Digitide Solutions Ltd (NSE: DIGITIDE) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Rajesh Lachhani — Head, Investor Relations and M&A
Suraj Prasad — Chief Financial Officer
Gurmeet Chahal — Chief Executive Officer and Executive Director
Analysts:
Unidentified Participant
Jyoti Singh — Analyst
Alekh Dalal — Analyst
Anukool Arora — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Digitite Solutions Limited Q3FY26 earnings conference call hosted by Aryan Capital Markets Limited. 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 this 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 Ms. Jyoti Singh from Ariyan Capital. Thank you. And over to you, ma’a m.
Jyoti Singh — Analyst
Thank you. Hello and good morning to everyone. On behalf of arihant Capital Markets Limited, I thank you all for joining in today. The Q3FY26 earning conference call of Digitized Solution Limited. Today from the management we have Mr. Gurpeep Jahel, he is the CEO. And Mr. Suraj Prasad, he is the CFO. Mr. Rajesh Lachani is the Head Investor Relation and MNA.
So without any further delays, I will hand over the call to Rajesh Lachani. Sir, over to you, sir.
Rajesh Lachhani — Head, Investor Relations and M&A
Thanks a lot, Jyoti. Good day. Ladies and gentlemen, thank you very much for Joining Digitized Solutions Q3FY26 earnings conference call. We will begin with a brief overview of the company’s performance. After which we will open the floor for Q and A. During the call we will be making some forward looking statements. These statements consider the environment we see as of today and carry risks and uncertainties that could cause the actual results to differ materially from those expressed in today’s call. We do not undertake to update any forward looking statements made in this call.
With that said, I will now turn over our call to Gurmeet Chahel, our CEO for his opening remarks. Over to you, Gurvit.
Gurmeet Chahal — Chief Executive Officer and Executive Director
Thank you, Rajesh. Thank you, Jyoti. So good morning everyone. Thank you for joining us for our quarter three and nine month FY26 earnings call. Let me begin by wishing you all a very, very happy new year. Look, FY26 is proving to be a defining year of transformation for Digitide. Before we dive into the financials, I’m incredibly proud to announce that Digitide has been certified as a great place to work for the seventh consecutive year. In a sector where talent is the ultimate differentiator, this is not just an HR milestone. This is a powerful attestation of our people centricity.
Sustaining this for seven years through a demerger and a public listing proves that our team sees immense work value in our vision for our shareholders. This translates into operational stability. Lower attrition costs and a high performance culture that is the primary engine behind our 3x3x3 strategy. Our roadmap is clear tripling revenues to USD 1 billion by FY31, we are moving from laying the foundation to building the structure this quarter. The green shoots have turned into visible, measurable momentum. Despite a volatile macro environment, we have delivered a resilient Q3 performance. Our consolidated revenues reached 780 crores which is a 6.5% year on year increase.
This marks our fourth consecutive quarter of forward momentum. Our shift toward high margin business is working. Tech and Digital revenues surged 19% year on year now making up over 30% of our total mix. Our Global business grew 11% year on year, providing us with the premium pricing and geography diversity needed to de risk our portfolio. Our focus on profitable growth is reflected in our EBITDA of 88 crore with margins posting a modest uptick of 7bps quarter on quarter. Although marginal, the improvement is noteworthy as it reflects the combined impact of improved operating leverage and better mix.
While PAT was impacted by one time adjustment related to the new labor code, our adjusted PAT hit a 3 quarter high of 24 crores. The most exciting lead indicator however is our sales engine. Our total contract value hit 662 crores, a record high for Digitide and a 20% sequential leap. We added 34Q new logos this quarter which proves that our value proposition is resonating deeply in the enterprise market. We have solidified our status as a hyperscaler first partner. Adding GCP to our existing AWS and Microsoft partnerships makes us a rare triple threat in the AI space.
Furthermore, earning the Microsoft Solution Partner designation for Data and AI positions us among an elite group of partners globally. We aren’t just talking about AI, we are operating with it. We deployed agentic AI into our Smart Page, Digi, Collect and Digiloan platforms, fundamentally improving predictability for our customers. We have handled 3.6 million automated transactions this quarter alone and critically and most important, we are future proofing our greatest asset. Over 6,000 digitizers have now been reskilled through our AI Learning Academy. So in summary, Q3 confirms that digitide is becoming the agile AI native leader we envisioned.
We have the right partnerships, a record breaking pipeline and a culture that remains one of the best in the country. We are well positioned for a strong FY26 exit and an accelerated FY27. Thank you to our employees, our 7 year great place to work, legacy holders and our shareholders.
