Datamatics Global Services Limited — Q3 FY26

Datamatics Global Services Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=U3QbOPqf1JU Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Data Martings Global Services Limited Q3 FI26 earnings conference 0:08 8 seconds call. As a reminder, all participant lines will be in the listenon only mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds concludes. Should you need assistance during the conference call, please take the operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:29 29 seconds I now hand the conference over to Mr. 0:31 31 seconds Pratik Jup from EY for his opening remarks. Thank you and over to you sir. 0:38 38 seconds Thank you Shri. Good evening to all the participants in the call today and welcome to Q3 FI26 earnings call of data 0:46 46 seconds global services limited. The results and presentation have been already mailed to you and it is also available on the 0:54 54 seconds website of datamatics. In case anyone has not received a copy of press release or presentation, please do write to us 1:02 1 minute, 2 seconds and we will be happy to send you all. To take us through the results today and to answer your questions, we have with us 1:09 1 minute, 9 seconds the top management of the company represented by Rahul Canodia, vice chairman and CEO. Ankush Akar SVP and 1:17 1 minute, 17 seconds chief financial officer. Mitul Maha, EVP and chief marketing officer. Rahul will start the call with brief overview of 1:25 1 minute, 25 seconds the quarter on business which will be then followed by Ankush we who will take us through the financials then we will 1:33 1 minute, 33 seconds open the floor for Q&A session. I would like to remind you that anything that is said on this call which gives any 1:40 1 minute, 40 seconds outlook for the future or which can be construed as a forward-looking statement must be viewed in conjunction with the risks and uncertainties that we face. 1:50 1 minute, 50 seconds These risks and uncertainties are included but not limited to what we have mentioned in the prospectus filed with 1:57 1 minute, 57 seconds the SEBI and subsequent annual reports which you can find on our website. With that said, I now hand over the call to Raula. Over to you sir. 2:08 2 minutes, 8 seconds Thank you Praik and a good day everyone and thank you all for joining the data matics quarter 3 FI26 learnings calls 2:16 2 minutes, 16 seconds and I wish you all a very happy new year. I will begin the call with sharing some key highlights from our quarterly performance followed by Ankush who will take you through the financial update. 2:26 2 minutes, 26 seconds We will then open the floor for Q&A sessions. [clears throat] Our total revenue for quarter 3 is stood at 510.1 crores giving us a revenue 2:36 2 minutes, 36 seconds growth of 19.9% on a year-on-year basis and a 4.1% on a quarteronquarter basis. 2:43 2 minutes, 43 seconds Our EITA for quarter 3 stood at uh rupees 96.2 2 crores, giving us an EITA 2:50 2 minutes, 50 seconds growth of 76.4% on a year-on-year basis and 8.3% on a quarter-on-quarter basis. 2:56 2 minutes, 56 seconds We improved our EITA margin by 604 basis points year-on-year and 75 basis points quarteron quarter to 18.9%. 3:06 3 minutes, 6 seconds Driven by our focus on improving operational efficiencies and discipline cost optimization. 3:13 3 minutes, 13 seconds I'm happy to state that this is one of the best quarters from a revenue and EITA perspective. We recorded a quarter 3:20 3 minutes, 20 seconds on quarter revenue growth across all three business segments. In digital technologies, we delivered a double-digit revenue growth and a sustained double digit EIT EIT margin. 3:31 3 minutes, 31 seconds Revenue and digital operations remain stable and EBIT margins improved to 18.1%. 3:37 3 minutes, 37 seconds Digital experiences performance remains soft and as highlighted in the previous quarters, two of our clients are transitioning their work to their 3:44 3 minutes, 44 seconds captive centers. However, we continue to add new logos as well as expand our existing relationship across clients. 3:52 3 minutes, 52 seconds Data is investing decisively in enterprise AI. We are further democratizing democratizing AI across 3:59 3 minutes, 59 seconds the organization. I'm excited that we are rolling out Google Gemini Enterprise across the organization, empowering our 4:06 4 minutes, 6 seconds teams to build intelligent agents, improve productivity, and drive innovation at scale. In partnership with 4:13 4 minutes, 13 seconds Google, we have certified 200 employees on Gemini Enterprise in the past one month as phase one of this exercise. 4:21 4 minutes, 21 seconds Additionally, we have built industry specific AI solutions for insurance, banking and logistics, enabling autonomous workflow orchestration, 4:28 4 minutes, 28 seconds smarter decision- making and enterprisewide productivity at scale. 4:32 4 minutes, 32 seconds This strengthens our AI first culture and positions data for sustainable growth and long-term value creation. Our 4:40 4 minutes, 40 seconds continued focus on scaling strategic accounts, strengthening global delivery and optimizing execution has further 4:46 4 minutes, 46 seconds improved oper operating leverage and contributed to sustained margin improvement. With that, I will now hand over the call to our CFO Mr. Ankush 4:55 4 minutes, 55 seconds Akar. Ankush over to you. Thank you Rahul. Welcome everyone and wishing you a very happy new year. Let me start with 5:03 5 minutes, 3 seconds financial performance for the quarter 3 FI26 and then I will take you through the 9 month ended December 2025 financial performance as well. Our 5:12 5 minutes, 12 seconds quarter 3 FI26 revenue stood at rupees 510.1 cr reflecting a growth of 19.9% on 5:19 5 minutes, 19 seconds year-on-year basis and 4.1% on quarter-on quarter basis. Our sustained cost optimization efforts and enhanced 5:26 5 minutes, 26 seconds operational efficiency helped us improve our AITA to rupees 96.2 2 cr a growth of 5:33 5 minutes, 33 seconds 8.3% on quarteronquarter basis and 76.4% on year-on-year basis. Our AITA margin 5:40 5 minutes, 40 seconds for the quarter stood at 18.9% reflecting an improvement of 604 basis points on year-on-year basis and 5:47 5 minutes, 47 seconds improvement of 75 basis points on quarter quarter basis. 5:52 5 minutes, 52 seconds Our ABIT for the quarter stood at rupees 74.2 2 cr which is up by 7.7% on quarteronquarter basis and 65.9% on 6:00 6 minutes year-on-year basis. Our abbit margin was at 14.6% reflecting an improvement of 404 basis points on year-on-year basis 6:08 6 minutes, 8 seconds and improvement of 50 basis points on quarter-on quarter basis. Changes in the new labor codes resulted in one-time increase of rupes 40.3 cr in graduity 6:17 6 minutes, 17 seconds and leave encmentment liability. This one-time increase was shown as impact on labor codes under exceptional item. Due 6:25 6 minutes, 25 seconds to this impact, our PAT after non-controlling interest was at rupes 36.4 K down by 42.5% on quarteronquarter basis. Our PAT margin stood at 7%. 6:36 6 minutes, 36 seconds Excluding the one-time impact, our PAT would have been approximately 12.7%. 6:42 6 minutes, 42 seconds Our EPS for the quarter stood at rupees 6.16 per share. In terms of segments, digital technologies revenue for the 6:50 6 minutes, 50 seconds quarter it stood at rupees 169.6 cr which is up by 10.8% on quarteronquarter basis. Digital technologies abid margin was also at 10.8% for the quarter. 7:01 7 minutes, 1 second Digital operations revenue for the quarter stood at rupes 273.8 cr which is up by.5% on quarteron quarter basis. 7:09 7 minutes, 9 seconds Digital operations ebit margin was at 18.1% for the quarter. Digital experiences revenue stood at rupees 66.7 7:17 7 minutes, 17 seconds cr which is up by 3.2% on a quarter-on quarter basis. Digital experiences ABIT margin was at 9.6% for the quarter. In 7:26 7 minutes, 26 seconds terms of geographical footprint, US remains our largest geography with 52% of our business coming from here 7:33 7 minutes, 33 seconds followed by UK and Europe at 22%, India at 17% and RO at 9%. Our client 7:40 7 minutes, 40 seconds concentration remains very healthy with top five, 10 and 20 clients contributing to 29%, 42% and 55% respectively. Let me 7:49 7 minutes, 49 seconds now take you through the performance for the 9 month ended December 2025. 7:54 7 minutes, 54 seconds Our revenue stood at rupees 1467.9 cr reflecting a growth of 19.7% on 8:02 8 minutes, 2 seconds year-on-year basis. Our AIA stood at rupees 261 cr a growth of 68.7% on year-on-year basis. Our Abita margin for 8:11 8 minutes, 11 seconds the uh for the 9 months ended uh stood at 17.8% reflecting an improvement of 516 basis points on year-on-year basis. 8:20 8 minutes, 20 seconds Our EIT for the uh for the period uh is stood at 199.6 cr which is up by 57.6% 8:28 8 minutes, 28 seconds on year-on-year basis. Our margin was 13.6% 6% reflecting an improvement of 327 basis points on year-on-year basis. 8:36 8 minutes, 36 seconds Our profit after tax after non-controlling interest was 150 cr down by 6.3% on year-on-year basis. Our 8:43 8 minutes, 43 seconds packed margin is stood at 9.9%. This decline was primarily due to one-time exceptional charge of rupes 40.2 cr 8:50 8 minutes, 50 seconds arising from changes in labor codes. In comparison 9 month ended December 2024 8:57 8 minutes, 57 seconds PAD uh was uh 160.2 cr which also included an exceptional gain of 34.8 cr 9:05 9 minutes, 5 seconds excluding exceptional item profit before tax grew strongly by 39.8% on year-on-year basis. Our build DSO was at 9:13 9 minutes, 13 seconds 55 days as of December 2025. We continue to maintain a healthy balance sheet as of December 2025. Our net cash and 9:21 9 minutes, 21 seconds investment uh net of debt stood at rupes 540.2 cr. Overall we had a good quarter with a strong financial performance. 9:29 9 minutes, 29 seconds With this I will now pass on the call to operator to open the floor for questions. Thank you for your patience and continued interest in data matics. 9:46 9 minutes, 46 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone 9:54 9 minutes, 54 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a 10:02 10 minutes, 2 seconds question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 10:18 10 minutes, 18 seconds The first question is from the line of Danashi Zada. Please proceed. 10:25 10 minutes, 25 seconds Yeah. Good evening everyone. 10:28 10 minutes, 28 seconds Good evening and congrat Yeah. Congrats on great site of numbers on operational self. Uh yeah so my question is regarding the how 10:37 10 minutes, 37 seconds should we see the the three revenue I mean the three segmental mix evolve in next couple of quarters and also if you 10:44 10 minutes, 44 seconds can throw some light on uh digital experience uh which has shown some decline in this quarter whether it will 10:53 10 minutes, 53 seconds uh recoup uh that degrowth in uh sorry not growth I mean in terms of margins and overall growth going ahead that is 11:01 11 minutes, 1 second the first question second is If you can uh throw some light on order booking and the nature of these that we have run 11:09 11 minutes, 9 seconds this quarter and pipeline if you can um give us some cues on how it is growing 11:16 11 minutes, 16 seconds uh and some cues on overall growth and margins going ahead. 11:21 11 minutes, 21 seconds Yeah. So on the digital experiences uh I mentioned about two quarters earlier that we have two customers who are 11:29 11 minutes, 29 seconds moving their work to the captives and therefore you see the margins becoming a little softer and the growth not being as much. Uh quarter four of this year we 11:39 11 minutes, 39 seconds will expect the full impact of that transition. From quarter 1 of next year we'll see an upswing because we've signed several new logos uh and uh they 11:47 11 minutes, 47 seconds have much healthier margins as well. So we will see an upswing in digital experiences starting quarter one of next year but quarter [clears throat] four 11:54 11 minutes, 54 seconds will remain a little soft on digital operations and digital technologies because as you see the numbers on digital technologies has has been quite 12:03 12 minutes, 3 seconds robust and I see that continuing for the next few quarters I don't see a major challenge there we have a healthy pipeline uh on digital operations uh 12:12 12 minutes, 12 seconds there's a lot of transitioning happening on the AI side so the margins are improving uh the pipeline time will also 12:20 12 minutes, 20 seconds improve as we deliver these solutions for automating business processes. Uh so that's really going to be the driver 12:27 12 minutes, 27 seconds going forward. Uh overall I'm quite okay with uh the next year uh going ahead 12:34 12 minutes, 34 seconds revenue by industry that's not true to your point in terms of the pipeline and the quarter right now is still fairly 12:42 12 minutes, 42 seconds strong. In fact we are seeing an little uptick on the pipeline. So that's good. 12:46 12 minutes, 46 seconds I think the current uncertainties in the US uh has become a state of normal in a way. Everybody knows and everybody's 12:55 12 minutes, 55 seconds remains uncertain. So they've sort of taken in this stride. Generally the mood is uh improving. The velocity is still 13:03 13 minutes, 3 seconds slow but it's uh we see a slight upper trend. 13:10 13 minutes, 10 seconds So yeah, that's it. 13:22 13 minutes, 22 seconds Thank you. Before we take the next question, we would like to remind participants you may press star and one to ask a question. The next question is from the line of Yajut Sha and investor. 13:33 13 minutes, 33 seconds Please proceed. 13:35 13 minutes, 35 seconds Hi sir, congrats on a great set of numbers. Just had a question regarding the Google Gemini uh enterprise 13:44 13 minutes, 44 seconds solutions that we have started to grow out. Uh it is a big portion of our revenue and also what is the expected revenue mix from that? 13:55 13 minutes, 55 seconds So so no we are implementing Google Gemini across the enterprise within data matics. So every person will be powered 14:02 14 minutes, 2 seconds with an AI tool in his hands. Uh that should impact productivity, efficiency and things like that. We are also integrating some of the Google 14:10 14 minutes, 10 seconds technology into our AI solutions which we are taking to the market. Uh we built agentic AI platforms for insurance for 14:18 14 minutes, 18 seconds logistics for for banks and we started taking that to market. Uh the revenues will will flow in in the next few 14:26 14 minutes, 26 seconds quarters. uh we've tested the solution right now and the response has been quite uh promising from customers but I 14:34 14 minutes, 34 seconds think once we nail a few customers or once we acquire a few customers in the next uh say 3 to four months we will get a good visibility on what those revenues 14:43 14 minutes, 43 seconds will look like. So the agenda of Google enterprise is to get every person uh hands-on with AI technology in the 14:50 14 minutes, 50 seconds company being a AI first company that's becomes paramount. So far the pockets of AI have been concentrated with a few 14:58 14 minutes, 58 seconds people who are deep into the AI space who are experts but now we need to democratize this and make sure that every employee in the company is uh 15:07 15 minutes, 7 seconds thinking AI first and is powered with an AI tool inside. So that's the the agenda. 15:14 15 minutes, 14 seconds Great. Great sir. And one last question. 15:17 15 minutes, 17 seconds Um uh the labor code is back. Uh is this just for this quarter or will we see any 15:25 15 minutes, 25 seconds other small impacts over the next quarter or the year? 15:29 15 minutes, 29 seconds It is just for this quarter in the sense that there's a backlog because of the one-time hit with a retrospective effect. So therefore this quarter has 15:37 15 minutes, 37 seconds taken a big hit. Uh from next quarter onwards it has become a routine marginal increase in graduity. uh so we expect 15:47 15 minutes, 47 seconds something in the range of maybe 34.5 but there are we still have to do the math because all these regulations are 15:54 15 minutes, 54 seconds not yet clear they're still coming out with clarifications so we are keeping our eyes open and talking to the consultants who can advise us uh on that 16:02 16 minutes, 2 seconds so but fundamentally going forward there will not be too much of an impact great thank you sir and all the best 16:11 16 minutes, 11 seconds thank Thank you. Participants who wishes to ask a question may press star and one on their touchstone telephone. 16:25 16 minutes, 25 seconds Participant who wishes to ask a question may press star in one. Now the next question is from the line of 16:34 16 minutes, 34 seconds Krishma Sha from Nvision Capital. Please proceed. 16:39 16 minutes, 39 seconds Uh good evening to the management team and thanks for taking my question. Uh uh curious to know how is TNQ Tech doing 16:48 16 minutes, 48 seconds and uh you know uh till 9 months uh we have the benefit of integrating you know TNQ on a year-on-year basis. Therefore 16:57 16 minutes, 57 seconds the numbers look good but if you had to exclude that and then look at the standalone business if you could give us 17:04 17 minutes, 4 seconds some idea as to how the business is done that should be great. 17:09 17 minutes, 9 seconds So TQ is doing good. If you look at the uh so we we are successfully integrating it very well into the company. Uh the 17:19 17 minutes, 19 seconds overall we've had a sequential quarteronquarter growth of 4% as you see. So that of course includes TQ as 17:26 17 minutes, 26 seconds well as the rest of data matics. So so the growth is not coming from the acquisition. Of course we got a bump up because of 19% because of the 17:34 17 minutes, 34 seconds acquisition for Q1 to Q3. But if you see for the last two quarters a sequential quarter growth has been 4% and above for 17:42 17 minutes, 42 seconds this quarter as well as the previous one. So I think we we are doing quite well in terms of organic growth and integration of TNQ and they remain 17:50 17 minutes, 50 seconds financially healthy and so in in that sense it was a very good acquisition from from a data management perspective. 17:58 17 minutes, 58 seconds I mean see if you had to look at even sequential growth of 4%. U I mean if you could give us yearon year how has TNQ grown? 18:08 18 minutes, 8 seconds So I have that figure handy but I know they've had a good growth their their growth has been in line with the rest of 18:16 18 minutes, 16 seconds data. So probably they're also talking about I don't have a figure exactly on hand so I I would be hesitant to give you a number but uh maybe you know 18:23 18 minutes, 23 seconds offline we can have a conversation and we can pull out those numbers or specifically KQ. 18:28 18 minutes, 28 seconds Okay. And just transitioning to captive center for the digital experience business line. This has been going on 18:35 18 minutes, 35 seconds since last December. I if I had if I remember correctly the last December quarter was uh you know really a uh slow 18:45 18 minutes, 45 seconds quarter for us. So I mean uh does it take like four quarters for the work to transition? 18:52 18 minutes, 52 seconds Yes. Uh it depends on each customer's situation but it it could be between two 19:00 19 minutes on the minimum it would be three one quarter at the maximum it would be four quarters. It depends on the situation. So these are both very slow and steady. 19:09 19 minutes, 9 seconds Uh but this was something that was writing on the wall. Uh so it's good it's good that it's been slow and steady. So therefore it does not create undue pressure on on data manage as well as the customer. 19:20 19 minutes, 20 seconds Okay. 19:20 19 minutes, 20 seconds And for FI27 uh you know what does the outlook look like? Is it uh a flat year in terms of 19:30 19 minutes, 30 seconds growth or is it low single digit? So what does it look like for you given the deal pipeline that is in front of you? 19:36 19 minutes, 36 seconds Yeah, so we are looking at high singledigits uh growth and then of course uh occasionally we do look at M&A. So I'm not factoring M&A into this 19:45 19 minutes, 45 seconds but the high single digits is something that would be a decent number to look at. 19:51 19 minutes, 51 seconds Okay. And uh uh I mean uh is uh Gemini the first AI tool that we are implementing or I believe we would have 20:00 20 minutes uh multiple other AI tools also that we were working on right yeah we we worked with Llama from Facebook we worked with anthropic we 20:07 20 minutes, 7 seconds worked with Microsoft OpenAI which is a big one is JPT we worked with Google as well so we worked with multiple uh we 20:15 20 minutes, 15 seconds found that Gemini has an edge over most others on several fronts uh so therefore we've gone with Gemini 20:24 20 minutes, 24 seconds across the board because we find that output to be much better and the idea should democratize it so really the assistance that we're getting from 20:31 20 minutes, 31 seconds Google to really train our people and you know empower all the employees having said that uh uh in different 20:38 20 minutes, 38 seconds pockets we use different AI tools so not one tool is going to fit everything so somewhere we using anthropic somewhere 20:45 20 minutes, 45 seconds it's using uh open AI but Gemini will be the uh dominant Having said that uh 20:54 20 minutes, 54 seconds so uh hi this is ML here. So uh you know while we are uh so we using uh Gemini uh 21:01 21 minutes, 1 second for uh you know internal uh productivity tools while we are building solutions while we are uh recommending classic 21:08 21 minutes, 8 seconds cases to customers. We have capabilities across all the tools you know all the AI uh models which uh Rahul mentioned beta 21:17 21 minutes, 17 seconds open AI Microsoft open AAI anthropic Google lama so capability development is across but then when we have to adopt 21:24 21 minutes, 24 seconds one particular tool across the organization for the people and that's why we we decided to go ahead with uh Gemini which suited more like 21:33 21 minutes, 33 seconds more for us as an organization having said that we've also built our own small language models and we've deployed those into technology situ 21:40 21 minutes, 40 seconds customer situations because it requires that kind of a solutioning, right? Okay. Okay. Okay. 21:48 21 minutes, 48 seconds And uh will the growth for next year be led by digital operations or you think 21:55 21 minutes, 55 seconds uh it will be across all the three segments? I mean uh it will be across all the three segments. I think technologies would 22:02 22 minutes, 2 seconds probably be the leader and you'll see an uptick in experiences as well. But it'll be across all three largely. 22:12 22 minutes, 12 seconds Okay. And how is Dexar doing above company average growth? 22:17 22 minutes, 17 seconds Yeah, Dexter is doing very well and we've been able to very successfully crossell into the data manage customer base. Uh we've got a very strong 22:25 22 minutes, 25 seconds pipeline right now. Uh and not only a strong pipeline but also much larger deals compared to what Dextra had. So overall quite uh optimistic about the 22:34 22 minutes, 34 seconds way Dex is panning out uh because of the cross- cell the pipeline and the D sizes that they're getting and that allows us in our strategy of penetrating our existing accounts uh very well. 22:47 22 minutes, 47 seconds Okay, fine. Thank you and good luck. Thank you. 22:52 22 minutes, 52 seconds Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question 23:00 23 minutes is from the line of Piml Parik from Suniti. Please proceed. 23:06 23 minutes, 6 seconds Uh good evening and thank you for uh giving me a chance. Um and congratulations on a great set of numbers. So my question was basically 23:16 23 minutes, 16 seconds and that during Q3 what was the spend on AI which we have written off uh is my 23:24 23 minutes, 24 seconds first question and the other was uh to Ral Bay that you know in his earlier experience when he had said that you know most companies are just testing out 23:33 23 minutes, 33 seconds AI so what is the experience now are the companies warming up to give more projects? 23:40 23 minutes, 40 seconds Yeah. So to your question, our spend I I can't specifically say AI but our spend on these uh transformation technologies is roughly 40 to 50 crores a year. 23:51 23 minutes, 51 seconds Earlier it was more in the product space where we are pivoting away from products uh investments and more into the AI investment. So basically it's all in the 23:58 23 minutes, 58 seconds investment space right so a little more investment. So we've reallocated our funds internally. So uh that investment 24:05 24 minutes, 5 seconds continues. uh to your other question on what was the other question your second one testing uh so the customers are 24:12 24 minutes, 12 seconds testing these things right now they've started going into production also we see uh some customers going into 24:20 24 minutes, 20 seconds mainstream production and not only that we find some customers very open to adopting technology as the main platform 24:28 24 minutes, 28 seconds on which they want to operate so we've started seeing that transition happen uh as I mentioned in my address that there 24:36 24 minutes, 36 seconds are a few solutions that we built which we've showcased to customers. We've already piloted it and the customers have loved the uh demos that we've seen 24:44 24 minutes, 44 seconds not only demos of proof of concept actually. So now it's about cashing in on those opportunities and converting them into live transactions. uh but the 24:54 24 minutes, 54 seconds the hesitation that we used to see about a year ago it seems to be waning and we 25:00 25 minutes see them more open to adopting AI in the main operations of their business. So that's that's good news and also the 25:09 25 minutes, 9 seconds solutions that they've seen from Datamax they've been extremely happy about what they've seen. 25:13 25 minutes, 13 seconds So sir do you expect this 50 crores to be spent every year or uh you expect that to taper down? So for right now 25:22 25 minutes, 22 seconds right now uh we will maintain that between 40 and 50 because we are doing a lot of this this whole area of technology is changing so fast and we need to keep breast with uh that area. 25:33 25 minutes, 33 seconds So we will maintain it for some time but we keep reviewing it every quarter just to see where we going. So as of now it's there 25:41 25 minutes, 41 seconds and we write off this as an expense uh in our books instead of capitalizing. Right. That that is correct. 25:47 25 minutes, 47 seconds Okay. Okay. And sir, any other industries um uh that we are now targeting? Uh I believe last time was uh 25:56 25 minutes, 56 seconds BFSI largely insurance. So any other industries that are we targeting? 26:01 26 minutes, 1 second No, our footprint is large in manufacturing in education and publishing and BFSI these are the three dominant ones. Uh so I think that that 26:09 26 minutes, 9 seconds will remain uh as they are. We are not looking at any new industry per se. 26:15 26 minutes, 15 seconds Okay. and uh your uh you know US was kind of lukewarm. So has things reversed 26:23 26 minutes, 23 seconds there or uh they're still lukewarm towards Indian? 26:28 26 minutes, 28 seconds They are still little they're little lukewarm more because of I think political reasons and political 26:35 26 minutes, 35 seconds pressures more than business. Uh and I think that overhang of the politics is still there. Uh it's beginning to look 26:43 26 minutes, 43 seconds up right now. So it is improving because I think everybody is now very comfortable with the uncertainty that exists. Everybody is in the same boat 26:51 26 minutes, 51 seconds and they've been in the this board for quite a while. So I think that that's the new normal that it just remains uncertain. So generally it's looking up 27:00 27 minutes but there is still a political overhang which uh we don't know which way to go. 27:06 27 minutes, 6 seconds Thank you very much sir. 27:10 27 minutes, 10 seconds Thank you. The next question is from the line of Rahel from Safia Capital. Please proceed. 27:17 27 minutes, 17 seconds Uh good evening sir. Uh can you hear me? Yes. 27:21 27 minutes, 21 seconds Yes. So sir just picking up on the previous one for the US market. So it is still like uh a heavy chunk of our business right the 3% plus. 27:30 27 minutes, 30 seconds Yes. Yes. 27:31 27 minutes, 31 seconds Okay. So because this you know this scenario is you know uh ever going and not uh looking like it will settle in the near term. So are you trying to 27:40 27 minutes, 40 seconds diversify and move away from the market or is it still you know reaping us good uh good good uh kind of contracts and business? 27:47 27 minutes, 47 seconds No, it's still giving us good contracts and business. Uh we're not looking at diversifying because uh between the US 27:54 27 minutes, 54 seconds and UK it pretty much covers 80% of the global outsourcing market. Uh so if you're looking out elsewhere you're 28:01 28 minutes, 1 second looking at adraction. Now 20% is the rest of the world. Now obviously we can't go to some lowc cost destinations like Africa and South America. We can't 28:10 28 minutes, 10 seconds go to certain other countries which are non-English speaking which are very different. So therefore you really that is the market uh and we will continue to 28:18 28 minutes, 18 seconds focus on it. I'm sure this current political headwinds will out soon and we are hoping that you know it it at least 28:27 28 minutes, 27 seconds reduces if not goes out goes away completely and that should improve the mood amongst all customers. So no we're not looking at other other geographies 28:36 28 minutes, 36 seconds but diversification also uh there is a you know our focus with on our growing our existing customers uh that is what one of the key 28:46 28 minutes, 46 seconds growth strategy is so which are which is basically again distributed across the geography uh which is US Europe uh and 28:53 28 minutes, 53 seconds uh India Middle East so I think that we have our hands full enough to plow there um once the uh you know overall economic 29:03 29 minutes, 3 seconds environment uh improves I'm sure we will we'll get some uh you know we'll see 29:09 29 minutes, 9 seconds those in in numbers. So is it uh fair to say that with the current customer base in the US mainly uh there is a lot of 29:17 29 minutes, 17 seconds scope for uh further wallet share increase and you know uh absolutely absolutely yes which can which can give uh which can 29:25 29 minutes, 25 seconds you know let us sustain it a good amount of growth for the coming years. Yes, absolutely. Uh you know these are pretty 29:32 29 minutes, 32 seconds large uh enterprises and need to keep you know we need to mine them. We need to build more stronger relationships with them and that's what the strategy 29:40 29 minutes, 40 seconds is and we are gearing up our we have already geared up ourselves last year we launched it and uh uh and we are seeing 29:49 29 minutes, 49 seconds fruits of that right um secondly so the Q3 this is impacted by you know 29:56 29 minutes, 56 seconds the labor port changes now you think it's going to taper down and you know settle settle in the next from the next quarter on versus quarter four uh 30:04 30 minutes, 4 seconds profitability will be you know inch up Right. And the same effect will not be there. 30:09 30 minutes, 9 seconds So, so as highlighted uh this is a one-time impact of the past liability which was there because of change in the 30:16 30 minutes, 16 seconds definition of wages. So that impact is a onetime impact. Going forward we don't see any material impact. There will be a minimal increase which will be there but 30:25 30 minutes, 25 seconds I we don't expect any material impact of this. Now it was just a one time legacy impact. 30:30 30 minutes, 30 seconds That's the impact of the whole industries. Hm. Got so fair to say the Aida margins of course not related to this labor co impact but I'm just in 30:38 30 minutes, 38 seconds general asking the bida margins are sustainable because on quote unquote we have been growing by a few basis points and we close with 19%. So is it sustainable for uh quarters ahead? 30:50 30 minutes, 50 seconds Yeah we will be sustaining uh the margins we continue to look at in terms of how we can we can keep our cost in 30:57 30 minutes, 57 seconds control and uh keep growing. So that's basically the key thing that we are looking at. So AITA will will maintain the AITA margin and keep improving. 31:06 31 minutes, 6 seconds Okay. You're confident of that. And lastly, uh you said FY27, you know, you see high single digits growth. Now are 31:13 31 minutes, 13 seconds you being conservative there? Because uh in the last three quarters in year on year you have grown around you know 18 31:20 31 minutes, 20 seconds to 20%. So why as a company we are not you know still guiding uh coming ahead and guiding with you know a strong 20 20% plus growth for consolidated level. 31:32 31 minutes, 32 seconds Uh no no so so the the growth that you see includes some degree of an acquisition and therefore you see a bump 31:39 31 minutes, 39 seconds up. uh we rather be conservative because there's still a lot of uncertainty partly uh thanks to the political 31:47 31 minutes, 47 seconds situation partly thanks to the disruption that AI can have and therefore there's some degree of greyness there and therefore you know we 31:56 31 minutes, 56 seconds this is the current outlook of course in by every as every quarter passes we'll get better clarity and I'm sure we'll have those conversations to see whether 32:03 32 minutes, 3 seconds we need to change our uh our estimations of future growth but right now this is what we're looking It is a little conservative but it does 32:11 32 minutes, 11 seconds include an M&A uh in the last yes but the sequential sequential growth that you see we've had for two quarters 32:18 32 minutes, 18 seconds 4% 4% so it's been a very healthy uh organic sequential growth oh okay okay sir thank you so much and 32:27 32 minutes, 27 seconds all the best thank you thank you the next question is from the line of Sri Nasu from TIA please proceed 32:37 32 minutes, 37 seconds uh hi sir uh thanks for the opportunity and congratulations for a great set of uh Q3 numbers. Uh 32:45 32 minutes, 45 seconds is data matrix clients asking you to uh build a agents on top of the existing platforms like Microsoft, Google, 32:54 32 minutes, 54 seconds Salesforce or uh are you have any a accelerators uh that you that you built 33:02 33 minutes, 2 seconds by yourself uh which is actually driving this? So we have a few accelerators that we are deploying. I earlier talked about 33:10 33 minutes, 10 seconds an agentic underwriting for logistics for banking for insurance. Uh we build solutions around Microsoft copilot. Uh 33:18 33 minutes, 18 seconds so yes we have built on top of existing platform because we we don't build a foundation model. The foundation model is from these large tech companies like 33:26 33 minutes, 26 seconds Google and Microsoft right. So we've taken those as a platform. Now when you build it on the customer's environment 33:33 33 minutes, 33 seconds uh you have to integrate into the core systems you can't it cannot be a bolt-on sitting on top. Uh so so therefore 33:41 33 minutes, 41 seconds customers are still testing that they're not quite clear how to do that because there's a fear of data going outside the enterprise. So that's the biggest fear. 33:51 33 minutes, 51 seconds So our solutions are are delivering good. Now when it comes to building solutions for the customer that is still sporadic because not every customer will 33:59 33 minutes, 59 seconds allow you to touch the core systems and AI will really work only when you can directly access data in their systems. 34:06 34 minutes, 6 seconds uh so there we but but the point I made earlier was that customers are now maturing and coming to the terms of the fact that that it's a good solution it's 34:14 34 minutes, 14 seconds a good thing to do and therefore more and more customers are uh sort of going down that path of putting it into the 34:21 34 minutes, 21 seconds main systems so so compared to other IT service 34:27 34 minutes, 27 seconds companies peers in India so what data matrix actually uh having a differentiation in terms of agentic 34:36 34 minutes, 36 seconds workflow or orchestration or do you have AI based automation or uh AI based DX personalization where exactly is the 34:44 34 minutes, 44 seconds strength with data? So we we have gotten an agentic AI workflow built. We have a whole platform. Uh we've trained several 34:52 34 minutes, 52 seconds people. I think the the key to this market is uh how fast you can move with the market and we've had a good start. 35:00 35 minutes We've moved in fast. We've got a few good very good customers. So that that's really the key. Also the the benefit 35:07 35 minutes, 7 seconds that we've been able to deliver is because we understand the business process services as well as the 35:14 35 minutes, 14 seconds technology services. We're able to put them to together very well and and deliver the end result. Ultimately the customer is looking at better, faster, 35:23 35 minutes, 23 seconds cheaper and uh we have successfully delivered uh uh return on investment to the customer. So it's really an 35:30 35 minutes, 30 seconds integrated IT and operations story that goes very well. uh and the ability to deliver ROI. 35:41 35 minutes, 41 seconds Okay. Thank you. 35:46 35 minutes, 46 seconds Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Sanjot and investor. 35:59 35 minutes, 59 seconds Please proceed. Hello. Good evening. Am I audible? Yes. 36:06 36 minutes, 6 seconds Uh yes, congratulation on a good set of uh operational numbers in a tough market. Uh I have two questions. Um one 36:13 36 minutes, 13 seconds is like uh Q4 is generally a similarly a good quarter for data matics and you mentioned that digital experience is going to have some uh 36:21 36 minutes, 21 seconds impact on the quarter. Is it going to be kind of uh overall is going to be kind of a muted quarter compared to Q4's 36:28 36 minutes, 28 seconds generally Q4? And uh second question is yeah you can answer first one please go ahead. No go ahead please ask your second question. 36:38 36 minutes, 38 seconds Uh yeah the second second question is about u u uh there is on a employee side like uh on a 36:47 36 minutes, 47 seconds headcount side in a Q3 uh have you added or uh any number of employees what is the current employee 36:54 36 minutes, 54 seconds count and uh on a wage hike is it already done for this financial year or is it going to be happening in Q4? Yeah. 37:03 37 minutes, 3 seconds So on the on the employee count, we've not added too much more. It's more about augmenting it with AI and improving productivity and not really increasing 37:12 37 minutes, 12 seconds headcount. Now uh in terms of wage hike for this year is done. There's nothing happening this year. We already did a midyear increment cycle. Uh the next 37:21 37 minutes, 21 seconds cycle will be probably next financial year April May time frame. Uh on your first question if you just jog my memory 37:27 37 minutes, 27 seconds on the first one. uh the digital experiences will have a little muted uh thing. Uh but that I think is the it 37:36 37 minutes, 36 seconds will pick up in Q1 of next year. So Q4 might be a little soft but Q1 will pick up 37:45 37 minutes, 45 seconds right mean experience visits will pick up from the Q1. uh but in the Q4 it will be having some impact and overall the 37:52 37 minutes, 52 seconds way uh Q4 generally is higher quarter it will be having a little impact on Q4 but other two businesses will be doing well 38:00 38 minutes yeah Q yes Q4 see so so we have some cyclical business and and because of the 38:07 38 minutes, 7 seconds growth in the nonyclical business uh and the acquisition that we made both as 38:13 38 minutes, 13 seconds well as DMQ the ratio of cyclicality has reduced so We will see a spike in Q4 but 38:20 38 minutes, 20 seconds it will not be as prominent as it has been in the past because the other businesses which are sort of larger and 38:27 38 minutes, 27 seconds more stable have grown. So yes, we will see a spike but not as steep a spike because the others are more stable. 38:37 38 minutes, 37 seconds All right, thank you and all the best. 38:43 38 minutes, 43 seconds Thank you. Participants who wishes to ask a question may press star and one now. 38:53 38 minutes, 53 seconds Participants who wishes to ask a question may press star and one now. 39:08 39 minutes, 8 seconds The next question is from the line of Biml from Sunniti. Please proceed. 39:13 39 minutes, 13 seconds Uh hello again sir just wanted to understand which which industry is uh best as far as adopting AI in your 39:22 39 minutes, 22 seconds opinion and what is your experience been? 39:25 39 minutes, 25 seconds So the industry uh the industries that are very heavy with information processing are the more likely ones. So 39:33 39 minutes, 33 seconds banking finance insurance are are adopting it quite well. They have a concern on data security and data privacy. uh but outside of that concern 39:43 39 minutes, 43 seconds they are very very open to the idea of using AI uh they they have issues with 39:50 39 minutes, 50 seconds compliance but uh but compliance when you use it internally that's a very potent area to to explore AI because AI 39:58 39 minutes, 58 seconds can automate a lot of the manual paperwork that goes on in compliances uh but they since these industries are 40:05 40 minutes, 5 seconds regulated they need to be a little cautious uh industries that have been lagards I would say is publishing uh because they are very concerned about 40:14 40 minutes, 14 seconds the IP rights of the authors and they're concerned about AI violating the intellectual property rights of authors. 40:20 40 minutes, 20 seconds So that's been a little slow. Uh technology industry has been good manufacturing more is also because a lot of 40:28 40 minutes, 28 seconds manufacturing goes into core brick and mortar kind of stuff where AI is a very different uh use case. Uh so it's really 40:36 40 minutes, 36 seconds BFSI and technology which have been large ones. Education publishing has been a little slow. Manufacturing has been kind of average. So this has been 40:44 40 minutes, 44 seconds our experience so far. Logistics also is doing what decent amount because logistics has a lot of information that they process and that's where they use AI. 40:55 40 minutes, 55 seconds Thank you. Thank you sir. 40:59 40 minutes, 59 seconds Thank you. Participants who wishes to ask a question may press star and one now. 41:19 41 minutes, 19 seconds As there are no further questions from the participant, I now hand the conference over to the management for the closing comments. Over to you, sir. 41:26 41 minutes, 26 seconds Uh thank you everyone for being on this call with us. Uh and thank you for your confidence in data manics. I think we've had a good interaction today and I look 41:34 41 minutes, 34 seconds forward to meeting all of you in the next quarter. Wishing you once again a very happy new year and uh we'll see you soon. Thank you again. 41:45 41 minutes, 45 seconds Thank you on behalf of Datamatics Global Services Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.