3i Infotech Limited (3IINFOLTD) Q4 2026 Earnings Call Transcript

We are waiting for a few other attendees and we'll start in two minutes. Ladies and gentlemen, good day, and welcome to the 3i Infotech Waterfall F526 earnings call. Before we begin, a few quick announcements for the attendees. Anything said on this call which reflects outlook for the future or which could be construed as a forward-looking statement may involve risk and uncertainties. Such statements or comments are not guarantees of future performance, and actual results may differ from those statements. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the opening remarks conclude. If you wish to ask a question, please use the raise hand feature available on your Zoom dashboard. We will announce your name on the call and unmute your line, post which you can proceed with your questions. Please note that this conference is being recorded. To take us through the results today and to answer your questions, we have the top management of 3i InfoTech Ltd., represented by Mr. Raj Ahuja, Group CEO, and Mr. Kalpesh Shah, CFO. Mr. Ahuja will start the call with business update. After that, we will open the floor for Q&A session. With that said, I will now hand over the call to Mr. Ahuja. Over to you, sir.

Thanks, Sukanshi. Good afternoon, everyone. And thank you for joining us on the Q4FA26 earnings call. After a brief pause in our investor engagements, I am pleased to reconnect with you all today. Over this period of last one year, our focus was on restructuring the organization. Strengthening our structure and building foundation for the next phase of growth. We deliberately chose to return to this forum once we have meaningful progress to share, and I believe today reflects that progress. The structure of my communication is simple. I will begin with the financial highlights of quarter four and full year FY26, followed by business updates across all three lines of businesses. A progress report on the key strategic initiatives, and finally, our outlook on priorities for FY27, followed by Q&A sessions at the end. Financial performances start with. For quarter 4, FY26, we reported a revenue of Rs. 175.7 crore, reflecting sequential growth of 2.1% increase from Rs. 172.1 crore in quarter 3, FY26. EBITDA increased to Rs. 12 crore in FY26 from 11.4 crore in quarter 3, FY26, reflecting a 5.9% quarter-on-quarter growth. Gross margins increase, percentage increase to 12.6% in quarter 4 FA26 compared to 10.8% in quarter 3 FA26, marking our sixth consecutive quarter of PAD profitability. This trajectory reflects disciplined execution and sustains efforts of the entire team at CREA Infotech. For the full year FA26, the revenue stood at Rs. 693.3 crore. As I address our investors today, I want to acknowledge that revenue remained largely range-bound through most of the year, particularly quarter 1 to quarter 3, reflecting a period of measured business momentum across key segments. Despite this, AAA Business Vertical continued to anchor the business through strong client renewals, new logo additions, and a CEO-led approach across application modernization, analytics, ERP, and AI-driven solutions. Infrastructure-based services delivered stable margins, strong account retention, and growth across cloud, cybersecurity, hybrid infrastructure, and AI-driven operations, while also expanding dedicated COE capabilities. BPS is undergoing a strategic repositioning from an India-focused BFSI model to a digital-first AI-led transformation business targeting new geographies and sectors. Across the organization, AI is now being embedded horizontally to drive scalability, productivity, and long-term growth. Meanwhile, in terms of geographical footprint, the U.S. emerged as AI's Infotech's largest market, accounting for 49% of the total revenue in FY26, with revenue in the region growing by 19% year-on-year. India accounted for 40% of the total revenue. For the full financial year, the company reported EBITDA of Rs.72 crore in FY26. This is against Rs.47 crore in FY25, registering a robust 53.3% year-on-year growth. Reflecting enhanced operational efficiency, the company's EBITDA margin improved to 10.4% in FY26 compared to 6.5% in FY25. We continue to maintain a debt-free balance sheet. Our DSO performance also has shown consistent improvement from 65 days in FY25 to 55 days in FY26, reflecting strong working capital discipline across the organization. Not only that, but our voluntary attrition rate also has been dropping consistently from 11.8% in quarter four of FY25 to 7.3% in quarter four FY26, which is a reflection of the stability, culture, and commitment that we have built within the organization and something we take immense pride in as a team. The successful completion of the right situation in FY26 marked a key milestone in strengthening the company's financial position and future growth readiness. The proceeds are being utilized to strengthen working capital and support strategic business growth and operational initiatives. The two legacy items, which are the eMudra and the Realtor Matters, they are progressing well. In the eMudra matter, statements were recorded during quarter 4 of FY26, while in the real-time matter, the arbitration panel has been constituted and a statement of claim has been filed. The company will continue to pursue both these matters towards a positive outcome. Coming to our first line of business, AAA. It stands for Application Automation and Analytics, continues to remain the anchor of our business, contributing approximately 71% of total revenues. We achieved a 90% renewal rate, added 60 new logos, reflecting the strength of our client relationships and the sustained relevance of our capabilities in the market. Our CIE-led approach with AI embedded across practices is strengthening our positioning and creating stronger differentiation in client engagements and strategic conversations. Coming to infrastructure services, the business delivered a contribution of 20% of total revenues for the year, supported by a healthy 98% renewal rate across keys accounts. In FY26, we added nine new logos and expanded large accounts across infrastructure management, data center modernization, hybrid cloud, and AI-driven operations. We have implemented continuous improvements programs across key engagements, helping streamline operations, enhance technology, and deliver measurable value to our clients. We have also started building dedicated COE capabilities across cloud, cybersecurity, AIOps, and digital workspace solutions by structured go-to-market initiative across India, US, and Middle East. Our focus still remains formally on the cloud opportunities, growing data center and growth ecosystem, cybersecurity, and managed services in India and