Hinduja Global Solutions Limited (HGS) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, and a very warm welcome to the Q1 and FI 2027 earnings conference call of Hinduja Global Solutions Limited. From the senior management we have with us today, Mr. Vinkanesh Korla, Global Chief Executive Officer, HGS, Mr. Winsley Fernandes, Whole Time Director, HGS, and CEO of Next Digital Media Business, and Mr. Mahesh Kumar Neutalapati. Global Chief Financial Officer, HGS. As a reminder, all participant lines will be in the lesson-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. And now, at the conference, over to Mr. Anand Venukopal from AdFactors. Thank you, and over to you, sir.

Thank you, Nirav. Good evening, everyone. We welcome you to the Q1FI 2027 earnings call of Hinduja Global Solutions Limited. Before we begin, I would like to highlight that some of the statements made during today's call may be forward-looking in nature. These statements involve risks and uncertainties, including those related to the company's future financial and operational performance. Additionally, in the unlikely event of a call drop during the conference, we will ensure the call is reconnected at the earliest. I now invite Venkatesh sir to deliver the opening remarks. Over to you sir.

Thank you. Can you all hear me okay?

Yes, sir. Loud and clear.

Excellent. Good evening, everyone, and thank you for joining us. I'm Venkatesh Khodla, Global CEO of HGS. I'll start with a brief update on our overall performance for Q1, FI27, and then share some of the key developments that are shaping our growth. This quarter reflects a continued focus on execution, capability building, and positioning HGS for its next phase of growth. We are working through a planned transition with some legacy contracts, completing as expected, while newer engagements continue to wrap. Although the revenue contribution from these wins will build progressively over time, We are encouraged by the momentum we are seeing in areas such as AI-led transformation, digital modernization, platform services, and intelligent operations. We believe the portfolio we are building today is strategically stronger, more aligned to evolving client needs, and better position to drive sustainable growth. Moving on to the slide four, snapshot of HGS. Our revenue from operations stood at 1,050.4 crores, and total income was rupees 1,201.2 crores. Total EBITDA. 16.3 crores with EBITDA margins at 9.7%. Two things sit behind that number. First, the contracts running off are doing so on schedule as expected. Business replacing them carries a different profile. More technology content, more offshore delivery, and increasingly, commercials start to out. Impact on margins. Looking at business highlights for the quarter, during the quarter, We are seeing multiple AI embedded client engagements move forward. These are not just... Clients are looking at AI as part of real operating models, where the focus is on measurable outcomes. We added 19 new logos across CX and digital services, and eight clients in HRO and payroll. Encouraging because it shows continued client confidence in our capabilities, even in a cautious demand environment. However, many of these relationships are at an early stage, particularly within the OSS business, and we expect revenue contribution to build progressively as projects mature. Pipeline remains strong in areas such as agentic AI, process automation, contact center, digital modernization. We have also strengthened our focus on domain hiring, fractional advisors, and solutions building. to move deeper into specialized outcome lending agents. Another important development was the incorporation of HGS MENA IT Consulting LLC in Dubai. This will help us build technology and consulting capabilities across the MENA region and support our expansion strategy. We continue to see encouraging external validation of our strategy and execution. In Q1, we received recognition for our AI-led innovation and employee experience initiatives, while analyst firms, including Forrester, Overall, the quarter reflects a continued focus on discipline, execution, expansion. Let me now spend a few minutes on where we are headed. A few quarters. Sharpening our market position. The opportunity today expands well beyond traditional CX or digital operations. Clients are looking for partners who can bring together technology, data, AI, automation. This is to reimagine entire processes around these outcomes. It's far beyond efficiency. It creates stronger customer relationships, improves agility, and builds a competitive advantage that is difficult to replicate. So, clients are increasingly seeking... End-to-end transformation and translate technology investments into real business value. HGS is positioned well to win in the space and aspires to be a leader in helping businesses move from cost savings to revenue generation. Enterprises are moving AI panels to AI execution across industries. We are seeing AI adoption accelerate, but the conversation has clearly changed. Questions around ROI, business value, speed to value, governance, and scalability. This is very evident from my recent meetings with clients and prospects. We have always understood operations deeply. We understand workflows, customer journeys, compliance needs, and the complexity of execution and executing large transformation on a global scale. When that operational depth is combined with AI, automation, data, and platforms, the opportunity becomes much more powerful. So, our focus is very clear. We want to help clients move from AI pilots to AI execution. In other words, not just deploying technology, but ensuring that it delivers measurable business impact. Tuning. Business action. At the end of March 26, we introduced a sharper... As an intelligent experience as partner. Since then, our focus has been on translating that position into action across the business. In line with our new position, we have clarified our portfolio. This will enable us to convey our end-to-end capabilities and our proven expertise. A key part of this is Our 90-day proof-of-value model is designed to help clients go in with more clarity, move faster to outcomes, and scale with confidence. We believe this formula is a strong differentiator in the market, and it is resonating with customers. We are verticalizing into four buckets where we have real depth, BFSI, consumer products, and retail. Modifying what we know into reusable assets, vertical agent libraries, and packages. in our delivery talent and The brand manufacturing company was managing critical sales, production, inventory, and customer data across multiple SAP and non-SAP systems, making it difficult to get a unified view of operations. It just built a cloud-based analytics platform on Azure that brought these data sources together into a single view, enabling better planning, forecasting, and decision-making. The results were significant. 99% sales forecast accuracy, 70% inventory cost optimization, 95% production planning accuracy, and improved responsiveness. to customer demand. It's a strong example how data and analytics can translate into measurable business value. In closing, let me finish with what we are actually seeing within our business. We intend to move a growing share of our contract value. This is the single most important thing. Contracts we are winning carry technology content and offshore-weighted delivery. Time does not pay for it. to get reflected. The market is moving towards it. And I'm now going to hand over to Vince to talk about our...

Thank you, Venk. Thank you, Venk, for that. I hope you Someone confirmed? Yes, sir. Thank you. Thank you very much. Good evening, everyone, and thank you for joining us today. I'm going straight to slide 11, and to share with you all, it's actually been a very, very strong start to the fiscal on the broadband front, and there have been several key aspects and several key factors driving that. I'm going to actually start in the reverse, which is the third point. challenges on the digital television vertical front. As you all know, there are significant headwinds impacting the digital television or the linear TV business. And those are not just industry-wide in India, but also pretty much globally. And rather than, you know, kind of take them in our stride, we have taken it head on, and we focused instead on what would be the appropriate mitigation aspects. And if you look at the challenges that are facing the business, the DTV business, we've been able to mitigate them through a lot of aspects, not just broadband, but also cost optimization is as adjacent to innovative measures as important. So there have been a whole slew of innovative measures that we've rolled out, which is bundling broadband with DTV in certain markets, rolling out IPTV, and of course, cost optimization, which we will continue to focus on. I mean, that is something that, as a business, it is we are beholden to look under every rock and every crevice to figure out how to make the business more robust. That is on the DTV front. On the broadband front, Celeritix, which is the enterprise business of oil, as I mentioned in the last quarter, has been identified as one of the forward growth engines for the future, and we have been putting in a lot of... Efforts on that front. And we're quite pleased to let you all know that we've seen not just new prestigious logos being added in the last quarter, but also more importantly, and this is very important, we've been able to get in corporates for repeat orders. And repeat contracts are very, very critical because, and why are they significant? Because corporates... Number one, it reflects the faith they have in the services and the solutions of Celeretics, but more importantly, from a one OTT Entertainment Limited perspective, a repeat contract is a longer-duration contract, and that is something that gives us great comfort and confidence. The third point, and I'm going to spend some time on the next slide itself, If I'd request you to go to the next slide, I apologize. There's no number. Slide number 1213, actually, which says Project Ganga was launched on 9 June 2026. This is, in fact, this is not just for one OTT Entertainment Limited. This is a matter of great pride for the entire nation, because it's a very unique project that was flagged off by the Honourable Chief Minister of Uttar Pradesh, Sri Yogi Adityanadji, on the 9th of June, 2026. Thank you. In terms of digital inclusion also, as all of you know, has been one of the pillars for growth. What makes it really interesting, and I'm going to go to the next slide, which is an update on Project Ganga. The title says Project Ganga Update. We just launched this on 9th June 2026. And just to recap for everyone, this initiative focuses on empowering youth. We're looking to support the government of Uttar Pradesh with enabling about 8,000 to 10,000 entrepreneurs as the Nyaya Panchayat is a collective of gram panchayats to be developed into independent digital service providers with 50% of them being women. And this is a very important factor that we've been focusing on. And over the next two to three years, Project Ganga, which, as you know, is an acronym for Government Assisted Network for Growth and Advancement, will look to connect over 2 million, 20 lakh households with high-speed broadband. And you see the photographs on the right. Those are actual training that have been done. We have received about 2,000 applications on the Project Ganga portal and mobile app as of 4th August in terms of getting this report ready. And as of today, we're very proud that about 500 such applicants have been trained in business, operations, technology, and field services. So it has parameters for selection. And on the basis of that, we shortlist people in training that you look at those three are in Noida, Prayagaraj, and Lucknow. And of course, there's an online dedicated training system that we've developed, which is a Project Ganga LMS, Learning Management System. This has been developed and with a very clear focus, again, with guidance that, you know, people in the most remote areas who may have challenges of travel and making it to the cities or towns for training. We'll be able to access the online training modules and pass the, because there is a certification process, and be a part of the potential Project Ganga DSP growth. So that is on this slide, which says Project Ganga update. And I will, in the next meeting and the next quarter that we have, I will share with you KPIs. Key performance indices in terms of how many people have been not just trained, but also how many people their network have received their loan from the CMUR scheme, how many people have rolled out their networks, and how many customers they've onboarded. Because as you know, one OTT Entertainment and the broadband vertical of Hindusha Global Solutions is tasked with being the non- And our role is to handhold these potential DSPs or DSPs once they are operationalized, all the way up to helping them roll out their technology networks, as well as helping them market their services to customers and, you know, turn their business into turning into a DSP business. With that, I'm going to the next slide. And just before I go on to the KPIs, we've always been in the news for the right reasons, and we're quite happy. If you look at the news, in addition to the entire Project Ganga coverage, which is, you know, was significant, we've also been in the news in terms of our growth factor, in terms of what our strategy is, and all that, the investments that we've made, not just in people and technology, But also in processes and innovation and ideas like Project Ganga, of course. All of those have been able to kind of bestow, we've been bestowed with the best future-ready networks of the year. If you look at on slide 15 on the right-hand side, this is very critical because the award essentially cites our consistent innovation and technology. And the fact that we continue to leverage our vast partner-driven network. So it is not just building our own networks, but also leveraging our partner networks. Something that I've shared with you all in terms of the success of Celeritix. And as Venk was mentioning, we are... We are focusing and we are harnessing and enhancing the AGS global approach of harnessing the three A's, artificial intelligence, analytics, and automation. And a lot of our processes, a lot of our technology is being leveraged to build out an integrated connectivity mesh across the country. So this is something that we've been doing quite effectively. That's slide 15. And I'll take you to slide 16 now. This is something we monitor, as I mentioned to you, I think, literally on a daily basis, because this reflects truly the strength of a broadband company or the strength of a broadband network. The customer adoption of the customer adaptation to packages and upgrades and upselling. And if you look at the shift in customer mix on slide 16, pretty much high-speed adoption, right, which was barely... About a year and a half ago, already it's risen from about 11% last year at this time to 15% on an expanding subscriber base. So that is, if you look at the two pies up on the left-hand side, it talks about 101 Mbps to 200 Mbps, 8% and greater than 200, 3 Mbps. So that's 11% in Q1 last year. That has moved, if you look at the Q1, on the right-hand side to 15% in those two segments in this quarter. And the other thing that gives us also a lot of comfort and confidence is that customers are choosing higher base plans at the start. So that base plan of 10 to 30 Mbps, which is like an entry pack, the customers opting for it is reduced from 22% to 18%, and that bodes pretty well. Of course, the mid-band, which is 31 to 50 Mbps, that's pretty much stable at around 67%. But the 51 to 100 again has continued to move up. So, all in all, this gives us, for anyone tracking how, you know, future growth or future revenue structuring or future, how do I put it, future broadband offtake across the country, this is a great measure to show that... The package uptakes will continue to increase. People opt for better packages at the start, and this is, of course, aided by sustained upselling and rising data consumption. People are looking at so many more apps and other aspects. So, that is pretty much it from my side. Thank you all for listening patiently to me. With that, I'm going to hand over to my colleague, Mahesh Nathalapati, who is our global CFO. Mahesh, thank you, and if I can hand over to you, please. Thanks, Vince.

I hope I am loud and clear. Loud and clear.

Loud and clear, Mahesh.

Thank you. Good evening, everyone, and thank you very much for joining us. As you have heard from both Venk and Vince in their respective business updates, this has been a quarter of deliberate, disciplined execution across both sides of the business, sharpening our position as an intelligent experiences partner, adding around 19 new logos in CX and digital services, and eight in HRO and payroll, incorporating HGS MENA in Dubai, and building a strong pipeline in authentic AI and platform services. On the media side, as Swing mentioned, Project Ganga was launched in June by the Honorable Chief in Sudapath, Pradesh. CelerityX continued to add and renew and spice logos, and we have kept the digital television headwinds well mitigated through cost optimization strategies and initiatives that were put underway. What I will now take you through is the financial expressions of that agenda. The first quarter reflects A business that is holding its revenue-based study while we invest ahead of the curve in sales and solutioning and domain talent and in our AI capability to build. I will walk you through the consolidated performance, the balance sheet, and our revenue composition, and then close with how we see the year progressing. So turning to the numbers for the first quarter of FI27, the headline is Business Holding Its Revenue-Based Broadly Study. The profitability for the quarter absorbing the investments and planned phase out of a large client engagement and its related one-time costs, fairly in line with what Wink and Wins have just described. So let me take you all through it. I am on slide 19. Revenue from operations for the quarter stood at INR 1,050.4 crores, moderating around 3.2% sequentially. And marginally lower by 0.6% year on year. Total income was INR 1201.2 crores, down 4.3% sequentially, and up 1.2% year on year. The depreciation for the quarter is at INR 123.6 crores as compared to INR 134.9 crores in the previous quarter and INR 128.3 crores in the corresponding quarter last year. Interest cost has come down to INR 45.5 crores from INR 48.1 crores sequentially and INR 57.9 crores year-on-year, reflecting continued discipline on the debt book. Other income for the quarter is at... INR 150.8 crores as against INR 170.0 crores in the previous quarter and higher by around 15.1% on a year-on-year basis. Profit before taxes, before exceptional item is at negative INR 52.8 crores as compared to a positive of INR 14.1 crore in the previous quarter and negative 26.5 crore in the corresponding quarter of the previous year. There are no exceptional items this quarter, as against INR 4.8 crore in the previous quarter, relating to the new labor courts. Taxes for the quarter are at INR 13.5 crores, as against INR 22.9 crore in the previous quarter, and INR 19.9 crore year-on-year basis. The total pack for the quarter is at negative INR 66.3 crores. As compared to negative INR 13.6 crore in the previous quarter, and a positive INR 11.2 crore in the corresponding quarter last year. Noting that the year ago quarter included INR 57.5 crore from discontinued operations, which does not repeat in this quarter. Total EBITDA is at INR 116.3 crore, with a margin of 9.7%. As compared to 15.7% in the previous quarter and 13.5% year-on-year. On margins, let me clarify about the drivers. This is not compressed because of any demand or a delivery miss. Operating expenses have stayed broadly flat around 1,084.9% while revenue moderated. And the quarter also absorbed a one-time cost related to planned phase-out of a large client engagement. And also some front-loading of investments in sales, solutions, domain hiring, and our AI capability built, including agent tax and the 90-day POV model that Wank spoke to. Consistent with what we have said in our prior quarters, we view this as a one-time cost and investment phase absorption rather than any structural change in our earning power, and we expect operating leverage to return as volume normalizes and these investments. Moving on to slide 20, which is the balance sheet. Our balance sheet remains strong. Total assets to that INR 11,474 crores as of June 26 against 11,556.7 crores in March 26. And total equity is at 8,402.5 crores against 8,436.1 crores. Broadly stable through the quarter, other equity includes non-controlling interest of 111.3 crores. As of June 26 against 119.6 crores as of March 26. Gross treasury and cash surplus is INR 6605 crores against total borrowings of 1,279 crores, leaving a net treasury and cash surplus of INR 5,326 crores as compared to INR 5,346 crores at the end of March. Liquidity remains selling. Gearing ratios are comfortable, and working capital metrics are stable. Collection discipline continues to hold, and we are funding our growth initiatives, including Project Ganga, primarily through internal accruals. So now I am on slide 21. Revenue composition by source and vertical on a base of 1,050.4 crores. The left side shows revenue by source. So CX services accounts for 54% of operating revenue and digital and media services for 46%, consistent with the balance we have carried through FI26. The right side shows split by vertical. Tech, media, and telecom continues to be our largest vertical at 46% of the total revenue. CG and retail at 19%, BFSI at 17%, and public sector at 12%, primarily from the UK and Canada. Health and life sciences at 3%, and others at 4%. The direction here is deliberate. Our vertical mix has become more diversified compared with prior quarters, with lower dependence on our largest vertical and broader base across BFSI, retail, and public sectors. Which is exactly the portfolio rebalance we have committed at the start of FY27. Moving on to slide 22, revenue composition by origination and delivery. From an origination standpoint, India accounted for 40% of revenue for the quarter. U.S. 30%, U.K. 16%, with Australia, Canada, and others adding up to the balance 15%. From a delivery standpoint, India accounted for 40%, U.S. 20%, Philippines 15%, U.K. 14%, with Canada and others making up the remaining Thank you very much. Our delivery footprint remains well-diversified across geographies, giving us a benefit of both cost flexibility as well as resilience. A point I would like to underline, picking up from Bank's remarks, our investments in agentic AI, agent tax, and our platform portfolio are steadily moving from build phase to commercialization, with multiple AI-embedded client engagements now in progress. And a strong pipeline in authentic AI, contact center modernization, and platform services. There is a near-term margin absorption as we are going to scale up these capabilities. But the client pull we are seeing gives us confidence that this is a medium-term margin accretive and not the direct one. Looking ahead, we remain cautiously optimistic. Micro uncertainties and client prudence may persist in the near-term. And our first quarter reflects that. But with a stable revenue base, a strong balance sheet, a well-diversified portfolio, and a clear AI-like differentiation, we are positioned for a gradual improvement in both growth and margins through the year. Our priority remains sustainable, profitable growth with continued rigor on cost, productivity, and capital efficiencies. With that, I would like to end my presentation. Thank you once again for all of you for your continued trust and partnership. With that, I am handing it back to the moderator.

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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Wait for a moment while the question queue symbols. Participants, you may press star and 1 to ask the question. President of Bresha Shah from Shah Family Office, please go ahead. I request to unmute your line and proceed with your question. Good morning, everyone. No response, we move on to the next participant. Next question is from the line of Ankit Jain from Gravita Consulting. Please go ahead.

Yeah, good evening, all of you. Thank you for giving me this opportunity. Am I audible to all of you?

Yes, sir. Go ahead.

Yes, I just wanted to understand that we read in certain sections of the media that the Project Ganga is going to be on no profit, no loss sort of a situation. Just wanted to understand what margins are we anticipating in Project Ganga? Is it the normal pricing that we are doing, like we are doing in all of the cases, or will it be a subsidized program where we will be bearing the cost of the implementation?

If I may, take that. Mr. Jain, good evening. Can you hear me, sir?

Yes, I can hear you.

Yeah, yeah. So, in terms of Project Ganga, we are the enabler and the knowledge partner. So, from our perspective, obviously, our role expands right up to hand-holding and commissioning the partner. Your point is really valid in terms of what would be the broadband pricing, what would be the margins, and how the business would operate. Let me put it to you slightly differently. The idea is that because of the scale of over 2 million homes to be connected, there remains enough of traction. And just to share with you, it's already pretty much public knowledge in terms of the pricing that's going to be rolled out. The pricing is in line with the competition that is there in Uttar Pradesh today in terms of national competition as well as local. So pricing is not the competition. What we're supporting the State Transformation Commission and the Project Ganga team is to ensure the quality of service, because that is what the challenge is today. So from a perspective, when you look at it from a, and rightly you pointed out the no profit, no loss aspect, that is in terms of helping support the networks to roll out. But in terms of being a pure ISP providing broadband or providing internet services, It means very much what we're doing in all markets and what is currently prevalent in the state of Uttar Pradesh. I hope that was provided some level of clarity, Mr. Jain.

Yes, so this will not be a negative cash flow play in your view also, is it?

It is not a negative cash flow at all. That is the reason why we've looked at it for me in no profit, no loss perspective. Because one simple reason, the process, see, let me put it differently. The expertise that you're bringing are from in-house people. We already have the resources in-house. We already have the capabilities in-house. We already have the training team in-house. So from a perspective of hand-holding, we already have the resources, the capabilities, and the capacities. From an ISP perspective, that is a completely different game in terms of being able to help connect them and provide them the bandwidth. So yes, to your answer, absolutely. We agree with you.

Thank you.

Okay, do you have any follow-up question?

No, thank you so much.

Thank you very much. Parasamun, you may press star and want to ask a question. Next question is from the line of Anirudha Sharma from Akanth Investments. Please go ahead.

Hi, sir. Good evening. Am I audible?

Yes, go ahead.

Yeah, so my first question is that you added 19 new CX digital logos in Q1. So how should we think about the ramp-up for these clients, and when do you expect them to start contributing meaningfully to the revenue growth?

Can you hear me?

Yeah, yes.

Yeah, so typically, once we add new clients, it takes around six to eight months before you start seeing the benefits of that revenue and scale. Initially, it starts off as small. A small amount of work, around $150,000 to $300,000, and then eventually it scales up. In the first three months or so, there is actually...

So, my next question is that with the strong addition of the new logos, what do you see as the key factor limiting faster revenue growth right now? Is it the time taken for the clients to ramp up, or is it the deal size, or is it the growth in the existing business? It's a combination of both.

See, growth in existing business continues to exist. There are some deliberate wrappdowns, as I mentioned in my presentation, that will continue to happen, and we should be coming to an end of that before the end of this current fiscal year. There will be, as we add these new clients, they're going to have... They're smaller in size compared to the past clients, because with AI, the actual revenue size goes... Marginal is smaller than the past. But on the other hand, margin is higher. Therefore, we expect the higher margins. As far as the limiting factors, it is ramp-up. Essentially, it takes time to transition from the customer, get the training done, and get people done.

Okay, sir. Okay. So, one last question from my side. Do you expect the pace of new logo additions to remain strong through FY27, or was Q1 an unusual strong quarter in this regard?

I expect it to continue to stay strong. In fact, in the last quarter or the end of the last fiscal year, I did talk about we added approximately 78 or 79 new logos in the all of last. We are continuing to see the same. But all these logos do take time to generate revenue. You need to establish trust, you need to establish trust.

Okay, sir, understood, understood. So, thank you for the opportunity, sir. That's it from my side.

Participants, you may press star and one to ask a question. Next question is from the line of Prisha Shah from Shah Family Office. Please, go ahead.

Hello, am I audible?

Yes, thank you.

Hello. Hi, sir. Good evening. I have a couple of questions. So, starting with the, you know, the strong demand which you are seeing for a genetic AI and the APAs. So, are clients now moving from pilots to larger production departments and what would be the, you know, typical timeline for this particular transition to happen?

Customers badly want to move from pilots to production deployments. For sure, there is a demand for that. The question is, are they ready for it? And the challenge that we continue to see is not all customers are ready with the data story and the governance story related to move to that phase. Albeit the fact that there is high demand, there is also the challenge that the customer may not be 100% ready, or they have an understanding of what.

Definitely seeing a transition with And my other question would be, where do you see HGS having a sustainable edge in the AI, you know, given that the underlying technology is becoming increasingly commoditized these days. So, where do you see HGS in this particular scenario?

Actually, HGS benefits from this idea of underlying technology becoming commoditized. Because the underlying AI foundational models are getting commoditized, but applying the foundation models to a specific industry problem and a specific process re-engineering problem is something that is unique to that customer and that company, and that is where HGS stands out. HGS's history has always been helping customers re-engineer their process and running those processes effectively and efficiently. In the past, we did it with a huge number of talent and team members. Today, it is a hybrid of talent and AI technology that you're able to deliver that value to the customer. So I think as the foundation models become more commoditized, it actually benefits AGS because the cost of the foundation model goes down. Therefore, the customer will be willing to spend more time in really adopting the technology to their use. I hope that makes sense for you.

Understood, sir. Very well answered. So my last question would be how we as an investor measure the success of Agent X over the next, let's say, 12 to 18 months time in terms of the customers' deployments, revenue or expansion within the existing accounts, if you may answer that.

Yeah, I mean, as we look to the future, one of the big things that we're looking at is how many customers are using and how many contracts that we have have AI embedded in them. It is less about AI-specific revenue because technically every piece of work we should be doing in the future should have AI as a component of it. One of the things that we can potentially start looking at... Tracking is how much of the revenue is influenced by AI. That is something we can take it away as a question and see how we can measure that and report it out.

Okay, thank you, sir. Understood. That were all my questions. Thank you and all the best.

Participants, you may press star and 1 to ask the question. Next follow-up question is from the line of Anirudh Sharma from Ekanth Investments. Please, go ahead.

Yeah, hi, hi. I just had a few more follow-up questions from my side. So, I just wanted to know how has the new intelligent experience positioning changed the conversations you are having with clients compared with the traditional BPM CX offerings?

We are seeing a lot of traction and excitement with the clients related to the idea of intelligent experiences that are starting to translate into leads coming in, existing customers reaching out, both intrigued by what it means and also to understand how they can adopt it. It has created an excitement around the concept. From our perspective, AFRL and Intelligent Experience is actually taking the experience and making it contextual, making it data-driven, making it knowledge-enabled, with both human and AI team members working together. So as we look to the future, we think that this will continue to drive demand and drive value for our customers. Technology getting commoditized, as a previous caller was asking. What's happening is more and more of the large brands are seeing a risk to their own business where they can be disrupted with a small AI-enabled team that can come and disrupt their business. So the only competitive differentiator these large brands will be able to create for the future is customer loyalty and brand affinity by their consumers. We are seeing a lot of excitement.

Okay, understood, understood. So, sir, are you seeing larger or more integrated deals as a result of this positioning, and could this gradually improve the quality of HGS revenue mix?

Yes, we are seeing every new deal that we have closed recently has AI components enabled in it. Either it is reading to... Running the operation and process using AI as at least 20% to 30% of the work, eventually scaling to almost 60% to 70% is what we foresee, as the customers get more comfortable with AI performing the job. Or we are seeing scenarios where a customer wants to get into intelligent experiences leading into an additional project or additional work that is related to data and analytics. Because fundamentally, to get intelligent experiences going, you need to get your systems integrated, your data quality cleaned up, and data throughput figured out. And then on top of it, the governance before you can deliver any AI-driven experience. So we are seeing a lot of the footprint of the types of work becoming more multi-powered deals. As the time progresses, we expect this to drive higher revenues and higher margins to our business.

Okay, sir. Okay, so just one last question from my side. If we look at Fi27 as a whole, where do you see the biggest acceleration coming from? Is it from the existing client expansion or is it new logos or is it AI digital or is it broadband?

I think the largest expansion growth driver is in the AI digital space. But as always, existing clients drive growth because establishing a new client, gaining the credibility with that client and driving growth from that takes time. So existing clients believing in the new concept of intelligent experiences and starting to adopt AI and digital technology for their needs is where the growth is going to come from in FR27.

Okay, sir. That's it from my side. Thank you for answering my question, sir.

Thank you very much. Ladies and gentlemen, we'll take that as a last question. Over to the management for closing remarks.

Mayesh, would you like to go first, and then Ven can go last to close everything. Yeah, I mean, sorry. No, no, no, no problem. Maybe you want to go first, and then I'll go, and then Ben can do the honors of closing.

Sure, sure. So, thank you, everyone, for joining us and airing us out what are our plans and how this water has been spanned. So, as I mentioned earlier, we remain cautiously optimistic with micro uncertainties. And, of course, the client prudence, where clients are waiting, how AI is going to span out and what kind of... Contributions that is going to get in. So, there is certain kind of a prudence from a client's perspective and which are the first quarter results also fairly reflects that. But as I mentioned earlier, our priority remains sustainable, profitable growth with continued rigor and cost, productivity, and capital efficiencies. So, thank you once again for your continued trust and partnerships.

Good evening, everyone, again. This is Vin Slayer. I'd just like to summarize, like I started the presentation on the digital media business, that it's been a strong quarter for the media business, especially in terms of the broadband vertical. We're very excited. With Project Ganga, Government Assisted Network for Growth and Advancement, this has entered the execution of the operational mode in quarter two, and at the end of quarter two, obviously, we'll be in a much better and a completely different position in terms of reporting. So that is something that is right at the top of our agenda, supporting the government of Uttar Pradesh in its digital inclusion, digital transformation, and social initiative plan. That goes without saying. Secondly, we're very happy that Celeritix has continued. And we will continue to invest in building this enterprise vertical. We're seeing more and more corporates across the country looking to engage with a single-window service company catering to the portfolio that are looking at the portfolio that Celeritix has. And the fact is that Celeritix, as I mentioned, is also looking, well, I probably didn't, is looking to build in more products. The challenge for us remains on the digital television front, and we will continue to work on mitigation strategies, whether it be innovation or whether it be cost optimization, those will remain ongoing to ensure that we continue to build a strong business over the next few quarters in the years to come. With that, thank you very much, and over to my colleague, Weng, for his closing remarks.

Everyone, thank you so much for taking the time to be on this call and listening to the progress of our business and where we are heading. I am very optimistic, albeit the caution about the macroeconomic situations and the changes happening in the market. We think that we are very well positioned for capturing the future opportunities that are there and continuing to grow. Thank you so much for being here.

Thank you very much. On behalf of Hinduja Global Solutions Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

Thank you. Thank you, everyone. Thank you very much.