All E Technologies Limited (NSE: ALLETEC) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Ajay Mian — MANAGING DIRECTOR
Unidentified Speaker
Sandeep Jain — Chief Financial Officer
Analysts:
Astha Jain — Analyst
Gaurav Didwania — Analyst
Vidisha — Analyst
Rohan Mehta — Analyst
Unidentified Participant
Akshay — Analyst
Presentation:
Operator
Sir, I think. Let’s begin. Yeah sure. I’ll just begin the recording process. General Foreign this meeting is being recorded. Ladies and gentlemen, I welcome you all to the Q3 and 9 months FY25 post earnings conference call of Ollie Technologies Limited. Today on the call from the management team we have with us Dr. Ajay Mia, Managing Director. Mr. Rajiv Tyagi, Executive Director. Ms. Ritu Sood, Executive Director. Mr. Sandeep Jain, Chief Financial Officer and Mr. Sandeep Salman, Head of Cloud and Managed Services. As a disclaimer I would like to inform all of you that this call may contain forward looking statements which may involve risk and uncertainties. Also a reminder that this call is being recorded.
I would now request the management to run us through the investor presentation for the quarter and nine months ended FY25 talking about the business and performance highlights for the period. The growth plan and vision for the coming year. Post which we will open the floor for Q and A over to the management team.
Ajay Mian — MANAGING DIRECTOR
Thank you very much Vinay. Good afternoon all of you who have joined this today, this afternoon. And thanks for spending your time with us. I hope you’ll find it worthwhile. This deck was uploaded last evening. So some of you might already have taken a look at it. We have. We have. We have divided the content into four sections. We talk about the numbers, what’s been happening behind and then of course what has been consistent and the standard annexures. So let’s go to the numbers. The revenue for this quarter stood at 359.9 million Indian Rupees which approximately 36 crores. The total income was at 38.13 crores. The EBITDA for the quarter for the first time it. Crossed 10 crores. The net profit came to 7.2 crores. The net profit margin rose to 18.9%. And you know these figures basically mean that while we had only a very slight change in the Q on Q revenue numbers, the Y on Y was close to 20%. And how are the profitability rose? If you look at the nine months numbers, the revenue crossed 105 crores. The total income from operations crossed 111 crores. The EBITDA 27.59 crores. Net profit crossed 20 crores. The profit margin for the nine months now has been 18% which means an operational revenue growth Y on Y is 22.3%. The repeat and recurring is around 93.9 94%. We added nine customers in this quarter and over the nine months we added 38 customers. The total team size continues to be around 360 people though we will have a new batch of campus trainees joining in about four weeks time. Four or five weeks time. Let’s look up some ratios and if we look at the quarterly Y on Y performance, the Revenue growth is 19.8%. EBITDA has grown y on y 37.6%. The EBIT growth is 38.6. Net profit growth y on y is 34.9%. The EBITDA margin stands at 26.4% and the net margin net profit margin at 18.9. The quarterly performance Q on Q, the revenue growth is only 0.2% but EBITDA growth is 10.1%. EBIT 11.1. Net profit growth is 7.8%. Q on Q the EBITDA margin is 26.4 and net profit 18.9 as we mentioned. So for, for those of you who might be thinking that, how is it that for roughly the same revenue the profits have increased? So this is because the proportion of services in the, in the revenue increased in this quarter and a good part of it was international services. So this is just, I would say this, this is an evidence to the fact that if our international services continue to grow, we have more. More opportunity to improve our overall margins. The nine month performance. Total revenue growth 22.2% EBITDA growth 41.7% EBIT 42.3% Net profit has grown in nine months 41.5% EBITDA margin is 24.8 and net profit margin for nine months is 18%. So these are some charts, you know, for, for visual analysis for operational income. We spoke about it, we spoke about the ebitda. We also spoke about the profit after tax. The one thing we did not speak about before is our earning per share. So as we see in the last quarter it was 3.31 rupees per share which has, which has grown to 3.57 and for the nine month period it has grown from 7 rupees to this nine months is 9.93, slightly under 10. So what has been happening, the story behind so this period of mid November to mid January have been, you know, it’s been a trying period. Some of it is expected. You know, there is, there is this whole, you know, New Year and Christmas and you know, holiday season which starts to impact. But I think there were other things. There were some political reasons maybe, maybe the, the whole elections thing happening in the, in the U.S. maybe some war, you know, sentiment impacting. But overall what we experienced was that from at least mid November, if not a little bit earlier, till like about a week or so back or about a week and a half back, we have sensed very cautious and prolonged decision making process by both customers and prospects. So customers for anything new projects, any new logos that we are trying to add and prospects for the new projects that we, you know, are talking to them for. And this basically has resulted and you can see it in the numbers, it resulted in lesser than the usual number of customers that we add in a quarter. So we had, in this quarter we had only nine new additions and with a V earlier on an average we have been adding like 14 to 15 per quarter. I’m not so much disturbed or bothered about the number less number. If our revenue per customer keeps growing and we still have a lower number of customer ads, I think we are still fine. But what has happened. Happened is while this mid November to mid January saw a little bit of sluggishness in the market, in the process our pipeline became healthier. So we still had customers and prospects who are interested in the solutions. They continued conversations. So our pipeline became healthier and we are expecting some conversions to happen now over the next four, six weeks at least. The other thing that has happened is we have experienced in this quarter the Middle east business has gained momentum for us. We have growing number of opportunities from the Middle east at this point in time. We have at least four new projects which are at a very advanced stage of signing up, we expect. So we have received, at least for some, we have received email confirmations. But, you know, contracting and so on will take over the next couple of weeks. And in view of what we have been experiencing this quarter, also a little bit last quarter the Olitech board decided that we should set up an operation in the uae. So this is something that is now being taken up, will probably get done in the next, you know, four to six weeks time or eight weeks time overall. In the conversations and the opportunities that we see, the enterprise applications remain the anchor. Businesses still need to have ERPs to modernize their operations to enhance their operational efficiencies. They need the customer engagement solutions to enhance their customer intimacy and serve them better. The retail and digital commerce is an area which continues to have significant interest in the market. And then of course, the one thing which is gathering momentum