Newgen Software Technologies Ltd — Q4 FY26

Newgen Software Technologies Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=H6vjQKXdLOU Published: 13 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the new gen software technologies limited Q4 FY26 0:10 10 seconds earnings conference call hosted by ICACI Securities Limited. As a reminder, all participant lines will be in the 0:18 18 seconds listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:25 25 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that 0:33 33 seconds this conference is being recorded. I now hand the conference over to Miss Simma Nyak from ICICI Securities Limited. 0:41 41 seconds Thank you and over to you ma'am. 0:44 44 seconds Hi, good evening and welcome to the key for SI26 earnings call of software technologies. It's my pleasure to 0:51 51 seconds introduce the senior management team of Musen. We have with us today Mr. Turad Razin wholetime director, Mr. Virind, 0:59 59 seconds chief executive officer, Mr. Tarun Nandwani, Chief Operating Officer, Mr. 1:05 1 minute, 5 seconds Arun Gupta, Chief Financial Officer, and Miss Victi Natur, head of investor relations. I'll now hand over the call 1:12 1 minute, 12 seconds to Miss Victi for the procedure. Thank you and over to you VIP. 1:17 1 minute, 17 seconds Thank you so much, Sema. Good afternoon everyone and welcome to the Q4 FI26 results of the company. Before we move 1:25 1 minute, 25 seconds on to the discussion, let me highlight that this call may contain certain forward-looking statements concerning Eugen's future business prospects and 1:34 1 minute, 34 seconds profitability which are subject to a number of risks and uncertainties and the actual results could materially vary from the forward-looking statements. 1:43 1 minute, 43 seconds Past performance may not be indicative of future performance. The company does not undertake to make any announcement 1:50 1 minute, 50 seconds in case any of these forward-looking statements become materially incorrect or update any forward-looking statement made from time to time by or on behalf 1:59 1 minute, 59 seconds of the company. For further details, you may please refer to the investor relation section of our website. I would 2:06 2 minutes, 6 seconds now hand over to Mr. Varad Rajan for presentation of the results which will be followed by the Q&A by the management. Thank you. 2:17 2 minutes, 17 seconds Good afternoon everyone and thank you for joining us today. We are pleased to report our results for full year and quarter 4 of FI26. 2:28 2 minutes, 28 seconds In FI26 we recorded a revenue growth of 6% YI to reach 1574 crores despite the uncertain market condition. 2:40 2 minutes, 40 seconds The quality of our revenue mix continues to improve materially driven by expansion in subscription based 2:47 2 minutes, 47 seconds revenues. Our subscription revenue grew by 24% YI to reach 525 crores. 2:55 2 minutes, 55 seconds Specifically, the SAS component grew by 36% Y. This provides us with significantly better visibility for 3:03 3 minutes, 3 seconds future revenues in the form of increased deferred revenues. Our annuality revenues were at 968 crores comprising 3:13 3 minutes, 13 seconds 62% of total revenues which is up from 56% in the FI25. 3:21 3 minutes, 21 seconds This depicts a structurally positive transition to more predictable subscription subscription uh revenues that improve revenue visibility. 3:32 3 minutes, 32 seconds Moving to geographic specific highlights. Our business model continues to be well vers diversified across geographies with each geography meaningfully contributing to our growth. 3:43 3 minutes, 43 seconds US geography continue to grow um record healthy traction and witness revenue growth of 17% by wide for the full year. 3:52 3 minutes, 52 seconds In Q4 specifically, US revenues were at 106 crores growing at 20% by wide. Our 4:00 4 minutes consistent wins during the year opened the door uh to broader regional adoption. Apacy witnessed revenue growth 4:09 4 minutes, 9 seconds of 14% by wide for the full year. India and IMIA continue to be the largest contributors to revenues. 4:18 4 minutes, 18 seconds However, the large deal closures continue to be slower in these regions as customers take time to evaluate their technology strategies and due to the geopolitical uncertainty. 4:29 4 minutes, 29 seconds India geography revenue growth has been muted due to low license revenues and customers holding off on making decisions particularly on large bills. 4:40 4 minutes, 40 seconds In the India geography revenue growth of performance has faced headwinds by geopolitical uncertainty in the West 4:48 4 minutes, 48 seconds Asia especially towards the end of the financial year. This has le led to delays in large deal closes. The 4:56 4 minutes, 56 seconds collection from the region has also been slower on that account which has in turn affected the overall DSO. 5:04 5 minutes, 4 seconds Over the course of the year we added total 47 new customer lovers. At the same time we deepened relationship with 5:12 5 minutes, 12 seconds the existing clients. The number of customers with billing over 5 cr 5:18 5 minutes, 18 seconds from 87 in FI25 to 101 in FI26 reflecting strong valid share expansion. 5:28 5 minutes, 28 seconds Our key wins particularly in this quarter include providing retail loan origination solution to a leading bank 5:36 5 minutes, 36 seconds in Malaysia. The aggregate order value of RM6.75 million entered into an agreement with a 5:43 5 minutes, 43 seconds leading insurance company in Illinois, US for policy binding solution with an order value of dollar 1.6 million 5:53 5 minutes, 53 seconds executed an agreement with a leading bank in Kuwait for corporate finance origination solution, retail finance 6:00 6 minutes origination solution and customer communication management system. The aggregate value of this order is 2.2 2 6:07 6 minutes, 7 seconds US million supply installation and implementation of the new gen one digital transformation platform for an insurance 6:17 6 minutes, 17 seconds company in the Caribbean. The again the aggregate value is $1.5 million. 6:24 6 minutes, 24 seconds Um building a tax compliance system for a large and reputed government organization based in UAE. 6:31 6 minutes, 31 seconds The aggregate value of the agreement is AED 5.3 million. Coming to our products, 6:38 6 minutes, 38 seconds the new gen one platform continue to unify content processes and communication into an 6:46 6 minutes, 46 seconds orchestration layer where intelligence is embedded into how enterprises operate with the trust, governance and control 6:54 6 minutes, 54 seconds built in. Continuing with the focus on innovation, new has filed five 12 patents during this year and has been granted two patents in the same period. 7:06 7 minutes, 6 seconds Overall, as of date, we have 67 patent filing and 25 patent grants. Our new one 7:15 7 minutes, 15 seconds platform helps in creating AI agents that leverage customer approved data to deliver explainable and evidence-based 7:23 7 minutes, 23 seconds model auditability. 7:26 7 minutes, 26 seconds These agents are safeguarded by the business rules and continuous monitoring to ensure reliable performance by 7:33 7 minutes, 33 seconds embedding agent agentic AI directly into its low code fabric. Eugen one enables 7:41 7 minutes, 41 seconds organizations to move beyond process execution toward autonomous policy safe decision making. 7:49 7 minutes, 49 seconds During the year we have continued with our focus on selling higher journey deals in banking and insurance. 7:57 7 minutes, 57 seconds Especially in the insurance vertical we have successfully added customers for our policy administration system offerings especially in the mature 8:05 8 minutes, 5 seconds markets. It gives us immense pride to share that for the second consecutive 8:12 8 minutes, 12 seconds year newen has been certified as a great place to work. It reflects the strength, consistency and shared values of the 8:21 8 minutes, 21 seconds culture we have built together. Our global workforce numbers approximately 4 4,300 professionals throughout the 8:30 8 minutes, 30 seconds year. We have worked on our employee AI upskilling program to build and scale a cohort AI skill talent within the 8:38 8 minutes, 38 seconds organization. We have also added senior leadership talent to strengthen goto market corporate and innovation capabilities. 