Computer Age Management Services Ltd — Q4 FY26

Computer Age Management Services Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=2Nnorzj90qE Published: 8 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the computer aid management services Q4 and FI26 only conference 0:09 9 seconds call. As a reminder, all participant line will run the listen only mode and there will be an opportunity for you to ask question after the presentation 0:17 17 seconds conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your test info. Please note that 0:26 26 seconds this conference is being recorded. I now hand the conference over to Mr. Nikol from MUG. Thank you and over to you. 0:34 34 seconds Thank you Danish. Good morning everyone. 0:37 37 seconds Welcome to Q4 and FI26 earnings conference call of computer age management services limited. From the 0:45 45 seconds management we have with us Mr. Anoj Kumar MD and CEO, Mr. Ramcharan CFO and Mr. Anish Savlani head investor relations. 0:55 55 seconds Before we proceed with the opening remarks, I would like to give a small disclaimer that this conference may contain certain forward-looking statements about the company which are 1:04 1 minute, 4 seconds based on beliefs, opinions and expectations of the company as on date. 1:09 1 minute, 9 seconds These statements are not guarantees of future performance and involve risk and uncertain. 1:16 1 minute, 16 seconds A detailed disclaimer has been published in the investor presentation. Now I would like to hand over the conference to Mr. Gan Kumar for his opening remarks. Thanks. 1:27 1 minute, 27 seconds Hey, [clears throat] Nikai. Thank you very much. Uh good morning to everyone. 1:32 1 minute, 32 seconds Uh appreciate all of you taking the time out to join um our earnings call. As you would have seen the results that uh we 1:41 1 minute, 41 seconds published yesterday. It's been a pretty solid quarter uh for CAMS in 4Q of FI26. 1:49 1 minute, 49 seconds uh you know that the external environment has not exactly been friendly. months of Jan and Feb uh those I would classify as the normal months in 1:58 1 minute, 58 seconds the month of March of course uh there was significant impact from what was happening in the environment but despite all of that uh you've seen our results 2:07 2 minutes, 7 seconds and I'm very happy to kind of share with you a set of events which I would say are pretty interconnected but uh and the 2:16 2 minutes, 16 seconds reflection is in the quarter that just went past but uh the foundational impact of a lot of things which are happening will continue to be seen I'm sure in 2:24 2 minutes, 24 seconds this year and perhaps the next but just to sum all of this up you've seen the deck so I'm assuming that you've gone through it at least once uh we posted 2:33 2 minutes, 33 seconds our highest ever work quarterly revenue in Q426 [snorts] for the first time I think I am calling out the nonMF performance ahead 2:42 2 minutes, 42 seconds of MF because nonMF kind of heralded uh the the growth metric a lot better than 2:49 2 minutes, 49 seconds MF did in this quarter we grew non MF revenue know close to 25% year on year. You know our promise has 2:55 2 minutes, 55 seconds been 20%. Uh but successively over the last 3 years we've been able to beat that and we expect that uh we have the 3:03 3 minutes, 3 seconds mix of products and go to market strategy to continue uh doing this. 3:09 3 minutes, 9 seconds Enterprise revenue for the quarter went up uh 11% for the I mean quarteron quarter it was 1.3% you know uh the 3:16 3 minutes, 16 seconds reasons annually it went up uh 11% year on year the MF business revenue was almost flat it just grew about.5%. Given 3:25 3 minutes, 25 seconds the circumstances, it wasn't uh bad at all. Uh MF yields held uh quite well and 3:32 3 minutes, 32 seconds uh with all the operational efficiency, automation, uh the the new platform program, what we 3:39 3 minutes, 39 seconds call the rearchitecture program, uh everything contributed there and obviously you know that there's a significant degree of fiscal discipline 3:48 3 minutes, 48 seconds in the company. Absolute amida scaled back to the highest ever. Now you will I will take you back to forq last year Jan 3:56 3 minutes, 56 seconds Feb when you know that we had done price adjustment etc. uh that is almost an event which is completely behind us 4:03 4 minutes, 3 seconds because from a peak of about 173 174 crores of absolute aida we went about 177 last quarter we've climbed up to 4:11 4 minutes, 11 seconds about 183 now and uh I expect that this is kind of a baseline number which was stick percentage a bit climb back to 4:20 4 minutes, 20 seconds just in excess of 46% about 46.5 and as a collectivity I think that's a great set of metrics to have on our side 4:29 4 minutes, 29 seconds uh From a mutual fund business perspective, AUM at 55.1 lakh cr is obviously significantly lower than the 4:36 4 minutes, 36 seconds 58.5 that we achieved at some time in 4Q. But uh because of the impact of what's happening in the Middle East, uh 4:43 4 minutes, 43 seconds it came down. Uh however uh this represents a 21% yearon-year growth and 4:50 4 minutes, 50 seconds holding 68% overall share. Share is a great story on equity assets. I think overall uh we holding 68% we grew AUM in 5:00 5 minutes line with the industry at 21%. And uh equity assets uh within all this within the turmoil uh went up to the highest 5:09 5 minutes, 9 seconds ever of 30.5 lakh cr uh with a share of 67%. 5:16 5 minutes, 16 seconds This is almost a night bip. So I would approximate it to about 1% went up about from 66 to 67 year on year. certainly 5:25 5 minutes, 25 seconds grew faster than the industry which is a great sign. 5:29 5 minutes, 29 seconds Equity net sales which I think is the most formative metric here because of the all the puts and takes this is [snorts] the real money which comes and 5:36 5 minutes, 36 seconds hits uh the books uh which was in just in excess of one lakh cr and within 5:44 5 minutes, 44 seconds equity and net sales therefore our share grew from 71% in the past quarter to 76%. These are great numbers. 5:50 5 minutes, 50 seconds Historically, if I take you back four or five years, CAMS used to be about 60% share of the active equity market and about 80% share of the fixed income market. This was before passive etc. 6:01 6 minutes, 1 second became popular. It was largely a 5 years back it was largely an equity an actively managed market 60% in equity about 80% in fixed income. That 60 6:10 6 minutes, 10 seconds gradually has climbed up to the number that you're seeing which is about 67. So about I think about a percent a year given the fact that this is the most 6:18 6 minutes, 18 seconds galized the most sticky the most reminiserative the most growth oriented component of the overall market it certainly is 6:25 6 minutes, 25 seconds formative it's not a flash in the pan it's nothing that happened in one quarter or two quarters and will then go away because we believe the foundational 6:32 6 minutes, 32 seconds components just remain intact uh new SIP registrations aid all of this the AUM the aid equity aum and the aid 6:41 6 minutes, 41 seconds net sales uh US IP registrations went up to about 1.26 cr. Uh our typical 6:48 6 minutes, 48 seconds baseline number is about a cr to 1.1 cr in a quarter. Uh this was a significantly higher number than 4q last 6:55 6 minutes, 55 seconds year grew about 46% industry grew 37. So another uh metric after metric in the 7:02 7 minutes, 2 seconds top four or five metrics that really matter again from a foundational perspective not just a quarterly performance perspective I think we 7:09 7 minutes, 9 seconds outpace the industry by some margin. uh annual SIP registrations uh hit just short of 5 crore about 4.7 7:18 7 minutes, 18 seconds uh up 17% uh over FI25 and this number is almost 2x of the 7:25 7 minutes, 25 seconds industry growth. So across uh across all of these that I've spoken about uh significantly or uh a little bit ahead 7:33 7 minutes, 33 seconds of the industry SIP collections crossed the 20,000 cr milestone in the month of March uh grew 20% yearon year and almost 7:42 7 minutes, 42 seconds touched 59,000 cr for the quarter uh and this is about 17% up year on year while compared to 4% for the industry. 7:53 7 minutes, 53 seconds So overall share of these collections went up from 57 to 64%. Unique investor base similarly you can see the number again outpace the industry. 