Thank you. Good afternoon, everyone.

Thank you for joining the NIIT Learning Systems Limited quarter three FY26 earnings call, and thank you very much for your continued interest. We know you had other commitments today, but you decided to give your time to us.

We are grateful to you. Quarter three is an interesting quarter, and we'll begin with some prepared remarks and the key business updates, including the inorganic activity.

Then we'll follow it with Q&A. [laughter] Just as a matter of record, before we begin, some comments that we may be making may be forward-looking and subject to risks and uncertainties, and actual results may differ materially.

We want you to note that. The agenda is to discuss the quarter three FY26 results, second, on our progress on our AI-first strategy and AI-enabled revenues, third, an update on the inorganic activity which we completed during the quarter, fourth, to discuss the outlook for the rest of the year, and then the rest of the time for question and answers.

I have with me the Chairman of the company, Mr. R.

S. Pawar, the CEO of the company, Mr.

Sapnesh Lalla, the CFO of the company, Mr. Sanjay Mal, Mr.

Kapil Saurabh, who heads the [cough] M&A and investor relations, as well as our other senior colleagues from finance, accounts, and other governance functions. I'll now hand you over to Sapnesh Lalla for his opening comments.

Thanks, Vijay. Good afternoon to all of you, and thank you for joining the call.

In my prepared comments, I will review our performance in Q3 and share our view on the path ahead. Let me first set the context.

The global environment, as you might be aware, remains uncertain. Client decisions, decision-making cycles are still elon- elongated, and discretionary spending continues to be closely scrutinized.

At the same time, we continue to see sustained demand for outsourcing and operating model transformation as clients focus on cost agility and productivity. We continue to see wallet share expansion across a wide range of our clients, though the overall environment continues to remain dynamic.

AI is continuing its rapid march to becoming mainstream, with significant investments by early movers across different segments. This represents a once-in-a-lifetime opportunity for us, as we have often stated.

In this context, we delivered another quarter of strong execution in line with our guidance. The revenue for the quarter was 4,997 million INR, was up 5% quarter on quarter and 19% year on year.

In constant currency terms, the revenue grew 2.5% quarter on quarter and 11% year on year. Excluding the real estate contract that came to an end as of June 30th, 2025, the growth was 9% quarter on quarter and 28% year on year.

The organic revenue growth was 14% year on year. Growth was driven by customer ramp-ups and wallet share expansion, along with stronger contribution from MST as we moved past the seasonally soft vacation period in Europe.

Robust growth underscores the strength of our go-to-market engine as well as the trust and faith our clients have in our delivery and execu- execution capability, especially for their critical needs. Importantly, our growth continues to be broad-based across services, supported by a healthy flow of new wins as well as renewals.

Our ability to expand wallet share with existing clients remains a key growth lever, supported by deepening relationships and demonstrated delivery excellence. While spend from existing clients improved modestly, the recovery remains gradual, and overall spend is still below pre-slow- slowdown levels.

We remain cautiously optimistic on the environment and the business impact that we can cause. Notably, the business continues to outperform its peers, demonstrating resilience through industry-leading growth and profitability.

Our customer momentum and revenue visibility remain strong. During the quarter, we signed four new MTS clients: one lo- in life sciences, two across BFSI, and one in the energy sector.

We also completed four renewals, and we delivered one significant scope expansion. As a result, our MTS customer rally tally increased to 107 at the end of the quarter, and the revenue visibility improved to $415 million, up from $409 million previous quarter and 391 million US dollars same period last year.

Our profitability remained resilient, with margins in the guided range. The EBITDA for the quarter was 1,038 million INR.

It was up 10% year on year, with EBITDA margin at 20.8%. It was within the range that we guided.

Margins benefited from improved utilization as well as MST's stronger contribution. This was partially offset by seasonality in the St.

Charles business and absence of the real estate contract con- contribution from the real estate contract this quarter. We remain disciplined on delivery and productivity, while continuing targeted investments to support our growth across improvements in capability, or investments in capability building, as well as go-to-market.

We made significant progress in building our AI capability. We now have a pole position in the L&D market, as acknowledged by our customers as well as industry analysts.

