Hinduja Global Solutions Ltd (NSE: HGS) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Unidentified Speaker
Partha DeSarkar — Executive Director and Global CEO
Vynsley Fernandes — Whole-Time Director
Srinivas Palakodeti — Global CFO
Venkatesh Korla — new Global CEO
Mahesh Kumar Nutalapati — new Global CFO
Anand Venugopal — NA
Prisha Shah — NA
Analysts:
Unidentified Participant
Ranga Prasad — Analyst
Hina Parekh — Analyst
Ravi Vadaga — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Hinduja Global Solutions Limited Q4FY25 Earnings Conference Call from the senior management. We have with us today Mr. Partha D. Sarkar, Executive Director and Global CEO at GS Mr. Winsley Fernandez, Whole Time Director at GS and CEO of the Media business and Mr. Srinivas Palakkodeti, Global CFO at GS along with Venkatesh Korla who was announced as the new Global CEO yesterday and Mahesh Kumar Nutalapati, the new Global cfo. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Venugopal from Ashfactor PR. Thank you. And over to you Mr. Venu Gopal.
Anand Venugopal — NA
Thank you Ranju. Good evening everyone. We welcome you to the fourth quarter and financial year ended March 31, 2025 earnings call of Induja Global Solutions Ltd. Before we begin the earnings call I would like to mention that some of these statements made in today’s call might be forward looking in nature and hence it may involve risks and uncertainties including those related to the future financial and operating performance. Please bear with us. If there is a call drop during the course of the conference call we would ensure the call is reconnected the soonest. I will now hand over the call to Pata sir to share his views.
Over to you Pata Sir.
Partha DeSarkar — Executive Director and Global CEO
Thank you very much and a very good afternoon to all of you. I hope my audio is clear. I wanted to start with the PowerPoint that has already been uploaded on the website. It gives you the snapshot of AGS’s financial performance. For the last quarter our total income stood at Rupees 1,297.7 crores. That is 153.4 million in US dollars. Operating revenue was 1,161.1 crore US dollar 137 million and the total EBITDA was 279 crores US dollar 33 million. EBITDA margins were at 21.5% for the full year that we just closed. The total income stood at rupees 4,958 crores US$586.1 million.
Operating revenues was rupees 4,404 which is US$520.6 million and the total EBITDA was rupees 811.8 crores US$96 million. EBITDA margins for the full year were at 16.4%. A short slide which is slide 5 on the qualitative summary of the business where we stand. There are some headwinds that political uncertainty is causing. All of you are aware of that and this is resulting in some amount of elongation of the sales cycle. Okay, so given that reality, we have got our sales teams focused on shorter and smaller projects. The good thing is that towards the end of the year we’ve been able to sign up quite a few new clients which the full year effect of their revenues will be visible on the next fiscal year.
We have seen a significant expansion of the margin and our sales pipeline continues to be very healthy. We have also last quarter appointed our UK CEO, Mr. Anshumant Singh and there is a significant focus in UK in digital operations in addition to the focus that we had on our North American markets. Offshoring services continue to be in full demand and as I said, quite a few new contracts were signed up in quarter four itself. So we’ll move to the next slide. As you would have read, heard, seen AI and Agentic AI, significant impact of that on the traditional CX businesses.
We’ve of course been in the thick of action in all of this because as you know, our Agentx platform, we have been investing on this platform for the last few years. We have added a lot of AI functionalities to our Agentex platform. We’ve also partnered with startups and tech players to integrate their AI offering into our product where there are features like language, translation, voice authentication and even deep fake detection. Quite, I would say very, very rich. Technology is now a part of our Agentix suite Digital services. AI is there in everything today. All our service offerings today are coming with AI.
And the other thing that I would like to call your attention to that our AI labs and these AI labs are in many countries as we speak. They are partnering with our clients in a sandbox environment to pilot many AI projects and that is eventually the path to AI adoption of our clients. So we are very encouraged by the trend that our customers are increasingly warming up to the idea of introducing AI in their customer journeys and our AI labs are a big part of the process. Our go to market strategy, as you know, have also now become vertical focused.
We include banking, financial services, consumer and retail and technology, media, telecom. These are our three main verticals. The difference is that we have and I mentioned this briefly in the earlier slide that we have been targeting middle market clients with AI LED vertical solutions. So fraud detection and anti money laundering, automated loan processing, customer insights. These are the kind of solutions that we’re taking for each of these verticals and these are all AI led. These solutions did not exist earlier. These are solutions that we have invested money in and we are bringing those products to the market.
Next slide Key Highlights of the business we have 375 active CX and digital clients and our HRO practice has 833 clients. Customer base of our DTV and broadband business is 6 million. We have 2 lakh plus partner fiber networks covering key cities and towns. We just opened a new center in Bengaluru for tech services and a CX hub in Cape Town. Across the world we won 18 hours business, technology, HR and CSR segments. Now in nine countries we have 32 delivery centers. Our employee strength is 18,347 gender ratio and this is something that I’m very proud of.
Our gender ratio is a very healthy 44%. The other certification that I have to mention is the fact that both AGS Canada and AGS Philippines were certified as Great Places to work in February 2025 and our CFR programs benefited 11 lakh people through formal programs and employee volunteering activity. Also this month. Earlier this month, 14th of May, I was there in Waterloo Canada which is on the outskirts of Toronto, about an hour’s drive from Toronto, inaugurating our Canadian AI hub. About 150 jobs will be created. It is going to be our flagship brick and mortar branch in Toronto, Canada.