8:03 8 minutes, 3 seconds From a new logo perspective uh you're aware that our philosophy has been that uh of course uh it's very encouraging to see in the environment that a large 8:12 8 minutes, 12 seconds number of uh new MC's are getting licensed. uh we've said that uh traditionally for the last three decades our franchise is built on a scale play a 8:20 8 minutes, 20 seconds bit of a brand play and a scale play and therefore our endeavor is to go after logos that we believe uh a great 8:29 8 minutes, 29 seconds fits into the scale play both the names that I mentioned Neo and Oakland uh conform to that and we believe that our 8:37 8 minutes, 37 seconds strategy of selling value selling just incremental uh consumer value and AMC value uh instead of selling price has 8:46 8 minutes, 46 seconds succeeded over a period of time. Uh so the total count of AMC's this is of course licensed AMC's not everybody's 8:52 8 minutes, 52 seconds live yet. Uh these are live these are licensed domestic AMC's adds up to 31 9:00 9 minutes uh transaction volumes continued to scale. They have continued to scale because that is the retitalization 9:08 9 minutes, 8 seconds penetration metric that everybody talks about grew about 20% reached 107 cr financial transactions there's a bit of 9:16 9 minutes, 16 seconds about two and a half cr non-financial transactions too on top of this but this is the core financial transaction 9:23 9 minutes, 23 seconds um sifs which was a product category announced uh somewhere early in 25 went live in September October of 9:33 9 minutes, 33 seconds four new SIS launched during the quarter. Total number of live SIS is now six and we have about eight which are 9:42 9 minutes, 42 seconds either licensed from a product perspective, eight additional which are either licensed from a product perspective or have made announcements and will get licensed soon. So you will 9:50 9 minutes, 50 seconds see these launches. I suspect the launches will happen between May, June, July, August or maybe even faster but certainly within those four months. So 9:59 9 minutes, 59 seconds this will uh this will become a very relevant uh competitive new product category for the industry and for us. So 10:07 10 minutes, 7 seconds very sanguin about the prospects. Uh retail fund launches in Gib City. I know that it isn't a great AUM story yet 10:15 10 minutes, 15 seconds but it's a compelling story for uh domestic investors wanted to invest uh in outside assets and not feel the 10:23 10 minutes, 23 seconds constraints of going through you know uh the the the ETFs etc. some of which have 10:29 10 minutes, 29 seconds uh run to a ceiling. So this continues when I move uh beyond MF when I move 10:37 10 minutes, 37 seconds beyond MF to non MF I think uh contribution to enterprise revenue obviously could have been better we 10:45 10 minutes, 45 seconds certainly want to scale it even faster but at 15.3% uh it's it's kind of underscoring all the diversification that we've tried to 10:53 10 minutes, 53 seconds do in a very focused manner in the last four years uh within this uh pay uh 10:59 10 minutes, 59 seconds which is now a licensed PA and a PG both uh delivered about 23% growth year on 11:06 11 minutes, 6 seconds year continue to add new clients and continue to do uh payment gateway and scale payment gateway which is the 11:14 11 minutes, 14 seconds additional offering alternatives although you know that not every app which has got a license has launched uh quite a few of them have 11:23 11 minutes, 23 seconds been licensed but haven't launched yet or have been differing launches but we had a very strong quarter revenue grew 11:29 11 minutes, 29 seconds over 25% % year on year AUM cross three lakh cr the 50% share of the outsource 11:37 11 minutes, 37 seconds market remained intact and the number of mandates uh you know these are like full service mandates 44 new ones 14 new 11:46 11 minutes, 46 seconds logos almost one a week or faster than that where you know that the business has gone through several moments of 11:54 11 minutes, 54 seconds reckoning in the last one year not one moment of reckoning and that's not just a story about us across the industry as uh investors have rethought their 12:04 12 minutes, 4 seconds strategy on participating directly in the equity market through the demat accounts and roofing accounts. U also some of the geopolitical stuff uh would 12:13 12 minutes, 13 seconds have had its impact on new folio opening etc. Uh despite all of that and despite the fact that now of course you've seen 12:20 12 minutes, 20 seconds that the K business will take a bit of a revenue down because of the price down. 12:26 12 minutes, 26 seconds So despite those several moments of reckoning within one year uh there's a 28% yearon-year revenue growth for the 12:34 12 minutes, 34 seconds quarter. Uh like we had said that our base is mutual funds. Our additional arena is brokerages and DPS 12:43 12 minutes, 43 seconds and within that we added a couple of fairly active large accounts and we believe that this trend is there to continue. So we will continue gaining 12:52 12 minutes, 52 seconds share. The integration of uh NCK which was a slump sale uh done by them and acquired by us in the month of January 13:00 13 minutes brought in about 13 14 lakh new fans. Uh it was a it was a very clean integration. You did not hear a single hiccup. You did not hear of single 13:08 13 minutes, 8 seconds service issue or anything on uh social media. So that part is in the base now. 13:14 13 minutes, 14 seconds uh rep um delivered a 6% year-on-year revenue growth uh for the quarter. 13:21 13 minutes, 21 seconds Uh Dimma central I think uh did well doubled its active user base. LIC 13:28 13 minutes, 28 seconds started policy issuance uh in the DMAT format digital origination. It was signed in 13:34 13 minutes, 34 seconds last March in 25 took about up to Feb March to get integrated. We're expecting that that will at some point and that 13:43 13 minutes, 43 seconds some point should be within this year add a new dimension to how the insurance industry looks at insurance demat as LIC scales. Um a lot of the other ones 13:52 13 minutes, 52 seconds who've been convinced about demat insurance and service will jump into the phrase. So again a formative metric we've said this for some time we'll wait 14:00 14 minutes for some decisive definitive action before we thumb the table but I think it's my duty to mention this to you. IR market share expanded to 40%. So again 14:09 14 minutes, 9 seconds just to sum it up 68% I've said this many times in the past 68% market share in MF 40% in IR 50% in the outsource 14:17 14 minutes, 17 seconds part of K of AIF K now decisively the number two player leaf frog from being number three about a year and a half 14:25 14 minutes, 25 seconds back to number two and all of that is held together and the last thing I would mention is that as this DBDP bill whose 14:32 14 minutes, 32 seconds rules have now been notified the date for adherence and compliance has been declared as the 1st of May next year. 14:39 14 minutes, 39 seconds Although the board is in the process of getting set set up, I think there is a lot of inquiry inside the markets. I would say right now inside the financial 14:47 14 minutes, 47 seconds services market, not as much in hospitality and airlines and retail and food delivery etc. Not all of that will 14:55 14 minutes, 55 seconds happen uh since we believe that we will have certainly a processor status in several segments of a business and in 15:03 15 minutes, 3 seconds one or more uh including K repository and RTA we could be a fiduciary uh we built an offering out largely it was a 15:11 15 minutes, 11 seconds captive offering but then both from a data discovery and a consenting part you know that we know consenting well because that's a fairly evolved practice 15:19 15 minutes, 19 seconds in M in both MS center and in account aggregator largely in Okay. Uh we decided to launch this commercial offering called Concentro 15:28 15 minutes, 28 seconds uh which which kind of delivers the end outcomes in as far as DBTP compliance is concerned and we're expecting that this market will undergo 15:37 15 minutes, 37 seconds um a lot of decisive action in the coming quarters as the date for compliance gets closer and closer. We're still about a year away and now the 15:45 15 minutes, 45 seconds action is just beginning to unfold. But we saw this opportunity. We'll keep you posted on how this goes. And the last thing that I decided to cover, there 15:52 15 minutes, 52 seconds have been questions across the board from all of us uh and all of you rightfully so on what is the behavior 16:00 16 minutes and what is the progress on the rearchitecture program? Are we on course? How's the Google relationship doing? And I think finally everyone 16:08 16 minutes, 8 seconds wants to know that uh why are you dropping less or dropping more of these words of uh you know GPUs and artificial 16:17 16 minutes, 17 seconds intelligence and self-arning algorithms and everything which is being said around us in the marketplace. 16:22 16 minutes, 22 seconds uh very happy to share with you just one metric that you would have seen us grow revenue on almost a flat headcount and 16:31 16 minutes, 31 seconds you know that we've never historically been a company which does uh you know frequent headcount resets. We actually haven't done it uh in recent times 16:39 16 minutes, 39 seconds including during the co years etc but on a flat headcount which means we are doing nothing to the headcount but we are just getting the productivity up uh 16:46 16 minutes, 46 seconds through a series of automation steps. I think that is something you would have seen in the last year. I saw it in the 16:53 16 minutes, 53 seconds last quarter and uh our belief is that in FI27 we will see all the revenue growth on 17:01 17 minutes, 1 second falling head count uh some bit of fall which we may choose not to do some backfill. Now some backfill obviously we'll have to do but if we choose to do 17:09 17 minutes, 9 seconds uh choose not to do some of it that I think will be uh significant increment in terms of employee productivity and uh revenue productivity for employees. 17:18 17 minutes, 18 seconds What are the key capabilities are? Uh one of the steps we had taken was uh you know this entire thing about uh you know 17:26 17 minutes, 26 seconds that we've done great stuff in uh face reading and video reading and face match etc. And we do the only ones who do that 10-minute KYC but we extend all of this 17:35 17 minutes, 35 seconds to form reading. Uh we're now almost taking out the maker step in in a lot of physical forms which means uh you know uh we still retain the physical chatter. 17:45 17 minutes, 45 seconds So there is a human but the other human we taking out and letting the machine do that work. This went on for in production now in actual production no 17:52 17 minutes, 52 seconds beta no testing for over a month now almost two months and we will continue to deepen this uh over a period of time. 17:58 17 minutes, 58 seconds Uh so that delivers some degree of operational efficiency but from other capabilities that you will see now uh 18:06 18 minutes, 6 seconds you will see uh data lake and uh transaction origination platform. These are large platforms where uh building 18:15 18 minutes, 15 seconds and testing it is one part and then taking it to market because everybody integrates which means all of them have to do a bit of integration work at their side. I think that is beginning to happen. Where will you see the impact? 18:25 18 minutes, 25 seconds You will see the impact in a significantly lower percentage of industry complaints when you see a one 18:33 18 minutes, 33 seconds and a halfx or 2x transaction base. So complaints uh per transaction as a metric we're significantly ahead of the 18:41 18 minutes, 41 seconds industry. Uh you will see and hear from the marketplace and from our clients about the nextG transaction origination platform. Of course taking it to market 18:49 18 minutes, 49 seconds and making sure that we sunset the old one and get the new one in place will take some time but we are ready completely ready and then uh the data 18:57 18 minutes, 57 seconds warehouse is uh ready to go both of these within the next 3 or 4 months. 19:01 19 minutes, 1 second they are technically ready and waiting for a roll out these and then there are several other things which obviously whenever we meet you oneonone we will 19:10 19 minutes, 10 seconds talk about those and where will you see the benefits I've told you the benefits that this is not just some technical jargon or something hidden in you know 19:18 19 minutes, 18 seconds five layers of technical detail it's obvious metrics you will see headcount you will see revenue headcount you will 19:24 19 minutes, 24 seconds see uh complaints you will see uh you know lowering of the complaints on transaction ratio you will see few 19:31 19 minutes, 31 seconds frauds. You will see few risk items, charges taken to the P&L basis, risk incidents, etc. I know a lot of you track those numbers. We track them 19:39 19 minutes, 39 seconds closely too. And [clears throat] I believe that uh all of this will have a salary impact on the overall functioning of the company as we make it more 19:47 19 minutes, 47 seconds productive and more battery ready for the future. So I will uh pause here. I will pause here and then hand it over to Ramchuran. Uh he will take you through 19:56 19 minutes, 56 seconds the specific numbers and then we are open for questions. We will have about 30 35 minutes for that. Ram over to you. 20:03 20 minutes, 3 seconds Uh thank you Anoj. I think Anoj has gone through the highlights from a financials perspective. I'll just call your attention to a few trends and numbers 20:11 20 minutes, 11 seconds and then open it up for questioning. As you would have noted uh you know there the am growth during the quarter was muted. It was a little more than 1%. And 20:21 20 minutes, 21 seconds uh if you actually see our uh yield the compression on quarteronquarter basis has been less than 1%. And if you drill 20:29 20 minutes, 29 seconds down further, I think uh you can very clearly see that this is entirely and I'm not saying 50% 25% but this is entirely because of the impact of the 20:38 20 minutes, 38 seconds mix which is that you have seen the passives grow over the last quarter more than what the active funds have grown and uh so if you see from that 20:46 20 minutes, 46 seconds perspective the yields have been very stable quarteron quarter and we have always said that post the reset of the pricing you will get back to the normal 20:54 20 minutes, 54 seconds uh equation of asset to asset growth asset fee growth. Happy to say that we are kind of tracking that and been doing better this quarter in terms of yield 21:02 21 minutes, 2 seconds stability. In terms of growth of revenue, you had you know 11% growth year on year for the quarter and 1.3% 21:10 21 minutes, 10 seconds quarteron quarter. And if you further split it down uh mutual fund revenue was sort of flat almost uh you know.5% 21:17 21 minutes, 17 seconds growth. uh the non-asset based revenue did go down on year on year and quarteronquarter basis largely driven by 21:24 21 minutes, 24 seconds some drop in transaction revenue uh in quarteron quarter on probably MF central related transaction revenue and also on OP and uh lack of new NFOs that are 21:33 21 minutes, 33 seconds coming into the market. Uh if you take that I think from a overall growth perspective asset based revenue broadly tracks the growth in AM. uh the bright 21:42 21 minutes, 42 seconds story of course as Anil was mentioning is the growth of non uh MF revenue and uh happy to say this is across the 21:49 21 minutes, 49 seconds spectrum this is not one outlier on a year-on-year basis you had camps pay af k uh everything growing more than 20% 21:58 21 minutes, 58 seconds right and it was not just one thing which was outside growing at 80% others not growing so it was across the spectrum kind of a growth you are seeing year on year which is more broad-based 22:06 22 minutes, 6 seconds and even on a quarteronquarter basis uh the you know the growth in non- visual fund sort of offset the weakness in the AUM growth and hence we are able to report 22:15 22 minutes, 15 seconds uh 1.5% increase in revenue. Uh we feel that this is kind of keeping in line with our projections that you know you 22:23 22 minutes, 23 seconds will see the non-mutual fund business grow more than 20%age. uh this this time it's 24.5% year on year and for the for 22:31 22 minutes, 31 seconds the year they are close to 18%age that's because we had a weak first quarter but going forward based on the run rate we are very sure of maintaining this uh 20% 22:39 22 minutes, 39 seconds plus growth of non-mutual fund revenue uh from a profitability perspective I think we put in strong numbers uh more 22:46 22 minutes, 46 seconds uh more of you know what an said on automation etc so we did have a margin of 46.5% for the quarter in spite of uh 22:54 22 minutes, 54 seconds no growth in mutual fund revenue uh there was some cost optimization that happened. uh just to take you back to the commentary on cost uh the earlier 23:03 23 minutes, 3 seconds part of the year uh I think what we had said was if you're able to keep the cost increase to say uh 11% kind of a number year on year I think we would have done 23:12 23 minutes, 12 seconds well on target. Happy to say that if you see the actual numbers on a year-on-year basis uh including the depreciation increase because of the additional 23:19 23 minutes, 19 seconds investments my cost increase has been 9% and if you actually remove the depreation the cost increase has actually been only 7.8%age. 23:26 23 minutes, 26 seconds and on a quarter on quarter we've had a very muted increase in cost of less than 1.5 percentage and so we we will continue to take these cost actions uh 23:35 23 minutes, 35 seconds we will continue to be focused on that that is a requirement uh but just to say that from a year perspective we have uh ensured that you know the cost remains 23:44 23 minutes, 44 seconds well within control and hence you will see that this there is a margin uh creep up in terms of year on year from 45%age 23:51 23 minutes, 51 seconds to 46.5 percentage uh some other important aspects I would like to highlight is uh One is the diversification is on track. You would 23:58 23 minutes, 58 seconds see in the 15 plus percentage number which has also mentioned and more heartening from a profitability perspective. We have been saying that 24:06 24 minutes, 6 seconds once the revenue starts flowing into the non-mutual fund, you will see the profitability also grow up. Uh uh so you will you would have noted that the 24:13 24 minutes, 13 seconds earlier profitability targets or or the ranges for non-mutual fund was around 12 to 13%. This quarter they are upwards of 16%age. So I think on a sustainable 24:22 24 minutes, 22 seconds basis uh we have said that we will get to a 20% margin. uh by the end of next year I think we are on target for that too. Uh and from a return on equity 24:31 24 minutes, 31 seconds perspective we continue to be top of market uh return on equity in spite of uh you know detaining 35% of the profits are not distributing as dividend 24:38 24 minutes, 38 seconds continues to be 39%age and uh the board has declared subject to confirmation by shareholders a final dividend of 2.5 which means for the year 24:47 24 minutes, 47 seconds we'll be dispersing a revenue of 305 crores. So overall across the board uh a very strong quarter in terms of uh profitability in terms of cost 24:55 24 minutes, 55 seconds optimization in terms of non-mutual fund growth in terms of profitability of non-mutual fund and in terms of stable yields. So with this I'll hand it back 25:03 25 minutes, 3 seconds to Danish and uh open it up for questioning. 25:06 25 minutes, 6 seconds Thank you so much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 25:17 25 minutes, 17 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 25:26 25 minutes, 26 seconds Ladies and gentlemen, we'll wait for a moment while the question Q assembles. 25:39 25 minutes, 39 seconds Our first question come from the line of Abhishit Takar from KC Securities. Please go ahead. 25:45 25 minutes, 45 seconds Hi uh good morning everyone. I hope I'm audible. Uh the first question was on the ax line. So the 10% sort of a number 25:53 25 minutes, 53 seconds in FYI 26 is the lowest in 5 years. You know uh one is if you can put this into 26:00 26 minutes context of you know how much of this would be you know deliberate or discretionary expense management given some revenue headwinds as against you 26:08 26 minutes, 8 seconds know some savings which could be thought of as more sustainable uh over the medium term. Um the second question is u 26:16 26 minutes, 16 seconds uh on the yield. Now when we think about the mix effect uh so the yield drop that you know RTAs take when it comes to 26:24 26 minutes, 24 seconds passive generally is much more than the yield drop that the EMCs have to absorb. 26:29 26 minutes, 29 seconds Now how do we think of it in terms of really the the uh the expense that or the costs that actually go into you know 26:36 26 minutes, 36 seconds supporting the passive investments and if there is a scope for some uh renegotiation uh with respect to that those would be the two questions. 26:46 26 minutes, 46 seconds Uh thanks Ajit on the cost part of it. I think I'll just amplify what Anud said earlier which is that this is not a one-off. uh I think uh what we have done 26:56 26 minutes, 56 seconds is a structural and automation kind of thing has crept into the entire system. 27:00 27 minutes So if you look at the just the numbers right if you see from last year to this year while the company strength may have grown by by around 100 120 people uh we 27:10 27 minutes, 10 seconds have achieved this entire 11 percentage growth with you will see a reduction in the core MF operations right it's there has been a reduction in the core MF 27:18 27 minutes, 18 seconds operations obviously some investment has happened for R some investment happened for risk compliance etc that's kind of cont contributing to the small increase in headcount and you have seen over the 27:26 27 minutes, 26 seconds course of the year there's no operational impact for any of these things right so which means we continue to get industryleading statistics in terms of compliance, risk etc. So there 27:34 27 minutes, 34 seconds is no there is not a one-time squeeze that we have done of everything and which is not going to be repeatable. I think what we are approaching is a more sustainable long-term kind of an impact 27:43 27 minutes, 43 seconds is what we see and next year again Anu laid out the targets saying that you're going to see further uh kind of optimization that's going to happen as we get more and more of this react 27:51 27 minutes, 51 seconds platform AI embedded into the operation system. So uh this is in our mind a very sustainable kind of a cost levels. uh we 27:59 27 minutes, 59 seconds not saying there'll be zero addition of cost obviously that's not going to happen but I think we will try to keep this to the minimum without impacting obviously day-to-day operations etc 28:07 28 minutes, 7 seconds which we have successfully done I would rather say below the rad in the last year you know without making a big show about it we'll continue to do that in the next year also so I don't think you 28:15 28 minutes, 15 seconds need to have any worry from a cost sustainability perspective on the uh on the passives and how it has worked out 28:23 28 minutes, 23 seconds see honestly I've been saying this throughout saying that this is such a small part of the operations that you know for us to kind of say a separate profit line and a cost line for this is 28:31 28 minutes, 31 seconds actually not so material uh given that it's it's less than 10% of my overall AM. Now from a yield perspective I think 28:39 28 minutes, 39 seconds the the rates that we have for ETFs are extremely low by by you know it's not nothing to do with AMC suffering more than us etc. It's extremely low. The 28:47 28 minutes, 47 seconds yields for passives by nature are extremely low. I don't think there's any room for us to kind of have any renegotiation on that you know given that it's actually at really low levels 28:56 28 minutes, 56 seconds now. So as the passive increase there will be some impact on the mix and there'll be some impact on the yield but it'll be very muted. If you see for the 29:03 29 minutes, 3 seconds last quarter if you actually line by line compare everything the only re only reason is that yields have not gone down any of the individual asset classes none 29:11 29 minutes, 11 seconds of the individual asset classes the eels have gone including passives including passives it is just that the mix of passives in the overall scheme of things has increased and that's why it's cing 29:19 29 minutes, 19 seconds this.9 percentage so I don't see this being a big cause of concern going forward also uh Ram just a follow up on the yield 29:27 29 minutes, 27 seconds cost yield question one was that you know uh because there is a mixed In fact, uh there's a hit on the overall 29:34 29 minutes, 34 seconds yields. Does it allow you in any way to kind of u have a stronger bargaining power when it comes to the yield 29:42 29 minutes, 42 seconds negotiation on the active book? You know, absolutely that's one of the one of the points that we will pick up in terms of yield decline saying that the mix is 29:51 29 minutes, 51 seconds also unstable to us. But we should also be cognizant of the fact that the other side this has a similar impact on the AMC's too. So I think this will be one of the things that we'll bring across 29:58 29 minutes, 58 seconds but uh I don't know whether that'll be the only argument in which we'll have or hats on. Okay. Got it. Thank you so much. 30:08 30 minutes, 8 seconds Thank you. 30:10 30 minutes, 10 seconds Our next question come from the line of P Jan from Motil Financial Service. Please go ahead. 30:16 30 minutes, 16 seconds Uh yeah hi everyone. Uh now firstly you know just on this uh renegotiations with 30:22 30 minutes, 22 seconds AMC's uh there is a three to five basis points impact what we've heard from all the AMC's uh that is likely to come and 30:31 30 minutes, 31 seconds they have indicated they'll be passing passing it on to distributors but any negotiations that has happened with u 30:37 30 minutes, 37 seconds with you guys on uh on you know on the commission changes uh or sorry on the RTA changes uh that should come through because of that change. 30:49 30 minutes, 49 seconds So pre so far nothing is there but we're not saying that we reload any discussions whatsoever on this. Uh so there may be something discussions 30:57 30 minutes, 57 seconds happening on this but one thing we are clear on our stand is that I think uh from a value perspective I think we have reached a stage where we are comfortable with the price value equation. So there 31:06 31 minutes, 6 seconds is not much of a room for us to kind of revisit that. Having said that I think this is a discussion that probably some people will have with us. nothing so far 31:13 31 minutes, 13 seconds concrete and nothing for me to report as a something that will definitely be there. Uh we'll keep you informed as we go along but we don't see that being a 31:21 31 minutes, 21 seconds big impact. As you said the 3 to 5 bits impact is the entire AMC impact and uh I've seen many commentaries saying that it's going to be passed on to the distributors. So we'll wait and see but 31:29 31 minutes, 29 seconds if at all there is an impact we've always said we don't think there will be any material impact on this. 31:34 31 minutes, 34 seconds So you know structurally you've been we've been talking about the 3 and a half to 4% decline in yields every year. 31:40 31 minutes, 40 seconds uh should we start thinking about this for FI27 and FI28 basis and that should be the way or how should we think about the yield drop on a regular basis? 31:50 31 minutes, 50 seconds So uh by by uh you know historically we've been very conservative in guiding you on these yields etc. We've always said that what we have seen over the 31:59 31 minutes, 59 seconds last 5 years in terms of trend has been this 3 to three and a half percentage. 32:03 32 minutes, 3 seconds So if you really want to build that into the model from your conservative perspective please do. But our aim will always be to bring it much lesser than that. And I think going by the last 32:12 32 minutes, 12 seconds quarter, I think we are on track to have a number lesser than that. But we not going to hurry and tell you please take only 1% one and a half% the you continue 32:19 32 minutes, 19 seconds to kind of work in the conserative way that you have and treat anything as a positive about that you know the other question was you know while you were we were 32:27 32 minutes, 27 seconds talking about AITA margin improvement and that's commendable job but you know empirically you know uh you know I would like to get an thoughts also out here 32:36 32 minutes, 36 seconds you know where you know we've seen that right you know we expand our margins to 46% and quite a few times that has happened uh empirically as well but you 32:46 32 minutes, 46 seconds know post that again we kind of there is a renegotiation or there some investments that come in and then we dropped back to 42 43 44%. Um you know 32:55 32 minutes, 55 seconds so at this point of at this juncture what gives you confidence that uh this is more of a sustainable margin trajectory than what we've seen in the past. 33:06 33 minutes, 6 seconds So PR uh the way I would think about this is just leading you back to the facts. 33:13 33 minutes, 13 seconds uh we were about on a quarterly about a 47% margin about five quarters back let's say that was the first time we hit 33:20 33 minutes, 20 seconds that number and from that 47 we went down to 42 for reasons known to all of you and then we've climbed back it's taken us four 33:28 33 minutes, 28 seconds quarters we've climbed back I won't say exactly to 47 but let's say 46 and unchanged we've climbed back to it I don't think it's a it's something 33:37 33 minutes, 37 seconds which has happened several times we've been continuing to underscore one thing that you should take that as a once in a 33:46 33 minutes, 46 seconds once in a blue moon once in a lifetime event and not as a frequent reset because the command center for this number is 33:55 33 minutes, 55 seconds sitting somewhere else. That's point number one. Point number two from an investment perspective and and that's 34:01 34 minutes, 1 second just a pure uh pricing and revenue play uh which you've seen over a period of time. I'm sure you guys give credit that 34:10 34 minutes, 10 seconds you are able to read us much better than you are able to read anyone else because we have cautioned you in advance. 34:15 34 minutes, 15 seconds Whatever I can see, we tell we've been telling you, right? So, we've never left you guessing in terms of what we see but what we don't tell you and therefore you 34:23 34 minutes, 23 seconds have to guess and and take a surprise the day the results come out. We have a history now of 20 plus quarters, maybe 22 and three quarters of publishing our 34:31 34 minutes, 31 seconds results and you've known things for much before that. So, that's point number one. The second is that as far as investments are concerned, we have 34:40 34 minutes, 40 seconds always said that there are four parts of the portfolio which are money-m which is MF, AIF, payments and K. So those four 34:48 34 minutes, 48 seconds are money making. There are four or five parts of the architecture which are not moneym which is repository 34:55 34 minutes, 55 seconds account aggregator pension to an extent think analytics they are not moneym but we made the investment we now made the 35:04 35 minutes, 4 seconds investment in consent. you should we should invite you to one of our events where be unveiling this entire thing. So we made the investments we may not have 35:11 35 minutes, 11 seconds made them in a high decibel way but all these four or five businesses like in any other business we continue to fund 35:19 35 minutes, 19 seconds till you get to a point where like we've said traditionally you achieve a 14 15 cr annual revenue you break even and then above that most of the money goes 35:27 35 minutes, 27 seconds to the bottom line that's a standard architecture of business. So we made those investments. All of those have been made in the last four years uh 35:34 35 minutes, 34 seconds between 22 to 26. Let's say those four calendars years 22 23 24 25. So uh what 35:41 35 minutes, 41 seconds is the choice for us now? The choice is that do we keep pushing optically on increasing this margin by about a percent a year and my guess is that will 35:50 35 minutes, 50 seconds happen by itself. Not because we are doing something fantastic in MF. We will continue doing what we are doing. But also like Ram said the non MF portfolio 35:57 35 minutes, 57 seconds now is of a size about 60 65 cr a quarter and I'll not be surprised in 3 years if it is 100 cr a quarter where it is generating money by itself on 36:06 36 minutes, 6 seconds aggregate non MF by itself has a power to stand on his feet. He reported a 16 and a half% line and we hoping that we'll get to 20% and onwards to 25. So 36:15 36 minutes, 15 seconds across the board the platform nature of the business apart from AI if which is uh very very serviceoriented 36:23 36 minutes, 23 seconds every other business is largely platform right you set up a platform you let transactions ride you let customers come and and use it as a highway and you get 36:31 36 minutes, 31 seconds paid for it I think that character is not changing so therefore our focus is that we'll continue investing in new things we will never get distracted we 36:39 36 minutes, 39 seconds will never do things which only sound fashionable and if margins in the process expand by a percent a year So be it. But we will not deny the right investments in business because of that. 36:49 36 minutes, 49 seconds The last thing I would say is that when you see this a better life, I would take the genesis to what we did two or three years back in investing in real 36:57 36 minutes, 57 seconds automation. Today I do a payroll for 200 fresh engineers who are fresh out of or two or three years out of IITs and 37:05 37 minutes, 5 seconds regional colleges and nits and those kind of places. The game will never be seen in a month but the game is being seen after 2 years. Will this game be 37:13 37 minutes, 13 seconds seen only today? No, you'll see for every year in the next 5 years because it's a past period investment. So just look at it like that. I know the shadow 37:21 37 minutes, 21 seconds of what you believe is unreasonable price negotiation looms heavy in your minds. I would just say that think of it 37:29 37 minutes, 29 seconds as a normal thing. Don't think of it as an oversized thing. 37:32 37 minutes, 32 seconds Got that? That's helpful. This last bit uh do you see any impact on the KYC business because of the changes that are expected uh from April 1st that were 37:41 37 minutes, 41 seconds implemented from April 1st and would that impact profitability in the near term? 37:47 37 minutes, 47 seconds No. No, it it should not. So we are just to be clear we are expecting to hold K revenue in FI27 37:56 37 minutes, 56 seconds after all the puts and takes. Uh what are the puts and takes? Whatever hit we had to take because of slow demat and broking and fo account opening we've already taken in fi26. 38:05 38 minutes, 5 seconds Uh some upside 2 and a half to three crores we'll get from nsek some revenue down about 6 to 7 maybe 8 cr rupes we 38:13 38 minutes, 13 seconds will take from the price down. So I have the base revenue minus 8 + 3 I lose about five that five we will make up through gross and increase in share. So 38:21 38 minutes, 21 seconds we will have flat k revenue. We do not expect that there is any profit challenge there. Got thank you so much and all the best. 38:28 38 minutes, 28 seconds Thank you. 38:31 38 minutes, 31 seconds Thank you. Our next question comes from the line of Di Shagarwal from Capital. Please go ahead. 38:39 38 minutes, 39 seconds Yeah, thank you for the opportunity sir. 38:41 38 minutes, 41 seconds Uh firstly sir just on the margins uh you did mention you don't see any significant real pressure but you also said that the new TR regulation for some 38:50 38 minutes, 50 seconds of the large AMCs are underway. So if this were to kind of rectify the impact will be retrospective starting from 1st 38:57 38 minutes, 57 seconds of April. Uh is that correct or this will be more like a retrospective starting from 1st of July? 39:03 39 minutes, 3 seconds Sorry uh I don't think uh DH just to clarify we did not say that there are some discussions happening with any AMC's on EAT. I think what we said is 39:12 39 minutes, 12 seconds nothing substantial is happening on that and uh we don't rule out the possibility of you know something like that happening over the next month or two. uh 39:20 39 minutes, 20 seconds you know but even if it happens it's going to be extremely muted. So I think it's premature to speculate whether it's going to be first April 1 July because we don't even know whether it's going to happen or not happen. So what we are 39:29 39 minutes, 29 seconds saying is that if if the discussions do happen at that point of time we will kind of decide appropriately and whatever happens will be muted. Uh we will see at that point of time I don't 39:37 39 minutes, 37 seconds think that we should have a significant impact of that from a recent perspective. The other contract negotiations we will not have a big price zone that is for sure. We have 39:45 39 minutes, 45 seconds some midsize contracts coming up for anyone in the course of the year. Uh but overall all put together we don't see that being a a big impact on the ES. 39:55 39 minutes, 55 seconds Understood. And in terms of the OPEX will this be another year where you'll see a single digit growth in the opex especially in your employee cost we see 40:03 40 minutes, 3 seconds that the growth has only been 5%. And Anish did mention that this time there could be a reduction in the head count on overall basis. 40:10 40 minutes, 10 seconds So are we looking like another year where the growth will be less than 5% in the employee cost? Yeah, absolutely. We are uh we are looking obviously there is 40:19 40 minutes, 19 seconds this increment that will have to be factored in which will which will kind of come from Q2 of this year. Uh that's when the increments will become effective. So there will be some impact 40:27 40 minutes, 27 seconds of that. Uh but I think we will look at a sub 5% and overall definitely sub 9% kind of a growth in expenses. We would 40:35 40 minutes, 35 seconds like to make it a little lesser than that but that's what we are shooting for. 40:40 40 minutes, 40 seconds Right. And uh so in terms of EITA margin uh what would be our uh expectation or target for FI27. 40:49 40 minutes, 49 seconds So uh we we've always said that you know we don't want to guide for a specific EBITA margin. We've always been range bound and we've said that in a bad 40:58 40 minutes, 58 seconds quarter it'll be less than 45 and a good quarter will be around 46 47. I don't see any reason for changing that. I understand that there is a cost uh you 41:05 41 minutes, 5 seconds know kind of thing. We'll have to wait for the asset growth number and revenue growth number as you know that we are kind of waiting for the markets to settle down on that. So for us to give a 41:14 41 minutes, 14 seconds specific uh IBITA number guidance will be difficult but our aim is to at least retain what we are in Q4 right in terms of the IBITA margins for next year. This is after observing the increase in cost 41:22 41 minutes, 22 seconds that may happen because of the salary increase and other investments we'll have to do and some pro some compression that will happen although not as much even close to what it was last year. 41:32 41 minutes, 32 seconds after that I think if you do maintain the 4Q ea margins I think I think it'll be a good target to have right sir and so finally on the non MF 41:41 41 minutes, 41 seconds side you did mentioned that uh targeted growth is around 20 odd% and we have already uh reached a revenue share of 41:48 41 minutes, 48 seconds 14% uh in the nonf business so uh are we looking at any uh new line of uh 41:55 41 minutes, 55 seconds business or uh any further diversification that can add to the revenue growth or this will be this the existing businesses in which we'll see the growth. 42:06 42 minutes, 6 seconds So, DH um I would say right now uh like we've always said in the past that building a product in markets where you 42:14 42 minutes, 14 seconds may not have the right to win and competing uh you know against uh not just traditional kind of competitors but 42:23 42 minutes, 23 seconds against startups, FinTech etc is not easy. So we don't want to get busy creating products where we have no 42:30 42 minutes, 30 seconds business to be present. Uh consent therefore the DPDP compliance product is the only product that we are putting 42:37 42 minutes, 37 seconds out. We may put out one adjacency we put in the deck I think which is a device uh unified device which will do payments 42:46 42 minutes, 46 seconds and KYC etc. But it's an agency. It is just going to expand the MFSIP market. 42:51 42 minutes, 51 seconds It will do nothing else. So we do not believe that we are angling for too many new things. We will just focus on what we have. We believe there's scale 42:59 42 minutes, 59 seconds opportunity in uh in payments, significant scale opportunity. We believe that rep should continue kind of 43:07 43 minutes, 7 seconds uh building mass like I said we will hold K revenue despite all the puts and takes and AF will hold on and grow. uh 43:15 43 minutes, 15 seconds between all of these and anything else that we do on the consent on the capsul and smaller product side we believe that we have absolute confidence and growing 43:23 43 minutes, 23 seconds at least 20% on that side and MF the story will unfold uh during the year as we see asset growth come back uh after 43:32 43 minutes, 32 seconds the last two months. So that's the broad story. Uh but but to answer your question, we don't want too many distractions. We're not in the habit of 43:40 43 minutes, 40 seconds just opening markets or just jumping into products just because it sounds fashionable. You will see that behavior uh more than less. 43:49 43 minutes, 49 seconds Perfect. That's all for Thank you. Thank you. 43:56 43 minutes, 56 seconds Thank you. 43:58 43 minutes, 58 seconds Next question comes from the line of Suba from Jeff. Please go ahead. Hi. Um thanks a lot for the opportunity. 44:07 44 minutes, 7 seconds I'll start with you know maybe the virtual fund side. So just wanted to understand you know if you could give us some update regarding the transition of 44:15 44 minutes, 15 seconds the RPA business to cloud from Prem where are we with respect to that and how are we thinking it was supposed to 44:23 44 minutes, 23 seconds be a three-year project so you know where are we and you know what kind of changes or you know new products from 44:30 44 minutes, 30 seconds that could we see over the next coming years you know that's that's one bit. Uh secondly, you know, there has been already a lot of discussion on the OPEX 44:39 44 minutes, 39 seconds pitch. Just wanted to understand what was the employee count that you ended at 526 with and going ahead what are the 44:48 44 minutes, 48 seconds other areas where you know you could maybe you know reduce cost. Lastly you know coming to the non 44:54 44 minutes, 54 seconds MF side uh you are running for a 20% growth. U the K business is supposed to be flat in FI27. 45:04 45 minutes, 4 seconds uh and that's one of the major parts of the nonMF business and has been a key contributor of growth hence wanted to understand what which are the other 45:12 45 minutes, 12 seconds parts of the businesses you think will be able to deliver much higher growth in FI27 so you know so that is one thing if 45:20 45 minutes, 20 seconds you could give some color and lastly just wanted a clarification so the 16.5% margin of the non side is for FY26 right 45:29 45 minutes, 29 seconds not fourth quarter 26 yeah those are my four questions thank No, no, sure. So I guess one of us must 45:38 45 minutes, 38 seconds have noted a four question, but I'll start with the first one which is on rearchitecture. So on the riarch side, 45:44 45 minutes, 44 seconds the plan was and is to build a brand new hosted on the cloud uh kind of a cloud 45:52 45 minutes, 52 seconds native platform which does uh the entire MF service delivery and platform delivery from the cloud. 46:01 46 minutes, 1 second uh we have opted for a feature by feature module by module build out taking things live one by one. The other 46:09 46 minutes, 9 seconds approach could have been to kind of build it all together and then test it and that is like moving an army because you could have gone wrong just anywhere. 46:16 46 minutes, 16 seconds So we will be taking things live module by module. Uh there are about nine significant modules. So think of it as nine significant modules and then a 46:25 46 minutes, 25 seconds number of things surrounding all of these and I'll give you an example of what has happened on both sides. uh of 46:32 46 minutes, 32 seconds the nine modules, the first one which is uh transaction origination which is getting transactions in from whichever 46:40 46 minutes, 40 seconds mode they come in from uh whether it is exchanges or banks or websites or you know partners and fintex uh including 46:48 46 minutes, 48 seconds paper and branches all of that that module is fully built and is now getting launched in the marketplace for consumption by a very broad audience 46:56 46 minutes, 56 seconds there literally several thousand people who will integrate and start passing transactions on it has several merits in terms of uh you know having a better 47:05 47 minutes, 5 seconds rules engine giving you rejections in real time etc. So that remediation can happen and any net shrinkage which happens because of u you know 47:14 47 minutes, 14 seconds transaction rejections etc it comes down so it is a treat for the industry. So that is the first thing which is live we are taking it to the market. The second 47:21 47 minutes, 21 seconds last thing which is ready with us but obviously has to be taken to the market because uh there there's nothing that I can sit here by pressing a button do 47:29 47 minutes, 29 seconds unless it's an internal process is this entire concept of a data lake where our 47:35 47 minutes, 35 seconds entire on-prem data is now uh AMC by AMC sitting on the big query on Google cloud 47:44 47 minutes, 44 seconds what it does is that all the MIS all the insights all the analytics all the what if can be done by speaking to a machine, 47:53 47 minutes, 53 seconds can be done by our people, can be done by EMC people over a period of time. 47:57 47 minutes, 57 seconds Other partners will also be able to do it. It is the most futuristic and capable uh single instance of you know a 48:04 48 minutes, 4 seconds data lake that has been built and that will go live again in 1 of this year. Uh beyond this of the core 9 other modules 48:13 48 minutes, 13 seconds like payments and settlements, transaction with exchanges, uh internal posting of transactions, all of that accounting will go live over a period of 48:22 48 minutes, 22 seconds time as they get built. We have a team of close to 200 engineers working on this. Uh we've not lost the opportunity 48:30 48 minutes, 30 seconds to kind of also build some of these smaller things which are relevant which are internal only which means I don't really have to interface with the 48:38 48 minutes, 38 seconds market. And the example that I gave you which is of form data extraction which means we still get about a million physical forms in a month and we are now 48:47 48 minutes, 47 seconds in the process of taking a maker layer out. You've heard the term maker checker. Two people trying to do the same data entry located at different 48:55 48 minutes, 55 seconds parts of the universe and an engine compares what they've done. We are taking the maker out completely. So AI is doing the entire making. That part is 49:03 49 minutes, 3 seconds live. Similarly there are several smaller parts which are live. This was envisaged to be a four to five year project. My uh advice would be to 49:11 49 minutes, 11 seconds strictly think of it as a fiveyear project, not even four. Uh about two years are done, which means the first two years are done and you will see 49:19 49 minutes, 19 seconds significantly increasing momentum as we move forward. Uh the revenue productivity and overall productivity that you've seen uh I gave you a metric of flat headcount and growing revenue. 49:31 49 minutes, 31 seconds uh over the last uh 3 years we've also seen transactions grow at 27% headcount grow at about 6 to 7%. You will see all 49:39 49 minutes, 39 seconds of that get accentuated as we move forward with that platform. So I would say we are about 3 to 4% behind on the 49:46 49 minutes, 46 seconds overall curve of the trajectory which is normal in IT projects of this nature but broadly we are completely on track from 49:54 49 minutes, 54 seconds a business benefits perspective. I'll pause there because you had three more questions. Do you want to take the answer? 49:58 49 minutes, 58 seconds Yeah. Yeah. So uh you your next question was on headcount uh and how did we exit 50:04 50 minutes, 4 seconds uh 2020 uh 26 etc 25. So the exact headcount uh I'll give you that 8300 50:12 50 minutes, 12 seconds right 8324 is what we had in 25 end and saying headcount as of year end it's not average for the year or something and 50:18 50 minutes, 18 seconds exited 26 with uh 8,420. So we had around 100 plus people but if you actually take the rearchitecture hiring 50:26 50 minutes, 26 seconds that we have done which is for the new platform that itself was more than 100 right and uh and from overall MF perspective we actually as I mentioned 50:34 50 minutes, 34 seconds earlier we dropped headcon by around 70 and uh you know we had some increase in the risk compliance in in kind of non-mutual fund businesses investments 50:43 50 minutes, 43 seconds etc. So that kind of made it neutral. So overall if you see if you take away the hiring that we have done for technology R perspective it was a flat headcount 50:50 50 minutes, 50 seconds year on year and the aim that an An was saying next year is to kind of better this and actually have some more optimization and have an reduction in 50:57 50 minutes, 57 seconds headcount. So that's the way the numbers will play out in the next year. Also in terms of non-mutual fund growth, I think your question was uh given the K will be 51:06 51 minutes, 6 seconds flat, how do you think that you'll be able to receive the 20%. If you just break it down to numbers, right? And depending on the exit quarter or on the last year, you're talking about a 45 51:15 51 minutes, 15 seconds crores probably close to 50 crores kind of a growth in non mutual fund revenue. 51:19 51 minutes, 19 seconds And if you actually break it down further, I think we confident of pay taking at least 20 crores of that if not more. uh you know AF taking some 78 51:28 51 minutes, 28 seconds crores of that and then you know ASP pension taking some 45 crores and then rep taking some 78 crores and then you 51:36 51 minutes, 36 seconds have the new lines like consent pro you have g city etc which will take a few crores so if you actually break it down to a 45 cr to 50 cr increase I think we 51:45 51 minutes, 45 seconds have it solution we have plans behind it we have it solution our aim is obviously to better than 20%age but I think 20% is reasonable visibility we have assuming that there is no growth in ing. 51:58 51 minutes, 58 seconds Okay. So, so any particular line that you know you see driving that 40 to 30 crore additional revenues or is it going to be across the other businesses? 52:08 52 minutes, 8 seconds Uh sorry, say that again. Uh I think we missed what you said. 52:12 52 minutes, 12 seconds Sorry. Yeah. So what I was asking is in the non MF side you know this uh the cemental growth is it going to come from 52:20 52 minutes, 20 seconds say payments or repository or is it going to be across the 45 businesses that you have? 52:27 52 minutes, 27 seconds No it'll be across I think that is what Ram was trying to say that if we convert this into simple arithmetic you're 52:34 52 minutes, 34 seconds looking at a base of about 60 62 crores of quarterly revenue at exit. So about 250 crores in the base to grow 20%, you 52:44 52 minutes, 44 seconds need a 50 crore revenue up solution. Of the 50 cr revenue up your question is that if K is zero where does the 50 come 52:52 52 minutes, 52 seconds from? I think that is what he was trying to answer. That payments will be about 20 cr out of that. Uh EF about 7 to8 cr and rep about 7 to8 cr to about 35. 53:03 53 minutes, 3 seconds Everything else the balance 15 is a sum of uh the account aggregators the TSP pension all of that put together should 53:10 53 minutes, 10 seconds add up to another 15 that's where the 50 comes from understood that's very clear thank you 53:20 53 minutes, 20 seconds thank you our next question comes from the line of Deepan go from city group please go ahead 53:27 53 minutes, 27 seconds uh hi um good morning everyone so uh coming back to one of the uh previous participant sessions um you know you 53:36 53 minutes, 36 seconds mentioned that one can probably conservatively build in around three and a half half to 4% MF field decline and maybe you've gone for maybe in the range 53:43 53 minutes, 43 seconds of around 1 to 2%. Now whether it's three and a half or 1 to2 I mean just wanted to uh get some sense of what are you factoring in uh in you know when you 53:52 53 minutes, 52 seconds kind of uh uh are thinking those lines is it uh a factor of the negotiations on the mid-range agencies that you 53:59 53 minutes, 59 seconds mentioned which are planned uh the asset mix uh what are your expectations on that uh and also you know any uh 54:07 54 minutes, 7 seconds probable discussions uh that might take place as you highlighted you do not rule out any possibility of such discussion so just to get the factors that you are 54:16 54 minutes, 16 seconds kind of building in in this uh expectations of MF. Uh the second question uh uh and the third question are data keeping questions on the CAM's 54:24 54 minutes, 24 seconds pay business. Uh if you can give some color on the uh MF and the non MF and within the nonMF also if you can kind of 54:31 54 minutes, 31 seconds break it up into some subp parts uh and also on the K business what would be the composition of the non MF uh business currently? 54:40 54 minutes, 40 seconds Yeah. So uh on the MF field the panen traditionally I think the the kind the the three three and a half% comes from 54:47 54 minutes, 47 seconds historical numbers right rather than any uh break up of what the expectation of the mix will be uh which over a period 54:56 54 minutes, 56 seconds of time and you would assume that over a period of time you've had various combinations and as I said that this is determined by not only asset mix it's also customer mix it's also negotiations 55:04 55 minutes, 4 seconds it's also scale based pricing everything put together so it's a complex kind of interplay of factors the three three and a half% is something that uh you know 55:12 55 minutes, 12 seconds historically we have seen now we've seen years where it is 1% also you've seen years where it is 8 9% also so it is just an average right from that 55:20 55 minutes, 20 seconds perspective and given that next year would be a normal year in terms of there being no big strains on yields and uh just to again clarify we not seeing that 55:28 55 minutes, 28 seconds we going to have discussions with AMC's on price etc the question was on specifically with respect to this three-fold bibs yield compression that 55:36 55 minutes, 36 seconds the AMC some of the AMC's may face and we just said that we don't rule out any discussion that they open and all these things because it's only their choice, right? Nothing that got to do with us. 55:45 55 minutes, 45 seconds We're not saying there's going to be any big negotiations. In fact, we see a period of yield stability. Now, our aim and our calculations are that this will not be 3%. This will be less than 3%. 55:56 55 minutes, 56 seconds But given that historically we have been around that number, I think it was prudent for us to kind of quote that number as a number that probably you can work with. But having said that, you know, it's a combination of everything. 56:06 56 minutes, 6 seconds We do expect some uh you know equities are close to 40 54 55 percentage. So we don't expect that to go much more in the mix when we did this calculation. We do 56:15 56 minutes, 15 seconds expect some sort of growth to come uh from the uh larger ANC customers which will have its own impact on the yields 56:22 56 minutes, 22 seconds and finally we do have some midsize AMCs who are coming for discussions but we don't expect a material decline in eels because of those discussions. All those things put together our aim is to keep 56:31 56 minutes, 31 seconds it down to the scale based pricing plus some minor adjustments here and there and not get into some major things. So that is why we said it'll be much less than 3%. 56:41 56 minutes, 41 seconds If I may just go to your second question on cams pay. So cams pay you know happy to say that the non-mutual fund share 56:48 56 minutes, 48 seconds has uh has been much more than 50%age on the back of cards right uh and we've had in fact in the last quarter if you see the PG business which is the credit 56:57 56 minutes, 57 seconds cards business mainly for insurance companies and some for loan repayments etc is almost like 25% of the revenue right almost more than two and a half 57:05 57 minutes, 5 seconds crores starting almost from near zero uh probably a year back we now reached 25% of the quarterly revenue coming from 57:12 57 minutes, 12 seconds car's business and most of it I'm Sorry, all of it is non-mutual fund. So our non-mutual fund revenue is much much 57:18 57 minutes, 18 seconds more than 50%age. Now in the CAM's pay in terms of split into how much is insurance and how much is uh uh kind of other sectors most of the non-mutual 57:27 57 minutes, 27 seconds fund is from insurance and EMIs for NBFCs. The exact split I'll let you know but this is basically how the revenue is split. And your question was on K. I I 57:37 57 minutes, 37 seconds think we've reached a 30%age non-mutual fund share of the revenue and we are onboarding a couple of new brokers as you would have seen in the presentation 57:44 57 minutes, 44 seconds couple of large ones. So we expect that this 30 will start creeping up in the coming quarters. 57:49 57 minutes, 49 seconds Uh got it. Uh thanks Ram and all the best. Thank you. Thank you. 57:57 57 minutes, 57 seconds The next question comes from the line of Madugar from JP Morgan. Please go ahead. 