Allied Digital Services Ltd (NSE: ADSL) Q2 2025 Earnings Call dated Oct. 29, 2024
Corporate Participants:
Nehal Shah — Whole-time Director
Paresh Shah — Global Chief Executive Officer
Gopal Tiwari — Chief Financial Officer
Unidentified Speaker
Analysts:
Mayank Vaswani — Analyst
Unidentified Participant
Piyush Dabra — Analyst
Manan Vandur — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Allied Digital Services Limited Q2 and H1 FY ’25 Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you. And over to you, Mr. Vaswani.
Mayank Vaswani — Analyst
Thank you, Dorwin. Good afternoon and thank you for joining us on Allied Digital Services Limited earnings call for the second quarter of financial year 2024-25. We have with us on the call today Mr. Nitin Shah, Founder and CMD; Mr. Ramanan Ramanathan, Global Head of Strategy for Growth, Innovation and Partnerships; Mr. Nehal Shah, Whole-Time Director; Mr. Paresh Shah, Global CEO; and Mr. Gopal Tiwari, Chief Financial Officer.
We will begin with Mr. Nehal Shah, who will cover recent developments across the business. Mr. Paresh Shah will then cover the operational performance and order wins followed by Mr. Gopal Tiwari, who will walk us through the financial highlights. Thereafter, we shall open the call for the Q&A session.
Before we begin, I would like to point out that some of the statements made in today’s call may be forward looking in nature and a disclaimer to this effect has been included in the earnings document that has been shared with all of you earlier.
I would now like to hand the call over to Mr. Nehal Shah for his opening remarks. Over to you.
Nehal Shah — Whole-time Director
Thank you, Mayank. Good afternoon, everyone, and thank you for joining us for our earnings calls today. I hope you have had a chance to review the earnings document we shared earlier.
I am pleased to report that despite ongoing geopolitical uncertainties in a challenging global economic environment, we have delivered a strong set of results this quarter. We have seen growth in both revenue and profitability compared to the same period last year, driven by the strong momentum in the Indian market.
A key highlight this quarter is the pickup of order wins. In prior quarters, we had indicated that discussions with customers were positive, but there were delays and deferments while finalizing orders. We are pleased to share that we have booked multiple orders this quarter aggregating INR675 crores, representing strong accretion to our order backlog.
To begin with, the INR430 crore Pune Safe City order is our largest ever order win for our smart city offerings. The first ever order win in UAE is heartening too from a BFSI customer. I am sure that all of you have noted the multiple order wins with a diverse set of customers and geographies this quarter. We take confidence that a rich profile of customers chooses to depend on Allied Digital for their critical requirements. The outlook remains positive. We are in advanced discussions with several new customers. We have also strengthened our leadership team and expanded our global office network to support future growth.
Now I would like to hand over to our Global CEO, Mr. Paresh Shah, who will provide further insights into our operational performance and key developments this quarter. Thank you.
Paresh Shah — Global Chief Executive Officer
Thank you, Nehal. Good afternoon, everyone. Here is a quick summary of the operational highlights for this quarter. As Nehal pointed out, it has been a great quarter. Allied Digital secured over INR675 crores in new orders and contract renewals this quarter. So that’s wonderful news. Key wins include, let me just walk you through some key wins: A leading life insurance company in India with 46 million customers across 148 cities where we will provide them complete infrastructure management services. The world’s foremost specialty packaging company serving major FMCG brands globally has chosen Allied Digital for a complete transformational infrastructure management services which includes NOC, SOC, digital desk platform and our workplace services. A global leader in the energy sector specialized in oil, gas and petrochemicals have selected us to deliver their infrastructure services comprehensively. An Indian public sector enterprise under the Ministry of Power where we will provide infrastructure and cloud solutions. India’s central bank responsible for regulating the bank system has engaged us for application support services. A regulatory authority in Maharashtra dedicated to promoting healthy growth in the real estate sector has engaged us for infrastructure and service desk opportunity. A prominent alumina refinery in Odisha [Phonetic] where we will be providing digital desk and digital workplace services.