8:47 8 minutes, 47 seconds Our on profits and margin despite uncertainties we have maintained our operational profitability through 8:55 8 minutes, 55 seconds optimization in cost. Profit of the tax for FI26 was rupees 301 cr impacted by 9:04 9 minutes, 4 seconds exceptional item excluding onetime statutory impact of new labor codes and provision for legal claim to the extent 9:12 9 minutes, 12 seconds of 42 crores. These if these exceptional items are excluded the adjusted profit 9:19 9 minutes, 19 seconds of return would have been 334 crores reflecting a good growth of 6% YI 9:27 9 minutes, 27 seconds instead of negative growth as reflected in the books of account which is incorporating exceptional items. The adjusted net margins are at 21.3%. 9:38 9 minutes, 38 seconds We are accelerating AI engineering, automation and operational efficiencies across our delivery and product teams. 9:47 9 minutes, 47 seconds We continue to prudently invest in R&D and sales and marketing initiative. 9:52 9 minutes, 52 seconds During the year, we have invested nearly 8.5% of our revenues on R&D initiatives 9:58 9 minutes, 58 seconds and around 22% of revenues on the various sales and marketing activities. 10:04 10 minutes, 4 seconds On the balance sheet front, we witnessed a robot robust cash flow generation with our net cash generated from operating activities for the year at 302 crores. 10:16 10 minutes, 16 seconds We have declared a dividend of rupees 6 per share. 10:23 10 minutes, 23 seconds Q4 revenue was at 457 crores versus 10:30 10 minutes, 30 seconds 430 crores in Q4 FI25 which is up from 10:34 10 minutes, 34 seconds up 5.3% YI. The Q4 S component grew at 10:41 10 minutes, 41 seconds 44% YI underscoring the momentum in our cloud and subscription based revenues. 10:48 10 minutes, 48 seconds Our deal pipeline continues to remain strong. Our order bookings have scaled and deferred revenue streams have 10:57 10 minutes, 57 seconds strengthened. All these are providing improved visibility into FI27. 11:02 11 minutes, 2 seconds While we remain mindful of the broad broader market condition, we are confident in our ability to continue 11:10 11 minutes, 10 seconds delivering value to our customers and shareholders. 11:14 11 minutes, 14 seconds So, thank you and we are now open for Q&A. 11:19 11 minutes, 19 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 11:26 11 minutes, 26 seconds star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you 11:33 11 minutes, 33 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 11:41 11 minutes, 41 seconds wait for a moment while the question queue assembles. 11:44 11 minutes, 44 seconds Our first question comes from the line of Sema Nyak from ICICI Securities Limited. 11:52 11 minutes, 52 seconds Please go ahead. Am I audible? Yes. Yes ma'am. Please go ahead. 11:58 11 minutes, 58 seconds Uh hi, thanks for taking my question. Uh so apart from Middle East, are you seeing any broader weakness in BSSI 12:05 12 minutes, 5 seconds demand and how is NBFC demand looking in India? And my second question is employee cost is at a multi-year low. So what exactly is driving that? 12:17 12 minutes, 17 seconds Those are my question. 12:19 12 minutes, 19 seconds Thank you. Thank you for asking that. Uh so you know you're right. I think Middle East also we didn't see too much of weakness but we saw disruption in terms 12:27 12 minutes, 27 seconds of towards the more critical quarters of which are very important for our business towards the end of Q4. uh so that was a kind of a disruption but on 12:36 12 minutes, 36 seconds the business or funnel or in terms of building cases I don't see there is too much of disruption over a longer period of time still we continue that you see 12:44 12 minutes, 44 seconds strong traction both in Saudi Kuwait UE for our business uh on the India friend 12:51 12 minutes, 51 seconds uh you know I think NBFCs we have LPS radally as we have covered lot of public sector banks and banks the larger 12:58 12 minutes, 58 seconds segment of NBFCs we are doing lot of work on that segment and uh that seems to be one of our good drivers. Uh apart 13:06 13 minutes, 6 seconds from seeing some challenges in you know areas of personal finance and something where there is kind of a slow movement all other areas which are important uh 13:15 13 minutes, 15 seconds you know in NBC's we are seeing a growth out there. uh having said that in India uh we had a very strong pipeline built 13:23 13 minutes, 23 seconds over two years on account of large public sector deals and we see there's still a challenge in terms of getting the larger deals out of the larger banks 13:30 13 minutes, 30 seconds but on typically the momentum of business in terms of acquiring more logos or more deals in MBFCs we are not seeing too much of a challenge 13:39 13 minutes, 39 seconds uh the other part of your question about the employee cost I think there are a couple of things driving that overall uh I think there's an operational 13:47 13 minutes, 47 seconds efficiency coming in as part of the scale but also this year if you looked at most of the revenue streams which have grown are not uh you know service 13:55 13 minutes, 55 seconds related so need of hiring more aggressively was not there. We also have started seeing the early advantages of 14:03 14 minutes, 3 seconds getting AI based engineering practices built in our system. Uh we had an optimization of roughly around 7% in our 14:10 14 minutes, 10 seconds manpower numbers for the year and I think that trend I think may continue slowly for a few years. 14:18 14 minutes, 18 seconds We continue to still hire aggressively from campuses because uh we will still need a lot of people to work on to support the growth. But as of now both 14:26 14 minutes, 26 seconds uh you know in terms of uh uh what do you call slower demand in the implementation revenue stream as well as uh what the AI advantages are bringing 14:35 14 minutes, 35 seconds onto the table or helping us optimize the employee cost. 14:44 14 minutes, 44 seconds Question. Yeah. Yeah. Thanks and all the way. Thank you. 14:50 14 minutes, 50 seconds Thank you. Our next question comes from the line of mid Virani from M&S Investments. Please go ahead. 14:59 14 minutes, 59 seconds All right. So, am I audible? Yeah. Yeah. 15:03 15 minutes, 3 seconds Okay. Uh so my first question on the side of large B conversion as we have discussed in earlier contact that uh uh 15:10 15 minutes, 10 seconds you mentioned earlier that delay in large B conversion but Q4 we have seen strong revenue growth almost here. So 15:17 15 minutes, 17 seconds can you help me to quantify how much of the growth was driven by conversion of ear delay large and whether these closer timelines have normalized or not? 15:28 15 minutes, 28 seconds Yeah. So I'm not sure I got the but I'll I'll try to explain what I understood from the question is so the large deal convergence for last two years if you 15:36 15 minutes, 36 seconds look at which have helped predominantly the license sale in our part of if you look at multiple segments of our revenue our licenses for previous two years have 15:45 15 minutes, 45 seconds grown at a compounded rate of more than 30 40% yearonear this year since we have not been able to get the deal momentum of large deals at 15:53 15 minutes, 53 seconds the same size especially which we are on the backdrop of larger deals coming in Indian public sector or some of the larger accounts in Saudi Arabia. Those 16:01 16 minutes, 1 second things we are finding uh there's a slow take in terms of decision-m process out there and there are multiple reasons about the decision-m process. Some are 16:09 16 minutes, 9 seconds some are to do with you know the challenges which are in the economy but also some are in terms of the uncertainty around the AI or uh you know 16:16 16 minutes, 16 seconds taking more time to evaluate whether what people are buying as the right value for the enterprise. So there is overall slowdown in terms of larger deal 16:25 16 minutes, 25 seconds momentum across all businesses. that's we are seeing broadly. 