Expleo Solutions Ltd (EXPLEOSOL) Q3 FY23 Earnings Concall Transcript

Expleo Solutions Ltd (NSE:EXPLEOSOL) Q3 FY23 Earnings Concall dated Feb. 15, 2023.

Corporate Participants:

Balaji Viswanathan — Managing Director And Chief Executive Officer

Desikan Narayanan — Chief Financial Officer

Ralph Gillessen — Chairman And Non-Executive Director

Analysts:

Asha Gupta — Christensen Advisory, India — Analyst

Pooja Ahuja — Monarch Networth Capital — Analyst

Deval Shah — RBSA Investment Manager — Analyst

Ravi Naredi — Naredi Investments — Analyst

Aman Shah — Jeetay Investments — Analyst

Rohit Balakrishnan — iThought PMS — Analyst

V.P. Rajesh — Banyan Capital Advisors — Analyst

Hiten Jain — Invesco — Analyst

Unidentified Participant — — Analyst

Faisal Hawa — H. G. Hawa and Company — Analyst

Jagdishwar Toppo — Japa Investment Adviser — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Expleo Solutions Limited Q3 FY ’23 Earnings Conference Call. [Operator Instructions]

I now hand the conference over to Ms. Asha Gupta. Thank you and over to you.

Asha Gupta — Christensen Advisory, India — Analyst

Thank you, Mike. Good afternoon to all participants in the call. Welcome to Q3 FY ’23 earnings call of Expleo Solutions. The results, press release and investor presentation have been already mailed to you and they are also available on the company’s website. In case, anyone does not have the copy of press release and presentation, please do write to us and we will be happy to send to you on the mail. Presenting the management today, we have Mr. Ralph Gillessen, Chairman and Non-Executive Director; Mr. Balaji Viswanathan, Managing Director and CEO and Mr. Desikan Narayanan, Chief Financial Officer. Mr. Balaji will start the call with a brief overview of the quarter gone by, which will be then followed by Mr. Desikan who will be getting into detailed financials.

And after that, we will open the floor for Q&A session As usual, I would like to remind you that anything that is mentioned in this call, which gives any outlook for the future, or which can be construed as forward-looking statement must be viewed in conjunction with 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 report, which you can find it on our website.

Having said that, I will now hand over the call to Mr. Balaji. Over to you Balaji.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Thanks Asha, and thanks once again for – everybody who has joined the call and there interest shown in Expleo Solutions. We’ve had a reasonably good quarter, year-on-year we had a 27%, 28% growth, quarter-on-quarter even though it’s marginal, given the kind of macroeconomic conditions, I think we still had a reasonably good quarter. Our investments on what we wanted to do in the digital transformation space is still showing good traction, we have added new customers, we have also added new engagements, different types of engagements. And the contribution from US is actually tracking well. This is what one of our challenges was in the past.

And apart from that, we have also done some tweaking in terms of how we wanted to manage our costs; we have been able to reduce some of our subcontractors and contractual employees, even saw volatility in the demand. And that’s actually helped us in improving our margin profile also. So overall a good quarter, and we still have — we are very positive in terms of where the market is headed and what kind of demands are coming in. But given the macroeconomic conditions and the kind of uncertainties that are there, so we are being very cautious in terms of there, we want to invest and how much we want to invest and how much we want to leverage.

So that’s [Technical Issue]

Operator

Sorry to interrupt sir. Your voice is slightly breaking, if you could repeat the last sentence once again.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yeah. So one of the things is that we will continue to be hawkish in terms of how we manage our costs for the next couple of quarters and be cautious on where we want to invest. And we are focusing on the margin profiles. And all the focus for this quarter, that is the Q1 — calendar Q1 of 2023, the Q4 of this financial year is going to be on the merger, which we’re on the final leg, hopefully should happen in the next two to four weeks kind of timeframe is what we are expecting this to get closed and all our focus is on making sure that that gets completed as per — So that’s — that briefly what the overview.

So I’ll hand it over to Desikan to cover the numbers in a greater detail.

Desikan Narayanan — Chief Financial Officer

Thanks Balaji. Good afternoon to all. We’ll take you through the quarter-on-quarter and the nine months performance. Quarter-on-quarter, revenue for the quarter improved by 3%, ending at INR135 crores against INR141 crores previous quarter. EBITDA percentage of around 23% and PAT increase by 6.10% [phonetic] compared to previous quarter 20%. Major contributor to increase is forex gains. We had a INR9.5 crores forex gain compared to in last quarter we had a INR1.9 crores loss — forex loss, majorly this unrealized loss because of the revaluation of the assets is the one major reason. Of course, this is because of Rupee 11.0 and pound and U.S. dollar which are all the major currencies, which we deal with. We have improvement in our DSO. DSO dropped to 74 days compared to 80 days, the previous quarter, and the cash balance have increased from INR108 crores to INR159 crores.

Now looking at the nine month comparison against the previous quarter, the growth was around 35% in revenue. EBITDA grew by 66%, major contributor is increase in revenue and also the we guys have doing a lot cost management activity that we try to – do not benefits in cost – contributed cost, which has led to this increase and also our earnings per share include 52% end with the 52.8 amount. On the update on merger precedings, we expect this — actually, it’s the last quarter when we roughly related to be expected this number by December. But due to the reconstitution of NCLT ventures and the court vacation, the matter finally came for hearing in January for all the three states.

So, the jurisdiction NCLT is toll three platers Bangalore, Chennai and Mumbai have heard the matter and they have reserved the matters for orders. So what it means is that they have had all the hearings and we don’t expect to have another hearing. We are following up with NCLT registry for pronouncement of the order, so that we can obtain the certificate, which we expected to complete in the coming weeks. So overall, the current expectation, hopefully there is no backlog from the NCLT side which will end before around the March with the current expectation.

