Excelsoft Technologies Limited (EXCELSOFT) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Q1FY27 Conference Call of ExcelSoft Technologies Ltd. As a reminder, all participants 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 the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sharma from AdFactors PR. Thank you, and over to you, sir.

Thank you, Yusuf. Good afternoon, everyone. Welcome to the Q1 FY27 earnings conference call of Excel Soft Technologies Ltd. Today, from the management side, we have with us Mr. Dhadamjai Sudhanwa, Chairman and Managing Director, Mr. Dorai Swami, Pallani Swami, Chief Executive Officer. Mr. Prashant, HM, Chief Strategy Officer and Head Investor Relations, Mr. Poonwacha Paruvangata, Chief Financial Officer, Mr. Ardars, SMS, Chief Innovation Officer, and also the AdFactors IA team. We will begin the call with the opening remarks from the management, after which we shall open the forum for the Q&A session. I must remind you that this conference may include forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the management as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand over the conference to Mr. Dejandre Sudhanwa for his opening remarks. Thank you, and over to you, sir.

Thank you very much for this opportunity. Good morning, good afternoon to everybody who's joined the call. It's a pleasure to address you today and share our performance for the first quarter of FY27. I would like to thank our shareholders, customers, employees, and all our stakeholders for their continued trust and support to us. We have begun FY27 on a strong note, delivering robust revenue growth while continuing to invest strategically in capabilities that will strengthen our competitive position over the long term. Our performance reflects the strength of our differentiated business model, the confidence our global customers place in us, and the commitment of our teams across geographies. At ExcelSoft, our mission remains clear to enable organizations worldwide to transform learning and assessment through technology, domain expertise, and AI-driven innovation. As education, workforce, skilling, and professional certification ecosystems continue to rapidly digitize, We believe the demand for secure, scalable, and intelligent assessment solutions, including high-stakes testing solutions, will expand. The demand for both the digital assessment and the high-stakes testing will improve in demand globally. So, these systems that we have to deliver or expect it to be highly secure, scalable, and intelligent to ensure that there are no defects, no errors. In fact, some of our customers insist that even one defect is not accepted. So, zero defect deployments are what. We are expected to deliver. Our solutions will continue to expand, creating significant opportunities for specialized technology providers, such as Rex and Soft. Strategic priorities, our growth strategy continues to be guided by core priorities, expanding our global market presence. Over the last several quarters, we have invested meaningfully in strengthening our Global Things organization and establishing a stronger local presence in strategic markets, particularly the United States and the United Kingdom. By hiring new resources into our team in these geographies, and while we continue to look for new talent, because being close to the customer gives us an extra advantage. I am pleased to share that these investments are now translating into tangible business outcomes. During the quarter, We expanded our customer-based clients, strengthened our qualified sales pipeline, and improved customer engagement across multiple regions. Our enhanced near-shore presence, near-shore and near-client presence has enabled us to engage more closely with customers and partners. To accelerate decision-making and participate in larger and higher value opportunities. These developments reinforce our confidence that our international expansion strategy is beginning to generate sustainable long-term returns, increasing wallet share with existing customers. While acquiring new customers remains an important objective, and we will see later in the presentation the type of customers that we have acquired in the last quarter, we also continue to see significant opportunities with our existing plant space. Many of our existing plants are large. Global, and we, their spend on use of technology in education and assessments and testing is also increasing. Our wallet share at this point in time can actually be increased quite a lot. So, if our relationship management are being close to the customer, differentiated product offerings, we believe, will help us get a bigger wallet share of our existing customers. This approach has led to healthy order inflows during the quarter, particularly in platform-led engagements with higher strategic value. Our near-shore delivery teams have further strengthened customer relationships by improving responsiveness, increasing collaboration, and providing quick turnaround when customer requires support, and identifying new opportunities across existing customers. Proximity to customer accounts also helps us identify New opportunities that comes up with these customer