Hello and good morning to everyone. On behalf of Arihant Capital Markets, I thank you all for joining in to the Q1 FY '27 earnings conference call of Ceinsys Tech Limited.

Today from the management we have: Mr. Kaushik Khona, Managing Director India Operations; Dr.

Abhay Kimmatkar, Managing Director; Ms. Amita Saxena, CFO.

Without any further delay, I'll hand over the call to management for their opening remarks. Over to you, sir.

Thank you, Ritesh-ji. Am I audible?

Thank you and good morning, everyone. It is a pleasure to welcome you to this earnings conference call for the first quarter of financial year 2026-27.

Let me first thank our host for today's concall, Messrs. Arihant Capital.

In the interest of some of the people who may be new to the company, let me first start by giving you a brief overview of the company first, followed by the performance highlight for the quarter under review. Ceinsys Tech, which is rebranded to CSTECH AI while the corporate name remains as Ceinsys Tech Limited, we are a leading technology solution provider in the IT-enabled sector providing engineering and technology solutions in the infrastructure domain.

We are acclaimed for our expertise in geospatial engineering as well as other engineering services and solutions. We offer a broad range of geospatial intelligence services, including data creation, data analytics, decision support system, and enterprise web solutions.

After the acquisition of mobility business of Allegro in 2022, we acquired a geospatial business of VTS in USA in 2024, which was majorly operating in telecom domain. Since then we are identifying some more targets for inorganic growth to expand our horizon into the domain where the company's already operating, that is the geospatial engineering services and the technology solutions, for which the company's already mobilized almost around US$28 million.

We serve prestigious global clientele that include large corporates, OEMs, asset management companies, and government bodies, highlighting its robust reputation in both geospatial and manufacturing sectors. With offices in India, in US, UK, and Germany, the company combines local expertise with a broad international reach.

Additionally, the company has initiated and invested into a development of product solutions focused on infrastructure vertical and emerging technologies through a vertical focus on the artificial intelligence and machine learning and embedded electronics. This vertical emphasizes development of the AI and ML-enabled applications and solutions to enhance our delivery for the existing domains at the outset and then reflecting the company's commitment to innovation and maintaining a competitive edge in the dynamic technological landscape.

Now let me come to the financial and operational highlights for the first quarter of the financial year 2026-27. We are going to discuss about the consolidated numbers.

For the quarter under review, operational revenue stood at ₹158 crore, registering a marginal year-on-year growth of 1%. EBITDA increased substantially by 27% on year-on-year basis to ₹39 crore with EBITDA margins improving to 24.4%, representing an expansion of 5 505 basis points over the corresponding period last year.

This improvement was supported by continued gains in the project delivery efficiency with EBITDA increasing sequentially for the eighth consecutive quarter. Profit after tax stood at ₹31 crore, which was a marginal decline, while PAT margin stood at 19.6%, a contraction of around 59 basis points year-on-year.

In terms of segmental performance, our geospatial engineering services revenue for the quarter increased by 30% year-on-year to ₹94 crores while technology solutions side revenue declined by around 25% year-on-year to ₹63 crore. For the benefit of all, the mix between the geospatial engineering services and the technology solution side keeps on changing based on the execution phase of each project.

As a theme, the company aims to enhance its technology services segment revenue and aims to go beyond 51% of the total segment revenue. Moving to our operational performance, the quarter saw continued momentum in our order inflows, with the company securing fresh contracts worth ₹143 crore during the period.

Our order book stood at 990 ₹990 crore at the end of quarter, providing a healthy base for the revenue visibility going forward. We continued to see encouraging tractions across our key business verticals.

Our international geospatial mobility business showed a meaningful improvement during the quarter, with new business development opportunities and contract awards gaining momentum. This progress is encouraging as we continue to expand our presence across international markets and leverage our capabilities across geospatial engineering and mobility solutions.

We are also taking deliberate steps to build capabilities in emerging technology areas. We have approved an investment up to ₹25 crore in joint venture with Ai-Fabric USA to be incorporated to create a sovereign AI Neo Cloud in India for Indian government, citizens, and companies focused on cybersecurity services and defense, to offer GPU as a Service, Model as a Service, and AI service, to build or lease data center capacity.

