Datamatics Global Services Limited (DATAMATICS) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Dita Martins Global Services Ltd. Q3 FY26 Earnings Conference Call. 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 presentation concludes. Should you need assistance during the conference call, please take them on Operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Japta from EY for his opening remarks. Thank you and over to you, sir.

Thank you, Shruti. Good evening to all the participants in the call today, and welcome to Q3 FY26 earnings call of Datamatics Global Services Limited. The results and presentation have been already mailed to you, and it is also available on the website of Datamatics. Thanks. In case anyone has not received a copy of press release or presentation, please do write to us and we will be happy to send you all. To take us through the results today and to answer your questions, we have with us the top management of the company, represented by Rahul Kanodia, Vice Chairman and CEO, Ankush Akar, SVP and Chief Financial Officer, Mitul Mehta, EVP and Chief Marketing Officer. Rahul will start the call with brief overview I would like to remind you that anything that is said on this call, which gives any outlook for the future, or which can be construed as a forward-looking statement, must be viewed in conjunction with the risks and uncertainties that we face. These risks and uncertainties are included, but not limited to what we have mentioned in the prospectus filed with the SEBI and subsequent annual reports, which you can find on our website. With that said, I now hand over the call to Rahul, sir. Over to you, sir.

Thank you, Pradeek, and a good day, everyone, and thank you all for joining the Datamatics Quarter 3 FY26 earnings calls, and I wish you all a very Happy New Year. I will begin the call with sharing some key highlights from our quarterly performance, followed by Ankhush, who will take you through the financial update. We will then open the floor for Q&A sessions. Our total revenue for Q3 stood at 510.1 crores, giving us a revenue growth of 19.9% on our year-on-year basis and a 4.1% on a quarter-on-quarter basis. Our EBITDA for Q3 stood at Rs. 96.2 crores, giving us an EBITDA growth of 76.4% on a year-on-year basis and 8.3% on a quarter-on-quarter basis. We improved our EBITDA margin by 604 basis points year-on-year and 75 basis points quarter-on-quarter to 18.9%, driven by our focus on improving operational efficiencies and discipline cost optimization. I am happy to state that this is one of the best quarters from a revenue and EBITDA perspective. We recorded a quarter-on-quarter revenue growth across all three business segments. In digital technologies, we delivered a double-digit revenue growth and a sustained double-digit EBIT margin. Revenue in digital operations remained stable and EBIT margins improved to 18.1%. Digital experiences' performance remained soft, and as highlighted in the previous quarters, Two of our clients are transitioning their work to their captive centers. However, we continue to add new logos as well as expand our existing relationship across clients. Datamatics is investing decisively in enterprise AI. We are further democratizing AI across the organization. I am excited that we are rolling out Google Gemini enterprise across the organization, Empowering our teams to build intelligent agents, improve productivity, and drive innovation at scale. In partnership with Google, we have certified 200 employees on Gemini Enterprise in the past one month as phase one of this exercise. Additionally, we have built industry-specific AI solutions for insurance, banking, and logistics, enabling autonomous workflow orchestration, smarter decision-making, and enterprise-wide productivity at scale. This strengthens our AI-first culture and position's datematics for a sustainable growth and long-term value creation. Our continued focus on scaling strategic accounts, strengthening global delivery, and optimizing execution has further improved operating leverage and contributed to sustained margin improvement. With that, I will now hand over the call to our CFO, Mr. Amkush Akar. Amkush, over to you.