I will now hand it over to my colleague Suraj to walk through the financials in detail. Thank you.
Suraj Prasad — Chief Financial Officer
Thank you Gurmeet and a very good morning to everyone on the call. I will start with the financials for FY26 and also give you a walkthrough on how this is translating into the momentum for the upcoming quarters revenue. As Gurmeet highlighted, we continue to deliver on a stable growth with revenues of 780 crores increasing both sequentially and on a year on year basis. This growth amidst the softer macro environment and our own reorganization post demerger and listing demonstrates our inherent resilience in our business. Talking about the segments revenue growth was broad based as BTM revenues of 545 crores was up 2% quarter on quarter and YUI with a strong momentum in tech and digital segment which continued to grow as revenue was up 3% quarter on quarter and 19% yu wide to 236 crores.
As a result the share of tech and digital business continues to improve in line with our earlier aspirational guidance pricing by 30 basis points to 30.2%. International revenues also increased 3% quarter on quarter and 1.4% y on y to 292 crores which now accounts for 37.4% of our total revenue increasing by 20bps quarter on quarter. Now moving on to EBITDA and margins, EBITDA improved 3% quarter on quarter to 88 crores with a corresponding uptick in the margins. The improvement in margins though modest is meaningful as it reflects the combined impact of operating leverage and a better mix segment wise.
EBITDA from BPM increased by 5% sequentially to 86 crores with EBITDA margins improving by 33bps. Tech and digital EBITDA witnessed 10% growth in margins to 23 crores with margins improving by 63bps to 9.6% with a stronger pipeline and a robust deal bookings as Gurmeet highlighted and most of the transformation and demerger related investments now fully absorbed, we are on track to our margin expansion plan as guided earlier adjusted pat rose by 43% quarter on quarter to 24 crores. The adjustments included exceptional loss of 25.4 crores towards the labor code changes which was announced on 21st of November.
The 22.1 crore is towards gratuity and 3.3 crores towards that as a lien cashmere and these impacts have been recognized as exceptional items in our financial statements Working Capital and dso. If you would recall we had post our demerger we had went into the process of innovating all our contracts from a spoilquest to digitized and we had a stretch of our DSO day starting in quarter one to 91 days. We improved that to 83 days in last quarter and happy to report that our working capital cycle in Q2 continues to improve the year. So days improved by another 3 days to 79 days as we had guided.
We also reported strong operating cash flow during this quarter at 92 crores which translates to 105% of my EBITDA which is really strong and we expect that to strengthen further as we exit FY26. We expect the DSOs to stabilize further, more supported by the nominal billing post, demerger related innovations, improved collection rigor and revenue assurance which we have put in place across all the group entities. Our balance sheet remains strong with a healthy liquidity and net cash position improving from 113 crores in quarter two FY26 to 125 crores in quarter three. Robust balance sheet position provides us the flexibility to continue investing in our capabilities, leadership, strategic priorities and partnerships and any potential in organic pursuits.
In closing, overall quarter three has been stable and confidence building quarter at the business front and tech and digital and international businesses which is our key forte for growth continues to rise. Bookings remain healthy and the balance sheet provides the flexibility for future growth. Also the revenue growth coming each quarter and the margins continue to improve and the pack strengthening cash conversions normalizing. We are entering quarter four and the last leg of FY26 with a very clear visibility and a strong momentum for growth.
With that I hand the call back to the moderator for any question and answers. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and one on your touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Jyoti Singh from Aryan Capital. Please go ahead.
Jyoti Singh
Thank you for the opportunity. So just wanted to understand like this EBITDA margin remain at 11% despite revenue growth. So what are the top two structural margin expansion lever over the next six to eight quarters and this targeted of 200 to 300 pips EBITDA expansion that we are expecting. So from mix shift versus operational efficiency how much and another when should expect that margin in tech and digital to converge closer to BPM levels. Wanted to understand These three point.
Gurmeet Chahal
So Jyoti, thank you for your question. See the structural levers for improvement in margin are the product mix. When I say the product mix mix, the more we move into tech and digital that will improve our margins. Second is the geography mix. And as you see on both those levels we have positive momentum and we see that continue based on the strength of the pipeline that we have both for our international and tech and digital business. On top of that, as we leverage AI to automate and optimize our operations, that will give further boost to the margin on the tech and digital.
There has been a margin expansion versus Q2. And as we all know in the tech and digital deals there is a lag between the start of the revenue and the margin uptick. So the good news is that we are already seeing that expansion just between quarter two and quarter three. And again, like I said, given that nature of that business, we will expect that to continue. As regards your third question on the guidance of 200 to 300 improvement, that was in line with our FY31 goal. So we stay committed to that.
