Subex Ltd — Q4 FY26

Subex Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=B51qzf-LvA4 Published: 15 hours ago

0:02 2 seconds Good morning ladies and gentlemen. I am Madri moderator for the conference call. 0:07 7 seconds Welcome to Sububex Limited Q4 FY26 earnings conference call. As a reminder, all participants will be in listenonly 0:15 15 seconds mode and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference 0:23 23 seconds call, please signal an operator by pressing star and then zero on a touchtone telephone. 0:29 29 seconds Please note that this conference is being recorded. I would now like to hand over the floor to Mr. Pratik from Investor Agency EY. Thank you and over to you sir. 0:40 40 seconds Thank you Maduri. Good morning to everyone who have joined the earnings call for the quarter ended March 31st 2026. 0:48 48 seconds I would like to introduce the members of the management who are present for the call. Miss Nishad, managing director and 0:56 56 seconds CEO. Mr. Sumit Kumar CFO, Mr. Harsha Angari, head corporate strategy and AI 1:03 1 minute, 3 seconds and Mr. Rau Akili company secretary and compliance officer. I would like to start the conference call by going 1:11 1 minute, 11 seconds through the safe harbor clause. Such statements in this presentation concerning our future growth prospects 1:18 1 minute, 18 seconds are forward-looking statements which involve several risks and uncertainties that could cause actual results to 1:26 1 minute, 26 seconds differ materially from those in such forward-looking statements. These risks and uncertainties relating to these 1:34 1 minute, 34 seconds statements include but are not limited to fluctuations in earnings, our ability to successfully integrate acquisition, 1:43 1 minute, 43 seconds competition in our areas of business, client concentration, liability for damages in our contracts, withdrawal of 1:51 1 minute, 51 seconds tax incentives, political instability, unauthorized use of intellectual property, and general economic 1:59 1 minute, 59 seconds conditions affecting our industry. With this, I now hand over the call to Nisha Dut to take it forward. Over to you, Nisha. 2:07 2 minutes, 7 seconds Thank you Pratik. Good morning everyone and thank you for joining us today. I'd like to begin with a brief reflection on 2:14 2 minutes, 14 seconds my tenure here particularly as this moment marks not just the close of the quarter but also end of the financial year. I've been here for 3 years u and 2:24 2 minutes, 24 seconds when I came in I came in with a clear mandate. It was to transform subex and return it to a growth path. In this time, we have strengthened the 2:32 2 minutes, 32 seconds fundamentals. We have exited non-core businesses. We have freed up capital. We have rebuilt the foundation that this company needed. Many of you have tracked 2:40 2 minutes, 40 seconds this journey closely. And I believe the first phase of that transformation has been delivered. And this is not just a claim. I think it's a fact that's 2:48 2 minutes, 48 seconds visible in the numbers and in the business that we are running today. Um if I were to look at this year, I would think that this was a year of transition 2:56 2 minutes, 56 seconds for us. Uh we had leadership changes, board evolution and a very challenging microeconomic environment. But these are 3:03 3 minutes, 3 seconds not small changes. So I won't minimize any of that. But I also don't wanted to let it define the narrative because the narrative of FI26 is something very 3:12 3 minutes, 12 seconds different. We didn't just hold steady uh through the change. We actually moved forward through it. Our order intake grew 24%. We released new products. We 3:21 3 minutes, 21 seconds went to the market more aggressively. We won more deals. We included more AI deals than any other prior year. We also 3:28 3 minutes, 28 seconds took on more AI models into production this year ever than ever before. On the board, I'm pleased to share that we have also added another independent director 3:37 3 minutes, 37 seconds further deepening the experime experience and perspective around the table. So this is not the signs of a distracted business. This is a business 3:44 3 minutes, 44 seconds that reset and kept building and by that measure this is one of the strongest years in the last three and that was the original promise and I think we have 3:51 3 minutes, 51 seconds delivered it. I'm aware that we could have moved faster on the top line and I own that but I also want to be very 3:58 3 minutes, 58 seconds unambiguous about the growth. Um I think that is going to be my singular focus in FI27. 4:04 4 minutes, 4 seconds On Q4 we closed the year with a 3% sequential growth. uh full year FI27 total income came in at 6% YI was 4:13 4 minutes, 13 seconds broadly supported by interest in terms we are growing but we are not at the rate that I would have liked us to say so I'll be direct anytime that you ask 4:21 4 minutes, 21 seconds that question of me but one important context is important it's important to remember before I go deeper into the 4:28 4 minutes, 28 seconds numbers FI26 and FI25 are not clean like for like if you remember we exited 4:35 4 minutes, 35 seconds non-core businesses last year which means that we are comparing against a different base. So if you stretch that out, the underlying picture is cleaner 4:43 4 minutes, 43 seconds than the headline suggest on profitability. A ribida is at 14.5% and PA at 13.6% for the quarter. Positive 4:52 4 minutes, 52 seconds ribida in nine out of the last 10 quarters. Three successive quarters of positive pads. That consistency does not 4:58 4 minutes, 58 seconds happen by accident. It reflects three years of genuine operational development and it gives us a platform to accelerate 5:05 5 minutes, 5 seconds from not just a baseline to defend. Our liquidity also strengthened by 70 crores over the year and I want us to sit on 5:14 5 minutes, 14 seconds that for a moment because this isn't a balance sheet footnote. It changes how we operate. We can now invest with conviction move on opportunities from a 5:23 5 minutes, 23 seconds position of strength and stop managing defensively. That is a materially different posture and we intend to use 5:30 5 minutes, 30 seconds it fully. And when I look at all of this together, the profitability consistency, the liquidity strength, the 24% order 5:38 5 minutes, 38 seconds intake growth, the AI traction, the quality of VS, and then look at where our share price sits today. It's very 5:45 5 minutes, 45 seconds disappointing for me and I'm sure it's it is for a lot of you that the market has not really caught up with the business. So I truly believe that the 5:54 5 minutes, 54 seconds stock is materially undervalued relative to our fundamentals and our trajectory and I think that gap will close and we 6:01 6 minutes, 1 second intend to close it by executing. The fundamentals are in place. The pipeline is converting. So let me walk you through what that looks like on the 6:09 6 minutes, 9 seconds ground. New logo in North Africa for our enterprise assets management solution. A competitor account we won back uh for 6:16 6 minutes, 16 seconds business assurance in Middle East. In my view, one of the clearest signals where our products credibility stands today. 6:23 6 minutes, 23 seconds Customers don't come back unless a product has earned it. A new deal in North America for AI handset fraud solution on fraud. And a T1 operator in 6:32 6 minutes, 32 seconds Africa who didn't just renew their managed services engagement, they expanded it into AI use cases. That last one matters because it shows that the 6:41 6 minutes, 41 seconds existing customers are deepening their relationship with us and that's the leading indicator of where this business is headed. three geographies, multiple 6:49 6 minutes, 49 seconds solutions and increasingly AI at the core of it. Uh we are also making sustained investments in Genai based software development. We are embedding 6:57 6 minutes, 57 seconds geni across our entire NCLC. It's to lift our developer productivity, accelerate releases and raise a quality 7:05 7 minutes, 5 seconds bar on what we ship. So this is not just a one-off initiative. It's a structured investment in how we build and how fast we build. the compounding effect of it 7:14 7 minutes, 14 seconds will show up in our ability to deliver to customers and to the market and now on FI27 we are six weeks in the 7:22 7 minutes, 22 seconds geopolitical environment is complex and I won't pretend that we are immune to it but we are watching it with clear eyes 7:29 7 minutes, 29 seconds but here is what I keep coming back to the pipeline is real the market conversations are strongest that they have been and for the first time in 7:37 7 minutes, 37 seconds years we have the balance sheet to fully back our ambitions we are going into this year on the front put not hoping for growth but we are organized and 7:45 7 minutes, 45 seconds resourced to deliver it so I believe that the reset is done the foundation is built and SI27 is where we will convert 7:52 7 minutes, 52 seconds it so next I will uh quickly cover the consolidated financial reserves for Q4 all the numbers are in INR revenue for 8:01 8 minutes, 1 second the quarter stood at 72.96 crores as against 70.79 crores for the previous quarter IDA for the quarter was at 10.58 8:09 8 minutes, 9 seconds crores as against 9.1 crores for the previous quarter. Normalized pack for the quarter is at 11.51 crores as against 7.68 crores for the previous 8:18 8 minutes, 18 seconds quarter and pack for the quarter stood at 9.93 crores against 2.9 crores including exceptional item in the 8:26 8 minutes, 26 seconds previous quarter. And thank you for listening. I don't just brag for your questions. I welcome them. So let's get into it. 8:34 8 minutes, 34 seconds Thank you ma'am. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on a telephone 8:43 8 minutes, 43 seconds keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. 9:01 9 minutes, 1 second Dear participants, if you have any questions, please press star and one on your telephone keypad. 9:14 9 minutes, 14 seconds The first question comes from Mr. AJ Doshi, an individual investor. Please go ahead. 9:25 9 minutes, 25 seconds Please go ahead with your questions sir. 9:31 9 minutes, 31 seconds Mr. Hay, sorry there is no response. The next question comes from Sanjot Karif an individual investor. Please go ahead. 