 minutes, 43 seconds of technological integration working into you know helping stores with reconciliation and you know selling automation solutions will be a very 29:52 29 minutes, 52 seconds powerful I think for us I would also like to add to what Anush said you have to take the fe you have to keep in mind the industry and how overall retail 30:01 30 minutes, 1 second sector in India suffered in H1 last year we saw Consumption you know all of you will be invested invested in other companies consumption really get 30:10 30 minutes, 10 seconds impacted till September end. So there was a churn in the sector itself. It is a relatively lower margin sector. There were clear sector trend shift from I 30:19 30 minutes, 19 seconds mean from physical retail to online retail to quick commerce which is impacting those customers. From our side, I think today we have almost Anush what 150 plus direct to retail logos. 30:29 30 minutes, 29 seconds 165 165 customers, right? This number was maybe zero two and a half years ago. Uh with these customers, we are cross-selling, right? We are not only in the business of retail cash management. 30:39 30 minutes, 39 seconds We are upselling them when retail cash vaults. We are upselling them with Hawkeye based solutions. And where we end up seeing the return uh make sense 30:48 30 minutes, 48 seconds from both revenue and margin perspective, we will continue to deepen our presence there. There will be some customers as you work with them for six months you realize the amount of volume 30:56 30 minutes, 56 seconds of cash and the revenue you can earn is not going to be material. At that point you need to have a sort of a clinical viewpoint and examine and sort of let go 31:05 31 minutes, 5 seconds of that and use that network capacity for better quality customers and that's what we I think have done. I don't think you should read too much into this in terms of change in strategy. I think 31:13 31 minutes, 13 seconds there sort of a aggressive launch and growth. we assessed things in the last three to six months uh to sort of take 31:20 31 minutes, 20 seconds stock and say what makes sense what doesn't make sense but overall I think we are um we are fairly um what are the 31:28 31 minutes, 28 seconds word I think we are seeing a lot more opportunity of cross-selling into our retail customers than just pure cash management 31:35 31 minutes, 35 seconds sure no uh my query was also in relation to one of the competitor talking about increased uh you know competition in 31:43 31 minutes, 43 seconds this area in the on the retail side and and uh I mean reading the aggressors in this area. So that is what I was kind of 31:53 31 minutes, 53 seconds I think you're right and we have ourselves in prior calls said that we are going to be very aggressive in this area because again we feel that will you know if you want to grow a market you 32:01 32 minutes, 1 second will have to make investments whether it's low cost low price deeper market expansion um I think we've done that we have sort of uh consolidated back right 32:10 32 minutes, 10 seconds now in this year and we'll again you know launch further expansion as we see opportunities in the coming year 32:17 32 minutes, 17 seconds appreciate. My second question is that for the SBI you know order uh there were talks of 32:24 32 minutes, 24 seconds 10,000 ATMs uh that were in freight for the outsourcing but the announcement that we made is it 32:32 32 minutes, 32 seconds pertaining to 5,000 ATM. So rest of the ATMs will it be uh coming in uh over next year or uh it's uh that particular piece is still away right now. 32:46 32 minutes, 46 seconds No, I think the total order is 10,000 in terms of what SBA wants to award. Um, if you go back, I think to some of our 32:53 32 minutes, 53 seconds earlier commentary in the first version of the outsourcing process, we were the only eligible participant and um that 33:02 33 minutes, 2 seconds would have you know meant we get the entire 10,000 but unfortunately with that getting scrabbed and them coming out with a new RFP um of that we were 33:11 33 minutes, 11 seconds the L1 uh participants. So we got about 5,000 of those volumes whereas going to other industry participants. 33:18 33 minutes, 18 seconds Okay. So the rest of it has gone to uh someone else. Okay. Yeah. Thank you. I'll get back in. Thank you. 33:27 33 minutes, 27 seconds Thank you. 33:30 33 minutes, 30 seconds Next question is from the line of Nihar Mata from Bay Capital. Please proceed. 