Birlasoft Limited (NSE: BSOFT) Q3 2025 Earnings Call dated Feb. 11, 2025
Corporate Participants:
Abhinandan Singh — Global Head, Investor Relations
Angan Guha — Chief Executive Officer and Managing Director
Kamini Shah — Chief Financial Officer
Analysts:
Ravi Menon — Analyst
Shradha Agrawal — Analyst
Sandeep Shah — Analyst
Sudheer Guntupalli — Analyst
Dipesh Mehta — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Bird Lasoft Limited Q3 FY ’25 Results Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Mr Abhinandan Singh, Head, Investor Relations, Birla Soft. Thank you, and over to you,
Abhinandan Singh — Global Head, Investor Relations
Mr Singh. Thank you, and welcome, folks. By now we have received or seen our results. Those are also available on our website,. Joining me on this call today are our CEO and MD, Mr; and our CFO, Ms Shah. We will begin the call today as usual with opening remarks from both and and then we’ll follow that up with — with some time for your questions and responses to those. But before I hand over the floor to Angan, a quick reminder that anything that we see on this call on the company’s outlook for the future could be a forward-looking statement and therefore that must be heard already in conjunction with the disclaimer that appeared in our 3rd-quarter FY ’25 investor update, which you would have received and it is also uploaded on our website as well as filed with these forward. With that, let me hand over the floor now to Mr Andan Goa, our CEO and MD. Over to you,.
Angan Guha — Chief Executive Officer and Managing Director
Yeah. Thank you. Thank you,. So good evening and good morning to everyone wherever you are, and thank you for joining us today as we share some perspectives on our performance during the 3rd-quarter for the current fiscal year. I trust all of you have seen our results. Our performance during the quarter reflects a seasonally weak quarter with higher furloughs than last year, compounded by the fact that the demand environment has not materially changed. While there are some early signs of improvement in certain pockets such as BFSI, those are relatively smaller contributor, as you know, to our overall business. So with that context, let me delve into our Q3 performance. On a year-on-year basis, our revenue grew at 1.5% in rupee terms and in constant-currency terms, it has been flattish. We’ve witnessed higher-than-usual furloughs this year and in some cases, the furloughs are even extending into January, and that has resulted in a softer revenue performance. On the margin front, we have reported an EBITDA of 12%, which is nearly the same sequentially from the Q2 quarter. The fact that we’ve been able to deliver this margin performance even after absorbing the impact of compensation hike that became effective from the 1st of October 2024 demonstrates our commitment to and our ability to sustain over-time improving our margin profile. Will delve more into this details during her remarks. We’ve also seen significant improvement on our cash balance thanks to continued strong cash generation. As a result, our balance sheet remains very robust. On the deals front, I am pleased to note that the deal signings during the quarter saw a sharp increase and we delivered $226 million worth of TCV signings. This by far has been the best quarter in terms of deal signings in the current fiscal. While a large part of this has coming from renewals, which is typical for the time of the year, we’ve also seen some net-new deals. Looking at the conversations that we are currently having with our clients and including one potential large deal and a new logo in Europe, we also expect a good PCV performance in Q4 as well. On the operations front, while we already enjoy a solid across multiple competency, a presence across multiple competency, I wish to share more on the areas that we have been investing in. Our investments are focused on bridging capability gaps and scaling existing capabilities that we believe are and will remain relevant in the marketplace. In terms of the bets that we are making in our tech capability roadmap, we are particularly concentrating our efforts in AI, Gen AI and AI-driven quality assurance services, data and product and app engineering. While Gen AI — which Gen AI you will recall that we had established our Gen AI Center of Excellence early last year and then had built our own Gen AI platform called to accelerate Gen AI-based solutions. We continue to harness the power of AI and Gen AI to transform our operations with new innovative in-house applications such as Beehive, which is a Gen AI conversational bot and, a Gen AI solution integrated with ServiceNow. These initiatives are aimed at bringing about structural changes in our business and that will amplify our competitive advantage, make us more resilient and enable us to better capitalize the — as demand conditions continue to improve. Looking ahead, as I observed earlier in my comments, the demand environment has not changed much from what we have seen over the past few quarters. There have been some signs of pickup in financial services, along with green shoots emerging on the discretionary side of customer spend. But it is too early to conclude that demand conditions have indeed turned around comprehensively. Clients’ budgets in most cases still indicate a hold and wait approach, particularly in verticals like life sciences, which as you know and may have noticed, is likely to be more subjective to the policy shifts in-line with the priorities of the new administration in the US. Additionally, we have seen some amount of project ramp-downs this quarter, which might have a near-term impact on revenues. However, needless to say, we are working with our clients to minimize all of it. Ongoing conversation with clients across verticals do give us a sense that demand should gradually pick-up as we progress into the calendar year, it will however take a couple of quarters for that to start reflecting meaningfully in our deal inflows and eventually in our revenues. Our deal pipeline remains quite healthy and we continue to invest in our capabilities that will enable the next phase of growth in our journey. At this point, I ask, our CFO, to share her perspectives on the quarter and the year under review. Kamini, over to you.