Jyoti Singh
Thank you sir. And also sir, I wanted to understand on the billing rate side what is currently and over the last four to six quarter and where the inflection point expected.
Gurmeet Chahal
So can you, can you please expand that when you say on the.
Jyoti Singh
Yeah.
Gurmeet Chahal
Revenue per employee, is that.
Jyoti Singh
Yeah, revenue per employee, sir.
Gurmeet Chahal
Okay, got it, got it. Yeah. So look, our revenue for employees has been inching up as well. In fact versus quarter three. There is a 1 improvement on the revenue per headcount. And as you would have also noticed that our headcount has actually come down a little bit. So that’s again telling us that the changes that we are making in optimization are working now.
Jyoti Singh
Okay, thank you so much sir. I will come in at you.
operator
Thank you. The next question comes from the line of Sanjay Shah from SK Securities. Please go ahead.
Unidentified Participant
Good morning gentlemen and sir, thanks for a nice explanation and congratulations on achieving the awards. So my question was regarding this 662 crore TCV we booked. So how, what are the time you expect these contracts to convert into revenue? And how much of the current order book is digital and how much is from bpm? And are you seeing any pricing pressure on the deal difference in BFSI and International Market?
Gurmeet Chahal
Mr. Sanjay, good morning and thank you for your questions and thank you for your wishes. So the deal conversions, Let me answer the deal conversion first. So Mr. Shah, most of our contracts are three year contracts, you know. And a rule of thumb is that once we book in the next financial year, 60 to 70% of revenue of the ACB gets materialized. That’s been our historical revenue realization from the book deal. So we don’t see a change in that which is in line with what the industry has. The sustained improvement in bookings quarter on quarter is now reflecting in the revenue growth.
Mr. Shah, as you can see, your second question was. The second question was on the split between tech and digital and the bps. While at some level it’s very difficult to parse that given that now a lot of our BPM deals also have a tech quotient in it. But overall, when I look at both our pipeline and the bookings that we’ve had, the tech and digital is higher than our current mix and that is also reflective. As you can see in the last two quarters our tech and digital has grown double digits. So even our current pipeline is biased strongly towards tech and digital.
And then your last question was that are we seeing some margin pressure from the BFSI segment? Look, the BFSI segment has been under pressure so it’s natural that they would also want to optimize their cost and vendor spend could be one of them. And that is where our proactive approach of embedding AI. And giving a benefit to our customers has been working in our favor. And in fact if you see at a segment level our BPM margin has also gone up. And the reason I mentioned that is in BPM we have a lot of exposure to BFSI. So I hope I have answered your questions, Mr. Shah.
Unidentified Participant
Yes sir. Yes sir, very much sir. Can I add one few questions more?
Gurmeet Chahal
Absolutely sir.
Unidentified Participant
You have indicated a growth trajectory which are clear 3x3x3 strategy. Can you highlight upon and indicate how that as you last pointed out regarding inorganic growth route also. So what are your threshold on that acquisition threshold and will that be a margin accretive and how that will dilute you in the near terms?
Gurmeet Chahal
Sure. So Mr. Shah, you are absolutely right as we had been continuously guiding that inorganic is part of our strategy. I had also highlighted earlier that our inorganic strategy is absolutely clear. We are looking at five cohorts in that two mix of horizontal and vertical capabilities. So horizontal capabilities that align with our current capabilities complement them and which are the higher growth areas. So digital engineering, data and analytics and hro, these are all double digit growth. Our strategy is very conscious that the acquisition will be for an asset that brings us global revenues bias towards tech and digital.
So that one our international mix improves which is going to be value accretive from A margin perspective and second, with a bias towards tech and digital assets which is also going to be margin accretive. So to summarize, inorganic is a strategy. We are actively looking for targets. We are looking for targets that will be margin accretive and targets that will strengthen our capabilities in the areas that we have chosen. Like I said, digital engineering, data and analytics and AI. Because HRO is a nice adjacency to what we already do. I hope that ANSWERS your question, Mr. Shah.
Unidentified Participant
Yes sir, very much sir. So my last two questions was regarding can you highlight upon how should investor think about all digits contribution to consolidated EBITDA and cash flow and are there any plans to simplify the group structure and to improve the value and visibility for all DG shareholders and even digitized shareholders? And the last one is cleanup of the balance sheet is over. Now in last three quarters we have seen many headwinds and we have seen many exceptional expenses. Is that a fake end of the provisionings?
