Hinduja Global Solutions Ltd (NSE: HGS) Q3 2025 Earnings Call dated Feb. 18, 2025
Presentation:
Operator
Good evening, ladies and gentlemen. A very warm welcome to the Q3 and Nine-Month FY ’25 Earnings Conference Call of Hinduja Global Solutions Limited. From the senior management, we have with us today, Mr Partha Desarkar, Executive Director and Group CEO, HGS; Mr Winsley Fernandes, Whole-Time Director, HGS and CEO of the Media Business; and Mr, Global CFO, HGS. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Dharshan from AdFactors PR. Thank you and over to you. Thank you, Rayo. Good evening, everyone. We welcome you to the Q3 and nine months financial year ’25 earnings call of Hinduja Global Solutions. Trust, you have gone through results and investor presentation that are available on Exchange. Please do note that some statements in today’s call might be forward forward-looking in nature. Moving to the nature of the business, it may involve risks and uncertainties, including those related to the future financial and operating performance. I request you to consider the present sectorial scenario while analyzing the results. Please do bear with us if there is any disturbance or call drop. We would ensure it is resolved as soonest. I now hand over the call to Partha, sir for his opening comments. Over to you, sir. Thank you. Thank you,. Before I start-off, quick audio check. Am I clear? Yes, yes. Yeah. Okay. All right. Thank you. Good afternoon, everybody on the call and thanks for taking the time to listen to us and present our financials for quarter three to all of you. We have sent out a slide deck, which captures what we are going to talk you through. So I will request you to refer to Slide 4, which tells you about the company at a glance. The key thing that I want to say in this slide is since our divestiture of the healthcare practice, this business has actually transformed itself completely. What used to be a peer-play BTM player is now a tech-enabled transformation partner for our clients. We are obsessed with optimizing the customer experience lifecycle, digital transformation, business process management and digital media ecosystem. So it is no longer the company that it used to be that it was a, BPO player. And significant investments in R&D and in M&A have gone in to build technology capabilities in this company, which will augur well for this industry, which is being reshaped by massive developments in artificial intelligence. And we’re going to take you through what we are doing in subsequent slides. I also wanted to tell you that since January 2022, when we divested our healthcare portfolio, we have actually grown the business. If you look at our footprint, our footprint has grown in Australia. Our footprint has grown in South Africa where we have just set-up a shop last year. So we’ve continued to grow our business. And today we have 18,000 employees. We operate from 10 countries with 33 delivery centers. We have a big broadband business as well, which is broadband and GTD and we cover 4,500 pin across India. We have 1.2 million broadband subscribers, 4.43 million DTV subscribers and the biggest thing assurance that all of you should have is that we have about INR5,000 crore in cash and surplus arising mostly from the divest feature that we did in Jan 2022. If you move to Slide 5, you will see the operating highlights for quarter three and the nine months. Our total income stood at INR1,234.9 crores, crores or INR147 million. Operating revenue was INR1,064.1 crores, about INR126.7 million and total EBITDA was INR234 crores and INR29.9 million, EBITDA margins were 19%. For the nine months in FY 2025, the total income stood at INR3,661 crores. That’s about $435.9 million. Operating revenue was at INR3,243.1 crores, that’s $386 million and total EBITDA was INR532.6 crores, INR63.4 million in US dollars, margins were at 14.5%. Quick metrics for the business in Slide 5. Let’s come to Slide 6, where we’ll talk about some key business highlights. We do see continuing delays in decision-making on award of contracts, but in-spite of that, we’ve won quite a few deals in this year. The largest that we have had is our core IT services engagement with a banking company from the Americas, it’s a very large contract. We’ve won it in the fad end of last year and we have started ramping-up in-quarter four, but the revenues will start showing up in our books in-quarter — in-quarter one of next fiscal. We also have been able to deploy agent tech to a large public sector client, a new client in Canada for whom we are doing complete contact center transformation projects, which includes setting up of their cloud-based contact centers, manning their sense lines and other technology services. So these two wins highlight our ability to transform ourselves from being a pure-play BPA player to play in cloud, security services, contact center services and in AI. And that’s the highlight of this particular transformation that you’ve gone through in the last three years. Our sales pipe pipeline continues to grow. We have won significant new logos in-quarter three and quarter-four. Unfortunately, because they have been won so late in the year, the revenues will actually start clocking only in-quarter one of next year. And you will therefore see that quarter three and quarter-four will have some depressed margins because what you will see is that the start-up costs mostly will come in-quarter four and the revenues will start coming up in-quarter one of 2026. The other encouraging business is that our onshore footprint has significantly reduced. You will see that. Our onshore business, as you know, has lower margins. We have been successful in winning our customers who are clear onshore customers to start operating with us offshore in Philippines and more recently in South Africa as well. The result of that is that we will see a revenue decline because offshore rates are higher than lower than onshore rates, but we are hoping that we will be able to deliver better margins from our offshore centers. Other factor that we have to speak about is the simplification of our corporate structure, a fairly important piece of work that we have done. We’ve had a lot of foreign subsidiaries, mainly emerging out-of-the various acquisitions that we have done in North-America