Kamini Shah — Chief Financial Officer
Thank you, Anken. Good evening, everyone. Hope you’re doing well. Thank you for joining us. Let me take you through the financial highlights for the 3rd-quarter of the current financial year. As you would have seen, we have reported a consolidated revenue of $160.8 million for — for the quarter, representing a constant-currency degrowth of 0.1% year-on-year and 1.1% quarter-on-quarter. In rupee terms, quarter three revenues have been at INR1,3627 million, a sequential growth of 1.5% year-on-year and a slight decline of 0.4% quarter-on-quarter. Performance during the quarter under review was led by BFSI vertical, which has grown 1.8% quarter-on-quarter, as Angan mentioned in his remarks. Our quarterly performance reflects higher-than-usual furloughs in a seasonally weak quarter, particularly in their life sciences and the manufacturing verticals. In some cases, the furloughs came in late into the quarter and are filling over into early Q4 as well. Among service lines, our digital and data business that contributes about 57% of the overall revenues grew by 2.4% quarter-on-quarter. The ERP business witnessed a sequential decline of about 5.7%, reflecting seasonal weaknesses. Moving on to the EBITDA performance, our EBITDA for the quarter was at INR19.3 million versus INR19.7 million in Q2. This translates to an EBITDA margin of about 12%. This is marginally lower than what we had reported in the last quarter. This is despite an organization-wide wage increase that came into effect from October onwards, indicating a three-month impact of the wage hike. Margin tailwinds that have enabled us to largely offset the impact of wage hikes and furloughs include exchange rate benefits from a strong dollar and some operational savings. Our PAT stood at $13.8 million, which is 9.3% lower on quarter-on-quarter basis. This is because we have recorded a lower quantum of other income during the quarter under review. Our other income was lower, primarily because of favorable to non-dollar currencies such as GBP, euro and others that have depreciated significantly against the US dollar and the rupee. Let me briefly touch upon the key balance sheet items. Our cash and balances at the end-of-the 3rd-quarter stood at INR240 million, up 8.2% quarter-on-quarter and at about 18.3% year-on-year. We have over the past several quarters demonstrated our ability to consistently generate strong cash flows. Our operating cash-flow for Q3 was at about $29.9 million, which is about 155% of our EBITDA. This has been on the back of strong quarterly collections. Consequently, we are happy to say that our DSO stands at 53 days, which is among the best-in our industry. In conclusion, I would like to say that we continue to enjoy a robust balance sheet with healthy cash flows. We are remaining focused on investing in capabilities for the future growth as we enter into the last quarter of the current financial year. Thank you very much. Back to you, Abhi.
Abhinandan Singh — Global Head, Investor Relations
Thank you thanks, thanks again. Moderator, can you please start the Q&A session?
Questions and Answers:
Operator
Sure. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. First question is from Ravi Menon from Macquarie. Please go-ahead.