Thank you, Rahul. Welcome, everyone, and wishing you a very happy new year. Let me start with financial performance for the quarter 3 FI26, and then I will take you through the 9-month-ended December 2025 financial performance as well. Our quarter 3 FI26 revenue stood at Rs. 510.1 crore, reflecting a growth of 19.9% on year-on-year basis and 4.1% on quarter-on-quarter basis. Our sustained cost optimization efforts and enhanced operational efficiency helped us improve our EBITDA to Rs. 96.2 crore, a growth of 8.3% on quarter-on-quarter basis and 76.4% on year-on-year basis. Our EBITDA margin for the quarter stood at 18.9%, reflecting an improvement of 604 basis points on year-on-year basis and improvement of 75 basis points on quarter-on-quarter basis. Our EBIT for the quarter stood at Rs. 74.2 crore, which is up by 7.7% on quarter-on-quarter basis and 65.9% on year-on-year basis. Our EBIT margin was at 14.6%, reflecting an improvement of 404 basis points on year-on-year basis and improvement of 50 basis points on quarter-on-quarter basis. Changes in the new labor courts resulted in one-time increase of Rs. 40.3 crore in gratitude and leave-encashment life-free. This one-time increase was shown as impact on labor courts under exceptional item. Due to this impact, our PAT after non-controlling interest was at Rs. 36.4 crore, down by 42.5% on quarter-on-quarter basis. Our PAT margin stood at 7%. Excluding the one-time impact, our PAT would have been approximately 12.7%. Our EPS for the quarter stood at Rs. 6.16 per share. In terms of segments, digital technology's revenue for the quarter stood at Rs. 169.6 crore, which is up by 10.8% on quarter-on-quarter basis. Digital technology's EBIT margin was also at 10.8% for the quarter. Digital operations revenue for the quarter stood at Rs. 273.8 crore, which is up by 0.5% on quarter-on-quarter basis. Digital operations EBIT margin was at 18.1% for the quarter. Digital Experiences revenue stood at Rs 66.7 crore, which is up by 3.2% on a quarter-on-quarter basis. Digital Experiences EBIT margin was at 9.6% for the quarter. In terms of geographical footprint, U.S. remains our largest geography, with 52% of our business coming from here, followed by UK and Europe at 22%, India at 17%, and ROW at 9%. Our client concentration remains very healthy, with top 5, 10, and 20 clients contributing to 29%, 42%, and 55% respectively. Let me now take you through the performance for the 9-month ended December 2025. Our revenue stood at Rs. 1467.9 crore, reflecting a growth of 19.7% on year-on-year basis. Our EBITDA stood at Rs. 261 crore, a growth of 68.7% on year-on-year basis. Our EBITDA margin for the 9-month ended stood at 17.8%, reflecting an improvement of 516 basis points on year-on-year basis. Our EBIT for the period stood at 199.6 crore, which is up by 57.6% on year-on-year basis. Our EBIT margin was 13.6%, reflecting an improvement of 327 basis points on year-on-year basis. Our profit after tax, after non-controlling interest, was 150 crore, down by 6.3% on year-on-year basis. Our PACT margin stood at 9.9%. This decline was primarily due to one-time exceptional charge of Rs. 40.2 crore arising from changes in labor courts. In comparison, nine months ended December 2024, 160.2 crore, which also included an exceptional gain of 34.8 crore. Excluding exceptional item, profit before tax grew strongly by 39.8% on year-on-year basis. Our bill DSO was at 55 days as of December 2025. We continue to maintain a healthy balance sheet. As of December 2025, our net cash and investment, net of debt, stood at Rs 540.2 crore. Overall, we had a good quarter with strong financial performance. With this, I will now pass on the call to operator to open the floor for questions. Thank you for your patience and continued interest in Datamatic.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Dhanashree Zadha. Please proceed.

Good evening. Yeah, good evening, everyone.

Good evening.

Yeah, congrats on great set of numbers on operational side. Yeah, so my question is regarding the, how should we see the three revenue, I mean, the three segmental mix evolve in next couple of quarters? And also, if you can throw some light on digital experience, which has shown some decline in this quarter, whether it will recoup that degrowth, sorry, not degrowth, I mean, in terms of margins and overall growth going ahead. That is the first question. Second is, if you can throw some light on order booking and the nature of these that we have run this quarter, and pipeline, if you can give us some cues on how it is growing, and some cues on overall growth and margins going ahead.