over the years. We’ve simplified the corporate structure. As of February 15, now we have merged five US wholly-owned subsidiaries with HDFCS Technology, a step-down wholly subsidiary of AGF. It’s been completed at 6. Eastern Standard Time on February 14, 2025. It is a major administrative move which will reduce lot of administrative costs that you will save of reducing number of board bidding, reducing number of audits that need to happen, all of that. So that is something that you should be aware of. I talked about expansion. Our new geography in South Africa is tracking really well. You would recall that we opened up the center and it went live sometime in-quarter three. That center is already oversold in a sense that we had taken two floors and based on the demand that we see today, two workflows are necessary and we have signed-up for two additional floors. That means that we will have a front of floor folds with approximately INR36 and the revenues from these — from this center will show-up in our books starting next fiscal year. I’m also very happy to state that we’ve taken an additional floor in Bangalore. This is on-top of our existing corporate office. This is the debt flow. We have added seats to set-up our AI hub and our support center to Support the banking client whose business we have won. I talked about it earlier. So this is again a very exciting new for us because it truly speaks volumes of our successes in slowly transforming the company from being a label-led a pure-play BPO player to a technology-led business transformation player. And I’m also happy to state that in April, we will inaugurate our first center in Waterloo, Canada. It is in the province of Ontario and this is going to serve our public sector client for the government of Ontario. Again, another hybrid sale that we’ve done, which is a combination of cloud, security, services, AI and services. So this is to talk about some exciting times ahead for the next year. Let’s move on to Slide 8 now. We’ll talk about Slide 9. Here, sustainable business. So today our business stands on three towers. The two extreme towers are the traditional CX business that we’ve done since 2000, right? That’s where we started. It is basically headcount-based, contact center. We are now transforming it to AI supported automation. We are driving cost-down through global shoring, which is reducing our onshore footprint and increasing our offshore footprint. And most transaction — most contracts that are FT-based, we are trying to move towards a transaction-based pricing and gives us an upside if we are able to deliver more through. On the extreme side, we have our technology services. This is something that we acquired in 2018, a small company called Element Solutions based out of Austin. We’ll be happy to know that our technology services were almost $90 million, which is a big growth since we acquired that company, which was about low-teens when we acquired it in 2018. We embellished that with another acquisition of in 2003. That acquisition is now over and fully-integrated. We are trying to now move from project-based revenues to managed services of recurring revenue. I talked about the banking and financial services clients. It’s a complete IT outsourcing or a GCC, we are also building new capabilities and AI-based development and implementation services. But what is most important to understand is tower digital operations, transitioning traditional services into verticalized AI-driven platform as a service. This includes AI-based unattended customer service, which is chatbox and intelligent voice assistance, AI-driven vertical process management solution and AI operations, which is data tagging and labeling. So this is the convergence of the two sides or the two extreme pillars, technology services and traditional. What we are doing in the middle tower is trying to see how we can completely transform our DTO business using technology. And this is where we are having good momentum as we are able to sell to our existing clients. The net effect of all of this is that we will have lower revenues in the short-term, but our margins will increase over-time because these are technology-based, subscription-based and because it is offshore typically gives you better margin. And we should also be able to with automation drive nonlinear recurring revenue. The two wins that I talked about that has started up in Bangalore, that is a bank which is the largest bank in one of the largest banks in the Americas. It serves about 500,000 customers in 20 plus countries. It faced issues related to core IT spend and execution as well as innovation. We have been servicing this customer from a DPO perspective. We managed their call centers, like we went and fixed our technology services to them and very happy to mention that we have signed-up a multi-year, multi-million dollar deal. It will involve hiring several tech specialists in Bangalore to deliver IT strategy and consulting services, cloud services, application development, automation and cyber security services. We are also going to deploy about 20 25 people onshore in the geography where the client operates. We are now seeing such a similar engagement from other banking clients in North-America. I want to spend some time in talking about the government client in Canada. This is a government vertical in Canada. It’s a public sector agency responsible for transportation in the province of Ontario. In Toronto and the surrounding regions, it carries about 100 million passengers annually. We have signed-up a six-year contract with them to service them on technology services. The first part of it is cloud contact center deployment, then cyber security services and then agent assisted services and AI assisted services. And the reason I mentioned these two is basically a proof point of the fact that we have now finally got endorsement of our technology progress that we have been building since our healthcare divestment. Let’s move to so I talked about it briefly. We are moving onshore to offshore. It will result in short-term revenue decline. It will not be short-term, it will result in revenue decline, but hopefully better margins. We are also moving all support services from onshore to offshore in Philippines and India. AI supported CX, Asian Text is our