16:29 16 minutes, 29 seconds uh I don't see I don't know exactly does it that completely settled but what we have in our control is we have we have pivoted to getting into so more mid-size 16:37 16 minutes, 37 seconds deals and are trying to accelerate that and you'll see as as part of that this year I think our deal momentum has been good in fact uh between your new logos 16:46 16 minutes, 46 seconds and existing logos we have got substantial amount of these and they have added to large license but it has not been at the same rate so does that 16:54 16 minutes, 54 seconds answer your question or you have meant something else yes I got government. Thank you much. 17:03 17 minutes, 3 seconds Thank you. A reminder to all the participants, ladies and gentlemen, you may press star N1 to ask a question. Our 17:12 17 minutes, 12 seconds next question comes from the line of Rahul Jen from Dalat Capital. Please go ahead. 17:20 17 minutes, 20 seconds Uh yeah, I uh uh Mr. Ra before you go ahead may I request you to use your handset please? 17:28 17 minutes, 28 seconds Uh I am on handset is this fine? Yes sir. 17:33 17 minutes, 33 seconds Yeah yeah yeah. Uh thanks for the opportunity. Uh so I know uh so far what I could gather is that the challenge 17:41 17 minutes, 41 seconds that we are seeing is mostly on the large deal sizes. uh but in in the perspective of how we are seeing the 17:49 17 minutes, 49 seconds market today in terms of deal sizes or in general spending behavior how we plan 17:56 17 minutes, 56 seconds to uh vinda trying to meet the objective on the growth side and what should be the aspiration for us uh with this uh 18:05 18 minutes, 5 seconds kind of a macro that we are in for FI27 or maybe on a medium-term basis uh what should be the growth band that we should 18:13 18 minutes, 13 seconds be operating Yeah, thank you for the question. So, yeah, I'll just you know break it in 18:21 18 minutes, 21 seconds couple of things. So, so one is uh your in terms of looking at market today. I think there is an element of uncertainty in the various pockets of market. We are 18:29 18 minutes, 29 seconds still not very sure about how Middle East is going to behave in the first quarter and second quarter. Uh we are not we are still unsure about some of 18:37 18 minutes, 37 seconds the larger deals which have got pushed out whether they are going to be decided. Having said that you know the applicability of what we have in terms 18:45 18 minutes, 45 seconds of products, solutions, technology is quite wide. We are continuously expanding new solution areas in existing 18:51 18 minutes, 51 seconds verticles. We are also expanding into newer geos and new markets which we not. 18:56 18 minutes, 56 seconds So we are slightly focusing on going wide this year. While you know we had challenges in India and Middle East on the revenue front but we still had very 19:05 19 minutes, 5 seconds substantial deals coming in those markets but they didn't match the license revenue of the last year. But overall if you look at deals we almost did the same number of deals out there. 19:13 19 minutes, 13 seconds In the meantime we have also added lot of customer bases in the newer markets. I think APAC has shown strong momentum. 19:20 19 minutes, 20 seconds We have also opened markets in Australia and UK where more deals have come in that most of these deals are subscription deals. So the revenues will 19:27 19 minutes, 27 seconds start figuring in uh future quarters. So for us uh we think we're very strongly believe with the kind of product 19:35 19 minutes, 35 seconds innovation and the vertical journeys we have. We have a very very wide market. 19:40 19 minutes, 40 seconds Though we may have you know momentary challenges in one market that does not change the overall growth story of the country. Our company we we are very 19:48 19 minutes, 48 seconds hopeful that we should be able to push back our growth very fast. In the intermediate time you may have a region or some other regions you know having 19:55 19 minutes, 55 seconds challenges for a moment but overall applicability of our products to wider market to total the growth of total 20:02 20 minutes, 2 seconds addressable markets. We are also thinking that the whole uh AI is going to give us a next generation of push for 20:10 20 minutes, 10 seconds enterprise content management. Our customer communication products our insurance pass systems have got early successes. We have got in that area. So 20:18 20 minutes, 18 seconds we are you know if you ask we're completely you know optimistic and hopeful in this kind of an environment projecting a number for next year may 20:26 20 minutes, 26 seconds not be advisable. I think we'll just wait for one or two quarters till we are getting a much more better insight of what's happening in the market. 20:34 20 minutes, 34 seconds Yeah g thanks for the color and I can understand key we are in a very uncertain scenario so it is very 20:41 20 minutes, 41 seconds difficult uh but we've been uh facing this challenge for a couple of quarters so uh we have been working on this 20:50 20 minutes, 50 seconds aspect that you know uh where the problems are what could be the potential mitigation step and all that. So with 20:58 20 minutes, 58 seconds that uh things keeping in mind is it like at least a doubledigit growth is 21:04 21 minutes, 4 seconds something uh we should be ensuring uh or you think uh it is so uh uh tough right 21:13 21 minutes, 13 seconds now to uh give any ballpark number would be uh difficult. 21:19 21 minutes, 19 seconds So anytime we do any growth which is lesser than our historical growth we're quite disappointed. So our plans never factor you know singledigit growth or 21:28 21 minutes, 28 seconds you know muted revenue. The other problem is as you're rightly pointing out last three four quarters the way we 21:35 21 minutes, 35 seconds see the problem is we had a very high license jerky revenue base in our uh revenue streams. Some of that has been 21:43 21 minutes, 43 seconds already rationalized. The business in control the deferred revenue and what you call the subscription base has grown up. So inherently the business has some 21:52 21 minutes, 52 seconds amount of compounding of growth with even uh you know lesser uh challenges this year. We should be able to probably 22:00 22 minutes put up a growth number. I would right now hold my horses to claim what is that number especially depending on what has 22:08 22 minutes, 8 seconds happened just in the last quarter. We were even thinking of doing much better numbers even last year but I think the last one month surprised us depending on 22:16 22 minutes, 16 seconds what in our major markets we could not just even move anything. So I think just give us one more quarter. I think by the end of the next quarter we should be able to have a much more clear picture. 22:26 22 minutes, 26 seconds Yeah. Thank you so much. Just last bit on margin if I could ask uh since we are uh of the view that uh the growth could 22:36 22 minutes, 36 seconds be bit tricky and you know uh we'll keep watching out on that front. So do you think this year we could see a little 22:45 22 minutes, 45 seconds bit of optimization on margin or you think uh last year margin of the uh best indicator to uh to see for this year? 22:57 22 minutes, 57 seconds Yeah. So you're right and I think last year you would see that there's a lot of work which has happened on the margin front. So the growth did not sustain but the margins were quite optimized and 23:05 23 minutes, 5 seconds within muted growth we are able to maintain margins. Generally we are always in the upfront investment zone. I think this year we are already at 23:13 23 minutes, 13 seconds roughly around 21% net margins. I think these are quite healthy. I think we would like to still as a business focus 23:20 23 minutes, 20 seconds on the top line and grow while being conscious about not going overboard on spend this year so that the margins don't get any seriously impacted. So I 23:29 23 minutes, 29 seconds would think our net picture at the end of the year may be similar but it will entirely so if we hit a growth which is in higher teams we may have expansion of 23:38 23 minutes, 38 seconds margin for that year but if it is on a lower team we may have we should be maintaining similar margin. 