So, on the digital experiences, I mentioned about two quarters earlier that we have two customers who are moving their work to the captives, and therefore you see the margins becoming a little softer and the growth not being as much. Q4 of this year, we will expect the full impact of that transition. From Q1 of next year, we'll see an upswing because we've signed several new logos, and they have much healthier margins as well. So we will see an upswing in digital experiences starting Q1 of next year. But Q4 will remain a little soft. On digital operations and digital technology, as you see, the numbers on digital technology has been quite robust, and I see that continuing for the next few quarters. I don't see a major challenge there. We have a healthy pipeline. On digital operations, there's a lot of transitioning happening on the AI side, so the margins are improving. The pipeline will also improve as we deliver these solutions for automating business processes. So, that's certainly going to be the driver going forward. Overall, I'm quite okay with the next year going ahead. Revenue by industry. That's not true. To your point in terms of the pipeline and the quarter, right now it's still fairly strong. In fact, we are seeing a little uptick on the pipeline, so that's good. I think the current uncertainties in the U.S. has become a state of normal in a way. Everybody knows, and everybody remains uncertain, so they've sort of taken it in the stride. Generally, the mood is improving. The velocity is still slow, but we see a slight upward trend. So, yeah, that's it.

Thank you. Before we take the next question, we would like to remind participants, you may press star and want to ask a question. The next question is on the line of Yajit Shah and Inverto. Please proceed.

Hi, sir. Congrats on a great set of numbers. Just had a question regarding the Google Gemini enterprise solutions that we have started to go on. Is this a big portion of our revenue? And also, what is the expected revenue mix from that?

So, we are implementing Google Gemini across the enterprise within Datamatic. So, every person will be powered with an AI tool in their hand. That should impact productivity, efficiency, and things like that. We are also integrating some of the Google technology into our AI solutions, which we are taking to the market. We've built authentic AI platforms for insurance, for logistics, for banks, and we've started taking that to market. The revenues will flow in the next few quarters. We've tested the solution right now, and the response has been quite promising from customers. But I think once we nail a few customers, or once we acquire a few customers in the next, say, three to four months, we will get a good visibility on what those revenues will look like. So the agenda of Google Enterprise is to get every person hands-on with AI technology in the company. Being an AI-first company, that becomes paramount. So far, the pockets of AI have been concentrated with a few people who are deep into the AI space, who are experts. But now we need to democratize this and make sure that every employee in the company is thinking AI first and is powered with an AI tool inside. So that's the agenda.

Great, great, sir. And one last question. Thank you. The labor code is back. Is this just for this quarter, or will we see any other small impacts

over the next quarter or the year? It is just for this quarter in the sense that there is a backlog because of the one-time hit with a retrospective effect. So, therefore, this quarter has taken a big hit. From the next quarter onwards, it will become a routine marginal increase in graduating. So, we expect something in the range of maybe 0.3, 0.4, 0.5, but thereabouts. We still have to do the math because all these regulations are not yet clear. They're still coming out with clarifications. So, we are keeping our eyes open and talking to the consultants who can advise us on that. So, but fundamentally, going forward, there will not be too much of an impact.

Great, great. Thank you, sir. Thank you.

Thank you. Participants who wishes to ask a question may press star and 1 on their touchstone telephone. Participants who wishes to ask a question may press star and 1 now. The next question is from the line of Grishma Shah from Envision Capital. Please proceed.

Good evening to the management team, and thanks for taking my question. I'm curious to know how is TNQ Tech doing? And, you know, till nine months, we have the benefit of integrating TNQ on a year-on-year basis. Therefore, the numbers look good. But if you had to exclude that and then look at the standalone business, if you could give us some idea as to how the business is done, that should be great.

