Subex Limited (SUBEXLTD) Q1 2027 Earnings Call Transcript

Good morning, ladies and gentlemen. I'm Madhuri, moderator for the conference call. Welcome to SUBEX Limited Q1 FY27 earnings conference call. As a reminder, all participants will be in listen only more, 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 and then zero on your telephone telephone. Please note that this conference is recorded. I would now like to hand out the floor to Mr. Prasik. Over to you, sir.

Thank you, Mahathri. So, thank you, Mahathri.

Call for the quarter event from 28th, 2020. I hope the members of the management who are present for the call are Mr. Managing and Mr. Kwan. I would like to start the conference call by going through the safe harbor clause. Such statements in the presentation concerning our future growth prospects are forward-looking statements, which involves several risks and uncertainties. That could cause actual results to differ materially from those in such forward-looking statements. Discs and uncertainties relating to the statements include, but are not limited to, fluctuations in our beings, our ability to successfully integrate acquisition, competition in our areas of business, client concentration, liability for damages in our contracts, withdrawal of tax incentives. Political instability, unauthorized use of intellectual property, and general economic conditions affecting our industry. With this, I now hand over the call to Nisha to take it forward. Over to you, Nisha.

Thank you, Prateek. I am audible, right? Loud and clear?

Okay.

Good morning, everyone, and welcome to the Q1 earnings call. Thank you for joining us today. So, a lot of you joined us for AGM, and you know that we concluded our AGM the day before. And I would first like to start off by thanking all our shareholders for the confidence that they have placed in the management team and in me personally. So, that trust means a great deal to me, and it's a responsibility that I certainly do not take lightly. And it is one that we intend to earn through consistent execution. Over the last three years, our objectives have been very clear. We set out to simplify the business, sharpen our strategic focus, restore profitability, strengthen our balance sheet, and build a more disciplined organization. And now I believe that that foundation is firmly in place. So, FI27, for me, represents the beginning of the next phase. And this conversation is no longer about whether SUBEX can complete its turnaround. The conversation now is whether we can translate that strong foundation that we have set into consistent and sustainable growth. And that is the mandate that we have set for ourselves this year. And every decision that we will make in this company will be, you know, aligned to that objective squarely. So with that, let me walk you through how we fared in first quarter. So we are encouraged by the start that we have made to this year. Revenue for the quarter grew 8.9% sequentially and 19.7% over the corresponding quarter last year. EBITDA margin was at 21.2%, while PACT stood at 17.9%. Equally important, EBITDA has now grown fourfold compared to same quarter last year, if you compare. So these results, to me, are not an outcome of a single large deal or a one-time event. In fact, they are a cumulative impact of the work that has gone into business over the past several years. So what have we done? And some of you who have been with us in this journey know this. We have greater operational discipline in the company now. We have improved execution of our order backlog. We have tighter cost management, and we have been achieving our key billing milestones consistently. And we also ended the quarter with cash-in-cash equivalents of 184.8 crores. This further strengthens our balance sheet and gives us flexibility to invest in the future. But I do, while I say these results, I also want to set the expectations a little appropriately. While as management, we are really pleased with the profitability that we have delivered this quarter, I do see these margins somewhat differently. They demonstrate the earnings potential of a business when the fundamentals are operating really well. So over the last three years, we have built a more disciplined organization, right? So this quarter reflects what that foundation is capable of delivering. But at the same time, I'd like to remind everyone that FI27 to me is about accelerating growth. So as opportunities present themselves, we will continue to invest in product innovation, AI capabilities, customer-facing teams, and delivery excellence. So our objective overall, the way we see this, is not to maximize short-term margins. It is to maintain a healthy margin structure while making disciplined investments that actually create greater long-term shareholder value. And I believe that striking this balance is the right way to build a stronger company. And one area that I'm particularly encouraged by is partner ecosystem management. As some of you know, that's one of our products. I mean, a lot of you know us for revenue assurance and fraud management, and rightly so, but there is also, you know, a third product that we are equally proud of, which is partner ecosystem management, also known as wholesale billing in telco environment. So, I've always believed when we joined that PEM, and, you know, we kind of call it PEM internally, was strategically important business to us that had not received the level of investment that it deserved, actually. So, over the past few years, we have rebuilt the team, we have strengthened the product roadmap, and we have renewed our focus on that market. And what we have seen as a result of that is that these investments are now beginning to show. So, some of the big deal announcements that we did last year, for some of you who remember, were actually in this area, in PEMS. So, now we are starting to see a stronger deal flow in this area. So, the renewal that we secured this quarter, together with the opportunities that we are seeing in the pipeline, give us the confidence that this PEMS can actually be an important contributor to our growth story. So, I wanted to particularly highlight this because usually the story becomes RAFM, But there is an equally third, equally important component sitting in our story right now. And commercially, this quarter reinforces our confidence that strategy, you know, the one that we have been pursuing is gaining traction. We renewed our managed services and software license agreement with a tier one operator in Middle East. I know a lot of you have had questions about Middle East. There might be slowdown, but again, you know, we went and we actually secured our renewal. We secured new business assurance and fraud management with a leading operator in Europe, Plast Water. We also renewed our PEM, Partner Ecosystem Management Engagement, with a Tier 1 operator in Asia Pacific. So what gives me confidence is that this is not simply individual wins, but what they collectively represent for us and our portfolio. Across geographies, across customers, we continue to invest in our core platform, which also tells us that they are, you know, sort of, they believe in our story and they are renewing with us. So that's a big word of confidence that customers are actually showing us. Alongside customer engagements, we continue to strengthen our market presence during the quarter. We participated in MVNO Nation. This specifically happens for MVNOs, not MNOs. There, we engaged directly with operators, industry stakeholders. We also took part in GSMA Fraud and Security Group meetings in Singapore. We have contributed to industry leaders, and we also continue to contribute to the fraud standard in the industry. So these engagements are important because they deepen our customer relationship, they strengthen our market positioning, and they reinforce our role in shaping conversations across the future, you know, around the future of telecom operations. These, in a sense, also position us as thought leaders in some of these spaces, and that's one of the reasons why we make sure that we attend all the... So important, you know, conferences where content is being discussed, and we contribute on the front foot in some of these. This quarter also marked the beginning of our non-deal roadshow, NDR. Some of you have been a part of that. So I found these conversations because I hit the market after three years, actually, to do the first NDR. So I found these conversations particularly valuable because they reflected how investors' perception of sub-excess evolved. And three years ago, I know that when I joined, questions centered around whether the turnaround was possible. But today, I felt the questions are very different for us. Investors wanted to understand how we sustain growth, how we allocate capital, how are we going to continue to expand margins over time, and how consistently can we execute against our commitments. And I welcome that change. That change in conversation tells me that something is working here, and, you know, we are delivering. It also tells me that conversation has moved away from recovery to performance, and that's exactly where it should be, and it is precisely where our focus lies today. On people front, we completed FI26 performance and promotion cycle during the quarter. So building a growth business ultimately depends on building a stronger organization. And recognizing performance, investing in capability, and continuing to develop our talent remain important priorities as we scale. So let me briefly cover the consolidated financial results for Q1. All numbers that I will speak now are in INR. The revenue for the quarter stood at 79.45 crores, as again, 72.96 crores in the previous quarter. EBITDA for the quarter was at 16.87 crores compared to 10.58 crores in the previous quarter. Normalized PAT for the quarter stood at 16.09 crores compared to 11.51 crores in the previous quarter. And PAT for the quarter stood at 14.22 crores compared to 9.93 crores, including exceptional items in the previous quarter. But before I conclude, let me leave you with one thought. The last three years were about rebuilding the business. The years ahead of us are about proving that we can grow it consistently. One quarter does not define an year, and I know that, but it can certainly establish a direction. We believe this quarter demonstrates that the business is moving in the right direction. We have stronger financial foundation. We have healthier profitability. We have deeper customer engagement, and we have a clear strategy for growth. So I believe our task is now quite straightforward. We execute with consistency, we invest with discipline, and we continue to create long-term shareholder value. Thank you once again for joining us today. I will now be happy to answer your questions. Back to you.