NIIT has always been at the cutting edge of technology, and learning, our AI-first strategy in learning, has evolved into a considerable point of differentiation for us. We have gone live with a number of enterprise deployments of our AI solutions.

Notably, the total AI-enabled revenue grew to about 11% for the busine- of the business this quarter. Spending another couple of minutes in on financials, our depreciation and amortization was at 194 million INR.

Net other income was 104 million, compared to 26 million last year and -89 million in the previous quarter. It's important to note that the key components included 87 million of treasury income, the net exceptional gains of 109 million comprising of a gain of 298 million due to fair value adjustment in the future acquisition liability with respect to St.

Charles, transaction expenses of INR 54 million on account of acquisition of SweetRush, one-time impact due to increase in employee liabilities due to the new wage code of 135 million, the net other expense on of 92 million, and this included forex loss of 61 million. It also included interest cost of 23 million INR.

Tax was at 205 million. The effective tax rate was 22% versus 32% last quarter, primarily due to no tax on the gain from adjustment in future ex- acquisition liability.

The PAT was at 743 million. The EPS was at ₹5.42.

The balance sheet and cash flow metrics remain strong. The DSOs stood at 74 days as compared to 66 days last quarter and 62 days last year, reflecting business mix seasonality and exchange rate movement.

Cash and cash equivalents were at 9,046 million. CapEx quarter was for the quarter was 126 million INR versus 99 million in last quarter on account of ongoing investments in AI as well as some of the infrastructure refresh that was accomplished during last quarter.

Operating cash flow was 1,038 million INR as compared to 777 million INR in the previous quarter, with free cash flow of ₹920 million INR for Q3. Net cash was at 6,927 million INR, was up from 5,917 million INR last quarter.

Our headcount was at 2,433 at the end of quarter three, up 77 year on year and down 38 quarter on quarter. Let me spend a minute on the overall market.

Like I pointed out in my opening comments, market volatility continues to heighten the emphasis on cost optimization, prompting increased client engagements on large-scale cost takeout as well as transformation initiatives, although the decision cycles are elongated. AI and its profound impact on the practice of L&D is real and starting to become visible.

Early adopters are starting to take advantage of AI with our assistance. We think this has the potential to be a multi-year growth opportunity, especially for NIIT Learning Systems Limited.

We believe NLSL is well-positioned to capture a disproportionate share of these opportunities, underpinned by continued investments in AI, consulting and advisory services, and sales and marketing and go-to-market activities; a strong brand as a trusted and reliable market leader, as well as an organization that its clients trust with some of the most critical L&D tasks. Our deal pipeline continues to remain robust, with active opportunities across large outsourcing deals spanning technology, automotive, life sciences, BFSI, and other sectors.

We would, however, like to point out that due to the significant market uncertainty, the decision mak- making cycles are starting to stretch beyond what we would consider typical. We continue to see ex- an accelerating structural transformation across industries we serve, driven by digitization, decarbonization, biopharma innovation, and AI, AI being mother of all key innovations at this time.

Many organizations are actively restructuring to improve cost agility, fueling increased demand for outsourcing. This environment is triggering an uptick in outsourcing activity, and NLSL is uniquely positioned to capitalize, especially as select competitors face strategic or operational distractions.

A minute on the investments we've made this past quarter and continue to make going forward, NLSL continues to make disproportionate investments in new capabilities and go-to-market strength. Generative AI is becoming increasingly central in client discussions, though broader adoption at enterprise scale for L&D remains cautious.

Nonetheless, we are rapidly expanding our use of AI across multiple work streams. Where deployed, we are becoming more ambitious in delivering measurable learning outcomes for clients, while also realizing notable efficiency gains.

We, as mentioned earlier, continue to invest disproportionately in our go-to-market capability as you saw recently with the acquisition of MST, where we invested significantly to implement go-to-market capability in the DACH region. We announced on January 9th NIIT Learning Systems acquired 100% of SweetRush, which is an award-winning provider of human-centered AI-enabled learning experiences, strategic training interventions, XR, immersive learning programs, certification programs, and talent solutions for Fortune 1000 corporations, along with professional associations and not-for-profit organizations.