So, TNQ is doing good. If you look at the – so, we are successfully integrating it very well into the company. So, overall, we've had a sequential quarter-on-quarter growth of 4%, as you see. So, that, of course, includes TNQ as well as the rest of Datamatics. So, the growth is not coming from the acquisition. Of course, we got a bump up because of 19% because of the acquisition for Q1, Q2, Q3. But if you see for the last two quarters, a sequential quarter growth has been 4% and above for this quarter as well as the previous one. So, I think we are doing quite well in terms of organic growth. And integration of TNQ. And they remain financially healthy. And so in that sense, it was a very good acquisition from a Dynamics perspective.

I mean, see, if you had to look at even sequential growth of 4%, I mean, if you could give us year-on-year, how has TNQ grown?

So I have the figure handy, but I know they've had a good growth. Their growth has been in line with the rest of Dynamics. So probably they are also doing it about, I don't have the figure exactly on hand, so I would be hesitant to give you a number. But maybe, you know, offline we can have a conversation and we can pull out those numbers or specifically take you.

Okay. And just transitioning to Captive Center for the Digital Experience Business Line, this has been going on since last December. If I remember correctly, the last December quarter was, you know, really a slow quarter for us. So, I mean, does it take like four quarters for the work to transition?

Yes, it depends on each customer's situation, but it could be between two, on the minimum it would be one quarter, at the maximum it would be four quarters. It depends on each situation. So, these are both very slow and steady, but this was something that was riding on the wall. So, it's good, it's good that it's been slow and steady, so therefore it does not

And for FY27, what does the outlook look like? Is it a flat year in terms of growth, or is it low single digits? What does it look like for you, given the deal pipeline that is in front of you?

Yeah, so we are looking at high single digits growth, and then, of course, occasionally we do look at M&A, so I'm not factoring M&A into this, but the high single digits is something that would be a decent number to look at.

Okay. And, I mean, is Gemini the first AI tool that we are implementing, or I believe we would have multiple other AI tools also that we were working on, right?

We worked with Lama from Facebook. We worked with Anthropic. We worked with Microsoft OpenAI, which is a big one, which is JGPT. We worked with Google as well. So we worked with multiple. We found that Gemini has an edge over most others on several fronts. So therefore, we've gone with Gemini across the board because we find that output to be much better. And the idea is to democratize it. So, really, the assistance that we're getting from Google to really train our people and, you know, empower all the employees. Having said that, in different pockets, we use different AI tools. So, not one tool is going to fit everything. So, somewhere we're using Anthropic, somewhere it's using OpenAI, but Gemini will be the dominant one. Having said that...

So, hi, this is Vitaliyar. So, you know, while we are using Gemini for, you know, internal productivity tools, while we are building solutions, while we are recommending classic cases to customers, we have capabilities across all the tools, you know, all the AI models which Raul mentioned, Bait, OpenAI, Microsoft OpenAI, Anthropic, Google, Lama. So, capability development is across, but then when we have to adopt one particular tool across the organization for the people, then that's when we decided to go ahead with Gemini, which suited more like us as an organization.

Having said that, we've also built our own small language models, and we've deployed those into technology, customer situations, because it requires that kind of a solution.

Okay. And will the growth from HDR be led by digital operations, or you think it will be across all the three segments?

It will be across all the three segments. I think technologies would probably be a leader, and you will see an uptick in experiences as well, but it will be across all three, largely.

Okay, and how is Dextara doing above company average growth?

Yeah, Dextara is doing very well. We've been able to very successfully cross-sell into the Datamanix customer base. We've got a very strong pipeline right now, and not only a strong pipeline, but also much larger deals compared to what Dextara had. So overall, quite optimistic about the way Dextara is planning out because of the cross-sell, the pipeline, and the resources that we're getting. And that allows us in our strategy of penetrating our existing accounts very well.

Okay. Fine. Thank you and good luck.

Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press star and want to ask a question. The next question is from the line of Pimbal Parikh from Suniti. Please proceed.

Good evening and thank you for giving me a chance. And congratulations on a great set of numbers. So my question was basically that during Q3, what was the spend on AI which we have written off, is my first question. And the other was to Raoul Bayh that, you know, in his earlier experience when he had said that, you know, most companies are just testing out AI. So what is the experience now? Are the companies warming up to give more projects?