Thank you, sir. Thank you, ma'am. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. Participants are kindly requested to restrict with two questions in the initial round and join back the queue for more questions. The first question comes from Kiran Cheda from Cheda Investment. Please go ahead.

Good morning, ma'am. Congratulations on a great set of numbers and the turnaround and the growth pop forward. Ma'am, when we met last time, I had made a suggestion for capital readjustment. Has the board given any thought to reducing the equity capital, writing it off against the losses that are pending, so that we become a lean company and, you know, all the numbers then start looking good?

Thank you, Karan. I think good to speak to you again. And I remember that suggestion so clearly. And we did actually discuss it in the board meeting that we just concluded yesterday. So what we are going to do is we understand that, you know, some structural changes need to be made. Board is aware of that. The management is acutely aware that once the numbers start looking good, there are some structural balance sheet things that we must do. So this is something that we will be, you know, we are going to consider. So as you can imagine, this is going to be a little bit of a long-term process. We will appoint a consultant. We will figure out, you know, what's the best way to do it, where we can protect all the shareholder interest. So we will embark on this. And as you know, this will take some time for it to manifest because once we have a path forward, this will require board approval, shareholder approval, NCNT. This is, you know, the song and dance. There is a little bit of a process here. But that said, this is strongly under consideration right now. So, yeah, the suggestion was great. I came back with it. We have discussed it. So, you know, we'll act on it.

Thank you so much. My second question is, has the board considered rewarding you much better than what they are doing now, considering your performance in the company?

I just wish that you were there in my performance appraisal, so I could have made some help. No, thank you. I mean, you know, this means a lot coming from a shareholder. We are discussing, so one of the things that we are discussing is how do we meaningfully improve, you know, stake in the company for a core set of people. So this is something, again, that board has taken quite seriously, and, you know, so there is a – we are acting on that. Again, you know, that's something that's not just under consideration. You will see action on that just, like, within a few weeks. So we have, again, you know, taken that into consideration. Board is aware of this. So, yeah, I mean, we are on that track as well. But I'm going to invite you next time when we do this performance appraisal. Thank you so much, everyone.

All the best. Thanks so much. Thank you, sir. The next question comes from Patrick Mathias, an individual investor. Please go ahead.

Good morning to you and all presidents of Subx. I have... One is, in terms of executable order pipeline for this year, what size of funnel are we working on, which is executable for this year? Second is in terms of new order wins or sign-ups, what's the total pending order wins that we have for billing over a period of... Whatever year, I mean, contracts will be signed for three years, five years, et cetera. So what are those total order wins that we already have?

Okay. So are those your questions? Are those two your questions?

Yeah, yeah, yeah.

Okay, okay, okay. So in terms of size of funnel, typically the way we work in SubEx or, you know, the way I would say enterprise sales work, right, enterprise business works, we aim for at least three to four times, you know, pipeline. So there is three years, right? There is something called a pipeline, then, you know, which can be unqualified, qualified, then there is a qualified pipeline. And then, you know, there is actually, you know, the order intake that we do, and that converts to revenue. That's typically, you know, the cycle that we follow. So our aim at any point of time, and as far, you know, how board also actually judges management and keeps us on track is that at any point of time, whatever my order intake target is for the years, I need to have at least 3x of that qualified pipeline I should be running at any point of time. So, rest assured, at any point of time, our pipeline is around 3 to – so, when you speak about the funnel, and I'm talking about qualified, not just unqualified, qualified pipeline is around 3 to 4x. Unqualified and all that, which you still need to qualify, is much, much larger, as you can imagine. But for me, what matters is qualified pipeline. So that's typically the pipeline that we run. In terms of orders, again, one thing that I wanted to clarify is that we don't announce every order that we win in the company because it's not required. Even by compliance standards, we are only required to announce either the new logos, significant deals, material deals, or a certain flavor of the deals. We don't actually announce every renewal, everything that we do, right, through the year. And if you remember last year, just the deals that we announced in the market, last financial, they were in the range of, you know, and again, you know, I might be a little bit off, but it was to the, you know, tune of $18 million to $20 million is what we announced. So obviously, you know, the actual pipeline will be greater than that. And our revenue, the composition of revenue, the way we work is 70% of our revenue is recurring in any given year. So, you know, if I'm hitting, let's say, 10 million, you are rest assured that 7 million I already had in the bag when I started the year. So this is how we kind of, you know, go through the year. And 30% is what we win in the year. And we convert some part of it. So if it's a three-year contract, we convert some part of it and recognize 30% of that in the year. So that's how typically our funnel works. So in terms of pending, you will switch a different stage, right? So if I won a three-year contract, let's say last year, I may be executing 25% of it this year. And then, you know, it goes into managed services or license agreements. So, every contract looks typically a little different, but in any given year, 70% recurring, and for the deals that we announced last year, let's say, you can assume that we are, you know, we are going to take in at least 30 to 40% of that value this year. So, that's typically, that we'll consider, you know, that becomes a part of our backlog that we enter the year. So, that's typically, you know, how our revenue cycle works. But I'm happy to expand on it, but this is what it is.

No, I wanted a specific number, not the expansion.

I'm familiar with the expansion.

I'm asking of the funnel, not the order. See, I am a very large retail shareholder who has been holding your share for the last 15 years. Last time also in one of the conference calls, they were asking you for specific answers, and we were getting generic answers. Sales Funnel and House Box. Pretty familiar with it. The stages of the sales life cycle, etc.