Founded in 2001, SweetRush, headquartered in San Francisco, California, the purchase price for this acquisition was up to $26 million, including EBITDA-based earnouts over a five-year period, creating strong alignment with outcomes expected from the business. This move moves us up the value chain, it strengthens our proposition in outcomes-led performance-critical learning, and compliments NIIT's scale managed services managed learning services engine; high-quality client base with high stickiness, long-standing enterprise relationships, strong repeat business and certification-led revenue streams add attractive adjacencies beyond our current reach.

The company has annualized revenue of approximately 22 million, with double-digit margin. Q3 is typically the strongest quarter for the company, contributing about 35 to 38% of the revenue.

Clear synergy roadmap and opportunity to convert project-led work into longer-duration managed engagements across and cross-sell of NIIT's global MLS platform into SweetRush's client base makes the acquisition attractive to to NIIT clients, as well as its contribution to NIIT's bottom line. Margin like I pointed out, is in early double digits, with near-term expected improvements through delivery mix optimization and operating leverage.

We think that the the the company will become margin accretive over the next six to eight quarters. It is EPS attractive starting FY27.

The leadership continuity and integration plans to preserve SweetRush's creative edge has been preserved, and integration plans to bring both the companies together so that they can leverage each other's key capabilities has been implemented. A minute on our guidance.

For Q4, we expect revenues to grow revenue growth to be 10 to 12% quarter on quarter or 25 to 26% year on year in constant currency terms. The growth is aided by robust contract pipeline, continued ramp-up in new clients, and impact of acquisition from of SweetRush.

For the full year FY26, we expect revenue growth to be 14.5 to 15% constant currency terms. Margins are expected to be in the 20 to 21% range for the full year and for Q4.

With that, I'll hand back the the meeting to Vijay for any comments, and then for Q&A.

No, I think, Sapnesh, you covered it all. We'll open it up for Q&A so that everybody gets time to ask their questions.

[cough]

Yeah.

Hi, sir. Thank you for the opportunity.

I just want to understand, given that SweetRush is at a lower EBITDA than our traditional business, what would the outlook be for let's say the next one year, if you can throw some light on that?

It will be in the 20% range.

Would that mean that we would see EBITDA margins coming up for SweetRush immediately as the quarters go on by?

No. Like I pointed out, it would take about six to eight quarters for SweetRush's margins to become accretive.

We would have every endeavor to get them to become accretive sooner. However, through other initiatives, we plan to ensure that the margins stay above the threshold.

Got it. Sir, on our cross-sell opportunity that has come with both the acquisitions, the SweetRush as well as the MST one, how do we see that transpiring to our traditional revenue growth?

How much will that aid our organic growth in terms of MTS clients, and how would that look like?

We expect that both the acquisitions will result into acceleration in managed learning services clients. It's still a little early to provide concrete information, but we think that each year, we might be able to add one additional MTS client or convert one MTS client out of the set of project clients that SweetRush and MST have.

Sir, how would it work on the other side in terms of how'd we leverage their services and then in turn, how would we see growth in those two companies then come in leveraging our client base? Can we quantify that in certain ways, how much will that aid our revenue going forward, and if you can put a number to it or maybe give a broad understanding?

Hello?

that our workshops where NIIT is participating in workshops with SweetRush clients and SweetRush is participating in workshops with NIIT clients such that we are able to introduce each other's services to our key clients.

Okay. Got it.

Just one last question, sir. Barring our RECO contract falloff this quarter, what would have been growth for us?

What kind of growth would have we seen if we adjust that?

Like I pointed out, our growth without the RECO contract would have been 28% year on year and 9% quarter

on quarter. Sir.

Yeah. Thank you, sir.

Thank you for that. That's it.

A substantial improvement in margin.

investor. Please

Sir, congratulations for the strong quarter in a traditionally weak quarter and macro challenges. Sir, my first question is regarding embracing of AI-related services by our clients and also our convincing new clients, to have L&D activities in MTS area.

Can you please throw some light on this, sir?

See, like I've pointed out, AI is going to be the game changer for learning and development. We've been investing in AI over the last 3 years, and we are starting to see AI take root at least across the key early adopters in our clients.