We’ll focus on advancing AI led CX automation data science. It was launched on May 15, was attended by clients, partners, government and industry leaders. Very happy to see that. With that I bring you to slide nine and introduce us to our new Global CEO. Venk is on the call. Venkatesh Kolla. Short form Venk. He’s known as Venk everybody. The board has approved his elevation to become the President and CEO of agsc. He was the President and CEO of AGS America and he will now be taking over from me Fraud as a global CEO of HGX.
He’s an accomplished business leader with 25 year plus of experience in core digital services and tech enabled customer experience cx. He’s a technologist at heart. He’s passionate about harnessing the power of technology, data and artificial intelligence to enable brands to digitally transform the customer journeys. He has had an impressive track record of growing high performance teams he founded Element Solutions which we acquired in 2018 and now is a part of the foundation of Edges tech services business. So he has been with us since 2018 when we acquired his company. A very successful entrepreneur and he is taking over from me as the new Global CEO of edgs.
This will be my last earnings call and from the next quarter onwards you will hear directly from banks. So with that I also want to introduce the other new member in our team on slide 10, Mahesh Kumar Nutalapati. The board has approved his elevation as well. He had joined us as the Deputy cfo. He now becomes the Global CFO of ags. He joined AGS in February. He’s a Chartered Accountant with about 24 years of experience in various aspects of finance, extensive expertise in financial transformation, risk management, business enablement. He will play a pivotal role in driving financial strategy and operation experience excellence.
He has perhaps multiple cost optimization initiatives and contributed significantly the formulation of ESG frameworks in his previous stints. So he is taking over from Sinivas Pala Codedi who has been our CFO for a long time now. So both of us, both me and Pala are handing over our roles effective yesterday to Venk and Mahesh respectively. With that I am going to now hand over to Venk who takes over from me to take you through market trends and our strategy going forward. Over to you Venk.
Venkatesh Korla — new Global CEO
Hello everyone. Thank you and good afternoon. Thanks for joining. I hope you can all hear me. Okay, so from a market trend standpoint our strategy has been to be building a sustainable digital LED business and we have taken what was our process management business and our technology services business and we are bringing them all together over the last few years and been working in scaling into scaling the technology services business create a new area for us called AI powered Digital operations which is focused on essentially executing process management AI led technology and then of course continue to invest into process management solutions with workforce deployment as needed.
Going to the next slide. The world is also further evolving, right? Every year, every few months you’re having new innovation AI and technology that’s showing up. With the current changes in the agentic AI capabilities that are coming out, we are starting to see that the manual business process management work has significant long turnaround times, time zone barriers, human error or black box processes which can deliver consistent outcomes will get automated or be worked on collaboratively with human workforce and AI capabilities jointly together and create productized outcomes. The common work that will be affected by this type of next generation AI agents will be call center operations Data processing, financial reconciliation, IT management of applications, HR outsourcing, all these different areas that we play in, we see that there’s going to be an impact.
Going to the next slide. Our strategy for this agentic AI opportunity is that three pillars we are looking at AI strategy and implementation services where we take an advisory to a full custom build role. It is contracted on a project fee basis with our customers. Second, we are taking an AI enabled package solutions where we use it as a value add and sell it as accelerators. The scope for repeatable delivery and it’s typically license of the packaged best practices and intellectual property along with project fees that we charge for that particular type of business. Third, with our investment in Agent X, what we have done is we are now converting that into more of a process management solution beyond just purely call center support products where we can actually execute AI enabled digital operations.
Where we’re going to have pre built blueprints for vertical and horizontal use cases where we’ll be able to execute end to end processes and charge fees for transactions. The experience that we have gone through in our own transformation journey positions us to lead by example for our customers. Going to the next slide One of the approaches we are taking for packaged solutions is that it’s not just a product and it’s not just a service. It’s a bridge offering the confidence of the product and the flexibility of compulsing services that the customers will get. The key objectives of that is to accelerate time to value for our customers, expand revenue through repeatable solutions.
Delivery efficiency, position us as a solution led partner, not just a service provider. And we’re also going to look to increase market penetration core verticals by creating solutions in the verticals of consumer goods, and retail BFSI and CMT. In FY26 our plan is to launch our initial set of solutions with prioritization based on market demand. We plan to establish a dedicated package solutions team, product delivery R and D and go to marketing. And we’re going to align that with our sales and marketing to drive new logo acquisitions. Going to the next slide the evolution of agentext itself for our digital operations.
We started off using it to operate better by increasing our productivity and lowering some of our costs which has resulted in improved margins over the years over the last couple of years. Then we move to the next area which is to deliver better where we’re able to deliver more efficiency, efficacy and value for our existing customers through a better quality of delivery. Using AI to provide interaction, intelligence, extract insights and drive outcomes. The future as we see it is to change the game, which is the journey we’re embarking on now, which is to create autonomous agents to run the processes to differentiate from our competitors.
So they’re going to go beyond sia, create vertical specific feature bank offerings and develop new high impact revenue and operating models which are primarily transaction based. With that, I’m going to hand off to Vinslee to talk about the digital media business.