biggest. Knowledge assistant training has been deployed across the Americas. Asian Texas is now a part of every deal that we bid for. Multiple proof-of-concepts are in-progress with clients to augment conversational artificial intelligence and we are hopeful that we will be able to sign-up with these clients for long-term contracts in a licensed subscription model. Asian text we’ve talked about it today we’ve developed it to be able to handle 250 global languages, including support for Indian languages. It is completely human-like you will not be able to differentiate whether you’re talking to a human being or whether you’re talking to an AI chatbot. It has capabilities of voice authentication and detection it can fully automate the QA function it can listen to calls and rate those calls as to whether they are good or bad. This function used to be a human function. Now it’s been completely automated where it has the capability of judge the quality of calls. Digital operations, I talked about the fully — this is Slide 11, fully automated quality assurance. Disclosure book is being expanded beyond AGF agents to our clients’ worldwide operations even in their own centers, vertical platform as a service solutions, fully functional anti-money laundering solution being developed for our banking clients, loan original origination automation, again for our banking to its. For telco, we are developing a platform customer 360 solution for hyper personalization in telecom. And for consumer goods and retail knowledge-based co-pilot solution using Gen AI. And the reason I’m saying is that these are not horizontal solutions unlike, these are very, very industry-specific. So over the last three years, we have spent significant amount in R&D and Para will talk about in detail to develop these capabilities and these platforms, which I believe will pay us — will stand us in good speed as we move forward, Slide 12, moving from project-based to managed services, this is our endeavor. Some success can’t say it’s been a huge success, but our endeavor continues and IT outsourcing global capability center and cyber security chapters and security operating centers for both these signed-up our first clients as we speak. Slide 13, we have verticalized the sales and account management piece along three lines to improve customer engagement. So three verticals are BFSI, TMT and consumer goods and retail. Apart from that, we also have a significant concentration in public sector, focusing on pipeline growth and industry-specific solutions. We’ve also built a pre-sales consulting team and partnership with significant technology players, SAP, Snowflake, Genesis, KPMG, strategic collaborations with Microsoft and Amazon cloud services and AI Lab, our own investments in labs across Philippines, India and New York. Well, we can make tall friends. We share is a proof point slide 14 which talks about how ISG, one of the top analyst firms rates AGS as a leader on the right quadrant and we are placed
Questions and Answers:
Operator
In a quadrant with million dollar, Southerland, Found Ever, Teleperformance, WNS,, these are big names. These are dollar names and we are really a small boutique out there trying to flex our muscles and our claim to fame. Other awards in Slide 15, the one that I’m very proud of is the great places to work. Again as you know, talent is key to success in our business. We’ve been certified in Canada and in Philippines, very, very happy that we’ve been certified in the great places to work-in these two countries. With that, I’m ending my section and I’m going to hand it over to Vince for his section on the digital Media business. Over to you, Vince. Thank you, Parto. And I hope everyone can hear me. It would be good if just I get a confirmation in-line that my audio is clear. Thank you. Yes. Thank you. Thank you. Thank you. So I’ll go straight to Slide 17. And the reason why I put up Slide 17 is for a very specific reason that there’s a lot of forays and a lot of initiatives being taken to ensure India sees significant broadband growth over the next decade, if not more. One of the key challenges that the country has faced has been obviously the lack of penetration today with over 300 million homes, only 40 million homes have broadband in the country via broadband today. And I am really delighted that the government is doing everything in its power to accelerate that broadband penetration, especially if you look at it in Tier-2, Tier-3 markets. So if you look at Slide 17 and if you look at the budget 2025 impact, the customs duty cut on Ethernet switches, the main sector that it will boost is establishing telecom infrastructure for rural markets. That is something that’s very critical for us as an organization. 60% of our base comes from the rural markets of the Tier-3 and Tier-4 markets and we believe that will help tremendously. And also the fact that there is significant push by the government to provide broadband connectivity to primary health centers as well as rural schools, that is something again we’re delighted that we’ll be a part of. I mean, this is all part of bridging the digital divide. And as the Digital Media division of Hinduja Global Solutions, our focus has been clearly on that. And what’s really important for us in our business is our key performance indices and I’d request you all to go to Slide 18. Slide 18 is a reflection and a reflection of the commitment that we made at the end of fiscal ’24. At the end of fiscal ’24, one of the questions on the call was that, you know, are you going to see growth this year? And the answer was that the focus this year will be on improving profitability and more importantly, working towards sustainability. I’m very happy that we’ve been able to grow our ARPU significantly because remember that as I mentioned to you, 60% of our base not only comes from Tier-2, Tier-3 markets, but also where speeds are below 50 MBPS. So that shows the kind of potential for growth, potential for sustainability. And that is the market where we’re very happy that the ARPUs, which were at around INR169 rupees last year per customer considering that we have a business-to-business to customer model has grown to INR199 at the end-of-quarter three of FY ’25. And more importantly, if you look at the graph to the right-hand side, we again