accounts fairly early in the cycle, which is a big time advantage for us. As a result, we continue to expand our share of customer spending while reinforcing our position as a prospective long-term technology player. Alongside the next topic, I will be talking about pursuing... Disciplined inorganic growth. Alongside organic expansion, we continue to evaluate selective acquisition opportunities in both the United States and India. In the United States, our focus is on acquiring specialized assessment technologies and complementary product capabilities that can strengthen our Existing portfolio, accelerate innovation, and provide access to new customer segments. And the additional advantage is if we are able to acquire US customers, we also get access to their customers. And we can add value to the overall business by bringing in our strong technology capabilities. In India, we see a compelling long-term opportunity driven by rapid digitization across education testing and workforce development. We are evaluating opportunities that can strengthen our domestic experience and position Excelsoft to benefit from this structural market expansion. Importantly, our healthy balance sheet provides us with the financial flexibility to pursue these opportunities while maintaining a disciplined and a shareholder-focused capital allocation framework. Accelerating AI-led innovation, artificial intelligence is rapidly becoming a strategic differentiator across our business. In many ways, I personally believe it is inevitable that our company and our business has to be AI-first and build AI-native applications. We are doing that quite rapidly. AI is helping us improve productivity, enhance solution capabilities, and compete for opportunities that... We were previously beyond our reach. We are embedding AI across our products, delivery platforms, and internal operations to create measurable value for customers while improving execution efficiency. Looking ahead, we plan to introduce several AI-powered products and solutions. including offerings targeted at the mid-market segment. We believe these innovations will significantly expand our addressable market while reinforcing Excelsoft's leadership in digital learning and assessment technologies. The market opportunity. The long-term fundamentals of our industry remain extremely Attractive governments, universities, certification bodies, publishers, and enterprises are increasingly adopting digital-first learning and assessment platforms. The growth emphasis on online exams, lifelong learning, workforce reskilling. And AI-enabled education continues to expand global Global addressable market. Our robust deal pipeline and the quality of ongoing customer engagements provide us with confidence that this demand environment will continue to support sustainable growth over the coming years. I will now talk about key strategic engagements. One of the important milestones during the quarter has been the continued progress on our engagement with AQA. AQA is possibly one of the largest examination authorities globally, delivering billions of exams, GCSE exams, term after term. We have an engagement already signed with AQA. The work is in progress on the e-marking platform and we will talk about it more. And we are very pleased that the client has liked the modules that we have delivered so far and is currently being piloted. Implementation is progressing well, customer feedback has been encouraging, and we remain confident that the program will scale significantly as it moves towards full deployment. We are doing it in a phased approach, and the numbers will now only increase as the pilots and phased deployments have been successful. Beyond its revenue potential, this engagement further strengthens access of credentials in delivering large-scale, mission-critical digital assessment infrastructure for global customers, including in India. We had an opportunity in India to deliver high-stakes, highly secure, large assessments, highly scalable assessments. We are now in a position to, one, have done that before, and two, to be able to provide a solution. Looking ahead, as we move through FY27, our priorities remain unchanged. We continue to invest in our technology platforms, expand internationally, deepen customer relationships, accelerate AI innovation, and pursue disciplined organic growth opportunities. While these investments may create short-term cost failures, they are designed to build a stronger, more scalable business, capable of delivering sustainable and profitable long-term growth. We remain confident in our strategy, optimistic about the opportunities ahead, and committed to creating lasting value for our customers, employers. Shareholders, all stakeholders, actually. Before I hand over to our CEO, Mr. Doreswami, I am pleased to share that our board has approved the appointment of Mr. Poonachah Kuruvangada as the Chief Finance Officer of Excelsior. With over 30 years of rich experience in finance, strategy, and corporate leadership, Unacha brings deep expertise in driving financial excellence. Thank you very much for listening to me patiently. Now, I hand over to Doreswami. Thank you very much. Doreswami, it's on to you.