This initiative is aimed at creating capabilities in an emerging technology segment while complementing our existing technology strength. On the domestic front, our engagement with government-led programs also continues to strengthen.

We have received a letter of intent from the Director of Urban Administration and Development, Madhya Pradesh for the selection and appointment of a manpower agency for Beneficiary Led Construction vertical under the Pradhan Mantri Awas Yojana with a total contract value of approximately ₹67 crore, which is going to be gained over the next 3 years. This contract enables application of geospatial technology and also application of AI.

We also strengthen our presence in water and smart city infrastructure segment. We recently received a letter of intent from Bhandara Municipal Council for a supply, installation, commissioning of a consumer domestic ultrasonic and electromagnetic AMR water meters under the AMRUT 2.0 with an order value of approximately ₹17 crore.

This project is to be executed over a period of 12 months and further strengthens our capabilities in smart water management solutions. Our recent order wins also demonstrate the breadth of capabilities across our business.

In the mobility segment, we have received an order of approximately ₹4 crore from EQS in Tech, India for design, planning, and simulation of four production lines to be executed over 3 months. We also secured an international order through our US subsidiary, Technology Associates, Inc., for the beta development of hybrid power transfer case for Emotive Mobility USA, valued at around ₹4 crore.

The routine contracts for mobility continue, which are not built in the order book. In our geospatial business, we continue to deepen our engagement with international customers.

Our earlier engagement with Teckon includes NVMe drive supply as well as AI-powered building and road extraction, encroachment, and asset monitoring through BrigAI platform, along with enterprise geospatial imagery repository and AI feature extraction capabilities. The aggregate value of these purchase orders was ₹30 crore.

On working capital cycle stood at 164 days during the quarter, broadly in line with the levels seen over the previous two quarters. We have received recent government resolution issued by Maharashtra government towards allocation of funds for the dues related to IoT and other projects to support collections and meaningfully improve the working capital cycle over the next two to three quarters.

Overall, we remain focused on converting our strong order pipeline into execution while continuing to diversify across geographies, business verticals, and emerging technology opportunities. With improving traction in our international businesses, a healthy order book, and new initiatives in AI and digital technologies, we believe we are building a stronger and more diversified platform for sustainable growth.

With this, now I open the floor for question-and-answer session. Thank you.

Am I audible, sir?

Yes, sir.

Yeah. Thank you very much, sir, for this opportunity.

Sir, just first up wanted to understand this around ₹1,000 crore order that we had, what would be the execution timeline? What sort of order pipeline we have and order inflow target that we are looking at?

I'll just give you the breakup of the order book. As I said, we have around ₹990 crore order book.

The execution timeline will be: some orders have to be executed within 3 months, some 6 months, some 12 months, and some of them have a plan up to 18 months. There are certain orders which also have O&M which goes beyond the capex position, which goes to 2 years or to 5 years, the O&M position.

There are orders which have an execution timeline which are different. On an average, the execution timeline, weighted average will be between 12 to 18 months.

I hope I answered your question. As regards funnel, if Dr.

Abhay would like to comment? No, no.

I agree, I'm continuing what Mr. Khona has said.

We have the execution spread across next 2, 3 years. The first 12 to 18 months would be the capex, and then later we will have 3 or 4 years of the opex.

That order book is going to get spread, and we will have that revenue coming into those. Yeah.

No,

on the funnel side, what sort of funnel we have in terms of order book?

From now onward?

Going forward, yes.

Going forward. Next two quarters looks pretty upbeat, and as in last concall also we said that we have a robust funnel.

We were L1, still few of them after L1 we are about to receive our orders. Funnel is pretty strong and will surpassing our last year's number.

That's for sure. I will maintain it and reiterate it.

We have a very strong funnel. Across our all verticals, yeah.

Will it be possible for you to quantify what is the range of funnel that we are looking at?

Exact number I won't be able to tell you, but I think Mr. Khona has indicated you kind of funnel and number but not exactly the number, but definitely we are surpassing.

Already he said that and you also said that we have already crossed about ₹1,000 crore, we will be achieving similar kind of numbers. I will pass this question to Kaushik.

Sir, just wanted to reiterate, we don't give the forward guidance because that's not within our policy. As Abhay already indicated, we have a strong funnel.