9:42 9 minutes, 42 seconds Uh hi good morning Nisha. Uh I'm audible. Morning. Hello good morning. Can you hear me? 9:50 9 minutes, 50 seconds Yes you are. Good morning. Yes you are. 9:52 9 minutes, 52 seconds Yeah. Yeah. Uh first of all congratulations on a good set of numbers and good operational results. I mean uh in last five years I say this is one of 9:59 9 minutes, 59 seconds the best uh as um we have been in the company for a long time. And uh just my 10:07 10 minutes, 7 seconds question is about uh we are seeing the sequential growth of around 3% um uh in revenue and uh in last one year I think 10:16 10 minutes, 16 seconds uh company has got orders more than 150 crores uh mostly um in whatever announcements was done by the company. 10:25 10 minutes, 25 seconds Now is it uh really not converting into revenue? How or when it will get converted uh more into revenue? uh it is 10:33 10 minutes, 33 seconds because of whatever the geopolitical problems are happening and the orders are not getting delivered or uh closed 10:41 10 minutes, 41 seconds uh for uh converting into revenue and uh are we seeing that at least for Q1 uh 10:49 10 minutes, 49 seconds whether the revenue will uh grow faster than uh earlier quarters. 10:55 10 minutes, 55 seconds So no thank you for that question. I think um it's right that we are entering the year with a strong backlog first of all and we also have a strong pipeline 11:04 11 minutes, 4 seconds and the order commercial that has happened um but the way our contracts work is first of all uh most of the wins 11:11 11 minutes, 11 seconds that we have had last year they are as much for this year but they are also for the future years right so we do have multi-year contracts so you have to see 11:20 11 minutes, 20 seconds it in that perspective um there are two ways to look at it it also gives us annual revenue as we go into the you know future years. Uh so one is we are 11:28 11 minutes, 28 seconds entering the year with strong back backlog. The other thing is that for all the contracts that we won last year, we have started executing those. So once we 11:37 11 minutes, 37 seconds complete the implementation phase of our product, our subscription revenues will kick in and that's when you will actually see a lot of uptick. But I do 11:46 11 minutes, 46 seconds expect in the future quarters as you as we go through this year um you will see that as we move from quarter to quarter 11:53 11 minutes, 53 seconds our you know um u conversion will look better and better because that's how it works because as you get to the end of the implementation cycle your revenue 12:02 12 minutes, 2 seconds starts kicking in. So we are expecting to see an uptick uh from on the back of what is one last change. 12:10 12 minutes, 10 seconds Sure thank you for that. And the second question about uh how this market situation now because of whatever the geopolitical things are happening uh and 12:20 12 minutes, 20 seconds lot of lot of work uh subex is doing in middle east as well as the countries which are uh impact in the in the 12:28 12 minutes, 28 seconds geopolitical thing. So that is one impact and second again uh the AI impact which is coming up and a lot of um uh 12:37 12 minutes, 37 seconds these companies or openi are coming up with lot of um offerings which are complementing uh 12:45 12 minutes, 45 seconds offerings given by uh some companies I don't know how that is impacting our company subex so these two uh scenarios 12:55 12 minutes, 55 seconds how things are getting impacted for the subigs so on Middle East see the risk is um 13:02 13 minutes, 2 seconds actually so obviously you know it's uh first of all it's very unpredictable as you know all of us know that situation 13:09 13 minutes, 9 seconds is changing on day-to-day basis so it's become a little unpredictable for us and we do have quite a bit of exposure in Middle East but that said what we have 13:18 13 minutes, 18 seconds done is that we do have a middle east mitigation plan right so a lot of our delivery for instance has have moved offshored uh we have offshored our 13:27 13 minutes, 27 seconds delivery already so last time when the actually the war broke out we moved a lot of resources offshore and we are continuing to work with our partners 13:35 13 minutes, 35 seconds they are also very supportive in Middle East for offshore delivery models so uh to the extent possible we have avoided the exposures and the work continues uh 13:43 13 minutes, 43 seconds we are doing it offshore instead of on shore right now so we are also going back uh I think the to aid protocols so 13:51 13 minutes, 51 seconds we are adopting some of protocols actually and moving it so in some sense we are able to mitigate it I think there 13:58 13 minutes, 58 seconds are two parts to the risk right one is delivering on the projects that we already have won. The second part is there we can control it by offshoring some of it. The second part is will you 14:07 14 minutes, 7 seconds get the renewals that you were expecting and you know will you still win a lot more in that market. So in that renewal I think we seem to have a good control 14:16 14 minutes, 16 seconds on the renewal part of the story uh because customers are still working with us. So we are pretty confident that we will get the renewal on winning the new 14:24 14 minutes, 24 seconds business is where uh we might struggle a little bit because um it depends on how fast the customers will move with you know allocating money to newer projects. 14:34 14 minutes, 34 seconds So that's where a little bit of uncertainty comes for us as for I think everyone else. So if I were to think about it, I would say that we have a 14:41 14 minutes, 41 seconds sound mitigation plan that two of the three buckets are kind of I would say a lot more under our control or uh we are able to exercise control unless it 14:50 14 minutes, 50 seconds breaks out into a much larger thing than it is right now. But currently as we stand we are able to control that quite a bit on the Middle East exposure on AI. 14:59 14 minutes, 59 seconds I actually think of AI uh you know open AI as a tailwind actually for our business. Um we are what we call and you know for those of you who have been 15:07 15 minutes, 7 seconds following there is something called you know system of records sor and then there is system of intelligence right si uh so what we think of our systems as we 15:15 15 minutes, 15 seconds think of ourselves as s actually where we are embedded in telos so we are the system of records and we are strengthening that and we deal a lot 15:23 15 minutes, 23 seconds more with qualitative sorry quantitative data right so what we are trying to do is we are trying to build an soi layer on our system of records and trying to 15:32 15 minutes, 32 seconds control that whole stack So for us it's been a tailwind actually. I don't see think of it as disruption. If anything I think it's giving us newer tools to 15:40 15 minutes, 40 seconds actually go out in the market and build the intelligence which we were already sort of you know sitting on. Um so I don't see it as a threat right now 15:48 15 minutes, 48 seconds honestly. Um if anything we are very excited about what's coming because it's giving us productivity internally. It's helping us move faster. It's helping us 15:57 15 minutes, 57 seconds build a lot more faster. So I truly think of it as you know a boom honestly. 16:02 16 minutes, 2 seconds So, oh that that's great. And my last question is about uh uh as Q2 and Q3 of 16:10 16 minutes, 10 seconds last financial year we are seeing lot of uh orders one the value of the orders were also high in Q4 the it has gone 16:18 16 minutes, 18 seconds down a little bit or uh the orders have reduced uh and uh yeah it's obviously some delay in uh decision making or uh 16:28 16 minutes, 28 seconds uh maybe what the things are happening but are we how are we seeing like a demand for the services offered by subbs 16:35 16 minutes, 35 seconds in other markets which are not directly impacted by this geopolitical. So are we seeing that the traction is better and uh the things are moving forward and 16:44 16 minutes, 44 seconds things may get closed in Q1 and Q2 more deals may get closed in Q1 and Q2. 16:49 16 minutes, 49 seconds Yes. So see the deals that you saw in Q3. Um so what happens is that uh there are two types of u um you know 16:58 16 minutes, 58 seconds businesses that we do right or the deals that we win. Some are we call them as you know the blockbuster deals. So some of the deals that you saw last year for 17:06 17 minutes, 6 seconds instance you know the one over 6 million or those those are blockbuster deals for us they don't happen 17:13 17 minutes, 13 seconds such that they don't happen every quarter but when they happen they come with a big number right on a quarterly basis and on a business as usual basis 17:21 17 minutes, 21 seconds are deal sizes are in the range of you know a million a million and a half that's what you see typically so that's a cycle so anything that goes over a 2 17:29 17 minutes, 29 seconds million 3 million is a blockbuster deal for us so Um so you have to speak with that a little bit of that perspective. 17:37 17 minutes, 37 seconds We continue to build in fact our backlog like I said right our backlog is very strong and our oi and when I say oi that's our order intake our order intake 17:45 17 minutes, 45 seconds last year was 35% higher actually than any other year. So we have done some amazing work last year. So we do that that gives us a strength of you know 17:54 17 minutes, 54 seconds backlog as we enter the year and we continue to see that momentum actually even from Middle East I would say not just from other geographies even from 18:01 18 minutes, 1 second Middle East. It's just that in Middle East like you said uh the deals are won but sometimes what happens is the eye is not dotted and the tees are not crossed. 18:09 18 minutes, 9 seconds So at the end moment you know there are some contracting delays that are happening but otherwise the deal win is still there actually. So I still think that we are you know we have a lot of momentum in the market right now. 18:21 18 minutes, 21 seconds Uh that's great and uh I'll come back in the queue. Thank you very much and all the best. Thank you. 18:29 18 minutes, 29 seconds Thank you sir. Participants are kindly request to ask two question in initial round and may join the queue for more questions. And the next question comes 18:37 18 minutes, 37 seconds from Abhishek Kali an individual investor. Please go ahead. Hey uh am I audible? 18:45 18 minutes, 45 seconds Yes you are. Fine. Uh Nisha uh what are our margins for the three service verticles? 18:54 18 minutes, 54 seconds Um you mean the FM or Oh no you mean the license and the 19:01 19 minutes, 1 second Yeah. Yeah. Yep. We have categorized our revenue by three segments, right? Oh yes yeah. 19:09 19 minutes, 9 seconds license and y what are our margins? 