global markets, and we are moving ahead with confidence and positive momentum. Turning to BPS, this is the segment where we believe the maximum transformation opportunity exists. The business closed the year at 9% of the total revenue for the year with 10 new logos. This revenue was below our internal expectations due to structural headwinds. We have been servicing mainly BFSI customers in India in this segment. This business model has been under stress due to regular changes and tightening of outsourcing guidelines across BFSI regulators, and also due to more automation and AI initiatives across processes, especially customer onboarding and servicing. However, the strategy for this business has now fundamentally evolved. We are no longer positioning ourselves only as an India-focused BFSI BPS player. Our focus is actively expanding towards opportunity in the US and Middle East, while also diversifying into sectors such as finance, HR, manufacturing, healthcare, retail, telco, and government. The larger objective is to reposition 3i as a global, digital-first, AI-led transformation BPS partner. Execution is already underway through the rollout of the COEs, supported by a dedicated delivery and sales team. While the revenue of these initiatives may take a few quarters to reflect, I believe the foundation work is being built in the right direction. Most importantly, AI enablement is now becoming horizontal across the organization rather than practice-specific. We are embedding AI into delivery frameworks, operational processes, and client solutions, which we believe will progressively drive higher scalability, improved productivity, and stronger margin performance over time. Several strategic initiatives undertaken in FY26 that may not yet be fully reflected in the revenue line, but are expected to play a significant role in FY27. A key milestone was the formal internal launch of our COE framework across all three business lines in December 2025, creating scalable revenue-generating and margin-accurative delivery models to be fully operational by the end of Q2 FY27. On the business front, we have further strengthened our leadership team across India, Middle East, and U.S., with key additions spanning business leadership, business development, pre-sales partnerships, and AI ML capabilities, enhancing our sales and pre-sales capabilities, and a shopper KRA-driven accountability framework. These appointments significantly enhance our execution, strength, and deepen our domain expertise across markets, while reinforcing our focus on driving growth, strengthening client engagement, and scaling emerging technology capabilities, including AI-led transformation. Our U.S. subsidiary has been onboarded into the SAP partnership ecosystem with a focus on SAP Cloud ERP solutions, which will help us to enhance value to our customers. We will leverage SAP Technologies Framework to strengthen our service delivery capabilities and accelerate outcome for clients across industries, particularly in areas of enterprise resource planning, Tata-driven decision-making, and cloud adoption. While we are still in the process of filling up some critical senior positions, under my direct leadership, this strengthens new leadership. Our new leadership bench will be instrumental in accelerating our next phase of growth as we move into F527. We're also building strategic OEM and technology partnerships across AI, IoT, and cybersecurity for joint go-to-market. Importantly, these are already operational, and we have begun publishing other wins to the exchanges to improve visibility and business momentum. Geographically, India and the U.S. continue to remain our core markets while the Middle East has emerged as a key growth focus under dedicated new regional leadership. We are also evaluating expansion opportunities in Canada and East Africa to start with. In parallel, Entity Restructuring Initiative including U.S. Restructuring, KSA and Netherlands closure and the India merger are progressing steadily. Supported by strong governance frameworks and structure reporting mechanism across the organization. On leadership and governance, both the board and management structure has evolved structurally over the last year, creating a stronger and more stable leadership framework in place with succession planning and review, with deeper operating expertise, clear accountability, and better alignments across strategic priorities, creating a stronger foundation for execution as we scale into the next phase of growth. This was all about the past one year. Now, as we head into FY27, profitability is no longer the question for us, as we have already established a more consistent profitability trajectory. Our focus now is formally on accelerating revenue growth while maintaining margin discipline. Our FI27 strategy is structured around six pillars, six P pillars, people, process, productivity, platform, partnering, and profitability, each driven through defined ownership, timelines, and review mechanisms. This is the most structured operating plan we have created till date, and I am personally driving execution against it. While our strong presence in the BFSI sector continues to remain a key growth driver, we are also witnessing increasing traction across sectors like healthcare, retail, manufacturing, education, energy, and government as further strengthening our growth outlook as well. On the revenue front, we expect a meaningful step up in FY27 driven by stronger sales execution, COE-led deal momentum, expansion across U.S. and Middle East, and gradual impact of our PPS repositioning from quarter two onwards. While we are not providing a specific number at this stage, we remain confident that FY27 will be a growth year for 3i, backed by a significantly stronger foundation that we have built over the last two years now. In summary, FY26 was a year of building strong foundation and was not about any one business or function. As we move forward, our COE-led approach, combined with AI-driven capabilities and new edge technologies, will play a critical role in how we differentiate ourselves in this market. It is about how we operate collectively as an organization. I also believe the leadership team structure is stronger and better aligned for execution. As we step into FH27, we do so with greater confidence, stronger execution capability, and a clear vision for the road ahead. I would personally like to thank our shareholders, clients, partners, and all the employees of 3i for their continued trust and commitment. I also want to acknowledge our long-standing investors who have remained supportive throughout the journey. Your faith in the company is deeply valued. Thank you once again. I will now hand it back to the moderator for the Q&A session.