In fact, the order book during this quarter, which is around 140- ₹143 crore, also shows substantial improvement from the order book as compared to the previous two quarters. As Abhay mentioned, there are few opportunities where we are already bid.

We expect the results shortly. As you are aware, as and when we get the substantial orders getting awarded, we also publish it to the stock exchange by way of routine declaration.

We'll keep you posted about that.

Okay. Understood.

Just one last thing from my side. Now in terms of growth, I think this first quarter we didn't see much growth, right?

What efforts we are doing to kind of improve our growth and what's the growth we might be looking at, right? We have seen last 2 years very good growth in the range of 50-60%.

Now so how should one look at this year and what efforts we are doing, yeah, to improve our growth?

As I said, we are on the target to not only increase the growth of turnover, we are also on the target to increase the margins, and you would have seen that this quarter the margins have shown substantial improvement. The growth obviously will continue as the funnel is also getting built up.

Some of the orders which are already mentioned where ₹143 crore which was received have the execution time within 3 next 3 months, 6 months, you will see the growth in next 2 to 3 quarters. As I again reiterate and for the benefit of all the listeners, we don't give forward-looking statements, and therefore we will be restricting ourselves to mention about the numbers.

We are sure to continue the trend of the growth which we have seen in the last 2 and 1/2 2 and 1/2 years.

Okay. Understood.

That's very helpful, sir. That would be it from my side.

Would like to wish you all the best, yeah. Thank you.

Thank you.

Sir, thank you for the opportunity. Sir, firstly, I wanted to understand regarding our order book.

Sir, last quarter, our order book was ₹880 crore, and that has moved to close to ₹990 crore this quarter. If I look at the order that we have received of ₹140 crore minus the order that we have executed of close to ₹148 crore, this number is not matching.

If you could help me understand on the same.

Thank you for your time and this question. I would just again clarify.

In the previous conference calls also we have clarified that not all the businesses go into the order book. There are certain run-rate businesses which we don't build in the order book.

For example, the mobility business, we don't build in the order book. For example, the OEM products and services, we don't build into the order book.

Therefore, there are certain business segments which do not form into the order book. This quarter also almost I would say around 40- around ₹50 crore of the turnover was without the order book because they are the run-rate business.

This run-rate business will continue. There will be certain orders which flow into the order books and the execution happens without the order book also.

If you want, I can make a reconciliation and then give it to the IR agency, who can then forward it to you. Opening balance of ₹880 crore.

What needs to be understood is during this quarter, even after execution of ₹157 crore, we have increased the net order book by around ₹110 crore, which I think is a phenomenal progress. Thank you for your question.

I will pass on the information to the IR agency.

Got it, sir. Sir, this non-order book business, sir, what percentage of our revenue was this number in FY '26 and where do we see it scaling in FY '27?

Right now it's close to 1/3 of our business, can this become 30 to 40, 45% of our business during this year?

FY '26, as I mentioned about the two segments which are without the order book was ₹130 crore, which includes mobility and the product solutions business. Besides, there will be some orders which is within the other existing domain, which are small run-rate business which don't go into the order book.

Out of ₹660 crore which we recorded last year, I think more than 20, 22% or 25% was without the order book, and which traction will continue.

Got it. Sir, just a final question from mine.

Sir, this Ai-Fabric partnership that we have created, sir, this ₹25 crore investment, what is this towards? What would be the solution?

Will we set up the whole cloud infrastructure for the government, and we'll receive payment for that? Or will we just become more of a EPC player for the sovereign cloud?

If you could help us understand the direction in which you are planning to go.

Let me clarify. This is the initial phase of evaluating the business opportunity of setting up the AI cloud for the purpose of sovereign cloud for the government, and this is basically going to cater to the defense requirement of the government is our target.

The proposed JV is between Ai-Fabric of US, Inc. and we with the contribution of 50 each 50% each.

Present situation is where we are contemplating to incorporate the JV, which should be done in next one or one and 1/2 months. After the JV is formed, the complete due diligence and the technical due diligence as well as the market due diligence will be carried out, and then second phase of another investment of ₹20 crore from our side will be done.

That's the kind of present traction. We don't intend to be a EPC company.