So Patrick, as you can imagine, these calls are recorded. They are recorded not just for our shareholders. They are also recorded for the purposes of competition in the market, right? We are listed. All my competition that I compete with in the market is private. Every single company that I compete with in the market is private. Nobody else is listed. So Bex is the only one that's listed in, you know, top four competitors that I work with. So some of these numbers by their nature are sensitive to us. So this is sensitive information. If there is a one-on-one you want to come and meet us separately in office, I'm happy to speak to some of this separately. But on a call, it's sensitive information. And hence, my hesitation is not that I can't give you the number. My hesitation, it's competitive. This information is competitive. And hence, I hesitate to get this. This is not something I can disclose, actually.

I'll be very straight with you. Your presentation does not give any direction on the business.

Okay.

I want direction.

What kind of direction would you like? Growth direction. Are you asking me? Growth, like I already said, right? We are on the trajectory to growth. This year, you know, we have already seen it's near double digit, right? We are already trending to that growth. And I have committed, and I think I've been committing for the last few quarters that growth is the focus. And FI27, we are going to be squarely focused on growth. And we are going to, you know, that is where the whole management effort is to deliver growth to shareholders this year. Because I think we have done a decent job on the bottom line. We have bottom line, you know, quite under control right now. What we need to do is build the top line, and we are squarely focused on that. Now, will I deliver, you know, double-digit growth, or will I do high single digits? That remains to be seen. But at least where we are, at least, you know, aspirationally, what we want to do is obviously much bigger for the shareholders. And you can imagine, some of the forward-looking guidance and all that cannot be given in earnings calls.

So, we are talking as if we are a $20 billion company. We have a small base. No, not million. I am talking about answers that I am hearing are as if we are a $20 billion company. We are a small company.

To grow on a smaller base does not mean... Thank you. Patrick, the rules don't change. Whether I'm a million-dollar company, a billion-dollar company, the rules of disclosure to the market...

I'm not talking about disclosure. I'm speaking about growth trajectory. I'm speaking about growth trajectory, not disclosure.

So growth trajectory, again, you know, I have been through this for three years. I know where I started, and I know what I need to deliver to make shareholders happy. I'm deeply aware of that. And when we went to NDAX, I got direct feedback from a lot of people on what they expect to see, you know, double-digit growth. We need to see this kind of sustainable growth. So I have all the feedback, and we are working towards it. So if you think that aspirationally a company is still going to do some, you know, anemic growth, that's not even the goal here. We don't want to deliver any more growth. So that's not the goal.

At the base you are, at the base we are, as a company, for the last many years, and for the last three years that you have been there. Honestly speaking, by now, after holding the share for 15 years, my expectation is given AI adoption, etc., there should be a minimum growth of 50% year on year on the top line. That's my expectation. Okay.

I am not going to comment on that, but I would also encourage you to go and look at, you know, the other telco vendors, what their growth rates have been. I will encourage you to look at telco industry itself, what the growth rates that they grow at. So since you are invested in this industry, since you have been a long-term shareholder, since you have been following this for a while, I would encourage you to please go and look at the comparables in the industry. And then, because I would also love to see another vendor that's growing at 50% right now. So, I would, it's not that aspirationally, we don't want to do that. But, you know, we also have to be grounded in the reality of where we are. And I have, I want to be sure that I give you the right guidance. So.

Thank you, sir. The next question comes from Ajay Desai from Jayant Enterprise. Peace, Mohay.

Yeah, good morning.

Morning, Ajay.

Nisha, congratulations on getting. Now, my question was to get a clarity on this ESOP thing, which is announced. So like when and at what price bracket it will happen or like market purchase trust when they will do. You can throw some more light on that.

So, Ajay, so the way – so we have the approval for ESOF. You know, you must have seen the announcement yesterday. So what we are going to do is – obviously, there are some steps to this. We are going to send it to the shareholders for their approval, which is a postal ballot. So it will take a month or so from the day we do postal ballot. I think Ramu probably has a better timeline than me, but I think within two weeks, we should be triggering postal ballot for this. Once we have the shareholder approval, what we will do is then we will start acquiring from the market. And when we have the shareholder approval is when we will decide or, you know, there is a set calculation for at what price we acquire, actually. So we'll do that calculation and we will acquire. So it's not decided, decided, it's, you know, by whatever the share has been trading at for the last 60 days. So there is a calculation there. Again, I can share that with you separately. Honestly, I don't have the number right now. But the way compliance works, and Ramon can probably clarify this, is we have taken the approval for 5%. But in a given year, in a given financial year, we are not allowed to acquire more than 2%. 2% is a cap on which, you know, we cannot exceed that. So, we will execute the 2%. In the moment we have the approval, we have the share price set, we will acquire, you know, within, let's say, a quarter or so, we will, you know, acquire 2% or so. That's our plan. In a year, we can only do 2% and we'll max out that cap. So, that's the plan right now. So, I think in terms of timeline, I am seeing that this should be executed at around Q3, given that, you know, we are going to go through postal ballot approval and all that. In Q3, we should be executing to this. And once we execute and acquire the shares, there is, again, a compliance that requires us to make sure that people who have to be awarded, this must be awarded within the six-month time frame. Again, Ramu, you have to correct me if I'm wrong here, but six-month time frame, we have to, you know, allocate it to the people that we want to give it to. So that will happen, you know, in the subsequent board meeting. We'll take the recommendations to the board and we'll get it, you know, allocated. So that's typically the process. So I'm expecting Q3 is when you should see us, you know, starting to acquire from the market.

Sure. Ramu, anything?

Oh, thank you so much. Thank you.

To add further, we may execute in Q3 or it may extend to the full financial year. This is the culmination from the company.

Yeah, because we take loan from the company.

Yes, yes.

The next question comes from Harshit Singhania from Robo Capital. Please go ahead.

Hello, on audible?

Yes.

Yeah, so congratulations on a great set of numbers. So I'm, like, quite new to the company, so I just wanted to understand, like, we have really grown our EBITDA margins. So where do we see them stabilizing around, like, so we have quite a number of contracts. So are these around similar margins, or how much is the variance in the margins? Thank you.