mentioned this in the last quarter that our focus is on a sustainable business also, which is not subject to the vagaries of pricing or periodic renewals and that is the enterprise segment. So the enterprise segment continues to contribute 10% of the revenues even for the period of ending, 31, 2024, the nine-month period. So that is a robust that reflects a robust diversified portfolio where our — where we are making sure our enterprise business, the managed services business all start to fire on their own cylinders. So rather than the pie getting smaller, it’s that the stakes are getting bigger for us. And in-line with that is one business, which we launched commercially in December 2024 in Mumbai. And that basically caters to the SOHO segments or what we term as the SMB, small-to-medium businesses. So that was launched in December 2024. That’s also well on song. So with that, one of the critical things that is important to also note is that we are focusing now on broadband being a sales-driven organization. The entire process of putting it on the path to profitability, the process of ensuring there’s a robust back-end, the process of ensuring that the business is sustainable and profitable. Those are activities that have been largely completed and now we’re focusing on profitable growth. So our entire focus is on building a very strong customer-facing organization, sales organization to push broadband all across the country, especially in Tier-3 and Tier-2 and Tier-3 markets. And that is actually a reflection also of the next slide, which is Slide 19. And as you all know, and I won’t make any bones about it, the linear television business is facing a lot of headwinds, right? I mean, you see it, whether it is direct-to-home or whether it’s cable television or whether it is any other linear platform are facing challenges. The one thing that we’ve worked on is rather than focusing on just growing the business, our focus has been on retention of the customers and in parallel, trying to push up the ARPUs or the average revenue per user. The way we’ve done that is by a renewed push of our integrated product. We’re one of the few companies that has the benefit of being able at the linear level to combine broadband and digital television. And that is something that has helped us ensure that the trajectory for digital television growth or rather digital television sustainability remains on song. So to kind of summarize, our driver for growth is our broadband business where we’ve seen the ARPUs grow by close to 18% over last year, which is really significant in the current environment and also reflects the potential to grow further. That is the growth driver. The strong base to be able to provide further for that growth is our digital television business, where we are at 4.16 million subscribers and where again ARPUs, which were around 116 at last year in the same-period have grown to 122. So overall, this is a very clear combined strategy for both the key flagship verticals to grow. And obviously, I’m happy to take any questions that will come up at the end of this session. But as of now, that’s all I had in terms of the slides. I thought I’d keep it tight in terms of just the KPIs. With that, if I can hand over to my colleague and Global CFO, Pala. Pala, can I hand over to you, please? Yes, thank you so much. Thank you. Pala. I hope you are all able to hear me. Loud and clear, Pala. I’m on Slide 21. This is the financial performance. So revenue from operations for the quarter came in at INR1,064 crores. Out of it roughly about 73% has come in from the BPM business and about 27% has come from the media business. And it’s not too different from what we saw in Q2 of this year, but slightly lower than what we had in terms of Q3 of FY ’24. On the depreciation side, on a sequential basis, there is a small increase of about INR4 crores, but clearly a drop on a year-on-year basis. Similarly, on the depreciation — on the interest expense, there is a drop on a sequential basis, but there is a slight increase of about INR7 crores on a year-on-year basis. On the other income side, a significant change, up from INR120 crores to about INR170 crores. And if you see it’s there part of our published result. In Q — for the quarter-ending September, we had an FX loss of about INR9 crores, INR8.85 crores to be precise, whereas in this quarter, there is an FX gain of about INR31 crores. So there is a INR40 crores impact of swing on the — which is part of the other income coming in from FX and interest, etc. and other components of other income. On a sequential basis, there is a rise of about INR10 crores. So overall, about a INR50 crore increase on the other income on a sequential basis. On a year-on-year basis, again, there was a FX loss Of about INR10.6 crores for the quarter-ending December. So roughly about INR42 crores swing on the FX gain plus increase in interest income, et-cetera. So which is explains the change in the other income side. At a PBT level, there is roughly an INR80 crores variation from a loss of INR40.7 crores in September quarter-to-quarter ending 41 December ’24, giving a profits of INR41.2 crores. However, there is substantial increase on the taxation side. This is the combination of both current tax as well as deferred tax. The current tax is roughly about INR19 crores for the quarter and the deferred tax part is close to about INR31 crores arising out-of-the timing differences. And the current tax is primarily payable in some of geographies are coming off from the treasury income. I will come to that separately. And as mentioned, you know, we have been spending about $2 million per annum every year-on the development of agent techs clearly that had an impact on the margins in the past and the current year, but we are very confident that this will give us good returns and Patha alluded to it during his section in the coming years. So that — but clearly that investment in Agent is having an impact on our margin. So at an overall level, PAT for the quarter, primarily coming in from the changes in the deferred tax, there is a loss of INR8.6 crores, but it’s substantially lower than the loss of INR50.5 crores which we reported for the quarter-ending September. So there is a substantial improvement in the performance of the company between quarter-ending