We intend to be the AI solutions company, and that's the objective. We won't be catering to the EPC part, but obviously when we build up a infrastructure, some of the infrastructure will be kind of constructed through EPC contractors also.

Our business will be AI solutions, not the EPC.

Got it. Sir, will we be providing something on the geospatial lines only to the defense sector through this cloud that you are setting up for the government, or will it be more of a data analytics or something on that front?

No, as of now, it will be a kind of technology platform which will integrate the geospatial as well as the satellite data as well as the enterprise solution, which will be user-defined, custom oriented based on the requirement of the customer. Right now we are not expecting ourselves to be only data analytics company.

It will be a complete solutions company. As we progress, we will then keep on kind of updating the investors.

Got it. Sir, just a final question from mine.

Sir, because our margins have improved, what has led to this margin improvement? Sir, what is the margin for the order book business versus the run-rate business from the mobility and product solutions?

How does the margin differ for these two segments?

Margins are improving, as you see. That is because we are scaling up on the kind of maturity scale of the businesses.

Earlier before 3 2 years, we were into more of data acquisition. Now we are into more of enterprise solutions.

We are in a scale of growth. If typically a business is measured on the platforms like it's a Scale 1, Scale 2, Scale 3, Scale 4, which Scale 4 is the highest, we would say we are between Scale 2 to Scale 3 and going up.

Earlier the margins were, let's say, when we began in before 2 years, margins were around 15 to 17%, and we are now going up to 24%. Second issue is before 2 years we also enabled our technology solutions as a part of new domain where the margin are slightly better, and therefore the overall mix of margin will be improving.

As regards the margin in the order book, obviously they will be either the same or better because as we keep on executing, because of the improvement in the way we execute and the economies of scale, the margins are expected to improve. We would, as I said in the earlier question also, we don't give guidance about what will be the margin improvement.

What was your next question?

No, sir, I think that answers my question. Thank you so much, and all the best.

Thank you.

Thanks for the opportunity, sir. My first question pertains to the previous participant.

I just want to understand if you can explain in a very layman term. Let's suppose it's a 50-50 JV.

We are infusing ₹25 crore, and additionally we'll invest ₹20 crore. That will be the infrastructure which we'll be setting up.

Now want to understand on the second part is, after the setting up the infrastructure, all the data which were collected will be stored over there, and then we create a so at a one type of SaaS model we have been planning to do, or we have been thinking of in terms of annuity stream which could help into increasing yield. What is our expectation in that part?

Let me again clarify. Right now the board has decided and resolved to invest total ₹25 crore in two phases: first ₹5 crore towards incorporation of the company and second ₹20 crore once the due diligence of the business is done.

The due diligence will include the technical as well as the market due diligence. What we have envisaged is to provide the solutions in the form of either the GPU as a Service, Model as a Service, or AI services, and this will be based on the building up of the data center for the purpose of serving the sovereign defense purpose of the country.

This is the right now objective. As we progress, I think it's still little far off to right now comment on what will be the business model and how we will structure the business model, because the phase of due diligence, etc.

will take another 3 to 4 months, and by that time we will be able to freeze the business model. I hope I answered your question.

Got it, sir. Basically, we are eyeing at in FY '28,

Right. Hello?

You understood right.

Yeah. Got it.

Sir, second question would be on the trade receivables. Just want to understand, we have seen a notification from the government end that they have released some payment from JJM perspective.

What are the trade receivables we have been stuck in, and how much receivables we are expecting going in a few months? How is the traction going forward from JJM now?

I would first of all answer the question on the overall parameter. If you see, our working capital cycle this quarter is also 164 days, and the same last previous quarter, previous two quarters was also in the range of around 162, 164 days.

We have maintained the working capital cycle, which means that whatever billing is happening is being recovered. That is first thing.

Second thing, I also mentioned in our presentation, which is posted on the stock exchange, that recently, I would say before 2 weeks, the government of Maharashtra has issued a GR where they have said that the majority of the funds which was stuck earlier for the IoT-related projects under the Jal Jeevan Mission, they have already resolved that the funds major funds will be dispersed. Therefore, we expect, as per the process which it takes, the time which it takes, we expect that in next two to three quarters and obviously before 31st March, all the overdues of IoT project and other project which are under the Jal Jeevan Mission will be cleared, which will substantially bring down the working capital cycle.