Thank you. So, typically, we have a, you know, threshold below which we don't pick up contracts in the market, right? So, there is, so that ensures a certain profitability. But margins are not just a reflection of what we sell our contracts at. So there is, you know, the actual EBITDA margin has a lot, a few other components. So one is, of course, the Cox part of it, which is, you know, what we sell our contracts at and at what margin can we deliver, because let's assume that I sell at, you know, X percent. I actually sold to a customer, let's assume, at 10 percent or so. Then there is, it's possible for me to extract further margins from my delivery efficiencies, right? So we will expect something else also on additional. On top of that, there are, you know, other costs. There are manpower costs. There are facilities costs. So there is a lot of other costs that we also control, operational OPEX, right? There are other OPEX items that we control to get to EBITDA margins. So typically, we make sure that contracts are not sold below a certain threshold. In every geography, we have a certain different threshold set because there are geographies that can give you better margins than others. So that's how typically, you know, our margin structure works. In terms of expansion of margin, like I was mentioning even in my opening remarks, See, we have a path to expansion of margin. We have delivered it this quarter. But I also wanted to just caution everyone that it's not that we can't expand margin, but I think the need of the business right now is that we reinvest for growth and for future. For me to create longer term value, it's more important for me to make sure that my products are well supported and I have a robust roadmap for that. And that's why I want to make sure that I don't get into the race of, you know, margin expansion indefinitely. What I want to do is we want to get to a good margin, which we have, and then, you know, also plow back some money into reinvestment, actually, of some growth initiatives that I feel that we absolutely need to run, especially around AI and all that. So we are going to do that. So you should expect robust margins. But again, you know, my thing will be not that we cannot expand margin, but I think we need to reinvest some of the money. We need to take and plow it back into business. So that's, you know, broadly my guidance or my thinking on how we'll do margin this year.

So, ma'am, completely fair point, and I just want to ask, like, so are these levels, like, stable? I'm not asking for aggressive margin expansion. Oh, stable. Okay. Okay.

It should be in the nib. It should be in this ballpark. Let me put it that way. It should be in the ballpark.

So, mid to high teams, we can expect.

Don't ask me for specific numbers, but yes, in this range, yes. I mean, obviously, you will see the margin expansion where we closed the year last year. So definitely, you know, as I case growth, I'm not going to cap margins where they were. So margin expansion is something that we are looking at. But, yeah, a reasonable margin expansion that gives us room to reinvest is, you know, more my take at this point of time and my ask from shareholders also that we ask for your understanding on this.

Okay, and just to like get a better understanding, so 70% of our revenue is recurring, and the 30% that comes in is the contract that we get in the current year, which is in the working year. So is that the 30% is where the main growth can be expected to come from and the operational efficiencies?

Actually, not necessarily, in the sense that 30% is very important because that tells me what I will do next year. So, while in this year, it's 30%, for next year, it will become a part of the 70% that I do a backlog for the next year, right? So, it's very important from a, I would say, forward-licking perspective, right? Because order intake is a lead indicator of our revenue. So, from that perspective, it's very important for me to do well in that 30% market. It's not so much for 30% of this year. For me, it's a 70% that will contribute to the 70% of next year backlog. So, from that perspective, yes, you are right. It's important. And that's where, you know, our revenue expansion comes from. The newer wins. See, once you win something, then you are on a trajectory. We know how we will recognize revenues against that. So, that becomes, you know, that already gets baked into the plans. The newer things that you do definitely are the things that, you know, it's like a cherry on the top, right? That's the cream. So, we need to kind of make sure that we do a good business there. So, a lot of expansion comes from the new business. So, in that sense, you are right.

Okay. And, like, so I understand you're not…

Hello. Sir, can you please join back to Kyoza for more questions?

Sure, sure. Sure. Thank you so much, ma'am.

Thanks, Asha. The next question comes from Sanjot Kare, an individual investor. Please go ahead.

Hello, good morning.

Congratulations, Nishan and the team. We are really seeing a good improvement for a long time, and it's consistently completed last quarter as well. So my question is, definitely you mentioned that a lot of orders are already won. Execution is going on. It is really important to really realize the margins. So how is the market scenario now? I mean, are we seeing that still there is a delay in order closures? Because we had, like, a good order announcement, like, two, three months back. And since last two months, again, we have not seen directly mention that not every order you announce. But I just want to see how the order closures are happening. And anything got delayed from the last quarter and this quarter is getting closed, especially on that.

So, in terms of contracts, we are seeing some amount of slowdown we have started to see from the Middle East, given the, you know, situation. Now, no cancellations. And when I say delay, what's happening is that contracts are taking us longer to close, not the commercial negotiations, actually the legal tees and tees. So, those kind of things are, you know, taking us more than anticipated time these days because people are also becoming very careful about, you know, And like liabilities that they sign up, LOLs, we call them. So there is a lot of negotiation that, you know, hard negotiation that we are having to do on some of these. So in terms of closure, I'm seeing, I'm not seeing big delays. I'm not seeing like a quarter and all that delay, but I have seen like last quarter that Q1 that we closed. There are some contracts that I would have liked to close in Q1, but as we stand, we are going to close them this month. So there has been a month forward, right? It shifted by a month. So we are seeing some shifts like this. What happens is that the war is in the Middle East, but fact of the matter is everyone gets cautious around it, right? So we are seeing some drag, I would say. I would not call it even a quarter delay, but yeah, it's moving a month or two here and there. It's happening. So some amount of delays are there, but nothing is lost, though. We haven't, like, lost any big deal and all that right now. But people are taking their own time to make decisions. So there is some amount of that drag as well. I'll be honest.

Sure, sure. And how the markets in U.S. and Europe looks like? I mean, is it getting better?

Europe is – U.S. is actually better. I think Europe is also okay. Where we are seeing caution is obviously from Middle East, and we are seeing some cautious buying on, I would say, little extended timelines even from Asia Pacific. We are starting to see some sort of, you know, delayed timelines even from APAC region. So that is the, you know, thing. Otherwise, I think Africa, again, you know, by nature of the way business works in Africa, they are, they do take a long time to close everything. So it's, you know, generally speaking, a little bit of a slower market. So, Africa, you know, has really been slowing down, at least for reasons known to everyone here, is becoming a little slower. I think APAC is taking a little bit more time, in my opinion, but what gives me comfort is that nothing is lost, and people are actually, so it's all getting delayed in legal negotiations and all that. Which I think, from my perspective, I am okay delaying it by a month as long as we make sure that legally we are, you know, doing very watertight contracts. So I'm more focused on we need a good contract in place instead of, you know, I need it on July 31st. So that is acceptable to me at this point of time. But nothing is lost. You should be looking forward to hearing some announcements and all that in the coming quarters. So we are working towards that. You will hear about it soon enough.

Sure, sure. Thank you. Just a last point. Yeah, definitely it's a good improvement into the top line as well as bottom line, and I hope we move towards consistently more towards double-digit growth as well as very soon we reach 100% per quarter. So I wish you all the best.

Thank you so much.

Thank you. Thank you, sir. Participants are kindly requested to reflect with two questions in the initial round and join back with you for more questions. The next question comes from Abhishek Khaled, an individual investor. Please go ahead.

Am I audible?

Yes, sir, Abhishek.

Good morning, Neha and Nish. Oh, sorry, I mean Nisha and... Good morning, Abhishek. Okay. A couple of questions, Nisha. The first is, from contract signing to subscription revenue, that window, right, do you have any metric that you are tracking? And I think that window is substantial, and I've been asking around this in the previous quarters as well. So, would you be able to share some kind of a number, and if we have done work on shortening that window, and to what extent have we shortened it, and what's the scope? If you can give a little color about it.