now, and I had mentioned it in the last quarter, is the area of data engineering. We have over this period of time expanded our footprint. We are now doing these projects for more customers. And as you see, Microsoft fabric is something which has several components. So for some we may be doing data warehousing, but for some others we are doing the real time intelligence and other data engineering aspects. So this is gathering momentum and we expect this to strengthen in the coming quarters. If you look at our services revenue geographically, in this quarter, the revenue from the Americas has been 59.5%, India is now at 23.6%, APAC at 5.1, Africa 8.1 and Europe 3.7. For the nine months period, these figures are 61.7, 24 point. Three for India, APAC at five, Africa for 5.5 and Europe is at 3.4. If you look at the customer engagements we have in, in the, in the Q3, you will see that our top 5 customers contributed 17% of the revenue whereas our, our, our top 10 contributed 26.6. You will see that these figures are a little bit lower than what we saw in the last quarter, which is a good sign, which means that we have more, we have less reliance on just a small number of customers. We added as I said, nine new logos in this quarter. Five of them were domestic and four are international. And if you look at our overall new customer ads so far it’s been 20 domestic and 18 international so far. This is the breakup of various industries that we serve. You know roughly similar to what we saw we have been seeing so far. Not much change, so pretty steady in that respect. Microsoft has been gaining strength and you know it is continuously ahead of the competition in most areas of our interest. From an operational updates point of view the international customer acquisition in the last quarter it remained a little slow but it will we expect it to improve in, in this and then the next quarter based on the pipeline that we see and more customers are now talking about data engineering which includes you know activities around RPA as well the co pilots also M and A is work in progress and some of you might think that this is always work in progress. Yes, this is indeed the case because we have to be cautious but you know is at least one sizable company which is under active conversation with our growth drivers have not changed the comprehensiveness of our offerings. The Microsoft business, our international focus, our IP LED solutions, these are what keep us ahead of the competition. They find us a place on the table for conversations and inorganic growth is high on our mind share. We continue to work on that. The rest of the slides is what you have seen before. We will incidentally be completing 25 years on the 1st of July this year. The rest of. Of it is what you have seen earlier. The solution areas stay the same. This is a stack that our solutions are built on. The board of directors, the lead management, everything remains the same. The NX are already on the NSE site, at least you can look it up there. So I think in the interest of time and in the interest of not becoming monotonous in my conversation, I would stop presenting this slide and open up for conversation. Is that okay, Vinay?
Questions and Answers:
Operator
Sure. Thank you so much. All those who wish to ask a question may use the option of raise hand. In case you’re unable to raise hand, just drop a message on chat and we’ll invite you to ask the question. Take the first question from Astha Jain. Astha, you can go in.
Ajay Mian
You are not audible. You are on mute in case you are speaking.
Astha Jain
Sir, I think I’m audible now, right? Yes. So my first question is, do you think your customer additions this quarter will be very high like in Q4 will be very high due to healthier pipeline and since the quarter three was quite normal, like quite softer. So in terms of customer addition, do you think that our Q4 will see good traction?
Ajay Mian
Well, Q4, so you have to understand this, you know, when I say good pipeline, this means these are conversations which are at advanced stages. But you see we are already one month down in Q4 and it is only in the last, you know, the, the second part of this month that many of the conversations which kind of appeared frozen have started warming up again. Now contracting takes time and because these projects are very important, customers take time to get ready for it.
So we cannot say that how many shall we actually sign up. But I think this is, this is something which we are fairly, you know, it’s looking quite healthy, I cannot say and I think it’s a saying that will it be very high and so on. You look, we are not in retail business, we are B2B. So you know, in cases of, if you look at the last quarters, we had like 14, 15, you know, customers being added every quarter. But look, this year, this quarter we added only nine but we still had the same revenue as we had in the last quarter. So sometimes it might be lesser number but with bigger tickets. So that might happen. But I would only say that at a macro level situation. And some of these things are not good to track. Even as an analyst, it’s not good to track. I mean you can track it, but it won’t give you any insights if. Track it on a quarterly basis. Because usually when you are talking of an enterprise application, the project analysis and decisions can take anywhere between six to nine months. But the answer, the broad answer to your question is yes. But if you think that will it like become 2 times, 3 times, 4 times, the answer is probably not.
Astha Jain
So sir, is it right to say that it takes generally six to nine months for a client conversion on an average in our business?
Ajay Mian
Yes.
Astha Jain
Okay. Okay. So my second question would be.
Ajay Mian
First of all, first of all, you know, before you take my take that answer from me and try to do any analysis on that, you have to have a very good idea of what is it that we do now. Because our, our business is about enterprise applications. These are applications which, which impact the entire business. The operations, the customer engagement, the analysis, the growth drivers, everything. So these are decisions which are not taken by one person or two people. These are decisions which are taken often by a team comprising of 6, 8, 10 people.
And they have to carry the entire organization with them. They have to be sure that what they are going in for really is what they will get. As I have mentioned in some of my calls in the past, what we do is not something which is tangible at the time that a customer is signing a contract. Customers buy on trust. They get what they need many months down the line. This is the reason for them to be cautious. If somebody wants to, for example, buy an iPhone, he knows what he wants to buy.
He can touch it, feel it immediately. And after paying money, he will have access to it immediately. In our case, however, he will pay the money. He will wait for a couple of months. He will have lot of challenges because people have to be trained, there is change management. He will start to get benefits on of it after a long time. So that’s the reason it takes six months, nine months.
Astha Jain
Understood, sir. So my second question would be, could you give me a revenue breakup for service and product revenue for Q3 and for previous quarter?
Ajay Mian
Sure. So in Q3 the the product and services have been about 42% product and 58% was services. In the previous quarter the product was 45%.