We have a handful of significant This

a handful of significant enterprise great implementations, and we think that these implementations will only accelerate over a period of time. Sir,

my second question is regarding life science segment. As life science segment is one of the major consumption of AI-related L&D services, is there any early indication that our AI-based learning systems are providing a synergy for a lot of life science companies?

Can you throw some light on this, sir?

You're right. They are early adopters.

In fact, one of our large life sciences customers has been an early adopter, and they've seen benefits, and they are moving to enterprise-level adoption as we speak.

Thank you very much, sir, for all the question answers and all the best for the future.

Thank you. Thank you.

Thank you.

Yeah. Hi.

Can you hear me?

Yeah.

Thank you for the opportunity. Actually, I have three questions.

Initially, I want to understand, you're saying that you're already deploying these AI services with with your clients and they are seeing good traction. Broadly, if I split this AI training, generally, it will come under three categories, right?

One is training on random data, I was hearing an echo. Okay.

Can you hear me?

It's okay. Go ahead with what you were

saying. Can you hear me now?

Yeah. That so, in short, basically, training, there is fine tuning, and there is inference, right?

Do you actually train corporates and customers, enterprises, on all the three categories? If you do, what would be nice is if you give them examples of how that has played out.

That'll be nice to hear.

No. I think your question was focused on, do we do a lot of training for our clients on how to use AI?

I think the majority of work for our clients in using AI for delivery of training, rather than delivering training on AI. We have a few clients for whom we deliver training that teaches their associates on how to use AI, but that's a minority of what we do.

The majority of what we do is build AI-enabled learning solutions for our clients such that AI is helping run the learning and development for a client, rather than teaching them on how to use AI.

Okay. Is it possible to give an example?

Sure. One of the areas where we use a lot of AI is in personalizing learning experiences, building simulations of real-life scenarios that are delivered through AI impersonators or avatars and provide coaching based of how a person did in that simulation.

These simulations could be of scenarios with respect to sales, customer service, more complex scenarios such as financial reporting, consulting, and so on and so forth. We use AI to help simulate use cases that our clients often confront, help them confront those use cases as training use cases in a safe environment, and provide them feedback on how they did, so that when they go into real life, they are able to perform better.

Okay. Thank you.

I think that actually answers my question. Just one follow-up.

I assume you also use open-source models like LLaMA, large language models. Do you also have some in-house models, in addition to this, when you do this?

We've built a fairly complex structure that allows us to use AI, both large language models as well as models that we have built in a secure environment. It would take me and some of my colleagues a little bit longer to explain how we do this, but we set up our infrastructure in such a way that it is safe, and it is able to work with the right LLM for the right question.

Okay. I guess it's the same for generative AI use cases as well, right?

That's true.

Okay. Yeah.

That's fine.

That's right.

Thank you. Yeah.

Thank you.

Thank you, sir. Sir, my first question is if you look at in the last few years, we have done multiple acquisitions.

I just wanted to check how do you internally check whether the acquisition has gone in line with your expectation or not. Typically, people use revenue expansion, the synergy and cross-sell that has happened.

Can you give me a sense of what are the metrics that you use, and if it is revenue expansion, how do the previous acquisitions have fared in the last few years, including the most recent MST Group acquisition?

We typically do not use revenue expansion as a criteria. We use three key criterias, the first one being a market segment that would be attractive for us, however hard to penetrate; a geography that would be attractive to us where we have not been able to create a lot of penetration; and then the last one is a key capability.

If you look at the acquisition of St. Charles that we did in November '22, the thesis was we needed to create a capability in consulting and advisory services.

We also found professional services firms as a key market segment that we wanted to penetrate, and St. Charles enabled us to achieve both scale in our consulting and advisory services as well as market penetration with the likes of Big Four as well as management consulting firms.

Our criteria is typically not to focus on revenue expansion, but to create ways in which we are able to penetrate market segments that are attractive, geographical markets that are attractive, as well as key capabilities. The acquisition of MST enabled us to penetrate the DACH region in a more complete way.

Got it. Sir, my question was slightly different.

What I was saying that let's say when you acquired let's say St. Charles, you acquired with a thesis that you wanted to get into the consulting segment, but since the acquisition, it has been multiple years.