So this is update on NCLT and we can open up for question, Asha. Asha? Hello?

Operator

Yes, sir. Can you hear me?

Desikan Narayanan — Chief Financial Officer

Yes, Mike, we’re done with summary.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yes, we’re done with the update. Open up the question-and-answer session, please.

Questions and Answers:

Operator

Perfect. [Operator Instructions] We have the first question from the line of Pooja Ahuja from Monarch Networth Capital. Please go ahead.

Pooja Ahuja — Monarch Networth Capital — Analyst

Yeah. Hi, sir. Congrats for the quarter and thanks for the opportunity. Firstly, if you could specify the revenue pattern EBITDA of the unlisted companies?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Okay. You see the PBT revenue for the nine months in the other two companies around the INR273 crores. And the PBT is around INR41 crores that is EU [Phonetic].

Pooja Ahuja — Monarch Networth Capital — Analyst

31?

Balaji Viswanathan — Managing Director And Chief Executive Officer

41 – 41 PBT – -Profit before tax.

Pooja Ahuja — Monarch Networth Capital — Analyst

Sure. Could you specify the EBITDA number?

Balaji Viswanathan — Managing Director And Chief Executive Officer

EBITDA is around INR47 crores.

Pooja Ahuja — Monarch Networth Capital — Analyst

Right. First, can we — I want you to understand, you know, the digital revenue as a percentage of the overall revenue has been coming down just wanting to have some sense on that. If you could just elaborate on that? What’s the trend? What’s that new pipeline that you’re seeing here?

Desikan Narayanan — Chief Financial Officer

No, actually digital revenue recurring revenue come down only in this particular quarter, Pookj. Because you know, if I were to compare it to last year, the absolute numbers have been growing so as a percentage as shown, I wouldn’t say it’s going down as a percentage because the denominator is higher. Like the percentage is lesser. But we actually — you know, looking to have close around 38% of our revenue in digital for the full year.

And we are – last quarter we had some customer who had ramp down and also lower number of working days for some of the geographies because of which it looks like actually its gone down a little bit. But it’s not a significant drop from INR45 crores went to INR44 crores. And we don’t see that slowing down in any season. Some seasonal ramp downs, which normally happens in the Q4 of the calendar year. That’s the reason why you saw some number.

Pooja Ahuja — Monarch Networth Capital — Analyst

Sure, understood. And on the attrition side, what was the attrition percentage this quarter? And do you think that’s kind of normalized now? What are you seeing any supply side challenges?

Balaji Viswanathan — Managing Director And Chief Executive Officer

We do see, I wouldn’t say it as a normalized because we actually see, you know, for us 50 – for us its actually normalize, we need to see at least a three months to four months of continuous trend of decline. Of course, the last couple of months has been on the downward trend, but still much higher compared to what we would like to see it at till in the range of around 28 – 27% – 28%, you know, on the volume.

Our expectation is that we need to get it down to 20 odd percent, but we still keep keeping a close watch on that. We still see challenges in attracting or getting the, you know, the highly technical talent. So which is why we are investing on the learning and development phase and upscaling piece of our talent. So to answer your question short, attrition is showing a slightly lower trend, but it’s too early to call for the – that particular issue has been sorted or not.

Pooja Ahuja — Monarch Networth Capital — Analyst

Okay. Understood. I will join back in the question queue. Thanks.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Deval Shah from RBSA Investment Manager. Please go ahead.

Deval Shah — RBSA Investment Manager — Analyst

Hello, am I audible?

Operator

Yes, it’s a little low. Comes closer to microphone?

Deval Shah — RBSA Investment Manager — Analyst

Yeah, I think this is better. So my question is with regards to the loans and advances to the related party. So what is the outstanding as on the quarter ending 31 December?

Desikan Narayanan — Chief Financial Officer

As of 31 December, we had a loan of almost INR – it is around INR63 crores

Deval Shah — RBSA Investment Manager — Analyst

INR63 crores. Okay, so follow on question on that only, sir. Sir, I just wanted to understand your thought process, because I understand our opex and capex mainly are in INR and if we don’t have any mid-term or near-term plan for overseas acquisition. So wouldn’t it be more sensible to have a treasury in India and earn the higher yield and be not exposed to forex risk and have a lower yield while having that treasury outside of India?

Desikan Narayanan — Chief Financial Officer

See, the way I look at it is on the cash management is that currently, if I look at my subsidiary account, liquidity company, I have some cash basically in the bank, which is not earning much. So that if I started in the brief cash pool, they have a cash pool and they do a – the interest rate of – overnight interest rate let’s say a 1%. So I think that keeping it in the bank, I can park it there and for me, it’s like instead of keeping it there – I can keep it there and also I will get back within three days. So that’s a very sharp kind of thing, which I can get it from them.

So, I feel that that is more chromed over and also the risk factor is comparatively better for me to get it. That is the whole point that we are making this kind of arrangement, when the group actually released for us. So it gives a good interest rates for us and over the period if you look at last quarter to this quarter, we have seen the interest is completed and so the term deposit, we are trying to use the maximum cash what we have in India into the term deposit so that also means the higher interest rate which you currently have, so that way we are replacing both side. Both from the overseas subsidiary cash, it’s a couple of cash and also the India plenty cash that’s the way we have.

Deval Shah — RBSA Investment Manager — Analyst

My limited submission was on this was that who we are managing our cash and treasury in a way opex line capex yield and looking at the near-term or whatever acquisition we have in the pipeline. So we are managing, keeping all these variables in intact, right?