23:45 23 minutes, 45 seconds Sure. And I would just uh request management to consider uh maybe uh 23:52 23 minutes, 52 seconds buyback kind of an option given that the pricing has been very attractive. 23:57 23 minutes, 57 seconds Generally the capital in the business requirement in the capital beyond working capital is very minimal. So a 24:05 24 minutes, 5 seconds meaningful uh allocation there could be a good opportunity for company to reduce the equity and help the uh investor to uh you know uh host up the earnings. 24:17 24 minutes, 17 seconds Thank you. Thank you. Thank you for the suggestion. 24:20 24 minutes, 20 seconds We'll surely take take it all things and we'll be concerned. 24:25 24 minutes, 25 seconds Thank you. Our next question comes from the line of Aditi from ICA Securities Limited. Please go ahead. 24:34 24 minutes, 34 seconds U thank you for taking my question. 24:36 24 minutes, 36 seconds Congratulations on good execution. My first question is on the uh Middle East 24:43 24 minutes, 43 seconds geography. So are we seeing any delays in new deal closures due to ongoing uh conflict in Middle East? 24:52 24 minutes, 52 seconds Yeah, thank you. Yeah, absolutely. I think we had a serious impact last quarter and uh we hope what has happened 25:00 25 minutes is you know in all turmoil after some time the business starts like in co people work around that. So we are seeing already that happening. Some 25:08 25 minutes, 8 seconds amount of dig moving move movement is going to you know progress. Some amount of travel has still opened up though there are still lot of challenges. Uh so 25:17 25 minutes, 17 seconds there is an improvement. If it does not deteriorate we should be able to you know solve some of those problems in Q1 and Q2. Uh but if it deteriorates 25:26 25 minutes, 26 seconds further then it's very uncertain to say what happens right now. 25:31 25 minutes, 31 seconds Okay. Got it. Uh can you give a color on how the order book has uh shaped up? Uh 25:39 25 minutes, 39 seconds the growth in order book for FI26 our overall order book at the end of the year compared to last year has grown by around 13%. 25:51 25 minutes, 51 seconds 13. 25:52 25 minutes, 52 seconds Okay. Okay. And so out of this some part must have already been converted to revenue. 26:01 26 minutes, 1 second Uh yeah. Yeah. So we are saying we are comparing apple to apple. So last year also some part would have been converted to this is the residual at the end of 26:10 26 minutes, 10 seconds the day whatever we booked for the whole year visa with whatever we booked for this whole year last year. 26:16 26 minutes, 16 seconds Okay got it. Thank you. And uh my last question is on uh we have seen a healthy 26:23 26 minutes, 23 seconds growth momentum in APAC and US. Do you expect that momentum to continue based on the pip based on how your pipeline is shaping up? 26:34 26 minutes, 34 seconds Yeah, I think we we're optimistic about it and uh though I think APAC is a smaller territory so it has it switches between high growth periods and lesser 26:43 26 minutes, 43 seconds growth periods. US the growth is based on some amount of lot of subscription deals accorded over multiple years. So there's not too much of jerkiness. Uh 26:51 26 minutes, 51 seconds but yes I think both of performed well ush well for us in this uncertain time. 26:57 26 minutes, 57 seconds We think that next year most of the je should perform for us. 27:01 27 minutes, 1 second Okay. And uh what is working well for us in the US? 27:08 27 minutes, 8 seconds I think what we are seeing in the US there are two areas which we invested in. One is typically going to the larger accounts over last two three years. Uh 27:16 27 minutes, 16 seconds uh so insurance has opened well in that space for us and we are doing a lot of journey cases in insurance. Um also we 27:24 27 minutes, 24 seconds got some very good wins in our ECME banking cases. These are two things which are shown more positive results 27:33 27 minutes, 33 seconds and these I think also some of that has translated in the revenue in last two quarters uh which were even you know 27:40 27 minutes, 40 seconds previously booked and if you continue to book strong this year we should be able to maintain the growth momentum. 27:48 27 minutes, 48 seconds Okay, got it. Thank you. 27:52 27 minutes, 52 seconds Thank you. Our next question comes from the line of Jen from ENS wealth. 28:00 28 minutes Ma'am before you go ahead a reminder to all the participants you may press star and one to ask a question. 28:08 28 minutes, 8 seconds Hi sir yeah thanks for giving this opportunity. So my first question is around the annuity revenue. Uh would you 28:17 28 minutes, 17 seconds be able to give the break up between SAS ATS AMC and support revenue for FI26? 28:25 28 minutes, 25 seconds uh you said it's 52% but if you could break that down for me okay I won't have that it's going to be 28:33 28 minutes, 33 seconds too difficult mathematically but if we can you know if we would send the data to you okay 28:42 28 minutes, 42 seconds just hold on he's going to let you know okay and also sir in Q4 uh you know what 28:48 28 minutes, 48 seconds I understand uh this was 58% uh in Q4 SI 26 and uh in Q3 this was 62%. 29:00 29 minutes So you know this has come off little bit this quarter. So just wanted some sense on you how do you see this annuity 29:08 29 minutes, 8 seconds revenue uh uh moving ahead uh uh in you know in in uh in uh next three four 29:15 29 minutes, 15 seconds quarters. Do you think this can again come up like just just your guidance over the annuality revenue how do you see this going ahead? 29:23 29 minutes, 23 seconds So switcher usually we tell investors to look at the annual numbers rather than look at the quarterly numbers. 29:33 29 minutes, 33 seconds So January was 6% of overall revenues compared to 56% last year uh because there are licenses [clears throat] in 29:40 29 minutes, 40 seconds certain quarters which could you know lead to uh lowering the percentages of annity. So I I request that if you look 29:47 29 minutes, 47 seconds at the overall annual numbers that will uh be more meaningful and out of the overall 62% uh uh about 29:56 29 minutes, 56 seconds 12% is SAS for us 21% of ABS AMC and about 28% is support okay understood and 30:07 30 minutes, 7 seconds also with respect to the India uh uh growth you know we've degrone in past two quarters so how do you see this 30:15 30 minutes, 15 seconds growth coming back uh you know in by when do we see uh this growth kind of you know or maybe the degrowth 30:24 30 minutes, 24 seconds stabilizing in India and how do we see the Indian markets for that sir I think one of the uh if you look at 30:31 30 minutes, 31 seconds overall the reason for degrowth is the sharp fall in the large license revenue so in India we have more like more than 30:38 30 minutes, 38 seconds 20 30% fall in the license revenue and if you look at all other streams are growing organically for this year we're on a 30:45 30 minutes, 45 seconds smaller base of license revenue compared to last year. So in fact just maintaining the performance of last year will still reflect in a growth this year. 30:55 30 minutes, 55 seconds Okay. So we do have that India should I think the worst in India is over in terms of numbers and we should be able to uh bring in a grow growth year this year. 31:04 31 minutes, 4 seconds Okay. Understood. So and just one uh bookkeeping question. So our trade receivables have increased [clears throat] compared to last year. 31:12 31 minutes, 12 seconds