Ravi Menon
Hi, thank you for the opportunity., so we’ve seen a bit of offshore shift this quarter, some bit of headwind, I guess, from that little bit of headwind from the pass-through revenue going away as well. And you talked about a lot of furloughs.. So can we think that some of this year is a very temporary headwind and you said that this continues in January. And have you seen that end? Or should we think about a similar sort of impact from furloughs for this quarter as well?
Angan Guha
Thank you. Yeah. So Ravi, thank you for that question. So look, you know, like I mentioned in also alluded to the fact that unlike the previous years, this year, we have seen more furloughs than usual and the spurloughs have come in a little late in the quarter, which kind of drove a little bit of muted performance. And the furloughs came in even from verticals where we had not seen furloughs earlier. Now also it’s a one-off situation, but just to answer your question, Ravi, the furloughs are extending into January as well. And since January is already over, the furloughs we have already accounted for. So that will show a little softness in revenue in Q4 as well. But like I said, we will concentrate on executing the quarter and see how much we can mitigate from those furlough impacts and see how the quarter goes. Our focus will clearly be on order booking. You saw a good order booking performance in Q3 and we would like to repeat the same order booking performance in Q4 as well.
Ravi Menon
If I heard you right, you were talking about large deal with the new logo. Is that correct?
Angan Guha
Yeah. So we are in discussions, Ravi, with a new logo in Europe where we think we can close a reasonable slice deal. I will not Call-IT a large deal, it is a reasonable size deal given the size of our company. So from our company standpoint, it will be. But it will be a marquee deal. We are still talking about it. We are confident on that. And if that gets concluded, we are confident of repeating the same performance as Q3 and Q4 in terms of order booking.
Ravi Menon
Thank you. And you had talked when you started this journey, talking about adding at least one major logo to each of the verticals. Can you talk a bit about the progress there and how you would have the sales team evolved now that group is departing? What’s the plan? How do you — how are you reorganizing the sales team?.
Angan Guha
Yeah. So Ravi, two questions and let me answer that. So of course, our endeavor is always to add at least one logo per vertical. And the logo that we hopefully will add a new logo in the manufacturing space in Europe will — will drive us towards that goal. But quite frankly, have we added a large logo in other verticals? The answer is no, but we’ve added new relationships. We’ve actually added, I think, company about three or four new logos in the three verticals that we serve. Now how much will the logo scale only time will tell. But the logo that we are talking about adding in Q4 will also come up — come along with the deal. Second question that you asked about roof departing, yes, roof has decided to take-up an opportunity outside of and we wish him well. So for now, I am stepping in to run the Americas business as an additional responsibility while we look for a solid replacement that we are working on,.
Ravi Menon
Thanks a lot and best of luck.
Angan Guha
Thank you.
Operator
Thank you. Next question is from from AMSEC. Please go-ahead.
Shradha Agrawal
Yeah, hi. Thanks for taking my question. Sir, you spoke about some near-term ramp-down in some deals. So any clarity on that front would be helpful.
Angan Guha
Yeah. So, again, thank you for that question. So there are two headwinds that we’re seeing in Q4. One is, of course, like I said, some amount of furloughs in healthcare are spilling on — spilling into the month of January. Now, of course, our job as a management team will be to minimize that as much as possible. So that’s one. In terms of project ramp-downs, we are seeing some amount of project ramp-down, not very large, but a little bit of project ramp-downs in healthcare as well as in manufacturing. So we will watch this space, but that of course is BAU because we — if we win some good deals and drive a good order booking, again, some of that could be mitigated. So we’ll have to see how that goes. We are already in the month of February. So the furloughs are already accounted for. The deal signings are in the offering. So we will see how that pans out, should.
Shradha Agrawal
So these project rundowns are over and above the furlough impact that we’ve seen in the month of January. I mean, is correct?
Angan Guha
That is correct. Yes.
Shradha Agrawal
So given this context, how should we look at revenue in 4Q for us? I mean, should — it would be a decline quarter, I’m assuming given we are talking of two such significant headwinds.