Has it fared as per your expectation or not? What are the metrics that you use?

One is at the time of acquisition, but over a period of time, how do you evaluate whether that has gone as per the expectation or not?

Other than what I mentioned, we don't disclose the exact metrics that we look at, but what I would say is that while St. Charles is in their final year of measurement, it has met the base criteria that we used to make the acquisition so far.

Got it. Got it.

Sir, one more related question on the acquisition. If I look at the acquisition frequency, seems to have increased in the last 1 year or so, with maybe smaller acquisition, comparatively.

Has anything changed in the external environment or internally which is driving this change of going for the higher number of acquisitions?

I would say, Gaurav, our ambition has been to become a more complete provider of managed learning services for our clients. The acceleration does not have a lot to do with market environment, but our desire to grow faster.

Okay. Okay.

More internally driven. Okay.

I get it, sir. Sir, just a last question from my side.

I was going to say as we gain more experience and confidence in terms of acquisition, that also will be reflected in our pace of acquisition.

Understood. Understood, sir.

Just a final question. When we look at revenue visibility, I think 2 2 to 3 years back, it was largely driven by addition of new clients.

Just wanted to check when we look at revenue visibility now, the split between the acquisition of new clients versus expansion of scope in the existing clients, and how do you see it going forward?

I think it's a healthy mix of both. As I mentioned earlier, our growth drivers are a healthy mix of wallet share expansion in our existing clients as well as new client acquisition.

Got it, sir. Great.

Thank you. Thank you.

Thank you.

Hi, congrats on a great set of numbers. Could you provide any details as to what the average ticket prices for contract which is when you onboard a new customer?

Contracts tend to be between one, typical contracts tend to be between $1 and $5 million. A small percentage of contracts tend to be in the $10 million range per year.

Okay. Got it.

Thank you so much, sir.

Sir, my question is more towards the vertical mix. The industrial vertical has demonstrated impressive momentum over the last two quarters, and I believe this would be majorly due to the acquisition of MST Group.

Do you see this trajectory sustaining in FY27? On the flip side, the other vertical seems to be consistently losing share.

Is this a part of a conscious pivot or specific headwinds you're facing in that vertical? That was my first question.

You're right. The acquisition of MST and specifically the fact that most of their presence is in the German DACH region, which is dominated by industrials, that has given us a head start into industrials.

We think that as we grow wallet share across the clients that MST currently has, as well as gain momentum and acquire new clients in the DACH region, we should see expansion in the industrials vertical. Whether it will grow disproportionately vis-à-vis others is hard to tell because we are focusing across all the key verticals that we focus on.

With respect to your question on others, one of the key clients in the other segment was the real estate contract that we had, which ended on June 30th, 2025, and consequently you're seeing a decline in that segment.

Sir. Thank you.

The another question is more towards the bookkeeping. I wanted to ask on the finance cost part.

Is there any seasonality affecting our interest rate cycle? Because in the last three years, including FY26, third quarter has seen a decline and then it inches up in quarter four.

This is Sanjay, Sanjay Mal. This is to do with the seasonality in terms of the interest rates movement.

To that extent, you will see the MTM variations, which happen quarter-on-quarter. In the first quarter this year, we had seen a bump up.

Then it in quarter two, and that's come back basically to Q3.

Okay. Got it.

Got it. Thank you.

Thank you for the opportunity. Thank you for the follow-ups.

I just want to understand, sir, how do we look at our verticals, I see that our tech and telecom has been growing extremely strong, and life sciences as well, and BFSI. Is there something that is playing out correctly in those verticals that we are trying to replicate or are not able to replicate currently in our rest of the verticals that will start happening as time progresses?

The way we pick verticals of interest is as follows. Like you pointed out, tech and telecom, that's been a key vertical, that's worked well for us predominantly because the rate of change of technology is so high that it automatically creates a need for training, not just employees, as well as customers and partners of large technology companies.

It is an inherent perpetuity cycle for training given the rate of change of technology. Other market segments that we have chosen include two key criteria.

One is are the market segments high on regulatory training, so that creates an impedance or sort of a flywheel because regulatory or mandatory training programs need to be conducted year on year, and that creates sort of a predictability in a line item that is mostly discretionary in nature. We look for market segments that have high regulatory content.

