Cms Info Systems Ltd (NSE: CMSINFO) Q4 2025 Earnings Call dated May. 20, 2025
Corporate Participants:
Unidentified Speaker
Prithvish Uppal — Vice President
Rajiv Kaul — Executive Vice Chairman, Chief Executive Officer and Whole Time Director
Pankaj Khandelwal — President and Chief Financial Officer
Anush Raghavan — President, Cash Management Business
Puneet Bhirani — President, Operations
Analysts:
Unidentified Participant
Praveen Kumar — Analyst
Krushi Parekh — Analyst
Amish Kanani — Analyst
Savi Kumar Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4FY25 earnings conference call of CMS Infosystems hosted by Ilara Capital. 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 conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prithvish Uppal from Elara Capital. Thank you. And over to you sir.
Prithvish Uppal — Vice President
Hi. Thank you. Good evening ladies and gentlemen. Thank you to the CMS team for the opportunity to host you. For the Q4 and FY25 earnings con call from the management team Today we have Mr. Rajiv Kaul, Executive Vice Chairman, CEO and Whole Time Director, Mr. Pankaj Khandelwal, President and CFO Mr. Anush Raghavan, President Cash Management and Mr. Puneet Bhirani, President Operations. We also have a webcast linked to today’s call where the management will be taking us through the results highlights. So request everyone to please join the web link. I now hand over the con call to Rajiv.
Sir. Sir, over to you.
Rajiv Kaul — Executive Vice Chairman, Chief Executive Officer and Whole Time Director
Thank you. Good evening everyone. I hope you have our earnings presentation visible to you. Details of which Pratyush has shared is also on our investor page on our website. I want to talk first about FY25. We entered FY25 fairly bullish on the back of 20% revenue growth in the prior three years and also record order wins of almost 1950 crores which we are expecting to execute in FY25. Unfortunately we encountered a sequence of unanticipated events which built into a perfect storm. We guided early in the year towards this and hoping that things would pick up in H2 and worked really hard on project execution which was at 15% end of H1.
This did ramp up to 30% in Q3 and we were hoping to close that 60% order execution by Q4. However, we fell short at 52%. February and March which are key months to close on projects for large PSU banks. But the large banks had to deal with severe disruption in their ATM operations due to issues at a key competitor which we are all familiar with by now. Therefore, new projects and execution took a back seat and in fact our team at CMS also had to jump in and help these banks navigate the situation in getting their ATM networks up and running.
This has led to revenue coming in lower at 2425 crores against our guidance of 2450 2,500 which we had shared in the Q3 call. Given this situation, we sort of had to recalibrate our focus several times in the year and we decided to focus first on market consolidation and focus on gaining market share in an overall tepid market we have gained. Market position has improved all of our business in the last year. We also decided to drive a complex reorganization which we had deferred in FY24 as it would have distracted us in a year of high growth.
We have more than 27,000 employees and associates and we have brought all of them into one single operating unit across a unified structure and organization. This is already yielding good results with both improved customer satisfaction and employee satisfaction trends. We ramped up our tech and automation investments last year, keeping a focus on long term investments and also in line with changing business mix and higher scale of operations. Both the reorganization and the tech and automation investments have helped us drive operating efficiency and enabled us to maintain a high margin profile despite an overall modest growth.
I am happy to report that the order win momentum improved significantly in H2 with 800 crores of wins 2x of that in H1. In fact Q4 had 500 crores of order wins. Moving to slide number four, our integrated platform approach is delivering very good results and improving the quality and visibility of our revenue streams from less than half from about almost half. Today two thirds of our revenue is directly from a bank or a retail customer. Our ability to cross sell solutions has helped us in driving both depth and breadth across key banks. In fact, end of FY25 we now had top 13 banks in India with more than 50 crores of annual revenue.
A more subtle shift which we want to point out here for you is in the nature of this revenue. We used to mostly be an annual revenue business wherein the contracts are of one to three years duration with fairly high retention rates. We have been driving a change to a recurring revenue model which are longer term contracts in the nature of seven to ten years. In fact, our recurring revenue business is growing at more than 20% CAGR and today accounts for more than 1/3 of our overall services buy. This will help us building a far more predictable revenue streams quarter on quarter.
If you look at the chart on the right hand side which shows you the change in business mix, we want to highlight the fact that our newer businesses are ramping up well and they now contribute meaningfully to our revenue. In fact, we have been successful in ensuring that we aren’t overly dependent on any one line of business. For example, if you look at the ADM cash segment which used to be more than 50% of revenue seven years ago, is now 1/3 of our revenue despite growing at a 10% CAGR over the seven years. At a segment level, when we report a number the split of cash business to Ms.