Desikan Narayanan — Chief Financial Officer

Yes, absolutely, absolutely.

Deval Shah — RBSA Investment Manager — Analyst

Okay.

Desikan Narayanan — Chief Financial Officer

The way we are looking at it, anytime if we need a CET generate cash for us – for our acquisition, we have that. We can generate whatever the balance is here, we can take it and also we can get the loan back and use it for that purpose.

Deval Shah — RBSA Investment Manager — Analyst

And the average yield would be only that treasury lying outside of India would be?

Desikan Narayanan — Chief Financial Officer

Overnight, plus the overnight rate plus they have a 3.75%. And overnight goes up and down, actually, it is going up that day the interest rates on that. It’s from the range of 5% plus. And what basically mentioned, instead of getting if you get the money into India, then taking it out is not going to be easy. You need a significant amount of approvals, all our future investments, whether it is in terms of acquisition, and whatever we want to do. It’s better to try and keep it as much as possible except for our normal working capital requirements in the subsidiaries.

Deval Shah — RBSA Investment Manager — Analyst

Okay. And my second question is more on the global outlook. So probably, since we already have a presence in penalties in Europe, so just wanted to get sense on overall outlook on the – on the demand side, specifically in the sentiments.

Desikan Narayanan — Chief Financial Officer

So, if you ask me whether the demand has tapered down, I wouldn’t say that, there’s a taper down. But there is certainly a slowdown in terms of the – the digital transformations of – are going on, but the larger investments are being reviewed, in no more minute period other than, people going on the investments are changing over the older platforms into new one, it is not something which isn’t the same pace as what it used to be earlier.

But that doesn’t mean that those projects are stopped or not people are not, but we need to be a little more cautious in terms of how this is going to go, it depends on whether it’s US or Europe. What kind of revision and if it was really good to go into a recession or if it goes into a recession, what level of impact it’s going to have. So that’s the reason why we are also cautious and customers are also cautious in making the investment. Ralph, do you want to add anything more?

Deval Shah — RBSA Investment Manager — Analyst

Okay. Okay. Thanks a lot. Yes, yeah, please, please, please go ahead.

Ralph Gillessen — Chairman And Non-Executive Director

Yeah. Probably from – even from a global perspective. I think we certainly see across all the industry strong demand when it comes to digitization initiatives, digital transformation initiatives, will even require highly skewed domains skews from our sides. And customers are little bit cautious even to make big commitment, but flying is even to even bring it into a sequence of even different steps so that they even keep their investment and run within some of the more engineering practices and capabilities around manufacturing, chemical engineering.

But these are areas where the customers are even see that they’re really trying to combine all the efforts that they have taken and business even then almost every competitive price and business even then especially in our existing customers base are really choosing even our carefully our own initiatives, where we can continue to lead to the customer success. But as it is where we price competitive here we are selected the business.

Operator

Thank you. We have the next question from the line of Ravi Naredi from Naredi Investments. Please go ahead.

Ravi Naredi — Naredi Investments — Analyst

….to give me this opportunity. My question is, is this top line. Can you describe which top line has increases our margin, either from existing customer or new customers?

Desikan Narayanan — Chief Financial Officer

Ravi, I didn’t understand, so what you’re asking is that, whether it’s a new contract, which is actually improving our margin or is it –

Ravi Naredi — Naredi Investments — Analyst

Whatever our top line has increases it comes from new customer or old customers?

Balaji Viswanathan — Managing Director And Chief Executive Officer

It’s a combination of both always, and always be new — the new newer that is the first logo revenue for a full year. But obviously, we don’t track the fresh logo revenues on a quarter-on-quarter basis, because none of the contracts really start big, when you’re starting out, so only look at what are the new customer revenue during the full year of percent.

And normally, our new customer revenues range around 10% to 12%, and our existing customers revenues in the range of 18% to 28%. So that’s been the last year or so earlier, it used to be much lesser the new customer revenue is much lesser, but we’ve been trending up but 10% to 12% of new customer revenue over the last couple of years at least.

Ravi Naredi — Naredi Investments — Analyst

Secondly, this year, net profit, higher net profit margin, it will be maintainable in quarter four?

Ralph Gillessen — Chairman And Non-Executive Director

So we mentioned what we have done is we have rationalized our costs, we have reduced the number of contractors, particularly some of these skills and others, because we didn’t want to keep too much of bench awaiting opportunities. So we will probably have to keep a close watch on that. So if there is any big demand, then obviously we’ll have to make big investment. But as of now, it looks like we will continue to be in that the range, which we had mentioned earlier, the closer to till the merger, it will be closer to the 19%, 20% range; and post the merger, it will be closer to the 16% to 18%.

Ravi Naredi — Naredi Investments — Analyst

Okay, Okay. And then what about new hiring in quarter three — quarter four, sorry?

Ralph Gillessen — Chairman And Non-Executive Director

Calendar year quarter four, that is you’re talking about?

Ravi Naredi — Naredi Investments — Analyst

No. calendar year, quarter four is gone. I’m asking for financial year ’23. What is the planning for March — up to March ’23?

Ralph Gillessen — Chairman And Non-Executive Director

So net of attrition we have — so we have been hiring close around 180 to 200 people on a month-on-month basis over the last 12 months, and that’s going to continue. And net of attrition, the addition will be in the range of 40 to 50 people.

Ravi Naredi — Naredi Investments — Analyst

And any utilization of the funds lying with us organic or inorganic, because the usually my I’m the shareholder since long, Expleo Solutions never hold the money with them. They always distributed the dividend or whatever they are in mind. But this year, two years, they are not doing so. So what is in mind of management that I would like to know?