19:17 19 minutes, 17 seconds So typically license is highest as you can imagine that's typically you know like 100% margins right on licenses 90 19:24 19 minutes, 24 seconds 90 you know very high margins on license implementation margins vary from project to project depending on you know what 19:32 19 minutes, 32 seconds your um um what is the complexity of the project but typically I would say implementation margins are also in 19:40 19 minutes, 40 seconds excess of you know um they can be in 40 45% range implementation margins they can even go up to 60 depending on the 19:47 19 minutes, 47 seconds complexity of the project. So, uh there is great variability in that license you know uh sorry in implementation component. Um then MS is obviously I 19:57 19 minutes, 57 seconds would say you know this is high quality revenue typically for us. So that's 50% plus on MS and AMC is 70% plus on the 20:06 20 minutes, 6 seconds margin. So so that's typically the margin profile right? But then uh Nishan if I were to 20:14 20 minutes, 14 seconds compare apples to apples uh from what you call uh to as the margins right they 20:21 20 minutes, 21 seconds are not translating into aa for me I mean if I take the weighted average of what uh how we have uh c categorized our 20:31 20 minutes, 31 seconds revenues right but that see so that's gross margin what what you would classify as cost so for 20:40 20 minutes, 40 seconds us you know that would be cost of goods sold or you know if you were to look at so what I'm talking about these margins are typically gross margin right a bida 20:47 20 minutes, 47 seconds is your off margin so it doesn't flow directly to a bida there are again you know expense line items below your cost uh line item which is you know your 20:55 20 minutes, 55 seconds gross margin and then you have some expense line item that then comes your iida so there is cost sitting below that and that cost is typically the cost of 21:04 21 minutes, 4 seconds uh just to explain it for everyone's benefit that cost is mostly like R&D cost which is our engineering and build cost. It could be our GTM cost you know 21:13 21 minutes, 13 seconds all our sales marketing uh cost um goes there. it will be our GNA uh like you know general and administrative lease 21:20 21 minutes, 20 seconds expenses all that and after that IITA comes so that's why you see that even our gross margins are pretty good actually by the time it flows down to 21:28 21 minutes, 28 seconds IITA we lose through the line items you know that are kind of those are you know where you build the market and take it to market so those line items are 21:36 21 minutes, 36 seconds sitting below this cost uh so that's the cost right so uh can I say these are the 21:44 21 minutes, 44 seconds operational uh items and uh is there a way we can further uh take steps to optimize those costs? Is there an opportunity there? 21:57 21 minutes, 57 seconds Absolutely. That is where our actually a lot of our operating margina has come from optimizing those costs because that's the only leverage I have in the 22:05 22 minutes, 5 seconds you know P&L. So and we are hitting that cost right cost efficiency when I say AI SPLC that I will use AI to develop my 22:14 22 minutes, 14 seconds products and accelerate that actually reduces my engineering cost which is already lineite is getting reduced effectively so that flows down to my 22:21 22 minutes, 21 seconds IITA so all the iidita improvement has happened because of this controlling these so okay it's a direct uh thing so there is a 22:29 22 minutes, 29 seconds framework for turnaround that we were following and our framework for turnaround actually has this very strong focus on uh you what our R&D so for 22:38 22 minutes, 38 seconds instance you know should R&D be benchmarked at 12% or 15% of my overall cost what can I benchmark it at so we have created a benchmark and we strongly 22:47 22 minutes, 47 seconds operate that so okay uh so uh one more question regarding the margins uh is there uh 22:57 22 minutes, 57 seconds classification that you could give me for the margins for our old and new products I mean fraud for example 23:08 23 minutes, 8 seconds Uh for example um you mean you mean the new products like fraudzap and all that versus yeah exactly exactly and and our legacy 23:17 23 minutes, 17 seconds products that we have already uh we have been uh working with the clients and fraud is my data 23:25 23 minutes, 25 seconds products you can imagine all the legacy products the ones that you see in uh MS and AMC you know are all legacy products 23:32 23 minutes, 32 seconds actually so those margins we have discussed in newer margin um I am a little reluctant to tell you that because it's only it's competition 23:40 23 minutes, 40 seconds sensitive on this call so I'm ballpark number take obviously much better obviously much 23:49 23 minutes, 49 seconds better Rishek because we have built it you know with a lot lot lower cost right so perfect then that makes me happy uh 23:57 23 minutes, 57 seconds another question if I may continue uh conservative and stretch target is the question that you don't like to answer mostly stretch targets for 2627 forwardlooking statement. 24:10 24 minutes, 10 seconds Rahu is staring at me. So who the company is definitely staring at me 24:22 24 minutes, 22 seconds so curiously shaking his head that no forwardlooking guidance. 24:29 24 minutes, 29 seconds No, I mean you rephrase it in whichever ways method but uh I would like to say 24:37 24 minutes, 37 seconds you know look we do we are going the year we are entering the year uh with very strong backlog we are entering the 24:43 24 minutes, 43 seconds year on the front foot um on the back of lot of wins last year. So I am you know if I were to give any um you know 24:52 24 minutes, 52 seconds without taking the numbers if I were to give very any guidance I would say that as team as you know everyone here we are 24:59 24 minutes, 59 seconds actually very bullish right now. So uh we are very bullish in this year and I feel that you know by all um by all 25:07 25 minutes, 7 seconds benchmarks we should beat everything that we have done this year. So you know we are we are going in very unless something I have three more questions 25:16 25 minutes, 16 seconds again trust the process right sorry so only one thing is trust the process I think it has given us a lot of results until now so please trust the process 25:24 25 minutes, 24 seconds it's working okay I have three more questions may I squeeze those in or do I have to come back in with you 25:32 25 minutes, 32 seconds uh maybe you can I think your turn will come very quickly so you can come back in with Okay. Okay. 25:44 25 minutes, 44 seconds Thank you, sir. The next question comes from AJ Doshi, an individual investor. Please go ahead. 25:56 25 minutes, 56 seconds Mr. Rajay, please go ahead with your question. Sir, I think he has a problem that is lying. 26:02 26 minutes, 2 seconds Yes, ma'am. There is no response. 26:08 26 minutes, 8 seconds Dear participants, if you have any questions, please press star and one on your telephone keypad. 26:18 26 minutes, 18 seconds The next question comes from Mahul from 40 cents. Please go ahead. 26:27 26 minutes, 27 seconds Hello ma'am. Uh thank you for the opportunity. Uh I'm new uh uh tackling this company. Yeah. 26:37 26 minutes, 37 seconds We have two questions. One is uh you know uh what is uh I know we are into 26:44 26 minutes, 44 seconds the software development. Um maybe we are not hear you clearly actually we your voice is breaking. I'm not able to hear you very clearly. 26:57 26 minutes, 57 seconds Is it better now? 26:59 26 minutes, 59 seconds Um hello let's see if we are able to hear you. Is it better? 27:06 27 minutes, 6 seconds Yeah, I think so. I think so. Hello. Is it Is it better now? I think so. Hello. 27:14 27 minutes, 14 seconds Yeah. Hello. I think so. Yeah. Am I audible now? Yes, you're audible. 27:20 27 minutes, 20 seconds Okay. Uh ma'am, uh I just want to understand what are the products which we are operating. Uh 27:27 27 minutes, 27 seconds I mean what are the products which we are serving our customers? I understand that we are mainly in the telecom sector. But uh what are the products and 27:35 27 minutes, 35 seconds what kind of services I mean and also uh uh what is our uh split between product and service revenue? 27:43 27 minutes, 43 seconds Okay, that is my first question. I have another question. Yeah, first I'll let you Yeah, go ahead please. 27:49 27 minutes, 49 seconds So products we you know mainly have um three or four products. So one is um revenue assurance. Um then we do fraud 27:57 27 minutes, 57 seconds management solutions for telos. So we did you're right we typically you know only serve uh telos and um we do so 28:06 28 minutes, 6 seconds fraud revenue assurance is basically protecting revenues for telos fraud management is helping them detect and you know fight fraud uh that is where we 28:14 28 minutes, 14 seconds also use a lot of AI actually uh the third one is um you know partner ecosystem um partner ecosystem I'm sorry 28:22 28 minutes, 22 seconds partner settlement system which is really wholesale billing so we do wholesale settlement you know billing settlements for telos 28:29 28 minutes, 29 seconds And the final one is um enterprise asset management which is uh essentially you know you discover assets on a telco 28:36 28 minutes, 36 seconds network and uh you kind of reconcile that with their text asset registry. So that primarily you know the core 28:44 28 minutes, 44 seconds products obviously uh we have embedded you know our AI and injected it in through our product portfolio but where 28:51 28 minutes, 51 seconds we see the strongest uh need for it is actually in fraud management and revenue assurance. So fraud management also because you are seeing the fraud grow on 28:59 28 minutes, 59 seconds your phones today right the WhatsApp fraud to call frauds to link click on the link fishing smishing so a lot of fraud types are now digitally evolving 29:08 29 minutes, 8 seconds uh because the attack vectors have increased with the number of devices that we use these days so that is primarily the our portfolio and uh we 29:17 29 minutes, 17 seconds are a product company we build products and we sell products and our service revenue is around the products that so we service only our products we are not 29:25 29 minutes, 25 seconds a general SI or system integrators that goes and services any products. We do services only around our products. Um I hope that answers your question. 