And tech business, this split used to be 7030 about four years ago. This is now at a 6040 and could in fact hit a 5545 in the next four to five quarters. Slide number five we’re quite focused on expansion and looking to identify next future engines of growth. We have shared with you earlier the sectors of our interest across payments, software, valuable logistics and banking services. In last year we augmented and beefed up our M and A team. We in fact screened hundreds of companies and came up with a short list of 65 companies with which we had meetings.
In these identified areas, we have earlier, as you know, incubated bullion and debt collection business. After extensive work in debt collections, we are dropping that sector from our focus for the current short to midterm. But from these companies we are identifying and working with a set of founders to look at who can align with CMS when they present us a good growth opportunity and a good ROCE profile for our future business growth. Slide number six to summarize FY25 while the growth rates and growth percentages are modest and under our expectations, we have managed to retain the margin profile and the cash flow generation nature of our business to build up a very robust balance sheet.
I think in the current environment this is a great asset for any company and while the growth numbers don’t do justice to the intensity of our effort, we are very certain that this will bear fruit in the coming quarters. With that, I’d like to hand over to Anush to take you through a more detailed business update.
Anush Raghavan — President, Cash Management Business
Thank you Rajiv. Good day to everyone. I’ll Switch to Slide 8. As Rajiv shared, despite a challenging macro environment which was marked by several headwinds, CMS has emerged stronger across all our core businesses. This year we won over 1200 crores in new order wins with a robust 60% coming from private banks, reinforcing our leadership in the financial sector. Execution has picked up in H2 with over half of our order wins from the prior five quarters going live. Our pending order book and the 500 crore of wins that we have in Q4 gives us a very healthy 1400 crore of orders to be executed this year.
Operationally we grew our ATM and retail touchpoints by 9% with our current business split of 73,000 ATMs and 77,000 retail equivalent touchpoints Growth has been biased towards retail as during the year we also saw a significant churn in the ATM network. Our CIT volumes have grown by 20%. Notably in our cards business we had solid growth in FY24 and focus in FY25 was to drive a contract level wise profitability which we have achieved with over 1,400 basis point or a 14 percentage point margin improvement. Overall we have gained 200 basis points market share in cash logistics further expanding on the 150bps growth that we had the last quarter.
Also with growth in our integrated contracts we are now among the top three managed service providers in India which is a clear validation of our strategy and execution. On to Slide 9. Our integrated contracts approach is helping drive a much deeper enterprise engagement with a growing share of recurring revenues and an increasing number of customers contributing over 50 crores in each annual revenue. With this change in our business mix and having a broader portfolio of revenues, we are no longer just a cash management or an ATM company. We have repositioned ourselves as one of the leading integrated business services platform and in FY26 we will invest in recasting our identity and positioning which speaks to our platform strengths.
The focus is on building a trusted end to end relationships which spans cash logistics, managed services, automation and digital transformation for our clients. FY25 saw significant disruption in the ATM ecosystem especially with operational challenges at a large industry player. At CMS we were quick to respond supporting major banks with timely cash evacuation and continued ATM services effectively reinforcing our reliability in mission critical situations. Q4 in particular saw significant operational intensity comparable with the likes of demonetization or Covid periods. Our agility and scale ensured in winning end to end managed solutions for leading private banks. The recent increase in the ATM interchange fees from 17 to 19 rupees per transaction has renewed focus among banks on expanding their ATM networks.
In fact, if you read yesterday’s interview with the Chairman of State bank of India, he says that as the country’s largest ATM deployer they have seen a significant churn in their estate in FY25 as they are focused on redeploying their network and are now looking at augmenting the channel in terms of our overall cash usage. Amidst the digital payment growth, cash continues to remain deeply relevant. ATM dispensation on CMS managed machines has been steady year on year our total currency handled has grown by 5% and crossed 14 lakh crore reflecting both our operational scale and the trust our clients place in US.
Retail cash is growing on a same store basis and the throughput continues to mirror the broader growth in organized retail, E commerce and quick commerce, all sectors that are increasingly dependent on secure and efficient cash management. The broader story here is that behind robust cash demand, even as digital grows, CMS is at an interesting intersection serving both traditional banking needs and the evolving requirement of newer retailers. With that, I would now invite Pankaj to share updates on our financial
Pankaj Khandelwal — President and Chief Financial Officer
thank. You Anush Good afternoon everyone. Moving to slide 13 financial summary of the year after three years of the strong growth of 20% between FY21 to 24, FY25 was a consolidation year with a moderate revenue growth of 7%. However we continue to maintain our strong margin profile with a pet margin of 15.4% on slide 14 which is Q4 financial summary. In Q4 we picked up momentum on our order book execution with execution inching up to 52%. However it is lower than the target of 60% given that most of the large banks bandwidth was occupied dealing with the deceptions of one of the industry players.