Thank you very much. We will now begin the question and answer session. Attendees can raise their hands. Our first question comes from the line of Santha Kumaran. Please go ahead.

Hello.

Hello. Am I audible?

Yes, you are.

Thank you for the opportunity. And congratulations for turning six consecutive quarters of profitability. I have about four questions. Shall I ask them all together or one by one? Hello.

You can ask all the questions at one shot, and then I'll reply to them.

Okay, thank you. Mr. Raj, your vision is the company should be a billion-dollar entity by 2030. But the current pace of the company and the declared order wins does not point towards that direction. Our order wins are just 2 to 3 crores and like that. So when can we see an actual order bins of minimum, at least 15, 20 crores, and whenever, when we can hear that, and when are we going to be going towards in the direction of your declared mission? That is my first question. Secondly, We are hearing the company has lost, especially in the BPS division, a number of marquee customers, those who are with the company for a very long time and very large accounts you lost. That is what the whisper in the outsource. So, what is the fact and how are you going to offset that? Thirdly, our contingent liabilities stand at more than 230 crores. That is nearly 60% of our total market cap. What percentage of this is realistically going to be expected to crystallize in the actual debt in financial year 27? And when can we do this legacy issues of Railtel, eMudra, and recently you also just published something about some tax demand from one of your subsidiaries, all these kinds of... Suspense or just surprises keep coming up. When can we just leave them all behind and go on a normal path towards your vision? My fourth question, we are a totally shareholder retail, shareholder driven company. There is no promoter. 85% of shareholders are normal investors like me and others. Not a single director or even the management has got the so-called skin in the game. Shouldn't the board have a director's qualification that you must have these minutes of shares, then only you can be considered to be the post of director? Shouldn't the board should come up with that kind of a mandate? And for you, since you are saying that financial aid 27 is going to be so profitable, and we are on the path towards the directions, so shouldn't the senior management also demonstrate to the market by buying from the market a considerable amount of shares and showing your confidence? Can we expect something like that to going to happen in this financial aid 27? My final question is about the EPS. We are a company, we are keep giving the EPS, this thing, and it is the shareholders holding value is keep decreasing. I can understand the longstanding employees must be. A remunerator. But even I just saw one resolution that is even people who have got a grading of one, which is actually an income pool, he should be authorized to be getting 50% of vesting rights. So just while the shareholder's value is reducing like that, is there any plan to go for a repurchase of the shares so that the value can be maintained? These are my questions. Thank you.