29:35 29 minutes, 35 seconds Yeah. Uh that answers. Thank you sir. 29:37 29 minutes, 37 seconds Followup ma'am followup question is that you mentioned that mainly uh you know you are uh providing fraud fraud detect 29:45 29 minutes, 45 seconds detection solutions. Uh so how does it work? because let's say I am a telecom 29:51 29 minutes, 51 seconds uh customer uh with Jio for example and uh you know so where will your product sit I mean uh I just want to understand 29:59 29 minutes, 59 seconds because you know uh I will be using Jio but uh somebody calls me and then there's no control who is the guy who is 30:08 30 minutes, 8 seconds calling me and what kind of fraud he can do I mean he can ask me for a pin so I'm just trying to understand 30:15 30 minutes, 15 seconds how does it work you know I mean I'm I maybe have given a wrong uh uh scenario but there may be some scenarios where 30:23 30 minutes, 23 seconds your solutions work. So I just want to understand so fraud is a ever evolving landscape right. I mean um one is um I will kind 30:32 30 minutes, 32 seconds of you know answer a little bit but I think if you are interested in um you know really understanding the product portfolio and what we do then I would 30:39 30 minutes, 39 seconds also say that maybe uh you know you should kind of look through some of our collateral but in terms of very quickly if I were to answer I would say that um 30:48 30 minutes, 48 seconds our system sits deep in tel right and what they do is they look like uh so we can solve things like you know sin swap wangiri fraud now the fraud that you are 30:57 30 minutes, 57 seconds talking about for instance WhatsApp fraud. These are all digital frauds that have evolved you know quite recently. 31:02 31 minutes, 2 seconds Actually this is the legacy on this is not very high and there are solutions that are targeting you know solving some of these things. So we build solutions 31:10 31 minutes, 10 seconds to see if we can you know help um telos fight some of these frauds. Um now will all telos use the same solution? No 31:19 31 minutes, 19 seconds because uh depending on what a telos infrastructure is the solutions also vary but our point is that we are helping them fight quite a bit of fraud 31:27 31 minutes, 27 seconds actually in the system. So an occasional call that comes to you or a WhatsApp call um it's not to say that you know because somebody buys our products there 31:36 31 minutes, 36 seconds will be no fraud in that network. Uh fraud is evolving actually very very fast. Fraud is a very fast evolving field right from deep fakes to account 31:43 31 minutes, 43 seconds takeovers it's actually moving at a very fast rate. So this is something that we have to be constantly on top of. 31:51 31 minutes, 51 seconds Right. Ma'am, how much of your uh you know, how much does uh your revenue come from top 10 customers? 32:00 32 minutes Um I think about 60% comes from our uh you know I would say the top tier customers that's generally the 60% is it? 32:09 32 minutes, 9 seconds Yeah. 32:10 32 minutes, 10 seconds Okay. And uh are your uh is it possible to know your key clients key customers? 32:17 32 minutes, 17 seconds I think uh we already disclose it in our uh investor presentation actually. So our investor presentation has the logos that we are working. 32:24 32 minutes, 24 seconds Okay, I'll look into it. And last question ma'am uh because you know uh mainly u uh whatever little I did uh 32:33 32 minutes, 33 seconds check uh I just check subx uh numbers today itself. So I don't know much but what I understand is that there is no 32:40 32 minutes, 40 seconds promoter holding uh so who is the largest shareholder in this company I mean who are the key shareholders I mean 32:49 32 minutes, 49 seconds just trying to understand very diverse no that's true we don't have promoters we have a very diverse shareholding and 32:56 32 minutes, 56 seconds um our um bulk of the shareholding is retail retail investors so we don't have uh I mean our capital is pretty um 33:05 33 minutes, 5 seconds diverse from that perspective So it's primarily retail shareholding and what kind of shareholding does the management have I mean because that is 33:13 33 minutes, 13 seconds all you guys should have skin in the game right the otherwise uh there's a kind of a 33:22 33 minutes, 22 seconds no is that not cores uh so the board has taken a cognizance of this task that has come up repeatedly 33:30 33 minutes, 30 seconds actually so management does have eox um I can you know and we are trying to Every time that the ESOP pool becomes 33:38 33 minutes, 38 seconds available, we are trying to kind of increase the shareholding of management consistently. Um, but the way management holds stock today is through ESOPs. 33:47 33 minutes, 47 seconds Sorry, through ESOPS. 33:52 33 minutes, 52 seconds Thank you, Sam. The next question comes from Abishek Kali, an individual investor. Please go ahead. 34:00 34 minutes Hi. Uh, hey Misha. Um, yeah. Um speak what's the progress uh in 34:09 34 minutes, 9 seconds onboarding our HNA investors and MF um one capital okay I'll come back again 34:19 34 minutes, 19 seconds your voice is breaking a little bit okay is it better now uh yes yeah 34:26 34 minutes, 26 seconds okay so what's our progress in onboarding HNI investors and MF we did one arhand uh capital uh presentation 34:36 34 minutes, 36 seconds but uh after that have we received any kind of a response from uh any HNI or 34:48 34 minutes, 48 seconds no not yet we have had some conversations but not yet actually I mean I don't have them on the cap table but what we are going to do is that uh 34:56 34 minutes, 56 seconds we do have a plan to actually hit the road and that is this quarter so we are going to hit the road and we are going to do uh start presenting because I 35:04 35 minutes, 4 seconds think now we have the results be you know with us so we are going to hit um so this quarter or this year a lot of my focus is going to be to see if we can 35:12 35 minutes, 12 seconds improve the cap table right now but this quarter onwards we are hitting the road actually we'll present to PMS and 35:21 35 minutes, 21 seconds so we are going to meet a lot of people okay um so one I think this is more of a 35:28 35 minutes, 28 seconds feedback uh I think when we sign our deals right in exchange announcements we disclose what is the uh likely order 35:37 35 minutes, 37 seconds size and the tenor for the order right but uh if we can uh if we can include 35:44 35 minutes, 44 seconds milestone payments right so this is when we see that these milestones would be met and this is uh the likely percentage 35:53 35 minutes, 53 seconds payment that we are likely to receive that I mean for us uh the 6 million deal let's take that it was a it's a fiveyear 36:01 36 minutes, 1 second deal for us Right? But I don't know how uh and when am I going to get the revenues. Right? So it would make uh a 36:10 36 minutes, 10 seconds lot of sense for investors to understand uh milestone based payments as to when we receive how much. I mean ballpark is fine but I'm sorry. 36:21 36 minutes, 21 seconds No, I think that might be challenging only because contractually we are bound by some you know confidentiality issues or with the customers. So because every 36:30 36 minutes, 30 seconds time we need to make a disclosure we have to make sure that the customer is okay with it and you know um so I think contractually I I'll have to check I'm 36:39 36 minutes, 39 seconds not sure if we can do that actually contractually they will not agree to this and also it's somewhere a little bit competitive information right how we 36:47 36 minutes, 47 seconds structure our contract how much of it is transloaded versus backloaded so some of this falls into that competitive sphere 36:55 36 minutes, 55 seconds I mean without breaching uh the uh the contractual obl applications and uh without uh h having to disclose to our 37:04 37 minutes, 4 seconds competitors what we are. I mean if there is any uh rough idea that we can get if possible 37:11 37 minutes, 11 seconds uh it would be a great help. And uh another question is on the goodwill write off is that past history done what 37:20 37 minutes, 20 seconds have our auditors said on that because uh I think two quarters back uh you had hinted that uh we may have to look at 37:28 37 minutes, 28 seconds the goodwill on our books about 190 crores plus amount. So what's uh happening? 37:36 37 minutes, 36 seconds So basically it's an annual exercise and impairment exercise is an annual exercise that we do. Um and you know Q4 being the balance sheet quarter it has 37:44 37 minutes, 44 seconds to happen. So that is why I had indicated earlier that it might you know um you know we will go through that balance sheet exercise. So we have 37:52 37 minutes, 52 seconds completed that and our auditors have concluded that uh you know the carrying value is fine right now and there was no need to invest actually any of their 38:01 38 minutes, 1 second investment. So that has also given us you know given us a lot of um forward and positive momentum because uh the 38:09 38 minutes, 9 seconds goodwill value is compared against you know your current performance. So they also felt that you know there is absolutely no need to impair this right now. So I think in that sense it's been a good outcome for us. 38:20 38 minutes, 20 seconds Perfect. Hey one last question it's about our board. Uh the reor is the reor 38:27 38 minutes, 27 seconds complete and uh have we received any initial feedback from the new members of the board uh from their vast experience 38:35 38 minutes, 35 seconds in this field as to how we can better our products offerings or approach uh on the sales side any inputs of that nature 38:44 38 minutes, 44 seconds actually they are very very engaged board so it has been an extremely engaged board um and we have received a lot of feedback and I think they it's a 38:53 38 minutes, 53 seconds very different board because the once we came in the first thing that they asked us for was for tech deep dives. So they said that they wanted to do a tech deep 39:01 39 minutes, 1 second dive and we had to organize like two sessions just taking them through our products and look through the demos. Uh they have given us feedback not just on 39:09 39 minutes, 9 seconds how we can build better but they have also given us feedback on how do we do GTM better you know how do we take our products to market better. So they 39:16 39 minutes, 16 seconds understood how the AI agents work. So I think in that sense uh it's a very um I mean if I were to use the word switch 39:23 39 minutes, 23 seconds right they're very swish talk and um we were we just went through our AOP and budgeting cycle for um Q4 you know for 39:31 39 minutes, 31 seconds FI27 and in that also uh they were very pushy with us right so all the plans that we presented they really pushed the 39:40 39 minutes, 40 seconds management to keep asking you know why can't you do better than this um you know shareholders are waiting for some better results why can't you do better 39:47 39 minutes, 47 seconds so there is a lot I would say good push that came from them which genuinely made us rethink our plans and you know we 39:55 39 minutes, 55 seconds kind of represented to them. So it's been a lot of push it's been a lot of good feedback and I think they're also 40:02 40 minutes, 2 seconds holding us accountable um but I would say most more importantly they are very fair and you know and so far as my 40:08 40 minutes, 8 seconds expectations or my interactions go they have been very fair as well uh to all of us. So it's a very engaged one. 40:16 40 minutes, 16 seconds Wonderful. Wonderful. One last question. 