Gurmeet Chahal
Yeah. So Mr. Shah again thank you very astute questions. Let me answer your second question first. As we had mentioned in the last quarter all the demerger related expenses were taken care of. In the last quarter itself. This quarter the labor code impact, which is an industry wide impact. So we have taken care of that as well. Unless there is a regulatory change like labor code impact, we don’t see any one time expenses impacting. Now your first question. Look Mr. Shah, like we have said we’ve created a culture of one digitized. We’ve brought all the companies together.
So I think looking at all DG as an independent entity would not be the right way to look at it. I know it’s a listed company but we are operating as one digitized. And that was the whole premise of this demerger and then getting listed. To your other point, look, the decision of making it one entity, merging it, that’s decision that the shareholders and the board will be taking. But yes we will. Now that you know we we are done with demerger. Now that we are listed, these priorities are over. We will definitely explore that and we will bring it up to the respective boards. Ultimately it’s the decision that the board and the shareholders will make.
Unidentified Participant
That’s great sir, very helpful and wish you best of luck and see this company growing under your leadership. Seeing a great future ahead. Sir, thank you very much.
Gurmeet Chahal
Thank you. Thank you Mr. Shah, thank you for your endorsement.
operator
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on your touch tone Telephone. The next question comes from the line of Gaurav from Capital Farming consultant. Please go ahead.
Unidentified Participant
Yeah. Hi. Good morning to the team and thanks for giving an opportunity to ask a question. I hope I am audible.
Gurmeet Chahal
You are Gaurav.
Unidentified Participant
Yeah. Thank you very much for confirmation. So my first question is on tcv and again building on the earlier participants question. Right. So as for the presentation that we have published. Right. I think slide number 20th in the last four quarters we have almost contracted a TCV of approximately 2300 crore. Right. In last four quarters. So just want to understand. Out of is approximately 2300 crore value how much would have been converted into sales as on K3FY26. So just to get an idea, like you said in first year a certain percentage get converted into sales and the remaining stands outstanding. Right. So. So. So just to get an idea of out of this 2300 crore how much has been converted into sales till Q3FY26.
Gurmeet Chahal
So Gaurav, thank you for the question. So Gaurav, before I answer the question there is some context that I like to bring. If you recall in quarter four and quarter one we had also taken down some business which was a conscious strategy. So the and we had guided the market also that we are exiting some contracts. Right. So typically look in our industry as we are adding new contracts there is always some dilution that is also happening. The dilution could be on account of some projects coming to a meaningful exit. You know. So when you look at this ECV to ACV to revenue conversion the thumb rule is the bookings that I make in FY25.
Let’s say I was to make a 2000 crore TCP. That will translate roughly into an ACV of 600, give or take. So of that about 60 to 70% should materialize in the subsequent subsequent year. So which would be about 350 to 400 crores on an annualized basis. But this is gross addition. Like I said, there will always be some dilutions also in a running business. So when you factor that the net addition comes in the ballpark of about 200 to 250 and then 5% revenue you always add through the in year sales. So that means whatever I sell within FY26 5 to 7% of that gets added into the revenue.
So that is the maths at an overall level, Gaurav. And if you look at our revenue trajectory in the last three quarters and if you net off for some of the proactive exits that we did we are very much in line with that math.
Unidentified Participant
Okay, I will just go through this number that you have, but let me just do it a different way but somehow on the same numbers only if as an analyst, if you want to get a visibility, right, say let’s say thing with Ko4 or starting with the FY27K1. FY27 at this point of time, what is the visibility that we have? Because this, this will ultimately take us to the FY31 vision that we have in the past of achieving 1 billion dollar or revenue. Right. So based on the TCV that we have already contracted, what gives us confidence that what percentage of growth we can assume.
We can assume. I’m not looking for a forward looking statement. Right. But on a year, on year basis growth, what we can expect from the already contracted TCV in FY27, we can achieve that much based on the already existing and which will be supplemented by the additional TCV that we will be doing a quarter on quarter basis.
Gurmeet Chahal
Yeah. So thank you Gaurav. Yes, Gauravaram. So based on the first three quarters and the pipeline and the likely conversion in Q4, we are very, very confident that in FY27, first of all we will finish FY26 stronger. And in FY27 we will be doing a double digit growth on the revenue. So based on the sales that we have already generated and the pipeline for quarter four, we are very, very confident.
Unidentified Participant
Okay. And related to this only, we have mentioned in our presentation that we are working with more than 300 plus customers. And in the last four quarters we have won approximately 120 new logos. So is it that in the last four quarters we have expanded our customer base from 200 plus to 300 plus? Do we assume this or there is a different interpretation of 300 plus customer in total versus 120 new logos worn in the last four quarters?