Thank you, Mr. Santha. First of all, thanks for acknowledging the profitability, six quarters. So we need wishes of all our well wishes to continue this journey over a longer period of time. Coming to your first question on the billion dollar target, the vision which we have set. And how we are going to achieve it, knowing that in FY26, we actually have a degrowth and we stand a little lower than where we stood around a year back when we fixed up the vision of 2030. The Vision 2030 framework we shared of roughly tripling our revenues by FY25 base, by FY30, this remains our directional ambition. So we are not changing that at all at this stage. It's a medium-term aspiration and not a fixed year-on-year guidance given to the market. What has changed is not the direction, but the sequencing. At FY25 and FY26, we have been focusing much on cleaning up the portfolio, exiting a lot of low margin work, and stabilizing profitability. That has been a strategy which I had communicated even in the last call as a long-term strategy for us. We wanted a very healthy revenue pipeline and a healthy revenue base, and that's what we have been doing by replacing the low margin deals with the equivalent high margins or a better margin deals over a period of time. This has created a very stronger and a more focused base to grow from now. As we move towards FY27, the focus has shifted more meaningfully now to execution and scaling our core growth engines, while the base has already been set. We will not recalibrate the aspiration at this stage at all. We will continue to let performance and visibility from the new bookings and pipelines guide how the trajectory evolves over a period of time. I am with you that all the new winnings what you have seen, they are of the smaller values, in the range of around 2 crore to 5 crore, with a couple of them exceeding 5 crores. But that's only a beginning. We have seen this growth happen. This is not the growth we have seen in the first few quarters where we were struggling for building up a healthy sales funnel and then growing on top of it. Now we have started converting the funnel into the orders, and this is just a beginning. I don't want to make anything public as yet, but there are some new deals which is almost closed, and you will also hear about those deals in the next few days and weeks to come. Your second question on the BPS weakness, you're right, and we have also made it public in our couple of messages earlier that India BPS has been facing headwinds over the last few quarters, which is driven largely by regulatory-led insourcing BFSI clients. And that has contributed to year-on-year decline seen in FI26. We conscientiously did not chase low-quality volumes in line with our strategy to exit low-margin work. We have lost some good accounts there. Sorry. We have lost some good accounts there. And the reason for that is... The outsourcing policies of our regulators, which is forcing the clients to look for a vendor replacement every three to five years period. So, and on top of it, the whole AI journey which the customers have started, especially in the customer servicing and customer operations, that has also led to the decrease in the BPS business. One of the major reasons why BPS business we are not able to scale is that we have always been focused on Indian market and BFSI market. We have not grown beyond these two markets. From here, the focus is on the stabilization and selective rebuilding through a clear approach, strategically pivoting to automation-led, domain-rich, BPS, where we can improve realizations. We are planning to expand into Tier 3 or Tier 4 locations to improve cost and retention strategies, and selectively growing in the higher-value markets such as US and Midwest. I have also mentioned that we are also looking for processes outside BFSI, which includes finance, HR, operations, manufacturing. We are also planning to expand into those markets. So that will take care of two problems. One, two, three, four, five, six, seven, seven, seven, seven, seven, seven, seven, seven, seven, From India, we are now planning to expand into the U.S. and Middle East market, and initially interactions are good. We already closed a couple of deals over there, though they are very small beginnings, but we have already closed three deals in the last one quarter, smaller deals in U.S. and one in Middle East. And we will continue to focus on those markets. Second is that we have also started building up the COE around non-BFSI processes, which includes finance, HR, administration, operations, and other things. While some residual churn in legacy contracts cannot be ruled out, we believe the bulk of the reset has been done in the BPS, and BPS is now expected to be a more stable and higher quality contributor to the growth, and it will be in a more measurable way. On the contingent liability side, Yes, we have roughly around 200 crore of contingent liabilities, and most of them are from the legacy tax issues what we have over a period of time. We have been closing one by one, whatever we can. In the last one year, we have participated in the VSP scheme. We closed a lot of those contingent liabilities. We also closed some of those old tax litigations. We have made it public also as a part of our press release that we had closed one old service tax issue, which could have resulted into almost 60-plus crore, 70-plus crore kind of exposure, which we have closed it at around 5.5 crore of final closure after the Supreme Court intervention. And that has already been provided in FY26 financials. And we will continue to negotiate and discuss on the penalty or interest waivers around that. This is an ongoing journey. I think contingent reliability, yes, for our scale and size, the number is high. But I think there have been a legacy of almost the last 20 years where a lot of issues have been opened up. And we are trying to close one by one whatever we can close. I'm not expecting any major hit as of now, at least based on our current visibility. I'm not expecting any huge hit to come in FY27 out of this contingent reliability to occur. Coming to the legacy items, the question is more on that. You keep hearing about the Railtel, eMudra, tax demand of U.S. While we understand that Railtel and eMudra are very two specific litigations or disputes what we have going through, and we have been... Making it very much like aware to the public as there is any development happening because both are critical in terms of value and the goodwill of the company. The tax demand from U.S. is one of the routine tax demands, which normally, post any assessment, you have to go through, there will be an order, like in India also it happens, there will be an order, you go through litigation, and you go through the procedures, there might be some final demand coming up, which will get provided in the respective quarter as it gets finalized. That's a routine process in, like, say, any text assessment, though the value is huge, but we are not expecting as of now, and we are obviously having, we are going to fight about that with the authorities. Coming to Realtel and Emudra, like we have been declaring, those are the two things which have been open for a long time, and it will continue to be open for a reasonably long time, I can tell you that, because both are in the matters of subject jurists, and I will not be able to comment more than that, whatever we made public, but since it is both are litigation matters, one with the government authority, another one of a strong magnitude, They will go through their own long-term litigation, in my opinion, unless we can negotiate some kind of arbitration or settlement from the parties, which obviously, as and when it is done, will make it public. So, other than these two things, there's nothing open from the past legacy matters, except for the new things will keep coming, which is more on the routine business tax and other matters. On the ESOPs that you have mentioned about the promoters not having a skin in the game, I recognize that the capital structure, what we have, after the 2021 restructuring, which was done, and after the 64 quotes right issue, which we did in FY26, the share base, the share capital base has been very high, almost 200 core plus. And number of shareholders are also huge. On top of it, our profits are not sufficient for doing any kind of a dividend at this stage. As the business stabilizes and it will generate consistent free cash flows, the board will obviously evaluate capital return options, including dividends, and if required, repurchase of shares to bring back the share capital to reasonable levels. But in the near term, I don't think we are planning to distribute or return any capital at this stage. In the near term, value creation will primarily come from reinvestment of the profits into the high return growth areas rather than the distribution. I also understand your concern on the ESOPs being given to the employees. One, I would like to tell you very clearly that ESOPs are, our approach is very, very tightly governed. They are only used as a retention strategy and alignment tool for the critical talent. We are not done a very broad-based ESOP compensation mechanism. It is only given to the leadership above a particular level. And the approved pool is managed conservatively, and we're not expecting any huge dilation to happen to the overall capital, knowing the base of the capital, what we have. With respect to the change what we have proposed, I don't know. I think you have not read that circular properly. For the persons rating 1 and 2, we are not planning to give any swap. So that continues to be 0%. So the moment the person is rated 1 or 2, his allocation becomes 0. It is only the rated three, which is in our parlance is known as met the plan criteria, met the objectives or KRAs of the individual. Only in that case, we are upgrading it from 75% to 100%. Earlier, it was if you're meeting your plan, you were given 75%. We are making it more rational by if you're achieved your plan, you should get 100% of the allocation. That's what the thought process has been. But on top of it, we have also ensured to amend the scheme for making it to four-year scheme instead of a three-year scheme, which is obviously against the employees, but in favor of taking the ESOP as a targeted retention strategy and not just an award or compensation strategy. I hope I was able to give answers to most of your questions. Let me know if I missed out anything in this.