Angan Guha
So, again, we will not — we don’t give a guidance usually. Our job will be to execute for the quarter. I can only tell you that while there are going to be furloughs, right, and there are going to be some amount of ramp-down, equally, we have won $226 million worth of deals. So part of it we will try and mitigate. Our job will obviously be to mitigate as much as possible. So we will see shutdow. I mean, as the month of February closes and the month of March starts, we will see how that goes. But our job will be to try and mitigate as much as we can, if not all of that.
Shradha Agrawal
Right. Sir and secondly, in terms of service lines, if I see ERP declined by a sharp 6%, this is a different from what other peers have been reporting in terms of opportunity in the Hana upgrade cycle. So is it something different vis-a-vis competition that we’ve witnessed in this quarter? And how do you see this service line normalizing to growth trends from the next quarter?
Angan Guha
Yeah. So, look, again, if you look at the ERP business of ours, our ERP business is equally split between Oracle SAP, of course, we have a JD component as well. The service line quite frankly, has not been doing well for the last two quarters. We have gotten more leadership to help the service line get back to growth. The HANA story will first play-out for the larger players. And even if you remember in the last quarter, I had said, the Airport HANA movement actually benefits the larger players to begin with and eventually it will come down to the smaller players. I’m still very confident that the ERP business will turn-around. And like I said last quarter, it will take us about two, 3/4 more, but I remain confident we are invested in the business. We’re getting more leadership in. I don’t know whether I will be able to turn it around in Q4 or Q1. But over the medium-term, I can tell you,, this business will start growing.
Shradha Agrawal
Right. And just last question, if I can. If I look at the revenue growth from the top six to 10 accounts, that has shown a sharp sequential decline of 5%. And on a Y-o-Y basis, it’s down almost 14% 15%. So any client-specific concern to be called out in that client bucket?
Angan Guha
Yeah. So some of this decline is because of the furloughs that I spoke about. So furloughs have impacted some of these clients, which was why they have shown a decline. I am not too worried from that standpoint because some of these revenues will come back. So if you measure us on a two to 3/4 period when it comes to the top-five accounts, you will see a normalized situation. But, look, I am — and we as a management team are acutely aware that we need to do more in mining. We’ve had six quarters of great mining growth. Over the last 3/4, we’ve seen some amount of decline. So we are working with our clients, at least our top-10 and top 15 clients to see how we can get them back to growth. So that’s one of the things that we are sharply focused on as a management team.
Shradha Agrawal
Great, sir. Thank you and wish you all the best.
Angan Guha
Thank you, sir.
Operator
Thank you. The next question is from Sandeep Shah from Equirus. Please go-ahead.
Sandeep Shah
Yeah, hi. So, sir, the first question in the last earnings call, we clearly called out that the revenue pickup and the margin pickup will start from 4th-quarter and the margin pickup may continue over next four quarters of FY 2026 as well. And now we are also calling out 4Q may have some headwinds. So sir, last two to 3/4, our predictability in terms of growth outlook even for the immediate quarters has been actually going down. So what are the reasons according to you and how are we looking to improve that the situation may not continue in FY ’26? Y
Angan Guha
Eah. So, great question. So — and let me be very candid and honest from this. See, as a management team, the two things that we ourselves are not — are not very proud of is the fact that this year, the current financial year, which is Q1, Q2, Q3 or even Q4, our predictability has suffered, right? There are two reasons for that predictability issue. One is because our real-estate, the clients that we serve have been impacted slightly from their own performance standpoint. And we have had to get like for example, Q3, there have been verticals which came and told us about furloughs as late as the 10th of December, which we had never anticipated. I mean, in our history, we never got furloughs for them, but it happened this quarter. So in that kind of a scenario, it obviously becomes quite difficult to give certainty because we are not a very large business to be able to absorb all that furlough. So now let me tell you, Sandeep, what we are going to do to kind of make sure that going-forward, this doesn’t happen again. So two things we are doing. We are expanding our real-estate in a significant manner. So some of the new logo wins that we are working towards to get will obviously improve the situation. Second, we are also investing in our existing clients, our top-20, 25 clients to make sure that we get the growth back, that is number two. Number three, the capabilities that we’ve invested in over so many quarters have actually not started yielding revenues. And at some point, Sandeep, these will start leaving revenues. So look, I mean, bottom-line, next year, I feel with all the corrective actions that we are taking, our predictability will improve, right? I — I cannot comment in terms of how much growth will I deliver next year. It’s hard to say. I’ll probably be able to give you a complete view after Q4 is over, but I can only tell you the predictability will be far better next year. That is something that we are committing towards. On the margin improvement front, again, it’s a matter of execution, correct? Now we never knew that the furloughs will happen in January. And it is something very hard to predict that the furloughs would have happened. But I hope to mitigate some of the furloughs and still continue to work on our margin improvement. So that we will continue to do. And if we can get the revenue back, then some of the margin issues will also go away. So these are the two or three things that we will do in terms of improving real-estate, working with our existing accounts to get more certainty. And in the immediate Q4 quarter trying to mitigate some of the furloughs and the ramp-downs to see how we can get the business back.