Ralph Gillessen — Chairman And Non-Executive Director

So I think this is a request symmetry I’ve heard, consistently. The way we are looking at it is that what is the best way to utilize the cash? What we were looking at was some kind of an investment that we could do to enhance our capability, which will actually add value to the company and to the shareholders as well. And if you’re not able to make any of those before end of the financial year, when we will look at redistributing it — distributing part of it, as part of dividend as well. So it’s not that the dividend is shutdown. But we want to wait and see if there is any opportunity for us to better utilize the cash. If I’m not able to do it then in the next session, this is the end of financial year we will take a call on how the cash would be distributed or utilized.

Operator

Thank you. [Operator Instructions] We have the next question on line of Aman Shah from Jeetay Investments. Please, go ahead.

Aman Shah — Jeetay Investments — Analyst

Hello. Thank you for the — taking my caution. Sir, a question on our revenue for the unlisted entity is INR273 crores. Can you give details of the DSOs there in the unlisted entity?

Ralph Gillessen — Chairman And Non-Executive Director

DSO should be cut for the unlisted entity, which is in the range of around 95 to 100, because there are some contracts which is more of an engineering side of things, which has a longer DSO. So that will be around 90 to 95.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Also just wanted to highlight here, the unlisted company, more than 50% of the revenues between both the [indecipherable] and the vendor entities is coming from the group and that’s not at that 90 or 100. That’s — it’s only because, these are at about 90.

Aman Shah — Jeetay Investments — Analyst

Sure, sure. Thank you. So then, once we get listed, will this — even the business that’s coming from group and as we see offshoring will increase. Whether these DSOs come down, even if there’s unlisted entities and get converge to our listed entities numbers of DSO.

Ralph Gillessen — Chairman And Non-Executive Director

Yes. So our target, there’ll be in the range of 65 or 70 and once the merger happens and that’s the same target that we will have for all the entities.

Aman Shah — Jeetay Investments — Analyst

Okay. Okay. And can you give me the headcount number for December, sir? And how much were we planning in September for ending the year? Like, for March, how much were we planning and where are we on March 2023?

Ralph Gillessen — Chairman And Non-Executive Director

So for the listed company, we’ve would not really — there is really not much of headcount increase in this quarter, but in the quarter ended December. Currently, the billable headcount is around 1,700 for the listed company, and we have close to 1,450, close to 1,500 for the unlisted companies. And the total headcount for the company is at around 3,850 in the roundabout. So, we should — we are expecting that as a company we’ll be at around 4,000 — close to around 4,000, excluding the contractor, and including the contractor, we’ll be at around 4,300.

Aman Shah — Jeetay Investments — Analyst

Okay. And how do we see this to ramp up next year, FY 2024, for the group consolidated entities?

Balaji Viswanathan — Managing Director And Chief Executive Officer

We will cross — our target is to cross the 5,000 employee numbers for next year.

Aman Shah — Jeetay Investments — Analyst

Okay. Okay. If our — like, I’m just seeing, our net addition is 50 a month, and that would take like — so that you were saying is only for listed entity, would that be —

Ralph Gillessen — Chairman And Non-Executive Director

Yes. As of now — the net addition is around 18 to 20 in the listed company alone, and overall, all the three entities put together is around 50 to 60. And we also have plans in 2023 to start the graduate hiring, which we reduced a little bit in 2022. So including the trainees we’ll probably be in around 5,200 or so for — by the end of the 2023-2024 financial year.

Aman Shah — Jeetay Investments — Analyst

Okay. Okay. And, sir, the last, group share of revenue, if you can share, for nine months for both listed and unlisted entities?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Listed entity it’s around 18%. And for the unlisted entity, overall if you look at it for both [Indecipherable] in the range of — actually in Pune it is around 80%, 85% of the revenue comes from the group company and engineering comes from — comes at a group company.

Operator

Thank you. We have the next question from line of Rohit Balakrishnan from iThought PMS. Please go ahead.

Rohit Balakrishnan — iThought PMS — Analyst

Hello. Am I audible?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yes, Rohit.

Rohit Balakrishnan — iThought PMS — Analyst

Hi, Balaji. Hi, Desikan. So just wanted to understand. So Balaji, I think, you mentioned that a large portion of the unlisted business is from the group. And I remember in the module call that happened almost a year or so back, we had a very strong outlook on increasing the overall offshoring for the group itself. So can you share a bit around that, how are you progressing there?

And even I think the parent also had a very strong year and also expecting to have a strong year next year. So if you can share a bit around how does that, I mean, how will that strategy shaping up for us? And what can it lead to in terms of growth for the next two, three years, if you can maybe spell that out also?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yeah, so Rohit, we have not really changed any outlook on these strategies. You recollect what we talked about around the year back when we made the announcement, because the combined entity, the current listed or unlisted, or when the merger happens, the two overall revenue contribution from the group could be in the range of around 30% to 32%. And in two years time by 2025, March 2025, we expect that the group contribution of the revenue would be in the range of around 40% to 45%. And the direct revenue contribution will be in the range of around 55% to 60%. And that does not really change too much. And if you look at even — overall, if you look at the number for the listed company,

I just mentioned, it’s at 18%, that is also primarily because the direct market, particularly the inorganic growth that we had last year increased the direct market shares. And that’s where the group revenue is at 18%, even though the total number has increased significantly, it’s seen almost 35% to 40% growth from what it was the previous year. So we continue to be upbeat. And that’s what the focus area is, so all of us are focused on. Both Rajesh Krishnamurthy at the group level and Ralph, everybody is pushing the base-shoring or the offshoring, of course, not only for India, but overall as a contribution.