Thank you, sir. And, good afternoon, everyone. I'm pleased to provide an overview of our operational performance, customer engagements, strategic initiatives for the first quarter of FY27. We delivered another quarter of strong revenue growth driven primarily by continued momentum in our education technology services business and the sustained demand across our assessment solutions portfolio. More importantly, the investments we have made over the past few quarters are beginning to translate into measurable business outcomes. Near-store strategy delivering strong early results. One of our most significant strategic initiatives has been the expansion of our near-shore delivery capabilities in key international markets. This initiative has exceeded our initial expectations. During the quarter, our near-shore operations generated approximately 10 crore of revenue while delivering a substantial improvement in gross margin from single digit levels at inception to approximately 26% during the quarter. Equally increasing is the visibility we now have into future business. We have already secured nearly 40 crore of revenue from these engagements for the current financial year, providing us with greater confidence in the sustainability of this growth trajectory. As the business continues to scale, we expect gross margins from our near-shore operations to improve further, potentially reaching The 35 to 41 range over time. This improvement will be given by higher operating leverage, improved resource utilization, and more favorable on-site offshore delivery means. Beyond the financial contribution, our nearshore present has strengthened our strategy position. It enables closer collaboration with customers, cost per exhibition, deeper account penetration, and... Significantly, it improves our ability to compete for larger and more complex engagements. Increasingly, the customers, particularly in the United States and Europe, are looking for partners with strong local engagement capabilities alongside global delivery excellence. Our investment position is also soft to meet these evolving customer expectations. Let me get on to the understanding of the marketing profile. Many investors will notice a modest contraction in EBITDA margins during the quarter. It is important to view this in the context of deliberate investments made to support long-term growth rather than any deterioration in the underlying business. Three key factors impacted margins during the quarter. First, We continued investing in our near-store delivery organization. While these teams initially operated on lower utilization levels, they created the foundation for higher value engagements and stronger profitability as they came. Second, we expanded our global sales organization by adding experienced professionals across the United States, the United Kingdom, and Dubai. These investments are already contributing to a stronger qualified pipeline, improved customer engagement, and increased new logo acquisition. Third, we incurred certain one-time strategic expenses during the quarter. These incurred at approximately $84 lakhs of our equity-related costs associated with the strengthening of our leadership and delivery capabilities, as well as approximately $62 lakhs invested in advanced AI training for nearly 300 employees who are specialized external training partners. These initiatives are investments in capability building and are not expected to occur at similar levels. Excluding these one-time expenses, our operating margins remain broadly stable year over year, demonstrating the resilience of our core operating model. Coming back to the revenue growth for drivers, looking ahead, we believe our growth will be supported by multiple complementary drivers. Thank you. Education Technology Services business continues to perform well and maintains a healthy growth momentum. In parallel, our nearshore business is emerging as an important incremental growth engine, enabling us to win larger engagements, expand existing customer relationships, and improve our competitive positioning in international markets. This combination provides us with multiple avenues for sustainable revenue expansion over the coming years. On topic of the business mix, our revenue growth during the quarter remained broad-based across business segments. ETS continued to be the largest contributor, accounting for approximately 63% of our total revenue, supported by exceptionally strong year-on-year growth. Assessment and cropping solutions remained a significant contributor, reflecting continued demand for secure digital assessment platforms globally. Our learning and student success, together with the learning design services, continue to provide stable contributions while expanding our ability to deliver integrated end-to-end learning solutions. This diversified portfolio enables us to serve customers across multiple stages of the learning and assessment ecosystem while reducing dependence on any single business life. With that, I will now... Hand over to our Chief Financial Officer, Mr. Poonachar, to discuss the financial performance for the quarter in greater detail.