Astha Jain
Got it sir. And so my last question would be, could you give us a guidance for FY26 on do we see our margins getting expanded or on revenue terms?
Ajay Mian
I think I have provided all the information which impacts this and as we have said and we have seen it as the percentage of our international services. In the business grows, our margins improve. And that is something that we continue to work on, we continue to invest on.
Astha Jain
Okay, sir, thank you. That’s all from my end.
Ajay Mian
Thank you.
Operator
We’ll take one member from chat. Mr. Gaurav. Didvania. Please go ahead.
Gaurav Didwania
Congratulations on the great set of numbers. I’ve also been an ex client of yours. So you know.
Ajay Mian
Which company are you from?
Gaurav Didwania
I used to work with Tres Vista. It’s been six months. You know, I’ve moved to. I’ve, you know, run my own PMS firm called Code.
Ajay Mian
All right, very nice.
Gaurav Didwania
Great. So I have a couple of questions on the cost side of the business. First is what’s the split between, you know, the revenue generating team and you know, the other part of the team and what is the utilization rate for the services side of the business?
Ajay Mian
See, we have always run the business very frugally and if you see our, the billable team, the delivery team, you know, out of this 360, the billable people would be in, you know, somewhere around 310. So our sales, marketing, admin and you know, sales also includes not just the people on the field, but also people who are doing inside sales job and other work.
So all of that is the remaining people. And in terms of utilization, well, it’s odd to say, but we almost never have people sitting twiddling their thumbs. So if they have some time available, we put them on either training, which is an important investment. So we time those trainings based on their availability or we put them in building some IP because that is also an important investment.
So because our business model is not that of resource augmentation, so we don’t differentiate between people on projects and people on bench, as a result of which I would say the utilization is high, barring days of vacation and maybe any health reasons. Otherwise, people are engaged at least 95%.
Gaurav Didwania
Got it. So the, the 300 people that you mentioned are on. Is there a further breakup between product side and services side or is it fairly, you know, the same team working?
Ajay Mian
So it’s. So if when you say product side and services side, you are probably wanting to know that how many people are involved in building ip, Is that right?
Gaurav Didwania
That’s right.
Ajay Mian
Okay. So the. There is a core team that works on building IP and then there are other people who may help them from time to time. So the size of the core team is about four to six people.
Gaurav Didwania
Okay.
Ajay Mian
And I’m saying four to six because sometimes these people. May also work on any specific projects when the IP is being deployed. Got it. But some other people may come in and help them from time to time. So really that’s the breakup.
Gaurav Didwania
Got it. So the reason why I was asking that question is when I, you know, just do the math of the services revenue, you know, upon the average billing rate and you know, the number of hours in a day, I get, you know, close to 55, 60% utilization. That’s the reason for my question, you know,
Ajay Mian
That computation, that computation is bound to be incorrect. And the reason for, the reason for that is, you know, you have to see that how do we compute utilization? Now if you compute utilization based on the revenue generated divided by, you know, the average billing expected from one person, there are several other variables that we miss out if we look at it in this fashion and therefore this is a faulty view of it.
Gaurav Didwania
Got it.
Ajay Mian
The first thing that we have to see is that our team, you know, people who are engaged in deliveries are also the people who are engaged in pre sales because these, these, these activities or these projects take long time. You have to do various demos, you have to do consulting sessions, sometimes you have to do assessments.
These are being done by the same team who’s involved, who are who? The consulting team. So some part of it goes in sales and pre sales. The other part also you have to see is that we have India business and we have international business. Understood? The billing rates are totally different.
Gaurav Didwania
Got it.
Ajay Mian
And you know, if you get X, you know, I have mentioned it at some point in time, you know, the, the margins in India would probably be in the range of 20, 25%, whereas margin internationally can be in the range of 45, 50%, occasionally more. So there is no simple way in which you can compute the utilization. There is no arithmetic that you can so easily put there.
Gaurav Didwania
Understood. Got it. I’ll go with my second question. You mentioned that there are 6,360employees. Now are those divided into different entities? The reason why I ask is when I, you know, check the numbers on, you know, the EPF website, it just shows from 360 dropped to 300 over the last couple of quarters and now it’s, you know, close to 330. So just wanted to check that.
Ajay Mian
No, so we have only three people who are full time employed in the U.S. other people are either visiting or on contract. Then we have, you know, very few people. When we have one more entity called Oli Consulting where we run the masterbar program, which is owned 100% by the Olli Technologies So that has a couple of people. But most of the other people are in the main entity. They are not really divided into different entities.
Gaurav Didwania
Got it? That’s it. From my side. Thanks a lot for answering the questions.
Ajay Mian
Thank you,
Operator
Gaurav. We’ll take the next question from Vidi. Vidisha, you can go ahead.
Vidisha
Hello. Good afternoon, sir.
Ajay Mian
Good afternoon.
Vidisha
Can I get a breakup of your revenue from how much you generate from SAS cloud, from erm, CRM. So can I just, just get a breakup from them and can I know, like, which of these contributes to the highest margins?
Ajay Mian
Okay, so if you look at, when you, when you’re talking about, you know, cloud versus non cloud, we are essentially talking of the product, you know, part of our revenue. So a lot of customers are still in the, in the transition stage. But I would think that at this point in time, nearly Sandeep 60 to 70% customers have gone to cloud now. Yeah, so about 60 to 70%. I would think about 60% because most of the Mastervar is yet to go that, you know, about 60, 65% of the product revenue has moved to cloud. There may occasionally be one large, you know, deal that might come on prem, like what we had last year.
So this large project that we had signed up in Nigeria, you know, they were still reluctant to go to cloud because of, you know, local issues there. So that kind of tilted our, you know, last year’s revenue a little bit towards the on Prem. But broadly speaking, I would say 60, 65% is cloud. The remaining are in the transition phase. But I think the more important question that you should ask really is that where are the new customers going?
So, because many of these customers are there for the last 5, 10, 15, 20 years and some of the, some of them might be continuing, you know, on prem, but I would say 9 out of 10 new additions go to the cloud.