Typically, for basic hours, Contract signing to implementation to subscription, we have been sort of, so every product has a different window in terms of, when I say every product, I mean, you know, Hypersense, Rock, every product has a different window depending, again, just to put some caveats around it. Every product, depending on the complexity of the implementation that we are doing, some implementations are very large and complex, so they take longer time to implement. And then there are some which are, you know, very plain, vanilla, standard, out-of-the-box sort of thing. So, obviously, what we are doing is, I think, in terms of, you know, product, our product has become, you know, extraordinarily, I think, we have made huge strides in that. So, it's quite stable. In terms of R&D investments, we are looking at reducing the timelines. But if I were to give you a specific number, so it typically takes from contract signing. So this includes our implementation, go live, and all that. Typically, we have seen it can take four to five quarters between, you know, when you will sign a contract and you will start seeing the subscription revenue. But that does not mean that we don't have revenue during this time, right? Even when we are implementing, we have a lot of milestones, like we will have a BRD sign-off, we will have an FSD sign-off. So, there are implementation milestones that let us take revenue even while we are executing or implementing the project. But this timeline is not specific to us. This is generally, you know, typically a cycle of the telecom. But that said, internally what we have done and our endeavor this year and last year has been to reduce. So my role or my... And the goalposts that I've given to my team is that we need to bring this timeline down by a quarter. So a quarter, I feel that if we are able to crash from five quarters to four quarters, or in projects where we are doing in four quarters to three quarters, that will give us enormous leverage in terms of revenues. So our goal is one quarter, but I can also tell you that we just implemented one project recently, which was done. So almost, I think, 45 days ahead of time, we were able to close the, you know, project. So are we there at a quarter? Not yet. But 45 days gain that we have made, actually. So we are starting to measure this. And I'm seeing on an average, we are able to gain almost, you know, a month to 45 days in our implementation cycle. And we are going to sort of extend that and see if we can get it to a quarter. But typically, that's what our, you know, a lot of internal initiatives that we are running are around this fact that, you know, can we use libraries, can we use reusability, you know, so we are working on a bunch of initiatives just to crash this timeline. So if that answers your question.

Yes. Second question, I need the flight plan for 100 crore stop line. Still waiting for that. I know Ramu is going to give you a blast for giving a forward-looking statement.

Yeah, no, but, no, it's going to be done, so, inshallah, it will be. Yeah, I mean, I'm just saying that if you can give us, when do you... I see it happening. Realistically, it should be in Q. I mean, you know, it should be in Q quarters. Definitely. Because, like I said, a lot of our business is backlog driven, right? So, I mean, I know what my backlog is for this year. So, I know my backlog. I know what I need to do in the year. I already know how my contracts are shaping up in Q1. So, obviously, I can't discuss all that on the call, but I have a good view of what it should be. And I feel that we will get to that number. We will get to, I have a line of sight. I could not have said that. I don't have, I mean, last year, if you had asked me, I would say that I'm aspiring towards it. But today, I can tell you that I have some line of sight. So if all the pieces fall like I want them to, and we are working towards it, it should happen. I'll just give us a few quarters. It should happen.

Okay. One last question, if I may. For ArtSapp, have you signed on any new customers during this quarter?

Broad Zapp, it's actually, again, I'm trying to recollect. I think, is it this quarter? Yes, actually. I think it was last quarter we did one. No, no, last year. No, this quarter also, like, this is one of the slight delays that I was talking about. It's moving by a month or so, but yes, this is, it will be. So, it will not technically become last quarter. It will be on this quarter, but yes. It's one of the details.

Okay. So, again, last quarter I had asked this question regarding the margins around FraudZap. Are you comfortable at this moment or still waiting to see some more contracts flowing through to get the margin number for FraudZap?

No, I think, see, we have done a few contracts already, so we know where our margins will land on products. I think it's much higher. So we, and I think if it gives you any comfort, we have already recovered our investment on this.

So my ROI is already done. Perfect. Perfect. Yeah, that makes me happy. And I'm still holding you for that flight part. Yes, of course. But then congratulations and give my regards to the entire team for the job well done. And looking forward to better numbers in the future quarters. Thank you. Thank you.

Thank you, Sam. The next question comes from Ajay Desai from Jayant Enterprise. Please go ahead.

Yeah, Nisha, now, like, if you can spend some more time in creating visibility of SUBEX in capital market, and with the kind of AI, you know, if we can do something, you know, which helps us recoup our big, big losses on which we are sitting, you know, so if you can.

Sure. We had already started NDRs, and we were just waiting for the silent period to get over. So, you know, as of yesterday, we are out of silent period. So, you will see us go back into the market. So, this is something that I plan to do consistently. So we will do consistently. We are actually going to meet both. Like last year also, we met both the buy side and the sell side. So we'll continue to do this with the help of EY. That's all the call. So there is a plan in place. We are going to actually hit the capital markets consistently and make sure that the story and our narrative is heard by as many people as we can reach. So absolutely on the job.

Sure. Thanks. And whenever you are in Mumbai, please do just let us know and we will also come.

Absolutely. As you know, all the capital markets are in Mumbai, so we have to be there.

So, absolutely, we will know that. So, if we are also informed, we will plan accordingly. Sure. Absolutely.

We'll make sure.

Thanks. Thanks.

Thank you. Thank you, sir. The next question comes from Nishita from Taper Capital. Please go ahead.

Hello. Hi.

Yeah. Hi. So, just on previous participants' question, I just want to add something. So, you mentioned that we have a threshold below which we don't pick up orders. So, if you could just like quantify what our threshold is, like what are the profit margins that we look for when we like take on new orders?

That's confidential. It's competition sensitive, right? Because as you can imagine, I'll tell you why this is confidential also. It's because a lot of the orders that we win, so anything in telco industry, and I'm sure this is applicable to many other industries where I've seen, any order that exceeds $800K, a million dollar threshold typically goes through an RFP process. And in RFP, we are, you know, competing and bidding against our competitors. So if I were to divulge, you know, what our thresholds are, you know, or what my profit margin or what my margin threshold is, this becomes competition sensitive, right? So they now know what to beat me at in terms of pricing. So there are two parts to RFP, as you can imagine. One is technical. So you have to be technically number one. And then you have to be also very competitive in your pricing, right? So there is a technical and there is a financial commercial component to this. So, I am not able to disclose because, you know, we are in, we do competitive RFP bidding all the time, actually. In fact, right now, as we speak, we are in multiple RFP bids. So, they will cut beyond our thresholds, if I mention a threshold number. So, you know, that's not something I am able to touch.

Right. Okay. So, I see that our margins have been improving quarter on quarter. We were like, is that trend going to continue, or if you could give some direction on how our margins will look like?