This is what we are expecting. However, as I already mentioned, whatever we are billing, we are collecting, there is no additional buildup of working capital cycle.

Amita, if you would like to clarify further.

We have IoT debtors and unbilled revenue from IT approximately UBR of around total amount of ₹100 crores, and we are expecting to get these funds by end of third quarter, most probably. We have that thing in mind and we have the clarity from the government also that these funds will get released very soon.

In terms of traction, if you can tell something?

If you look at our execution and in the past two quarters of conference also we have mentioned that while Jal Jeevan Mission projects continue to be executed, the focus now is also going into various other domains. For example, transport or energy or other geospatial, and recently if you see the wins which we have had which is under the Madhya Pradesh Urban and Administration Development Department, there also it is more of a geospatial.

We are taking conscious call to see that we bid for those opportunities where there is more clarity of the funds, budget allocation is already there, and funds are already arranged for by the government projects. Earlier we had a setback for some time till November 2025 for the issues of Jal Jeevan Mission, but now since November '25, we are not seeing any buildup on that, and things are more manageable.

I hope these things are clarified.

Got it, sir. Want to understand the Allegro visibility, how it's been panning out, what are your expectation in terms of growth, and what is the current challenges which we have been facing over there?

I think it's been at least from 2025 December onwards, we are seeing positivity in the mobility business. As you may recollect, Allegro was acquired and then it's already since merged with the company, right now mobility is a division.

The only thing which remains out of this company is a JV, which is Allegram, which is a JV with Grammer AG of Germany where we are 70% stakeholder and 30% is Grammer. These results of Allegram are not consolidated because they are a JV.

Now as regards mobility, the things are looking better. In fact, Grammer also has seen that there is a improvement in the order book for the calendar year 2026, and that is a general improvement overall in the mobility business.

We are expecting some more traction in the mobility. On the international side, I think the subsidiary, wholly owned subsidiary which has mobility as well as geospatial, we are seeing that there is a substantial improvement in this quarter as compared to the previous year same quarter.

Even

the Top line has also increased for our overseas business in this quarter. Even the margins have improved in that business.

We foresee a good traction in the US subsidiary also in this coming year.

Got it, sir. Last time when in last conferences you have mentioned about the RFI near to transport as which we have been planning to scale, ramp up, or is that tendering been started, or it's still under the approval from the government end, and it will start soon?

No, so as regards the ITMS and the ATMS business on the transport, which is the Intelligent Traffic Management System, we have already gathered the capabilities. In some of the cases where we did not have, we already tied up with the partners, and we are already in discussion with the government for some more opportunities.

We expect some positive developments in the next one or two quarters on the transport domain.

Got it. Sir, my last question would be, recently we have seen order book pipeline has also increased by ₹1,000 crore, and while without our order reflection it more or less stays around 20-25%.

Are we expecting a significant revenue in FY '27, the reason being, first of all, our order conversion is 12 to 18 months, and other than that, our order book it doesn't include 20% of the new orders in flow? Do you expect a significant 900 to 1,000 crore mark in FY '27?

I would just refrain from giving any guidance for the future. As you rightly observed, there is an improvement in the order book.

There is execution timeline also of 12 to 18 months in most majority of the project. We are trying to push the execution to increase the kind of level of execution to have the continuous growth as we have seen in the last 2 and 1/2 years.

We won't be able to give you guidance on what will be the turnover for 2026-27.

Got it, sir. Thank you.

Thank you so much. I will join back in the queue, sir.

Thank you.

Hi, sir. Thanks for the opportunity.

Sir, my question will be on this growth side for FY '27. You mentioned ₹990 crore of order book we are yet to execute, right?

Yes, sir.

Should we assume 30-40% of this order book will get executed because you have given a weighted average of maybe 12-18 months? Sir, how should we think of execution of order book in this financial year?

I have already mentioned that the majority of the orders have the execution timeline of 12 to 18 months, I think as we progress, some of the orders obviously will get executed. Besides, I also mentioned earlier that some of the orders have the execution timeline of 3 months, 6 months from the date they have been received.