The execution inch up help us to deliver sequential revenue and PAD growth of 6% and 5% respectively. In Q4 and FY25 results were impacted on account of full provisioning for the service provided to one of the industry competitors. Moving to slide 15 talking about our ELD segment financials, both cash and managed services business reported revenue growth of 8%. EBIT of cash business grew at 4% to 401 crore whereas the EBIT of the managed services business remained flat at 157crore. Slide 16 Talking about our quarterly segmental financials, cash business revenue grew at 2% on quarter on quarter basis and 7% on year.
On year basis managed services reported strong quarter on quarter growth of 16%. However on year on year basis there is a decline of 8%. Given that in Q4 FY24 was an exceptional quarter with 56% year on year end growth. The segmental margin is impact of the provisioning which I spoke about earlier as well as the cost incurred for helping banks streamlining their operation are disturbed due to issue at one of the industry competitors. Slide 17 Coming to balance sheet and cash flow we continue to maintain strong financial discipline focusing on the cash flow and strong roce.
Despite overall liquidity crunch our OCF to EBITDA improved to 76% resulting in OCEF generation of 482 crore rupees. We continue to operate at a high ROCE at 25% plus high OCF and ROCE help us to expand our cash and cash equivalent to 1000 crore plus from 784 crore last year. This year in addition to interim dividend which we have declared in Q2 I’m sorry Q3, we also declared a special interim dividend of rupees 3 and proposed to final dividend of 3 rupees 25 paisa taking a total payout ratio to 42% of the patch. With this now I would like to hand over to Anush to talk about the future outlook.
Anush Raghavan — President, Cash Management Business
Thank you Pankaj. Switching to slide 19 there are two areas which we see as very interesting areas of opportunity for us, the first being retail opportunity. I had covered this briefly in our last call but I would like to take this opportunity to reiterate some of the key points. India’s organized retail sector is at a very key inflection point. Of the roughly 3 million retail touch points, only about 550,000 are organized and roughly one third of these have outsourced their cash logistics. This signals a massive untapped potential for cms. We see strong demand for payment automation, secure cash logistics and a real time store level reconciliation as retailers look to drive efficiency and transparency.
Our 360 degree retail solution is designed for this environment which integrates cash logistics with AIoT based remote monitoring and unified settlement processes. Serving not just retail but also adjacent sectors like fuel, automotive, government, E com, logistics and healthcare. This segment will be a key growth driver for us over the next few years both in terms of the cash business as well as remote monitoring as we become the platform of choice for modern retail in India. Moving to slide 20 coming to remote Monitoring Our remote monitoring business which we now refer to as Vision AI Platform has rapidly scaled to becoming the number one platform in India’s ATM space.
This year one of the key milestones was that we completed our in house proprietary tech stack. This enables us to roll out multiple new AI modules which are key to winning mandates with leading banks for their branch network and large new economic lines. Less than 20% of India’s 140,000 branch network is outsourced for monitoring and our marquee solution win, with one of the leading banks to build and operate a large and very complex monitoring solution which will go live soon will be a key tech demonstrator to win similar such mandates. Last call we shared our breakthrough WIN on the retail side with a quick Commerce client.
Our implementation is underway and the dark store count has increased from the initial estimate to now. We’re also running further pilots with them on using our solution for the delivery vans, ambulances and also in store AIoT integration. We have an aggressive goal of growing our business from the current 30,000 sites to 50,000 in the near future. With that I would request Rajiv for his closing comments.
Rajiv Kaul — Executive Vice Chairman, Chief Executive Officer and Whole Time Director
Thank you Anush. I think for summary and to close out our presentation today I will focus on the midterm FY25 to FY27 opportunity. If I look out for these two years we are as a team aiming for robust growth in line with our historical growth rate. The drivers for this will be first and foremost we aim to and we hope to finish our order book execution in H1. This will be a key pillar for our growth in the near term. The market for us is consolidating. If you look at cash management, they’re really two scale companies and a couple of smaller ones from an end to end integrated players instead of three.