Thank you, everyone. Thank you, Mr. Dhwaraswami, and good afternoon to everybody on the call. I will now thank you through the financial performance for the first quarter of FY27. We have delivered a strong start to the financial year with healthy growth across a key financial metrics. The performance reflects the continued execution of our growth strategy, supported by robust demand across education technology business and sustained momentum in our assessment solutions portfolio. Coming to revenue performance, revenue of operations for Q1-FI27 stood at 802.63 million, compared with 557.18 million in the corresponding quarter last year. Representing 44.05% year-on-year growth. The primary driver of this growth was our education technology services business, which delivered 170% year-on-year growth, reflecting continued customer demand, successful execution of large engagements, and increasing contributions from our expanded near-show operations. Strength of this performance demonstrates that strategic investments made over the past several quarters are beginning to translate into meaningful revenue exploration. About profitability, EBITDA for the quarter stood at $150.31 million, compared to $100.41 million in Q1 FY26, representing a healthy 29.78% increase year-on-year. EBITDA margins for the quarter were at 16.24% compared with 18.02% in the corresponding period last year. As Mr. Bhaviswami explained earlier, this moderation in margins was primarily driven by strategic investments made to strengthen the business for future growth, rather than any deterioration in the underlying operating performance. These investments included the expansion of our nearshow delivery capabilities, strengthening our international sales organization, recruitment costs associated with our scaling leadership and delivery teams, And one-time investment in advanced AI capability development across the organization. Importantly, including these one-time investments, our underlying operating margins remain broadly stable, demonstrating resilience and scalability across our business model. We remain confident as these investments mature and utilization levels improve, they will support both stronger revenue growth and margin expansion over the medium term. Coming to profit after tax, profit after tax for the quarter should add 92.28 million, compared to 58.73 million for Q1FI26, representing a robust 53.13% year-on-year increase. PIT margins improved to 11.5% compared to 10.54% in the corresponding period last year. The strong growth in net profits reflects continued operating leverage, disciplined cost management, and efficient execution despite ongoing strategic investments. About revenue mix, our revenue profile continues to remain well diversified. Education Technology Services contributed approximately 63.4% of total revenue and remain our largest business segment. Assessment and proctorial solutions contributed approximately 23.5% while learning and student success solutions and learning design services together accounted for the remaining revenue. This diversified business mix provides resilience while allowing us to capitalize on multiple growth opportunities across the border, across broader digital learning and assessment ecosystem. Next slide. Concentration. Our customer relations continue to remain strong and stable. During the quarter, our top 5 customers contributed approximately 50% of total revenue, while our top 10 customers contributed approximately 83%. More importantly, we continue to deepen engagement with these strategic accounts through cross-selling opportunities. Platform expansion and long-term partnerships, while simultaneously expanding our customer base through new logo acquisitions. This balanced approach supports sustainable growth while reducing concentration risk over time. For balance sheet and capital allocation, our financial position remains healthy, providing us with significant flexibility to invest in future growth. He continued to maintain disciplined capital allocation framework, balancing investments in technology, artificial intelligence, global sales expansion, and talent development with prudent financial management. With this, now I am opening the floor to the question and answer session. Both of the questions have.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Urmesh Shah from Money Wiseh. Please go ahead.

Yeah. Am I audible? Yes, please go ahead. Yeah. Thank you for the opportunity, sir. Sir, my first question is on the revenue split from products and services. We have seen a shift YOY. So could we just give some color on this is a strategic shift and can we expect this revenue split going forward in the same direction?

Yes, this is Sean. Basically, if you look at the slates, the first slates, we kept it as an ETS services, education technology services. The second one, we clubbed all the products together because these products are interconnected and then there are certain customers. Taking multiple products together. So it makes sense for us to put it into one bucket and then call it as a product instead of going into multiple product lines. Okay.

So in the opening remarks when server was explaining how wallet share is increasing, so is it on the product side?

In both the sites, in some places where the customers are taking in our products, and then the products are increasing, and where there is a service business is also increasing. So we can see a uniform growth across services as well as the products.

Sir, just to add to Mr. Geraswamy, in Q4, we had an opportunity to, you know, place some on-site resources in the U.S., because of which we were able to win several accounts in the education technology services business, all of which is reflecting in the growth that we see in Q1.

Okay, sir. Sir, one final question. You know, I do understand that you explained that there was a one-time cost which led to the moderation and the margins. But of this impact, how do you see the margin profile for the full year?

We would be, as we were in the last part also, we mentioned that we would be somewhere around like 24-25% upon a margin. That's going to be the year-end margin. So, we are in that direction, and we are pretty much confident on achieving those numbers. Okay, sir. Thank you.