Vidisha
All right, thank you, sir. And I just have one more question. So like, out of these, like, as you mentioned, you all had recently gotten into AI and cloud pilot. So out of that, like, what is what, which of these is contributing to the highest margins looking forward, and which of these are we focusing on more?
Ajay Mian
Well, I think the answer to that first of all is it depends where the customer is. If the customer is in India vis a vis the customer is in the us, we will have very different margins. So more important than saying whether it is it is AI or RPA or is it erp. And when you are looking at it from a margins point of view, more important question. Is a geography. But if you compare the same, I would still say margins are better on the ERP business at this point in time. Because the other side of it, which is the data engineering side or RPA side for most customers, they are currently doing small projects on it. They are not that large projects yet where we can say that they make a significant shift, you know, one way or the other.
Vidisha
All right, thank you.
Operator
Thanks, Vidhi. We’ll take the next question from Rohan Mehta. Rohan, you can unmute and answer.
Rohan Mehta
Hello, sir. Am I audible?
Ajay Mian
Yes, Rohan, you’re very audible.
Rohan Mehta
Right. Thank you so much for taking my question. So first I wanted to ask about the update on the US acquisition where, you know, the due diligence was paused for about six months. So has that resumed or. No, the initial update you gave was for a different company.
Ajay Mian
Different company that has not resumed yet. But we have, we have a different company that is on the table right now.
Rohan Mehta
Sure, sure, sure. And so in terms of your team cohort, I wanted to understand what part of your team cohort is into specialized teams focusing on AI, data engineering and what part of it is in the generalist mix.
Ajay Mian
So we have no journalists at all in the company. Okay. So you will have large teams which are for example, specialized on one ERP and another team which is specialized on the other ERP. Because Microsoft Dynamics has two ERPs. Dynamics 365 Business Central and then Dynamics 365 Finance and Supply Chain Management.
And then we would have a team which is focused on the CRM product line and the power platform. And then there is a team which is on data engineering and rpa. So they’re all specialized. We don’t do generic software development work.
Rohan Mehta
Right, right. Got it. Got it, sir. And can I also know what part of your team right now has experience above 5 to 10 years? I, I completely understand. There’s a new batch of campus trainees which you just mentioned.
Ajay Mian
Yeah, sure, I, I get it. But I would say that. And maybe RITU can answer that question better. But my, my guess is maybe 25% of the people or 30% of the people are less than five years. You know, the rest of the company all. All people are above five years. Is that right? Ritu, you have. You have an opinion?
Unidentified Speaker
No, that’s. That’s the
Rohan Mehta
Right. Right, sir. That’s all from my side. Thank you so much.
Ajay Mian
Okay. Thank you,
Operator
Rohan. We’ll take the next question from Bhavish. Bhatia. Bhavish. You can unmute and ask the question.
Unidentified Participant
The opportunity. Sir. Congratulations on a good set of numbers. My first question is with respect to the increase, the marginal increase in the finance cost. So it’s around 53,000. What exactly it is.
Ajay Mian
Sandeep, you want to take that?
Sandeep Jain
Yeah. This is the interest cost we paid on buying one vehicle in the company
Rohan Mehta
Vehicle. Okay. So going forward we won’t see any increase in further increase in the finance cost?
Ajay Mian
No, no. More or less similar.
Unidentified Participant
Okay. So my second question is with respect to the cash and cash equivalent, what is the current cash in hand with the company?
Ajay Mian
You want to take that?
Sandeep Jain
Yeah. Currently we have around 126 crores of cash in hand.
Unidentified Participant
Perfect. And sir. Ajay. Sir, this is with respect to the increase in the packed margins. So going forward do we see a stabilized margin or do we see an increase in the margins?
Ajay Mian
See, if we succeed in increasing our services portion of the business from international customers, we will see a further increase in margins. So it’s very clear, you know, at the bottom most of the times are the services delivered in India. Next is the product margins that we make. Or rather I would say the product margin that we make from our master var side of the business. Although our investment in that is now very small. That’s at the bottom.
The services delivered in India are. The next about that is the product margin that we make overall, be it India or us, you know, globally. And finally are the international services in that order, our revenue margins, our margins on the revenue.
Unidentified Participant
Understood, sir. That’s it from my side and all the rest. Thank you.
Ajay Mian
Thank you very much.
Operator
Bish, we’ll take the next question from Dipesh. D. You can go ahead.
Unidentified Participant
Hi. Am I audible?
Ajay Mian
Yes, please.
Unidentified Participant
Yeah. Just wanted to understand since you’re talking to a lot of us clients, what is your.
Unidentified Participant
Outlook of the entire Trump effect on business.
Ajay Mian
I think it would probably be too much for me to, you know, ascribe any of what we experienced to such a large event of a government change in the U.S. you know, we are just a little dot on the canvas. However, I would still say that when we. So if we are, if you are talking to 10 people and if their decision making is getting delayed, it’s very hard to say whether it is for one reason or the other, because this Trump effect was also combined with the New Year and Christmas vacation and so on.
But overall, I would say we have more customers in our pipeline eager to resume conversations, you know, be it because they is a new government. And you know, new government is not necessarily between Republicans and, and Democrats. I think it’s also about stability. But you are right. Large parts of the US Population sees Trump as, you know, trade friendly. So they expect their businesses to, to move and they want to invest to be competitive.
So conversations are today more actively happening than they were happening before. But I’m still staying short of trying to say that this is really an impact of, you know, the Trump administration because that is too big a phenomenon for me to say that we are directly impacted by it.
Unidentified Participant
Right. My other questions were actually answered before and also in your presentation, detailed presentation was really good. Just have a question. When do we plan to shift to the main board?
Ajay Mian
I think we still have, you know, we still have to be on the, on the SME board till December of this year. And once we, in December of this year, we will cross that criteria of three years. And once that happens, we will shift to the main board.