33:38 33 minutes, 38 seconds Yeah. I just had a couple of questions. 33:40 33 minutes, 40 seconds one if Anush can comment on the overall RFP rollout. How is the outlook looking like in terms of new rollout from banks and cash logistics? 33:53 33 minutes, 53 seconds So I think for most of FY26 the RFP pipeline has been fairly subdued just on account of the both industry being 34:02 34 minutes, 2 seconds volatile banks you know struggling with um you know uh dealing with the fallout of AGS shutting down the ATMs industry 34:11 34 minutes, 11 seconds consolidating and understanding you know where things are. Um all of that has led to banks sort of making a shift in their 34:19 34 minutes, 19 seconds outsourcing strategy and the two key shifts here are they're moving away from or depending less on ATMs and pivoting more towards recyclers. 34:30 34 minutes, 30 seconds They see recyclers as being a very strong complement to helping branch transactions and the second pivot is moving away from 34:39 34 minutes, 39 seconds transaction based pricing to fix based pricing. That is something that as PMS we've been advocating for a long time. 34:45 34 minutes, 45 seconds We stayed out of the transaction market for almost last 12 to 18 months now. Uh when I think about the RFP pipeline in 34:52 34 minutes, 52 seconds FY27, we see meaningful activity coming back into the market. As we speak, we are 34:59 34 minutes, 59 seconds aware of almost about 6 to 8,000 ATM units which are in various stages of the pipeline. Um this means that there's a 35:08 35 minutes, 8 seconds total contracted value opportunity of about 2,000 crores. I think the timing of when these come out and you know what we win and how we position ourselves that's going to be key. 35:18 35 minutes, 18 seconds Okay. Understood. And just one more question. What's the cash? 35:24 35 minutes, 24 seconds Sorry to interrupt Mr. Mata. Your you are not audible. Your voice is breaking. 35:29 35 minutes, 29 seconds Yeah. Just uh one more question. What's the amount of cash on the books as on December 8th? Hello. 35:37 35 minutes, 37 seconds Um I'm just asking about 600. It's about 600 crores. Hello. Yes. 35:48 35 minutes, 48 seconds Uh Mr. Ma, does that answer your question? I could not get the last part. 600. Yeah, 600 crores. 35:56 35 minutes, 56 seconds Okay. Thank you. That's it from my side. All the best. Thank you. 36:02 36 minutes, 2 seconds Next question is from the line of Prakhar Agarwal from Dexter Capital Advisor. Please go ahead. 36:10 36 minutes, 10 seconds Yeah. Hi team. So thanks for the opportunity. So my question was along the lines of our outstanding order book. 36:17 36 minutes, 17 seconds I see like we have one uh 1,600 cr worth of order books in FY26. So I wanted to 36:24 36 minutes, 24 seconds understand like which side of our managed services business uh is this order book tilted to? I mean is this related to mostly software or our 36:33 36 minutes, 33 seconds banking automation business? If you could provide some color on that. 36:40 36 minutes, 40 seconds Um it's mostly a mix of both um you know integrated contracts on the manage server side and you know Hawkeye 36:47 36 minutes, 47 seconds especially when you look at the large you know uh complex branch RFP uh rollout. 36:55 36 minutes, 55 seconds Okay. So this also includes like Hawkeye uh contracts with uh uh our customers. Yes. 37:04 37 minutes, 4 seconds Okay. Yeah, that's all from Thank you. 37:12 37 minutes, 12 seconds Next question is from the line of Akshhata from Multiac PMS. Please go ahead. 37:19 37 minutes, 19 seconds Yeah. Hi, thank you for the opportunity. 37:21 37 minutes, 21 seconds So my question was more related to the cash management services. So sequentially if you look at the numbers we've still had a degrowth in the cash 37:30 37 minutes, 30 seconds management part and uh if you look at it that revenue for that segment has peaked out at around 417 crores and now we are 37:38 37 minutes, 38 seconds down to around 384 crores. So with uh the services guidance that you've given for next quarter and for the next year uh what is the outlook on this specific 37:46 37 minutes, 46 seconds segment and uh you know how much will the SBI order help for this you know the recovery in this segment? 