So just wanted some some sense from you you know how do we see this you know yeah so we have this problem in two 31:20 31 minutes, 20 seconds dimensions one is typically our ability to collect in IMA over last one month has drastically affected the IMA trade receivables that but also we have some 31:29 31 minutes, 29 seconds challenges in APC which are more operational I think they should get stabilized again I think this year we'll take an aggressive target to reduce the trade receivables aggressively and try 31:37 31 minutes, 37 seconds to come back to the contract okay but do we see any provisioning coming on account of weeks in in coming quarters or uh like we are okay with it. 31:48 31 minutes, 48 seconds No, I think this is automatically factored in the ECL norms on that but receivables uh you know will not have any direct correlation with 31:55 31 minutes, 55 seconds provisioning. Provisioning will be build as per the ECL norms on that. Right now whatever has been is only a delayed in payments. There is nothing nothing to have payments at risk. 32:04 32 minutes, 4 seconds Yeah. Basically I think when we are talking about ECL basically it is an extreme credit loss model basically uh based on last 12 quarters uh collection 32:14 32 minutes, 14 seconds trend. So accordingly we provide as per the accounting standard and we are continuously doing that. So that risk is kind of taken care in the books as far as provisioning is concerned. 32:23 32 minutes, 23 seconds Okay. Okay. answer just one last question. uh it's uh more to do with the industry and then maybe uh you know even 32:31 32 minutes, 31 seconds to to us uh with the whole AI thing is what I understand you know as the uh 32:38 32 minutes, 38 seconds companies shift from efforts based billing to the outcome based billing you know uh that's where the shift is going 32:45 32 minutes, 45 seconds to happen and in term period there will be impact somewhere in the revenues in the margins and you know where the 32:52 32 minutes, 52 seconds companies that shift will happen uh uh you know uh uh the margin somewhere will stabilize say over uh a certain period 33:00 33 minutes of time say 8 or 12 quarters so that's where the industries will shift the companies will shift how do we see that 33:08 33 minutes, 8 seconds happening for us with the whole AI thing and you know uh how does that shift happen for us and where do we you know 33:17 33 minutes, 17 seconds see see us as as the company and just just wanted some sense uh from you around this 33:25 33 minutes, 25 seconds I think the challenge is I think the conversation right now is going on two fronts. One is about what is happening to the service industry and service pricing models changing. 33:35 33 minutes, 35 seconds Our business is still decoupled from that. We're still in solution solution and product based product based there are already multiple 33:43 33 minutes, 43 seconds models of product pricing already factored in right from consumption to usage to any other model which is linked to the business. So there is going to be an evolution and also on product pricing. 33:54 33 minutes, 54 seconds So that's one another challenge in terms of will it be more in because when AI becomes central to the use cases then AI based consumption has to be factored in 34:02 34 minutes, 2 seconds the product based pricing this is which all product companies are grappling with right now they are also coming with more models working along with customers 34:10 34 minutes, 10 seconds which are the more acceptable pricing which is more transparent to them. 34:13 34 minutes, 13 seconds So our challenges will be more lying in the product pricing models which are different than service pricing models. 34:19 34 minutes, 19 seconds Okay. uh but but your point is well taken and I think already a lot of work a lot of work is happening along with so what we work on is generally you know as 34:27 34 minutes, 27 seconds we are operating out of multiple countries and I think customers also tend to define what are the most suitable pricing models in those jewels 34:35 34 minutes, 35 seconds for those segments and verticals so slightly we have a tendency to lag on pricing so that first is to solve the 34:43 34 minutes, 43 seconds customer's problem then also to work out the right pricing model with him so that it can be used out there so [clears throat] I don't I don't have 34:50 34 minutes, 50 seconds a really a great technical answer for that but I think I would go with my customers and work out a pricing model which will suit both us as well as the customers. 35:00 35 minutes Right. Right. Right. Okay sir. Thank you. Thank you so much and appreciate it. Thank you. 35:07 35 minutes, 7 seconds Thank you. Our next question comes from the line of Dshit Dhi with Whiteststone Financial Advisors Private Limited. 35:15 35 minutes, 15 seconds Please go ahead. 35:17 35 minutes, 17 seconds Uh yeah thanks for the opportunity. Uh so couple of questions so I'm slightly new to the company. So uh one of the 35:25 35 minutes, 25 seconds basic question I wanted to understand was uh so we have a in annuity revenue we have a SAS ATS AMC and the support. 35:34 35 minutes, 34 seconds So where do you record this subscription revenue in this three segment? 35:41 35 minutes, 41 seconds Yeah. So dsha this is part of the SAS where we recognize the subscription. So you know as you're rightly say saying that some of the customers take the 35:49 35 minutes, 49 seconds whole S service which we you know providing as part of almost consumption and some only realize uh the license is 35:57 35 minutes, 57 seconds part of SAS is typically subscription based licensing. So today's SAS has both subscription based licensing and the cloud revenue. 36:05 36 minutes, 5 seconds Okay. And uh some of the subscription revenue also recorded in any other segment. 36:12 36 minutes, 12 seconds It's a one of our one which is the ATS is typically the NUT fee on the license which is a subscription based but we call it typically ATB industry calls it 36:20 36 minutes, 20 seconds ATS so we call it ATS it is typically having the same same margin profile as license uh because there's no service attached 36:29 36 minutes, 29 seconds to it but uh you know and the support is typically more about extended ATSS where people are deployed for the customer and 36:36 36 minutes, 36 seconds that's how it is okay and uh so just correct me if I'm uh wrong. So basically uh what uh in the 36:45 36 minutes, 45 seconds previous uh let's say when we uh do a license deal uh so uh when uh when we sold the license the revenue is in the 36:53 36 minutes, 53 seconds sale of product uh and during the implementation it is in the implementation segment and then the uh 37:00 37 minutes the it is linked uh and then over the years we'll get the ANC and support charges and if somebody is not taking 37:07 37 minutes, 7 seconds the license and going for a cloud or a SAS with revenue then everything comes to the SAS revenue is is it right? 37:15 37 minutes, 15 seconds Perfect. He explained it better than I could. 37:18 37 minutes, 18 seconds Okay. So, AMC support and implementation is [clears throat] basically linked uh with the growth in the uh onetime 37:25 37 minutes, 25 seconds license and uh so let's say over last one uh over last one year our uh sale of 37:33 37 minutes, 33 seconds license revenue slightly slow down. So do you expect the ANC support and uh 37:40 37 minutes, 40 seconds implementation also to slow down over uh medium term? 37:46 37 minutes, 46 seconds So this is what the issue is sale of license has got a subsequent sales of implementation. So more deals we do more 37:53 37 minutes, 53 seconds implementation we do. So there is a direct correlation between both sale of license or sale of subscription to implementation. But ATS has a more 38:01 38 minutes, 1 second compounding effect which is a multi-year effect. So ACS is not only about what you did that year, you also did last to last year. 38:08 38 minutes, 8 seconds And so either way it does not slow down, it grows. It can grow at a more accelerated pace or lesser pace. Okay. 38:14 38 minutes, 14 seconds Because it's always compounded. It does not your observation about uh the two factors which is about the implementation partially linked to 38:23 38 minutes, 23 seconds license because if you don't make more deals you won't have more implementation but the ATS has been decoupled and similarly support also is to do more 38:31 38 minutes, 31 seconds with more customers go live they end up you consuming higher ATS and support so I would call more more direct 38:38 38 minutes, 38 seconds correlation is with implementation and much lesser correlation with ATS and okay and ATS AMC and support is usually uh for how much 10 years? 38:49 38 minutes, 49 seconds So generally lifetime for APS is kind of an insurance over the license because in enterprises you don't use unsupported versions. Okay. Yes. 38:57 38 minutes, 57 seconds But support support varies. You can start small and grow bigger or sometime also it could have a fluctuation of lesser continuation or more adding more people. 39:08 39 minutes, 8 seconds Okay. Got it. And uh second question is uh so usually uh in our previous calls we have mentioned that due to the 39:16 39 minutes, 16 seconds closure of deals uh typically our Q3 and Q4 more particularly is uh seasonally 39:23 39 minutes, 23 seconds better uh in terms of revenue uh but let's say uh in future over next 2 3 39:29 39 minutes, 29 seconds years when your fast revenue and AMC revenues become the more more bigger part of the revenue does this 39:37 39 minutes, 37 seconds seasonality will come down or even those segments have a seasonality. 39:42 39 minutes, 42 seconds So see naturally it should come down irrespective of what we do because as the annuity keeps on compounding the seasonality falls. Last three years uh 39:51 39 minutes, 51 seconds the it has still come down but has not come down at the pace we expected because lot of last three year growth was based on the license growth sale of license growth. 40:00 40 minutes So the compounding which happened in terms of annoties and downstream revenues were not at the same pace as the license 40:07 40 minutes, 7 seconds group. So if the license growth is muted compared to subscription growth then this will happen faster otherwise it will happen at a slower rate. Either way 40:16 40 minutes, 16 seconds it's happening because you know we are now reach the 62% kind of annual it can reach all the way up to 75 80% of the you know annual revenues. 40:25 40 minutes, 25 seconds Okay. Okay. And one last question. So uh I do understand it slightly less but uh 40:32 40 minutes, 32 seconds uh you know there are a lot of talks about the uh cloud micros and it's mainly for the banks and we do a large 40:40 40 minutes, 40 seconds business with the banks. uh so if you can help us understand uh whether it will it can impact us or it can benefit 40:47 40 minutes, 47 seconds us uh because it's uh we we'll have to check the you know the vulnerabilities of all our uh softwares and also if you 40:56 40 minutes, 56 seconds can just uh help us understand something over there see the impact of my in terms of vulnerabilities and you know when it's 41:04 41 minutes, 4 seconds going to be available to the rest of the world for really solving those vulnerabilities is a different question but what's happening clearly there There's huge interest across all our 41:13 41 minutes, 13 seconds existing customer and implementations to invest more aggressively in securing the systems. All these initiatives right now are not being talked in the business 41:21 41 minutes, 21 seconds language in terms of orders. This is more about supporting each other and making sure that things don't go wrong. 41:26 41 minutes, 26 seconds But you're right, I do anticipate that downstream it will uh you know accelerate the process of upgrading systems. It will 41:36 41 minutes, 36 seconds accelerate the process of modernizing applications so the risk do eliminate which should impact in terms of our downstream revenues coming from accounts 41:45 41 minutes, 45 seconds but right now it is more about you know in a firefighting mode helping our customers and making sure that the maximum number of risks are eliminated. 41:54 41 minutes, 54 seconds Okay, understood. Thank you. That's it for myself. Thank you. 41:59 41 minutes, 59 seconds Thank you ladies and gentlemen. A reminder to all the participants you may press star N1 42:06 42 minutes, 6 seconds to ask a question. The next question comes from meani with M&S investments. Please go ahead. 42:14 42 minutes, 14 seconds All right. So coming back sir uh am I? 42:19 42 minutes, 19 seconds Yeah. You're all right. Yes sir. Sir you have all right. So the company have a strong uh you know cash generation and 42:28 42 minutes, 28 seconds how are you planning to use the for business extension or especially in areas like SAS AI audio market can you elaborate on it? 42:38 42 minutes, 38 seconds So we I think the purpose of the company so far is to make sure that we are able to accelerate growth. So all the cash 42:45 42 minutes, 45 seconds expansion or whatever is need typically will help us either to organically grow or in organically grow. So the whole aim right now is to make sure that the growth acceleration happens out there. 42:57 42 minutes, 57 seconds All right. So sir any plan we have for in organic growth apart from our business? 43:04 43 minutes, 4 seconds Yes. So we are we are looking at multiple options in typically to make sure that go to markets can be excellated in mature markets and also in certain certain areas of product 43:12 43 minutes, 12 seconds complimentary technologies in various areas. I think but nothing is right in the stage which is more final and concrete and once if you have things 43:20 43 minutes, 20 seconds like that we'll surely come and communicate back. All right. Thank you. 43:29 43 minutes, 29 seconds A reminder to all the participants you may press star and one to ask a question. Ladies and gentlemen, if you wish to ask a question please press star 43:38 43 minutes, 38 seconds N1. Our next question comes from the line of Jalaj from Precian. Please go ahead. 43:50 43 minutes, 50 seconds Hello. Yeah. Yeah. Thanks for the opportunity. 43:56 43 minutes, 56 seconds Uh so I had a few sets of questions. So my first question was with regards to the license 44:02 44 minutes, 2 seconds uh as we see the the discussions with the clients and the pipeline and the order book. uh should we believe that uh 44:10 44 minutes, 10 seconds we reach we have reached to a tough in terms of the bottom in terms of the the license revenue and incrementally 44:18 44 minutes, 18 seconds uh we should have growth from here or or we still believe that because the Middle East and then the demand in India is 44:25 44 minutes, 25 seconds still to pick up or or the newer NBFCs and banks have to come up with new deals 44:31 44 minutes, 31 seconds so it would it will take longer time and so what I will say is what is going to happen that if the business starts 44:40 44 minutes, 40 seconds behaving better in India and Middle East, we have used we we can agree that we have reached the bottom of the license and we should be able to do better. But if the business momentum or 44:49 44 minutes, 49 seconds growth starts coming more from more mature markets, then we'll still sell more licenses but they may be in the form of subscription or SAS based 44:56 44 minutes, 56 seconds revenues. So it depends on what geos start performing but overall if you look at addition of the SAS and license in 45:05 45 minutes, 5 seconds all years we'll end up growing. That's the whole idea because we we always end up making more deals than what we did last year and so some of the composition 45:13 45 minutes, 13 seconds of those deals change and they may not reflect in the same year. So I'm hoping this year also looking at both what we sell in license and what we sell as 45:21 45 minutes, 21 seconds subscription licenses we should be able to do better than any previous year. 45:27 45 minutes, 27 seconds Got it. But but uh but but as as we see the discussions with clients, has there been any sensible change in the momentum 45:34 45 minutes, 34 seconds or discussions as we stand today? If you were to compare it a quarterback or two quarterback not much I I I won't say like that. I 45:43 45 minutes, 43 seconds see I think the industries we are working in always very hungry for modernization or transformation of their businesses. It's only that and the when 45:51 45 minutes, 51 seconds the you know what you call when the or uh work about taking decisions about those deals those we think things that 45:58 45 minutes, 58 seconds getting more impacted the conversations are always in the market the interest is always in the market sometimes just that final go ahead takes more time or 46:07 46 minutes, 7 seconds there's a you know more challenge within the enterprise to go ahead with that that time so those are more challenges I don't see any 46:15 46 minutes, 15 seconds difference in the client conversation happening as of today about changing priorities or or reducing their spend on IP or something. 