58:05 58 minutes, 5 seconds Uh hi hi sir congratulations on a good set of numbers. There's two questions from me. Uh first uh uh what is the kind 58:15 58 minutes, 15 seconds of uh pressure that uh uh we are going to see on the K business? What what sort of pricing decline uh are we seeing and 58:25 58 minutes, 25 seconds uh you know how is this determined? Is it uh we understand that there is this is like an industrywide phenomena but I 58:32 58 minutes, 32 seconds also gather from our previous conversations that we were already at a discounted rate. So uh so what sort of 58:41 58 minutes, 41 seconds hit in sort of blended pricing uh would we be uh looking at and second I wanted 58:48 58 minutes, 48 seconds to get a sense of the uh new opportunity that uh Anuts was uh speaking about uh 58:57 58 minutes, 57 seconds and uh uh it's something that I uh I I I'm not that well uh aware of this coin 59:03 59 minutes, 3 seconds pro or uh so so maybe you could give some background and um uh you know uh about this opportunity. Thank you. 59:13 59 minutes, 13 seconds No, sure. Uh thanks Madur. So on the K uh I mean effectively uh just think of 59:20 59 minutes, 20 seconds it that starting 1st April uh uniformly the K industry has taken a 59:27 59 minutes, 27 seconds 20% price down. Uh why have we taken a price down? Obviously uh there was uh 59:35 59 minutes, 35 seconds there was a reaction from the industry not for a day or two but for a long time that in order to broaden the franchise and bring in lower value consumers and 59:45 59 minutes, 45 seconds you know that the industry has been bringing lower value consumers the chip was a campaign around that and there were multiple uh you know initiatives to 59:53 59 minutes, 53 seconds collect money from non-saried people daily etc. The K cost was seen as a bit of an abusive amount not our opinion but 1:00:02 1 hour, 2 seconds obviously as a collectivity that's what the industry thought so initially we had specifically done a remission for small 1:00:10 1 hour, 10 seconds value but it did not look like that gave a lot of room uh to spread uh uh I would 1:00:18 1 hour, 18 seconds say happiness across so then the industry came together and said that let us then just lower K prices. I think 1:00:26 1 hour, 26 seconds it's a voluntary action. It is done together at industry level. It has nothing to do with a single instance of anyone coming and negotiating. Of 1:00:34 1 hour, 34 seconds course, uh there was a long dialogue with the industry and with the regulator when all this happened. But I think in good faith it's a good step. You also 1:00:42 1 hour, 42 seconds know that concurrently we have enriched the K architecture so much that today uh we do a daily demise reconciliation. 1:00:50 1 hour, 50 seconds There is now disability uh records inside of that. And so there is a lot of enrichment from a record keeping perspective and then there are lower 1:00:58 1 hour, 58 seconds prices. So like I had said that FI27 for K we are projecting a flat revenue on a base of about 42 43 cr. We expecting 1:01:08 1 hour, 1 minute, 8 seconds about a 8 crore price down uh that's just the fem. 1:01:13 1 hour, 1 minute, 13 seconds We're expecting about 3 cr of revenue up from the nsek part which showed up a little in Jan March but will show up for 1:01:20 1 hour, 1 minute, 20 seconds the whole year. So that's net addition and the balance five the 8 minus 3 which we will lose because of price we're expecting to make up through natural 1:01:28 1 hour, 1 minute, 28 seconds growth and new logo wins etc which is entirely possible. So we will keep about flat revenue. I would not read a lot 1:01:35 1 hour, 1 minute, 35 seconds more into this. I'm expecting that the K machinery continues to kind of grow with the industry and enable the industry a lot more. There will be less uh thoughts 1:01:44 1 hour, 1 minute, 44 seconds about bringing in smaller value consumers now that the K price is down. 1:01:48 1 hour, 1 minute, 48 seconds Uh so that's point number one. The second question was on uh I think on consent pro. So uh you know that the 1:01:57 1 hour, 1 minute, 57 seconds digital person's data protection that's what DPDP stands for that bill which essentially I would not say is cloning 1:02:05 1 hour, 2 minutes, 5 seconds the GDPR regulation in India but is somewhat somewhere on those lines is now being contemplated across the board for every industry. The financial services 1:02:13 1 hour, 2 minutes, 13 seconds sector of course will be one of the biggest consumers. We started working on this to to do this ourselves. We just wanted the expertise to be in house 1:02:21 1 hour, 2 minutes, 21 seconds rather than to buy it. So we built this product called consentra. It has u a consenting mechanism. It has a full data 1:02:29 1 hour, 2 minutes, 29 seconds discovery tool and someday it's perhaps educative for you to sit with one of our people to just see what it does. And 1:02:37 1 hour, 2 minutes, 37 seconds then it has various other angles of regulatory reporting and consulting and all of that. All of that comes packaged 1:02:45 1 hour, 2 minutes, 45 seconds under consent pro. We built this inside of think 360 and it's a commercial offering. Now we decided to make it a commercial offering because we know that 1:02:52 1 hour, 2 minutes, 52 seconds almost 40 to 50,000 Indian companies will end up buying this in the next year year and a half and no harm in uh at 1:03:00 1 hour, 3 minutes least assisting the capital markets and the financial services segment with this. So if you want more details happy to have a separate conversation but that's broadly the view behind this. 1:03:09 1 hour, 3 minutes, 9 seconds Got it sir. Uh thank you and all the best. Thank you. 1:03:15 1 hour, 3 minutes, 15 seconds Thank you. Our next question come from the line of Sankit Ga from Evidence Park. Please go ahead. 1:03:22 1 hour, 3 minutes, 22 seconds Yeah. Um thank you. Thank you for the opportunity. Uh I think most of my questions got answered. Just just a one small question on KYC business again. Uh 1:03:31 1 hour, 3 minutes, 31 seconds uh I mean finance minister and the chairman of spoken about one KYC thing for for all financial sectors including 1:03:39 1 hour, 3 minutes, 39 seconds capital markets. So so does it change the conduct of the business? um whether the pricing because it will be CQYC 1:03:47 1 hour, 3 minutes, 47 seconds linked. So so in a way um pricing will come down and and what are the fetch revenue will or or the uploading of 1:03:55 1 hour, 3 minutes, 55 seconds information revenue is there uh will we will see a um meaningful change just uh just wanted to understand one KYC will make any material change or not. 1:04:05 1 hour, 4 minutes, 5 seconds Uh well I would say we have to watch it we have to continue watching it. This has been in the air for some time now. 1:04:13 1 hour, 4 minutes, 13 seconds Just so that you know uploading of any new KYC records that the K gets uh that obviously in the MF industry it does get uploaded to CKYC. So that lag is intact. 1:04:24 1 hour, 4 minutes, 24 seconds Uh does a CKYC record uh is it eligible completely to create a KKYC? Not yet. Uh 1:04:32 1 hour, 4 minutes, 32 seconds so I think the price down is uh is a first step to make it easy for the industry to broaden itself. Like I said 1:04:39 1 hour, 4 minutes, 39 seconds that was attemp number one. Uh your question perhaps is that will there be a day and will there be a day soon where 1:04:46 1 hour, 4 minutes, 46 seconds CKYC subsumes everything under itself and there is no Kyc left. I think uh from a 1:04:53 1 hour, 4 minutes, 53 seconds feature benefit uh just architecture interoperability uh the fact that KAS authenticate all 1:05:01 1 hour, 5 minutes, 1 second the data themselves and uh do not just do or take what the intermediary tells them but there's a separate layer of authentication that's a significant uh 1:05:10 1 hour, 5 minutes, 10 seconds amount of value that is embedded in the K architecture uh it is not completely like that in CKYC maybe at some time it'll get there 1:05:18 1 hour, 5 minutes, 18 seconds I think it's good to keep watching this conversation to see where it goes But right now we believe we are in good shape. 1:05:25 1 hour, 5 minutes, 25 seconds Understood. So, so but when you say verification is it largely related to say bank card information or or satka 1:05:32 1 hour, 5 minutes, 32 seconds information anything what what when when you exactly say verification how it is exactly different from CKYC download compared to K download. 1:05:42 1 hour, 5 minutes, 42 seconds uh when an investor let's say goes to a micro finance institution the micro finance institution uh would take his 1:05:51 1 hour, 5 minutes, 51 seconds details verify them which means they will either look at the originals most of the time they look at the originals 1:05:58 1 hour, 5 minutes, 58 seconds and then they will upload that information to CKYC in the K architecture the intermediary 1:06:05 1 hour, 6 minutes, 5 seconds will take all of those will do whatever verification they are doing K will do a full verification ation. So a name 1:06:14 1 hour, 6 minutes, 14 seconds match, a face match, a DOB an address from source typically dig or UIDI. So it's a two-let process rather than being a one process. 1:06:24 1 hour, 6 minutes, 24 seconds Okay. So so which means that the fetching related mean basically even even if CKYC becomes 1KC kind of a norm 1:06:32 1 hour, 6 minutes, 32 seconds uh given authentification verification part is too too strong here. uh is it fair to say that uh we will not see a 1:06:40 1 hour, 6 minutes, 40 seconds meaningful disruption even if CKYC gets adopted because of that extra second layer of verification? 1:06:46 1 hour, 6 minutes, 46 seconds Well, they're trying to build a lot of these features. All I can tell you is they're trying to build a lot of these features like you know Rome wasn't built in a day. So it will take some time 1:06:54 1 hour, 6 minutes, 54 seconds before those you know tens of crows of consumers kind of fit into this architecture. But for their road map they are also trying to build it. I 1:07:01 1 hour, 7 minutes, 1 second would say the K architecture has been significantly ahead of market in the last 5 years in building all of this ahead of time and and implementing it in all the stores. 1:07:12 1 hour, 7 minutes, 12 seconds Understood. Yes. Uh that that was my only question. Thanks. Thanks for the answers. Thank you. Thank you. 1:07:18 1 hour, 7 minutes, 18 seconds Thank you de ladies and gentlemen. That was the last question for today. I would like to hand the conference over to Mr. 1:07:24 1 hour, 7 minutes, 24 seconds Ramstan for closing comments. Thank you and over to you sir. So thank you to all the participants for spending time with 1:07:31 1 hour, 7 minutes, 31 seconds CANs and following our story. If you have any queries, please do reach out to Orian Capital or Ani Savlani for and they'll be happy to assist you. Once again, thanks for your time. 1:07:42 1 hour, 7 minutes, 42 seconds Thank you sir. Ladies and gentlemen, on behalf of MUFG, that conclude this conference. Thank you for joining us.