37:57 37 minutes, 57 seconds I think specific to SBI you know as you called out it's about 500 crores of incremental opportunity over 10 year period so you should think of that as 38:06 38 minutes, 6 seconds about being about 50 crores per year the delta between 415 417 to 385 I think you 38:13 38 minutes, 13 seconds know we've sort of explained in in different ways but fundamentally it's a link of two three things it is a dip in our overall business points or ATMs that 38:21 38 minutes, 21 seconds we used to handle the the 4,000 an odd um dip that we had going in from Q1 to Q2 and Q3 that has had an impact. the 38:31 38 minutes, 31 seconds cleaning up of retail that we've done has had an impact and um also the calls that we had to take to fix our DSO 38:38 38 minutes, 38 seconds situation has had an impact with most of these you know you know either being fixed or normalizing right now we 38:45 38 minutes, 45 seconds anticipate this to get improve in the coming quart also just you know I I do want to we have mentioned this before I I would 38:53 38 minutes, 53 seconds like our uh analysts and investors both to start looking at our business in total because the managed services business and it itself being a customer 39:02 39 minutes, 2 seconds of cash management is now ramping up and we have a lot of integrated contracts. 39:06 39 minutes, 6 seconds So the revenue is actually and that's why you'll see an interview sort of a knockoff as we merge our P&Ls into the three business lines we talked about ATM 39:14 39 minutes, 14 seconds solutions will will be one complete business line where you'll see ADM cache managed services uh brown level ATMs 39:21 39 minutes, 21 seconds fixed price machines all of that will be in one revenue bucket we think that business overall should grow 15 to 18% 39:28 39 minutes, 28 seconds next year the retail and currency logistics business should grow about 12ish% and our technology and payments 39:36 39 minutes, 36 seconds business which includes Hawkeye and cards would I think grow about 20% for the next year. So that will give you the blend of revenue growth which we are 39:43 39 minutes, 43 seconds thinking about. We are working to uh build a P&Ls on these business lines and so that you will be able to see the 39:52 39 minutes, 52 seconds growth in each category by themselves instead of cash and MS and um tech. 39:58 39 minutes, 58 seconds Okay, fair understood. Um so this question was specifically uh you know from your margin guidance also. So for next year you know we are guiding the 40:07 40 minutes, 7 seconds margins to go back to our FI25 AIDA of around 25 26%. And uh you know if you look at your old segments so where we've 40:15 40 minutes, 15 seconds moved to new segmental uh reporting but since we continue to report uh old segments also uh the margins have broadly been impacted due to the 40:24 40 minutes, 24 seconds operating dele that we've seen in the cash management service. So uh you know the recovery for cash manager services 40:31 40 minutes, 31 seconds is also important for your margins and based on the next year margin guidance uh it is fair assessment that the cash management also has bottomed out within 40:40 40 minutes, 40 seconds services and it should uh grow from these levels. 40:45 40 minutes, 45 seconds No absolutely you're absolutely right. I mean uh I think from a cash management perspective both from a macro perspective and even from our own uh 40:52 40 minutes, 52 seconds what decisions we had to take in Q2 Q3 the revenue has bottomed out. I think currently the trend line is to grow uh 41:00 41 minutes is already growing higher and Anush mentioned to it is on our investor deck if you look at specifically the retail cash volumes they are very robust even 41:09 41 minutes, 9 seconds um in December and Jan for segments our ATM uh cash management contracts we have 41:16 41 minutes, 16 seconds from let's say SBI and then we think of the ICI order which is a managed services and cash management order win I think that will all lead to both the 41:24 41 minutes, 24 seconds cash management revenue growing as as well as uh the margin uh profile increasing. Um to set you a quick 41:31 41 minutes, 31 seconds context, we were roughly about 70,000 ATMs under cash management about a few quarters uh ago, which dipped to 68,000. 41:39 41 minutes, 39 seconds We are back to 70,000 now. We are targeting an aggressive ramp up to 74 75,000 ATMs by the end of March or 41:46 41 minutes, 46 seconds April. As that ATMs under cash management come in, you will also see the margin profile improving back on the overall business. 