Sandeep Shah
Okay. And then just a follow-up, the impact of furloughs, which we have witnessed in Q3 would be also similar or higher in Q4 because if it’s similar, that means the incremental Q-on-Q growth impact should not be that big.
Angan Guha
Yeah. So I’m saying it will not be as much as Q3, obviously, it will be half of what we had witnessed in Q3. So to that effect, we have some cushion. But look, Sandeep, we’ve never witnessed furloughs in our business in Q4, let alone even in Q3 in, let’s say, Life Sciences businesses. So it’s a new world for us. But to answer your question specifically, the amount of furloughs we saw in Q3 the amount of furloughs we will see in Q4, the Q4 will be half as much as Q3.
Sandeep Shah
Okay. And, if I look at the new business TCV for the first-nine months, it is down on a Y-o-Y by 28%. So where are we going wrong? Because the order book with some of your peers has not given any major headwinds. They have actually shown a Y-o-Y improvement even in some large-cap as well as mid-caps. So do you believe this is internal philosoph related issue or is it more to do with the demand with this set of customers which we serve?
Angan Guha
Yeah. So look, Sandeep, last year, if you really think about it, there was one large deal that we had closed. If you remember, we closed a $100 million deal last year, correct? And that in — actually Q2, right
Abhinandan Singh
In Q2.
Angan Guha
So that really swung our order book significantly last year. So if you were to take that one large deal out, okay, then — and if you compare the order book, then our order book has really grown. But that’s no, Sandeep. So even this year, we should close — we — I mean, we obviously want to close a large deal. We’ve not closed any large deals this quarter. But if I look at between, let’s say, January and let’s say April, May, June in the first-six months of this calendar year, our attempt will be to close at least a couple of medium-sized deals, not large deals. So things should start improving from there on. So that’s answer number-one. The answer number two, Sandeep, it is also a manifestation of the real-estate that we hold, right? Where our real-estate companies — the companies that we serve, our top-20 accounts, though they are financially very stable. There’s no problem financially. If their growth stutters a little bit, then we obviously have a problem, which is why I was telling Shradha also that while the focus will be to grow our top-25 accounts, absolutely and we will get them. We absolutely will get them back to growth. We have a plan to do that. We will also focus equally on creating new logos because our existing real-estate at some point in time will plateau out,.
Sandeep Shah
Okay. And just last two, in terms of earlier call, which was post 2Q result, we had an aspiration to go to, 15% 16% EBITDA by end of FY ’24. So, the growth outlook becoming slightly soft? And second question is in terms of the war chairs, cash and bank balance as a percentage to-market cap, if I’m not wrong, is as big as 14% 15% of the market cap. So are we looking to return this to shareholders or we are in active discussion in terms of M&A?
Angan Guha
Yeah. So, Sandeep, let me answer the first question and then I will ask to also chime in on that, right? So actually what was my first question?