Obviously there will be execution within this year itself. What percentage, whether it will be 30%, 40%, or 50% of the order book in this financial year, I won't be able to give you guidance.

Yes, we are on track with all the milestones which are as per the order book. We are not behind any of the milestones, we should be able to progress as per the timelines mentioned in the order book.

Okay. Sir, drivers of this growth, which segment do you think will lead for us?

There are two or three major initiatives which we are seeing. One is the geospatial enterprise solutions, we are seeing good traction.

In fact, in the buildup of order book of ₹143 crore, majority of the orders have come from the geospatial enterprise solutions. Besides, we are also expecting a traction in the transport domain, because there we see lot of opportunities and we have also kind of gathered capabilities to execute or bid for them.

Therefore, these are two major domains. Besides, we also see the opportunities in the energy for which some of the opportunities we are also tracking, and the satellite defense-related data collection, analytics as well as the enterprise platform for those kind of services.

These are some of the tractions which we continue to monitor. As you already know, we are into all the infrastructure domain, the opportunities in each of the domain continue to be tracked.

I hope I answered your question. Sir.

Understood. Sir, on the margin front, will we be able to maintain this 22, 23% margin?

This quarter, we have clocked 24.4, I guess we should be able to do that.

Understood. Thank you so much.

Thank you.

Hi, sir. Thank you for this opportunity.

I have my question regarding the order book itself. In the last concall, also you mentioned that we are L1 in three large orders whose values were around ₹350, 400 crore, correct me if I'm wrong, which is more than the total order intake last year.

I just want to understand are we on track for that, which you mentioned by the end of Q2 or in Q2 we should receive these orders. Can you shed some light?

Yes, we are on track. In fact, one of the order which we already got was that ₹67 crore worth of order where we were L1, which we mentioned at that time, although we didn't give the name.

We continue to have other opportunities, apart from the two which are already in pipeline out of the three mentioned in the previous call. We continue to bid for the new opportunities, and the funnel keeps on increasing.

As and when the final orders are awarded, because once if you can understand and appreciate, the bid process itself typically once the bids are called for, invited, and finally even if the bids are kind of registered, the evaluation, technical evaluation and the award of the contract typically takes 2 to 3 months. Sometimes it exceeds 2 to 3 months also.

Therefore, we are on track. We should be able to expect something more.

Dr. Abhay, if you would like to add something?

You're rightly mentioned. Last time also we had mentioned that we are L1 in three or four of those orders.

Other one were very pretty small, we didn't need any mention, but yes, one of that ₹67 crore has already come and two more are in offing. One of the order will come this quarter because there is a huge process going to board and then giving the final order.

There are a few more tenders just we got those open. Commercials are yet to be opened.

Another two orders would be lined up, probably in this quarter if those goes well. We have very strong pipeline and strong closure anticipating in this and next quarter, we will definitely surpassing those.

It's pretty strong built up for next two quarters. They've already created.

Some of the tenders are going to get published, one tender has already got published. This is a strong pipeline, that's what I can reiterate.

Got it. Based on this, we can assume that we can cross about ₹350, 400 crore order book intake by Q2, if I understand it?

Sir, as I said, we don't give any guideline, although the funnel remains to be substantially big. The finality of awarding of an order has a lot of process, it would be wrong for us to give you any futuristic guidance because that's not as per our policy.

As I said, you can observe that from the last quarter where we had order book closer of ₹880 crore, this quarter we are ₹990 crore after execution of ₹157 crore, obviously there is improvement, right? We expect that to further improve, and as we will keep on registering as and when we get the orders.

Correct. Sir, in FY '25 when our order book increased significantly, there was one large order worth ₹350 crore itself.

I want to understand how is the bid pipeline currently directionally? Are there such tenders floated currently which have such large sizes, or directionally as an investor we would like to just understand, not an exact figure, but tenders currently which are floated right now, are they comparable to the demand environment in FY '25 or a bit slower than that, if you could help us understand how the situation is?

I will put some light on that. That one of the case, but we are building up such cases wherein we can see.

Such cases takes 1 or more than 1 or 2 years build up, and get the funding and everything approved, and you need a national kind of program, and those were JJM projects, we could get that. However, after that, we have built up some of the project, we have built a capability, and we may see such projects coming in next 1 or 2 years.