As Nehal pointed out, let me talk about other opportunities outside India. The largest bank in the UAE, a leading financial institution, has selected us as their total IT outsourcing provider, encouraging — encompassing digital workplace services, end user support, data center support and critical infrastructure management services. I would like to highlight one of the large U.S. offerings. Also, a global leading — leader in silicon carbide and gallium nitride technology in the chemical industry serving sectors like electric vehicles and renewable energy where we are delivering 24/7 global service desk, end user support and command center operations including cybersecurity services. That’s another win. These contracts reflect our continued growth and expanding capabilities across business sectors as well as encompassing all sectors of our offering.
Now I will hand over to Mr. Gopal Tiwari, who will share the financial updates during the period under review. Over to you, Gopal.
Gopal Tiwari — Chief Financial Officer
Thank you, Paresh bhai. Good afternoon, everyone. I’m sure all of you must have gone through the financial performance of the company for Q2 FY ’25. Hence, I would like to highlight some of the key developments regarding the financials and governance. I’ll start with other expenses. From the financials, it can be seen that other expenses have increased from INR14.2 crores in the Q1 FY ’25 to INR17.5 crores. This increase is mainly on account of an extra provision for ECL of around INR2 crores based on our ECL policy and expenditure of around INR1 crore incurred towards pan-India celebration of our company’s 40th anniversary. As is evident, both these expenses are non-recurring in nature. Despite this increase in other expenses, we have reported an EBITDA margin of 11-plus percentage in this quarter.
Now moving on, our cash balance as of September 30, 2024 has increased to INR170 crore from INR99 crore in September 2023. Again, this gross borrowing is to the tune of INR55 crores only, higher from INR43 crore in the same period last year, primarily due to increase in working capital requirements for project execution. Hence, on a net basis, our net cash balance has risen meaningfully to INR115 crore.
Another important metric that I would like to cover is the improvement in debtor days. Our DSOs continue to improve further and were at 72 days as of September 30, 2024 compared to 87 days at the same time last year. We will continue to make efforts to further improve on this. Recently, we have added Bank of Baroda as our third banking partner to meet our enhanced working capital requirements. While we remain adequately capitalized as indicated by our present net cash balance, we felt it prudent to ensure the necessary financial flexibility to cater to operational requirements.
Now as you are aware, Messrs Singhi & Company, one of the leading audit firms in India, was appointed as our statutory auditors at our last AGM in place of Messrs Shah & Taparia, who had completed their maximum permissible tenure with us. The limited review reports for the quarter two FY ’25 results have been issued by them only. Further to inform, KPMG remains our auditor for transfer pricing reports, ensuring that we engage with leading names of both global as well as domestic heritage.
Thank you. I will now hand over it to the moderator to open the forum for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Athar Shadab [Phonetic], an individual investor. Please go ahead.
Unidentified Participant
Hi, sir. Congratulations on a great set of numbers. I have two questions. There has been a slight dip in the margin this quarter year on year. What is the management commentary on that? Especially, I could see the expense rising in purchase and other direct expenses. What it is about? Second question is that now we have crossed INR200 crore revenue mark in this quarter, do you want to revise the guidance of INR1,000 crore revenue? Can we expect it now in FY ’26?
Nehal Shah
So thank you, Athar, for the question. I will answer the second question. The first question will be taken by our CFO, Mr. Gopal Tiwari. Regarding our guidance, we have been giving our guidance of INR1,000 crore for the year ’26 and we feel in the next six to seven quarters, we should be able to reach our top-line guidance of INR1,000 crore. In respect to the margin dip which is very periodical only for this quarter, I think Gopal…
Gopal Tiwari
Yeah. As explained in my speech, this is mainly because of certain expenses of non-recurring nature, which we incurred in this quarter, mainly on account of, as I mentioned, ECL provision, which is only provision made. It might be getting reversed in the coming quarters. And secondly, one-time expense we have incurred for our celebration of 40th year in our organization. So because of that, margin was [Indecipherable], but still we have achieved our EBITDA margin similar in line with our earlier quarter. So had those expenses been not there, the EBITDA margin, our margin would have been a little better.
Unidentified Participant
Last earning call, we had a guidance of 15% — of reaching 15% in near future. Is it still on track like we are targeting that?