Kamini Shah
The first question was in terms of our aspiration. So Sandee, let me take that question off, right. In terms of aspiration, if you remember last quarter when we spoke about it, we said we expected our margins to bottom-up in Q3 and then we slowly start inching upwards from a margin improvement standpoint. Our aspiration remains the same. That’s where we want to get to. But I think the path to that could become a little slower given what we have seen from a — what we are seeing from a Q4 standpoint, right? So I think I would say — I would say that from that standpoint. On your second question on given the cash that we are holding, do we have any plans as of now to return to the shareholders? I would say no. At this point of time, really looking at conserving cash for any potential opportunity that would come up in the in.
Angan Guha
Yeah. And, just to add, we have clearly mentioned that we will continue to improve our margins, right? So our goal is to absolutely do that, right? I mean, we have got a lot of internal — you know, internal processes that has got laid out now in terms of what will we do and how will we do to cut cost and cost takeout initiatives to improve the margins. But equally, Sandeep, we need to invest in our business and we don’t want to take a short-term measure because in the long-term, I’m reasonably certain we get growth back. But to answer your question, we want to improve margins quarter-over-quarter. Q4, some furloughs have hit and hopefully we will not have any furloughs in Q1. So margins will see an improvement. On the cash front, we have continued to generate a lot of cash. We will look at an M&A at some point in time, but right now, we want to deliver a couple of quarters of revenue growth. And as soon as we can deliver some quarters of revenue both organically, then we will look at how we can look at an asset and if we can acquire an asset, et-cetera. But right now, the entire management focus is operationally improving margins and delivering quarter-on-quarter revenue growth.
Kamini Shah
Yeah. And I’ll just add to what you said, Andhran. I think to Sandeep’s question, we also consistently reward shareholders with the dividend payouts that we do and that despite being a slightly softer year, we’ve continued to do so. So to that extent, I think our philosophy on return back to shareholders has not changed, Sandeep.
Sandeep Shah
Okay. Thanks. I will come in the follow-up. All the best.
Kamini Shah
Thank you.
Operator
Thank you. Next question is from Sudhier from Kotak Mutual Fund. Please go-ahead.
Sudheer Guntupalli
Hey, hi, hi,. Good evening. So just a couple of questions. Firstly, you are seeing a bit of an offshoring impact and you had furloughs in December and you expect only half of that in March quarter. And despite that — despite the furloughs and some ramp-downs you called out, you are still sounding confident on FY ’26 growth and your ability to mitigate the impact of it in Q4. So is this confidence coming from your, let’s say, confidence that you will be able to close that large deal, is that largely closing the bridge between or between the current quarter and FY ’26 and your ability to mitigate in Q4?
Angan Guha
Yeah. So Sureek, let me correct a statement a little bit. Look, we have not said that we are confident of overcoming all the furloughs and the ramp-downs. Our best effort will be to try and mitigate most of it, how much will we be able to mitigate, how much we will be not be able to mitigate. We don’t know that yet, okay? So that’s number-one. But of course, as a management team, all of our team’s effort will be to mitigate maximum. So that is as far as the medium Q4 is concerned. Now, again, when I talk about a reasonable size deal and I will not Call-IT a large deal, a reasonable price deal considering our company’s size, Sudeep, if we close that in this quarter, that revenues will start only flowing from Q1 and Q2. So that gives us a little bit of more confidence for next year. But look, again, Sudeep, like I said, let me close Q4 first. And after we’ve closed Q4, I will be able to comment in terms of directionally how next year would look like. Though we never give a guidance, we do not give a guidance, but directionally, you will see and we can comment in terms of how the next year would look like. Right now, our focus is to mitigate the furloughs and the ramp-downs in Q4.