And this year, there is a renewed focus, even though it will reduce the top line to some extent, the focus is on bottom line and to make sure that we get — we try and achieve our offshoring or base-shoring targets. So there isn’t really too much of a difference in terms of the strategies, the rigor is getting more.

Rohit Balakrishnan — iThought PMS — Analyst

Right. And — so like in terms of, I mean, we’ve been around INR94 crores, INR95 crores in the unlisted entity. So just wanted to understand, how do you see this — given what you mentioned, how do you see this panning out? Like, three, four quarter out or maybe a year or two out? I mean, can we see whatever we are seeing — I mean, what you mentioned in terms of outlook, what we hear in terms of slowdown, etc.. But notwithstanding that, can we sort of see quarter-on-quarter growth of about 4%, 5%, 6%, is that possible?

Or do you think that we may have to sort of be more realistic and see how the external environment is? Just wanted to understand on this part, because this has — I mean, the unlisted portion has sort of stuck — got me stuck at around INR9 crores, INR95 crores per quarter over the last three quarters. I know unlisted entity had — because of an acquisition, but just wanted to understand this part of how are you thinking?

Balaji Viswanathan — Managing Director And Chief Executive Officer

So, when we look at the numbers for the last three, four quarters, we look at it overall as one India, including unlisted, and in some part of the business have grown, some part of the business had some sluggishness. But overall, as a country, we still expect that year-on-year, our growth will be in the range of 15% to 20%, even after the module as well. So, after the module, obviously, we’re not going to look at revenue, unlisted, listed [indecipherable] per se.

And we still think that you will be able to grow the 15% to 20% range year-on-year. And there is enough potential in the market to do that overall. And including the best showing, if we are able to make sure that we are able to grab more business from the group, that’s going to — it’s going to only ease that particular contribution. So, we are really not tapering down any of our ambitions.

Rohit Balakrishnan — iThought PMS — Analyst

That’s great.

Balaji Viswanathan — Managing Director And Chief Executive Officer

The good quarter — the next quarter, we may have to be a little more cautious, but overall outlook for the next three years, we are not tapering down any of our ambitions.

Rohit Balakrishnan — iThought PMS — Analyst

Sure. And what will be the cash on the unlisted side basically?

Desikan Narayanan — Chief Financial Officer

Sorry, I didn’t have that number when we had the cash balance of this, maybe I can find it.

Rohit Balakrishnan — iThought PMS — Analyst

Sure. Sure. But our overall cash balance is about INR159 crores on the listed side, plus about INR63 crores that you’ve given to our parent, correct. Is that right?

Desikan Narayanan — Chief Financial Officer

Correct.

Rohit Balakrishnan — iThought PMS — Analyst

Sure. While Balaji you did talk a bit about our overall thought process around sharing — I mean, passing your cash there. Also — I mean, because of this merger, maybe we have not been able to finalize the dividend policy as such, but would be really — would really appreciate if you can probably post the merger articulate how we are thinking as a group, that would be really, really helpful for us as shareholders?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yes, absolutely Rohit. And that’s certainly there on the cards. Like what I mentioned, we will take it up during our next Board meeting for sure. Of course, I can’t predict the outcome, but we’ll certainly take it.

Operator

Thank you. We have the next question from the line of V.P. Rajesh from Banyan Capital Advisors. Please go ahead.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Hi, thanks for the opportunity, guys. So one question for Ralph. If I recall correctly, in the last con call, you were expecting the group to grow at 20%, in the current financial year — or current calendar year, I should say. Given the comment you made about customer being cautious, has that changed that all?

Ralph Gillessen — Chairman And Non-Executive Director

No, has not changed probably I think I’m assuming that where we’ve seen cost inflation at the end of yesterday or the day before about their performance of group less concern that we were able to grow organically about 33% last year, you can see that we have good growth following the year. What is even remarkable [indecipherable] growth strategies for 2023. So the guidance that I’ve even given there for the group is confirmed and the press release that we have communicated.

And what we were able to achieve in 2022 and we have had good growth in the year [Indecipherable] to continue even in 2023 and I think its really additional and even more opportunities from that global perspective to actually even then and that is the key part of the strategy including work and more work to our different centers we have we know we’re in the heart of strategies [Indecipherable].

V.P. Rajesh — Banyan Capital Advisors — Analyst

Okay, so Balaji, I’m wondering, your guidance from your revenue growth is 15% to 20%. And your share from group is supposed to be going up on a combined basis, then, doesn’t that seem a little conservative? Or are you seeing something that we are not looking at, which is making you give this kind of guidance?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yeah, we are — and I wouldn’t say conservative Rajesh, because three last quarter, if you heard me, I kept saying 20% plus

V.P. Rajesh — Banyan Capital Advisors — Analyst

Correct. You’ve been saying 15% to 20% primarity because of what — I’m not saying that it is going down, but what are the cost shipments received in the market

Balaji Viswanathan — Managing Director And Chief Executive Officer

At least for this quarter, the 2020 Jan to March quarter, and the next quarter, we are just being a little cautious. But still, our ambitions are under 20% plus.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Okay, Okay. Understood. And then the second on the cash that you’re parking with the group, are you guys thinking of a limit to that, or if you can just give some color as to — I understand what you’re saying that it’s been some M&A opportunity abroad, it will be easier for you to execute if the cash is sitting these group levels. But if — as you guys are thinking about the policies, if she can decide that there is a upper limit to that and if there is one then if you can share that with us.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Generally, the way we look at it as we try to ensure that we have almost two to two and a half times of the working capital to be kept in here. So, everything above that we see that we will be using it for the for the kinds of cash flow activities so, our half thing has been like that So, that is the way we are putting the cap on the bigger around 2.5% — 2.5 times of operating expenses what we have — we don’t want to take it outside. But we will take three times of property expense which goes.