Nehal Shah
Yes, that is still on track, but it is going to take some time because right now our focus, we would want to make sure that we are getting the customers, we onboard them. And while we are onboarding new customers, whenever you acquire a new customer, there are upfront costs that you have to pay. And that sometimes reduces your margin a bit, but in our line of business, the best part is that we get customers who stay with us for another five years, seven years. So we have got a lot of time to improve our margins once we go in the second year or after three or four quarters that we start with them. So that margin [Indecipherable] is our need, and we also would want to achieve that and we hope to do that soon.
Unidentified Participant
Got it. Thank you, sir. Congratulations again.
Nehal Shah
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Piyush Dabra from LT. Please go ahead.
Piyush Dabra
Hi. Good evening, everyone. First of all, congratulations to the ADSL team for the great set of numbers for the quarter two. And my question is on the front of cybersecurity space. How is ADSL planning to move ahead? What is our business outlook for the next maybe three or four quarters and what all revenue and what all funds we are expecting our business to come from only in the cybersecurity space?
Paresh Shah
Yeah, from the cybersecurity space — this is Paresh here. We see a lot of exciting opportunities. As you know, this quarter also we closed a couple of deals on cybersecurity, which we see there is a continuing demand, and we are also growing in our customer’s logos and we see that sector growing more and more over time. So we are excited about this, and we have a very strong outlook on cybersecurity.
Unidentified Speaker
Yeah. Just to add to what Paresh is saying, cybersecurity is now becoming an integral part of managed services more and more because that is expected now by almost all the customers since cybersecurity is so prominent. And the other part is we are into safe city projects and smart city projects. And safe city and smart city projects by their very nature include more and more cybersecurity. So our — not only our competency in this is increasing, but we are also investing appropriately for us to be able to grow in this region and to make a difference to our customers.
Unidentified Speaker
So I would like to add the third-party organization like Equitymaster, recently, they published their study and research. They have selected and they talked about three main companies to be observed in India in Cyber Security space and we are one of them. This is from Equitymaster.
Nehal Shah
Piyush, am I audible? Are we okay with the answer?
Piyush Dabra
Yes, yes. Thank you, sir. Thank you for your comments.
Operator
Thank you. [Operator Instructions] The next question is from the line of Pratik Dedhia [Phonetic], an individual investor. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Operator
Yes, you’re audible. Sir, you may proceed.
Unidentified Participant
Yes. Thank you. Thanks for the opportunity and congratulations on a great set of numbers. So my question is regarding the margins. So what levers do you see going ahead in terms of improving? What parts would lead you to around 15% margin? And for the current quarter, since the margins came around 11%, any specific factor that you can point out which resulted in a muted year-over-year margin kind of thing?
Nehal Shah
So Pratik, thanks for the question. I think the current quarter, the margins, Gopal Ji has already answered about it. Having said that, there is a constant endeavour for us to improve our margins and we are working towards it. If you see, we have improved a lot of our parameters. Parameters like DSO going from 87, coming down to 72. Our ROC has also started going up. We are back to double digit. Similarly, there are other things also. If you see our cash reserves and all are also growing day by day, quarter by quarter. So there is a constant endeavour that we have to make sure that we keep on improving our margins. I personally would — as a promoter, would also want the margins to be as better as possible. We are doing whatever we can, and we will strive harder to make sure that our margins keep on improving with future quarters.
Unidentified Participant
Okay.
Paresh Shah
Just to add to what Nehal talked about, we are also engaging more into app support. We have an AI roadmap. So we see that there are better margins also to be looked into areas where we can kind of flourish more. So these are the areas that we are quickly catching up and looking at those kinds of projects also.
Unidentified Participant
All right. Fair enough. So just to confirm, you mentioned AI, right?
Paresh Shah
Yes.
Unidentified Participant
Okay. Got it. All right. And I have a second question regarding the data center part. So, I think last quarter, I had asked about in terms of how is that business going. So just during the quarter, how was the traction pertaining to it and what kind of offerings have you or probably what kind of business have you gotten in terms of the data center offering?