BFSI, life sciences, industrials are examples of market segments that are highly regulated. In industrials, if you look at heavy manufacturing, or automotive, or energy, or mining, or aerospace, these are all market segments which are highly regulated and therefore consume a lot of mandatory training on a year-on-year basis, and fit well with the annuity business model that we have.

We try not to focus on market segments that have traditionally shown a low spend on training. On the contrary, we look for market segments that have high spend on training.

Professional services and management consulting firms are an example of a market segment where the per employee investment in training is very significant, because, as you might imagine, big four, highly regulated, and on top of that, their product is the employee or the consultant. They want to make sure that the consultant is highly trained, and consequently, in the professional services and management consulting segment, they spend 2 to 3x of the average spend across Fortune 1000 companies.

Those are some of the criteria that we use to pick the segment that makes most sense for us.

Got it, sir. Got it.

Sir, just to understand, in the SweetRush clientele, which segment would majorly contribute to SweetRush's revenue, and do we add any new verticals with that acquisition?

One of the things that we found very interesting about SweetRush is a large part of their revenue comes from creating learning materials that are used to train an organization's extended enterprise, be it their customers or be it partners. For example, some of their clients are the largest chains in hospitality where the training that SweetRush creates for them is used to train their franchisees, which in turn contributes positively to the business outcomes for the franchisee or the organization that's carrying or paying for the brand and the customer service promise.

Likewise, they have a number of clients that have large extended enterprises, some of them including professional associations who offer training as a membership benefit, as well as not-for-profits who have extended enterprises. That's an area of training where SweetRush is able to create training not as an activity that an organization consumes, but as a product that the organization sells to create business outcomes.

That's something that we found very interesting about SweetRush, and it creates a new opportunity for us from a growth perspective.

Sir. All right.

Got it, sir. Just one last thing, sir.

Our utilization gains that we are seeing which is helping inch up our margins, is that primarily due to the use of AI? If so, then can we see that going up further?

I think we are seeing gains because of AI, but the question that you asked about utilization, gains are more focused on improved operational excellence.

All right. That's it, sir.

Thank you.

Am I audible?

Yeah. Sir, my first question is on SweetRush.

If I look at SweetRush calendar year dollar revenue growth, it was -10%. If I compare that with what we clocked in, let's say, our fiscal year FY25, it was in mid single digits.

I just wanted to understand what was the reason for this 10% decline, and how much growth are we expecting, let's say, in calendar year '26 from SweetRush? At an overall company level, what is our guidance in CC terms for FY27 for the whole company also?

That is my first question.

I think, as you pointed out, SweetRush saw a challenging environment in 2024, and they were not alone. We saw a challenging environment as well, and it affected large swath of training industries.

I think that's really what caused them to see negative growth, what caused us to see single-digit growth. I think as we look ahead, and as I pointed out, starting to see modest but certain improvements in consumption.

We've seen that across our clients. Given the fact that most of SweetRush's clients tend to be organizations that serve an extended enterprise and use training as a product, they are likely to be among the first to see an uptick in their business.

because their business is directly linked to the performance of their clients.

Okay. Sir, for FY27, then, at an overall company level, including SweetRush, what is our revenue and margin guidance?

For FY26? Is that your question, for FY26?

No, '26 is kind of over right now. I'm asking for the next fiscal year.

We will be preparing our budgets and our guidance for the next year over the next couple of months, and we will be publishing that in our next quarterly call.

Okay. Sir, one more question on the cost front.

If I look at our headcount this quarter, there was a reduction of 38 people. Despite that, our employee cost has gone up 5% QoQ.

If I recall correctly in the previous couple of calls, highlighted that when things are uncertain, you would rather want your P&L to be more flexible, that's why you would want to execute more of the work through that professional and technical outsourcing route rather than taking fixed cost on your P&L. If I had to break down this quarter's analysis, then it is there is a reduction in headcount, but increase in employee cost, and our professional technical outsource expense also is flat QoQ.

Is there any change in strategy of how we deploy or execute the project?

There isn't a change in strategy. I think we make hiring choices across a multiple of different criteria.

In this past quarter, we saw a reduction in offshore staffing, however an increase in staffing onshore, both through increased go-to-market investments, as well as some direct cost investments where our employees need to be much closer to our clients.

Okay. Sir, one bookkeeping question.

If I look at your interest cost, this has come down this quarter. I'm presuming that it has something to do with your earnout payment as well, which is linked to St.

Charles. You have already highlighted in the quarterly results that due to some adjustment, we have recorded a fair value gain.

That means in future liability, it would go down to that extent. Would it be fair to assume that on a quarterly run rate, our interest expenses would be either at the current run rate or it would be lower?

The other income, as you've observed, that it has multiple components. One of the components, of course, is relating to this, and you're right that the future acquisition liability has come down.

It depend, and it is linked to the performance as we go forward, and to that extent, there could be the impact in the other income as it would be coming. No,

he's asking whether in the future, interest will reduce. Our answer will be no.

Interest will be the

Yeah, debt has because of the acquisition.

It's likely to

to consummate St. Charles acquisition, we have funded part of it through debt, and therefore, interest cost

No, no, you're talking about SweetRush.

Oh, SweetRush, yeah, the interest cost on that debt will

Increase

on a quarter-on-quarter basis. On the other hand, there are repayments which are happening on the other hand.

Okay.

For this quarter, it'll increase.

Yeah. Yeah.

See, our approach is not to use our funds straight away in the acquisition. If possible, we try to leverage it because I think it works out beneficial from more angles than one.

Therefore, to that extent, the interest cost will change, but net cash or net earnings from treasury, interest cost earned minus paid, that will always remain very positive.

Continuing to release cash.

Hi. Thanks for the opportunity.

Several of my questions are answered, just one or two. [cough] So, firstly, on the organic growth for the quarter, I think you mentioned the number in the beginning, but I kind of missed it.

If you could please repeat that. Our

organic growth was 14% in INR and 7.2% in constant currency terms.

7.2% in CC terms.

[cough] In constant currency. In constant currency terms, YoY.

Right. What would be the QoQ CC number?

About 1.1% organic QoQ in constant currency.

Right, thanks for that. Also, Sapnesh, you had this comment that AI could be a great opportunity.

You have shared some input here, but if you could help me connect the point that would be limited to providing training, which could be more like a one-time training to a lot of enterprises, just like they train on different capabilities, or this would be also extended to creating agentic solution and on which we could be doing a more like a recurring thing, because there will be constant [cough] enhancement that would happen to the product. Similarly, on the cost side where we could be leveraging already and where we are aiming to leverage the AI to reduce our side of the cost as well?

I would say all of the above. Some of our most exciting solutions are, like you pointed out, where clients are able to get personalized learning experiences, personalized for each individual employee or each individual student, and those leverage the agentic capabilities of AI and, in turn, result into subscription-based business models.

We have a few use cases of those at enterprise grade which are currently operational. We think that those solutions A, have much stronger outcomes and B, are able to create growth as well as improvements in profitability, but it'll take time for them to become significantly more material than they are today.

We are taking advantage of low-hanging fruit with respect to efficiencies, and we gained efficiencies using AI-enabled systems from an overall productivity of work performance.

Just one part to it. You said that we also have a subscription business.

On the tool that we are providing, apart from training on using that, we are also charging the agentic fee that then we might have created. Is that what you're trying to say?

That's correct.

These are just few projects as of now and yet to scale in terms of the adoption at current point.

That's correct.

Right. We started creating solution which might suit many of our MTS client, or what is the go-to-market for this kind of a thing?

What is going to be the approach? How fast do you think this could become an opportunity in itself?

It is a significant opportunity. However, like I pointed out, it is going to take time to scale.

We are bringing these solutions to all our clients. Several clients or a handful of clients have, like I mentioned, implemented these at enterprise scale.

My belief is that over the next 3 to 5 years, a large percentage, very large percentage of training would be delivered using the model that you described.

Sure. Lastly, on the SweetRush business, are we expecting almost like a full-quarter consolidation, or it is too early to call that out?