I'll join back for further questions. Thank you so much. Thank you.

Thank you, Mr. Thank you. Participants, to ask a question, you may press star and 1. Next question is from the line of Disha from Sapphire Capital. Please go ahead.

Hello. Am I audible, sir? Yes, thank you so much, sir, for this opportunity. A couple of questions. The first question on your margins. I think in the last call, you had mentioned that despite the ongoing investments, we'll see with higher utilization, we'll see revenue ramping up much faster, so we're expecting EBITDA margins of around 50-31% for FF27, and right now, I think you mentioned we're expecting EBITDA margins for 24-25%, so how should one look at that?

Yeah, this is Prashant here, just responding with us. I have responded to that question in the previous one. So what we were talking about in the previous call was a slight shrink in the margins because of the operations in the U.S. that we were talking about. And we said that, you know, it would come back to normalized levels. However, you know, the investments that we have made in the sales team, as well as the capacity building internally, those investments we haven't taken account for. If you look at the operations around the nearshore alone, then that, the impact of which, may not be as much, because, you know, we've already been on a growth curve there. We have already been improving our margins in the near-shore operations as it is. We have grown up to about, like what Garen mentioned, it's about 26% already. So by the end of the year, we would have taken it to roughly about 35 to 40%, which in itself wouldn't impact so much on the margin. Overall, see, the idea is as simple as this. You know, if there were two options, one where we deliver a 30% plus, Growth on the top line with a 25% EBITDA or the other option could be grow at a 20-25% on the revenue with a 27-30% EBITDA. We would want to take the first one, right? So grow at a faster pace so that we acquire the market quickly and then, you know, grow to a... God forbid, let's say, God willing, a thousand-store company earlier than anybody else, anybody's normal imagination. So that's where we are headed. You know, we want to really grow fast, and the necessary investments that are required to be done, to that effect, we are not shying away from. That's the message you would want to give it to you.

Okay, okay. Yeah, yeah. And the impact of all these investments that we're making will only be for this year, right? For the next year onwards, we don't see any impact of those expenses coming in.

Sir, that's what, you know, the growth rate of 30% plus on the revenue would come by making some investments and not necessarily that the investments we make now. So that's why we are a little cautious that, you know, there could be further investments required going forward and that would contribute to a slight impact on the EBITDA. I'm not saying that that is going to happen. And there is an opportunity to increase the EBITDA margins, but we don't want to, you know, overcome it at this point in time. So what we want to do is ensure that it would be at 25% for sure. That's where we are.

This is Sudhanwar. Particularly given the rapidly changing technology scenario, I said earlier that AI is a must, and AI first applications and products are becoming a must. Because we have to keep up with the market, with the competition, and with customer expectations more than anything else. If we have to do that, along the chain, from designers, design applications to developers, to delivery, to training, all this, This will cost money and will be an investment until AI matures. We've already seen that in the last one year, we've seen so many models, so many different ways in which AI can be implemented, and that requires spending. If we don't do that, The risk on the other side is we may lose out to competition. And we have to be on par with the customer so that we don't lose customer's respect to our capabilities. Hence, the spend will be required, upskilling will be required. If there is a new technology that comes by or AI takes a little different share, And AI also means we have to address a lot of potential risk. Again, spend on that. So this requires upskilling of our workforce, many times helping and providing support to our customers through our nearshore or on-site teams. To help them be in sync mode, help us be a complete sync. And hence, until it stabilizes, which is anybody's guess, but my experience, yes, would be, it will take two years to stabilize. Until then, we will see shifts in underlying technology stats. AI has a lot of math and algorithms below it to make AI happen as we see it. There are newer models emerging, newer devices being supported. As Excelsoft, we need to upskill all our people, whether they are in QA or development or design or delivery or support. That is a training that will go on, upskilling that will go on for a couple of more years. So that is a long answer. I'm sorry, but I...

No, no, sir. Thank you so much for the detail. Yeah, sorry. Go ahead, sir.