46:24 46 minutes, 24 seconds Got it. Got it. That extends well. And so uh my second question was on with regards to the margins and specifically on the people costs. So we see that on 46:33 46 minutes, 33 seconds year on air versus the people cost has been flattish. So u is it largely explained by the productivity AI related 46:42 46 minutes, 42 seconds productivity or partially as you alluded to the the lower license leading to a lower implementation headcount or or 46:50 46 minutes, 50 seconds implementation requirement is that being driven by that and maybe a headcount comparison on YI would help us to 46:58 46 minutes, 58 seconds substantiate that yes so we have roughly around 6% reduction in headcount Y and Y and uh That's an organic reduction. 47:08 47 minutes, 8 seconds While uh we have uh in all our years added around 400 campus people even this year we're going ahead with adding three to 400 campus people but most as I 47:17 47 minutes, 17 seconds rightly said you know we we have a there is a transformation happening in the engineering processes and there are 47:25 47 minutes, 25 seconds benefits about AI which are coming and creeping into the system that should help us to keep on improving margins and delivering faster. So we you will see 47:34 47 minutes, 34 seconds some amount of efficiency on that front also coming in this year and uh you know we have uh we have invested very aggressively on the AI today almost 47:43 47 minutes, 43 seconds around 80% of all our people have access to all kind of technologies and AI uh you know agents so that they can work on 47:51 47 minutes, 51 seconds that and uh the whole process of engineering is getting transformed slowly and I do think those benefits will keep on continuing for few more 47:59 47 minutes, 59 seconds years as the full transformation and full advantage of the transformation permission comes. 48:06 48 minutes, 6 seconds Got it. Got it. And sir, my last and a quick question would be the client discussions which you are having for let's say a relatively mature client in 48:14 48 minutes, 14 seconds banking uh because of AI disruption as such. Are the decision making getting delayed per se because they are not 48:21 48 minutes, 21 seconds themselves sure of the what sort of architecture would it be because every now and then new models are coming and and some of the new introduction is 48:29 48 minutes, 29 seconds happening. So is it partially or or we are seeing the discussions getting postponed because of that. 48:36 48 minutes, 36 seconds So what is happening that so you see we've dealt a lot with businesses across all places in our customer segments. 48:44 48 minutes, 44 seconds Businesses are still focused on their business outcomes and they are expecting AI as one of the enablers to provide better value in that. So all the use 48:52 48 minutes, 52 seconds cases which we are selling today have a strong component of AI helping the customer in achieving their business goals. 48:59 48 minutes, 59 seconds uh the problems we are talking about cases which have started in isolation AI AI projects and AI PC's which have been completed over two years but don't know 49:07 49 minutes, 7 seconds what next to do on that those are some of the things which are creating disruptions about so such AIE cases but typically if you look at core business 49:16 49 minutes, 16 seconds cases about modernization digital lending uh account or relation tax systems the problem is not about AI out 49:25 49 minutes, 25 seconds there the problem is how can you use AI to provide better advantage, better behavior in those systems. So those are still being considered and AI 49:33 49 minutes, 33 seconds evaluations are becoming important part and integral part of evaluating those systems. 49:40 49 minutes, 40 seconds Understood. Understood. That makes thank you Mr. Thank you. 50:02 50 minutes, 2 seconds A reminder to all participants you may press star and one to ask question. The next question comes from Raja Kumar 50:08 50 minutes, 8 seconds Vadinatan from RK Investments. Please go ahead. Yeah. Can you hear me? 50:16 50 minutes, 16 seconds Okay, sir. But may I request that you use your handset, sir? Your audio is slightly muffled, sir. 50:22 50 minutes, 22 seconds Yeah. Can you hear me now? Yes sir, this is better. Thank you. 50:26 50 minutes, 26 seconds Yeah, thanks for the opportunity. So the first question is on the license model. 50:31 50 minutes, 31 seconds Uh you know as we know that the geni agents are now kind of performing some uh discrete business tasks continuously 50:39 50 minutes, 39 seconds in many of the businesses. So I just want to know are we is moving out from perfect license to the agentic work unit pricing model? 50:51 50 minutes, 51 seconds Raj I think you know this is uh what uh uh there's a discourse happening globally that uh also as companies are 50:59 50 minutes, 59 seconds are facing a challenge and all software licenses have to have a consumption based pricing uh we working as like I think if you were in the call previously 51:06 51 minutes, 6 seconds we spoke in detail about this so what's happening in enterprises we are keeping our pricing models close to the business outcomes which we deliver and now what's 51:15 51 minutes, 15 seconds happening a lot of there's an agentic or what you call the token cost coming to all business use cases And we are trying to price that as part of that. This we 51:23 51 minutes, 23 seconds are working in in closely with customers to evolve what is the right pricing model. So it's not so we assume that the company determines pricing model. It's 51:32 51 minutes, 32 seconds also the buyer who is buying them. It should be transparent to them. So right now this is a conversation going on. I think you will get better answers about 51:39 51 minutes, 39 seconds this maybe in six seven eight months down the line when more more transformation would have happened. Till that time we are working with our clients to come up with the most right 51:47 51 minutes, 47 seconds pricing which is AI agents plus tokens plus our business value and then how we package it together. 51:54 51 minutes, 54 seconds Okay. So but as of now it's in the headwind for us. 51:59 51 minutes, 59 seconds No no I think we are not pricing is the least amount of advent I think the advent are around more about decision making what's happening in markets about 52:07 52 minutes, 7 seconds economics per mile. So those are price pricing is not okay. Okay. Got it. Yeah. So the next 52:15 52 minutes, 15 seconds question is a housekeeping question. So I see your deferred revenue has gone up from almost 220 220 to almost 300 crores 52:23 52 minutes, 23 seconds uh this quarter. So what is driving that? Because uh generally defscription orc revenue. So that should be backed up 52:32 52 minutes, 32 seconds by license right. So so much spike in license. 