We consummated the transaction on 9th of January, we would not be consolidating the full quarter. We would be consolidating the number of days for which they have been part of NIIT in our upcoming quarter in our fourth quarter.

81 days. Also,

I guess, you mentioned somewhere that for them, the Q3 is the largest quarter. Is that what you mentioned somewhere?

Yeah. That is accurate.

Quarter ended December is their largest quarter.

Okay. From their own annualized run rate point of view, Q4 may not be full year divided by four kind of a number, and plus, it would be there only for 80-odd days instead of a full quarter.

That's correct.

With those things, you said 10-12% type of a growth for Q4, which was another comment. [cough]

What about that?

Was there a comment that in Q4, you're expecting 10-12% QoQ growth as well?

That's correct, inclusive of SweetRush.

Understood. Understood.

Thank you. That's it from my side.

Thank you.

Hello, sir. Thank you for this opportunity.

A couple of questions. Firstly around margins.

Sir, as I understand, our real estate business was kind of higher margins. That has gone away.

On a like-to-like basis, if you could comment on the margin trajectory, that would be great. That is my first question, and then I'll ask my second question after that.

Our margin trajectory is in line with our guidance. We mentioned that not inclusive of the real estate business, our margin would be in the 20 to 21% range, and that's where we have reached in Q3.

Just a critical correction. It's not the real estate business.

It is to train people who work in real estate. We are not in the business of transacting real estate.

Yes, sir, my bad.

I guess you also meant the same, but I just wanted this call is being recorded. Suddenly, shouldn't have switched to the real estate business.

Yeah. My bad, sir.

Apologies. We acquired MST Group, and you made a comment that we have been making certain investments in terms of go-to-market strategy.

What would be the discretionary portion of this investment which is kind of pulling our margins down temporarily, if at all?

Discretionary, I didn't quite understand the question. I think what you want to ask is what is the disproportionate component of the investment or additional investment that you are making.

Oh. I think like I pointed out, the key investments we have made with respect to MST's post-acquisition has been strengthening their go-to-market in the DACH region.

Could you quantify it by any chance?

No, we don't break out investments based on market regions.

Sure. Sir, last question from my side, what is the cash component in your SweetRush deal?

What would be the split between the upfront cash that you have paid versus the future earnout that you would be paying?

Go ahead,

Sanjay. We paid about 10 million as upfront, and the balance is on various milestones, and certain are on true-up, and the others are on performance linked over the next five years.

Got it. That's it from my side.

Thank you, and all the best.

It looks like we might have one more question. If there is a question, we can take that as the last question.

Hello? Hello?

Hello?

Yes. Go ahead, Mr.

Joshi.

Yes. Go ahead.

Ha. Sir, extremely sorry.

I missed the first 25 minutes, sir. What was your guidance for quarter four?

Can you repeat just in 2-3 minutes if it possible, or can I get the email so this conversation before tomorrow market is open?

He just wants the guidance for Q4 or the email address.

Why don't you give your email address, and maybe you can

Trilok, you can reach me at [email protected]. It's [email protected].

Can you say

Anyway, you will see the transcript on the website in a couple of days.

Is it possible before market open tomorrow can I get? I missed the first 25 minutes your conversation.

If you can send an email to Kapil, he'll be able to respond to you.

Kapil, na? Can you please repeat the email ID?

Just I will send just Kapil. Saurabh

Saurabh

at niit mts Ha. .com niitmts.com.

Okay. Saurabh

By the way, you can give us your you can give us your number, and Kapil will also get in touch with you.

Can I give you my number now? My number is 932-

Yes.

Hello?

932

432-

Go ahead.

9324324287.

4287.

9324324287. Thank you, sir.

I am the investor of your company since last 5 years. [laughter]

Thank you, and we'll get in touch with you. Thank you.

Okay. Thank you, sir.

Yeah.

All right. Thank you.

Thank you, everyone, for [cough] joining the call and for your interesting questions. As usual, we learn a lot from your questions, and it helps us sharpen our strategy.

We are available to you for any further discussions or questions you have. Kapil Saurabh just gave his email address, and in any case, you can reach out to us, address is available on the website, and we'll be very happy to interact with you.

Thank you once again, and wishing you all the best. Operator?