Gurmeet Chahal
Yeah. So look Gaurav, the 300 is the key customers that we mentioned. Obviously our list of customers could be longer because you have to keep in mind that for example, in the all Digi business, given the nature of that business being a payroll solutions provider, we will have a lot of smaller customers as well. But the key customers is the 300. And within that now as we have added and we’ve also exited some contracts, that list will be about 325 to 330. And when I say key customers, these are the customers where we see, you know, where we see an opportunity to grow more.
In fact, you know, within this also we look at our top 100 customers, both from a perspective of where we are with them and what is the total addressable market of their spend and what’s the wallet share expansion we can do. So I hope I answered your question, Gaurav.
Unidentified Participant
Yeah, yeah, thanks. If you allow me to last question. Before I come in the queue for follow up, can I go ahead with the last question?
Gurmeet Chahal
Sure.
Unidentified Participant
Yeah. Yeah. Thanks. So on a consolidated basis we have reported an EBITDA approximately 11%. Right. Whereas when I was looking at the numbers reported by our a key subsidiary which is also listed all Digitech, right. They have reported an EBITDA of 30%. Right. So, so, so, so if we exclude the EBITDA from our consolidated numbers contributed by all Digitech, then the remaining entity of Digitide would be, I’m, I’m assuming somewhere around 10% or even more, less than 10% of EBITDA contributing. Right. So I was just wondering as an analyst, as a shareholder, right, what innovative business all DG is doing where they are commanding an EBITDA of 30% and what labor intensive, or I would say not so exciting business remaining digitized is doing, which is giving us a peanut contribution or EBITDA of just hardly 10 odd percent.
Right. So, so can you as a CEO, can you give a clear, crystal clear differentiator between the business model being operated by all dg Visa Vision? Right. I’m not bringing any other listed peers or our industry competitors into this competition. Just all these versus digitized remaining. Yeah. Thanks.
Gurmeet Chahal
So Gaurav, again, very astute observation. So first of all, you know, like I said earlier, I think we should look at both all Digi digitized as one. You know, that’s how we are operating today. But to answer your question, the nature of business that is parked within all DG is slightly different from what is the other part of Digitide. What I mean by that is Digitide has a platform led business, you know, which is the payroll business. And as you can imagine that the platform LED business is always much higher EBITDA margin. That’s number one because it’s a non linear growth that we expect through that channel.
So the margin profile is very different even on the BPM business. Almost 67% of the BPM business that gets reported under ALDG is international business, which is higher margin. So as a combination of the two, the business that we report under ALDG is of a higher margin profile. Then if you look at the other business that we have that is largely domestic bpm. And as we all know, that the margin profile of the domestic BPM business is materially different from that of international. Now on that Gaurav, our strategy is how do we improve that? And there are multiple things we are doing.
One, the quality of deals that we are taking hereafter. Second, how are we embedding more tech in the domestic DPM so that we can take out the non value added things and improve the margin profile? Third is looking at some segments which are more attractive for us and within those segments also changing the product mix. For example, today some of my business is platform led. Can I make more platform led business even in the domestic market? So those are some of the changes we are making so that in the days to come we can see a margin expansion in the domestic BPM as well. So I hope I have answered your question.
Unidentified Participant
Yeah, thanks. I will come back in queue for follow up. Thanks.
operator
Thank you. The next question comes from the line of Manthan Patel from Patel Investments. Please go ahead.
Unidentified Participant
Hello. Good morning everyone. I have basically two questions. First question, as we are aspiring for a billion dollar revenue by 2031, when can we see double digit revenue growth? I mean can we see double digit revenue growth for upcoming? 2, 3. And the second question is how much business is right now annuity based? Thank you.
Gurmeet Chahal
So Manthan. Thank you. So Manan, like I answered the previous question, we are very, very confident that in FY27 we should see double digit revenue growth based on the bookings we have done so far and the sales momentum. That’s your first question. And your second question if you don’t mind repeating.
Unidentified Participant
How much part of the. revenue is annuity based? Like platform based?
Gurmeet Chahal
Yeah. So the annuity based business is 2, 4, 1 obviously which is platform linked and second is managed services contract. So at an overall digitized level, almost 70% of our business is annuity based.
Unidentified Participant
Okay, that answers my question. Thank you and have a good.
operator
Thank you. The next question comes from the line of alek Dalal from 130 capital. Please go.
Alekh Dalal
One is there’s been obviously a debate on how much AI is going to cannibalize the core business. So can you give us a sense of how much it’s cannibalizing versus how much you are replacing it by sort of new AI led opportunities? That’s the first question and then I’ll ask my follow up after that. Thanks.