40:19 40 minutes, 19 seconds Uh with the recent announcements which PM made wherein there he has asked us 40:26 40 minutes, 26 seconds most people to try working from home right. uh if a significant portion of 40:33 40 minutes, 33 seconds our employee group right uh temporarily at least works from home would that impact our operations by any means 40:41 40 minutes, 41 seconds because we would have had this situation in co era so would that impact as to how we function as a team 40:50 40 minutes, 50 seconds actually honestly um we already are working in a hybrid mode so subex never run back to five days a week in office 40:58 40 minutes, 58 seconds so we are um you know um yeah We don't work 5 days a week. We actually work 3 days a week and two days uh people work from home. So we are already on hybrid 41:07 41 minutes, 7 seconds and we have plenty of experience managing employees and you know uh sort of uh you know employees doing their 41:14 41 minutes, 14 seconds work in some sort of a hybrid mode. So that does not bother us as much as it might bother people who call employees full-time you know back to office. But 41:22 41 minutes, 22 seconds um you know my personal philosophy in this has always been that you need to have a high trust environment. If we can't trust our employees to actually do 41:31 41 minutes, 31 seconds right by us, no matter where they are sitting, then I think we have something wrong and broken in our system. So, so for me, you know, I like to work in a 41:39 41 minutes, 39 seconds high trust environment and we will navigate as it comes. Um, but honestly, I don't worry too much about it. We have a very good set working with us. 41:49 41 minutes, 49 seconds Wonderful. Thanks. That is all from my side and uh my best wishes to for for continued success. Thank you. 41:56 41 minutes, 56 seconds Thank you. Thank you. 42:00 42 minutes Thank you sir. The next question comes from Mahesh Kumar an individual investor. Please go ahead. 42:05 42 minutes, 5 seconds Yeah good morning Nisha. First question is Morning. 42:09 42 minutes, 9 seconds Uh this quarter we announced one deal for fraud zap. Now with this deal how many paid customers we have for fraud 42:17 42 minutes, 17 seconds zap? That is first question. And so second question around three quarters back we have made announcement of team 42:24 42 minutes, 24 seconds of LLM for fraud management and fraud detection. So do you have any paid customer for this team of LLM? 42:33 42 minutes, 33 seconds Uh sorry I didn't get second question Mahesh see few quarters back I think three or four quarters back subex has 42:41 42 minutes, 41 seconds made announcement that they have launched a product which is made of team of LLM for fraud detection 42:52 42 minutes, 52 seconds um are you referring to fraudzap uh because that's the one we launched actually fraudzap is a different one there was a one announcement also regarding team of 43:00 43 minutes lln team of MLMs. Oh yeah yeah yeah yeah got it. Okay. 43:05 43 minutes, 5 seconds So you had some announcement and then uh some PC's were going off for that. So for that particular product or solution do you have any paid customer now? 43:16 43 minutes, 16 seconds So on fraud app see we kind of built the product we did PLC and we launched it and we got the first paying customer all 43:24 43 minutes, 24 seconds within a year. So it's early pipeline for us. So currently if I think about it it's one paid customer but uh the back 43:32 43 minutes, 32 seconds of that customer has three telos. So it's one customer to us but at the back I mean the contract actually has three telos participating in it. So if you 43:40 43 minutes, 40 seconds think about it the product is actually embedded in three cases. So that is how the you know um so it has last quarter also you had announcement 43:48 43 minutes, 48 seconds of a paid customer for a fraud act and this quarter also there is announcement. 43:54 43 minutes, 54 seconds Yes, that is the three customers actually because what's happening is that we are working through um how do I put it? Okay, so we are working through 44:02 44 minutes, 2 seconds an intermediary who keep onboarding you know newer telos. So we had onboarded a telco now we have for instance three telos. So the telos are onboarding onto 44:11 44 minutes, 11 seconds the product. So every time a new telco onboards on the product it becomes a new customers for us. So currently from uh that perspective we have three customers 44:20 44 minutes, 20 seconds and working of So team of LLM right now actually you know we are in PC's we have actually 44:27 44 minutes, 27 seconds completed the PC's we are in conversations with at least two or three customers to make it commercial now 44:34 44 minutes, 34 seconds actually in this quarter so we should be making it you know commercial the one challenge that we are running into 44:41 44 minutes, 41 seconds slightly on team of LLM is the hardware challenge because it requires some GPUs and most of the customers um as you can 44:49 44 minutes, 49 seconds imagine are a little reluctant to procure GPUs and especially in Middle East because they don't want to make any hardware investments right now. So we are so the 44:59 44 minutes, 59 seconds product is ready the PC's are done. Uh they want to sign up with us but you know the GPU is the hardware is becoming a little bit constrainted right now. So 45:07 45 minutes, 7 seconds we are we are also finding a way around it. For instance we have figured out a way that we could probably do an agent in a box kind of a model. So we are also 45:15 45 minutes, 15 seconds trying to see if we can make agents work on CPU instead of GPUs. So that's a technical challenge that we are wrestling with even as we speak. So that 45:23 45 minutes, 23 seconds has been a little slightly you know delayed for us from that perspective. 45:27 45 minutes, 27 seconds It's not because the interest is not there. It's not because the customers are not willing to pay for it but hardware is a little slight challenge you know we are challenged from that 45:35 45 minutes, 35 seconds aspect and what will be the impact of Iran war on our business because we are only 45:43 45 minutes, 43 seconds focused on Gulf region 31% of the revenue coming from that region. 45:49 45 minutes, 49 seconds We do have quite a bit of revenue coming from that region but um AP pack and Europe is also very strong for us actually. So I think APAC and Europe 45:58 45 minutes, 58 seconds remain steady um America's we are going to invest heavily into America this year and see if we can bring it back up. 46:04 46 minutes, 4 seconds Africa also is seeing momentum. Middle East no doubt you know does have uh will have some impact but the way we are 46:12 46 minutes, 12 seconds trying to mitigate is that all the all the implementation all the projects that we have already won I just mentioned it to Sanjot as well that all the projects 46:19 46 minutes, 19 seconds that we have already won we are trying to offshore those projects and see if we can deliver them from here and customers are very supportive of that given the 46:27 46 minutes, 27 seconds situation so most of the resources we have actually moved them out of Middle East back to India and we are now uh delivering from Bangalore most of it in 46:35 46 minutes, 35 seconds terms of contract renewals uh we don't see a major risk unless it blows into a much bigger war and um in terms of new 46:45 46 minutes, 45 seconds decisions or new purchase decisions that's where we see a slight risk of customers delaying decisions so um that 46:52 46 minutes, 52 seconds may be a slight risk there so that's where we are okay I will join back with you after 47:01 47 minutes, 1 second thank you ma'am thank you sir the next question comes from Jendra Bora an individual investor. Please go ahead. 47:11 47 minutes, 11 seconds Good morning. Morning. 47:15 47 minutes, 15 seconds Yeah. So, uh I would like to ask you about the uh we had closed that sector business. Now there were certain 47:23 47 minutes, 23 seconds receivables for which we we had filed we were trying to take some steps for recovery of that. 47:29 47 minutes, 29 seconds So what is the status of sector as of now? Has it been closed? All contracts over closed and whether those receivables which we 47:36 47 minutes, 36 seconds is closed one is closed the other one and uh yeah please yeah the other one which was pending and 47:45 47 minutes, 45 seconds uh secondly you know what is the status of uh those receivables from the uh earlier contract which we closed and we had you know written off some money good amount of money. 47:56 47 minutes, 56 seconds So in spectri so there were two major contracts one is closed in fact we are you know kind of um it's almost 48:03 48 minutes, 3 seconds contracts are the final contracts and liabilities we are closing actually so I would you know from my perspective consider it closed almost um the second 48:13 48 minutes, 13 seconds one is where um there are also receivables there we have decided to take a legal route so that's where we will go you know down the legal path and 48:21 48 minutes, 21 seconds we will try to we are actually engaged uh we have engaged a lawyer and we are going to go down the legal path and see if we can do some recovery there or 48:28 48 minutes, 28 seconds arbiterate with the end customer. So, uh those receivables will take some time because um you know we are going to we are going down the losses path on that. 48:38 48 minutes, 38 seconds Okay. So, the this is the one which you're talking about which we have already written off that receivables or the contract that is the one that no no the one that 48:46 48 minutes, 46 seconds we have already provided for. So, we have already provided for it last year. 48:51 48 minutes, 51 seconds So, yes. So, there is no risk to anything. we have already provided for it in the book. In fact, if anything uh if we are able to you know settle this 48:58 48 minutes, 58 seconds and as we if we are able to recover money and you know I'm hoping that we recover all of it but um you know through arbitration whatever recovery 49:07 49 minutes, 7 seconds comes we will sort of offset you know our provisions against the income that we u you know book. So that's how we will offset the provisions. 