Thank you, Mr. Aja Huja. You addressed almost everything, and all the best for your future endeavors. You left one issue, which if you can address, that is the board members and the senior management to buy shares from the market to show the direction and the confidence, to increase the confidence.

Sure. As of now, most of our board members are independent directors, and so they are not obligated or they are not forced to buy any shares from the market because they should remain independent and they should not have a skin in the game. For the management, I agree. As of now, the management is getting shares only through ESOP schemes. I don't think there are many management members who is buying from the market and holding shares. Yes, but your point taken, I think I'll put it to our analysis committee of the board and see like if we can have some kind of a, not forced, we cannot force anybody, but can we have some kind of a guidance or a suggestion to increase skin in the game from the directors or management side.

Okay, thank you. All the very best.

Thank you, sir.

Thank you very much. Before we move on to the next question, there's something I'd like to add. Please keep the questions limited to two and fall back in the queue so that we can give everyone a chance since we are short in time. Next question comes from the line of Sanjot Khare. You can now speak.

Yeah, can you hear me? Yes, we can.

Yes, we can.

Yeah, yeah. Good afternoon, Raj, and congratulations on another quarter of Positive Pat. My question is about the different revenues growing, you know, it is lower speed, and you already mentioned that you're working on it. The profit for the Q4 is mainly, I mean, is including operating income as well as other income, and because of the other income, I think it has really helped in getting a positive path. So my question is, now, as things are under control or already the plan is there, are we going to see, when are we going to see? Operating income is going to be more than the expenses. I mean, that will help in getting up that, as well as the gold, what you have said, like about 3,000 crore by 2030, which is almost four times of the revenue, 3.5 to four times. So as we have to go step by step, are we seeing that at least for the FY27, can we grow at least by 20%?

Okay. Thanks, Sanjot. First of all, coming to the operating income versus other income. I know that in the financial, audited financial, we have this line called other income. But when you see the details of that other income, we personally, internally, we don't treat that as other income coming from somewhere outside the operations. Most part of our other income consists of something which is related to business, and I'll explain to you. Though it is because of the accounting principles, it is shown as part of the other income and not part of the operating income. The biggest item in this is the foreign exchange gain or loss. I personally feel, and the management also and board also personally feel that forex is a part of the business. So it is not something which is outside the business. This is not about we are having foreign investments or some legacy assets and liabilities, which we are revaluing and the profit of that is coming into the P&L. For us, it's an extended arm of our revenue, which is 49% is coming from US, and the revaluation of all that operating assets comes into the other income, which technically is operating income for us. And then we also have, we can always say that, okay, interest is out, interest, we are not counting it as operating income. That's coming mostly from the FTS and also. Most part of the operating income comes from either, other income comes from either the accounting treatments like AS accounting standards accounting or it comes from the forex gain. The maximum amount, actually, if I see roughly 60% to 70% of the other income is coming from operating operations and not coming from just accounting of other incomes like your income tax or income tax refunds or interest incomes or grants, those are excluded out of this. So I still personally feel that once you see when we release the retail financial, you should see the breakup of the other income and try to see we are already profitable from an operating income point of view also, and not just because of other income. Sorry, what was your second question? Second question was, I think, a repeat of the earlier things. One is that it's not 3,000, it's 2030. So the target is 2030 by 2030, which is roughly three times. FY27, yes, internal plans are very aggressive. We have done a couple of investments in building capabilities and bringing the leadership team and our execution team below them in the last six months post the right issue. Funds were received. We started doing the basic investments into capability building, the whole COE formation, and so many other things. And we should start seeing some results in the quarter one and quarter two of this year. I'm not putting a number. You asked me a number. I'm not putting a number as of now because we don't give any forward guidance. But yes, the internal growth aspirations are much higher and which should take us to the tower goal of 2030 by 2030. We are not changing that goal. We are continuing with that goal and all our internal calculations are moving in that direction already.