No, no. I was saying, you know, look at the top-line growth, and this would be, you know, if not at the same 44%, definitely it would be a very good growth in the rest of the quarters of this year as well, and that would definitely, you know, offset margins in absolute numbers, although the EBITDA, yeah, you know what I mean.

And then, EBITDA AI is slower.

And of course, there are many other strategies that we are putting in place, which would contribute to better, you know, improvement in expansion in the market. However, we would want to, you know, keep it conservative at this point in time and commit to a 25, 25 percent, but then deliver more.

Right, right. Fair enough, sir. And also, so, in Q4, we mentioned the EdTech business, we were able to get a lot of several accounts. So, do we see this momentum in the EdTech business sustaining?

Yes, two things there. One, with our existing customers, we were talking about, you know, expanding because of multiple reasons. One is that, you know, we are able to provide additional services around AI and all such things. Our existing customer accounts are growing. Secondly, you know, the opportunity, because we are nearshore, we are expanding our sales teams as well, the opportunity being closer to the customers, acquiring newer customers for educational technology services. If you remember, I had articulated a point that, you know, some of our product customers who are already with us for more than a decade, you know, they would say that, you know, I would look at you for any services provided you have operations onshore. So such things is where we are seeing traction, and there is an expansion on ETS overall in the top line as well, happening across the country.

And after this, I'll shut up until if there is a next question. The fact, the testimony to our product superiority differentiation and also our ability to deliver superior services comes from the fact, you know, one of the evidences is all Credible international conferences in the area of online learning and assessments, particularly assessments and testing, we get invited speaker slots. Sometimes in a conference, we get four invited speaker slots, wherever it happens in the world. We don't pay for it. We get invited to speak because they believe we are a thought leader in this state. They want to hear about what we are doing and our understanding of the current state of the market. So that is encouraging and also it's an opportunity for us to evangelize our approach to this sector. And that is also generating leads. And they are high-quality leads because they come, they spend time, they speak to us, they look at demos, and, you know, they will make up their minds and follow through with the next processes until procurement happens.

So, typically Q1 for us is the slowest quarter. And I think it accounts for around 18 to 20% of our overall revenue. So, based on that, we can easily...

20 to 22%. Sorry, 20 to 22% generally. 20 to 22% generally.

Right, right. So we can easily be targeting to touch around 370 sort of revenues for this year.

We are concerned about reaching us under some number, but I don't want to commit a 400 CR at this point of time at this call. But it looks positive. The market looks positive. And then here, digital assessments and the property services are picking up in a big scale. We see a good amount of an attraction. Hopefully, we should reach a good number.

We were confident for 360 given the pipeline that we have caught, and with a little bit of a luck and a stretch, it would be closer.

Yeah, and sir, just on the AQA integration, have you recorded any revenues for this quarter?

Yes, yes, revenue has started coming in.

Yeah. Will it be possible for you to contact? Yeah, it's roughly 2 and up crores. We booked it in the current quarter. It is just started, so the billing has started. And then we see another 12 to 15 crores filling in the current year.

And for the next year, sir, any contribution we expected? And just for the last thing, on the acquisition, we said that we're looking at acquisitions for both in US and India. Anything on the advanced stages, sir?

Yes, ma'am. Currently, we're pursuing another three targets, one in the US and the two in India. Two are in the, we have issued a non-binding office, and then there's a negotiation going on. The third one is, in the early stage, we have just started interacting with the promoters, understanding that there's a model, etc. So, currently, these three are in the pipeline.

Okay, that is it, Sorkomar. Thank you and all the best.

Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star and 1. Next question is from the line of Kevaldoshi from Onyx Capital. Please go ahead.

Hi. Good afternoon, everyone.

A couple of housekeeping questions. One was, what is our catch balance as of date or as of the quarter end?

It's 400 crores, including FDs we are carrying the damage.

Okay. What is the amortization amount during the quarter, which we have taken to the P&L?

68 crores. 6.5 crores.

6.5 crores. And what is the fresh capitalization?

Good morning, everyone.

Good morning, everyone. And all this is for freshly new products that we are, like Mr. Sridharma said, we are building AI native products, and all this investment is going into AI native products.

And considering that we are expanding for near-term services, does it mean that there will be expansion in the growth rate at the cost of money? I have a question. So, the question was, since we are expanding on near-shore services, the margins will not be as good as what they were for the offshore services we used to provide. So, is it likely to

compromise on our margins for the sake of higher growth?

In the short term, but it is a balanced approach. What we are taking is we are not going to build on too much of a near shore capabilities immediately unless there is an absolute necessary from the customer side. But on the other hand, the near shore is currently helping us in terms of. Retention upon a customer, some of the new projects, and then this nearshore team can act as a catalyst to get a more business in the customer space and then shifting back to, you know, offshore team. So, in that way, there will be some, you know, lower margins, but, you know, in the long term, I don't see that is going to happen on a content space. Yes.

If I can add, this is Sudhanma, to... Thank you. One of the options we are exploring is to set up an office in Toronto. And move a few of our people who are currently anyway talking to our U.S. customers, both for business development and support, so that it will be easier for them to go across, not only to support existing customers, but also to do more business development and get us more revenues that in process.

Sir, like any large organization, most of our customers have churn. So, building strong relationship with them, continuously visiting them, meeting them week on week is very important, which is hard to do from here. Having people near shore in the U.S., in Canada will definitely help us, and that is the rationale for the industry.

Understood. The next question was, there was an acquisition on which we had spent significant management time a couple of quarters ago, including some costs which we had to write out. So, is that target still in sight, or that acquisition has been dropped? That acquisition, we are pursuing it right now, sir. One option, again, why there is a delay? Due to the IPO, we have to slow down, and then we have to take it up later, and then the numbers have also been changed by the time we went back, and then we want to review their numbers again. The moment of the re-negociation has been happened, but we are now taking it up, and then it's moving on. It's actually in the final stage of our acquisition. In a couple of weeks, it's either, you know, they're accepting our offer.

They have issued a non-binding offer. Okay.

Okay. And the last question was, whatever has been happening in the education industry in India, what we saw is happening to these competitive exams. Is there any opportunity which we are looking at or have some gates open for us to get into business with the government on some of the competitive exams?

Thank you very much. After the recent problems... I'm glad to say the National Testing Agency's CEO got in touch with us. I don't know how he got a reference, but the question was, apparently, you've done similar exams for customers overseas. Will you be able to do... The kind of exam where we had problems recently, we have said yes, and post that we are already in touch with the task force that the government has formed, a four-member task force, and I have a meeting with them on Thursday. So, yes, we are aggressively pursuing this opportunity, and they are also impressed from what we have done so far.

Excellent. Thank you so much and wish the team all the very best.

Thank you. Next question is from the line of Krishna Rao, an individual investor. Please go ahead.

Hi, sir. Congressman on a good set of numbers. What I would like to understand is, hello. What I want to understand from the management is that how big the EQA approach it could be for us going down, say, one or two years, and what is the vision and the growth strategies that our company is doing, whether it will be more of inorganic or adding more logos or what will be the roadmap going ahead to become a much larger company.

Mr. Rao, thank you for this question. It's a good question. A.K.F., at this point of time, the visibility of what we have over a period of four years is roughly around a $17 million revenue. That's the number which we are able to see, but we are hopeful of getting much more than that. So it's going to be a large account, second largest account for us. And the second question for you. The growth for the future, next five years, will be in a mix of organic and inorganic. At this point of time, we are crunching in numbers, roughly around 69 to 30% will be from an organic growth, and then 30% will come from the inorganic growth. Is that the answer to your question or?

One more on the margin side. How long will be incurring these one-off expenses to build a good base in the overseas and what is the potential that is going over there also?

As we explained, these expenses are inevitable for our growth. So we have kind of got into this one, and then the whole idea of investing into this one-off expenses, whether it is in a sales or an year show or strengthening the management team is for a future growth perspective. I won't say that it is a recurring expense in a quarter-on-quarter business, but on a selective basis, there will be some investment will be there in a couple of quarters down the line.