Vynsley Fernandes — Whole-Time Director
Thanks Venk. Good afternoon everyone and thank you all for joining in on a Thursday afternoon. Truly appreciate your time on this call. First of all, welcome Venk and Mahesh. Good to have you all on board the team and we look forward to together taking ags, obviously up and beyond coming to the digital media business. I’m going to go to slide 18 as I promised in one of the calls, always to be able to kind of give you a heads up what’s happening in the industry. I think these two, the two news articles says it all.
On the right side you’re seeing the digital television business which is being buffeted, or rather buffeted by significant headwinds, where the pay TV industry has certainly faced a decline in subscribers, OTT becomes more popular and of course DD free Dish, which is the free service in YouTube. But the fact remains that even as of today, linear television, where your company has the only head end in the sky platform in the country, still reaches 900 million audiences compared to about 540 million. So while it’s having a hard time today, we certainly we’re not throwing in the towel and we’re continuously working on areas that can improve and make the leap to digital.
On the other side, on the left side, if you look at it, very interesting because this is something that we, that actually is linked to our history where we have over the last nearly three decades been building a strong local cable operator network across the country as part of our Hinduja Group’s Partnership for Growth philosophy. Today we have over 10,000 operators and these operators are becoming critical for expanding wide broadband in the country. We all know that today that the wired broadband base has already crossed 41 million and we expect that to potentially double by 2030.
I mean, interestingly, as the news article says, even then it will account for only 4.4% of the total broadband user base. So the amount of headroom that’s available for growth of wide broadband in the country that requires speed, that requires bandwidth, et cetera, is going to see exponential growth. And it’s clearly, I mean, you know, and rightfully so, it’s called one of the sunrise sectors in the country today. Moving to slide 19. This kind of reflects exactly what I’ve been saying. So why the. On the left hand side, our broadband business has been nice and stable.
On the back of, you know, we’ve been expanding through the Pan India digital television base and the reason why our main where they are is that we are focusing on Tier 2 and Tier 3 markets. We’ve always been strong in semi urban and rural markets. We know those are the aspirational markets, we know those are the markets where the government is very, very clearly focused on digital inclusion and therefore we are very, very keen to kind of support those markets actively in terms of broadband. And that’s on the left hand side. So the Arpus have stayed at around 179 rupees which is a very healthy arpu for the business.
On the digital television front of the DTV front, even though there have been significant headwinds that have affected the subscriber base, our team has worked very, very hard to be able to ensure that the ARPUs or what’s average revenue per user have actually improved significantly. If you look at it, and that is a result of the innovative packaging that we do for markets. There’s a lot of new content that we push on, there’s new packages that are created for regionalized rural markets. So all of that put together has helped push the digital television arpus up.
That’s on slide 19, on slide 20. It’s something again that I promised that I would share in every quarter and I’m really happy to do so. Our entire focus last year has been on the segments which provide greater value creation and value accretion. So organic growth, if you look at it, has improved year on year. If you look at the graph on slide 20 on the left hand side, the organic base has improved as well as more importantly the enterprise business which is celeritics, has increased and contributes about 3% to the total revenue that is generated by the broadband business.
Our strategic alliance partners, which form a very core of our business. It’s not like the percentage contribution, the percentage contribution has gone down. But the interesting part is the pie has become much bigger. So we look to continue to grow the top line and the base and for the organic retail business to keep on contributing significantly. So if you look on the right hand side, the revenue mix by segment shows you exactly how each segment of ours started to contribute. And therefore one very important thing this does, and probably I can’t stress on this enough, it de risks the business model to a Great extent as celeritics, which is purely an enterprise business.
Bulk bandwidth, which is again mainly providing bandwidth to smaller partners and of course organic and sorry, joint ventures in organic start to contribute significantly and therefore make sure that as a business we’re on the right track to provide each segment is robust on its own. That’s on slide 20 and request moving to slide 21 as we start this new fiscal. Can we move to slide 21 please? Sorry, am I losing audio? Can you all hear me? Yeah, okay, I think we’re still stuck on slide 20. Father, are you able to see which slide is on?
Srinivas Palakodeti — Global CFO
Yeah, I mean I’m looking at my screen. I’m on site 21, but I’m okay on my screen. It’s okay. Continue.
Vynsley Fernandes — Whole-Time Director
No, no, no, no, I’ve changed it. Sorry, sorry, sorry. I just. Sorry, I just realized my error of my way. Sorry. So moving on to slide 21. If you’ll move to slide 21. I apologize for a moment I thought it was being controlled centrally. I apologize for that. If you all move to slide 21. This is again very critical from a perspective to be able to understand where we go from here. As I mentioned to you at the start of my segment, the broadband base is projected to double in the next five years. Now the reason why it’s quite interesting, it has taken us about 15 to 17 years to reach about 41 million.
And it is projected now to literally double in the next five years. As digital proliferation increases, gaming increases, people want higher bandwidth, people want connectivity at their homes, Cybersecurity starts to play a very critical role. Banks and other institutions want data or want connectivity on tap. So all of that put together looks like the industry is going to see some significant growth over the next five years. So our focus is, we are looking at three key aspects on focused pillars. Actually the first is if you look at the left hand side on Slide 21, we’re focusing, continuing to focus on segments where we have our digital cable operators present because we already have a presence and therefore the cost of acquisition is lower where the entry barrier is low and quality of service is very important.
So as I mentioned, we are focusing on tier 2 and tier 3 markets. That is a very important thing. And then upselling to improve ARPUs. And I’m going to pause here for a moment and just spend 30 seconds on it. Interestingly, today the speeds in India are still well below the. I mean the majority speeds are still well below 100Mbps. While most of the western world and everyone else is migrating to much higher speeds. So we believe that there’s great potential to also upsell and, and that is one of the three factors that will play a significant role in growing our retail organic subscriber base.
The second thing is, and something that the Hinduja Group is very good at doing, is building a mini entrepreneur model. We’ve done it in the digital television business before. We built entrepreneurs and partners pretty much who’ve been with us for decades. And the idea is to expand into underserved markets through aligning with these local entrepreneurs and build a new network of partners for providing broadband and other digital services, including IPTV as well. Which just to let you know, we’ve just rolled out a test case in Bengaluru and we look to expand it to the rest of the country.
The third piece, of course is Celeritics, what I just shared with you. This is effectively the youngest member of the group Celeritics where we’ve been focusing on the enterprise business and Celerityx will continue to focus on mid sized tenders. There’s a lot of traction we’re seeing in working with enterprises and we’ll focus on not just growth but also an expanded portfolio of solutions, something that Venk was talking earlier. As you know, there’s a lot of synergy between our CX business and the media business and this is one vertical which has leveraged that opportunity to the maximum with internal development happening for solutions that we can offer to our customers.
But for all of this we require the fourth pillar which is building a very strong sales oriented organization. There’s a lot of activity happening on that front. We’re very happy to welcome some senior people on board across, you know, structure across areas like commercial control, product development and of course customer experience, especially as we move into tier 3 and tier 4 market, sorry, tier 2 and tier 3, what becomes important is tech support and of course a very strong customer experience. And since we have a backbone of digital cx, we believe that we can leverage it very strongly for us going forward.
So all the four pillars are pretty much focused on driving growth in the broadband business, being a sunrise sector and with the industry expected to double. And very clearly, even though it faces significant headwinds, we believe our digital television business remains resilient and we’re able to ensure traction as we go along and as we see more offtake happening in the smaller markets. Thank you very much everyone for listening to me patiently. With that, I’m going to hand over to my colleague Pala Pala, if I can pass on the baton to you. Thank you.
Srinivas Palakodeti — Global CFO
Thank you, Vince. I hope you’re able to hear me.
Vynsley Fernandes — Whole-Time Director
Clearly, loud and clear. Yeah.
Srinivas Palakodeti — Global CFO
Thank you. Thank you everyone for joining on our Q4 and FY25 earnings call. I am on Slide 23. These are the results for the quarter. As you would see on a sequential basis revenues are up from 1064 crores to 1161 crores. And as you will see in the segment analysis on the our publication page, both the BPM business and media business have shown growth in revenues on a year on year basis. Sorry, on a sequential basis. On a year on year basis there is a small dip dip gradually coming in from the BPM business.
As you would see also the depreciation has seen a reduction on a sequential basis. And at the overall level the PBT for the quarter has come in at 103.5 crores as compared to PBT of 41.3 crores. For the quarter ended December of 24. And. Quarter ended March 24th PBT was in the same range of about 41.4 crores, same as what we had for quarter ending December 24th. Tax is 105 crores. That is significantly higher than the 50 crore provision for tax that is primarily becoming from increase in the deferred tax. The details of the split of deferred tax and current tax are there on the publication page. So at an overall level PAT for the quarter came in at a loss of 1.7 crores which is significantly lower than the loss for Q3 of FY25 and you could almost be a near break even for the quarter ending FY24.
And this has been driven by improvement in the EBITDA margin where EBITDA margins have improved from 19% for quarter ending December 24th to 21.5% for the quarter ending March 25th. Moving on to slide 24 this is the full year on year numbers. You will see there is a drop of around 200 crores in operating revenues between FY24 and 25. This drop has come primarily from the drop in the BPM business. The media business has grown close to about 1718% on a year on year basis. There is EBITDA margins have been stale in the range of 16.4% an improvement of 100bps over FY24.
There is reduction in depreciation but there is an increase in the interest expense. Other income has shown an increase over FY24. So at the overall level PBT has come in at 59.8 crores compared to 110.5 crores. Total tax for the year has come in at 177.7 crores. Bulk of this is coming in from the deferred tax line. And at the overall level, profits for the quarter sorry, profit for the full year has come in at 100.7 crores as compared to 131.2 crores. And you would note the profit of 100.7 crores includes profit from discontinued operations which was reported in Q1 of FY25.
Moving on to the next slide. This is the balance sheet. We have a strong balance sheet. Our total net worth is about 7855 crores. If you see our total debt we are at about 1187 crores. So we have a very strong balance sheet and our gearing ratios are low on the surplus, treasury and cash surplus. I’ll come separately from a cash flow point of view. I’m on slide 26. We had strong cash flow from operations. After factoring into account the working capital changes that has increased from about 192 crores in FY24 to about 457 crores in FY25.
About 502 crores has gone towards investment. One thing to call out is there’s an outgo of 127crores which was linked to the earn out payment for the TechLink acquisition. Overall the total cash which we have cash and cash equivalent for the year have increased from 675 crores to 752 crores at the end of the year. Moving on to slide 27. This is the position on the gross treasury and cash surplus as well as total debt. Our total debt has reduced by about 25 crores between December and March whereas there is a small decrease on the treasury and cash surplus about 10.4 crores.
So on an overall basis our net treasury and cash surplus has increased by 15.4 crores and stands at 5168 crores as of 31st of March 25th. Moving on to revenue by composition from a split perspective, our tx services delivered 54% for the quarter and 56% for the full year. Our digital services both from the BPM business and the media side that stand at 46% for the quarter ending 25 and it’s higher than 44% for the full year. So clearly second half last quarter the share of digital revenues have gone up. Moving to the next slide.
Revenue by composition on the origination side, if you look at From a full year perspective, India accounts for about 37%, US 30% UK 13% Canada and Australia account for about 18%. Moving to the next slide, slide 30 on revenue by vertical on a full year basis tech, telecom and media accounted for 50% 54% not too different from what we had for Q4 BFSI there is a slight increase from 16% for the full year compared and in Q4 it came in at about 18%. Others no major change. The public sector is there primarily from UK and the Canadian market.
Moving on to slide 31. This is the client concentration. Our top customer accounts for 8.3%, the top five for about 21% and top 10 for about 28.5%. Obviously the media business is mostly on the B2C side, so all the clients come in from the BPM business. But you’ll see we have a fairly distributed client across so the top 10 accounting for about 28.5%. In terms of DSO days it remains healthy. It has dropped by about three days between Q4 of FY24 and Q4 of FY25. So there’s an improvement of about three DSO days. And as you’ve seen from the cash flow statement, our overall cash flow from operations remains strong and our clients are all in good stead.
All healthy clients. So before I conclude my presentation, as Partha mentioned, I’ll be stepping down retiring by end of June. We have a new CFO and CEO. So I’ve been with NGS for about 15 years so probably about 60 quarterly earnings call. Partha has been around for much longer so I suspect he must have crossed the hundred mark by now. So thank you for all of you for being participating in our earnings calls, for the interest shown, asking, giving us meaningful insights, asking tough questions where required, keeping us on our toes. And thank you for all the support and encouragement in good quarters and for asking the right thought provoking questions if the performance was not as per your expectations.
Thank you for all once again for all the interest shown in NGS and its plans. I would now like to hand it back to the moderator for opening up the Q and A session.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Shah An Individual investor, please go ahead.
Prisha Shah
Hello sir, could you just elaborate on how many centers for our BPM business performing and what kind of scale and potential can we see from new center in Bangalore for Tech Services and CX Hub in Cape Town.
Srinivas Palakodeti
So currently we have about 32 delivery centers across nine countries. The center in Bangalore is for tech services and the one which we have. Sorry, I didn’t get this part of second part of the question. Could you repeat that?
Prisha Shah
So my second part was basically what kind of scale and potential can we see from the. Which is the new center for tech services and in the CX hub in the Cape Town.
Srinivas Palakodeti
Okay. So in as far as Cape Town is concerned that is something which we have started last year. We are seeing good opportunities for growth within a short period. We’ve realized that we needed to take additional space. This is something which we had shared in the previous quarter as well. So that is expanding and you know delivery from South Africa is showing a lot of traction interest from customers in UK as well as from in US and even in Australia. So we are very optimistic about quick scaling up of in the Cape Town facility. As far as the tech services hub in Bangalore is concerned, that is primary to for supporting tech service delivery for business coming in from North America.
As you know, that’s the biggest market for tech services.
Prisha Shah
Thank you sir. That answers my questions. I have one more question. So are we facing any delays in the contract, when in the Q4 and if yes then how are we tackling the situation and when can we expect the normalization?
Vynsley Fernandes
That’s a very tough question to answer. Yeah, that’s a very tough question to answer. Given the global market uncertainties and I think you’re aware of what these uncertainties are. I don’t need to elaborate. That’s a very tough question to answer today. I frankly don’t have any satisfactory answer for you.
Prisha Shah
Okay, thank you so much. No issues. I’ll come back in the queue. Thank you.
Vynsley Fernandes
I will only add. I will only add. Sorry. I will only like to add that we are seeing encouraging development in the mid market segment where the decision cycles are slightly shorter. So in the mid market the momentum is reasonably good. And that’s why I talked about the fact that in quarter four we did sign up quite a few mid market trends but larger deals and all are taking time.
operator
Thank you. Next question comes from the line of Ranja Prasad, an Indojel investor. Please go ahead.
Ranga Prasad
Good afternoon everyone. At the outset I would like to thank Mr. Partha Visarekar and Mr. Palakodeti for their stellar services rendered to our organization over the many years. I’d also like to take this opportunity to welcome Mr. Venkatesh Kodler and Mr. Manish Kumar to the organization. My first question pertains to the standalone results. First of all, what are operations or divisions that covered in the standalone financial results? Do they include the media and communications divisions? Operations too? At the standalone level the loss before tax was 49 crores for the quarter and 242 crores for the whole year.
And this was at the PDT level and at the tax delivery, 106 crores loss was there for the quarter and 323 crore loss was there for the whole year. By when can we expect to do break even of the standalone level because the losses are quite significant.
Srinivas Palakodeti
Thank you sir. This is Pala here. So the standalone results comprise of our Philippines branch, our India delivery watch services, the you know, clients coming in from US uk. It also includes the HRO business and also the digital TV part of the media business. So that’s what it covers. And just to add the broadband business which is part of the media group that is in a subsidiary owned by GS and hence the broadband business and other components of media business, those form part of the consolidated financial results. But in the standalone we primarily have only the digital TV business.
So your point on the performance is well taken. There are a couple of things which I wanted to point out. In addition to the all the businesses we do have the corporate team costs sitting out of sitting in India. So those form part of the standalone results and we also a lot have a lot of shared services which support operations in other countries. So obviously we are focusing, you know, on whatever we can do in terms of growing revenues and more importantly in terms of savings on what we can do from cost savings and cost rationalization.
That is something which we started in the previous year and which will see more traction as we go through the rest of the year. Coming to specifics, Vince has talked about some of the challenges on the DTV business and we are looking to use our customers from the DTV side to sell other services like broadband rather than the growing the digital TV part directly. Vince, please feel free to add.
Vynsley Fernandes
No, no, I think you’re spot on. So sai il only. Mr. Angaprasad, good evening to you sir. Good evening. So sir, if you actually look at it from a perspective of the media segment, right. If you’re looking at purely the media and communications segment, there’s been a, even though there’s been headwinds on the DTV side there’s been growth which is effectively being compensated by the broadband side of the business. So that we’re already seeing significant tailwinds. Actually being able to push that up, sir. So we hope to keep on that track for a while to come. Sir,
Ranga Prasad
I’ve seen that media division profit before, accounting for interest has gone up from 10 crores to 30 crores. So that’s a very positive sign.
Vynsley Fernandes
Yes, sir.
Ranga Prasad
The other one is what are the main contributors to the other comprehensive income? Because this seems to be very substantial for the year.
Vynsley Fernandes
Sure. So I’ll just look at it from the media and community because I’m assuming that’s what you’re referring to, Mr. Prasad.
Ranga Prasad
Actually. Overall.
Vynsley Fernandes
Okay, overall. So Paula, you want to. And then I’ll. Yeah. About the media aspect.
Srinivas Palakodeti
So his question was on the other comprehensive income. So those are basically items like, you know, hedge effectiveness, the changes are seen as temporary or you know, where there are hedges which have not gone ineffective and whatever is the pluses or gains on that, those sit into the effectively in the balance sheet without going hitting the P and L directly so that you keep varying. But unless something dramatic happens, a foreign exchange cover taken goes ineffective or some interest rate swap goes ineffective, those typically don’t impact the PNL for the year.
Ranga Prasad
And I asked this question even last time, why are the deferred taxes so high? We are showing a loss at the tax level and even then we are having high deferred taxes. What is the cause for that?
Srinivas Palakodeti
So this is really a accounting issue where it is about, you know, creating deferred tax assets based on the timing difference. And you know, we’re looking at the overall uncertainty. We have taken a slightly. We have taken a more prudent approach and we have derecognized certain deferred tax assets which have been created. So if you see on the standalone, there is an increase, there was about a 17 crore provision in Q3, that has increased to about 55 crores in Q4.
Ranga Prasad
Okay, thank you very much.
Vynsley Fernandes
Thank you, sir.
operator
Thank you. Next question comes from the line of Heena Parikh with Invest First Advisors. Please go ahead.
Hina Parekh
Hello. Thank you for the opportunity. So my first question was what are the steps we are taking to improve our revenue and margin in BPM business, including traditional call center business and business like TechLink.
Srinivas Palakodeti
Yeah. So thank you for your question. So our focus really has been to grow the CX business on the offshore side where revenues may be smaller in dollar numbers, but essentially. I have the. Ability to deliver much Better margins. So the focus is on growth for delivery out of places like India, Philippines, Colombia, Jamaica and also South Africa center which we opened. So if you look at our geographical expansion, those are in lower cost delivery centers like Colombia, which we opened a couple of years back, and South Africa, which we opened last year. And the onshore part of revenues, typically they tend to be lower in terms of profitability. So there is much lower focus. What we have been able to do is to reduce the scale of operations onshore and we’ve also moved where clients have agreed, some of those clients from onshore location to offshore location.
So do bear in mind that when a client moves, let’s say the billing rate is X, once a client moves to a lower cost location like India or Philippines, the billing rates drops by roughly around 50%. So you will see a drop in revenue but improvement in margin as we move from onshore to offshore. But as Venk mentioned, our focus really is on growing the digital services technology services and that’s where we are. And of course there are opportunities for cross selling our tech services to our existing clients as well as to look for new clients for growth.
On the cost side, we are rationalizing costs wherever possible. We have let go a lot of real estate overseas. As you know, we scale down operations. We are also looking to do more and more operations centralized from lower cost or internal services, shared services from lower cost locations like India and Philippines. I hope that helps.
Hina Parekh
Yeah. And secondly, what are we doing differently in regards to increase in profitability of media business, broadband and digital TV business as well? And also what a strategy we are using to increase our margin and revenue and media business further.
Vynsley Fernandes
Yeah. So good afternoon, Hina, good connecting with you. Thank you so much for your question. You can hear me loud and clear.
Hina Parekh
Yeah.
Vynsley Fernandes
Yeah. Okay. So the, as I’ve mentioned in the last quarter, Hina, and I think a couple of quarters before that, our focus has been on growing broadband and to look at markets essentially where the entry barriers are lower. You know, in the cities the options are tremendous. Right. I mean you have 10, 20 easily players in one particular city who are there. But in Tier 2 and Tier 3 markets, the entry barrier is much lower because the number of players that are there are lower. But the aspirational levels of the customers in those markets is very high and they have no problems paying for a good quality of service.
So our entire growth that we’ve been working on has been coming in from the tier 2 and tier 3 markets. So that is one key focus area. And you’re Seeing the growth happening in Q4 as well, which is directly a result of the strategy of expanding those into your home. The other thing that we’re doing, and I mentioned this, albeit briefly, is silanalytics, the enterprise business that we launched last year was actually the first full year of operation, has been making a lot of inroads into the corporate segment. The enterprise segment, the beauty about the enterprise segment is when you’re dealing with corporates, A your arpus much higher and B, your duration of contract is much longer.
Essentially we sign contracts for nothing less than 12 months, right? For a retail customer it could be even one month, for that matter two months. But in a corporate customer, the general contracts are anywhere between 24 months to 60 months. So that allows us to be able to be very robust and resilient, not just on the top line, but on the bottom line as well. So I think these are the two factors that are continuing to kind of help us. And the third factor, our cost of acquisition is lower for one simple reason, that the markets that we’re penetrating into, even in tier 2 and tier 3 and tier 4 markets, are markets where we already have a digital television presence through our head.
And in the sky business, you know, the head end in the sky business is all across India, smallest markets, smallest places, etc. So we’ve been able to leverage that. I think that has put us in good stead in this fiscal year and we’re going to continue to use that. As I was sharing and if you go to Slide 21, I think you should be able to get a good sense of how we’re going to expand that same strategy in the, in the year ahead, as in FY26. I hope that answers your question. Ina.
operator
Are you done with the question?
Hina Parekh
Yes, yes, thank you, thank you, thank you.
operator
Next question comes from the line of Ravi Wadaga with an individual minister. Please go ahead.
Ravi Vadaga
Hi, can you guys hear me?
Vynsley Fernandes
Yes, yes.
Ravi Vadaga
Okay. I think first question is with respect to slightly, you know, just a strategic directional question. See the media business, if we look at, in a standalone and then the remaining, the bpm, the tech digital business, these two seems to be two separate groups, right? We see media business traditionally being done by more telecoms. The arpu, the metrics and the whole DTV and other things are taken over telecom, whereas the other ones are more in the tech digital, bpo, those kind of things. How do we see, I mean, what is the synergy between these two businesses to coexist? I know it’s a, it’s not an operational question.
I’m just thinking from a CEO level, what is, what are the kind of synergies of these two businesses to coexist? And I think the second, I’ll just say my second question and I think some color in terms of, you know, there’s so much amount of cash lying in the balance sheet. I know this must be irritating because it comes every quarter on quarter, but some of us are long term investors. We just want to know what is the strategy, what is the plan to utilize this and, or is there any policy in terms of distribution of some of it to the shareholders.
Vynsley Fernandes
Ravi, this is Vince. Good afternoon to you. Thank you. Can you hear me, Ravi? Loud and clear.
Ravi Vadaga
Yeah, I can, I can.
Vynsley Fernandes
Okay. Okay, I’ll take your first question, Ravi, and it’s a very, very fundamentally relevant question. So one of the things that we thought about earlier itself and the beauty is we’ve always as a group been ahead of the curve. And I’m going to take a slight rollback, for instance, and walk you through how the Hinduja Group philosophy is and therefore how Hinduja Global Solutions, the next digital and therefore the old media space. See, way back in 2012 we realized that even with cable, we couldn’t expand all over the country. We couldn’t go to markets like the Andamans, we couldn’t go into, into deep pockets.
And India is so much of opportunity outside of the cities. That’s when the group hit upon developing the head end in the sky platform or hits. And as you know, today we’re the only platform in the country connecting 4500 pin codes in over 1800 cities and towns. So Vision has always been looking at what does the future hold. So when we launch that, even though there are headwinds to other platforms, we’ve been able to hold our ground to a strong extent. Similarly, quite a few years ago we said the future is digital. There is an access customer base of 6 million homes.
There is a fantastic digital CX business which is not just developed, which is not just providing CX services, but also developing solutions. You know about Agent X and the AI bank was talking about it, etc. We said, how can we leverage this? Because the biggest component, as you saw in Pala’s presentation, the biggest customer base is effectively the TMT base, which is tech media and telcos. Right. And the products that we’ve been working on in Celerity, for instance, have been premised on that synergy, the synergy of leveraging the technology capabilities of the BPM team and Working together with the digital media team to develop a whole bunch of solutions which today are kind of setting the gold standard, right? I mean there’s a product called One X, there’s a product called NetX, there’s a product called SkyX.
These are the products that have already been rolled out and are kind of working for enterprise companies. So the idea is there is a tremendous amount of synergies, A in the customer base that we work with, B in developing these technologies together and C, essentially there is significant value creation because everything that we want to develop for everything that we want to roll out or everything product that we want to test is pretty much well addressed within the group itself. So the strategic vision has always been that, that our plan has never been just to build for today or short term as we build for the future.
So today you’re hearing about broadband of a satellite coming into the country. So you’re talking about millions of customers that need to be supported. Now just look at ags for instance. Not only do we have the CX capabilities to deal with customers who require that service, but on the other side we also have a technology team which has already experience in broadband and already experience in satellite delivery. So you can’t ask for a better kind of product mix. So pretty much, Ravi, our vision has been to take these disparate bits that have great synergistic value, put them together and drive it.
And I think even one of the slides that Venk had will kind of give you a sense on how, for example, the synergy will come out to play. When you look at it from a perspective of technology or you look at it in terms of the customer user base, you’re talking about autonomous agents to run processes, you’re talking about vertical specific back office operations. Now when you’re looking at those, you need a strong network of backend in terms of technology, you need future ready technologies, which is what the BPM side and the CX side does.
And you need a strong front end which is the entire technology and customer facing business of the media business. So all put together it actually provides a very well rounded approach to the entire business. So that vision has always been there. That vision is why we created the synergy and the organizational approach and we all we’re looking to do is actually take it step by step further. I hope that answers your question, Ravi. In terms of purely the strategic aspect on the cash side of things, I think the right person, not I think I know the right person would be Pala to address that.
Srinivas Palakodeti
Thank you. Thank you for your. Yeah, thanks Ravi. Thank you for your question. Very valid question. While when you look at the cash or treasury surplus on a consolidated basis, that’s sort of lying across not in one geography but across multiple geographies. If you may recall from the sale of the healthcare business which happened in multiple legs across India, U.S. philippines and Jamaica. But from the India leg we’ve actually done a buyback about two years back and about 10, 20 crores was written to the shareholders in a very tax efficient manner. The tax was paid as per then rules by the company on the buyback.
Now obviously the buyback rules have changed. So even if I were to do a buyback that’s not necessarily the most efficient way because anything received by the tax by the shareholder becomes taxable. But more importantly the cash is lying outside India in countries like Mauritius. And moment we bring in all the money, essentially that money would be used, there would be a big tax as tax on overseas dividend. So bringing that money back is not necessarily the most efficient way. The third part essentially what what are we use that cash for? That cash has been used for acquisitions we made for TechLink, for the acquisition of our Australian business and for growing up for doing our ventures in, as I mentioned, our greenfield projects when we started operations in Colombia as well as in Jamaica.
And this money is being used, will be used primarily for acquisitions. We’ve been careful. We just don’t want to get carried away with the AI hype and end up paying overpaying for acquisitions. So we continue to look at acquisitions, evaluate them and we will do what we think makes sense both in terms of the, you know, the capabilities it brings, the technology it brings, the clients it could bring at a fair valuation.
Ravi Vadaga
Okay, so I mean the summary understanding I is primarily we will use to do acquisitions and what could be, I mean just a rough time frame, 12 to 18 months. Would that be a fair assumption? I know it can change based on the business conditions and based on the kind of acquisition targets that one might have. But would a good amount of the cash which is lying, do you think that will get will be used up in next 18 months? I’m getting fairly long roadmap. That’s just a viewpoint.
Srinivas Palakodeti
Look, I said, you know, we will continue to look for acquisitions which makes sense and you know it going to be more on the technology, not on the traditional cxp. Just to give a direction in terms of what we are looking at. It could be, you know, a few small deals or a couple of larger deals. So hard to put how many by which number? But that’s the broad direction where we are headed.
Ravi Vadaga
Okay, maybe I’ll just do a very small follow up question based on what shimmy you mentioned. So say come 2027, right? End of, I’m talking 24 months May, what would hedges would look like? Because a lot of it would be defined by what we are running. We already know what we are doing and some of the transformations being carried out. But also the kind of where we are looking at adding through inorganic growth. What would just some vision aspect in terms of how would 2027 may look like given this next 24 months. If one of the, you know, if Partha or you know, Venki, one of you guys can take a stab at it, it will be a direction.
It will give us some kind of a roadmap to the investors.
Partha DeSarkar
So let me take that question. It’s a great question. Right now we have a fairly big mix of business that is being done onshore. We see that footprint to be going down because those are low margin businesses. So we expand our offshore presence. We have opened new offshore centers in South Africa. We have centers in Jamaica and Colombia and Philippines and India as well. So we are growing those footprints as well. And we are reducing our onshore footprint. That will be the move going forward as well. You will significantly reduce our onshore footprint and grow our offshore footprint.
That’s number one. Number two, our revenue mix today by the end of next year would be about 32% digital and 68% traditional businesses. Going forward. Three years from now, I would say that the ratio will change in an inverse way in a sense that we will have more digital businesses, much more digital businesses. Hopefully we should have a higher percentage of digital businesses than traditional BPO business. That will also drive margins up so directionally. That’s what I would like to comment.
Ravi Vadaga
Fair enough. Thanks Pathur.
operator
Thank you. Ladies and gentlemen, that was the last question for today. Due to time constraints we have reached the end of question analysis session. I would now like to hand the conference over to Mr. Partha for closing comments.
Partha DeSarkar
Thank you. So once again my goodbyes to all of you. I’ve been doing this for a long time now. 19 years, four quarters each year. And as I hand over to Venk, I’m very, very happy that we are finally getting somebody who is very technologically savvy to take the company to the next level of technological evolution that our business is going through. And you are in good hands. So with that I’d like to bring a close to this call and hope that all of you will continue to enjoy a good ride with the next leadership that is coming in.
Bye. Bye.
Venkatesh Korla
Thank you, everyone.
operator
Thank you. Thank you. On behalf of Global Solutions Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.
Vynsley Fernandes
Thank you. Thank you, everyone.
Srinivas Palakodeti
Thank you.