There are only two companies now. It will be very difficult for any third player to build this set of services now. This will lead to naturally market share gains for leading companies in the coming years. The Retail section Anush already mentioned the opportunity and took you through it. We have been executing very strongly in this sector for the last two years. We have regained our market leadership and we have momentum in the sector. In our vision AI business we crossed 30,000 sites and is poised for rapid growth. In fact, our overall software business which is 7% of our revenue, should cross 10% of revenue by FY27.
As we have guided to earlier, the ATM interchange increase is going to lead to an increase in the ATM network. In fact, the chairman of SBI has already alluded to the fact that SBI is looking to expand its ATM base in the coming year. The ATM base does see a lot of churn basis usage, but I think the sites are set to grow on an overall segment basis. We feel that the cash related businesses should grow at a 10 to 13% CAGR and the Ms. And tech BU should get back to a strong 25 to 30% growth rate blended.
This should lead to a services revenue CAGR of 14 to 17% in the coming two years. We also last call had alluded mention to the fact that we would like to do an analyst event and investor meeting at the end of the full year results. However, when we are planning for this, given the whole geopolitical scenario a couple of weeks ago, we decided it’s best to wait and do this when things are calmer. In fact Also that will. The dust would have also settled by then in terms of the ATM operations which banks are trying to take over from a competitor.
And we’ll see how that business pans out and hopefully by then we also have to. We have other interesting updates to report you on, so we’ll keep you posted. We aim to do this meeting in the next three to four months. Thank you for your patience and thank you for your support.
operator
Sir, should we open the floor for the Q and A session now?
Rajiv Kaul — Executive Vice Chairman, Chief Executive Officer and Whole Time Director
Sure, please.
Questions and Answers:
operator
Thank you very much, sir. We will now begin with a question and answer session. Anyone who wishes to ask questions may press star and one on the touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Praveen Kumar from Equitas Capital Advisors. Please go ahead.
Praveen Kumar
Thanks for the opportunity. I had a couple of questions. First one was on your cards parts of the business. If I look at FY24 numbers, the size of the cards business is fairly modest. Maybe looks like sub 100 crore. Kind of a top line. Right. When I refer to one of the recent large competitors in this space who file for a prospectus a few months back, their numbers seem to be much higher in this space. So just wanted to get an understanding how do you approach this space. And especially given the strong relationships that you have with banks across the public and private side, one would expect that you would be able to make larger forays into this space.
So wanted to understand how do we approach this space? How do we see ourselves in this space? Yeah.
Rajiv Kaul
Is that the only question you said you have two.
Praveen Kumar
The second question was on the vision AI part of your business. Just wanted to get a understanding of what is the differentiation that we offer in this space to the clients.
Rajiv Kaul
Okay. So you know, great questions, especially in the card side. It’s not a business which people normally ask too much about. And so I think, you know, if you go back to what we have said earlier, our goal as a company is to operate in sectors where we can be a clear market leader. Unless we, I mean there are some sectors we can’t be a market leader but then we make it a very profitable niche in the card business. We focus on a niche. In fact, if you think of the business last year or this year and maybe de grown in revenue by 20% but the EBIT margins have drained significantly.
We clearly focused on working with fewer clients, high quality, good pricing and good margins. The company you are referring to has more of an integrated play where they do everything from card manufacture to stationary to card supply to personalization which had a very different level of capital intensity and ROCE metrics which we clearly didn’t take that approach to compete in that business. On that basis. We continue to focus on this being a high ROC business, working with clients for decades in areas where they feel very competent to work with us. So very different strategy out here and therefore the scale of the business is more modest compared to the companies you.
May be referring to. On the vision AI business, I think it’s a few things we’ve sort of come in almost in the end of the sector. Last we launched this in 2122 and we sort of scaled this to 25, 30,000 sites. I think what we bring to the table is first and foremost any large enterprise, let’s take a bank. That’s where we’re working with especially atm. This is a very distributed network in remote parts of the country. So there are different types of vision AI solutions which could be from base bare minimum to more high end using AI and ML.
I think our approach has been to use more machine learning based approach to manage this and also our field force and our engineering teams on the ground is able to address any local issues when they do always come up in the remote parts of the country. So being able to manage scale along with a technology platform which is iterating and learning and being invested into to learn by itself rather than having thousands of eyeballs looking at each site, I think has been an approach we have taken. Though it’s not an approach which cannot be copied easily.