52:38 52 minutes, 38 seconds No. So exactly. So basically the more of the Skype spike which has come in has come in the revenue streams which are slightly in terms of back ended they are 52:45 52 minutes, 45 seconds not realized up front. So uh any orders which have come as part of subscription license sale add to the deferred 52:52 52 minutes, 52 seconds revenue. Any large 8th renewal contracts which have come in of licenses sold over previous years have added to the deferred revenue. So which gives us a better insight going into the next year. 53:03 53 minutes, 3 seconds So so all deferred revenue is not an outcome of a license revenue. 53:09 53 minutes, 9 seconds So deferred revenues are also coming part of renewal agreements and ATS's and of sale of subscription or cloud-based licenses. 53:17 53 minutes, 17 seconds Okay. But there's a substantial jump. So what is uh causing the jump that is the it is the growth in business in growth 53:26 53 minutes, 26 seconds in business in Australia, growth in business in UK and US because out there the growth is also reflected in the deferred more of growth in deferred revenue. 53:35 53 minutes, 35 seconds Okay. Okay. Got it. Like don't contribute. India and Middle East are predominantly licensed based businesses. So they don't contribute to 53:42 53 minutes, 42 seconds the effort revenue but all other markets contribute to the effort. 53:47 53 minutes, 47 seconds Okay. Okay. Got it. And uh just continuing on that agentic uh model uh so just want to know what uh kind of 53:55 53 minutes, 55 seconds mode uh region has because now with all these opensource agents uh you know they can build the companies can build their 54:02 54 minutes, 2 seconds own basic workforce right so so what do you think the mode has in the new a world 54:11 54 minutes, 11 seconds yeah I think you can go to our website also you'll get so what what basically if you look at what at the core what new does is we have we have got you broadly 54:19 54 minutes, 19 seconds three platforms but predominantly two are the most relevant ones. We are a enterprise store for content. So one we 54:26 54 minutes, 26 seconds are looking at the whole interest in AI and using enterprise knowledge along with agents and LLMs you need a very 54:34 54 minutes, 34 seconds strong records management content management governance process and also an extension of this content management into getting the getting the rags 54:41 54 minutes, 41 seconds implemented getting knowledge graphs implemented. So this is our product out there which really helps customers to go and implement LLMs. The second part of 54:50 54 minutes, 50 seconds our product is where we do the journeys journey orchestration. So we are today orchestrating between current systems 54:57 54 minutes, 57 seconds business services and enterprise workflows. So what's happening with agentic? 55:03 55 minutes, 3 seconds Agentic is helping customer a to automate further workflows or automatic human activities. So we are still 55:10 55 minutes, 10 seconds looking at ourself as a orchestration platform which orchestrates between systems of records, agents, non-human entities and existing business 55:19 55 minutes, 19 seconds processes. So lot of government a lot of industry which is we are dealing with are regulated industries. So you can't 55:27 55 minutes, 27 seconds let an agent lose to get the loan or approve a loan. So you still need traceability, you need in terms of uh transparency in decision making, you need to still tie up to the core system. 55:37 55 minutes, 37 seconds We need to talk to hundreds of government services. So we are the ones who do that even for the digital journeys. So we are excited. We are 55:45 55 minutes, 45 seconds coming with a product road map about really where a customer does not have to really go out right from agent builders to orchestration of agent workflow whether it's deterministic or 55:53 55 minutes, 53 seconds nondeterministic. We are having products for that. 55:57 55 minutes, 57 seconds Okay. So in short this EI it's not a kind of a headwind for blue chain right? 56:05 56 minutes, 5 seconds No, no. I think at least I I think uh this is uh I think lot is being talked about that AI is the only tool now with the industry book. That's not the 56:13 56 minutes, 13 seconds challenge. We are looking at AI as an opportunity to accelerate growth. 56:18 56 minutes, 18 seconds Okay. Got it sir. Thank you so much. All the best. Thank you. Thank you. 56:26 56 minutes, 26 seconds Ladies and gentlemen, our last question for the day comes from the line of Sumuk from Kman Capital. Please go ahead. 56:34 56 minutes, 34 seconds Uh hi team am I audible? 56:36 56 minutes, 36 seconds Yes sir please go ahead. Yeah. So I'm not sure if this question is already answered but uh my question is uh sir did you see any revenue deflationary 56:46 56 minutes, 46 seconds impact of some AI like clients asking you to pass on the productivity that you're getting from AI and also like 56:54 56 minutes, 54 seconds what part of your business is coming from the discretionary IT spend if you want to categorize it that way. So I'm just trying to understand like if the 57:03 57 minutes, 3 seconds budgets tighten right at the point so what part of your revenue is at risk from that point of view. 57:11 57 minutes, 11 seconds Yeah I think what's going to happen uh since u globally enterprises have to invest in aggressively in AI so some 57:19 57 minutes, 19 seconds amount of budget has to come from run the business or business as usual. Uh so there is going to be some pressure across the globe in terms of optimizing some services which are running as is. 57:29 57 minutes, 29 seconds So we are still into a product solution based. So our streams like license sale, subscription sale, ATS have very little 57:36 57 minutes, 36 seconds impact. Uh similarly implementations are negotiated for a short period of time they have impact. So our streams like renew you know the what are typically 57:45 57 minutes, 45 seconds renewals in support or ATS in since we are not really into large projects like we don't have hundreds of people working 57:53 57 minutes, 53 seconds anywhere. We have very technical teams to solve critical business problems. So we may see some amount of pressure coming in those areas but as of now we 58:02 58 minutes, 2 seconds are not estimating more than 2 3% impact on these two revenue streams for this year in that area. 58:11 58 minutes, 11 seconds Okay. So these streams contribute how much to your revenue sir and where do you see these two streams contribute roughly around 40% of our revenue? 58:19 58 minutes, 19 seconds So this 40% sorry 2 3% this question is on this 40%. Is that correct? 58:26 58 minutes, 26 seconds Yeah, I think yeah it's difficult to estimate but this is what we are factoring right now depending on what conversation going on but at the end of the day here you may see that these 58:34 58 minutes, 34 seconds streams have grown further because we are still selling to newer customers and doing new projects. 58:40 58 minutes, 40 seconds Okay. And so where don't you see uh AI impact at all uh in yourselves? 58:47 58 minutes, 47 seconds No, I I think AI impacts is in all areas of businesses. But I'm saying some impacts are positive. Some impacts are 58:54 58 minutes, 54 seconds about change of how we are doing job and some impacts are optimization of costs which in some areas which were sold at cost X maybe on a now delta reduced cost 59:03 59 minutes, 3 seconds of that X but collectively we look it as a net positive for the company. Oh okay. 59:11 59 minutes, 11 seconds Yeah. And um yeah that was my question. So thank you. Thank you very much. Thank you. 59:18 59 minutes, 18 seconds That was the last question for the day. 59:20 59 minutes, 20 seconds I now hand the conference over to Miss Dipki, head of investor relations for closing comments. 59:27 59 minutes, 27 seconds Thank you so much for your participation everyone. For any further queries, you can connect with me or go to the website of the company. Thank you. 59:36 59 minutes, 36 seconds Thank you. On behalf of ICICI Securities Limited, this concludes this conference. 59:42 59 minutes, 42 seconds Thank you for joining us and you may now disconnect your lines. Thank you everyone.