Yeah, so to your question, our spend, I can't specifically say AI, but our spend on these transformation technologies is roughly 40 to 50 crores a year. Earlier, it was more in the product space where we are pivoting away from products investments and more into the AI investment. So basically, it's all in the investment space, right? So a little more investment. So we've reallocated our funds internally. So that investment continues. To your other question on, what was the other question? Testing. So the customers are testing these things. Right now, they started going into production. Also, we see some customers going into mainstream production. And not only that, we find some customers very open to adopting technology as the main platform on which they want to operate. So we started seeing that transition happen. As I mentioned in my address, there are a few solutions that we've built which we've showcased to customers. We've already piloted it, and the customers have loved the demos that we've seen. Not only demos, a proof of concept, actually. So now it's about cashing in on those opportunities and converting them into live transactions. But the hesitation that we used to see about a year ago seems to be waning, and we see them more open to adopting AI in the main operations of their business. So that's good news. And also the solutions that they've seen from Datamax, they've been extremely happy about what they've seen.

So, sir, do you expect this 50 crores to be spent every year, or do you expect that to taper down?

No, for right now, we will maintain that between 40 and 50 because we are doing a lot of, this whole area of technology is changing so fast and we need to keep abreast with that area. So, we will maintain it for some time, but we keep reviewing it every quarter just to see where we are going. So, as of now, it's there.

And we write off this as an expense in our books instead of capitalizing, right?

That is correct.

And sir, any other industries that we are now targeting? I believe last time was BFSI largely insurance. So any other industries that are we targeting?

Our footprint is large in manufacturing and education and publishing and BFSI. These are the three dominant ones. So I think that that will remain as they are. We are not looking at any new industry per se.

Okay, and your, you know, U.S. was kind of lukewarm. So, has things reversed then, or they're still lukewarm towards Indian?

They are still little, they're a little lukewarm more because of, I think, political reasons and political pressures, more than business. And I think that the overhang of the politics is still there. It's beginning to look up right now, so it is improving, because I think everybody is now very comfortable with the uncertainty that exists. Everybody is in the same boat, and they've been in this boat for quite a while. So I think that's the new normal, that it just remains uncertain. So generally, it's looking up, but there is still a political overhang, which we don't know which way to go.

Thank you very much, sir.

Thank you. The next question is from the line of Rahil from Sapphire Capital. Please proceed.

Good evening, sir. Can you hear me?

Yes, I can hear you.

So, sir, just picking up on the previous one for the U.S. market. So, it is still like a heavy chunk of our business, right? The 50% plus?

Yes, yes.

Okay, because this, you know, this scenario is, you know, ever going and not looking like it will settle in the near term. So are you trying to diversify and move away from the market or is it still, you know, reaping us good, good, good kind of contracts and business?

No, it's actually giving us good contacts in business. We're not looking at diversifying because between the U.S. and U.K., it pretty much covers 80% of the global outsourcing market. So if you're looking out elsewhere, you're looking at at best of action. Now, 20% is the rest of the world. Now, obviously, we can't go to some low-cost destinations like Africa and South America. We can't go to certain other countries which are non-English speaking, which are very different. So, therefore, really, that is the market, and we will continue to focus on it. I'm sure this current political headwind will wane out soon, and we are hoping that, you know, it at least reduces, if not goes away completely, and that should improve the mood amongst all customers. So, no, we're not looking at other geographies, but I was looking at it.

Also, there is, you know, our focus on our growing our existing customers. That is what one of the key growth strategies is, which is basically, again, distributed across the geography, which is US, Europe, and India, Middle East. So, I think that we have our hands full enough to plough there. Once the, you know, overall economic environment improves, I'm sure we will get some, you know, we'll see those in numbers.

So, is it fair to say that with the current customer base in the U.S. mainly, there is a lot of hope for the wallet share increase in that?