Got it, sir. Thank you. Thank you so much, and best of luck for your future interview. Thanks a lot. Thanks a lot.

Next question is from the line of Vivek Rai from Inka. Please go ahead.

Good afternoon. So, congratulations on a good set of numbers, sir. My question is regarding EBIT and PET relation. So when I see at the PNL of quarter, I think it's 2.02 million EBIT and the PET is about 118.

So can you explain the component which leads to increasing the PET level?

I mean, if it's too bad, it's going to increase. So, the question is, why, what is that?

Interest is low, right?

So, that's the key. So, when I say interest amount, interest amount is 5.05 million.

Yeah, it was 7.8.

No, no, sir, the 65.118 is the difference of approximately 50, 15 million difference.

You are talking about EBIT, right?

EBIT to PET, so how PET will increase?

EBIT to PET, interest is a major person, right?

Tax is a... There is an average income of one of... It's been added into the fact. He's talking books now.

In the books, are there income part of EBIT only? Part of EBIT only, so the only EBIT to fact is...

Mr. Rai, please add other income into that one. I think in EBITDA, what you're presenting right now is that we have taken only operating income and then the operating expenses. So that's why it's been provided.

And then you add back the income.

So it adds up to the fact. Okay, understood. So my second question regarding guidance, can you give

me some guidance regarding revenue of pet level for the current year?

But currently, we are expecting between 350 to 350 crores, as our chairman mentioned, that's the number which we are looking at it for the current financial FI 26.7. And at Fed level, the same margin will be continued? We are talking about 24 to 25 percent of EBITDA, sir. Okay, understood that. Thank you. Thank you, sir.

Thank you.

Next question is from the line of Karthi from Suyash Advisors. Please go ahead.

Good afternoon, gentlemen. A couple of clarifications. One is on the 40 crore offshore order that you spoke about, near shore order that you spoke about. Would this be executed entirely with the onshore mix or would you be using any local resources also?

Okay, sir. This 40 crore number, what we reference, we use in the call, is for the top line offer. This team, which is going to bill it. The execution part, there will be some amount of an exhibition that will happen from offshore, and then the onshore.

And would this be only one client, or have you been able to add other clients also?

Sir, we have added two clients. First, we started with one, and then this year, this quarter, we added one more.

The other thing is, in the first quarter, product revenues were flattish year-on-year basis. Right? Right. So, what is the outlook for the revenue on a full-year basis, product side only?

Sir, it will increase because normally what happens in the first quarter, the number of tests which have been taken using our platform on the lowest side, and then it will increase in the coming quarter. Normally that's the trend which you would have seen. Thank you.

Yes, yes, but what I am asking you is, what is the current visibility for growth? Because you will be booking meaningful revenues from AQA as well. So, therefore, I am just trying to understand what is a reasonable growth number to bake in here.

You are, you know, between 25 to 30% growth in the product line also.

Okay, so worth a 73,000, we should assume another 25-30% kind of a growth. Okay. Thank you and best wishes.

Thank you.

Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Dhanan Jaisudarva for closing comments.

Thank you for giving us the opportunity to present our Q1 results. In summary, we are pleased with the strong start to FY27, and we are quite optimistic that we will do well during the year and see even better performance during succeeding quarters. The investments we have made over the past several quarters are beginning to deliver measurable results. Through stronger revenue growth, improved customer engagement, and then expanding the quality pipeline globally. While we continue to invest in building long-term capabilities, we remain focused on maintaining Financial discipline, improving operational efficiency, and delivering sustainable, profitable growth. For the stronger order pipeline, a healthy balance sheet, differentiated technology platforms, and increasing demand for AI-enabled learning and assessment solutions, we believe Excelsoft is well-positioned to create long-term value. Thank you very much. Thank you for taking your time to have this discussion with us, and we have made notes of all your comments, and we will definitely attend to it, and hopefully all of the comments will be addressed even in the next quarter.

Thank you.

Thank you so much, sir. On behalf of Excels of Technologies Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.