Unidentified Participant
Okay. And as you said that we are completing 25 years in this July, investors should expect something. Well, if the company performs, continues to perform well, you know, you will, you will expect something.
Rohan Mehta
We always expect something. I’m just trying to understand that, you know, do we expect the board to actually announce a bonus or maybe, you know, a good dividend? We have a good cash on our reserves. I mean, that’s why
Ajay Mian
You see, you know, my view on these are a little bit at divergence with how some people think. And I think the amount of investment somebody makes in the company is, I would say, much larger. And whether the dividend is one rupee or two rupees or three rupees, Really very small in comparison to the overall business gains that we see. So we have very cautiously, you know, try to secure our funds to use them for appropriate purpose. So I think, you know, I would be happier if the, if the business as a whole delivers more than what you are even thinking of in terms of a little dividend increase here or there. But you see some of the questions that you have asked, whether there can be a rights issue or there can be something else, all of those are topics of conversation which are kind of looked at from time to time. And it will be inappropriate for me to talk about any of these before the board of directors has brought it up and have thought about it.
Unidentified Participant
Absolutely. I just wanted to understand, since we are doing, I mean, I’m sure with the cash, if you’re doing an ROE of about 18%, I think it’s more than what we, I mean, we are fine about it, but can we maintain this ROE to, I mean, plus 20% in going a few quarters and years?
Ajay Mian
You see, we know what it takes and we are working towards that and we are trying to invest towards that. Incidentally, for, you know, you probably know it already, but when we look at a US company and, you know, now I have looked at three companies very closely in the last six months, those companies do not make this level of margins.
So it is not as if our acquiring a US company will immediately increase margins. It will not. Briefly, it might actually reduce, but that will give us the ability to turn it around because we will be able to get into those companies and, you know, move a lot of delivery operations to India, which therefore will enable us to increase the margins of that business and the overall business.
So this is precisely the reason, if you look at our presentation, which were maybe made in the Q3, Q4 of last year, and you compare it today, you will see a shift in the percentage of business from the international services. And it’s no magic. I mean, we know this is how it happens. We have been working at it. We have been getting some results out of that. We will continue to work at it. We will try to keep improving it. It’s very hard to say that when will, how much of this be accomplished? Because it’s not just a mathematical, you know, solution to something. You need to have clarity and you need to keep working at it.
Unidentified Participant
Right. Fine. Great. All the very best.
Ajay Mian
Thank you very much.
Operator
Thanks, Dipesh. We’ll take the next question from. You can go ahead, please.
Unidentified Participant
Congratulations on very good set of numbers and thanks for giving me this opportunity. As per the presentation, you mentioned that there are like four projects which are in the advanced stage of kind of signing up. Can we know what are the sizes?
Ajay Mian
Yeah, sure. So the smallest one is in the range of about $100,000. And the largest one of them is about $600,000.
Unidentified Participant
Okay. Okay. Thank you, sir. That’s all from my end.
Operator
Thanks, Suvindra. We’ll take the next question from Akshay. Akshay, you can go ahead, please.
Akshay
Hello, sir. Congratulations on the great set of numbers, especially on the margin side. I, I wanted to ask a different question. So with the, with the advent of deep seek now, how do you see the, the AI adoption happening going forward? How fast do you see it’s happening forward? And the, so with the, with the kind of projects that are coming to us, do you kind of sense in the market that there is more need for the AI applications going forward? And are we prepared and how are we prepared for that happening?
Ajay Mian
Absolutely. So, you know, AI is here for everyone to see, experience and gain from. Olitech is not a company which is, you know, dependent on driving one particular technology. We are in the business of helping customers consume solutions which are building up and evolving. So when AI is maturing, as AI is maturing, we are trying to help our customers gain from that.
So AI is definitely changing the landscape. Our customers are needing different things and we are in the business of helping them gain from what’s new on the market. So this trend will continue and we will, you know, as this trend continues, we will keep on adapting and adjusting our, our offerings to still keep helping our customers consume it and gain from it.
Akshay
Great, sir, thank you. Just, just a quick follow up question on that. So does the AI application side of things have the similar scale of the enterprise application side of things? Like, let’s say. There’s a computer enterprise application that we are building using Microsoft Dynamics. And if it’s on top of that, if AI application is required to maybe increase the efficiency, do you see the same sort of scale in that side of things as well? You see the Dynamics 365 applications already have AI embedded in them at different degrees.
Ajay Mian
So for example, all Microsoft products have this copilot now inbuilt, whether you look at the browser or you look at Microsoft Office or you look at any of the other applications. So these copilots enable users to enhance their efficiency. They make them fast, they make them more productive. But now, in addition to that, the new generation of AI capabilities are becoming available.
So this whole concept of agents which is coming up now, for example, the Dynamics 365 Business Central has now agents which enable you to do things which are way different from how you would have done them otherwise, or even with the use of co pilot. So these are all stages. So you know, initially it was all everything being done by a human.
And then the next stage is where co pilots are helping them do the same thing. And in the agentic world, many of these things will become autonomous. And you know, the adoption of this is basically the first thing is conceptualizing that what is possible to do building those products and then enabling people and businesses to consume them.
So this is a journey and the journey is already, you know, kind of, it’s been on for the last, you know, I would say at least two years and it’s only gaining speed.
Akshay
Perfect, perfect. Thanks a lot sir, and all the best. And yeah, we are delighted as shareholders. Thank you very much.
Ajay Mian
Thank you very much.
Operator
Thanks. We take one more question, we’ll take one more question from the chat from Shashank. Rastogi Shashank, you can go ahead please.
Unidentified Participant
Yeah, hello. Yeah, thank you sir, for the opportunity. Just one question from my side, sir. With the Deep Seek in, you know, advent in the technical arena, sir, our revenue portion comes from the cloud business as well. So this open source AI, will it impact our cloud revenue of Azure from the Azure side? So just want to know a little bit about it.