49:17 49 minutes, 17 seconds And my next question is regarding the uh revenue. Uh we find the revenue and stuck around 70 72 quarters from you 49:25 49 minutes, 25 seconds know uh so when when could we expect this revenues to blow exponentially? sitting in the back of 49:33 49 minutes, 33 seconds some uh contracts that we won last year in good. Um as our implementation cycles start uh come finishing um you know I 49:41 49 minutes, 41 seconds would say by middle of this year and all that as the implementation starts coming to a close provided there are no delays the revenue uptake should start at the 49:48 49 minutes, 48 seconds back of it. So so your uh uh wish and the our target of 100 crores per quarter then could we 49:56 49 minutes, 56 seconds expect inshallah sir That's that is that is a point you know where uh the glory of subix will lie. 50:08 50 minutes, 8 seconds No absolutely oh that's no that's my war cry internally as well that is my war cry to my team that we have to get this 50:14 50 minutes, 14 seconds 100 crores. So um no absolutely I think this is the year we go for it. 50:21 50 minutes, 21 seconds Are we looking for any uh acquisitions uh in organic or uh uh how do you want to proceed with the amount of uh cash 50:29 50 minutes, 29 seconds which we have now at least we can take some uh some sort of a risk for our products? 50:35 50 minutes, 35 seconds Oh absolutely. So we do have about um so if I were to you know kind of put some cash aside for our working capital if I give myself 6 months runway and all that 50:44 50 minutes, 44 seconds I still have about 50 crores sitting on the balance sheet plus we will also generate cash through the year right. So 50:52 50 minutes, 52 seconds uh we are wanting to go back and look at some potential ways of you know seeing if we can do some package this year. So 50:59 50 minutes, 59 seconds uh that is actively a discussion that we are having um with the board within the team. Uh so that's definitely on the cards. We'll be looking at some opportunities. 51:10 51 minutes, 10 seconds So are we doing anything with ongrid investment planning to increase or dilute or divest? Uh what are the valuations 51:18 51 minutes, 18 seconds on grid? Uh no because ongrid actually is doing very well right now. So um because every year when we complete the year we obviously look at you know we 51:26 51 minutes, 26 seconds ask for ask them for their P&L and balance sheet. So it's actually looking really good for them. So since they are doing so well, my investment in them is 51:35 51 minutes, 35 seconds doing well. Uh there is no good reason for me to exit right now. So no, that's absolutely correct. So the company is doing well. Are we planning to add some more investments into that 51:43 51 minutes, 43 seconds or we're just holding on put what whatever we make? 51:46 51 minutes, 46 seconds No, actually I would rather reinvest back into our portfolio. So you know I feel that I would rather there are more opportunities for me to you know grow my 51:55 51 minutes, 55 seconds money than to you know put it outside and I would I would rather take a bet on my team than take a bet on you know some other team. So 52:04 52 minutes, 4 seconds so at appropriate time we will be divesting on. 52:09 52 minutes, 9 seconds Oh yes when the you know when we need the money honestly today I don't need the money right so I don't necessarily need the money in that sense I mean I I 52:17 52 minutes, 17 seconds think let it grow there it's a good bet for us and uh we have enough cash to invest in our business so let's just grow back you know we have enough bets 52:24 52 minutes, 24 seconds that we want to take internally we are excited about agents uh we are excited about you know some of the things that are coming up for us so we want to go 52:32 52 minutes, 32 seconds back you know more bullish on those areas so we'll take our own bets so our revenues are mostly very important currency. So we are we being 52:41 52 minutes, 41 seconds benefited out of this uh rupee depreciation uh how because our expense is mostly India based uh we do how does it help? 52:53 52 minutes, 53 seconds So I mean obviously when we measure our performance and rupee depreciation helps us only because most of our contracts are in USD and u 53:02 53 minutes, 2 seconds you know foreign currency. So rupee depreciation from that perspective does help us but um because some of the 53:10 53 minutes, 10 seconds geographies where we work their currencies are also in high fluctuation. 53:13 53 minutes, 13 seconds So on every contract um when we are winning new contracts or when we are in negotiations with new customers one of the sticky points that's coming for us 53:22 53 minutes, 22 seconds is that most of the customers now want to work in their currencies uh which we don't want because obviously you know the exposure for us is high. If the 53:30 53 minutes, 30 seconds other currency is also equally you know fluctuating then I cannot take that currency exposure. So the sticky point becomes uh for often for us that do they 53:39 53 minutes, 39 seconds have the USD to give us or not? Can they do dollar contracts or not? So that is also slightly delaying some contract negotiations and all that but we are 53:47 53 minutes, 47 seconds sticking to our ground for us. I think um we are to the extent possible we are only doing our GDP USD and euro contracts. 53:57 53 minutes, 57 seconds That's great. 54:00 54 minutes The next question comes from Ashish Koti, an individual investor. Please go ahead. 54:06 54 minutes, 6 seconds Uh good morning ma'am. Thanks for the morning. Hello. Can you hear me ma'am? Yes. Morning. 54:14 54 minutes, 14 seconds Yes, I can hear you Ashish. 54:15 54 minutes, 15 seconds Yes. Uh ma'am, I have a question. uh basically with regards to uh our focus 54:21 54 minutes, 21 seconds ma majorly on the fraud management uh on in telecom with more and more uh consolidation happening 54:30 54 minutes, 30 seconds and with Starlink and uh where competition would get uh you know more severe for smaller players how exactly 54:39 54 minutes, 39 seconds uh telecom would be enough for us? 54:44 54 minutes, 44 seconds Um so see we are actually so obviously telco is our bread and butter so we are 54:52 54 minutes, 52 seconds deeply embedded um we have I would say that you know we have around 125 130 customers active customers um we have 55:01 55 minutes, 1 second very low churn I have 80% of all T1 customers so there is a lot of um so that's why we have a lot of strength but 55:09 55 minutes, 9 seconds that does not prevent us from looking outside you know it does not tell us that you know we should not look Right. 55:14 55 minutes, 14 seconds Uh there are uh sectors or areas where our revenue assurance and fraud management might be horizontally scalable and uh this is where we are 55:23 55 minutes, 23 seconds actually looking at um you know seeing if we can get into this area. But on your question on Starlink even our customers are actually signing up with 55:31 55 minutes, 31 seconds uh life of Starlink. So Telos are also investing aggressively and getting into hybrid phase right now. So telos are not 55:40 55 minutes, 40 seconds the telos of you know um old school telos anymore. So they are also taking a lot of bets and getting out. So I think in that sense it gives us a horizontal 55:48 55 minutes, 48 seconds expansion opportunity. But more than that we are ours is also aggressively you know looking at some very high growth areas right now uh which are you know I would say high growth high tank. 55:59 55 minutes, 59 seconds So we have identified a few areas that we are starting to take a bet on that. 56:04 56 minutes, 4 seconds So we are going to you know start experimenting with some of those areas. 56:07 56 minutes, 7 seconds take our products, look for fitment. So, uh you're right. I mean, you know, uh telco is not the only play that we will have. So, we are also hoping to cautiously expand into something else. 56:18 56 minutes, 18 seconds Would you be able to throw that line uh some light on uh areas which you are exploring? That is one. Second uh within 56:25 56 minutes, 25 seconds data centers whether uh our fraud management systems uh has any role to play and whether on electricity side uh 56:35 56 minutes, 35 seconds whether we can kind of support our fraud management system. 56:40 56 minutes, 40 seconds So data centers are definitely a good play that's because data centers not just need fraud management actually I would think revenue assurance is a bigger play in data centers honestly. 56:49 56 minutes, 49 seconds So, so I think in that sense data centers are something that we are starting to look at uh carefully because it's also a very high growth industry 56:58 56 minutes, 58 seconds right now right it's one of the highest growing um it's almost data center is a new infrastructure right um it's like 57:04 57 minutes, 4 seconds when telos um grew last time it grew on the back of telos expanding massively and we now see the same movement 57:11 57 minutes, 11 seconds happening around data centers so it's it's building a new infrastructure altogether and I think in that sense it becomes a very strong uh you know 57:19 57 minutes, 19 seconds consideration for us in terms of electricity and all that. Um personally we are a little bit reluctant to go go into utilities pure utilities kind of 57:28 57 minutes, 28 seconds space because receivables and you know the decision cycles are very long they are very slow and receivables and other 57:35 57 minutes, 35 seconds things become very problematic with utilities. So um so those are not areas my product can possibly work in those areas but utilities are something that 57:43 57 minutes, 43 seconds we actively stay away from water and electricity etc. So and ma'am our all our uh revenues are 57:52 57 minutes, 52 seconds totally 100% on subscription model only. 57:57 57 minutes, 57 seconds Um no it's not it's a it's a traditional uh thing where it's a license 58:05 58 minutes, 5 seconds implementation and support. So it's not 100% subscription. 