Thank you, Raj, for the clarification. And this last question is about in the shareholding pattern, it has observed that NVCON systems has acquired more than 1.5% of this equity of 3i InfoTech. And I'm sure in this quarter, they might have acquired more as the price has gone up. So I just want to understand, is there any working relationship or any strategic partnership or things going on with this NVCON systems?

So we also realize because we keep getting those weekly reports and we keep observing if there is any major movement happening in the shareholding pattern. And yes, you are right. Enricon has acquired roughly around now. Sorry. 1.5% shareholding, which was done, I think, over a period of two or three months in quarter four. And after that, they have not been adding. I think they have been stable at that level for the last, I think, four weeks or so. Actually, they have sold off a little bit, very small portion of their equity. They've sold also in the last two weeks, I think, once the rates were up. To tell you frankly, I've been in touch with the promoter of Envicon. I have spoken to him after we realized that to see whether there is any kind of a relationship possible to leverage on the synergies of the two businesses because they are into the similar kind of business. But I realized that I think they are looking at this investment more from a financial investment and not a strategic investment. And we continue to wait and watch on their next thing because since they are doing a financial investment, so we are also not aggressively partnering with them as of now. And their operations in India are also very limited. They are mostly Europe-based delivery operations.

So, yeah, thank you. Thank you. And may I ask this last question?

Sure. Go ahead.

Yeah, just last question is about the eMudra, as you already mentioned, things are going on. And in eMudra conference call, like this Q4 conference call, it was mentioned by their chairman that they are in touch with 3i Infotech, and they are not receiving any information, received any information in last quarter, as well as they have sent a legal notice to 3i Infotech. So that's just some comment has made into their conference call. So I just wanted to give that information. I'm sure like you may be aware of it, but I just want to give you an idea. And anything like it's progressing, which will be benefiting 3i InfoTech.

So, we are also aware, we keep noticing what information they are taking to public. As of now, we are not in direct touch with them at all. They have sent us a legal notice, and internally, the board is discussing how the legal notice to be responded to, because the matter is already subject to this. We have already filed a complaint, and the statements and all are being recorded. So at this point of time, the legal notice doesn't carry any sense. Frankly, knowing the legal process, since the matter is already with the authorities, I would not like to comment beyond it. And the legal notice, once the matter is already with the authorities, doesn't make any sense to us. But we are still talking to our lawyers and trying to see what is the best way to handle it. From our side, we are not in direct touch with the management as of now.

All right. Thank you. Thank you, Raj, and you guys are doing a great work, really brought back the company on good operational performance. Wishing you all the best for A527.

Thank you, Sanjot. Thank you.

Thank you very much. It's a request to please keep your questions limited to two so that everybody can get a chance. Our next question comes from the line of Rishi A. You can now speak, so.

Yeah, hi, have I been audible? Yes, I see. Hi. First of all, thank you for giving me the opportunity. I'll just quickly shoot my questions across. See, revenue has declined considerably. Cash loss is 50 CR. Operating loss is also 50 CR after excluding forex gain and COVID subsidy from US. Auditor has qualified report. They have not covered 85%, which seems to be a severe violation. As per market rumors, we also hear ICSA Securities and IDFC has been lost, yearly revenue of nearly 80 CR. This is not informed to the stock exchange, which again seems to be a CBA violation. The management has kind of wiped out 200 crores cash in three years. Grass margin is only 12%. It looks like a flipping business. When all the parameters are bad, the admin expenses have gone up by 30%. With these, you are projecting 2030 by 2030. Is it just a big imagination and only wishful thinking? Please provide answers to these questions.