But I think what we are trying to do is with our resources keep investing in customizing and creating new use cases so that we are ahead of the competitors by just able to offer customers more bang for the money they spend on this. And finally I think you can measure in terms of uptime and how many incidents you prevent and I think that’s the holy grail and the gold standard for this. I think really making sure that the estate of places we are managing with a remote AI solution with a machine learning solution has almost zero incidents per month remains the goal for our operating teams.
Praveen Kumar
Thanks, that’s very useful to know. Just wanted to expand that second question a little bit and understand you have addressed vision AI as applied to bank ATMs and branches etc. But I just wanted to get a flavor of what is Your offering, for example, you won a recent big deal with a Quick Commerce player which had alluded to in last quarter. I just wanted to understand what do we offer there in terms of what’s the differentiation we offer and what kind of relationship are we building there.
Rajiv Kaul
I think Anush is going to tell you more on the Quick Commerce. But I just wanted to clarify the Vision AI platform in the business world is mostly in the ATM business today. In fact the bank branches, the solution is far more complex. Securing an entire branch and branch operations has lot more nitty gritty than just a small ATM site could have. And therefore that is still if you look at it in our slide, less than 20% of ATM bank branches today have an AIoT like solution. So that’s the solution in progress. I think we’ve made tremendous progress in building a good platform there.
I think there is significant opportunity as that business comes up for hopefully for bids and coverage in the coming years. But let me now pass the mantle onto Anush to give you the Quick Commerce.
Anush Raghavan
Sure. I think if you look at the curve of how what started as remote monitoring and why we’re calling it Vision AI, it’s really sort of about eight years back when banks decided to eliminate manned guarding at ATMs and move in the direction of cameras using the footage on the cloud. The idea was to sort of create a replica of manned surveillance to E surveillance. But as the technology has progressed and as Rajiv said, we been investing in creating further use cases and becoming a lot more tightly integrated with our customers using machine learning and AI, it’s sort of taking the form of being able to craft more and more AI based use cases to detect alerts and almost act as a way as a sort of a business insights and partner the key business and operations team.
And as we moved from ATMs to bank branches and now last year during several calls that I’ve shared with you, a lot of the type of use cases and pilots that we are doing with different broader set of retail customers in Quick Commerce. It really started off as saying how does a brand for example have access to even knowing what is typically happening in a dark store other than having two, three or four people working in the store? How do you really know what is truly happening there? How do you create a single command and control monitoring platform which gives them an insight into into the SOPs being followed, the hygiene and in order to do all that, the first thing is to just have them onboarded onto our monitoring network.
The incremental pilots that we have been doing all sort of have indicated that once we achieve the rollout to the entire darkstore network at that point to start work at that point to roll out additional AI use cases. Now these could be around achieving greater operational efficiency wherein we do a aiot integration with several other operational processes of this and other sensors which are already there in Dark Store. It could be towards helping them with loss prevention, for instance, or for example creating a tightly integrated solution between the fleet as well as the Dark Store network.
I think the possibilities are quite tremendous and it’s only after creating some of these use cases they decided to work with us.
Praveen Kumar
Thank you. That was very useful.
operator
Thank you. I reminded all the participants that you may please press Star and one to ask questions. Also for the participants who are connected on the webcast page, you may also type in your questions on Ask a Question tab. We’ll take the next question from the line of Khrushi Parekh from Buggle Rock pms. Please go ahead.
Krushi Parekh
Yeah hi. So my first question is related to some of the new businesses that you have incubated. So I Recollect that in Q1FY23 call you are looking to spend more time, more management bandwidth to incubate some of these businesses so that we can generate some new revenue streams between FY25 and FY30. So I understand that the collection business is shelled as of now, but can you just touch upon where we are when it comes to these businesses that can help us expand our TAM or expand our revenue stream?
Rajiv Kaul
Hi, I think you know at some point in one of earlier calls you shared that one of our goals or one of our constant goals is always to keep expanding our portfolio of solutions based offerings. And last year, two years back we shared with you that we are planning to incubate two new businesses, collections and bullion. I think Rajiv covered the detail on collections, which is we did extensive efforts to incubate the business and also did a fairly detailed diligence of one of the companies that we had shortlisted currently and post that we decided to drop it.
Several concerns with respect to the fact, I mean which basically indicate that relative to the effort that goes into running the business, the returns aren’t really proportionate yet. It’s still a relatively unorganized market. We will keep a wait and watch approach. There is a change in the broader economy’s credit cycles. We’ll sort of wait in the short to midterm to see how things change before we exercise our point of view on that. But the Collections are something that we are dropping for now. On the Boolean side, our in house business is doing fairly well. We are scaling up quite rapidly, but related to overall contribution to some of the other businesses is still very small at about 1% of our overall revenues.
But we’ll keep coming back and constantly updating you on how that is fading out. The other exercise that we had or the other initiative that we had was also to sort of broaden our retail efforts and retail outreach. So two years back we had almost 100% of our retail cash business coming to us from banks. Today we have onboarded more than 100 customers with whom we are working directly, with whom we have achieved a very high degree of tech integration wherein it is our cash ERP solution and mobile app which is fully integrated into their sales cycle and their settlement cycles.
And today that represents anywhere between 20 to 25% of our overall retail cash business. So I think doing that was extremely important for us to be able to tap into the broader addressable market of retail in India.
Krushi Parekh
Okay, so my second question is that we have generally refrained from giving margin guidance in the history in the past. But given that.
operator
I’m sorry to interrupt you, your voice is breaking, sir.
Krushi Parekh
Is it better now?
operator
Yes, please continue.
Krushi Parekh
Okay, so. So my another question is that we have generally refrained from assigning any margin related conversations. But given the annuity type businesses that we enjoy, the long term nature of the contract that we have, is there a kind of a range that the management is comfortable having, you know, internally or is it something that how do we approach when it comes to margins across businesses? I understand there is complexity involved in, but it’s coming more from the annuity type business. The long term nature of the contract that we have, we are in a position to plan out our expenditure as well.
So can I have some thoughts on this?
Rajiv Kaul
So you know, if we had a choice, we would not even give a revenue guidance. But given that ipo, nobody thought the sector and this company could grow. I think we are forced to come up with the revenue guidance to give people some belief in what we can do and what the opportunity is. I think margins we will refrain from simply because one, I think we are operating at fairly good healthy margins. You have the results of our margins in the last three years post listing. In both high growth and modest growth environments, our aim will always be to focus on roc.
I think we said that our goal will be to focus on ROC. We are maintaining consistently a 25% plus ROCE profile. So going back to Some of the earlier calls. Our first priority as a team is to focus on market share, revenue growth and margin profile in that sort of order. We ideally like to get all of them right, but maybe not possible every quarter. I think we and that’s the reason we don’t give margin profile guidance. Very difficult to estimate impact of anything from oil price to people cost and whatever may happen out there.
But we keep constantly driving a lot of automation and efficiency to make sure that we can keep growing our productivity in line with our expansion and our market growth.
Krushi Parekh
All right, appreciate this and yeah definitely we can see the productivity gains over there. Thank you so much.
operator
Thank you. Participants, you may please press star and one to ask questions. We’ll take the next text question from Sonal Gandhi from Asian Market securities and the questions are what led to margin decline in managed services business? And the Second one is CapEx guidance for FY26.
Rajiv Kaul
So I think from a CapEx, I think first we’ll talk about the margin guidance. We have been reporting segmental EBITs but as our business is changing I think it’s important to share this nuance almost. I think you should look at the overall EBIT for the company as a Trend line. Almost 20% of our managed services service revenue is captured as a revenue in a cash BU and that we eliminated through interview recognition out there. It’s difficult to capture the cost of the contract by bu. It’s actually a merged and fungible cost. So therefore if you look at our EBIT margin overall at 19 to 20%, I think that’s the range of business you should think about.
Having said that, I think the last one to two years there was a mix change with more sales of product automation which comes in at a lower EBIT percentage which may have an impact on the EBIT margin perspective. From a CAPEX perspective. I’ll have Pankaj answer your question.
Pankaj Khandelwal
Capex for FY25 was approximately 130 crore. It was significantly lower than the guidance we have given of 300 crore. Considering the large order book we have got in FY24 and 25 our capex will remain as we have guided earlier that 200 crore per year. And we are expecting that FY26 the capex will be 300 to 325 crore rupees. That includes around 163 crore rupees which is lying in the CVIP in FY25.
operator
Thank you sir. We’ll take the next question from the line of Amish Kanani from novice investment managers. Please Go ahead, Amish. Your audio is not that clear. I would request you to use your hand.
Amish Kanani
Is it better?
operator
Yes, much better. Thank you.
Amish Kanani
Yeah. Sir, if you can give us some sense on the ground about the disruption that has happened because of one of our peer going, you know, default. I understand you said that, you know, few months after the situation will be much better. But you know, just to understand whether, you know, you mentioned banks are taking over those operations and maybe it will come up for building in future and something like that. Is there a possibility that the competitors business will be up for sale and something like that. If you can give us some flavor, that will be helpful to understand whether, you know, there is a increase in market share at play or it is, you know, how are banks dealing with this problem? Because we also mentioned that we have had some cost related to, you know, managing banks to see through this transaction.
Rajiv Kaul
Sure. Let me give you some broader points in terms of what’s happening and how we end up piecing it all together. I think as Rajiv said, we’ll wait for a quarter or so once the dust settles. But as I sort of alluded in the backdrop of our last call, you know, we had sort of been seeing an increasing disruption to the ATM networks on the back of liquidity issues, but eventually resulting in employees not being paid. I think by the time we were working with the banks to help them out, the mandate was really for two things, right.
Which is how do you ensure that there’s an evacuation of all the currency in atmospheric. Because the first and foremost thing for everyone is how do you handle the risk associated with all this. So cash is lying in the ATM and cash is lying in the vault. All of this needs to be evacuated. Extremely operationally complex simply because there are way too many stakeholders and too many moving pieces. Given that a large majority of this network was actually transaction oriented and had assets which did not belong to the bank, were in fact mortgaged to various other leaseholders.
It made the ownership and identification of the assets. Landlords haven’t been paid for rental dues for many months now. Electricity bills weren’t paid. So ATM wasn’t even up and running. We had to figure out a way to get them live to be able to access them and open them in the first place. So it has been a crazy task so far in just being able to help banks with reconciling, what are their effective views. So I think that we’ve sort of had the lion’s share of the responsibility just by being the largest partner to them.
The Second and the more onerous task which falls onto them is to figure out how do you ensure a resumption of activities on these networks and ensure that customer service gets back to, you know, limps back to normal. That is where I think banks are taking a little bit of time. A significant chunk of ATMs in this network was not just transaction oriented but also were quite old. So for banks to think about transitioning this to someone else and for someone to pay the respective values, it’s. It doesn’t really make sense. So most of them are looking at options around, you know, what is the best way to refresh this estate? As we shared with you in the slide, at least with two of the largest private sector banks we’ve been able to make a win the contract to do that.
And yeah, I think that’s primarily that. Thank you.
Amish Kanani
Sure sir. And in that context as the order book, you know we have mentioned that the rate of winning of order book is increasing in the second half as well as in the fourth quarter. Again, you know, the execution of the old order book was not up to the desired extent is what was mentioned. The question is one, you know, between the two. Sorry for my ignorance of the business but you know, which business is this order book? How is it, you know, kind of getting executed and whether this disruption. Is there any way to kind of, you know, can correlate to the disruption that is happening at the.
Is the market share win already reflected in the order book is a question then. Thanks.
Rajiv Kaul
I think just to sort of summarize for everyone’s benefit, what exactly happened with order book in FY25? If you go back and look at our earlier conversations, we had won about 1900, 1950 crores of order wins in FY24. The bulk of these wins were RFP led around public sector banks. Given the longish election cycle and just the sort of execution delays in being able to get testing approvals and go ahead from the bank to implement order book, it led to a significant time delay in just being able to roll out these contracts and recognize the revenue for it.
So what was about 15% of execution in H1 has increased to 52% right now. Why do we feel FY26 should be different? For two reasons. One, as Pankaj alluded to, we have. First of all we’ve got 52% execution done. Second, there is a large increase in our CWIP in our end of FY25 financials and the balance sheet if you look at it, which basically reflects orders which are in stage of being rolled out and delivered to the banks. Third, the order wins that we had in FY25 have been more biased towards private sector banks wherein we hope with we should be able to work with them to get a faster execution done.
And the other part of the question with respect to our order book historically we always refer to the growth potential around our managed services and technology business. That’s a business where we are building out longer term recurring revenues. It’s not in the context of the cash business but given the fact that most of our wins are integrated contracts, it will have a bearing on the cash business as well as the ATM growth is concerned.
Amish Kanani
One last question on this extended part. Is there a execution timeline of this order book which we can understand?
Rajiv Kaul
No, I think for the order book which we are talking about where we are done 52% end of March. We expect to finish it all by September this year.
Amish Kanani
Oh okay. Thanks a lot and all the best sir.
Rajiv Kaul
Thank you.
operator
Thank you. Ladies and gentlemen, please press star N1 to ask questions. You may also type in your text questions on the webcast page. We’ll take the next text question from Shil Shah from Samiksha Capital. And the questions are the first one EBITDA drag FY25 because of our debt collection pilot and the second one is balance sheet. What is the capital WIP of 152 crores and within current liabilities other financial liabilities increased from 60 crores in F25 FY24 to 193 crores in FY25. What is driving that?