Ajay Mian
I think you probably need to take a step back and look at what is Deep Seek or for that matter, what does OpenAI do or what. Are the large language models, what are they doing? So first of all, a very important thing is that these models require the cloud even in order to get the data and get trained and so on. If you look at the Azure offerings and services that we currently look at, people are moving their on prem applications to the cloud, which enables them to leverage their data in a manner where they can do better analytics with it and they can train their models with their own data to leverage them for some kind of better automation and even machine learning and then AI. So Deep Seek is another model which basically has enabled humanity to train these large language models with a significantly lower level of compute than one had thought of earlier. So, for example, a large language model like Chat GPT, I think it takes approximately 25,000, you know, GPUs of, I think it is a 100 category of chipset, you know, whereas, you know, Deep Seq was trained with only 2048 GPUs. So that is a scale. And it’s just a new way of doing the same, solving the same problem which has, which has come, done this. Now people will still. So these will help people do more analysis. But this is not taking the cloud away. It is in fact going to reinforce the advantages that cloud brings.
Akshay
Okay, sir, just because, you know, I was having a feeling that it needs a hard, it needs, it needs a hardware side, you know, for the development of the software rather than the cloud side. So that is why I asked this question, sir.
Ajay Mian
So you see, our customers are in the business that they are in, you know, whether somebody is in manufacturing or professional services or travel or epc. And they want these applications to run their business. Now to run their business, they need applications and they need infrastructure to run those applications. These applications are becoming increasingly more intelligent. They are throwing up more data. The cloud infrastructure helps to capture that data at a significantly lower cost than it was available before. Right. So that is where, this is where you will have some usages of, you know, things like a Chat GPT. Or owen model from OpenAI or the Deep Seek. But it is not going to fundamentally change the business that the customers are in. Our customers are not the companies. OpenAI is not our customer. We are not in the business of providing people to these large tech companies. We are in the business of helping other businesses that you know of in the physical world, or digital businesses for that matter. We are in the business of helping them become more efficient, more competitive. So these are good things for us because these things will increase the demand and awareness for people to use technology.
Unidentified Participant
So that means our cloud business margins will remain intact and no threat on them as such.
Ajay Mian
You see. I see margins are dependent on a lot of things. Margins are dependent on pricing, Margins could be dependent on the OEM policies. But I would say it would be wrong for me to say the margin will be same or less or more. But I would say the cloud business itself will only increase because there is more and more applications which are available from cloud and this trend is only going to grow. So our cloud business is going to grow.
Unidentified Participant
Thank you sir for explaining this much. Thank you so much.
Ajay Mian
Even if you look at the Microsoft results that were announced yesterday, you will see their cloud business has marginally grown. The Azure plus business as last quarter grew at 30% but now it is at 31% or something like this.
Unidentified Participant
Yeah, yeah. So its expectation was 31.8. Just a little bit it came down, but yeah, almost in line.
Ajay Mian
Yeah.
Unidentified Participant
Thank you. Thank you sir. Thank you so much.
Ajay Mian
Thank you.
Operator
Thanks Shank. We’ll take the follow up question from Vidisha. Vidhi, you can go ahead please.
Vidisha
Yes, sir. So previously last quarter the US contribution was around 61 and this year it was around 59. So looking ahead by 26 and 27 and the years to come, so what percentage of revenue are we expecting from us versus the other country?
Ajay Mian
You know, it’s very. It becomes a little impractical to kind of either forecast or track these numbers at like such like fraction of percentages, you know, from that point of view, you know, one project here or there or one milestone being done earlier or later, you know, can make this difference. And I get you from your point of view, you have only these numbers to see and kind of try and make a forecast from. But I would only say, you know, these fractions of decimals one way or the other are no trend. They are fairly impractical. What you have to see those. Though is while you are looking at this difference, a fractional difference between last quarter and this quarter and whereas you see that the revenue in the last quarter and this quarter is about the same. The point which you have not, you know, seen though is that in this quarter our services component grew substantially in comparison to our product component. So even though percentage point wise it may appear down by a, by a fraction, but in absolute it increase in a very healthy manner and as I said, we very clearly know where we want to go. Will we always get there in the, in, in any forecasted period of time? Well, that’s what we keep trying, but nobody can ride these things to a very high level of precision in stone.
Vidisha
Got it, sir. And in the previous concourse you had given a guidance of 20 to 25% revenue growth year on year. So are we still intact on those numbers for FY26 and 27?
Ajay Mian
Well, you see, when you take a target, it’s not right to keep, you know, switching it. You know, we don’t do it. And as I said, maybe we are a percentage point a little bit down or a little bit up, which is okay. But we can’t just change these numbers based on our convenience. We still want this to be what drives the people towards it.
We’ll see what does it take us to get there. We will do everything that is needed for us to get there. Whether we get there, we fall a little short or we go a little further, we will see when we come to that point.
Vidisha
All right, thank you so much.
Ajay Mian
Thank you.
Operator
Thanks Vidhi. We’ll take the next question from chat from Ravi Kiran. Hege. Ravi Kiran, you can go ahead please.
Unidentified Participant
Hello, Am I audible?
Ajay Mian
Yes, please.
Unidentified Participant
Yeah, thank you. Thank you. Ajay sir, thanks for the opportunity to interact at the outset. I mean great set of numbers, great results. Thank you so much and thanks for being so transparent and sharing, you know, the business. This two questions I had from the business viewpoint. One is now as we are competing in the US for clients, speaking to clients and competing against like other American service providers, I’d like to know how we kind of compare with the competition there you are seeing. So obviously we would be price competitive being a company from India. But apart from that, how would you rate our company in terms of the various parameters in any instance,
Unidentified Participant
Share interesting cases you could share in terms of, you know, getting those deals, etc. It would be interesting to know for us.
Ajay Mian
Sure. So you see, the area that we work in, in that area, the cost of the project is not really what the customer pays us. A significantly higher cost is what the customer incurs in change management, in getting their people trained, in aligning the organization with the new solution. So the cost of failure is very high because of that. Nobody compromises on the project outcomes simply because something else is cheaper. What that means is that being a little bit cheaper or being cheaper, you know, from the local competition gives us a competitive edge.
But that by itself is not a winning mantra. Winning requires that you still are able to instill the faith and trust in the customer, that his objectives will still be met and his project will succeed, and he will get the desired outcomes from the project impacting his business. And if you are able to do that, only then will be the question. If you are able to do that at a price point which is better than the price point being given by local people, you have possibly a winning proposition.
There will always be some who will say that maybe, you know, we have 5% risk in trying to go to somebody who will do on site, offshore and all this kind of stuff, and he says, I don’t want to take that risk, and I would much rather pay 50% more or 100% more and go only to a big four. Well, yeah, sure, you will have those kind of people, but you will also have the, you know, a lot of other people who would say, I want what it takes for me to succeed, but I also am very conscious of my price and I want to go it and do it at the best price possible. But nobody compromises on an outcome.
Unidentified Participant
Thanks. I mean, yeah, that. That absolutely makes sense. But then how do you, you know, convince your prospective clients in terms of. Is it. I mean, I’m sure there would be client referrals and so and so, but any. Anything you could share in that?
Ajay Mian
Well, it’s very simple. You know, in. In, you know, as I just mentioned in this call, also, in our business, customers buy on trust. Now, this trust is not something which is kind of instilled in one conversation. Our opportunities take many months, and what happens over these months are several. Conversations, demos, solutioning, talking to several people from different departments. And it is this process of talking to people, showing the product, showing them the solution, which gives them the comfort that you understand their business and you understand how the solution needs to be delivered. So when this faith, so this is a process and when they get that faith, then they think, yeah, you probably are somebody that they can, you know, trust and have faith on. That is when you get an opportunity to progress.
Unidentified Participant
Right, thanks. Thanks.
Ajay Mian
It’s all consultative. It’s all consultative.
Unidentified Participant
Right, thanks. The second question from a business perspective is in terms of the service revenue, right. So we would have a service component understand for most of the deals. And so the proportion of the service income would increase over time as we have more and more clients on board. Right. So if you could help me understand how, you know, that would play out in terms of, you know, over time, how. Sorry.
Ajay Mian
Yeah, sure. So you see the, the service rates that you realize in India are different from the service rates that you realize. For example, in the US Price, the product pricing, however, is roughly the same. Now what happens in India, if I just average out over many, you know, customer wins in India, our product to services ratio stays somewhere in the ballpark of 55, 45 or maybe 60, 40, you know, the higher one being the product.
But you know, if it is a, if it is a medium sized customer, but if it is a very small customer, maybe the product price is lower. But you know, comparing Apple to Apple for the same customer in the US the product will probably be 25% and services 75%. So this ratio is not likely to change simply because we get more projects. But what is likely to happen is that if you get large customers who have large number of users, the product component may go up. The service component may not scale up in the same proportion though. You will end up doing more things for those customers because their needs will also be in proportion to their scale.
Unidentified Participant
Right. So the more complicated the organization would, there would be, I imagine, more customizations, more, you know, things you need to take.
Unidentified Participant
Take care of to make it suitable for the customer. Right. So service component, shouldn’t that be more.
Ajay Mian
You’re right, you’re right. But you know, those things don’t change the, you know, value of the project that much. You know, you know, comparing a very simple to let’s say a little complex, the price difference will be not more than maybe 20%, 25%. But let’s say if you have a, if you have an organization which has 10 users versus an organization which has 100 users, the product price will be significantly different.
Unidentified Participant
Right. Okay, got it. Thank you.
Ajay Mian
All right,
Operator
Thanks. I have one more question, but I would probably go back in the queue. Thanks. Okay, thanks Ravik. We’ll take the next question from Bobby J. Bobby, you can go ahead please. Bobby. Okay, we’ll take the next question from Harsha Karan. Harsha, you can go ahead please.
Unidentified Participant
Yeah. Hi. Am I audible?
Ajay Mian
Yes, Harsha very much.
Unidentified Participant
Thank you. Congratulations first of all to all the board members to having been making so far together, it is very rare to see all of, all of you together like this. So my, my other questions have all been answered. So I just have a small question here of all the companies that you were analyzing to acquire. Okay. Hypothetically if I have to ask you if you had acquired a company, would that, would it make our company vertically integrated or horizontally integrated? Just some lines on that. You’ve been analyzing so many other companies to acquire. Right. So I just wanted to know what, what sector do they cater to which makes our company vertically or horizontally integrated? Just some color on that.
Ajay Mian
Correct. So even though we have looked at many companies, but I would say that the companies that we have advanced, I would say to a serious level so far have all been doing exactly what we do. But in the U.S. okay, what that basically means is that we are looking at the same customer type, we are looking at the same technology, we are looking at the same nature of solutions.
So if that would happen, you know, we’ll kind of get joined at the butt and we will be able to deliver more of those projects from India which will over a period of couple of quarters enable us to increase margins in that business.
Unidentified Participant
Okay, thank you. Thank you. That’s it for from my side and thanks for answering. If I have any other queries I maybe write up to you.
Ajay Mian
Thank you. Thank you. Thank you. Thank you. Thanks Hara.
Operator
If anybody else wish to ask question then please raise hand.
Ajay Mian
Bobby, if you are there, you can unmute and ask.
Unidentified Participant
I think there isn’t. Yeah, Bobby, you can go ahead please. Yeah. Hi. You mentioned that you know, before clients can use generative AI, you need that data to be on cloud. So do you help your clients do that?
Ajay Mian
So the data is in cloud for most of the customers now and it’s not just be it an ERP data or CRM data or data from other applications, barring a few customers who may be still continuing with their on prem erps. As I said, most of the new projects are all cloud based projects. One of the core offerings, and you may look back at our presentation, one of the slides was showing the six offerings that we have and one of that is digitizing the core and that includes the cloud transformation.