September and quarter-ending December. If we go to the next slide, so I’m on Slide 22. This is revenues for the nine months ended December ’24. Revenues are lower than the previous period of nine months ending December ’23. This, this is coming primarily on account of drop-in the BPM revenue, whereas the media business there has been an increase. Out of this INR3,243 crores, roughly about 72% has come in from the media — sorry, the BPM business and 28% has come in from the media business. Our depreciation is fairly flat in the range of INR400 crores. Interest expense, there is an increase of roughly about INR44 crores. Other income, there is an increase of about INR105 crores. So with the changes in the other income as well as on the — the profit from discontinued acquisitions, which came in Q1 of this year. On a YTD basis, our PAT for the nine months ended December is INR102 crores compared to a INR43.2 crore profit for the year and for the nine months ended December ’23. If we move to the next slide, this is on the balance sheet. You will notice the total borrowings, which is basically current and non-current. There the borrowings stand at INR1,212 crores for December 2024, whereas as of March ’24, it was about INR1,305 crores. So roughly there is a reduction of about INR93 crores during the course of the year. And you would see in the subsequent slide that there is also a reduction on a sequential basis. I’ll come to that in a minute. That’s the main call-out from the balance sheet. And as you will see, we have a very strong net-worth of about INR7,830 crores as of December ’24. Moving on to the cash-flow, I’m on Slide 24. Our cash-flow remains strong. If you see for the nine months ending December, INR272 crores from operations and even if you net of the capex — sorry, the capex of INR67, we are roughly about INR205 crores of net free-cash flow. And in addition to that, we have — so that is enough to support even the payment for, there was an earn-out payment which happened in June. So it is able to absorb that INR129 crore payment as well since the net free-cash flow from operations after capex is about INR204 crores. So our cash flows remain strong and we do have a healthy balance sheet and as well. Moving on to Slide. The next slide, I’m on Slide 25. This is the overall position as a company as of December 24, we have net cash of INR5,152 crores and you would see that the borrowings have come down by INR44.5 crores in the quarter-ending September, that has come down from INR1257 crores to INR1,212 crores. So we do have a strong balance sheet and net cash of about INR5,152 crores. Moving on to Slide 26, this is revenue split by origination. About 57% comes from the CX business and 43% comes from our digital services and our digital media business. If you look at the next slide, this is revenue by origination. Our US continues to remain large, 24%. India is a combination of our media business, the HRO business and some small components of the digital business is from a delivery location. And from an origination perspective, the USA is the largest at 31% and we have Canada at 12% and UK at 13%. India comprises the HRO business and the media businesses. So revenue split by vertical, I’m on the next slide on Slide 28, the tech, media and telecom is the largest vertical at about 53%, followed by BFSI at 17% and consumer and retail at about 14%. And we have a fairly big public sector from our clients, mostly from UK and some also from Canada. Moving on to Slide 29, this is the client concentration. So you see the — from a revenue perspective, this is all — it’s fairly good. The top customer accounts for only about 10%, whereas the top-10 account for about 32%. So this is fairly well distributed from a client concentration perspective. And given the nature of business, the top customer — top pi customer, top-10 customers would all be from the BPM business. On the — if you look at the table on the right-hand side of Slide 29, a significant improvement in the DSO days. We were at about 60 at the beginning of the year. It went up because of seasonality and ramp-ups to about 65 days, that has come down to about 61 days. So again, this is helping in the overall cash-flow from operations as I pointed out in the earlier slide. So that’s all I had on my section. Now I hand it back to the moderator for the Q&A session. Thank you, everyone, for listening to us patiently. Sure. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from Nakul Day from ND Investments. Please go-ahead. Yeah. Am I audible? Yes. Thank you. Thank you for the opportunity. A couple of questions. The first one being, the media business remains a significant challenge for the company’s turnaround. So if possible, could you share some insights into the company’s plan to enhance its profitability and what key measures are you taking to drive this improvement? Yeah. Evening. Afternoon, Nakul. This is can you hear me, Nakul? Yes, yes. Yeah. So Nakul, I think the one Fundamental aspect is the media business is a significantly capital expenditure-driven business, right? And this is not unique to our company. This is across the entire spectrum in the space that we play it, whether it’s broadband or whether it is digital television. And one, although having said that, the key aspect that we look at is that when you look at the business, the main factor that we look at is the EBITDA. Are we on course for that? We definitely are on course where that is concerned. But as you asked the question, how do we perform in terms of the — where do we go from here in terms of the profitability? And as I was saying during the session, the driver towards profitability will come from the broadband business. The broadband business is continuing to grow. If you see the ARPUs from 169, it’s gone up to 199, right? While DTV, which has been the — the base business and the strength of the organization has also continued to improve its ARPUs. Now combined between both of these, we expect definitely a significant push in terms of working towards our path to profitability. I think I had mentioned this in fact right in the last call that while the business is already making operating profits, the depreciation impact is mainly due to the capex the company has incurred for expansion, right, whether it is acquiring 7-star Balaji