Sudheer Guntupalli
Sure. And just on margins, right, I think despite the wage hike, you were able to maintain the margins stable quarter-on-quarter basis, which is pretty impressive. So from here on, what are the headwinds that you have which — which you foresee at this stage apart from the regular investments and let’s say, if the large deal materializes that you’ll have to do certain onsite investments and all. But apart from that, are there any other headwinds that you foresee at this stage? Because I think circling back to Sandeep’s earlier question, Q3 possibly should be the peak of all the headwinds, including the wage hike. And despite that, you are able to sort of show better-than-expected margins.
Angan Guha
Yeah. So Sudeep, let me answer the first part and then I’ll ask to add as well. So clearly, our endeavor is to keep improving the margins. But like Kamani also said, because in Q4 also, we are looking at furloughs, of course, wage hike is not there, but the furloughs will still impact at least half of it, right? We’ll need to see how we can execute through the quarter and see whether we can maintain margins or improve margins. Again, I am not giving a guidance here. I’m just telling you directionally, that’s where we want to go towards. And like I was telling Sandeep and, our obviously endeavor will be to continue to improve margins going-forward, right? Now the other question, Sudeep that you asked is in terms of what could be other possible impact on margins be, right? So the one possible impact is our business mix. If our infrastructure business continues to outperform our applications business, then obviously in the medium-term, there could be margin impact. So that would be one. Second is the pricing pressures. Now up-to-date, we have not heard from any of the client asking for a discount. So that’s a positive thing. But we don’t know what happens in the future, so that we don’t know. The third is as we fight newer and newer deals, even if it’s the medium-size, the $30 million, $40 million, $50 million deals, that is getting extremely, extremely competitive. So I don’t know-how much amount of pricing power we will have in those kind of deals. So I’m just giving you a broad direction in terms of way things are going. But look, from our perspective, we will be growth-focused. We need to grow revenues for the company. And I will admit that FY ’25 has been a bad year for us and FY ’26, we need to get the company back to growth. And I feel with all the investments that we have done and all the optimization that our Chief Operating Officer is driving, margins at some point in time should also be back.
Sudheer Guntupalli
Sure. And maybe last one from my side, possible to call on the fund loan this quarter?
Angan Guha
I can’t give you exact numbers,, because that is client-specific information. It will not be right to give numbers, but safe to assume it will be 50% of what we experienced in Q3.
Sudheer Guntupalli
I meant in December, what was the Q-on-Q growth that got shared off because of furloughs? That was one example.
Angan Guha
Yeah, sorry.
Kamini Shah
Yeah. So I think, we really don’t call-out that very specifically, but I would say it would be at least about 150 beds in terms of what has got shaped off because of.
Sudheer Guntupalli
Thanks and all the very best.
Operator
Thank you. The next question is from Dipesh Mehta from Emkay Global. Please go-ahead.
Dipesh Mehta
Yeah. Thanks for the opportunity. A couple of questions. First about the quarter-four, you indicated about two factors. One is furloughs, which is half of Q3 and second factor was ramped down. Now if I look half of the weakness in Q4, it itself will give you positive growth in-quarter four on Q-o-Q basis. Plus frame down will negate it largely. So I just want to understand from directional perspective, whether we are seeing any improvement in business underlying growth momentum perspective, considering last two, 3/4, we have taken some step to isolate revenue growth, investing in business capability as well as domain kind of things. So if you can provide some color around that? Our second thing is about the demand, which also you are indicating some early signs of improvement, which is better than, let’s say, two, 3/4 back. So which ideally should support growth improvement? So if you can provide some perspective on that? That is question one. Second question is, I just want to get a sector-wise outlook because life sciences continue to remain weak for now long period of time. Manufacturing is also fairly weak. So if you can give some sense about four verticals where we are present, how we expect growth to play-out in calendar ’25 or some demand trend? Thank you.