So, like I was saying, the margin expansion, we are looking at expanding the margins from where we closed last year. And, you know, this quarter, you have already seen margin expansion. So, we are going to, you know, that's one of the big goals that we want to do margin expansion. But like I was explaining to one of the, you know, previous shareholders, Brian, you know, just now, I do not want to continue to, you know, expand margins at the cost of reinvesting in the business. So, we want to get to a healthy margin profile, and I think we are at a healthy margin profile. Beyond the point of, you know, creating... Um, what do I say? You know, it's beyond the point of actually just expanding margins. I'm going to take some money and plow it back into business. So what you will see, what essentially what this means for shareholders is that you will see us, and I don't want to say that we are artificially capping it, but you will start seeing that we will start holding margins in a certain range. And after that, we will take any excess money or, you know, any excess cash that we are generating will start going back to the business. Because I think The journey of SUBEX, what I've seen, and the opportunity that I see in the market, we really need to invest, actually. We really need to invest and invest well to win this, you know, Gen AI race, right? So, it's not true, and we need to do this.

And my next question is that, are we looking for any inorganic acquisitions, inorganic growth, like in terms of acquisitions or something like that?

We do have cash on the balance sheet, and one of the ways to balance sheet, you know, leverage our balance sheet is obviously, you know, through some of these methods. So that's very much on our radar. I don't have any, so we are kind of, you know, running a pipeline in the back. We are seeing what we can do. Am I actively talking to, you know, someone right now? Answer is no. But are we strongly considering it? Do we have, you know, you know, pipeline? And are we strategically looking at what kind of assets will make sense for SUVEX? Answer is yes. So, because we do have some cash, as you know. So, we have about 185 crores. Okay.

Understood. Yeah. Thank you so much. Thank you. Thank you, ma'am. The next question comes from Meet Mehta from Prasun Exponentials. Please go ahead.

Hi, thank you for the opportunity. You know how to do it? Yes, you are. Okay. So, my question has been answered. I just wanted to understand your R&B expense for the annual is around 25, 35 crores approximately. So, are we seeing any increase over here? And exactly where are we doing the investment when you said that, you know, for growth, we are preparing reinvestment in the business. So, just wanted to understand that.

So, can I go with my second question? Yes, yes, please, ask away, ask away. I'll answer both.

Okay, so next question is on the, given the Middle East conflict and all that, so are we seeing any better interviews going further, and how are you going to, you know, manage to work in capital? So, yeah, please.

Yeah, so in terms of R&D expense, so when I said that, you know, we don't want to kind of keep stretching the margin profile, you know, lock it at a certain healthy, you know, margin profile and then reinvest in the business. The reinvestment is essentially for R&D, actually. So R&D for us is, you know, for a company like R&D goes into two parts. One is obviously, you know, engineering. The second part is AI, AI engineering, right? So for us, R&D spend buckets are only these two, and these are large enough. So do I see that our R&D intensity will increase in the coming quarters? Absolutely. And I think that's a bet and that's an investment that we must make. Because being a product company, again, we are not services. So my investment in people or, you know, expanding my workforce does not make sense. I need to go back and invest in technology. So the way I think about it is that, you know, my people expense will be replaced by my token expense, right? I'll use more and more tokens. So, will the R&D intensity increase? Yes, absolutely. We need to do that. To be competitive in the market, we will need to do R&D intensity. And we are also going to pursue some new initiatives, right? And when I say new initiatives, I need to look at not just telco, I need to look at some adjacencies where I can go. So, all this is R&D for us. So, R&D is not just, so there are two components. There is R&D for the current products to make sure that, so for instance, my Hypersense and ROC set of products, they are both, today, Gen AI enabled. They are both conversational products. So that is R&D into the existing set of products, which then I can go and tell my customers that, look, you have an older version of the product. Would you want a newer version with, let's say, newer AI models, newer Gen AI capabilities? So that's one part of R&D, which is your existing products, you want to really make them world-class cutting edge, right? The second part of R&D is more experimental, where we want to make sure that we are listening. So as you must have seen, the fraud types are changing, right? Like your fraud, the way it used to happen on banks and all that, today the fraud has come to our phones, right? So when you want to tackle new fraud types, like let's say social engineering kind of fraud or account takeover, all these are R&D bets. And we have to take those R&D bets to make sure that we are expanding our portfolio appropriately. So that's also an R&D, right, so for us. So some part of it is, so I think of our spend in terms of horizons. We do three horizons. H1 is obviously what exists today, and I need to kind of fund that to make sure that products are well supported. H2 is... Two years down the line, how do I want my product portfolio to be? H3 for me is highly experimental. I am making a bet for the future, and if it pays off, it's a big payoff, right? So typically in capital allocation, we'll spend 10% on H3 kind of bets because I want to – I have to eat today. I have to feed myself tomorrow also. So there is a horizon spending that we do. So this is how we generally panic out. So long answer to your short question, are there the intensity? Yes, it will pick up. And it has already picked up last year, and we intend to pick up this, actually. And are you sending a question on Middle East conflict? Yeah, so Middle East conflict, as I was mentioning to another shareholder, Is it beginning to affect us? I think the effect that we are seeing is in terms of slowdown. So slowdown of orders, not cancellation, of slowdown or shifting of orders. But one of the ways that we have done some mitigation ourselves is obviously when we were discussing the, you know, our AOP and budgeting for this year, Middle East conflict was on already. So we have some amount of risk that's already baked into the plan this year. But obviously, if it, you know, completely escalates, then that's not a scenario that anybody can plan for. Or we just don't know what that scenario is. But as we speak, what we have done is we have offshored all the delivery to India, to our Middle East. So in that sense, we make sure that, you know, the delivery continuity or implementation of projects does not get affected in Middle East. So a lot of on-site resources that were actually sitting, let's say, in Dubai, in Kuwait, in Qatar, have been pulled back into Bangalore. So now a lot of delivery is happening from Bangalore. Customers are obviously, you know, understanding and appreciative of it. But so we have done the mitigation that we can right now. Again, you know, it's a wait and watch for us, whether it actually de-escalates or it escalates into a different state. But for now, I think that, you know, we have our eye on it. For now, we are okay. Some slowdown is there. That's also something that I'll acknowledge.

Understood. And just one last question. What is your amount of R&D team and the percentage of

total people in your R&D? That would be my last question.

So, our R&D team, my overall strength is approximately give or take 700. Our core R&D teams are about 200 out of that.

Okay, Investor.

Thank you. Thank you. Thank you, Sam. The next question comes from Mahesh Kumar, an individual investor. Please go ahead.

Yeah. Good morning, Nisha. My first question is, is this profit margin sustainable? That is first question. Second, multiple previous investor calls, you have told that you are going to have Investor Day in Bangalore. So, when it is likely to happen? Okay. Because most of the information which you don't want to disclose in investor call, that you can share in the investor day that time.