Rajiv Kaul
So I will take the second question first about the CVIP. CVIP is related to the project what we are executing. We have executed around 52% of our project new contract we born and we expect that everything will be go live by end of September. So CVIP is related to those execution of those contracts. The current current liabilities which is gone up from 60 crore to 193 crore is related to capital creditors which are mostly related to this cvip. So if it is netted off the amount is not significant.
Anush Raghavan
If you could repeat the first question, I think that was all the debt. Collection business
operator
is there EBITDA drag on FY25 because our debt collection pilot.
Anush Raghavan
Yeah, I think this is more relevant in FY24 wherein we were investing to incubate the business not so much in FY25.
Rajiv Kaul
FY25 is really a function of just investing in for the recurring contracts we have to ramp up for project execution. You don’t necessarily control when the projects will go live because that’s still dependent on the banks. But you have to ramp up your internal resources and also therefore there’s always catch up on revenue to cost. Given the nature of these large complex integrated contracts when they make up after the first year of fully operational it starts making up and paying for itself.
operator
Thank you sir. We’ll take the next text question from Sumangal Pukalia from Snap Securities LLP and the question is what is the amount of provisioning done for competitor receivables in current quarter.
Pankaj Khandelwal
Single digits? So we have made an adequate provision in FY25 and this quarter. However we have made whatever the legal recourse available with us to recover that money and we are fully provided for whatever is receivable from that competitor.
operator
Thank you sir. Participants you may please press Star and one to ask questions. The next text question is from Govindarajan Chellappa from CSIM and the question is do the challenges faced in by your competitor changed the nature of the ATM business transaction versus fixed price or the pricing is renegotiation possible? How are you changing your business model, own business model if at all? And the third one is how much provision was made due to the problems with your competitor.
Rajiv Kaul
So you know I want to be both respectful and careful in answering this question in terms of just making sure that we are sharing just the right amount of information as to our playbook here. But our overall approach in bla irrespective of what happens to any competitor remains as of now to focus on fixed price contracts. We are bearish on transaction based contracts. Historically we had guided earlier, much earlier that we will keep this as less than 15% of revenue. Now we drop that to less than 10% of revenue saying we will position size bla base on transactions to a smaller percentage of our overall business and therefore our focus will remain on clients and banks which are focused on uptime and are willing to work on a fixed price model.
On the transaction side we will generally stay away unless there is enough buffer to take care of any drop in transaction in the coming years. From a perspective of any orders or projects which may get re RFP’d or bid out, I think the same strategy will flow. We will prioritize working with clients that are willing to work on a fixed price model and be very competitive. Given we have the best cost structure in the industry and any client sometimes some banks will prefer to continue working on a per transaction basis, we will mostly give it a pass unless there is a Very good margin of safety.
And the third question I think we’ve already answered about the impact in our financials.
operator
Thank you very much, sir. We’ll take the next question from the line of Pratham Kankaria from Quantum AMC Private Limited. Please go ahead. Pratham, I have unmuted your line. Please proceed with your question. Prathanma, I am sorry, we are unable to hear you. Can you please unmute yourself and speak? I would request you to kindly rejoin the queue. Participants, you may Please press star N1 to ask questions. You may also type in your text questions on the webcast page. The next question is from the line of Savi Kumar Jain from 2.2 capital. Please go ahead.
Savi Kumar Jain
Hi, can you hear me?
operator
Yes, sir. Please proceed.
Savi Kumar Jain
Any update on the bullion business? Where are we at? What is the scale? How is that growing?
Rajiv Kaul
So, Savi, bullion. Anuj has referred to it. Right. Currently it’s an internal incubation. We have built a team. We have up and running. It’s contributing to about 1% overall revenue. Our strategy to scale this will finally be through M and D ideally. But we have to wait for the right opportunity and the right company to look at it. But meanwhile we’ll. I mean, it’s a small base. It’s going to grow rapidly. But right now contribution to overall total company revenues is less than 1%. Almost. I think 1%. Roughly 1%.
Savi Kumar Jain
Okay, got it. Thank you.
operator
Thank you. You may please press star N1 to ask questions. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to Mr. Rajeev Kaul for closing comments. Thank you. And over to you, sir.
Rajiv Kaul
Thank you so much for your time today. Look forward to connecting in the next three months. At the end of Q1 to update you on our progr, on our FY26 FY27 goals. Good evening.
operator
Thank you very much, sir. Thank you. Members of the management, on behalf of Ilara Capital, that concludes this conference. We thank you for joining us. And you may now disconnect your lines. Thank you.