Nehal Shah
So thank you for the question. The answer to that is data center is something which is very close to our heart and we are absolutely getting customers around it. The Puna Safe City is one. [Indecipherable] So there are constantly customers coming to us and infra being our core forte, we feel that this is something that we are going to be going ahead on.
Unidentified Participant
Okay. Got it. Fair enough. Sorry, but there is some disturbance while you’re speaking, so the answers are not very clear.
Nehal Shah
Okay. Is this audible better? Do you think it’s better?
Unidentified Participant
Yes. Yeah, this is better. Okay. Thank you.
Nehal Shah
Do you want me to repeat the answer once again? I can do that.
Unidentified Participant
Yeah, yeah. Sure. That would be helpful.
Nehal Shah
Yeah. So I’m saying that data center business is very close to our hearts. We have been constantly doing things. If you remember, I had spoken in my last call that we have done close about 14 safe cities. In every safe city, there is a data center component in it which we have built and delivered to the customer. Even the Pune project that we got, the extended to the phase two that we are talking of has got a data center built in it. So we will continue doing that. Apart from that, there are a lot of enterprise customers with whom we are talking about data center management as well as helping them to migrate from on prem to cloud. So being in the infra business, this is our core business and core competence. We are very excited about things that are happening in the data center side. Even the Government of India, if you have seen, has also given out a budget of about INR30,000 crore for making data centers in India to make sure that the data of Indians are kept inside. So that again opens up an avenue for us. Our core competence once again lies in building a data center, managing data centers and making sure they are running for a period of three to five years.
Unidentified Speaker
So I would rather like to talk the scenario about data center. It has got four different phases. One is own the data center, build the data center, operate the data center and manage the data center by providing managed services. And the first, own the data center is highly capital-intensive activity, whereas all the three others, rest others, build, own — not own, operate and manage is completely skill-intensive activity, which is where we are there. And we are very sure that in any case we will be doing, even for third-party data center also, we keep continuing doing that. And recently, we are in the process of getting empanelled with MIT. MIT has come with a very large opportunity, and they are going to shortlist some good companies like who are into AI and cloud. So while we are talking to you, we are in the process of preparing or responding to that RFP. Thank you.
Unidentified Participant
Okay. All right. This is very helpful. Thank you. I will come back in the queue.
Operator
Thank you. [Operator Instructions] The next question is from the line of Manan Vandur from Wallfort PMS. Please go ahead.
Manan Vandur
Yes. Hello. Thank you so much and congratulations on the numbers. Sir, I came late in the call so someone might have already asked. So please bear with me. On the 28th slide of your presentation, I think there is a mistake in the numbers. So the EBITDA numbers which are showing is INR23 crore as EBITDA, but actually it is including the other income. So the actual EBITDA is coming to INR19 crores if we do INR203 crores minus INR184 crores. So, it’s coming to $19 crores. So if we do that, then our margins are coming to 9.35%, but our EBITDA margins are showing as 11%. So this is what I wanted to ask, like, this is a significant dip in our margins from like 10%, 12% to like 9%. So can you please help with this?
Gopal Tiwari
Yes, sir. The point is, first of all, EBITDA margin is calculated in my opinion or everywhere after taking other income also. This is distinct from operating margin. In EBITDA, we have to take other income also in account. But having said that, even if we don’t take that other income, I had explained in my speech, I think you were not there, our expenses, if you go through, our other expenses in this quarter have increased by over INR3 crore. And that is mainly on account of some expenses which are non-recurring in nature, which is one-time expense which is there in this quarter. I mean it’s not going to be again repeated in the coming quarter. So if you take out those expense, so we will end up earning — our EBITDA earning more than 11%, which is in line with our earlier quarters. So that is another reason. Even if you don’t take that other income in account, we have still achieved our EBITDA margin in comparison to earlier period on similar lines.
Manan Vandur
Okay. So is it on account of hiring, like getting new employees because we won…
Gopal Tiwari
No. It is mainly on account of two counts. One is on account of our extra ECL provision made on account of this [Indecipherable]. And another one is that we celebrated last — during last quarter our 40th anniversary. Our company’s 40th anniversary was there, we celebrated in a large scale, pan-India basis. So that expense is also [Indecipherable]. And that expense is definitely not recurring in nature. It’s not going to be repeated again. So if you take out those two expenses, then our margin is still better than last quarter.
Manan Vandur
Okay. So — and another question is that, even as you’ve won orders, are we planning to hire new employees so that we can streamline more of our projects? So any hiring process are we doing, which might incur one-time expense and then later on help us out in our revenue and margins and everything in the later coming years?
Nehal Shah
Yes. Manan, so I’ll tell you [Indecipherable]
Operator
Sir, sorry to interrupt. Your voice is not clearly audible, sir. Is it possible to have like a earphone or something, please?
Nehal Shah
Is it better now?
Gopal Tiwari
Should we reconnect, Dorwin?
Operator
So yeah, now I think you’re very close to the mic. It’s just one management member who is not very clear, sir. I think it’s a little too distant.
Nehal Shah
Is this fine right now?
Operator
This is much better.
Nehal Shah
Yeah. So with respect to hiring, I think since we are in the business of IT, manpower is the most important thing for us. We are constantly hiring people. With respect to the recent orders that we’ve won, there’s a lot of time that we’ll have to make sure that we are delivering the contracts appropriately. Apart from that, there are also certain senior leadership people that we’ll be hiring soon for which you’ll be getting to know in a quarter or two for enhancing our business in India as well as abroad, maybe in the U.S., anywhere in the European markets. So there are talks happening with several candidates for that as well from a leadership growth perspective. And from BAU, that is business as usual, as contracts come in, we’ll be hiring people, refilling our current [Indecipherable] and making sure that we are there on our toes to make sure that the delivery happens.
Manan Vandur
Okay. Okay.
Unidentified Speaker
So just to add to what Nehal said, see, our hiring strategy is twofold. Number one, to cater to new projects that we have got. And so, they have become billable very quickly. And that is one hiring strategy. The other is to proactively hire based on anticipatory projects where we are reasonably confident of winning them. And so there you incur an initial expense, but that becomes recoverable very quickly as soon as we win those projects, because we don’t want to waste our time trying to hire only after we have won. So these two things form an important part of our hiring strategy. And of course, the hiring is based upon observable, confirmed pattern of billing.
Manan Vandur
Okay. And the last question will be on the finance cost. Like we have — we saw that we decreased like — we repaid some of our debt, our long-term debt, from INR12 crores to INR8 crores, we have gone, but still we see that from INR1 crores something odd to INR3 crores odd, we have gone in finance cost. So what would be the reason for this?
Gopal Tiwari
So, I will answer that question. See, as you see our business is growing and long-term debt is not there in the company, that is sure, but working capital funding is definitely there. We need a lot of working capital to cater to our working capital requirements. So borrowings are there definitely, and it is being increased day by day based on the increasing volume of business. And having said that, in this quarter, the increase of the finance cost is mainly on account of some regrouping of the income and expense. Earlier, we used to do some interest income, getting netted off against our expenses, which we have to change because of the new auditor coming into the picture now from this quarter. They guided us and they said, you cannot net off the income part from the expense. So you have to take the interest income in other income and entire interest expense has to be shown in the expenses. So because of that regrouping, our finance cost is increased in this quarter and other income got also increased with the same amount. So that is the reason of showing the increase in finance cost.
Manan Vandur
Okay. Understood. So which is why — okay, so…
Gopal Tiwari
[Indecipherable]
Manan Vandur
Okay. Because of this other income has also increased and interest also.
Gopal Tiwari
Yeah, absolutely.
Manan Vandur
Okay, got it. Yeah, that’s it from my side. Thank you so much.
Gopal Tiwari
Okay. Thank you.
Operator
Thank you. The next question comes from the line of Shweta from Arihant Capital Market Limited [Phonetic]. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Operator
Yes. You are audible, ma’am. You may proceed.
Nehal Shah
Yes, please.
Unidentified Participant
Yes. First of all, congratulations, sir, and best wishes for the festive season. And my question is, can we see more quarters with order wins of INR500 crore?
Nehal Shah
Shweta, I would like to have more orders wins, who would not want that, right? But the reality of life is that I cannot give you a number, but there are larger deals that we are talking with customers, and we are hoping to close with them. As and when we have a concrete go ahead from our customer for delivering projects, we will start, and we will come back and give you announcements. But all I can say right now is that the traction is very good. And you would have seen that this quarter we saw about INR675 crores. This is the same quarter first time we have gone with a top line of INR200 crore plus. And we would want to continue to maintain this trend going forward as well, so that we reach our INR1,000 crore top-line mark. Yeah, we are very, very excited and I think this is a good time to do business and acquire more and more customers.
Unidentified Participant
Okay. And when will revenue from Pune Smart City start accruing?
Nehal Shah
Some of it will start from this quarter, that is the third quarter. Majority of that would come in the fourth and the first quarter next year.
Unidentified Participant
From third quarter?
Nehal Shah
From third quarter, we will have some billing done for transition. From fourth quarter, we will have the implementation done. And first quarter next year, we will have the final implementation billing done. So it will take about two to three quarters before we have the complete implementation done, before we move to the O&M.
Unidentified Participant
Okay. Got it, sir. Can you give some light on cash flow and return on capital employed?
Gopal Tiwari
See, return on capital employed we have reached around two-digit number, 10% we have achieved, but as earlier also we have pointed out our denominator, the networth figure is almost INR600 crore. So that includes almost INR200 plus crore of our real estate properties in the company. So if we net it out from our networth figure, then return on capital will increase, shoot up by another 3%, 4% definitely. So that is the reason, I mean, the more we will grow in our numbers in income and our ratio will keep on increasing.
Unidentified Participant
Okay. Got it, sir. Thank you so much. And best wishes for Diwali. Thank you, sir.
Operator
Thank you. [Operator Instructions] We have the next question from the line of Pratik Dedhia [Phonetic], an individual investor. Please go ahead.
Unidentified Participant
Thanks for the opportunity. Am I audible, right?
Operator
Yes. You are audible, sir.
Unidentified Participant
Yeah. In terms of — I just wanted to check in terms of the order bids that you put if you can just give us some broad ballpark number in terms of what range of orders you put in or probably number of orders that you bid, so that just gives us some idea in terms of the future possibility in terms of the order wins. And also in terms of — so this is more from the government sector part. And second question is, are there any specific orders or proposals that you put in for the private sector as well? So that would also be helpful?
Nehal Shah
So I couldn’t get your first question, Pratik, but I’ll answer your second question first and then you can repeat your first question. With regard to specific private customers we have been working closely with a lot of private customers here in India as well as global. If you look at our numbers, most of our revenues from outside India are non-government. They are all private enterprise that we are working with. There are certain large deals that are there in the pipeline which are on very advanced stages of negotiation and closures. In the coming quarters, we will do — in the next quarter, I would rather say if everything goes fine, we’ll be able to give out the names and the details about the orders, but the traction is very, very strong. We are constantly getting good traction, good number of bids are going in. For me to come up and give up a number on the bids would become a little challenging here. But having said that, the traction is fantastic and there are a lot of customers that we are right now negotiating for these divisions.
Unidentified Participant
Okay.
Unidentified Speaker
If I can add, you have to understand the nature of our business. Our nature of business is large projects in the Indian sector, particularly in the government, in smart cities and so on. And they’re typically of the — anywhere greater than INR30 crores, INR40 crores at a minimum, but it can go as much as like how the Pune city project went for INR433 crore. The second is enterprise customers. So our enterprise customers are typically in the international sector, they are multi-million-dollar projects. They are not small projects. And even in India, the enterprise customers are in the larger range because they are large customers. So, it would be a pan-India sort of setting. So you get an understanding of the flavor of the business that we go after. And therefore, by its very nature, the projects are significant in size, though they are of different sizes, and some are very large indeed and some of them are not as large. But all of them are significant projects from many perspectives. So that is the nature of the business that we are after.
Unidentified Speaker
So I would like to add there, every business of services that we are doing, what you see currently is only 20% or maybe 15%, depending upon the tenure of the contract, five years or six years, but you may see that every such contract would start yielding us that kind of profitability or the revenue for all subsequent years. So we are very happy with this recurring revenue kind of project. So we don’t have to worry and get frustrated to sign or get any business whichever comes our way. So sometimes if the margins are not good, we refuse also. We don’t take them. And that’s how our strategy is, but in every approval profit that you have seen, all the revenues that you have seen, most of the revenues are repeatable for the subsequent year also.
Unidentified Participant
Got it. Okay. Fair enough. I think that gives me a lot more clarity. So thanks. I’ll just repeat my first question. So I understand you cannot divulge the value, but for government orders, if you can just give a broad ballpark number of orders that you bid or waiting for and — sorry what do you say, waiting for the bid to be open?
Nehal Shah
So there are a couple of orders that we’ve already bid for, for which we are waiting for the technical evaluation happening. On the pipeline front, there are about five or six large tenders that are up for bidding. We are evaluating them. We will soon be figuring out which are the ones that you want to go after and bid for it. So if you want, what I can do is I can give you a little more detail on an email. So if you could share your email with our team here, I would be able to give you a little bit more detailed answer on that.
Unidentified Participant
Sure. Okay. That would be great. Yeah, I’ll share my email. Thanks.
Operator
Thank you. [Operator Instructions] The next question comes from the line of Sameera Middha [Phonetic], an individual investor. Please go ahead.
Unidentified Participant
Hello. Good afternoon, sir. I have a question regarding the recent acquisition done by the company. So, can you please elaborate upon that?
Nehal Shah
So Sameera, we haven’t done any recent acquisition. What we have done is opened up our office in Middle East that is in Dubai for expanding our business there. And we are glad to share that we’ve got our first customer, for which service delivery has already started and we have hired close to about 65 people there. So it’s opening up our branch office rather a subsidiary there in the Middle East in Dubai.
Unidentified Participant
Okay. And this is just to increase our presence in that particular location?
Nehal Shah
Correct. So we’ve got a customer which is local there. It’s a BFSI customer in Dubai and Abu Dhabi. So to cater to them, we have got some local presence in terms of hiring people, deploying them and also building purposes. So this gives us a good opportunity for us to expand ourselves in that region.
Unidentified Participant
Okay. Got it, sir. Thank you so much.
Operator
Thank you. The next question is from the line of Karthik Bhatt from Allied Digital Services Limited [Phonetic]. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Operator
Yes. You are audible, sir.
Unidentified Participant
Yeah. Like I have two questions. Like can you provide the top- and bottom-line guidance for your FY ’26? And like, when it comes to smart city, like what will be the revenue percentage coming to this year?
Nehal Shah
Karthik, I mean, you are calling [Phonetic] from Allied Digital?
Unidentified Participant
No, no. Like at that time, like I give you on the name.
Nehal Shah
Okay, okay. Fine. No issues. So the revenue guidance I’ve already said [Indecipherable]
Operator
Sorry to interrupt, sir.
Unidentified Participant
Sir, your voice not audible.
Operator
Your volume has gone low and it’s not audible clearly, sir.
Nehal Shah
Am I audible? This is better?
Operator
Yes. This is better, sir. Please go ahead.
Nehal Shah
So our revenue guidance once again I’m giving. It’s going to be INR1,000 crore. For the next seven quarters, we should be able to do it. I’m not saying a year, because that [Indecipherable] rather six to seven quarters, we should be able to have our annual top line of INR1,000 crore done. With respect to bottom line, I would want to say that we would be doing better than what we are doing today. [Indecipherable]
Operator
Karthik, does that answer your question? Do you have any further questions, Karthik?
Unidentified Participant
None.
Operator
Thank you. [Operator Instructions] Ladies and gentlemen, we have no further questions. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Nehal Shah
Thank you for your participation and engagement during this call. In closing, I would like to state that given the traction in order wins, we remain well positioned to reach the INR1,000 crore [Indecipherable] revenue in the near future. A comprehensive transformation program has been undertaken over the last couple of years, encompassing governance, transparency, human resource management, leadership and sales and marketing. This will ensure that our growth and progress is multidimensional and not restricted to financial parameters alone. If you have any additional questions or require further information about our company, please reach out to our team or contact CDR India. On behalf of ADSL family, we wish all of you a Happy Diwali and a prosperous New Year. We look forward to interacting again in the next quarter. Thank you.
Operator
[Operator Closing Remarks]