41:54 41 minutes, 54 seconds Understood. Understood. Very good. So last question is on the cost side. Uh so uh you know sequentially I understand that last quarter had some reversals on 42:02 42 minutes, 2 seconds account of ESOP and the bonus forgo. But uh even if I ignore the last quarter and if I look at you know uh your YI 42:11 42 minutes, 11 seconds employee cost u so that run rate has gone from around 81 cr to around 100 cr. So we've grown that by around 20 plus%. 42:20 42 minutes, 20 seconds um uh and uh your uh vehicle uh sorry your service uh charges have remained flat. So we are seeing a insourcing 42:29 42 minutes, 29 seconds trend. So you know just wanted to understand the background behind this and whether the insourcing trend as you know it's it's complete and what should 42:37 42 minutes, 37 seconds be our employee cost and services under rate that we should you know uh understand going forward. 42:45 42 minutes, 45 seconds So let me give you the philosophy and how what this what has happened and then specifically punkage can maybe answer. 42:50 42 minutes, 50 seconds I'm not pro to the 800 cr number right now which you're referring to. Uh the overall employee cost you should think in conjunction both employee cost and 42:58 42 minutes, 58 seconds service security. Uh it's not you insource outsource depending on where in the regions are you working and also 43:04 43 minutes, 4 seconds what nature of business. Um right some of the higher value more risk business will always be insourced. um uh we have 43:12 43 minutes, 12 seconds had increase in overall employee cost if you com combine the P&Ls both two reasons one was wage inflation linked to 43:19 43 minutes, 19 seconds us signing long-term wage settlements earlier in the year we talked about this in Q1 um we have a 3 to four year cycle of signing wage settlements we normally 43:27 43 minutes, 27 seconds recoup it back through productivity but this year given volume growth was low recouping it back within the year was difficult but I think we'll start seeing 43:35 43 minutes, 35 seconds that in Q4 Q1 going forward the second was linked to the fact that we invested and made the wrong decision of investing for capacity assuming we were getting 43:43 43 minutes, 43 seconds the whole SBI contract in April May that was with hindsight a terrible call to make and we're paying for that and we're 43:50 43 minutes, 50 seconds trying to fix that right now um so if you think of u the overall number pank you want to talk about overall number 43:57 43 minutes, 57 seconds which you refer to yeah so if we see that uh if you add both the service and security and the 44:04 44 minutes, 4 seconds employee cost uh it is increased around 6 to 7% over uh Q3 of FY25 44:12 44 minutes, 12 seconds to Q3 of FI26 and this is because of the as we explained to you there is the LTS impact and the new business whatever we 44:20 44 minutes, 20 seconds got is impact of related to that and so there's no there's no change in insourcing outsourcing I think for that we are fairly agile in what we need to 44:28 44 minutes, 28 seconds do for the business okay understood understood one last question sorry to interrupt Mr. Hara, may we 44:36 44 minutes, 36 seconds please request you to rejoin the queue for the follow-up question, sir? Sure, sure. Thank you. 44:44 44 minutes, 44 seconds Next question is from the line of Suraj Singha from Ratnata Capital. Please proceed. 44:52 44 minutes, 52 seconds Yeah. Hi sir. Uh thank you for the opportunity. Most of my questions have been answered. Just uh one question was around your capeex estimates for FI26. 45:01 45 minutes, 1 second You had earlier guided for 300 crores of capeex. Now we have done 275 crores this year. So what what is the capex that we 45:08 45 minutes, 8 seconds estimate for this year and next year that's one and one is the data keeping question which is since secur 45:16 45 minutes, 16 seconds business has now been consolidated in our P&L what is the revenues and aida from the securance business in Q3 F26. 45:32 45 minutes, 32 seconds So um as we have given the guided that our capex will be around uh 300 to 325 cr rupes and we have already spent 275 45:40 45 minutes, 40 seconds cr. We expect that we will in the range of 300 to 325 cr rupes only uh secures 45:47 45 minutes, 47 seconds uh in around 18 cr rupees uh uh incremental 12 crores uh total revenue of 18 cr rupes. 