Gurmeet Chahal
So Alek, thank you. Thank you for your question. So look, you know on AI, I mean it can be seen as a threat and as a growth level or an opportunity, we are seeing AI Ladder, which is an opportunity to grow my top line and also optimize my bottom line. That’s the reason we have proactively made a lot of investment in AI. In fact, today, if you see both my BPM business and my tech and digital business has actually grown, you know, and we have actually embedded a lot of AI already. For example, we are managing about almost 4 million transactions through agent AIs.
We have 15,000 AI agents complementing our human agents, you know, so what that tells you is that while we have embedded AI, it’s actually accretive for us, it’s not dilutive or it’s not compromising our business. That’s one second is also if you peel the onion on our business, you know, of the BPM business that we have, which is roughly 70% of that 70%, 60% is tied to platforms like our payroll platform, our collections platform, our loans platform and the insurance platform that we have, only 40% is what you would call non platform led. Within that also there is some transaction in the FNA and procurement and supply chain.
The customer experience business that I have is biased towards three industries which is bfsi, healthcare and fast growth tech. These are the industries where human empathy is very, very important. And also the nature of work that I do, which is revenue enablement for most part requires that human touch. So that’s why we don’t believe that that business is at risk. Now this is, I mean like this 25% of my total business, you know, but there also the industries that I am in, the nature of work that I do, the human empathy and human touch is extremely important.
And that’s the reason we’ve been able to embed AI and at the same time actually grow our revenues. So Alec, I know it was a long answer, but I thought it’s such an important topic, it deserves that context.
Unidentified Participant
No, no, yeah, very helpful. My second question is, as you now sort of enter the phase of, you know, sort of standing on your own two feet as an independent company, can. You give us some color on where. You are in that journey in terms of management and organization structure? Whereas where do you see gaps in terms of talent that you need to hire or areas that you need to work on, or you’re 100% there and now it’s growing, going forward is just growth from here. Just give us a sense of that, please. Thanks.
Gurmeet Chahal
Sure, sure. So again, Anik, great question. So if you will recall that when we outlined a blueprint for 2031, this was the 3x3x3 we had also said that there are five critical levers for us to execute on that blueprint. These five were leadership, talent and culture, organization, architecture, you know, offerings that we take to the market and inorganic. So those were the five building blocks. Let me walk you through the progress that we have already made on each of these five. Today we have a very, very strong leadership with a combined experience of 20 to 50 plus years which is steered by a very diverse board.
So for example, our Chief Revenue Officer joined us from aws. Saket, our Chief AI and Strategy Officer joined us from Coforge. Sandeep, our Chief Operations Officer Natarajan joins us from Accenture. Our Chief Marketing Officer joins us from lti. Mindtree, our India business leader who has joined us recently has joined us from PRI prior to that with hcl. Ruchi who was the group Chro for Quest is now our Chro and Suraj who was our deputy CFO is the CFO here. So we’ve got a very, very strong leadership in place. And then N1 also we’ve made some changes in the last three quarters and we got that in place.
As you would have seen, we’ve got a very diverse board with a good representation of people from us, Canada, India across industries. So that’s number one. Second on talent and culture. Like I said, seventh year in a row we are a great place to work. We are one of the best places for leadership academy as the people’s magazine call it. The investments that we are making in not only hiring but reskilling our people. Like I said, 6,000 of our colleagues have already been trained on AI. So that’s part of that. Basically what we are doing is we’ve got a very clearly defined talent strategy to bolster a performance driven culture and which is manifesting in things like the great place to work which we have won now for seven years in a row.
From an organization structure we’ve got a simple market focus structure with investments in sales and marketing which we had highlighted in the first two quarters and then of course a very, very differentiated delivery model. And that is also very important to understand. I have presence in 17 cities so 40% of my talent is in tier 2 and tier 3 cities on AI. I did highlight the progress that we have made in AI. If you recall we had said that we are going all in on AI as the bedrock of our platform based tech, digital and BPM offering suites.
So we’ve done that. We have created a brand pulse of AI offerings. We look at AI through three Personas, Persona of industry, Persona of process and, and Persona of sorry industry process and Persona of the CxO like AI for CIO, AI for CHRO. And the proof of that is already in the numbers that I talked about. 4 million transactions, 59,000 AI agents. The last piece of the fifth building block of a strategy was inorganic and as I had alluded to Mr. Sanjay Shah’s question, we have a well defined strategy there which is inorganic growth in prioritized areas to enhance our capabilities and market access. And we are continuously working on that. So I hope that answers your question on the building blocks of our strategy and where we are on that.