We can anticipate to get one of those in this year, fingers crossed. I cannot put the number over there, but if not the fourth quarter, the first quarter of next year, we will definitely have one of such kind of project.

We are definitely building up this one of the project which can be really a game changer for us. Every other year, probably you may find such project coming in, and we are having specialized team to carry out such kind of mission projects wherein we can get good kind of revenue.

Those are there definitely. It's not the only one of the project in 2025 we've got.

We will have such projects coming in every other year. I hope I answered

your question. Great to hear that.

Secondly, in terms of our acquisition, we had raised funds I think 2 years ago for the acquisition. It has been delayed since 2 years.

I just want to understand what proactive measures are we taking to expedite this process? Are we currently evaluating any companies for acquisitions, or should we expect something in FY '27 in this regard, because it has already been 2 years since we have been trying to do this?

I will just take this. When we talk about the raising of ₹238 crore, it was expansion, new opportunities, acquisition, and all.

One of the major kind of initiative which we recently took which I also talked about and where even the board meeting discussions were also posted in the stock exchange, we are evaluating to kind of set up a JV which will be into the building up of sovereign AI cloud where the primary purpose will be to go for defense contract with the government. Now if that fructifies, that also will have a large business investment opportunity, which can be evaluated after the due diligence is already completed, which may take 3 to 4 to 5 months.

As of now, while that was one opportunity, we are also simultaneously evaluating few opportunities where we can get maybe a higher return than what we already getting, and therefore it's taking time. We don't want to invest just for the sake of investing.

We want to see that the investments are in line with what we are doing, either it is vertical integration backward or vertical integration forward within our line of business, so that it enables the margin expansion. We understand your question.

We hope that we should be able to give you some kind of visibility about what new investments we are making shortly.

Got it. Sir, around ₹300 crore of funds have been lying idle with us since 2 years.

If we look at our current share price, it is trading at very reasonable valuations. Why don't we just consider some capital allocation like a share buyback, which also shows our confidence in our own company and gives a signal to the market as well?

Also for the long standing shareholders, it will be beneficial because EPS will be increased permanently because of shares being extinguished from the market. Why don't you consider a share buyback as our company is available at?

Sir, this is a temporary thing.

Sir, the solution which you are giving is a temporary thing. Share buyback generally happens when you have cash surplus from operations.

Whatever funds we have is the promoters who have invested in the company because they're confident about the growth and the future prospects of the company. The funds which we have arranged is for the growth and development of the organization, rather than for this buying back of shares.

Right, but the funds have been idle since 2 years, and we have not been able to successfully allocate it.

We have been evaluating few opportunities, but you will appreciate we don't want to invest just because we have funds. We don't want to invest into an opportunity which is not going to give us a margin or profit margins or something like that which we are right now in.

If the business which we were exploring, if that is going to reduce the overall margin of the company, we decided not to go for those acquisitions, and we are looking for some good opportunity wherein we can sustain our margins also along with the investment.

Just to clarify, out of ₹230 crore, ₹130 crore has been received in March '26. It's just for your clarification.

This is received in last quarter only.

First ₹100 crore was received in September '24, but I think the majority funds have been received now. I think we are on track to see that they are properly used.

They are properly invested and we can generate the revenue in long term.

Absolutely.

Over those funds.

Got it, sir. I hope that you make the best decision, and I trust the management to do that as well.

All the best, and thank you very much.

Thank you.

Thank you.

Sir, I wanted to understand that if we look at our 31st March balance sheet, we have a huge unbilled revenue of around ₹320 crore, which is 50% of our standalone revenue of last year. Sir, and if we see in the first quarter numbers also, the revenues are by and large flat.

When exactly will it be billed?

Sir, this unbilled revenue major portion is of JJM things, and which we have clarified in one of the calls, that we have got the clarity from the department and this amount will be billed in this next two quarters, and this unbilled revenue will automatically go down in next two quarters once we have this funds from the JJM projects.

Understood,

ma'am. Normal unbilled revenue is already getting converted into billing and other things, and that cycle is moving.

It is just because of JJM, which last two or three quarters it is getting piled up. Then, once, as Kaushik-ji has already shared, that we have clarity from the government, now we can expect to have these funds very soon.