Sure. Thanks, Rishi. I think if you see from an independent point of view, a lot of these points are factual statements, and there is no disagreement to some of those things. But each of those points you have to see in isolation and then see why they are there in the current form. Let's talk about cash loss. We have raised the rights issue, the equity capital, because we were into the working capital cycle issues. And once the funds were raised for the working capital, obviously, it will result into usage of those funds for the working capital, which includes paying to our vendors and employers in time, which was not happening till around whatever, nine months back. There was a delay of almost five to six months to the payment of vendor and paying salary delays. And also all this has been corrected in the current year, which has resulted into over usage of cash to bring vendors and employees in line with the payment terms, which we have agreed to. And so the cash loss is not only this year cash loss, but it is the accumulation of the few years of non-payments to the vendors and employees in time. And that's what it resulted into cash loss. And that is linked to the other point on the 200 crore, like in the last year, and I'm assuming you're talking about a period between 22 to 21 to 24, when the previous management was in place. And I'm assuming, I'm sure like, say, if your investor or any investor before that would have asked that kind of question to that time management that why there is a loss and board was still okay. But having said that, so I'm not going to get into the past that why there was a 200 crore loss. That was all done by 24 when we booked a huge loss and write-ups in 24. And 25-26 is when the new management, the new board is taken over and then we have corrected most of the things. I've already explained operating loss. I think you are reading it without other income. And internally, when we review our own performances, we include certain things like forex gain and loss, both sides, loss and gain. We take it as a part of our operations only, though accounting-wise, it comes under other income. I have also mentioned about revenue degrowth. Revenue degrowth was part of our strategies. For the last, I think, three calls, whenever I've been there, we have been making it clear that the previous management has got into a lot of this low margin loss making deals, zero margin deals, which we are trying to correct. And then we had told the market in the beginning of the year itself that there will be a degrowth this year. And this is not a surprise or an unknown fact to anybody. We have said that in very clear terms that there will be degrowth because we want to exit loss-making and zero margin deals or loss-making deals. We are internally, I've already mentioned about 2030 by 2030. It's not a dream. Yes, it is a stretch, it is a wish, it is a far off target. But we have worked a lot in the last 24 months on creating an execution plan, putting everything in place, cleaning up all the legacy issues. Getting the funding done through rights issue and so many other things we have done to set the base right. So that we can do a quick start from here onwards. And I think we are ready now. Yes, we have lost some of the couple of accounts. I don't want to mention client's name because they are under confidentiality agreements. But I can tell you very clearly that it is not that we have lost those contracts. We had the contracts valid only till a particular date, and they are still there. As on 31st March, both the contracts are still valid. They will go over the period of the next few months. And they are part of the routine vendor, what do you say, vendor. The churning, the vendor churning and guidelines of RBI and SEBI and so many other regulatory authorities. And we are very clear and we have been in touch with the highest authorities over there. They are not the loss of clients, they are loss of contracts, which means that we are still talking to them and we will still come back to them. With the other contracts and other revenue opportunities within those companies, they have churned because there is a regulatory guideline to keep churning the vendors every three to five years based on the evaluation and the risk assessment of the risk appetite of those companies. But it is not that the relationship has been finished. The relationship continues to be on. It is not a delivery issue. It is not a service quality issue. It is purely driven by the regulatory guidelines, which has led to these contract closures. And they are not contract lost. You mentioned about SEBI. They are not the contracts lost. Their period had ended. The contract was for a particular period. The period has ended its own natural period. So, as per guidelines, there is no need to report if the contract is ending as per the contract terms. Only the cancellations or any, like, like if there's a dispute with the customer, those only gets. These are part of the ordinary business. It's like when we say that 90% of the business or 98% of the business gets renewed. This is the part of the balanced 10% which doesn't get renewed. And this is normal for us. We keep losing some business. We keep winning some other business. Good part, as far as I'm concerned, we have not lost the client. The relationship is still on. And we are still talking about some other projects with them, with the same client. The fact is that we also got almost 80 plus logos in this year. So for us, winning logos and losing some businesses is part of our routine business. So I'm not concerned. Yes, they were big account. I'm not trying to underplay here. Those are big accounts. The number you mentioned are like on a higher side, but a little lower than that. Yes, that's a loss. But I'm not concerned as of now.

Hello. Yes. Another quick question, sir. In the 80 plus logos that you're talking about, what would be the amount that we'll be winning? Yeah.

Okay, the total order value against these 80 accounts is roughly around 80 crores, 77 to be precise. It's around 77 crores of the new business. But some of these accounts, at least like say 10 of these accounts has a huge potential. And like this is only an initial, like I was giving example of the BPO business, we got three clients over there in US. They all started to experiment with us. They started with five seats and 10 seats. But there is a potential to go up to 100 plus seats over there. Well, we started with one client, which we made it public, also make it public because we have not mentioned the name. We started with the initial understanding of around 70 FTE equivalent IT services, and we are already now ramping up to around 130. So initial order booking was 77 crore for these 80 clients, but all of them has a huge potential to grow as long as we continue to deliver well.

Yeah, also quickly on the qualified report, we don't see a coverage of 88%.

Yeah, no, no. So requirement is 80% and we are fully compliant. So there is no qualification on this topic. I don't know from where you were reading that. The SEBI requirement is 80%, we are covering 80%. That check has been there from the beginning. We have never defaulted on any of the compliances or SEBI guidelines in this regard. Yes, there are qualifications which we've explained. There are a couple of qualifications which are all pertaining to legacy opening balances and all. There is no new qualification which has come in this year. The old legacy, because there are some losses booked in some of those subsidiaries, which is making it a long-term business sustainability issue for those branches, which is the legacy issue. And then we are evaluating and we continue to take actions to bring them back to the track. But there is nothing new which has got added this year on the qualification side also.

Thank you.

Thanks a lot for the responses, Mr. Raj. Thank you.

Thank you very much. Please take a note that the questions in the chat will not be addressed. It's a request to get in the queue. Our next question will be coming from the line of Sanjeev Padra. Sir, you can now speak.

Thank you so much, ma'am, for giving the opportunity to speak, and first of all, I would like to congratulate the whole team of 3i Infotech. Thank you so much, Mr. Hoja, for addressing the investors. I would like to say that your arrival was a big hope for all of us, and still we are hoping it will be a turnaround story. Now, I have two questions. It comes from annual operating plan. I mean, your targets or execution. What were the exact AOP targets for FY2526 across revenue, EBITDA, net profit, new client acquisition, EPS growth, AAA growth, large deal wins? And which of these targets were achieved and which were missed? If targets were missed, what were the primary reasons? And were these external market issues or because of the internal execution failures? What are the corrective actions for these all? Can you please guide on this, sir?