Alekh Dalal
Thank you.
operator
Thank you. The next question comes from the line of Ankul from Inved. Please go ahead.
Anukool Arora
Yeah. Hi. Thanks for the opportunity. So wanted to understand that our tech and digital margins were around 9.4% whereas our BPM margins were around 15.4%. So what are plans to converge our tech and digital margin upwards? First question is this.
Gurmeet Chahal
So Anukul. Thank you. So Anukul, as a reminder, when we started this business as a standalone entity, most of our tech and digital business was biased towards system integration and P and M contracts which by nature are lower margin. And a significant part of was that was on site work in US and Canada which again has a lower margin. So now what we are doing is actually, you know, the partner ecosystem that we have developed. That’s why we were laser focused on developing that partnership ecosystem so that we can get into larger manager services, tech transformation deals.
So the partnership now that we have with aws, Microsoft, gcp, Tricentis as the leading testing platform and even Duck Creek in the insurance space is positioning us for the larger transformation deals which have a healthy offshore mix which give us higher margin. So you know, the building blocks for the transformation of the tech and digital business is already in place and we are seeing the sales momentum of that already and then which will start translating into revenue and the margin profile improvement, as you rightly said, between Q2 to Q3, we’ve already expanded our margin for the segment. So that’s, that’s the game on improving the margin further on the tech and digital. Anukul, I hope I’ve answered your question.
Anukool Arora
Yes sir. Yes sir. Understood sir. So my other question is on the side that you had earlier guided that we’ll be exiting Q4 around 10% growth. So are we on a track to, to achieve that run rate?
Gurmeet Chahal
Sorry, I missed a part of your question. It was not clear on my end.
Anukool Arora
Yeah, I’ll just repeat my question. So earlier in the con call, you had guided that we’ll exit this year by around 10% on growth. So are we on track to achieve the same?
Gurmeet Chahal
So Arukul, like I mentioned earlier, based on the deals that we have won and the momentum that we generated in this quarter, we are very, very confident that we will finish the quarter four on a stronger note than quarter three. And we are also confident that in FY27 we will be in the double digit revenue growth.
Anukool Arora
All right, yeah, that’s answered my question. Thank you so much.
Gurmeet Chahal
Thank you.
operator
Thank you. The next question comes from the line of Madhurati from CCIP. Please go ahead.
Unidentified Participant
I wanted to understand that out of our target of tripling revenues by FY31, how much contribution is expected to come from our subsidiary All Digitech?
Gurmeet Chahal
So look, sorry, was there another question? So Madhur.
Unidentified Participant
Yes, please go ahead.
Gurmeet Chahal
Yeah, so Madhur, I, I will give you the architecture how we have envisioned. So today we are about 350 million. So we have to add about 650 million. We believe that two thirds of that will come through organic growth and that organic growth will be across the digitized portfolio. I don’t see the all DG is already growing at a healthy 14, 15% which we see to continue. So the 2 third will be coming from the organic growth. The 1 third of that 650, roughly 200 million is what we expect through inorganic route. And like we had guided earlier, you know, ideally we would like to do two to three acquisitions which add about 150, 160 million, which grows up to 200 million.
So that’s the overall architecture of that 1 billion. Obviously the old Digi portfolio is going to be a key contributor to that as is going to be the remainder of the business which is picking steam every quarter.
Unidentified Participant
So my second question is about rupee depreciation. So what kind of benefit. Do we. Envisage from rupee depreciation in the standalone entity as well as our subsidiary All Digital?
Gurmeet Chahal
Yeah, I mean look, if you see about 37% of our portfolio is international revenues. If you issue benchmark against last year, I would say the benefit is to tune of about 1.5% for us overall as digitized.
Unidentified Participant
And sir, the Aldegi.
Gurmeet Chahal
So all dg. Because in all dg, the if I look at standalone all dg, given that they have slightly more international revenue, that would be in the range of two and a half percent.
Unidentified Participant
So this is permanent improvement and we won’t have to pass it on to our customers.
Gurmeet Chahal
This we don’t have to pass on to our customers.
Unidentified Participant
Okay sir, so very great to know. And sir also sir, one question that sir, aren’t we thinking about shifting to. Tier 2 and 3 geographies in India. To lower our lease, rental and employee costs like Bhopal, Ranchi, Coimbatore, etc.
Gurmeet Chahal
Yeah, yeah, absolutely. So in fact today Madhur, 40% of my talent is in tier 2 and tier 3 cities. We are already in 17 cities. For example we have delivery centers in Mohali, Jamshedpur, Indore, Mithapur, Coimbatore, Lucknow, Pune. And we are absolutely committed to tier two and tier three. And this is, if you ask me, one of our differentiators, most of my peers do not have such a deep penetration in tier 2 and tier 3 cities as we have.