Beyond that we will do this [Indecipherable] but anything going this and that that will be the cap for us currently that is the cap we are looking at even though we are not given that much of loan. Max — maximum loan is something which we’re looking in and then also if you look at whatever the approval which we got from the shareholder I don’t think we will even now exceeded for now that amount

V.P. Rajesh — Banyan Capital Advisors — Analyst

Thank you.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Thanks.

Operator

Thank you. [Operator Instructions] We have the next question line of Hiten Jain from Invesco. Please go ahead.

Hiten Jain — Invesco — Analyst

Yeah. Thanks. So my first question is that in this…

Balaji Viswanathan — Managing Director And Chief Executive Officer

Mr. Jain, your audio is not very clear, if you will come closer to the microphone, please.

Hiten Jain — Invesco — Analyst

Is it better now?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yes.

Hiten Jain — Invesco — Analyst

Yeah. So in the current quarter, and even in the previous quarter and what you’re seeing on ground, we’re seeing some kind of cautiousness given macro economic challenges. I was just trying to understand that the offering of offshoring, effectively it plays it takes center stage in time. So in difficult times, where clients want to save cost optimization deals, kind of take center stage. So I was just wondering that, why can’t do we — why can’t this environment be used in to our favor and actually increase offshoring to the clients and where we can actually benefit? So what is the thought process on this Balaji?

Balaji Viswanathan — Managing Director And Chief Executive Officer

So the focus on offshoring has always been there. Obviously, it can’t be a short-term solution that now that because there is requirement for cost optimization that will start offering immediately because of that. But it has to be a strategic decision, because when they talk about offshoring, it’s not something which is reversible strategy. So everybody has their own commitment as well. So but we all have as a strategy, what the group has been progressing, and what we have also been supporting this, any new opportunity that we are running, by default, we look at what kind of offshoring can be done and where it can be done?

And for any existing opportunities, it has to be a full presence, transition phase, and the acceptance of the customer, how, — because it’s not that they can just rub down in the local countries and move here, because, they all have their commitments locally as well. So it can be a short-term strategy, it has to be something which has to be a long-term plan. And that’s something which we are executing. And that’s something which is showing in the result as well, in terms of absolute numbers. Even though that’s a company the percentage doesn’t show because, we had a larger growth in the direct market. Ralph, do you want to add anything more?

Ralph Gillessen — Chairman And Non-Executive Director

Yeah. We have seen from a group perspective that even the amount of delivery of the contribution is going up, even quarter-by-quarter. On the other side, as we are even focusing a lot on marketing to produce the transformation part of our customer portfolios, they’re not always trying to achieve some cost reductions. So, as described by Balaji, we would certainly continue to do this. We are included not only for the cost, especially even from a competency skills, capability perspective, all the knowledge and expertise that we have in our delivery service offering and this is even where we even see that we are increasing the cost reduction, especially competence from India, with the many expertise to competency and all that.

And all the customizations both new engagement and even existing engagement that is definitely what our short-term strategies, we also acknowledge the marketplace mitigation and trying to approach the market purely based on the cost or on cost reduction, that we will see this again very short-term approach and lots of policies given the local strategy of the company.

Hiten Jain — Invesco — Analyst

Okay. Thank you.

Operator

Thank you. We have the next question from the line of [Indecipherable] from Imperial Asset Management. Please go ahead.

Unidentified Participant — — Analyst

Yes. Hi. Am I audible?

Operator

Ma’am, you’re sounding very low on the call if you could kindly come closer to the microphone.

Unidentified Participant — — Analyst

Yes, hi. Thank you for taking my question. I’m sorry, I might have missed. I joined the call 10 minutes late, but my understanding is that your unlisted business has done INR273 crores of revenue for the first nine months. Is that correct?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yes. For the nine months.

Unidentified Participant — — Analyst

Sure. So I just wanted to understand how is the direct business doing here because if 20% is what you’re doing from the parent. And if I just kind of apply the similar run rate for the next quarter as well it’s not a very strong growth compared to the base year. And you know, given that you have a significant exposure to strong growth markets, like even arrow is picking up now and autos. So I wanted to understand and some of the other companies that we track with exposure to the sector have done pretty well. So, firstly, how is the X group business performing?

Balaji Viswanathan — Managing Director And Chief Executive Officer

So, in terms of the — I’m assuming that what you’re asking for, because the 20% is only for the listed company, and not for the unlisted company, unlisted companies in order with the group’s contribution a little over 50%. So in the listed company, the group’s contribution went down from 20% to 18%, primarily because the direct markets grew faster. And also added to that as the my small acquisition that we did, because of which, overall, even though the number was lower, the percentage is lower, the overall number is certainly much higher.

And so it’s not that the arrow business or the engineering businesses not growing, it is growing, but most of the growth is actually coming in from the larger groups customers, as well. And we still think that the 2023 is that the one businesses will grow faster, like what you mentioned, primarily the arrow and different understand segment, and we expect significant growth. And if you’re not — if you’re tracking, we also participate in the arrow. So in India as well and there are significant upbeat momentum on a particular business, Ralph, do you want to add anything more?

Ralph Gillessen — Chairman And Non-Executive Director

Yeah. Even relative what we’re assuming in 2022 and what we even are projecting for 2023 is close range, we will definitely achieve that goal for us, followed on what we’re doing in automotive [Indecipherable] around the embedded electronics, really been accelerated our growth and even then followed by several other industries, including even the banking, financial services, insurance markets, etc, as a group, that the fastest growing segments in 2022 and the dividend underpinning the planning for this year or for this fiscal or calendar year from an exclusionary perspective, again, especially segments that are different segments where we have two very strong demands, you can see really great permission or not for the miracles that needed additional demand [indecipherable].