Moreover, from milestones, usually that UBR gets nullified in the last quarter because government gets funds and major milestones gets closed in those. You will find this UBR getting majorly reduced in the last quarter.

It's a historical figure. You can go and see that.

Of course, government is going to get release this JJM fund in this quarter itself.

Sir, now the second concern is that, sir, if we look at our standalone EBITDA last year, it was upwards of ₹170 crore. If we look at standalone operating cash flow, it was 1/10 of that, ₹19 crore.

If we look at the past 3 years also, the cash conversion from EBITDA to cash flow, it is very miniscule. Sir, though I understand the nature of the business is working capital intensive and the top line has also grown, sir, but after adjusting, sir, what is your view?

Can we see some significant jump in operating cash flow in this year's balance sheet?

Sir, I think your observation is perfectly correct. As a part of suggestion I would say my general submission is that when a company is growing at the rate of 50% CAGR, and you rightly observed, because the working capital keeps on getting invested.

Secondly, you just mentioned that UBR. Obviously when the UBR also gets piled up because of the specific reason which are also getting addressed, therefore the cash flow from operation was small.

However, as our CFO Amita already clarified, we expect this financial year to have a better, maybe how much better, obviously we will not be able to pen down a number, but we should certainly have a better operating cash flow in this financial year.

Sir, I appreciate the answer you gave to the previous participant, and, sir, even if we don't find a good acquisition opportunity, it is best not to do a acquisition, even though we might have raised capital for that purpose. Sir, now, but the concern is that if we look at our stock price from April high of over ₹1,200, now it is below ₹800, whereas the general market trend is the opposite.

Sir, there is no smoke without fire. I'm trying to understand that at this market cap, the stock is trading at seven times EV/EBITDA.

Now when we are looking to acquire any company, what is the EV/EBITDA that we are looking to pay for a acquisition target? Because our own stock is trading at seven times EV/EBITDA, now if we go and acquire some outside company for 15, 20 times EBITDA, then that is value destructive.

Either we find a acquisition target which is trading below seven times EV/EBITDA, then it will be a basically value accretive acquisition.

No, I think it's a good observation. I would only submit that, first of all, there is no smoke and there is no fire, I don't think that analogy fits here.

Maybe it's a good opportunity for somebody to buy in more. I'm not recommending that because it's not in that official position to do that.

Question is, at what rate of EV/EBITDA we will evaluate, obviously we will evaluate based on what additional EBITDA percentage we are able to acquire. Most of these deals in this kind of segment of industry are driven EBITDA multiple or turnover multiple.

Typically, the acquisitions, whether it is domestic or foreign, they have the EBITDA multiple ranging anywhere between 5 to 7 to 10, depending upon what kind of phase of that company is in. We will obviously evaluate how much that will add to our top line and bottom line, which should be incremental.

We appreciate your suggestion, and we are perfectly going to ensure that the shareholder wealth improves as for any decision which we take.

Sir, lastly, if we see then in mid-November Mr. Phaneesh Murthy resigned, and since then only the stock price has been into a tailspin.

Sir, is it a coincidence or there is something more to it? Why exactly did he resign within a year of getting appointed?

Sir, Phaneesh Murthy-ji has resigned in the month of April 2026 and not November 2025. There is a correction in the date, and there is no relevance of share price and exit of Mr.

Phaneesh Murthy. He has resigned because of his personal reasons, there is no correlation between November '25 or share price going down.

He has resigned in April '26, if you can just go and check the

No, ma'am, I'm talking about April 2026 only. If you look at our stock price, on 17th April '26, the stock was ₹1,230.

I believe Mr. Murthy resigned in 16th April or thereabouts, basically mid-April.

Maybe it's a coincidence, maybe the dots don't need to be joined over here. Sir, I appreciate all your answers, and, sir, best of luck to you.

Thank you.

Thank you.

Thank you all for participating in this earnings conference call. I hope we have been able to answer your questions satisfactorily.

If you would like to know more about the company, please reach out to our IR managers Valorem Advisors. We would once again thank Arihant Capital for hosting this conference call.

Thank you. Thank you.

Thank you.

Thanks a lot. Thanks a lot.