Yeah, you have a fair point. So, I think in terms of sustainability of margins, I think I've answered that a few times today. But again, to reiterate, Mahesh, we want to kind of make sure that we get, I think we are at a healthy margin profile right now. So, and we are looking to be in this ballpark. And I think, you know, from that perspective, do I see that we can sustain this margin? Today, as I speak, I think that, you know, we should be able to maintain.

I'm sorry, everyone, and welcome to the call.

Can you – so today as we see the margins, I think, you know, we should be able to sustain it in this ballpark. So that's what we are actually thinking. In terms of Investor Day, what we have done instead is what I would do is we started NDRs. In NDRs, we have also invited some of our existing shareholders to come and meet us. So my recommendation will be that the next NDR that we do in Mumbai and, you know, EY team is on the call. We invite you to our, you know, one of the NDRs that we do, because I think that might be a better way to do a lot more coverage, because I can meet newer potential investors, I can meet existing ones. So, essentially, you know, instead of just doing one NDR, one investor day in a year, I thought that doing quarterly NDRs are a better way, you know, because we will come to your cities. So, we are thinking, you know, like Mumbai, we are thinking, and the Batch, and I, so we are planning to do like a broader coverage of NDRs. So, we'll come to your city, we'll invite you, and we'll make sure that, you know, wherever you are, we kind of invite you into the next NDR that we do. And investor feedback was also that NDRs are more useful to them. So, we will not likely do one day. We will go and, you know, do NDRs with you. And we'll invite you to go. So you should be able to get an opportunity to ask anything that, you know, we can't comment on in our, you know, earnings call.

Thank you, Sam. Thank you. The next question comes from Nanda Gopal, an individual investor. Please go ahead.

Hi, Nisha. Congratulations for this great number. My question is around the R&D piece that you were talking about. And just curious, you know, because you spoke about Horizon 1, Horizon 2, Horizon 3. Also, you spoke about you have plans to invest in the future. What's the future looking like ahead, Nisha, you know? Is it, there will be something in your mind? Because all these three are building blocks, horizon one, horizon two, horizon three, but they all lead into something that you are able to visualize. So I would love to hear that. I'm not looking for any numbers at all, but. If you could tell me what is that end state looking like, it'll be good, you know, because at least we'll be able to plan how long to hold on, what is being created also, we'll be able to at least have some sense, you know.

Yeah. So, okay, that's an interesting question. So one thing is the way... So, there are three parts to it in Horizon, but what we are essentially looking to do is, and I think I covered this in some part in NDR, but essentially what I'm planning to do is in Horizon, obviously, I want to make sure that our current set of products is, you know, GNI enabled entirely. So, our current suite of products, be it RA, FM, or PEMS, definitely needs to be, you know, completely in line with what the market is doing. The second part of it is that I want to make sure that we enter markets that are going to be very exciting. So, for instance, you know, I'm looking at some of the CapEx expansion that's happening across the world. So, there is a large CapEx expansion happening around, you know, as you are aware, in data centers and other areas. So, we are strongly looking at that and seeing that, you know, so there are two ways, right? I develop new capabilities or I look at my product and see where else I can take it. And I'm looking at both, actually, right now. So, my thing is that, can I transition? So, in the next two years, I want to transition my split to like a 60-30-10, right? So, 60 becomes my H1, 30 becomes my H2, and 10 becomes my H3. So, this is where I want to, you know, finally, this is where we were, but where I want to kind of... The goal is to see if I can get into this newer area, actually, because there is a lot of exciting things happening with satellites. There is exciting things happening with, you know, data centers. And I think we need to be on one of these waves. And we need to catch that. We need to ride the wave. I always tell people internally also that you have to catch a wave to ride. And we must ride some waves right now. So that's where a lot of R&D spend is investing, you know, kind of going. In the middle, there is another sweet spot, which is, you know, to expand our portfolio. So fraud. So fraud, for instance, is kind of changing into account takeover, social engineering. These are complex frauds. These are not the frauds, you know, that are, let's say, called records, called data records of telcos. This is a fraud that's manifesting very differently. So we want to make sure that we are those people that, you know, you call first if you have an ATO, if you have a, you know, social engineering fraud. So I want to be people who kind of go and solve some of the hardest frauds that are there to solve in terms of, you know. Portfolio expansion. So for me, make your current portfolio really strong. Make it Gen AI enabled. Make, you know, expand your portfolio into the areas where we haven't gone before, which, you know, I would say are not just the usual frauds and all that that we tackle, not like SimSwap and all that. I want to get into, you know, newer areas. And the third part of it is go to areas which are going to be, you know, the future and tomorrow and I think, you know, very exciting for us in the future because I know there is a lot of push, right, go outside of Terco and all that. And I don't want to go to utilities, for instance. That's not where excitement is. For me, the excitement is satellites. The excitement is data centers. There is, you know, there is activity happening there, and that's the, you know, wave I need to catch. So there is a lot of spending that I'm doing there in that area. So if I were to say, I want to make sure that we retain or hold on to our cash cows, and we truly make them cash cows, so that we can, you know, release money to really go after some of these areas that require, as you can imagine, high spend, it requires high spend, it requires a different kind of team, I feel almost. And, you know, that's what my focus area is. So my, again, you have been with us long term, but my request would be that I feel there is a lot of excitement in the space that we are in. And it's, you know, it's fast catching up. It's interesting where it's going. And I want to go with it.

Perfect, Nisha. At least, if not for the shareholders, at least within the organization, I hope these conversations have started. Because you cannot lead an organization without a vision. And for the last many years, all conversations, even in these calls, have been very transactional. How does the next quarter look? Let us steady the ship. Now, once the ship is steady, I think these conversations at least should start within the organization, so that we can hold on to talent also, because if there is so much promise ahead of us. I think it has to be tabled, you know. People have to know that, yes, you're running towards something which is meaningful. Otherwise, we could be having problems, right?

No, no, I agree. I agree. See, because I, in fact, as you can imagine, it's frustrating for, you know, shareholders, but it's equally tiring and taxing for the management team to be on a quarterly treatment, right? And this is something that we must do. And now today we have broken that, Anisha.

We have broken that today.

And it's not frustrating, it is never frustrating for an investor, Because some investors hit for the long term. But the only thing is, it can be very blinding for the investor. He doesn't even know where is he going. So at least that visual identity, if you can give that, hey, 10 years down the line, we could be like this. The word called could is built into it. So nobody is going to hold on to the could. These are not goals. These are visions. Very gaseous in state. They do change. So I think it's high time we start communicating that. What is it that we wish to create in future? Now, nobody is going to hold on to you for that, right?

Yeah, yeah. I mean, no, but it's a fair point. I think I will, what I will do is I'll take this feedback and I will probably come back and articulate this much better, you know, next quarter. Let me articulate, you know, let me take this as an action item.