last year broadband to create one seven-star, whether it is the setting up of equipment for the national long-distance routes. So there is a significant impact that we’ve had in terms of the depreciation for expansion. But we are clearly working on a path to breakeven at PBT levels. We have a horizon. I mean, it would be — it would not be correct of me to kind of put a number to it, but or a date to it. But I believe between the 24 to 28 month period at a PBT level, we definitely expect to get there. Would that answer your question? And the second part to your question, Nakul, was what are the initiatives? So the initiatives are, first things first, we’ve entered the — we pushed the enterprise segment significantly. If you look at the enterprise segment, earlier, it contributed a very small percentage of our revenues. And enterprise has two great advantages. One is the ARPUs are very, very-high because obviously it’s the enterprise segment. Second is that it works on long-duration contracts, right? You’re talking about minimum of 12 months going up to three years, four years, five years. So you’re assured in terms of your revenue realization and your revenue assurance. So we are continuing to focus on the enterprise segment. But at the same time, the second big initiative to tell you, Nakul, is that 60% of our base today and this is very important KPI, 60% of our base is actually in the speed range of up to 50 MBPS. Why? Because those are mainly in-markets in Tier-2, Tier-3, et-cetera. So for us, it’s not just growing the subscriber base. We don’t need to necessarily just go out and push for more customers. We also have the inherent advantage of upselling and upselling not only to the lower-usage segments like a 10 MDPS segment or a 30 MDPS segment, but also to the digital television base that we have. So that has been our key initiatives in Q2 and Q3, and we will continue to push those initiatives right through right now. So as of this quarter, our focus has been on how do we build a strong customer-facing organization and see significant sales orientation. So there’s been a lot of activity in terms of building a strong sales organization. That is the other aspect that we focused on now that all the building blocks are together. So Nakul, with that, I hope I was able to explain myself. Yes, this is very, very rarely laborative what I wanted to understand. Thank you. Two questions that I had before. The next one being that in the previous call, if I was not wrong, you mentioned the Internet was internet through a satellent. Correct, correct. Could you provide an update on this development over the past quarter and what is its growth outlook in the coming quarters? Okay, sure. So Nakul, if you recall, we were hoping that the licensing process would be eased off and the Telecom regulatory Authority of India was going to work on a structure. And unfortunately, as of today, there is still a bit of gray area around that aspect. The one thing we know is that the couple of international players that were looking very closely at India have complied with the — with the laws of the land that are required to secure a license. So that’s good news. From our perspective, we are continuously engaged already, as I mentioned to you in providing services. So for us, all we’re doing is kind of waiting on the sidelines and for that to take-off. Will it take-off? Absolutely. I think there has been strong — yes, let me be clear, the government is very, very clear on bridging the digital divide, right, whether it is the Tier-3 markets or rural markets, there is a strong push towards digital inclusion across all parameters. And I think it’s a matter of time and not how, when we’ll be able to see some traction. But I think time is the key question that we’re kind of all waiting on. If I ever get an update before that, I’d be happy to share that, Nakul. I understood. Understood. If I can squeeze in one final question, how much further could we scale in South Africa and how further do you think we can improve our revenues and profitability in the best-case scenario. Pala, would you like to? Nakul, as you say we started operations in beginning, I mean, somewhere around June, July and already the demand is strong for us to take additional space and expand capacity. Being offshore, we believe that it will have better margins than what we would see if you’re doing the same revenue in US or UK. So that’s what I would like to say broadly in terms of where we expect the business to go. Okay. Okay. That is really helpful. Thank you. Thank you so much for your — for giving me the opportunity. In case I have any further questions, I’ll join the queue. Thank you. Thanks for your question. Thank you. Next question is from Mitil Bhuva from Analysted India. Please go-ahead. Yeah. Firstly, I’d like to congratulate the management that Agility is now a listed company with over INR20,000 crores of market cap. Any comments on that from the management? Well, as you know, I mean a correct company no, I mean we know that it has been sold, but still it was the healthcare unit, right, of year. So yeah. So it basically talks to the inherent value of the businesses that we build, which so we don’t get easily recognized by the stock market. So even now, if you look at our stock prices, it’s not reflecting of the core value of the business. We have to understand where the business is, right? Let me take an analogy and if you don’t mind you will taking an analogy which is more day-to-day as opposed to business, you know if you’re into gardening you will prune a tree hoping that the tree will go back. Now once you’ve cut the leaves of the tree which is what represents the healthcare business the tree takes time to go back to grow strong we’ve also transformed the company from a pure player BTO player to the technology player. It takes time. So you know, that’s why I know there is impatience. I know that there is concerns about revenue decline and profitability. We’ve tried to cover that as to what is happening in our business, how we are changing things up and how we are setting ourselves up for success in a world driven by AI. It just needs time. And like the healthcare business in the past, the value will be understood once the transformation is over. So I had a couple of questions. Firstly, on the