Hiten Jain — Invesco — Analyst

Sure. And just to understand, I’m trying to reconcile, again, you know, the guidance that you give as a group and also the clear strategy of increasing offshoring to the India business, it compared to the guidance that for growth that you have as a group. So, both the drivers inching up in terms of contribution to growth and the group guidance being strong itself and unable to reconcile the 20% growth guidance that you have, is that the conservatism for the next few quarters. I mean, is that — do we have to wait for one or two quarters before we can reconcile those two? Or is it like you’re building the in that that same picture for the entire year.

Balaji Viswanathan — Managing Director And Chief Executive Officer

What we meant was 20% growth as for the entire one and as an organization, and if I look at where we were, to where we are as a combined entity, whether the monitoring, we will still be in the range of around 18% to 20% from last year, even though the listed company has grown by close to over 37% to 40% range in the last one year. And I’ve mentioned this even earlier as well.

So, when the numbers were smaller than we were in the INR200 crores and INR270 crores, INR280 crores in our revenue numbers. What we talked about a 40%, this is not the same, many are actually a five on the cost plus, that’s the reason why we get talking about totally. In percentage terms, it can’t be the same, but in real terms, it will, it could still be in the range of INR100 crores to INR120 crores year on year. So that’s what I meant for the 20% growth.

Desikan Narayanan — Chief Financial Officer

Balaji, even the guidance that was given, even looking at the press release from yesterday, so they’re able to do 1.27 billion in revenue in 2022. We’re aiming to crop to EUR1.5 billion market in 2023, but we’ve been able to achieve in 2022, the percentage wise if we don’t believe in taking this into consideration, as we see that we have shifted more work over even into our delivery, revenue contribution that we’ve been making, to protect and probably even to increase the profitability of the company than it is at the absolute beginning of 2022 from a group perspective even only in ’23.

Operator

Thank you. We have the next from question line of Faisal Hawa from H. G. Hawa and Company. Please go ahead.

Faisal Hawa — H. G. Hawa and Company — Analyst

A key rationale of any investor investing with Expleo Solutions India is the, you know, strong parent that is there, you know, it’s almost like a $1.5 billion revenue group now. So, you know, you feel that we at – in the Indian subsidiary could also, you know, demonstrate a very large scale in four years to five years. You know, it’s simply just building upon the learnings of the parent and be ambitious enough, and you know, getting a lot of business from the parent once the merger is through. So, are we thinking the right way on that rationale? Or is it a bit of too much of an extrapolation?

That’s one. And secondly, sir on a previous con call you were on record saying that, you know, by 2025 calendar year, we would be reaching 10,000 employees? So is that still on? That’d be deferred by a year or so.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Okay, so if you were to track the ambitious plan, of course, we are ambitious. And that’s, that’s what’s actually, you know, you would seen the numbers as well in the last three years are [Indecipherable] from INR280 crores to INR500 plus crores as of December. You know, if you look at the calendar year of December. And that ambitious plans are not it’s – its aligned with what the group wants to achieve as well in terms of the other growth plans overall as a company.

And as a combined entity since we’re tracking it as a combined entity even though we are not a combined entity as yet, India is actually 100 million plus, you know, will be 100 million plus when we actually combine the numbers as of March 31, 2023. And your question, the second question on the 10,000 number. We still have the ambition of going to a 10,000 number and once the combined entity starts selling some of these services in the direct markets and with the focus on the group business coming into India, we still have the ambition of getting to the 10,000 by December 2025. Ralph…

Faisal Hawa — H. G. Hawa and Company — Analyst

And so how soon how soon you feel that, you know, you could be having this you know $5 million contracts or you know, one contract of more than $10 million. Do you feel that once the merger proceedings have gone through, you know, there could be more business flowing from the parent, because finally there is this, you know, shortage of manpower in Europe and even Eastern Europe countries.

Balaji Viswanathan — Managing Director And Chief Executive Officer

So, not sure as to the shortage of manpower team because the unemployment rates are once again going up. So I’m not sure about the — the shortage of manpower. We have our skill gaps in India. So I don’t want to get down to that discussing about the manpower decision, but scale and size, you know, India one which can actually deliver the scale and size. We still have some supply side challenges in India. But hopefully 2023, you know, should get the better off. That’s what our expectation is. And as far as your question on 10 million plus contracts, you know, if you look at what we had shared in our investor deck as well, so the number of customers who, where we have more than 1 million.

The number of customers, where we have more than 5 million has significantly increased over the last three years. And once the group business comes in, group – we are not going to have customers of 10 million and 5 million or 20 million, because the larger contract is designed by the group and we will only be an education partner there. And you know, that way, if I look at group as a customer, we are already having group as a customer and overall, you know, across India, the group alone is contributing to close to 25 million or close to 30% of our revenues as well. So I don’t think, that larger contract which the group will signs, will certainly have a benefit for us and India. Ralph, so do you want to add anything more?

Ralph Gillessen — Chairman And Non-Executive Director

Probably, I think – looking it from a – let say – employment in Europe and India – and especially India. We’re not coming from only a more negative observation and understanding that something is limited we – India that we can scale and that we can accelerate. But even by maintaining even all this expertise people have in the European markets, and I think it’s a combination of giving up quite a bit opportunities and then to do this and the language competency that we have especially – the opportunities that we have to scale the business especially in India.