Absolutely, absolutely.

Which can, you know, let us sustain a good amount of growth for the coming years.

Yes, absolutely. You know, these are three large enterprises and we need to keep, you know, we need to mind them, we need to build more stronger relationships with them. I mean, that's what the strategy is, and we are gearing up. We have already geared up ourselves. Last year, we launched it, and we are seeing the fruits of that.

Right, got it. Secondly, so the Q3, this has impacted, you know, the labor court changes. Now, you think it's going to taper down and settle. When the next quarter on, which is quarter four, profitability will be, you know, inch up, right? And the same effect will not be there.

So, as highlighted, this is a one-time impact of the past liability which was there because of the change in the definition of wages. So, that impact is a one-time impact. Going forward, we don't see any material impact. There will be a minimal increase which will be there, but we don't expect any material impact of this now.

It was just a one-time legacy. That's the impact of the whole industry.

So, practically, the EBITDA margins, of course, not related to this labor co-impact, but I'm just in general asking, the EBITDA margins are sustainable? Because in quarter-unquote, we have been growing by a few basis points, and we closed with 19%. So, is this sustainable for quarters ahead?

Yeah, we will be sustaining the EBITDA margins. We continue to look at how we can keep our cost in control and keep growing. That's basically the key thing that we are looking at. So EBITDA will maintain the EBITDA margin and keep improving.

Okay, you're confident of that. And lastly, you said F527, you know, usually high single-digit growth. Now, are you being conservative there? Because in the last three quarters, year on year, you have grown around, you know, 18 to 20%. So why, as a company, we are not, you know, still guiding, coming ahead and guiding with, you know, a strong 20-20% plus growth for consolidated level?

No, sir, the growth that you see includes some degree of an acquisition, and therefore you see a bump-up. We'd rather be conservative because there's still a lot of uncertainty, partly thanks to the political situation, partly thanks to the disruption that AI can have, and therefore there's some degree of grayness there, and therefore this is the current outlook. Of course, as every quarter passes, we'll get better clarity, and I'm sure we'll have those conversations to see whether we need to change our estimations of future growth. But right now, this is what we're looking at. It is a little conservative, but it does include an M&A.

Yes, yes.

But the sequential growth, if you see, we've had for two quarters 4% and 4%. So it's been a very healthy, organic sequential growth.

Okay, okay. All right, sir. Thank you so much, and all the best.

Thank you.

Thank you. The next question is from the line of Sreenivasu from TIA. Please proceed.

Hi, sir. Thanks for the opportunity, and congratulations for the great set of two, three numbers. Is Datamatics clients asking you to be agents on top of the existing platforms like Microsoft, Google, Salesforce, or you have any A accelerators that you built by yourself, which is actually driving this?

So, we have a few accelerators that we are deploying. I earlier talked about agentic underwriting for Logitech, for banking, for insurance. We've built solutions around Microsoft Copilot. So, yes, we have built on top of existing platforms because we don't build a foundation model. The foundation model is from these large tech companies like Google and Microsoft, right? So, we've taken those as a platform. Now, when you build it on the customer's environment, you have to integrate it into the core systems. It cannot be a bolt-on sitting on top. So, therefore, customers are still testing that. They're not quite clear how to do that because there's a fear of data going outside the enterprise. So, that's the biggest fear. So our solutions are delivering good. Now, when it comes to building solutions for the customer, that is still surrounding because not every customer will allow you to touch the core systems. And AI will really work only when you can directly access data in their systems. But the point I made earlier was that customers are now maturing and coming to the terms of the fact that it's a good solution, it's a good thing to do, And therefore, more and more customers are sort of going down that path of putting it into the main systems.

So, compared to other IT service companies in India, so what data metrics actually having a differentiation in terms of agentic workflow orchestration or do you have AI-based automation or AI-based DX personalization? Where exactly is the strength of data metrics?