INR5,000 crores cash that we have on the balance sheet. So we have deployed that in the group companies that is Machan Dave Corporation, Finance, INR2,000 crores, Machan is around INR1,000 crores. So can you just highlight like are these long-term finance that we have given them or is it short-term in nature? So when we transfer the funds on a, all I can question please? Yeah. These are primarily short-term and we have the ability to call-back these funds as and when required. So let’s say we were to make an acquisition then — and if we need the funds, these are available to be called back. So it can be called back anytime. So it’s a short-termination. Yeah. For example, Corporation, what will be the yield on the ICD? Broadly speaking, for funds which are outside, we are all — I mean on we are in the range of around 6% plus on in dollar terms. So any areas where we want to deploy this particularly because very significant amount. So — and any timeline within which we want to do this? So we continue to look for opportunities where it where there is business energy and we expect these to be all-in the space of digital AI automation. And where — so that’s a broad direction where we expect to get new capabilities or new technologies, which we can implement for a growth. That’s where we are headed from a direction point-of-view. Obviously, you know, as and when a transaction happens, we will — we are required and we’ll make the announcements. So at this stage, I will not be able to say anything more. Okay. Sir, the other question is on the DTV side. Are we like planning to collaborate with some big celebrity who can understand this business very well? Well, like on the sales front, they know what else. Like when I see the subscription paid channels, we have paid around INR540 crores last year, that was year-ended 2024. So are we in technical collaboration with some celebrity who understands this content business very well? Sorry,, I didn’t understand. In terms of celebrity, are you referring to an individual or something who can — yes and for example, if it’s, so he understands the content so very well that what content sells actually sure. And last year we see that subscription pay channels is around INR540 crores. So are we yielding any money on that or no? That’s what I’m trying to understand. So the content cost is purely the pay channel content that we bring on-board, right? So for example, last year would be start television, Viacom or Geo, which is the channels like colors, et-cetera, then Sony, then Z, all the pay channels have a content cost, which we kind of distribute to our customers and then who pay us obviously for the packages, right? What we work on in terms of the brand marketing, see, our business is mainly B2B2C. So if you had a brand ambassador, your challenge will be that there will be significant what we term as marketing wastage. I’ll give you an example, right? For example, if I advertised a digital television in Mumbai, and the chances are there would be a significant wastage because the cable operator that connects to your home will be either aligned to NextDigital or you may be aligned to a competitor. So even if you wanted my service and you are in an area of, let’s say, competitor one, it may not be possible necessary for you to switch your service. So that is where the use of a, you know a kind of, a marketing icon becomes a challenge. On the other hand, broadband is something that we’ve been looking at. I’m not sure if you’ve got — we’ve been advertising recently over the last quarter, there’s no real brand ambassador. It’s been more family orientation because our whole idea is to show that our brand is something for everyone, whether it’s — whether it’s a daughter doing a homework using a laptop, whether it’s a grandfather kind of supporting someone with a recipe or whether it’s a child and his mother playing a game, and I think what we’re doing is first establishing that one broadband is a very powerful brand that can basically provide connectivity to the whole family. Would we have thoughts in future about having a brand icon? Absolutely,. I don’t think the idea is out-of-the way. So I appreciate that. Actually, I was not referring to the branding part? I’ll rejoin the queue as there are several participants waiting for the show. Yeah. Sorry,, maybe my answer is sure. I’ll just complete it that branding is not for the marketing, but for the strategy, like what content really our subscribers are looking out for now? So someone smart like Shahru can’t understand that what is the content that really sells? So I was just referring to that. I’m just okay. Got you. Duly noted. Duly noted. Thank you. Thank you. Next question is from Amit Akeja from. Please go-ahead. Good evening and thank you for the opportunity. Am I audible clearly? Yeah. Yeah. First of all, congratulations and I appreciate a lot to all the three companies like Mr Partha Desarkar, Vin Anandesh and Mr Sriniwas, because like the presentation is excellent and the speech which I gave is just explanated for most of the things and I appreciate the presentation. My question was connected to the use of cash. Like are the company having any potential dividend buybacks or investment plans for using the cash? Hi, this is Para here. So as you know, we’ve already completed the one buyback in the month of June of ’23. So that’s so we returned about INR1,020 crores of cash to the shareholders. So most of the funds which we now have are abroad to do the buybacks would mean bringing the money to India which becomes tax inefficient to start with. And as you would know that the changes made in tax tools last year, our, our buyback is no longer efficient for from a shareholder perspective as well, right? So we’re not sure that’s the best way to utilize the fund. We would rather use the funds for growing the business organically or through acquisitions, as I mentioned in response to one of the earlier questions. And sir, are there any plans to reduce the debt further given the strong cash position? Yeah. So you know wherein possible, we will reduce cash as we have demonstrated during the quarter and during the year. As long as we don’t run into prepayment penalties, etc. Thank you for the applies and all the best for the future. Thank you. Thank you thank you. Next question is