Angan Guha
Yeah. Thank you,. So, first of all, a demand situation for us has not changed too much. I only said that there are some green shoots of demand coming back-in financial services. But that again is a very small part of our business. Number-one, Vipation, that is a little back-ended. So I don’t see demand coming back for our industry and for frankly for us as well in the next two quarters. It will probably happen in the back-ended call for the calendar year. I’m not saying financial year, but calendar year. So that is number-one. Number two, from our perspective, if you look at financial services, that has continued to show growth that will continue to be strong. Of course, you may see 1/4 or 1/4 here and 1/4 there where financial services also could be flattish or slight amount of de-growth. I can’t comment on that. But overall directionally, I think financial services is good for us. Healthcare on the other side has been hit by client-specific issues where like I was telling the other members in the call saying that there are customers of ours who have — who are financially very strong, but they are facing headwinds in their own businesses and their revenue growth. That is in our real-estate. And that is simply affecting our performance as well. I strongly believe that our finance — our healthcare business will come back to grow. I understand that it’s been four quarters of not good performance and we’ve done two things, Dipesh. One is we’ve hired a very senior leader to run our med devices business. As you know, almost 70% of our business is med devices. So we’ve hired a leader from a Tier-1 company who has just joined us to lead our med devices under the healthcare vertical. We are also in the process of hiring another leader to run a balanced part of the business, which is the pharma business, again, under the healthcare vertical leader. So we’re strengthening that team and with some of these investments that we are doing, I’m hoping that, that business will turn-around. Now coming specifically to Q4, Dipesh, look, like I keep saying, while we are looking at those headwinds, our job is to execute for the quarter. We will try our best to minimize the impact of furloughs and the ramp-downs, how much we will do? I — I can’t comment right now. We will wait-and-see, but that’s our commitment. From an underlying business resilience perspective, I have said that Q3 and Q4 will be good in terms of order booking. We’ve delivered strong order book in Q3. We hope to deliver strong order book in Q4 also. And that is giving us slight amount of confidence that FY ’26 will hopefully be a better year, but let Q4 finish and then we will give it directionally a commentary in terms of how FY ’26 looks like.
Dipesh Mehta
No and I think two things left. I think manufacturing and E&G, I think you have not covered. And second thing is about deal intake. When you said good, do you think current level of order book is sufficient for you to return to double-digit growth rate?
Angan Guha
No, I don’t think so. So, quite frankly, a current level of order book is not sufficient for us to deliver double-digit growth, right? But is it — is it good enough for us to get back to sequential growth, it is, right? So Dipesh, look, I mean, let quarter-four get over, then I will give you directionally in terms of how FY ’26 will look like.
Dipesh Mehta
Maybe if you can give last is about the other two verticals or how you are seeing demand trend?
Angan Guha
Yeah. E&U — E&U, I think will pick-up. E&U also because we have got a couple of deals that are currently going on that may not close-in Q4, but will definitely close-in Q1. So from that perspective, I think EMU will be back. Manufacturing will be soft for another couple of quarters. So if you look at the larger picture, I think EMU and financial services will lead growth over the next one year. Now again, 1/4, you may see financial services also impacted. But I think over the next four quarters, if you normalize, financial services and EMU will continue to grow — grow. Manufacturing will take a couple of quarters to come back. Healthcare also, I’m reasonably confident that in a couple of quarters, it will come back.
Dipesh Mehta
Thank you.
Operator
A reminder to participants that you may press star and 1 to ask questions ladies and gentlemen, to ask a question at this time you may press star and 1 well, as there are no further questions, I would like to hand the conference over to Mr Angan Goha, CEO and MD of Birla Soft Limited for closing comments.
Angan Guha
Yeah. Thank you, everyone. Thank you for attending the conference call and I truly appreciate your interest in Builder Soft. As I’ve said that the quarter that went by was a tough quarter for us in terms of revenue as well as in terms of the furlough impact that we saw. But the positives in our performance has been our order book. Order book was strong and the ability to maintain margins in a quarter where we gave a wage hike and have the furlough impact, I think was positive. We and my team will be focused on getting the predictability back. We understand the predictability has been a big issue. So our big focus will be to get the predictability back as we try and close more deals to enable to deliver better sequential growth quarters. So thank you once again, and I hope to speak to all of you at the end of Q4. Thank you.
Operator
Thank you very much. On behalf of Birla Soft, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines