Datamatics Global Services Limited (NSE: DATAMATICS) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Pratik Jagtap — Investor Relation Practice, E&Y LLP
Rahul L. Kanodia — Vice Chairman and Chief Executive Officer
Ankush Akar — Senior Vice President and Chief Financial Officer
Mitul Mehta — Executive Vice Preseident and Chief Marketing Officer
Analysts:
Hemant Shah — Analyst
Harsh Chaurasia — Analyst
Grishma Shah — Analyst
Unidentified Participant
Jyoti Singh — Analyst
Sanjay — Individual Investor
Deekshant Boolchandani — Analyst
Presentation:
Operator
And gentlemen, good day and welcome to Global Service Limited Q3 and FY ’25 Earnings 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 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 Pratik Jaktab from ENY Investor Relations. Thank you, and over to you, sir.
Pratik Jagtap — Investor Relation Practice, E&Y LLP
Thank you. Thank you, Mana. Good afternoon to all the participants in the call today. Welcome to the Q3 FY ’25 earnings call of Global Services Limited. The results and presentation have been already mailed to you and it is also available on the website of. In case anyone hasn’t received a copy of press release or presentation, please do write to us and we will be happy to send you all. To take us through the results today and to answer your questions, we have with us the top management of company, represented by Rahul Kanodia, Vice-Chairman and CEO; Ankur Shakar, SVP and Chief Financial Officer; Mitul Mehta, EVP and Chief Marketing Officer. Rahul will start the call with a brief overview of the quarter on business, which will be then followed by Ankush, who will take us through the financials. We will then open the floor for Q&A session. I would like to remind you that anything that is said on this call, which gives any outlook for the future or which can be construed as a forward-looking statement must be viewed in conjunction with the risks and uncertainties that we face. These risks and uncertainties are included, but not limited to what we have mentioned in the prospectus filed with SEBI and subsequent annual reports, which you can find on our website. With that said, I now hand over the call to Rahul sir. Over to you also.
Rahul L. Kanodia — Vice Chairman and Chief Executive Officer
Thanks, Pratik, and a very warm welcome and wishing everyone a very Happy New Year. And thank you all for joining our quarter three FY ’25 earnings call. I will briefly discuss some of the key quarterly performance highlights, while Ankush will provide an update on preview on the financials, after which we will open the floor for a Q&A session. Our total revenues for quarter three stood at INR425.5 crores, giving us a revenue growth of 15.2% on a year-on-year basis and a 4.6% on a quarter-on-quarter basis. Our revenue growth has been healthy across digital Technologies, operations and experiences. Our EBIT for Q3 stood at INR44.7 crores and we improved our EBIT margin by 84 basis-points to 10.5%, driven by a focus on cost optimization and disciplined execution. Artificial intelligence continues to be a strategic priority for us. AI is gaining popularity. We have started building innovative and customized agent AI solutions for our customers and have also incorporated this technology into our platforms, Finato and TruBot. Last week, we were a divorce during the World Economic Forum and engage with global industry leaders to share our AI vision. The sentiment across the industry is highly optimistic about the potential of AI and with a strong focus on achieving impactful outcomes. Our business continues to progress according to plans. This quarter, we expanded our client portfolio by adding 12 new customers, including one AFC customer. We have expanded our operations in the Philippines with the inauguration of our force delivery center in Sibu City. Our integration of Dextera is growing smoothly. We have successfully cross-sold Salesforce services into five of our customers and we acquired T&Q Tech on the 31st of December 2024. TMQ Tech manages digital content for scientific journals. TNQ Tech brings along a modern technology platform and several patents in content enrichment besides it increases our presence in the European market. With this acquisition, we will serve nine of the 10 largest publishers in the world, solidifying our position as market leaders in the digital content space. I take this opportunity to thank all our stakeholders, including employees, customers and shareholders for being an integral part of our journey. With that, I will now hand over the call to our CFO, Mr Ankur Shata. Ankush, over to you.
Ankush Akar — Senior Vice President and Chief Financial Officer
Thank you, Rahul. Welcome, everyone, and thank you for joining us in-quarter three FY ’25 earnings call. Let me start with the financial performance for quarter three FY ’25. Our quarter three FY ’25 revenue stood at INR425.5 crores, reflecting a growth of 4.6% on quarter-on-quarter basis and 15.2% on year-on-year basis. Our cost optimization efforts and disciplined execution helped us improve our EBITDA. Our EBITDA for the quarter stood at INR54.6 crores, which grew by 11.9% on quarter-on-quarter basis. Our EBITDA margin for the quarter stood at 12.8%. Our EBIT for the quarter stood at INR44.7 crores, which grew by 13.7% on quarter-on-quarter basis. Our EBIT margin for the quarter stood at 10.5%. Our PAT after NCI stood at INR74.3 crore. Our PAT margin for the quarter was 17%. Our tax-rate for the quarter was 15.3% compared to 19.9% in the last quarter. Our EPS for the quarter was at INR12.58 per share compared to INR7.18 per share in the last quarter. Exceptional items during the quarter represent exchange gains arising from the buyback of equity share capital held by an overseas subsidiary and expenses incurred on the acquisition of TNQ Tech. We have acquired 80% shareholding of TLT&Q Tech on 31st of December 2024 and remaining 20% will be acquired by 31st of July 2026. Current quarter includes revenue and margin only for one day, full impact of the acquisition on our consolidated revenue and margin will reflect from the next quarter. In terms of segment, Digital Technologies contribution to total revenue was at 41%, digital operations contribution at 42% and Digital experiences contribution at 17%. We continue to maintain a healthy balance sheet. As on 31st of December 2024, our cash and investments stood at INR512 crore and debt stood at INR186 crore, resulting in net cash and investments of INR326 crores. This is after payment for the acquisition of TNQ Tech. Our bill DSO was at 58 days as on 31st of December 2024 as compared to 58 days as of September 2024. In terms of geographical footprint, USA remains our largest geography with 53% of our business coming from here, followed by India at 23% and rest of the world, including UK and Europe at 24%. Our client concentration remains healthy with top-five, 10 and 20 clients contributing to 22%, 36% and 50% respectively. With this, I will now pass-on the call to operator to open the floor for questions. Thank you for your patience and continued interest in DataMedix.
Questions and Answers:
Operator
Thank. Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles a reminder to all participants, you may press star and want to ask a question. The first question is from the line of Heman Shah from Seven Island PMS. Please go-ahead.
Hemant Shah
Yeah. Thank you for the opportunity. Am I audible?
Rahul L. Kanodia
Yes.
Hemant Shah
Okay. So just one question. What is the expenses with respect to the acquisition of GMQ for this quarter, which we acquired provided.
Rahul L. Kanodia
So we had an intermediary firm that helped us strike this deal and the fees paid to that firm are the expenses that you’re referring to.
Hemant Shah
Okay, what would be the quantum, sir
Rahul L. Kanodia
How much did you pay them?
Ankush Akar
It’s INR5 crores.
Hemant Shah
Okay, okay. So I mean, I’m just trying to assess the one-off expense. That is one. And second, with respect to this TNQ, now we have acquired through Lumina DataMatic, right?
Rahul L. Kanodia
That’s correct.
Hemant Shah
So if you can — if you can just provide some — I mean, perspective with respect to-market reach, strategic positioning with respect to the integration of these two companies going-forward? And secondly, this is absolutely a mirror company like MPS, what we see. Only the domain is different. I think you are more focusing more on the science publications MPS is I think is into the almost every publication, right? If you can just throw some light with respect to the integration and how do we compare this — how do we differentiate ourselves with MPS, okay?
Rahul L. Kanodia
Sure. So as far as the integration is concerned, we acquired this on the 31st of December. And so that’s — it’s not even one month. Today, we are in the 30th of January. So it’s just about a month-old. So-far, we’ve had good engagements with the leadership team, but the integration process is now beginning. So as such, there has not been too much integration in the last 30 days, but yes, it’s beginning to do that, point number-one. So-far it’s going smooth. In terms of the strategic advantage to us. One is by virtue of this acquisition, we now service nine out-of-the top-10 publishers worldwide. So that consolidates our position as a dominant player in this space. TMQ has a very good technology platform, which augments our platform as well. So it expands the reach and the coverage that our technology basically provides and then we can take the same thing to the customers, our customers. The third is that they have several patents with them and that gives us an edge as we take this platform and the patents to our customer-base. And finally, of course, being part of, there’s a lot of technology that we have within and we will certainly bring all of that to the table in the customer-base that T&Q has. So that will give T&Q a significant advantage as well. So that’s in a nutshell where we are — of course, finally, it gives us a larger presence in Europe. Our presence in Europe was not as deep in this space, but with this acquisition, we have a much better, bigger footprint in the European market.
Hemant Shah
Okay. Okay. Wonderful. And how do we differentiate ourselves with MPS, sir? I mean, or we are in the absolutely similar line-of-business, right?
Rahul L. Kanodia
Well, it is similar, but I think what does differentiate us is the technology that we bring to the table because data is a very strong technology hour and it’s a technology that we bring to the table that makes a difference.
Hemant Shah
Okay, okay. But that means going-forward we’ll be having a better margins for this Lumina plus a T&Q put together.
Rahul L. Kanodia
But they are — as I said, they’ve come with a strong technology platform already. So they have very healthy margins. I think going-forward, what will happen is we’ll be able to provide more value-added services. So it’s more from a value-add point-of-view rather than squeezing margins because they are very efficiently run company already.
Hemant Shah
Okay, okay. Wonderful, wonderful. And secondly if I may ask, I think the total revenue combined entities, Lumina as well as plus T&Q, I think last year it is almost INR700 crore. And yeah, and the profitability is, I think INR127 crore, right?
Rahul L. Kanodia
We don’t — I don’t have that last year. Last year’s where T&Q was not part of our operation, but they are very profitable. I think that segment is running at about 24% 25%,
Ankush Akar
24%, 25% EBITDA.
Hemant Shah
Okay, correct, correct. So I mean, where do we see Rahul, the Illumina plus TMQ going-forward for the next three years. I mean this is where this is where we expect definitely a good growth. And personally, we feel that cross synergies and cross-selling opportunities are really there to unlock potential — true potential of the combined entity.
Rahul L. Kanodia
Yeah. Yeah. So I think we are in a good wicket given that we are consolidating our position as a dominant player in that space and this is a very sticky business. So I think it will maintain stability and stickiness with all the large customers and they — in fact, all the customers were very positive with this move. So it only reinforces our position with. So I think we are well pledged.
Hemant Shah
Okay. Okay. Fair enough. All right. I’ll come back-in the queue. Thank you.
Operator
Thank you. Before we move on to the next question, a reminder to all the participants in the conference, you may press star and want to ask any questions. The next question is from the line of Harsh from Capital. Please go-ahead.
Harsh Chaurasia
Hello. Am I audible? Yes. Yeah. Good afternoon, sir. So I had one — I wanted an update. And I think in Q3 FY ’23, we announced a largest TCV win, which was around $85 million as I remember. So out of that $85 million, we mentioned that there are three large which is $70 million, which account for $70 million. Okay. And you mentioned the execution cycle for around three to five years and the first — and the rest $15 million would be coming in one to three years. And there was one more deal in the same financial year, which was the Delhi Merit metro. So since if I take the FY ’23 numbers and I just annualize the FY ’25 numbers, the incremental revenue addition is just INR217 crores. So if you can just give me an update or throw some light on that, like is that the deal is running late or what is happening on that part? If you can just give me an update
Rahul L. Kanodia
Sorry, there’s a lot of background noise, so I could not hear your questions clearly.
Harsh Chaurasia
Sorry. So what I wanted is not am I audible
Rahul L. Kanodia
You are audible, but there’s a lot of noise in the background. So your voice is getting overridden by echoes and echos and noises
Harsh Chaurasia
Okay.
Rahul L. Kanodia
This is better.
Harsh Chaurasia
Okay. Sorry for that. So should I repeat my question again or you just missed in-between?
Rahul L. Kanodia
It of it, but if you can compete, I’ll be
Harsh Chaurasia
So basically what I wanted to understand is basically in Q3 FY ’23, we announced a $85 million PCV win, which accounted for 70 million large deals, which was — which was about to be executed in three to five years and the rest $15 million was about to be executed in one to two years. And I think in FY ’23 only, we also had Delhi Merit Metro station deal, which was — the deal tenure was for three to five years. So what I wanted to understand is since then till-date, so it’s almost around six to seven quarters, but the incremental revenue is INR217 crores, if I annualize your FY ’25 number. So wanted to know like what is the update on that deal, like is it trending late or what is happening on that side?
Rahul L. Kanodia
So yeah. So I’m not specifically recollecting the numbers that you’re sharing, but nevertheless, there is one large deal that I remember we signed and then we — at the very early-stage, we had some challenges on payment terms with the customer. And so we were the ones who actually terminated that contract. And that was I think in November ’23, if I’m not mistaken, $35 million, thereabouts. So there was a $35 million deal which we did sign and then we exited that deal consciously because of the payment issues that we were having. So that was one. The Delhi Merit project is going smooth. We continue to serve with them and it’s very much on-track and we’re going quite well actually. And along with the Delhi metro, we had also signed around the same time Metro, and that is also going smooth.
Harsh Chaurasia
So wanted to know like just one more question on this to understand data more better. So if you can just give me a broad bifurcation between of your total revenue mix, how much would be the discretionary and how much would be the legacy?
Rahul L. Kanodia
Sorry,
Harsh Chaurasia
Sir, like discretionary and legacy
Rahul L. Kanodia
Discretionary so I don’t
Harsh Chaurasia
So I’ll just tell. So basically discretionary deals which are like Salesforce, you’re working with hyperscaler or digital transformation deals and legacy which are like automation or the whole like publishing type of bank, the overall bifurcation between those two.
Rahul L. Kanodia
I think not have that data because we don’t break it up that way.
Harsh Chaurasia
Okay. Okay.
Mitul Mehta
But mostly, most of our revenues are coming from digital technologies or not discretionary, I’m just using the words which we typically use. It’s digital technologies and then the legacy systems. But most of our revenues now are from the digital space. So we are now no longer bifurcating between watch my digital technology share. Okay. Technology has a predominant share of revenue.
Harsh Chaurasia
Okay. Thank you very much, sir. Thank you.
Operator
Thank you. A reminder to all participants, you may press star and want to ask question. I repeat, you may press star and want to ask a question. The next question is from the line of Greeshma Shah from AnVision Capital. Please go-ahead.
Grishma Shah
Good afternoon to the management team and thanks for taking my question. Curious to know if you could highlight how Dextera has done. I believe it would now be more than 12 months that Dextera is a part of over the last 12 months, how has Dexterra performed and particularly in this quarter, what has been the growth for Dextera?
Rahul L. Kanodia
Yes. So Dextera has been with us for nine months now, 3/4 or we’ve been able to cross-sell, as I mentioned in my address, about five new customers of data manager, we’ve been able to cross-sell sales for services. By and large, the company remains stable. It would — our sales cycle on an average is about nine to 12 months. So it takes that long to really generate business. So I think we are well-placed. The team is stable. We’ve had no attrition challenges there whatsoever. So I think we are well-placed, but it’s been stable. The growth has not been as aggressive as we thought it would be and that’s important to call-out, but we are not having any major problems with that.
Grishma Shah
So now is Dextera on path to do, 30% 40% kind of growth rates which you used to do before we did the acquisition, is it on that stellar growth run-rate or we will take some more time as we are integrating?
Rahul L. Kanodia
No, we will take some more time. The integration exercise is fairly almost done another two, three months and it will be over and the integration has gone up very smoothly. They have not crossed that 30% growth that we were expecting, but I think next year should be a better year because the pipeline is looking quite strong.
Grishma Shah
Okay. And the other question is on the revenue growth. While the revenue growth has been decent this quarter, given that the first two quarters of this year we struggled with our growth rates, but margins have not, you know inched up as anticipated. So what is the outlook on that? And also some color as to how you know the core business is going to shape up over the next 12 months given that we are in the beginning of the year, how are the conversations happening? If you could provide some color
Rahul L. Kanodia
So the margins have improved a little bit, if you notice. Yeah. So having said that, we always have a spike in Q4, you would know that from our previous calls. And for that we ramp-up in Q3. So the ramp-up that happens in-quarter three tends to dampen the margins a little bit and then the benefits are accrued in-quarter four. But margin has been retained at a decent level. So I’m not too worried about the margin front. Having said that, yes, we have taken steps to do more-and-more automation and tighten our belt and that exercise of course continues. Your second question was,
Grishma Shah
Sir, if you could provide an outlook as to how each of our three business segments are shaping up now that you would have started the conversations for the year beginning of the new calendar year.
Rahul L. Kanodia
So there are things shipping. Good. They’re all looking good. We are right now in the process of doing a planning for the next year, our year, as you know, begin 1st of April. So before the end of this quarter, we will certainly have all our plans in-place and see that. Now the only sort of unknown element there is a little bit of the US market, although it’s looking very positive and it’s upbeat. But with the new administration in-place, one-to-one has to look at their outlook towards outsourcing and they may come their policies around that is a little unclear. So that is something that we still are observing. But generally the mood is positive.
Grishma Shah
Okay. So we’ve kind of moved in a very good revenue range this quarter. You know our sequential growth of 5% is also good and 15% sales growth year-on-year both ways the numbers look really good. So is this kind of a run-rate or the absolute number that we intend to clock over the next few quarters or there were certain one-offs in this quarter for?
Rahul L. Kanodia
No, it’s — we will maintain a certainly a healthy growth going into the next quarter. As I mentioned, the pipeline is looking good. But obviously, our Q — this December quarter — ending quarter is always a little soft quarter because the world goes to sleep there, Christmas occasions, Thanksgiving, all of that. So given that, I think we’ve had a good performance and I think we’ll continue a very healthy trajectory going-forward.
Mitul Mehta
Q4 also.
Rahul L. Kanodia
Yeah, Q4 should be also strong. Hello.
Operator
So the participant got disconnected.
Rahul L. Kanodia
Okay.
Operator
So before we move on to the next participant, a reminder to all participants to press star and one to ask any questions. The next question is from the line of, a shareholder. Please go-ahead.
Unidentified Participant
Some of my questions were already answered. Am I audible?
Rahul L. Kanodia
Very embuddled.
Unidentified Participant
Yeah, yeah. Some of my connections were already soon. So congratulations on good numbers, first of all, sir. And my first question was actually regarding the EBITDA margin only, which you just answered. But I have another point-of-view on this question that from last 3/4, we have seen 13% — 12% EBITDA margins, whereas before that we haven’t seen such low-margin for like three years. So first of all, what is the reason behind this? And can we actually look-forward for good mid-teen margins from next year? Thank you.
Rahul L. Kanodia
Yes. So we are in the process of, you know, of becoming a little more efficient, tightening our belt. You’re right that last three years has been better, but I think as we tighten our belt in this quarter, we will see better margins in the next year for.
Unidentified Participant
Okay. Thank you so much. Second question would be, sir, then we all know the global cues regarding the sector AI and everything, the deep, the problems created by China and US also. I would like to know the management outlook on this and whether it will impact our company’s operations and financials?
Rahul L. Kanodia
Yeah. So the release from China of the new platform will not impact our margins or our performance. There certainly launched a very good product, no doubt, but there is a fair amount of skepticism right now. The largest consumer market is still the Western world and the Western world is very, very with China, with their IP rights and things like that. So I don’t know where that will go. As far as AI is concerned, as I mentioned even with my visit to Davos that it’s a very optimistic outlook. Everybody is very, very excited about that, very positive about that. But the projects are still small. Customers are still experimenting with AI. So nobody has gone down the path of large projects and a big bank. So they’re all flirting with it, they’re experimenting with it, they’re testing it and small projects are being done. I think it will be another 12 to 18 months by the time we see some sizable projects coming down the path of AI.
Unidentified Participant
Okay. Thank.
Rahul L. Kanodia
That’s the new frontier on technology. And therefore, every company has no choice but to focus on that area.
Unidentified Participant
Thank you so much. Definitely, we believe that there is space in this sector for everyone. Last question would be, sir, that I — it’s a very good positive point for our company about the partnership with Microsoft, Google and Salesforce. I just need to confirm and reassure as a shareholder that will this be any — will this be continued for future like how many years? And is there any plans to get dismissed or anything like that?
Rahul L. Kanodia
Yeah. So we are in dialogue with them for joint business and joint go-to-market and we’ve had some very fairly decent traction with both of them. Both Google and Microsoft are leaders as far as the AI space is concerned. For the next two, three years, easily I see a stronger relationship building with them because the joint go-to-market will deliver the results, but they are the leaders in AI and that’s what we are focusing on. So we do see a significant improvement in that engagement.
Mitul Mehta
Yeah. And mind you that this is a technology partnership. It is where we get access to some of those cutting-edge technologies before it really hits the market and goes to a wider set of enterprises. So this relationship would give us the access so that we can build solutions for our customers on this. And also jointly go-to-market with Microsoft and Google to some of the larger enterprises.
Unidentified Participant
Okay. Thank you so much and all the best for the next coming quarters and years. Thank you so much, sir.
Mitul Mehta
Thank you.
Unidentified Participant
Thank you.
Operator
Thank you. We have a follow-up question from the line of Greesh Masha from Envision Capital. Please go-ahead.
Grishma Shah
Yeah. Sorry, sir, I got disconnected. I also am keen to understand how are each of these three segments you know shaping up for us. And with you know the new acquisition getting consolidated for the full-quarter, you know what kind of run-rate are we expecting from that acquisition?
Rahul L. Kanodia
So the acquisition is — will consolidate next quarter. This quarter, we’ve not had any impact of that because we acquired on the 31st of December. Going-forward, so the roughly the revenue stream of that company is about INR285 crores or thereabouts. So that’s what will get added on to our numbers in next financial year. So therefore, if you look at that, we are talking about roughly INR2,000 odd crores in revenue in next financial year. Without — on overall consolidated basis, we’ve not yet baked-in our growth strategies and growth plans, so that will still come in.
Grishma Shah
Okay. So overall on a consolidated basis, roughly INR2,000 crores of sales for next year and INR285 crores particularly from this acquisition for the entire year. That’s what you’re seeing.
Rahul L. Kanodia
That is correct.
Mitul Mehta
Roughly adding about $80 million about $10 million on a quarterly basis.
Grishma Shah
Okay, okay. And there, you mentioned the margins are 25% at the EBITDA level, does it slow-down equally well at the bottom-line?
Rahul L. Kanodia
Yes. Yes.
Grishma Shah
Okay. Okay. And can you give us some, you know, color as to how each of our segments are looking for the next financial year or calendar year, you know, given that we’ve seen some challenges across two of our segments for sure, you know-how things are shaping up?
Rahul L. Kanodia
No, I think the technologies and digital experiences are looking good. Digital operations with this acquisition will as it is get boosted. So I think we are in a good place across-the-board across all three of them.
Grishma Shah
Okay. And we also had some of our top clients scaling down and you know, are they back you are they doing more business with us now or you see that possibility coming over?
Rahul L. Kanodia
Yeah. So some of them are scaling up with us and we see that happening already. So some of them did move some work to the captives, but we also see them parallelly working with us and in fact, increasing their wallet share with us. So I think we’re in a decent place.
Grishma Shah
Will it also be fair to assume that FY ’26 would be a good year of consolidation and growth compared to one more M&A or you are still looking out for acquisitions.
Rahul L. Kanodia
So certainly a lot of energy will be spent on the integration of T&Q Tech. Sure. We don’t have any hot deals on the table, but yeah, we are in touch with companies. We continue our dialog. You never know what comes through. But the focus will be more on the integration rather than going out and making several more acquisitions. Having said that, of course, we remain in touch with a few companies to keep exploring the market.
Grishma Shah
Okay. Okay. Fine, sir. Thank you and good luck.
Rahul L. Kanodia
Thank you.
Operator
Thank you. Thank you. A reminder to all participants, you may press star and want to ask questions. The next question is from the line of Singh from Arihant Capital Markets. Please go-ahead.
Jyoti Singh
Thank you for the opportunity. Sir, just wanted to understand on the TNQ tech side, like currently we are having 13% revenue contribution from Europe. So as you clearly mentioned, we’ll be enhancing more on the Europe side because of the TNQ Tech. So going-forward, what our expectation on the revenue contribution side, it will going to increase? And also any bigger client that we got access through TNQ Tech on the Europe side?
Rahul L. Kanodia
Yes. Yes, we just get — so we — so we were already working with a large client and they were working — their — their wallet share was larger than ours. And with this acquisition, we further consolidated our position with this large client. So did we acquire any new logo versus the acquisition? Not really. It was more of a consolidation strategy rather than a new logo acquisition strategy. Their presence in Europe in this space, particularly digital content was stronger than ours. We were more focused on the US, they were US and Europe. So this gives us a stronger presence now in the European market. Yeah.
Jyoti Singh
Okay. And sir, just wanted to understand with the synergy of TNQ Tech, we are seeing any visibility to acquire more clients in Europe on a larger-scale basis?
Rahul L. Kanodia
Because we have a stronger presence in Europe, of course, the acquisition of new customers naturally goes up. There — of their revenue, 47% comes from Europe and 53% comes from the US. So of the INR285 crores that I mentioned earlier, you can roughly estimate about 53 from the US and 47 from the European market. So it does give us a much stronger presence in Europe.
Jyoti Singh
Okay. Thank you, sir. And sir, another on the number side, like this time exceptional item one-time in consol basis. So obviously, it will not going to be in the upcoming quarters. So like can you guide us on the top-line and bottom-line, what are expectation or how optimistic they are?
Rahul L. Kanodia
Yeah. As you see, we had a good quarter, Q3 and Q3 is always a slow quarter, relatively speaking, globally for all companies. So given that, I think I’m quite optimistic about quarter-four and then the next year as well. So we don’t typically give a very specific guidance around quarter-four numbers, but yes, we are very optimistic about quarter-four.
Jyoti Singh
Okay. Thank you so much, sir.
Rahul L. Kanodia
Thank you.
Operator
Thank you. A reminder to all participants in the conference, you may press star and want to ask a question. We have our next question from the line of Sanjay, an Individual Investor. Please go-ahead.
Sanjay
Thank you for the opportunity and congratulations on good revenue for this quarter. I get this is the highest-ever revenue given by the company looks — I mean, you can confirm that, but I think it’s highest revenue. The question is about seasonally Q4 is the strongest quarter. So is that situation still stays? I mean, are you seeing the deals and the closures will be happening in Q4 or there will be some spillover will go into Q1 and the revenue may get impacted.
Rahul L. Kanodia
No, I don’t see revenues get spilling off from Q4 to-Q1. A deal flow will continue. I mean, it’s an ongoing — it’s a everyday situation. Yeah. So there is no answer pattern that you might see between three and four, quarter three and quarter-four. But revenues, I don’t see any major spillovers.
Sanjay
Sure, but as a seasonality, Q4 is going to be a strong, right? Better than Q3. Q4.
Rahul L. Kanodia
Traditionally for us, it has always been the strongest and yes, we — that will continue. Well, also next quarter, you will also have a spike because the T&Q consolidation of that quarter. But we generally do have a — we generally have a quarter-four spike anyway.
Sanjay
And so has there been impact in margins because of the P&Q revenue or it will be in similar lines?
Rahul L. Kanodia
No, it will improve a little bit for sure. But it’s only quarter 1/4, so it will be really — it will not be huge, but there will be a positive impact.
Sanjay
All right. Thank you very much and all the best.
Rahul L. Kanodia
Thank you.
Operator
Thank you. A reminder to all participants, you may press star and want to ask a question. The next question is from the line of Dixant V from TB Wealth. Please go-ahead.
Deekshant Boolchandani
Hi, congratulations on the great numbers, sir. Sir, the first question is, out-of-the two acquisitions that we have recently made, what was the contribution of these two acquisitions to our top-line?
Rahul L. Kanodia
So the first one, Dextera contributed about $7 million to the top-line on an annualized basis. T&Q has not impacted our top-line because we will consolidate in Q4. Q1, technically there was a consolidation of one day, which is really insignificant.
Deekshant Boolchandani
Okay. Okay. Okay. So on our core business, what has been the growth that we have registered for our core business?
Rahul L. Kanodia
So only whatever growth we see is all the core business because T&Q does not impact will come next quarter. And Dexter Dextera as sales force, we already had a sales force practice and that as I mentioned earlier in one of the earlier questions that it remained stable with some growth, not the 30% growth that we were expecting. So by and large, whatever growth you see is the core business of.
Deekshant Boolchandani
So the — I think you understand the line of thought process here is that what we are looking at is the 7%, 8% growth that we are seeing. What would be the contribution of the new acquisitions versus the stable business that we are having, sir? So that’s the whole thought process here. Could you just shed some light on this, please?
Rahul L. Kanodia
So we had talked about a projection of about 4% impact with the and 4% organic growth totaling to about 8% for the year. That’s what we had given in our earlier project.
Mitul Mehta
Annualized basis.
Rahul L. Kanodia
Annualized basis, yes,
Mitul Mehta
Not the quarterly basis. If you look at the quarterly numbers, our quarterly growth for Y-o-Y is about 15% and quarter-on-quarter is about 4.6%. So if you are — and we are talking about a 4% impact on revenue top-line through XTAR acquisition, which is now nine months old, which is 3/4. T&Q tech that acquisition, the impact has not yet felt on any of the top-line or the bottom-line with a very, very marginal impact if I have to put, which is for one day. Got it, which is negligible. What you will see from now onwards is Q4 onwards, you will see a TNQ tech impact on the quarter numbers.
Deekshant Boolchandani
So what kind of growth do we think that TNQ can build us like in a year time?
Mitul Mehta
So TNQ will add a top-line of roughly about INR40 million in a year for about INR7 million will come from Dextera. So if you were to purely from an inorganic, if you want to put it in those two numbers you can add to the — to the top-line of.
Deekshant Boolchandani
Yeah. So would this be margin-accretive to us as in that would we be seeing better margin trajectory or do we think that the margins would be the same as TNQ as being amaluminated with the company?
Rahul L. Kanodia
No, it will be accretive. There will be margin improvement.
Deekshant Boolchandani
Okay. Okay. So overall, what do you think are the growth drivers for us right now because we have done some inorganic acquisitions and the management has told us that we are still looking for more opportunities. So what is the growth driver for us going-forward, how we can go from a single-digit to double-digit number?
Rahul L. Kanodia
I think the key element would be really the investments that we are making and we are hoping that some of them will start giving the results. The focus that we have on hyperscalers continues and the engagements with all these hyperscaler big tech companies should give us results fairly soon. Also, the renewed focus. In fact, we are right now in the midst of relooking at our strategy and account penetration and some of those account penetration should give us a better market. Then finally, of course, we’ve also increased our penetration in the European market. So the increase in presence in Europe at all penetration and the hyperscalers, I think as a combination will give us the upside we’ll be looking for.
Deekshant Boolchandani
Okay. So to follow-up on this is — so right now we are from a lot of peers in the same domain, we are seeing some sort of upcycle being — people are preparing for an upcycle and upcycle is being seen. So do you think that in, let’s say, six to eight quarters from now, we can see a top-line growth of 20% plus.
Rahul L. Kanodia
A lot of it depends on some of the newer technologies that are now coming out into the world, particularly around AI. I think the jewelry is still out as far as that technology platform is concerned. I think in the next six to 12 months, you’ll get a much better visibility as to what’s happening in that space. The basis that we will be able to be more confident about talking about those kind of growth numbers?
Deekshant Boolchandani
Sure, sir. Sir, last question is on US versus Europe. So do you see better spending happening in Europe still or is it much more of a competitive market than US because like the economic — economy of US versus Europe, there are quite significant differences, right?
Rahul L. Kanodia
Yes. So the US is much more vibrant as a market, certainly much faster making larger deals. Europe is having their own set of economic challenges. So I won’t say it’s more competitive, but they are having a lot of pressure because of the current soft economy that you see pretty much across Europe. So in that sense, it is a softer market than the US our focus is therefore going to be more on the US than in Europe? Of course, having said that, it’s still a better market than India, the Middle-East or some of the other parts of the world.
Deekshant Boolchandani
Of course. Just a last follow-up is, sir, current, if you can just give even ballpark figures that what are we expecting post amalgamination of what would be our revenue-share from US and Europe even if you could — with any sort of timeline that you feel comfortable?
Rahul L. Kanodia
Yeah. I think if you — right now our US share is about 53%. Europe is about 23 odd percent. So together, I think that’s 75% 76%
Mitul Mehta
’23
Rahul L. Kanodia
Yeah. And ’23 is India, that should go up to upwards of 80%, 85% with the acquisition of T&Q. Europe and US will both increase.
Deekshant Boolchandani
Which the major part of this will be US or 53% of that is US and 47% is Europe. So major part will be US.
Ankush Akar
So broadly from a revenue mix perspective, the US will remain in the same range of 53% 4% at overall level. Our Europe mix will go up with the T&Q acquisition, and that is what we will see from the next quarter.
Deekshant Boolchandani
Are we looking to acquire more?
Rahul L. Kanodia
As I said, we continue to be in dialogue with some companies, nothing serious. Right now, our focus will be more on integration of this company rather than acquisition. But yeah, we continue some dialogue dialog here.
Deekshant Boolchandani
Awesome. Thank you so much, sir. Wish you the best, wish the best to the investors. Thank you, sir.
Ankush Akar
Thank you.
Rahul L. Kanodia
Thank you.
Operator
Thank you. We have a follow-up question from the line of Heman Shah from Seven Islands VMS. Please go-ahead.
Hemant Shah
Yeah, thank you again. I have two questions again. We have been spending, I think a lot in terms of technology since last maybe 1.5 years, two years, right? Maybe on newer technology, AI, you have been speaking on every call, right?
Rahul L. Kanodia
Yeah.
Hemant Shah
So I mean is this spending of last maybe 1.5 years, two years is going to yield positively in terms of EBITDA margins going-forward? And what would be the quantum which we are burning actually?
Rahul L. Kanodia
Yeah. So we have mentioned in earlier calls that we are burning roughly about INR40 crore to INR50 crores a year-on the technology and that right now continues. We are still very hopeful of seeing the ROI on this investment because these are investments on all the latest technologies that we’ve been talking about, the whole area of intelligent document processing, IGP, robotics and now AI. So all of these technologies are critical for future growth because that’s where the wave is and not being in the forefront of cutting-edge technology, you can be the alligators and become obsolete very, very fast. So that will continue. And now I think some of these technologies are mature even generative AI for the last two years has made a lot of buzz, but it’s beginning to mature and you can see that maturity coming in. So yes, we are still very hopeful of getting a good ROI on those investments.
Hemant Shah
Wonderful. But, I mean this spend is going to continue for even the current year FY ’26 as well, the same quantum or I think as you said, the maturity level has reached. I think the quantum would be lower?
Rahul L. Kanodia
No, the investments will continue. Hopefully, we’ll get better deals, more deals and little larger deals, but the investments will continue. Because this area of technology is moving very, very fast in multiple different directions. And if we slow-down, then we will certainly fall-back and we do need to keep pace with the current market, particularly the US and China are way ahead as far as this technology is concerned and it’s important that we somehow keep pace with those guys.
Hemant Shah
Okay. So what would be your expectation of the ROI on the spending?
Rahul L. Kanodia
I think another one year will give us a very good picture. In 12 months from now, we’ll be in a very good place to know because by then really matured and we would have started seeing a decent deal flow coming in.
Hemant Shah
Yeah, why I’m asking is because this is going to play a very critical role in improvement of the margin overall besides TMQ, right? The TMQ is TMQ and the data of Lumina are the two entities which are yielding almost 23% to 25% EBITDA margins. And the other part of the business, which is almost INR1,500 crore of the business, which is yielding a negligible margin on a standalone basis. So I’m just trying to do a math, if the margins are going to improve, what kind of — what would be a good margin where you will be satisfied technologically as well as I think even after adoption of the AI in your — the whole organization.
Rahul L. Kanodia
So if you — if you look at the mid-teens is early very, very doable.
Hemant Shah
Okay. Okay. No, because if I do a pure clear math, we have done an EBITDA of INR250 crore last year, INR246 crore precisely and the TMQ is going to be added for the next year and which is yielding 25% EBITDA, okay, on a top-line of Indian rupees is around INR290 crores, which is almost INR70 crore. So INR320 crore is the EBITDA which is coming actually on a turnover of INR2,000 crore, which is already having an EBITDA margin of 16%. So on and above that, what kind of delta we can expect by the spend of this AI, which we have been investing?
Rahul L. Kanodia
That’s what I’m saying. So a lot of the AI projects and the technology projects today are still small pilots. They’re still experimenting. The larger deal has not yet started. But certainly we — and when we compare ourselves with some of our other competitors, we are absolutely at the cutting-edge of where technology is. So I’m very optimistic about the deal flow coming in as this technology matures. We’re still waiting for the larger deal flows to come in, but we are seeing the maturity coming in already. So the customers are now two years, they’ve all sort of flirted with it. They get a better sense of where it’s going and how to deploy it. So I’m quite optimistic as the next year should be a good year in that space. Now if you’re asking for a very specific number, I don’t know because I don’t have a of who is going to take what decision?
Hemant Shah
No, no, no, sure, sure. I understand absolute. Wonderful, Rahul. I mean we are thinking on the right direction. Thank you so much. Thank you so much and all the best.
Rahul L. Kanodia
Thank you.
Operator
Thank you. Ladies and gentlemen, that would be the last question for today. And I now hand the conference over to the management for closing comments. Over to you, sir.
Rahul L. Kanodia
Thank you everyone for being on the call with us today. Once again, wish you a very Happy New Year and look-forward to meeting you in the next quarter. Thank you for being on the call.
Operator
Thank you. On behalf of Data Global Service Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.