45:56 45 minutes, 56 seconds incremental revenue of around 12 cr rupes in Q3 and securities will have actually a negative PBT because we will be front loading the depreciation on that assets. 46:07 46 minutes, 7 seconds Got it. Got it. So 6 crores was accounted in the last quarter if I understand that. Yeah. Yeah. Yeah. Got it. Thank you. 46:16 46 minutes, 16 seconds Thank you. 46:19 46 minutes, 19 seconds Next question is from the line of Danch Gupta from Latin PMS. Please go ahead. 46:26 46 minutes, 26 seconds Hi uh one question you had mentioned that uh the contracts are now moving from let's say cash machines to recyclers. 46:34 46 minutes, 34 seconds Uh so the question is that as recyclers uh do the number of trips that we have to do reduce and therefore lead to a 46:42 46 minutes, 42 seconds revenue pressure for us going forward or we price it in and increase the realization. 46:51 46 minutes, 51 seconds Um no danch I mean if if I look at our current base also recyclers are a lot more um have a lot more complexity than 46:59 46 minutes, 59 seconds medium and especially in terms of how they need to be managed and more importantly serviced. Um the expectations from customers is also that 47:07 47 minutes, 7 seconds the quality of service and uptime on these machines have to be of a much higher order. Generally recyclers are deployed at onrem branch sites which 47:17 47 minutes, 17 seconds means that you know for they generally have a higher footfall and you know so banks are very keen to sort of you know 47:24 47 minutes, 24 seconds for example if atm 95% of time recyclers is almost 97 98%. So um to us we actually see recyclers as being sort of 47:33 47 minutes, 33 seconds an upsell and a higher value solution than ATMs. 47:38 47 minutes, 38 seconds But when you say uptime, it means more cash availability or I'm assuming it means more cash availability. But given that more end user end user availability 47:47 47 minutes, 47 seconds right now which which is which could be cash availability which could be you know how how do you fix the faults it could be things to do with the software things to do with the hardware but end user availability. 47:58 47 minutes, 58 seconds uh but for just to double click on it see assuming that machine of an ATM and a cash recycler both are of sufficiently 48:07 48 minutes, 7 seconds good quality then let's say non-cash uh metrics will largely be same and given 48:14 48 minutes, 14 seconds that the customer can deposit cash the cash out situations will reduce so therefore does it reduce the number 48:22 48 minutes, 22 seconds of trips that was my I I think you should look at you know what a recycle ular means to different stakeholders. To a bank, it definitely brings about a greater degree of 48:31 48 minutes, 31 seconds efficiency in terms of how the currency is utilized. It is effectively less cash at float. To us, we also like a recycler 48:38 48 minutes, 38 seconds model simply because both unit economics wise and in terms of the complexity, it is a higher value, which means that in 48:47 48 minutes, 47 seconds in terms of the monthly fixed fee, it is usually pegged above an ATM. 48:51 48 minutes, 51 seconds Um now the number of visits might be lesser in certain cases but that doesn't really change the nature of the revenues 48:59 48 minutes, 59 seconds simply because the amount of work that still needs to be done especially in an ATM you only need to withdraw cash and 49:06 49 minutes, 6 seconds load it in a recycler you might have to load it you might have to evacuate it there's a lot of reconcilation work that also needs to be done so it's not as 49:13 49 minutes, 13 seconds plain speaking as that but um netnet it it ensures to us a higher realization than what a normal ATM would 49:22 49 minutes, 22 seconds to a bank it's not necessarily higher cost because they need to look at it in terms of what what a cost of a branch transaction is visa v what that of a 49:30 49 minutes, 30 seconds recycler would be so it is generally a more efficient way of managing things understood and the second question was 49:38 49 minutes, 38 seconds in the analyst day deck right we had mentioned that we have 38% market share in the retail cash management 49:45 49 minutes, 45 seconds uh but uh at least that my understanding was that currently we do not have pricing power or we were looking to 49:52 49 minutes, 52 seconds increase pricing after uh some time. So is there a target market share which will allow us or how 50:00 50 minutes should we understand that when should pricing ability to price it higher for retail cash management can be expected. 50:10 50 minutes, 10 seconds uh let me let me take an analogy on the ATM business right or rather you know when I look at what 50:18 50 minutes, 18 seconds we gain in terms of our ability to you know both influence the market as well as influence our own outcomes I think with each step change in our overall 50:27 50 minutes, 27 seconds market share it creates a very different kind of an outcome and we've seen this we've seen you know um what CMS was 15 50:35 50 minutes, 35 seconds years back 10 and now especially in terms of the way we've been able to unlock incremental uh IBIDA margins ac 50:41 50 minutes, 41 seconds you know as we've scaled up in the ATM business as we went from a 35 to 40 to 45 50 and closer to 57 58% market share 50:49 50 minutes, 49 seconds all of that step change has had a differential outcome in terms of pricing route optimization right now in the retail I think we're in a zone where we 50:58 50 minutes, 58 seconds are focusing more on yield management and yield improvement which means that we are sort of evaluating things on a contract by contract basis um our focus 51:06 51 minutes, 6 seconds there is really to continue to increase market share to continue to expand the addressable market opportunity and to invest in both building the sales 51:13 51 minutes, 13 seconds capability as well as using that to cross-ell into technology solutions. I think for I would uh you know the way I would ask you to think about is and this 51:22 51 minutes, 22 seconds is a question we ask ourselves right uh first of all you want to defend your revenue and market position in the market right that's the most important thing right now you don't want to suffer on revenue and market position uh 51:30 51 minutes, 30 seconds margins can go up and down we are fortunate in many ways to have a margin profile which is substantially better than anybody else we know of in 51:38 51 minutes, 38 seconds internationally or locally maintain that margin profile and growing revenue rapidly both of those are not easily possible right so something has to give 51:45 51 minutes, 45 seconds at some points of time um I would argue you now with hindsight like the last year has seen the opposite happen where we defended market and revenue and 51:53 51 minutes, 53 seconds therefore has had some impact on margins possibly. We will hope to undo that in the coming two three quarters. 51:59 51 minutes, 59 seconds Specifically to retail, I mean I think Anu said we will look at our network and look at our capacity to see how we can keep growing revenue at a sensible 52:06 52 minutes, 6 seconds margin profile. Um and is there a particular mar market share number where it makes sense? I don't know right. I mean I think it if you have one 52:15 52 minutes, 15 seconds competitor who is willing to anyone right now there are four competitors in the sector. If you have only two the second one can keep aggressive being u 52:23 52 minutes, 23 seconds aggressive in pricing maybe right. So really you can't determine when and how much pricing power you can get. I think if you can keep focusing on quality 52:30 52 minutes, 30 seconds cross-selling to the customer other lines of businesses I think you're fine. Understood. And just one last question. 52:37 52 minutes, 37 seconds Sorry to interrupt Mr. Gupta. May we please request you to rejoin the queue sir for the follow-up question. Thank you. 52:45 52 minutes, 45 seconds Next question is from the line of Shivam Parik from Value Wise Wealth Management. Please go ahead. 52:52 52 minutes, 52 seconds Yeah. Hi sir. Good afternoon. Thanks for the opportunity. So we are having a good cash position of around 600 crores in our books and having a great balance 52:59 52 minutes, 59 seconds sheet as well. So also with us being market leaders in the business that we do and further consolidating our market share further in in the in tough times 53:08 53 minutes, 8 seconds last financial year and this financial year. So are we thinking of enhancing shareholder value through buybacks to gain advantage of the low valuations currently? 53:19 53 minutes, 19 seconds Yes. 53:23 53 minutes, 23 seconds Hi um I think as perhaps you have joined late in the initial part of our opening remarks as Raj mentioned given the 53:32 53 minutes, 32 seconds changes to the buyback regulation that have been announced um and we feel that right now it is a lot more equitable for all stakeholders as opposed to the 53:39 53 minutes, 39 seconds earlier regime. Uh this is something that has been discussed at the board level. We will evaluate this closer to the end of this year as we look at our 53:48 53 minutes, 48 seconds overall capital needs in terms of growth capital M&A. 53:52 53 minutes, 52 seconds Yeah, I think we you know we have we do have a fairly active M&A pipeline. We've been working on that for a long time. Uh we are looking at um investing for 54:02 54 minutes, 2 seconds growth. As I said our priority is simple organic uh then inorganic and then returning shareholder uh returning capital shareholders whether that's through dividends or buybacks. I think 54:10 54 minutes, 10 seconds we will take the we will have the board discuss at an appropriate time. Um right now we are seeing active opportunities in the M&A pipeline. We don't know that 54:18 54 minutes, 18 seconds doesn't mean deals will happen. We will continue working on them and what makes sense for us to build and scale our business in with good returns. I think 54:26 54 minutes, 26 seconds that's the first priority for us as a team uh to us and to our shareholders. 54:31 54 minutes, 31 seconds Okay. So sir with you seeing buybacks favorably for us. So you are seeing no sorry let me let me let me let me 54:38 54 minutes, 38 seconds clarify. It's not about seeing buybacks favorably for or in unfavorably. I think buybacks because there has been a constant ask 54:46 54 minutes, 46 seconds and question on buybacks. We want to address it proactively in line with our capital allocation philosophy which we have entailed out. We're not saying a 54:53 54 minutes, 53 seconds buyback is going to happen or not. If we do see excess capital and we don't have a need for it, we then will evaluate 55:00 55 minutes returning it via dividend or buybacks as the board deems fit. 55:05 55 minutes, 5 seconds Okay. So sir if any uh buyback was to be possible so uh can we expect uh in financial year 27 or uh this year this 55:15 55 minutes, 15 seconds financial year I I I don't uh think I could forecast this at all. Uh this is not a decision which a management team makes. I think I 55:23 55 minutes, 23 seconds think we've been fairly clear on the way we think about it. Uh we will let you know end of the year if there's any change to the thinking. 55:31 55 minutes, 31 seconds Also with buybacks being taxed unfavorably. So does that have a bearing on our decision. That was my last question. 55:40 55 minutes, 40 seconds Certainly yes absolutely you're right because we have to think of capital allocation in with light of all of that. 55:46 55 minutes, 46 seconds That's why we have proactively talked about it. Not to say that there's something happening just to share with you how we think and we are clear to our shareholders equally to give you an 55:54 55 minutes, 54 seconds answer on our thinking. We do see capital needs for the growth of the business both organically and organically. If after that we see a 56:01 56 minutes, 1 second sufficient cushion for us to return capital, we will definitely look at it. 56:07 56 minutes, 7 seconds Okay sir. Thank you sir. That was very helpful. 56:11 56 minutes, 11 seconds Thank you ladies and gentlemen. We will take this as a last question for the day. I now hand the conference over to the management for the closing comments. 56:22 56 minutes, 22 seconds Thank you so much. Uh thank you for your uh Q&A and for all the questions you asked us. I think I'll summarize by saying that yes, we've had uh two 56:31 56 minutes, 31 seconds quarters of disappointing numbers. We are hoping to turn the tide with Q4 and going into Q FI27 strong. Um I know 56:39 56 minutes, 39 seconds there's a revenue forecast which may seem little aggressive given the Q3 specific numbers um and the last two three quarters of sort of 56:48 56 minutes, 48 seconds underperformance but we're hoping to turn it and deliver stronger numbers for you and for us to meet our own internal 56:54 56 minutes, 54 seconds target which we have set for FI27 of 2700 to 2,800 cr of services revenue and overall revenue of 28 to 2900 crores and 57:04 57 minutes, 4 seconds with an IITA margin of 25 to 26% for the uh for the Thank you. 57:11 57 minutes, 11 seconds Thank you sir. On behalf of MK Global Financial Services Limited, that concludes this conference. Thank you all for joining us and you may now 57:20 57 minutes, 20 seconds disconnect your