Thank you so much. It was a dream to see this result. Thank you. Bye-bye.

Thank you so much.

Bye.

Thank you, sir. The next question comes from Jitendra Bhutorya, an individual investor. Please go ahead.

Good morning. Thank you for this vision update actually which you gave just now. That was really nice and great. My first question is whether we have any recoveries from those earlier secretary contracts which we had written off earlier because some legal recourse was being taken or maybe some settlement talks which might have taken place. And second, secondly, we had done some investment in that Middle East subsidiary. Now, since there was a showdown there, are you thinking of would certain more funds would be required to be infused into the subsidiary so that, you know, once this situation improves, we can really gear up faster.

Okay. So I will answer the first part of sectorial contracts. In Middle East subsidiary, again, I think we are, I will ask, you know, Sumit to add in if there is anything that he wants to add in. But let me tackle the first part. To be honest, we are still in litigation on sectorial contracts. We are still litigating this. And as you know, Jitendra, with litigations, It takes time. So, you know, these are things that move through the process. So, we are also, you know, looking at mediation, settlement, all those are a part of litigation, right? So, nobody gets to the court the first day. So, it's all a part of litigation roadmap. So, in some places, we are settling. In one of the larger contracts, actually, there were three entities. One has been settled and dispensed with. So, we are looking to close the other two in the, you know, hopefully, we have been chasing it honestly from our end, but I'm hoping that this quarter we are able to close. So, with that, one of the big contracts will be closed and done with, dispensed with. The second one is entirely under litigation right now. So, that litigation is ongoing. And, again, I don't have a timeline, honestly, but I'm hoping that before we close this financial year, we are done with all the litigation there. Given, you know, left up to us, we would have kind of... We have done this this quarter or next quarter, but given that this is not India jurisdiction that we are doing litigation in, this litigation is outside of India, actually. So this is a different jurisdiction that we are fighting in. So it's taking time. The court systems are working, you know, taking their own sweep time. And again, to give you some sense, it's Middle East where we are doing this jurisdiction. So Middle East is, by default, only a little bit slow right now. So doing a litigation there, it's taking us some time. In terms of Middle East, I don't think we will need to capitalize the entity anymore. I don't think so. Again, Sumit, do you see any such, you know, do you have a view on this?

Yeah, currently not. It is self-sufficient the last time which we

formed the capital more about to support the business. So that remains the same. So we don't expect further infusion right now. Again, the situation is also volatile in the Middle East region. So current visibility is no, but again, in future, something is there. Obviously, we'll come back to the shareholders for their views.

And my one more question, we had invested, you know, when we sold off ID Central, we got shares of some company, I just forgot the name. So how is that 1 or 2% investment in that company was there? So how is that investment missing like?

It's doing very well. Actually, we have turned out to be good investors, I think. So, it's actually turned out very well. What we'll do is, I think, again, Sumit, I'm not sure, but will we do it in Q2 or Q3? We'll do an SMB kind of markup. We'll do a fair market valuation and do a markup. But to answer your question, actually, that investment is yielding very good results for us right now. We are really happy with the way it's going. Again, Sumit, I think it's Q2 maybe, right? Q2 or Q3, we do SMB markup.

Yeah, so basically Q2 is going to be our balance sheet we have to disclose. So based on the current performance, things are investment. It's again, as you appreciate, it's an unlisted space which we have invested, and the company is really doing well. So, it needs evaluation and all that. So, we are looking at the company primary, the results are really good. So, Q2 will be the event where we can look into that, whether it needs revaluation of fair market to be done. And based on that, we will accordingly report it. But just to summarize this investment, apparently, as we speak, it's performed really well.

So, is there anything on the forex gains, you know, when the currency has depreciated and most of the contracts are in foreign currency? So, what is the forex gain on the last quarter or maybe because, you know, sales is a function of, you know, revenues. So, whatever revenues we get in foreign currency only. So, that impact is also captured in the jump in sales. Can you comment on this, please?

Yeah, that's correct. So, there is obviously, so compared to the last quarter to this quarter, the closing affects $2.00. There is a bit of a loss because the rupee has a strength in compared to the last quarter. And from a quarter-on-quarter point of view, the forex gain per se is not much, but though from a year-on-year point of view, definitely there's a good gain. And again, based on the accounting policies, how the INR conversion happens is basically that month average rate. So, definitely, on the numbers side, it has worked well. And, predominantly, our entire revenue is largely a foreign-demanded revenue. So, yeah.

So the jump which we see from 72 to 79, what is the portion that comes out of the forex increment?

State again, sir, somehow I have not followed the question.

I think he's asking from 72 to 79, what's the currency gain in that? That's what you're asking, correct?

Yeah, correct, rightly so. Thank you.

I think it's about 3 crores, this currency gain, to answer your question.

Okay, okay. Thank you so much. Thank you.

Thank you, sir. The next question comes from Harshit Singhania from Robo Capital. Please go ahead.

Hello. Hi. Yeah, so most of my questions are answered. So I think I would like to just add on that. So like 70% of our revenue is recurring. So it would be just great if you could like in the future sometime when the company is stabilizing a lot better, then we could get some better, like a bit more directional guidance at least so that we can understand where the company is at and how the revenue is looking. So I think that's just the last comment that I have.

Thank you so much. We can use all the luck.

Thank you, sir. There are no further questions. Now, I hand out the floor to Ms. Nisha for closing comments.

Firstly, thank you to all our shareholders for your continued engagement. I think the questions that you ask, the perspectives that you share, and the expectations that you articulate in these calls, they really keep us sharp. And I don't view that as scrutiny, as pressure. Actually, I view it as an important part of building a better company. So, one thing that has struck me over the past few quarters is, this is something that I want to share with all of you, is how invested, you know, our own people, and when I say our own people, Subxians, are in these conversations. So, a big sea change for me is that the members of the management team regularly ask me how the investors are responding to our performance. Many of our employees dial into these earnings calls because they genuinely want to understand how the company is progressing and how the market views the work that they do every day. So, to me, that's a very healthy sign, and it reflects an organization that increasingly understands that the work we do every day ultimately has only one purpose, right? It's to create lasting value for our customers, for our employees, and most importantly, for you shareholders. So, I think this kind of awareness has created a strong sense of alignment across the company. So, there is a shared understanding that sustainable value is created when we consistently execute quarter after quarter, Not through promises, but through delivery. So this is very, very well understood through the DNA of the company right now. So I think this is something I particularly wanted to share here. But thank you once again for your time, your questions, and your continued support. So we appreciate your confidence in Subrex, and we look forward to updating you on our progress in the quarters ahead. So thank you again. Good luck, and stay safe, and please stay healthy. Thank you. Bye-bye. Thank you, ma'am.

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