Unidentified Participant
Got it sir, one question was on. Margin and in the BPM segment sir, one of our competitor 1.1 sir, they have very high margins, 25% plus because of the outcome based revenue model that they follow. So so you mentioned a lot on the AI and these automation. So where do we see outcome based BPM as a overall mix for all DG as well as for digital going forward?
Gurmeet Chahal
Yeah, so look, if you looked at our segment margin, our BPM margin is at 15% plus. So it’s a healthy percentage from that perspective. But we are not stopping there. So we are doing three or four things. One is converting more and more of our contracts from FTE to managed services or outcome based. Second, infusing AI and technology so that we can optimize the cost. In fact if you see versus last quarter while our revenues have gone up, we have not added headcount. In fact my headcount has come down by about 400 people and my revenue per headcount has also gone up by about 1.5%. So we are already executing on that and it’s actually working.
Unidentified Participant
Sir. So considering we are already implementing these things, can we expect a late teens to early 20 margin in the BPM segment over the next five years?
Gurmeet Chahal
Yeah. So look overall as a company we had said that over the next by 2031 we expect 200 to 300 basis point expansion. Given that you know almost 70% of our current portfolio is BPM and we expect it to be 60%. So the margin expansion will come through both tech and digital and BPM and it will be through a mix of, you know, the levers that I highlighted and also as we do more and more international BPM business that will also expand our margin.
Unidentified Participant
Got it sir. Just final Question from my end sir, if I consider what percentage of our total revenue currently would come from this managed services or outcome based revenue model and sir, what is the incremental margin we earn on that versus our overall BPM segment currently?
Gurmeet Chahal
So look and Suraj, keep me honest. 40% of our contracts are time and material overall. The other contracts will be a mix of outcomes, managed services and fixed plus variable. Because there are multiple models that we have. The margin profile is not just a function of the model. It is a function of many other things. The nature of work I am doing. For example, if I am doing a high end technology project on a time and material, it could still have a much higher margin profile given the nature of the work. I could also be doing a managed services work which is at a low margin.
So just your billing model or how you have contracted doesn’t control the margin. What it controls is your ability to manage the margin better and claw back some of it. So that’s how it is. It will be very difficult to give you margin by the nature of contracts.
Unidentified Participant
Would it be higher by 5 to 6% on an average on a conservative basis or that is a higher number that I’m quoting.
Gurmeet Chahal
Again look, on paper, yes, one would expect. And the reason I’m saying this Madhur, don’t get me wrong. So for example if I’m doing a project in US on site and if I just lift and shift and bring it to offshore I can expect more than that margin expansion even if I’m doing it in a time and material manner. So the on site margin could be let’s say 6, 7% offshore margin could be 15, 16% at a minimum. So right there you can see a 10% change. While I have not changed the billing model typically on the managed services contracts, yes.
There is an ability for the organization that over the term of the contract one could expect a margin expansion of 4 to 5%. So from that perspective your yardstick is correct.
Unidentified Participant
Got it. So just a final question from my answer on the acquisition front. Sir, you mentioned that we are looking at digital engineering or data analytics and AI and hr. So, so how do we make sure. So my question is specifically to the HR segment. So the HR equisitions will be done in through dg, all DG versus DG tide. So that that business can. So they are already doing payroll processing. So I would expect that would be extension to the services that they are providing. So on that front because I think that would create much more shareholder value for both these for us as well. As for them, because their valuation is a inherent reflection, our valuation. So I wanted to get some of. Your thoughts on that.
Gurmeet Chahal
So Madhur, like I said, we look at it as one digitized. Where the acquisition is made is a function of many things. The nature of the business we are acquiring, the kind of customers. So we have to look at the synergies, we have to look at the people synergies. So obviously those are some of the filters we will apply when we look at any acquisition, whether it is HRO or digital engineering. But from overall perspective, it is an acquisition by digitized, you know, so we look at everything as one digitized, like I’ve mentioned earlier also.
Unidentified Participant
Got it, sir. Thank you so much. And all the best.
Gurmeet Chahal
Thank you.
operator
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you. And over to you, sir.
Gurmeet Chahal
So Jyoti and the Aryan Capital team, thank you. And I want to thank everyone who joined us today. Very, very encouraging. You know, thank you for your continued trust in digitite. We are on the right track and we’ll be in touch very soon. Thank you so much.
operator
Thank you. On behalf of Ariyahan Capital Markets Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.