It’s a very important offering from us. In fact, my colleague Sandeep, who’s, who’s here with us in this meeting, he runs the cloud practice and Azure Infra platform managed services and many other services that go from Azure is what he runs now probably for close to about 100 customers.
Unidentified Participant
Right, so what do you mean is you create a data warehouse where different departments of the organization with their buried data, it all consolidates into one sort of a warehouse which you can use for artificial intelligence. Inference models for artificial intelligence.
Ajay Mian
Yes. But you see, this thing has evolved in the last couple of years. So when you talk of data warehouse, most of the data warehouses are all gathering structured data. So data warehouses would typically get created, let’s say with a SQL data warehouse. But organizations increasingly also have, you know, data which is not structured data. You know, this may be data from, let’s say your social media. This could be data from, let’s say your emails. And there could be various other types of data, which is also very, very important. And when you need to bring all this data, you have to move to other technologies which are now known more as the data lakes or even the data lake houses. If you have streaming data, for example, you can’t store it in a SQL type of a database, so you have other technologies and app. As data has become more important and as more, for example, IoT data, you can’t store IoT data in a SQL server so you have to move to a data lake or a data lakehouse for those data sets, which is all now a part of the Microsoft data fabric. And yes, this is what we do.
Unidentified Participant
All right, great, that helps.
Ajay Mian
Thank you.
Operator
Thank you. We will take the follow up question from Ravikiran. Ravikiran, you can go ahead please.
Unidentified Participant
Yeah, thanks. So I’m sorry I had joined late, so I’m not sure if the question has been asked. So we talked of a little slowness in the customer decision making leading to, you know, affecting the deal making. So subsequent to the quarter end, how are we seeing things now, you know, in terms of closing of the deals already in the pipeline?
Ajay Mian
So indeed, you know, we did discuss this a little bit. So as I had mentioned that mid November to somewhere like mid January, we saw a little bit of a freeze. But you know, we started seeing some warmth happening in some cases defrosting happening in the last couple of weeks. Things are warming up, you know, several conversations are back on table. So we do anticipate, you know, some or several of them getting converted in the coming weeks.
Unidentified Participant
Okay, thanks. And just a last small question pertaining to, I mean you had shared your thoughts on the kind of prospects for, you are looking for in terms of acquisition. I mean I, I understand the, the opportunities for margin expansion with that strategy but the only downside I see is the limited cross selling opportunities in that case. So let to know your thoughts on that.
Ajay Mian
Sure. So if you look at our overall set of offerings and there’s a slide in the deck which will give you a view of it. Our offerings are not limited just to enterprise applications. It’s not just ERP CRM, you know, and commerce applications. Our offerings go beyond this. Now data engineering itself is a very vast area and it is very adjacent to our other offerings. So this is something where opportunities exist for all growing companies. So while we see that organizations of typically of this size in the U.S. 10 million, 12 million, kind of remain focused on their core, but that is what brings us the opportunity because to the same customers, to the same company, To their customers. If they are bringing only an ERP or a CRM, we have the ability to take to them and bring opportunities from data engineering. We have opportunities to talk commerce applications or portals to them. So we may get from them, you know, a customer base and how do we bring our other offerings to that customer base is then for us to figure out. This is not going to happen on day one. This will probably take like a year, sometimes a little bit more depending on the customer base and the size and the specifics of that organization. But other than this, there are two other areas in which we have been continuously either evaluating other companies and also gradually building up ourselves. And that is an area of digital commerce, but also the area of data engineering. So we have our own team. But in terms of acquisition, if we come across companies who are at least a couple of million dollars, have some international customers, we are happy to look at that and make investments to strengthen this area. We are also talking to candidates who could come in, senior people who would come in and give a further boost to this. So we are looking at all the areas which are associated with our code. So it’s not just one thing.
Unidentified Participant
Okay, thank you so much, sir. Thanks a lot and appreciate the. Thank you. We’ll take one follow up question from the chat with Devendra Rawat. Devendra, you want to go ahead?
Ajay Mian
Yeah, sir, so I was asking, do we have like ongoing engagements with research firms like Average Group and Gartner kind of firms? Right. Because a lot of time many of the clients start looking for potential partner through these forums. You are right. And my answer to you at this point in time is no, you know, and it’s not because we have not looked at it. But you know, sometimes you have to do a good amount of ROI analysis in terms of what is it that you are getting at what price? So Gartner typically, typically comes at a very, very high ticket price. It is something that is under, I would say conversations, but we have not yet bitten the bullet.
Unidentified Participant
All right, sir, thank you. Thanks, Devendra.
Operator
I believe that is the last question for the day. Sir, would you like to give any closing comments before we end the call?
Ajay Mian
Well, yes. Thank you very much all of you for taking your time and joining us this afternoon. Overall, this period has been a little bit different from how we have seen the last couple of quarters. But we think that things are warming up. It will get better. At a macro level, I think we are placed very well. It takes a lot to establish a business in a completely different geography. Sometimes we may think that if you have to set up in US you can send somebody, one person there or you can hire somebody there. It doesn’t happen that way. You have to have a lot of customer engagement. You have to have reference cases you need to be well connected with. If you are working with Microsoft, you know, people have to know you. So it just takes a certain. You have to log in a certain number of, you know, years before you become of any relevance, you know, in these geographies. So fortunately, we have, you know, come a long way in doing that. So we are now a business which is in serious contention for leadership positions in some of these geographies. We will continue to push that. We do think, well, the next several quarters they are not going to be easy. But I think we will have opportunities for us to, you know, go up gear. So I’m very optimistic for, for the next couple of years. I think we are, we are doing what the market needs. We are in the geographies that are growing. And so we are. We are all set.
Operator
Sure. Thank you. Thank you, sir. Thank you to all the participants for joining on this call and thank you to the management team for giving us their valuable time. This brings us to the end of today’s conference call. Thank you very much.
Ajay Mian
Thank you very much.
Sandeep Jain
Thank you, sir.
Operator
The recording has stopped. Sa SA.