58:10 58 minutes, 10 seconds No. Uh but in terms of sales uh I'm not talking about uh operation and maintenance. I'm to give it purely in terms of sales. All our revenue is in 58:19 58 minutes, 19 seconds terms of subscription model or is it uh product sale also still? 58:24 58 minutes, 24 seconds No, we do sell and we do the license, right? So, we sell our product, we recognize some license revenue and then we do implementation of the product. we 58:33 58 minutes, 33 seconds get implementation revenue and that's when after the implementation is over and uh customers achieve what we call you know at go ice which is you know our 58:41 58 minutes, 41 seconds product is live and working in their system that's when it moves into what we call support contracts either you know that's the subscription part of it so it 58:48 58 minutes, 48 seconds moves into support which is u you know it can be an AMC it can be an additional manage service so support contract taken after that so that's the subscription 58:57 58 minutes, 57 seconds piece of it so there are three distinct pieces to how the revenue moves for a customer. 59:03 59 minutes, 3 seconds Uh I I I thank you for that. But then if revenue mix can be broken down into this uh 59:10 59 minutes, 10 seconds different heads then you know it gives it already is it is invested in that is how it's broken up and I was telling 59:17 59 minutes, 17 seconds Abishek also earlier on the call that's exactly how it's broken up. You will find it as license implementation. 59:23 59 minutes, 23 seconds You'll find MS and you'll find AMC. So NSMC is the subscription if you want to think of it you know a subscription. 59:29 59 minutes, 29 seconds MSMC is a subscription bridge. The license implementation is a product part of it. So if you if that helps you 59:38 59 minutes, 38 seconds okay ma'am I'll come back in the queue for any more question. Yeah thank you. Thank you Ashish. 59:45 59 minutes, 45 seconds Thank you sir. The next question comes from Mahesh Kumar an individual investor. Please go ahead. Yeah, Anisha 59:52 59 minutes, 52 seconds in multiple past investor calls you have been mentioning that your first priority is to take the sheep out of strong? So 1:00:00 1 hour as on today is the sheep out of storm that is the first question. 1:00:05 1 hour, 5 seconds Yes. And second question, if the sheep is out of storm, what are the new growth 1:00:12 1 hour, 12 seconds engines that you are trying to put in place which will give at least more than 10% growth? 1:00:20 1 hour, 20 seconds And third one, since you are focusing on data center, why the data center companies who are 1:00:27 1 hour, 27 seconds also software companies, also services companies will use your product rather than building that in-house? 1:00:35 1 hour, 35 seconds These are the questions. Questions. 1:00:38 1 hour, 38 seconds So ship out of the storm. I think that you know um every time you think they are out of the storm a new one looms. 1:00:44 1 hour, 44 seconds But I would say that um in terms of overall um direction I actually like I said early also on you know when I was 1:00:52 1 hour, 52 seconds um giving the initial opening remarks. I truly think that ship is out of the storm in that sense. The first part of transformation I think we have 1:01:01 1 hour, 1 minute, 1 second delivered. So now our focus has to be on growth because and we have a balance sheet actually. So I think in that sense the fundamentals are back in place 1:01:08 1 hour, 1 minute, 8 seconds right? So when fundamentals are in place I can confidently say that we are on our way now. Um so that gives me confidence that we are over the work. So second 1:01:17 1 hour, 1 minute, 17 seconds part of your question is on I think it's asked about data centers. So data centers is something that we are growth engines. 1:01:24 1 hour, 1 minute, 24 seconds Sorry what are the growth engines? 1:01:25 1 hour, 1 minute, 25 seconds Growth engines are kind of okay. So our growth engines broadly come into you know I would think of it as four categories right. So there is a 1:01:34 1 hour, 1 minute, 34 seconds traditional telco um that remains for us. Uh telos themselves are becoming tech. So I think like I was saying that 1:01:42 1 hour, 1 minute, 42 seconds there are horizontal expansions with JB done by starlink and all that. So there gives us a horizontal expansion. There is bank there. Then there is a new thing called aentic inhouse and MS placement. 1:01:53 1 hour, 1 minute, 53 seconds Right. So wherever they have MST so all Telos have a lot of you know managed services team. So wherever they have managed services we can actually go and 1:02:01 1 hour, 2 minutes, 1 second place you know agentic AI and see if we can replace or you know reduce their managed services fee that is a very different plan. The third is you know 1:02:10 1 hour, 2 minutes, 10 seconds the new age leakage vectors right so fraud zap and all that control those new age leakage vectors like social engineering A2P SMS fraud account 1:02:18 1 hour, 2 minutes, 18 seconds takeover. So we have built a suite of products that can now address the new leakage vectors and the final one is telco edsc that is where the mobile 1:02:27 1 hour, 2 minutes, 27 seconds money fraud MDNo IoT assurance um you know telco fintech data center all this comes into telco edsc that we are 1:02:35 1 hour, 2 minutes, 35 seconds strongly looking at so if I actually look at the tam uh this is you know 4.3 million so 4.3 billion of tam that did 1:02:43 1 hour, 2 minutes, 43 seconds not exist even two years ago so a new t market has opened up completely for us Um so I actually think that the play for 1:02:51 1 hour, 2 minutes, 51 seconds us is quite big and these are the exact levers that we are going to answer our business of and all of this is quite fast growing 1:03:00 1 hour, 3 minutes right so this is none of this is a slow growing market anymore and what about data center why the data center companies will use your product 1:03:08 1 hour, 3 minutes, 8 seconds when they are themselves having huge software teams to build it I think uh that goes without saying 1:03:17 1 hour, 3 minutes, 17 seconds right telco see one thing is uh you should remember that wherever our products starts uh telos uses for scale 1:03:24 1 hour, 3 minutes, 24 seconds right so we shouldn't forget that there is a one is scale uh one of the telos that we work with and this is not an 1:03:31 1 hour, 3 minutes, 31 seconds isolated example we process like 120 billion records a day so a software is not just a software you it has to work 1:03:38 1 hour, 3 minutes, 38 seconds at a certain scale and we have production grade software that works at a very huge volume right and scale so I think that's one good thing that we have 1:03:46 1 hour, 3 minutes, 46 seconds going for us the Second is on some of the products like revenue assurance and all that even telos have huge teams. Why 1:03:54 1 hour, 3 minutes, 54 seconds do they still use use? It's because there is a makers checker system right. 1:03:58 1 hour, 3 minutes, 58 seconds Uh you cannot actually make your revenues and also check it. It's like auditing pretty much right. We use auditors because we cannot I cannot report my you know revenues directly to 1:04:07 1 hour, 4 minutes, 7 seconds you unless an auditor puts a field and says I've seen it externally and it's true. So all a lot of our software is also you know I would say an audit uh 1:04:15 1 hour, 4 minutes, 15 seconds kind of a compliance kind of a requirement right and the third piece is domain knowledge that is very specific to solving fraud domain knowledge 1:04:23 1 hour, 4 minutes, 23 seconds doesn't build overnight actually so we have cut our teeth for three uh 30 years in it right we have seen patterns across 30 years across telos no individual 1:04:32 1 hour, 4 minutes, 32 seconds telco can beat us when it comes to you know we I know hot patterns across 100 plus telos can any one telco team come 1:04:40 1 hour, 4 minutes, 40 seconds and beat that you know with it they cannot and that's exactly the reason why we people continue to buy and I think it is these are the kind you know kind of 1:04:48 1 hour, 4 minutes, 48 seconds skill set no I'm coming to the data center question as well because that is the kind of skill set that has stood the test of time in telos 1:04:56 1 hour, 4 minutes, 56 seconds and we believe a lot of it is actually horizontally scalable because it's the same stuff when you actually go into data centers they still need revenue 1:05:04 1 hour, 5 minutes, 4 seconds assurance that's a maker checker auditor kind of thing right so they will still continue to buy from outside we have to see if we are the people who actually go 1:05:11 1 hour, 5 minutes, 11 seconds and win this game. So I mean that's at least our thought process and it's not about code writing right if you could just win this by having a team of 1:05:20 1 hour, 5 minutes, 20 seconds developers then I think everyone could just enforce all this but that's not what it is you know patterns evolve over a time you need someone who's watching 1:05:27 1 hour, 5 minutes, 27 seconds it um across across data centers and you know can bring those patterns into the product and embed it and put it in your 1:05:34 1 hour, 5 minutes, 34 seconds system so that's where we think our play will be like again I said that uh you know we have not honestly gone into the market on data center this is one of the 1:05:43 1 hour, 5 minutes, 43 seconds agencies that they are considering strongly uh for instance you know because we can solve fraud problems people are starting to use us for mobile 1:05:50 1 hour, 5 minutes, 50 seconds money now why because I can solve fraud actually essentially and mobile money sees a lot of fraud so we are already seeing that our products are 1:05:59 1 hour, 5 minutes, 59 seconds horizontally scalable so I mean that's the bet actually data centers again you know I I I don't want to give anybody an impression here that we are working with 1:06:07 1 hour, 6 minutes, 7 seconds data centers and all that we are starting to consider it because that's a definitely a very strong growing sector and you know it's building the I would 1:06:14 1 hour, 6 minutes, 14 seconds say the next layer of infrastructure in the world so it's very natural for us also to see if you know there is a place for us and that's something we are 1:06:21 1 hour, 6 minutes, 21 seconds strongly considering right now so but do you still want to go back into IoT assurance again because we have existed that business recently 1:06:30 1 hour, 6 minutes, 30 seconds we actually never did IoT assurance sector was um industrial you know security it was never um actually an IoT 1:06:39 1 hour, 6 minutes, 39 seconds assurance business in the first place So, so I think you know there seems to be some confusion and IoT assurance is 1:06:47 1 hour, 6 minutes, 47 seconds actually a set of controls which are RA controls that are those are revenue assurance controls for existing telos. 