from Ranga Prasad, who is an Individual Investor. Please go-ahead. Good afternoon, everyone. At the outset, let me say that I’m very enthused to note that the management is very optimistic of better performance in the quarters to come, especially in improving the operating margins. I’m also very happy to note the improvement in profitability of the Media division. Hopefully, this signals a turnaround, which will continue in the quarters to come and ask to the profitability of our company. Now my question relates to the high-level of deferred taxes. Can we expect this trend to continue or it’s a one-time thing? I mean, in the quarters to come, will there be high levels of deferred taxes? And the second question is with the finance cost of INR174 crores, even when we have a cash and treasury balance of INR5,000 crores, can we expect to see a reduction in the interest cost in the quarters to come? Because that will add to the profitability of our company. Thank you, Mr Prasad. This is Sala here. So if you look at the interest component and so they are basically, broadly speaking, two, three broad components on the EBITDA, so two broad components on the interest cost, right. So one is the actual interest paid on borrowings. And as I’ve said, we are seeing a reduction in debt borrowings during the course of this year. The second component is basically what is coming out as accounting from IFRS-15 or India is — IFRS 16 or India is 16. Whenever you have property or exacts or anything which you take on lease from an accounting standard point-of-view you will have to create additional interest and depreciation. So that is the one which may increase because you may take a new office premise on these or you may lease a transponder or lease set of boxes or those — those kind of transactions. So as I said, on the interest side, attempts are made to reduce debt and reduce the interest cost and we’ve shown the reduction in borrowings. So I hope that helps. Second, on the deferred tax, I think Q3 was extraordinarily high. So going-forward, we expect those amounts to be lower as we go through on a go-forward basis. Thank you. Now my — I want to make an observation on the media division. I’m really very enthused about the performance. The segment-wise performance shows that it’s actually shown a profit of INR10 crores before our unallocated interest. That’s very good from a loss of INR43 crores last quarter. So I’m hoping that this does include indicate a turnaround and not just a one-time one-off quarter. MR. Can explain on that. Sure. So, sir, good evening to you, sir. And nice to connect with you again. Thank you so much for your support. And you’re right, we’ve been working very hard, as we’ve assured you to — and you can see it from the revenues itself on a year-on-year basis. And I’m going to ask my colleague, Amar to explain it, but it’s a combination of a lot of cost rationalization that we’ve done, bandwidth negotiation, transmor negotiations, broadcaster costs. So there’s a lot of those activities. So Amal, if I can respect request you perhaps to explain that more from a high-level for Mr Angla am I audible then? Yeah, loud and clear. Yeah, good evening, Mr Prasad, nice and you so coming to the profitability swing from a negative of INR42 crores to a positive of INR10 crores. There are a couple of two, three components in that. One, of course, there is an other income increase as you may have seen. Our other income has increased by about INR20 crores because we keep looking at how can we sort of monetize some of our passive assets, which for which we have invested in the past, but whether we can monetize it because the business needs cash. So that’s roughly about an increase of about INR20 crores. Is that a one-time effect, it could probably recur because it’s not that we monetize all our assets, we keep looking at, which are the ideal assets which we can monetize. That’s point number-one. The remaining increase is caused by the cost rationalization. There are three components of our costs which are very, very — which are very critical. One is the broadcaster cost, which is the main cost. Then we have transponder, satellite transporter costs and third is in the broadband business is the bandwidth cost. So as far as the bandwidth cost, like Vince has explained in the past, we have been renegotiating with all the bandwidth providers and we have had a significant saving in the bandwidth costs as far as broadband business goes on its path to profitability. As far as the broadcaster cost goes, yes, there has been a renegotiation with the broadcasters because like every other MSO, we’ve also renegotiated with the broadcaster on deals and sort of arrived at a variable-cost model with them that if the business grows, then the cost grows. Otherwise it’s at a steady-state. The third, of course, is the transponder. Transporter, again, we have been going back to the satellite service providers because whenever there is an interference, solar interference or whatever it is, we definitely go back to them for certain discourse because there is lots of revenue. So a combination of these three costs on the cost side and the other income has actually resulted in the profitability. And we believe that it is a sustainable change. Thank you very much. I’d like to congratulate the entire JX team for putting a very informative presentation. Thank you very much. Thank you,. Thank you, sir. Thank you. Thank you very much. We’ll take that as the last question. I would now like to hand the conference back to Mr De Sarkar for closing comments. Thank you. Once again, I’m very happy to be with you and looking-forward to another engaging conversation at the end-of-quarter four. As you realize that we are in the middle of a transformation of a business which was very traditional, very clearly into a technology powerhouse. It takes time. I would ask you guys to be patient as we go through this journey and I’m sure you will see more value being added to your business as we improve our profitability that and that way. I’m going to finish this call today thank you, everyone. Thank you. Thank you very much. Thank you. Thank you very much everyone. Thank you. Thank you. Thank you. On behalf of Hinduja Global Solutions Limited, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines. Thank you.