Okay. Thanks, Sanjeev. On the annual operating plan, since we don't, since the annual operating plan is not in the public domain, I can only tell you the categories rather than sharing the exact numbers. We have missed revenue targets for sure. So our target was to show a net almost stable numbers or a little higher than the stable numbers of the FY25 numbers. But we have obviously not grown to that extent. And so that's the missed target. Profitability, we have actually overachieved. So, and we have overachieved because of our control on a lot of costs, what we have done. Despite the revenue being down, we have improved on our operating margins as well as reduced costs. Just to tell the team here that U.S. tax refunded NL were also planned as a part of this one. So that's not a windfall gain for us. That was part of the NL operating plan. So on profitability, EBITDA, as well as PAT, we have done better than our internal plan. We don't have a separate target for last deal wins, but the one thing which we have failed is the growth part, which anyway, I've just said as a top line heading, but the new order booking has been weak. And that is mainly because of the weak sales team, which we corrected in the last four or five months now, which since I have taken over directly that role, we have reworked on the whole team. We've got new leaders, the second-line leaders in the team. We are re-establishing the whole sales framework. We've got some consultants to help us in setting up the sales processes, the sales funnel creation, the reviews, and selling techniques, and everything. So we have got some work done over there in the last four or five months. We have got the new leadership team in the Middle East. You would have seen the press releases, Jagdish has joined us, the old hand, Middle East, strong person, and then the initial signs are very, very positive as of now. We have started looking at expansion into East Africa and Canada. We have got one person each looking at the sales of those at this location. We built up a sales team in US while we continue to build sales team in India. And then we continue to fill up those gaps of the leadership as we go forward. So in Asia-Pacific, Thailand has been one of the things where we said we'll grow. We have not grown, again, the same revenue issue, but there also the things are in better shape now in the last one quarter where we have got the new salesperson or two new salespeople here and the initial things are good. So it's a mix of bag. I will not say that we have achieved all our objectives. I think we couldn't achieve many of them. Some of them were more execution issues, like sales. We took a little longer time than we were expecting to set up the team and then build up the funnel. I think it took more than what we were expecting. And part of that was also because of not being able to attract the talent in the first six months of the year because of our cash flow issues and delay in salaries. So that was the issue of attracting good talent, which got corrected. But I think there's still some little bit of... Hangover over there of the old cash flows still. So, a mix of things. I don't think that we have got impacted largely because of any external things. U.S., small impact, but that's business as usual. I'm not seeing that. Some of the government contracts which we were doing was big contracts for us. That got into a little bit hibernation because of the government policies and funding issues in U.S. for the government departments and projects. But in Middle East, in the last two months, there have been a little bit of a headwind because of whatever is happening in Middle East. But we have not seen much of the ground level impact. Again, I will call it as more of ordinary business issues. As of now, business is still going on. It is not growing the way because of the people being a little bit cautious of whatever is happening in the US and Middle East. We don't have any presence in Russia's side, so we're not concerned with Russia, Ukraine, whatever has happened. But overall, I think economic conditions, people have been in little backseat to delay decisions and not take aggressive calls, and that has impacted. But I think that's the business cycle which we have to live with anyway.

Okay. Okay. I have one more small question if you allow me to ask.

Sure.

May I, ma'am? Sure. Sir, what would normalized profitability look like excluding forex gains, ERTC grant income, and one-time adjustments? Can you please throw some light on this as well?

To tell you, frankly, We have given a guidance. We have given a vision. We said that we will be at a higher single-digit profitability numbers by 2030. We are much lesser than that, for sure, as of now, roughly around, if you exclude that U.S. grant, I think we are at roughly around 4% number, EBITDA, and we want to take that 4% EBITDA levels to our internal target is to take it to around early teens, which is 13-14%, and parat levels of higher single digit, which is around, say, 8-9%, 10% levels. That has been the guidance as per the vision, and we still stand by with that number.

Thank you very much. Due to time constraint, this would be our last question. I would like to hand over the call to Mr. Ahuja now for the closing remarks.

Okay. Once again, I think I'd like to repeat that I'm very, very thankful to the investors who has given me this opportunity to, like I think one of you said, the turnaround story. So I'll be happy that it actually turns out to be a turnaround story and I will be happy to lead this story for the market. Thank you once again, everybody. And thanks for your wishes for the good FY27. And we'll keep connecting. I think this time we'll do it a little more often. Last year, we took a little break. But this year, we are planning to do quarterly calls as we were doing it earlier. And we'll catch up once again in the next quarter. Thank you, everybody.

Thank you very much. You can reach out to the Investor Relations team, NNM NextGen Advisory at research at the rate cocagood.com for questions. On behalf of 3i Infotech Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.