So we have got an agentic AI workflow built. We have a whole platform. We've trained several people. I think the key to this market is how fast you can move in the market. And we've had a good start. We've moved in fast. We've got a few very good customers. So that's really the key. Also, the benefit that we've been able to deliver is because we understand the business process services as well as the technology services, we're able to put them together very well and deliver the end result. Ultimately, the customer is looking at better parts are cheaper, and we have successfully delivered a return on investment to the customer. So, it's really an integrated IT and operations story that goes very well and the ability to deliver.

Okay. Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press star and mark to ask a question. The next question is from the line of Sanjot. I'm an investor. Please proceed.

Hello. Good evening. Am I audible? Yes. Congratulations on a good set of numbers in the tough market. I have two questions. One is like Q4 is generally a good quarter for data metrics. And you mentioned that digital experience is going to have some impact on the quarter. Is it going to be kind of, overall, it's going to be kind of a muted quarter compared to Q4, generally Q4. And second question is, yeah, you can answer the first one, please. Go ahead.

No, go ahead, please. Ask your second question.

Yeah, the second question is about on an employee side, like on a headcount side in Q3, have you added or any number of employees? What is the current employee count? And on a wage hike, is it already done for this financial year, or is it going to be happening in Q4? Yeah.

So on the employee count, we've not added too much more. It's more about augmenting it with AI and improving productivity and not really increasing headcount now. In terms of wage hike for this year, it's done. There's nothing happening this year. We already did a mid-year increment cycle. The next cycle will be probably next financial year, April, May time frame. On your first question, if you can just jog my memory on the first one, the digital experiences will have a little muted thing, but that, I think, it will pick up in Q1 of next year. So Q4 might be a little soft, but Q1 will pick up.

Actually, digital experience, business will pick up from the Q1, but in the Q4, it will be having some impact. And overall, the way Q4 generally is a higher quarter, it will be having a little impact on Q4. But other two businesses will be doing well.

Yes, Q4, see, so we have some cyclical business, and because of the growth in the non-cyclical business and the acquisition that we made, both Dexar as well as D&Q, the ratio of cyclicality has reduced. So we will see a spike in Q4, but it will not be as prominent as it has been in the past Because the other businesses, which are sort of larger and more stable, have grown. So, yes, we will see a spike, but not as steeper spike because the others are more stable.

All right. Thank you and all the best.

Thank you. Participants who wishes to ask a question, may press star and one now. Participants who wishes to ask a question, may press star and one now. The next question is from the line of Pimal from Suniti. Please proceed.

Hello again, sir. Just wanted to understand which industry is best as far as adopting AI, in your opinion, and what is your experience being?

So, the industries that are very heavy with information processing are the more likely ones. So, banking, finance, insurance are adopting it quite well. They have a concern on data security and data privacy, but outside of that concern, they are very, very open to the idea of using AI. They have issues with compliance, but compliance when you use it internally, that's a very important area to explore AI because AI can automate a lot of the manual paperwork that goes on in compliances. But since these industries are regulated, they need to be a little cautious. Industries that have been laggards, I would say, is publishing because they are very concerned about the IP rights of the authors, and they're concerned about AI violating the intellectual property rights of authors. So that's been a little slow. Technology industry has been good. Manufacturing is also because a lot of manufacturing goes into core brick-and-mortar kind of stuff, AI is a very different use case. So it's really BFSI and technology, which have been large ones. Education, publishing has been a little slow. Manufacturing has been kind of average. So this has been our experience so far. Logistics also is doing what? A decent amount, because logistics has a lot of information that they process, and that's where they use AI.

Thank you. Thank you, sir.

Thank you. Participants who wishes to ask a question, may press star and 1 now. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments. Over to you, sir.

Thank you, everyone, for being on this call with us, and thank you for your confidence in data management. I think we've had a good interaction today, and I look forward to meeting all of you in the next quarter. Wishing you once again a very happy new year, and we'll see you soon. Thank you again.

Thank you. On behalf of DataMatix Global Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.