1:06:53 1 hour, 6 minutes, 53 seconds So we already do that and we are wanting to you know expand that business within our existing telos. So IoT assurance is 1:07:00 1 hour, 7 minutes one of the assurance businesses for our existing RA book you know portfolio actually it's not a different product 1:07:07 1 hour, 7 minutes, 7 seconds line. Yeah, I have a last question. See, Subz is very proud of its domain knowledge then data it is having the 1:07:14 1 hour, 7 minutes, 14 seconds patterns it has learned over 30 years time. 1:07:19 1 hour, 7 minutes, 19 seconds So if that is the case I have fundamental question why we are not building a mythos type of model ourselves. 1:07:29 1 hour, 7 minutes, 29 seconds Uh that's a you have to give me you guys have to believe in us more. I want anthropic level salary. 100 million is what we 1:07:38 1 hour, 7 minutes, 38 seconds need to build my car. So that's for no that is that that cost is in is in the US India cost will be much lesser than 1:07:46 1 hour, 7 minutes, 46 seconds that. See take take Mahindra MD told I will build build that chat GPJ type of thing in $1 million. 1:07:57 1 hour, 7 minutes, 57 seconds See there is a okay so I wish we we could actually because that's what exact also. So this is here 1:08:05 1 hour, 8 minutes, 5 seconds but what we are doing with our domain knowledge I mean I want I won't take the mythos example but I will take the 1:08:12 1 hour, 8 minutes, 12 seconds claw skills and plugins. I'm sure you are familiar with that. So yeah in our context our agents are equipped with you 1:08:20 1 hour, 8 minutes, 20 seconds know proprietary skills which is our domain knowledge. I mean you can kind of think about it like that. So only we can provide that skills. I mean there was an 1:08:28 1 hour, 8 minutes, 28 seconds earlier question also about LLM. LLM's claude or open AI can build but the proprietary skill we bring and that is 1:08:36 1 hour, 8 minutes, 36 seconds why our agent can you know investigate fraud much better than any human or any other agent because we have all these 1:08:44 1 hour, 8 minutes, 44 seconds patterns which we bring or render in the form of a skill. See that is that is what we are using AI to build services 1:08:53 1 hour, 8 minutes, 53 seconds or solutions that that approach but when we say yeah I mean we think of the agent as a 1:09:02 1 hour, 9 minutes, 2 seconds product because it's positioned as a independent product stack for which we sell and we kind of get again license uh 1:09:10 1 hour, 9 minutes, 10 seconds revenues like was already discussed because what is happening nobody thinks is a AI first company this This is the 1:09:18 1 hour, 9 minutes, 18 seconds impression in the market today. See there is so gang go about AI AI across the world but nobody is considering 1:09:26 1 hour, 9 minutes, 26 seconds Subex as a AI first company. So I want to bring that impression by such a 1:09:32 1 hour, 9 minutes, 32 seconds development that it is a AI company and uh it's a fair point. It's a fair 1:09:39 1 hour, 9 minutes, 39 seconds point and I think um if I I will take this as a feedback. I think we have a lot more work to do on messaging then and we will make sure that we do a lot 1:09:47 1 hour, 9 minutes, 47 seconds more work on it. So it's a fair point. I kind of take your feedback on that. But that's not to say we are not doing the work Manish you know. So sometimes you 1:09:55 1 hour, 9 minutes, 55 seconds know the there are categories like the basic technology development. Now if you see this uh entropy and all those they are 1:10:04 1 hour, 10 minutes, 4 seconds building the technology building the model is a technology what Indian companies are doing using that model we are building the services and solution. 1:10:14 1 hour, 10 minutes, 14 seconds So if Ruchir Sharma who is the investor he told India has lost the air bus if you see his interview every year he 1:10:23 1 hour, 10 minutes, 23 seconds gives this what are the trends he is like we are likely to see in 2026 he told AI bus India has missed because 1:10:30 1 hour, 10 minutes, 30 seconds Indians are not innovators they are good at uh followers but I think u I kind of have a slight 1:10:38 1 hour, 10 minutes, 38 seconds disagreement with that position because it's like saying that deep research is the only research worth A lot of India's growth has also 1:10:46 1 hour, 10 minutes, 46 seconds happened on the back of applied research. Right? You don't need to be a deep researcher. The deep research requires deep pockets and deep money 1:10:53 1 hour, 10 minutes, 53 seconds which I don't think Indian markets have today. Maybe that kind of you know muscle the muscle reli you know is still sitting in Silicon Valley. So they are 1:11:02 1 hour, 11 minutes, 2 seconds doing deep research. They are coming up with fundamental models that does but that does not stop us from actually taking what they have built and applying 1:11:10 1 hour, 11 minutes, 10 seconds it to our domain. So I would say that we are the applied research companies right and there is nothing wrong with it. 1:11:16 1 hour, 11 minutes, 16 seconds There is actually it's hard work it's difficult work to do even applied research and I feel that if India and if companies like subex can actually do 1:11:23 1 hour, 11 minutes, 23 seconds that well then we would have also you know won a major battle actually. So I almost think of it u like that that you know our AI can work at massive scale. 1:11:33 1 hour, 11 minutes, 33 seconds So why should we kind of think that we have lost the race? I actually think the race is just beginning now and you know see now what happens you were saying at the forefront of it will get to win 1:11:42 1 hour, 11 minutes, 42 seconds it. So I have a slightly different persona perspective from Rocher on this. 1:11:46 1 hour, 11 minutes, 46 seconds No see what happened. You were saying the hardware GPU is the issue for team of LLM. 1:11:51 1 hour, 11 minutes, 51 seconds Okay. So the out ofbox thinking would have been why can't we use neuromorphic to implement all these team of LLM? Your 1:11:59 1 hour, 11 minutes, 59 seconds cost will come down drastically and you will have a patented solution. 1:12:05 1 hour, 12 minutes, 5 seconds uh why can't we use what sorry neuromorphic processor neuromorphic processor so we are 1:12:13 1 hour, 12 minutes, 13 seconds actually looking at in fact boxing it into pretty much a laptop size right now arrange so that you know we can just 1:12:20 1 hour, 12 minutes, 20 seconds take our laptop work into a customer site plug in and start playing from there so we are also so it's not that we are not thinking through that process 1:12:28 1 hour, 12 minutes, 28 seconds when we hit that roadblock of GPUs we are not going to not push our agents in the market because some people don't have the wherewithal to buy GPUs, right? 1:12:36 1 hour, 12 minutes, 36 seconds So I'm going to come you know around you will be challenged by the neuromorphic because neuromorphic is basically AI at age 1:12:45 1 hour, 12 minutes, 45 seconds we are actually working with sneak pe um I will look into what you're saying uh definitely but my point is that you 1:12:54 1 hour, 12 minutes, 54 seconds know it's a yeah it's a neural structure right so but my point is that we are not sitting 1:13:01 1 hour, 13 minutes, 1 second with the challenges we are actually you know breaking through it and seeing that can we Make our agent work on CPU. Can we do it on literally on a laptop? No. 1:13:10 1 hour, 13 minutes, 10 seconds AI agent with laptop is a traditional method of solving the problem. 1:13:16 1 hour, 13 minutes, 16 seconds If you want to innovative solution, you should look for new computing architecture like neuromorphic. 1:13:23 1 hour, 13 minutes, 23 seconds So we actually kind of do both. But I think to you know uh take it into market today with the infrastructure that is 1:13:32 1 hour, 13 minutes, 32 seconds available with Telos. Obviously they do not have this kind of computing because the way our but you are you are trying to put in a box now you are trying to put in your own box. 1:13:42 1 hour, 13 minutes, 42 seconds No no no but the reality of today is that our agent requires a certain IQ level and at that IQ level no agent 1:13:50 1 hour, 13 minutes, 50 seconds works on a CPU. So the fact that we are cracking it to make it work on a CPU which will kind of unblock this GPU 1:13:58 1 hour, 13 minutes, 58 seconds hardware challenge itself I think will be a big win for us especially if you want to realize revenue in the near term 1:14:05 1 hour, 14 minutes, 5 seconds because CPU is something our customers have access have procurement processes and so we can start actually rolling out 1:14:13 1 hour, 14 minutes, 13 seconds a lot more agents. So while we look for you know different architectures which we do but I think uh the reason why we 1:14:21 1 hour, 14 minutes, 21 seconds are going on CPUs primarily because it is something available and can be commercialized. 1:14:28 1 hour, 14 minutes, 28 seconds Neuromorphic is also available. There are companies who provide this hardware. 1:14:34 1 hour, 14 minutes, 34 seconds Okay. Uh I will actually ask my team to kind of look at it. Okay. Thank you. 1:14:42 1 hour, 14 minutes, 42 seconds Thanks. 1:14:45 1 hour, 14 minutes, 45 seconds Thank you sir. That would be the last question for the day. Now I hand over the floor to Miss Nishad for closing comments. 1:14:54 1 hour, 14 minutes, 54 seconds Um thank you for all the questions. I mean you know um again I think we have had a good year. Um like I said earlier we are looking to do better this year. 1:15:03 1 hour, 15 minutes, 3 seconds We are at least the team is very bullish on the year that's coming ahead. So thank you for staying with us. Um I'm hoping that you stick for the journey. I 1:15:12 1 hour, 15 minutes, 12 seconds would like I always think that you know the best days are still ahead of us. So thank you for your patience and your confidence and I look forward to 1:15:20 1 hour, 15 minutes, 20 seconds speaking to you again um during AGM and then after that you know in the investors. So thank you and we'll be in touch. Thank you. 1:15:31 1 hour, 15 minutes, 31 seconds Thank you ma'am ladies and gentlemen. 1:15:33 1 hour, 15 minutes, 33 seconds This concludes your conference for today. Thank you for your participation and for using dust sabas conference call service. You may disconnect your lines now. Thank and have a blessing day.