When it comes to the size of the customer – the group portfolio where they are in large corporate, even when only 10 million or 20 million in revenue, there are customers in the portfolio 10, 15 or 20 times revenue on what he has mentioned or – and even then mind is range 100 million plus 200 million plus, I think it is even more likely that there will be accelerating even more into India little bit into the service delivery the share of revenues from the customer.

Operator

Thank you. We have the next question from the line of Jagdishwar Toppo from Japa Investment Adviser. Please go ahead.

Jagdishwar Toppo — Japa Investment Adviser — Analyst

Good afternoon, sir. You know, I was going through the press release of the group statement where our Group CEO had made few statement, guiding for the 2023 number and he sounds very bullish, I mean statement is bullish is EUR1.5 billion revenues, 20% growth and also it adds that there will be addition of 7,800 workforce for the next few years.

So, from that point of view, our CEO is down in bit cautious. So, there is a dichotomy there, but you have explained you know quite a bit there. So, my specific question would be how much of that 7,800 will come in India? I mean, how much will be added in India? If you can answer a very specific number. I mean, you would have done all the calculations, the bottoms up approach. So, how much would be added in India as a whole all the all the three entities.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Okay. So, I’ll probably try and answer the question in two parts. One is I’m not trying to get to the 7,800. And, how much of that 7,800 is going to come to us, our objective is to try and look at both from our direct market how much people will need and how much of the business from the group which we’re going to get. So with that in mind, we had set a target of saying that we will probably be in the range of around 5,500 by the end of 2023, calendar year 2023. And we’ll get to close to 10,000 by calendar year 2025 end. So the 2023 or the end of 2023, number 5,500, we may be closer to that, but may not really hit that. It will be in the range from around 5,000 to 5,200, is what we expect. However, we are still not tailing down our ambition of getting to a 10,000 headcount by 2025, and the 2025 headcount to be both organic and inorganic.

And we still hope that we should be able to get to that 10,000 headcount by 2025. And if we were to look at the numbers that Rajesh has talked about, in the group’s results, and how much of that would come to India. As of now, if you look at all the bestshoring which the group does more than 50%, or close to 60%, of all the bestshoring or the group does. Or even, in some cases, it’s even more than that. It’s actually coming to India. I don’t want to put a number there, but that’s the kind of share of bestshoring that India is getting right now. Ralph, we are closer to the statement, so if you want to add anything more?

Ralph Gillessen — Chairman And Non-Executive Director

I’ll just add something – let’s just comment on some of the numbers that what we see. And there is definitely even one of the objectives that will be positive. You can see that the with the largest number of employees in the group. I think most of you know this French committee, with the largest country in terms of employees as such France, and I think even then we have changed it, so that India will even then be the country with the highest number of employees in our portfolio and we will even see it going forward and I think that will be – its all what we said before and even then we accelerated. The 1.5 million we invested. You know the group is listed here.

The global market guidance, what we want to achieve, and where we even believe that we are on a good track. So you even know wanting to communicate for years that you’d like around the guidance, you know, the guidance you know we are have good growth. We have higher capacity for INR4 lakh crore or INR4.50 million last year so we are confident [indecipherable] again, in 2023. And it is, I think as always, an increase in net count, we move down even to – even due to some of the integrations that are in some of the European countries even in an increase in good prices. And overall, as a combination of products you can see that we are – that’s why we have even communicated with some companies. That’s why we are confident.

Jagdishwar Toppo — Japa Investment Adviser — Analyst

Okay. Okay. Fair enough. My second question is really quick go on. Your US business is now almost 14% of the total revenue, and which is quite reassuring. So, what’s the target you have for next few years? How much of a US business would contribute to your overall revenue, I mean, ballpark number would be quite helpful. And what did you do to break that ceiling, you know, US as in very tough for you, I mean, it was a remarkable achievement. So, I mean, if you can elaborate a bit on that one.

Balaji Viswanathan — Managing Director And Chief Executive Officer

So, I think we talked about the U.S., yes, what we wanted to do. So, at this particular point of time, we see continue to be focusing on U.S. more from the listed entity perspective rather than as an organization as Expleo. And the strategy for U.S. is going to be determined based on when the group is going to make more aggressive push U.S. which is — which will probably be end of 2023 or early ’24, when the group could actually make an significant acquisition in that market, which will drive the growth for all the entities put together, including the listed entity as well.

Till then it’s going to be more of what we could do with an additional INR5 million, INR10 million here or there. The U.S. growth in 2022 also is primarily driven based on a smaller acquisition that we did, and also having more salespeople there. Now we have true dedicated salespeople focusing on that particular market from the second half of last year. So that’s what is actually helping us in growing but still — at this particular point of time, it’s more focused based on what the listed company is doing. That’s what the pushes. Not, not at the group level. And the group level push will come, hopefully by end of 2023 or early 2024.

Operator

Thank you.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Mike, I think we are over short of time. So I really the call…

Operator

Sure Sir, would that be the last question then?

Balaji Viswanathan — Managing Director And Chief Executive Officer

Yes.

Operator

Sure, sir. You can — over to you Sir for the closing comments.

Balaji Viswanathan — Managing Director And Chief Executive Officer

Okay. Thanks so much. I didn’t even realize that we are over short of time interesting questions, and really appreciate the level of interest, and on what we are doing and how we are doing. Thanks so much for joining the call, and you continue to show interest in the company and its purpose. Nothing more to add from side. Thank you for interest.

Operator

Thank you.

Desikan Narayanan — Chief Financial Officer

Thank you.

Operator

[Operator Closing Remarks]

Balaji Viswanathan — Managing Director And Chief Executive Officer

Thanks. Appreciate. Bye-bye.