Indegene Ltd (NSE: INDGN) Q1 2026 Earnings Call dated Aug. 01, 2025
Corporate Participants:
Unidentified Speaker
Abhishek Agarwal — Head, Investor Relations
Manish Gupta — Chairman and Chief Executive Officer
Suhas Prabhu — Chief Financial Officer
Analysts:
Unidentified Participant
Shiwani Kumari — Analyst
Abhishek Bhandari — Analyst
Naman Bhansali — Analyst
Sankaranarayanan S — Analyst
Mohammed Patel — Analyst
Rohan Vora — Analyst
Omkar Sawant — Analyst
Vinit Manek — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Indigenous Limited Q1 and FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Abhishek. Thank you. And over to you sir.
Naman Bhansali — Analyst
Thank you Moderator. A very good morning to all of you and thank you for joining us today for Indigene’s earnings conference call for the first quarter of the financial year 2026. Today we have with us Mr. Manish Gupta, Indigene’s Chairman and CEO and Mr. Suhas Taboo, CFO to share the highlights of the business and financials of the quarter. I hope you have gone through our results release and the quarterly investor presentation which have been uploaded on our website as well as on the stock exchange website. The transcript of this call will be available in a week’s time on the company’s website.
Please note that today’s discussion will be forward looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team. I now hand over the call to. Manish to make his opening remarks.
Manish Gupta — Chairman and Chief Executive Officer
Thank you Abhishek Good morning everyone. Thanks for joining our Q1 earnings call today. What I’ll do in this call, Apart from our Q1 results, we’ll also touch upon some of the external trends. We spoke about them last time and so we’ll just double click on what we are seeing. We’ll also lay out our FY26 outlook and strategic priorities starting with external perspective. There was some renewed talk about US Pharma tariffs in the last few weeks. Now at least what we see from is that this continues to be a non factor, not a big thing at all for the innovators.
We see it based on all the analyst commentary and more importantly based on our customer interactions. There have been some other program announcements like the National Priority Voucher Program by the FDA that should positively impact drug review timelines and maintain high throughput of drug approvals and launches. Also there was a changes at CDC’s ACIP, the immunization advisory Committee which might have a little negative impact on the vaccine sub segment but not material. The bigger item was passing of the what has been called one Big Beautiful Bill act there are some positives in it for the pharma industry.
A broad exemption for rare diseases, disease drugs from the Medicare price negotiation program and preferential tax treatment for R and D expenditure. Industry and a lot of companies are excited about this development. On the other hand, there was one point of a projected decrease in federal and peer drug spending via Medicaid. This will also be because of increase in the number of uninsured individuals. While this healthcare spending reduction might have a larger impact on providers which are hospitals, it will only have a very small impact on the pharmaceutical industry. This is because Medicaid only accounts for a small portion of many drug makers revenue in the US and even smaller share of their total revenue worldwide.
Further, even prior to the changes introduced in the obba which is the Big Beautiful Act, Medicaid has historically reimbursed companies for drugs at lower rates than those in other programs like Medicare or commercial insurance, so the impact is even lower. Even so, this dynamic is likely to broadly influence patient access to medications and in turn investment decisions related to research and development, M and A strategy overall sales performance in the pharma and biotech sectors One way or the other. This is yet another step in line with our strong belief and long term outlook for the business that innovators will have to accelerate digital first transformation, adoption of AI advanced analytics across R and D supply chain and commercial operations to improve speed to market and reduce overhead as a response to a secular pressure on drug pricing.
Something which we have been saying again and again. Now if I summarize, we see no change in the industry outlook directionally the pressure remains on drug pricing and hence pharma operations will be more pressured to be more efficient and recent macro news and trends reinforce this pressure as well. Now if I come to the industry this year has been going I would say reasonably well for the industry so far. Industry is expected to have mixed growth with most companies growing between low to mid single digit. There are of course some of them which will be doing extremely well and they seem to be managing the macro pressures well.
More interestingly, we also see clients now coming back to the table more and more for the next level of evolution of the programs we’ve been working with them for. While decision making is not on steroids, it’s not very fast. This is a conservative industry. We have said it again, but we clearly see clients actively shaping the directions of their programs. Now. Now moving on to our business performance for Q1 FY26 revenue came in at INR 7068 million, a growth of 1.8% in USD terms and 0.7% in INR terms. The growth in USD would have been 2.2 quarter on quarter but came lower due to a one time credit given to a customer in settlement of unresolved project expenses.
These expenses were in relation to an engagement which was concluded mid of last fiscal and were already provided for as project expenses and hence no material impact on profitability in the current quarter. EBITDA came in at INR 1.536 billion, a growth of 0.7% quarter on quarter. We reported a Q1 PAT of INR 1,164 million. At this point I would like to introduce Tectonic to you. We’ve been talking to you about this for some time now. These are large transformative conversations we’ve been having with our large customers. This is not taking shape and we are calling it Tectonic.
This is indigenous effort to move up the marketing value chain on commercial content creation, site creation side and capture more work upstream which has traditionally been done by AORs or specialized healthcare agency but this time by use of our marketing and medical capabilities, global operations and technology, especially AI capabilities, we are making decent impact in this area. Q1 has seen us make good progress in terms of conversations which led to paid pilots and eventually full scale engagements. We have generated more than US1 million of revenue from Tectonic in this quarter across two customers. Both of them are top 20 and we’ll continue to take this proposition to other customers as well.
Now at this point of time if we just go from a segment reporting perspective, Tectonic will not be reported separately but will be part of ECS Enterprise Commercial solutions. We believe over time the lines between upstream tectonic work and the downstream production work will that we are currently doing will become part of single larger engagements and that’s the strategic direction we are working towards with our customers. Before I go deeper, given that we spoke about Tectonic and the impact of and the reason why we are able to do this well bringing all our capabilities together, let me also allude to some of the stuff which we are seeing across the board in our solutions as we have incorporated AI and Cortex as we had announced earlier, now our clients are excited, right? What we have been able to offer are very unique value propositions, differentiated propositions across the value chain, right? In medical affairs, regulatory, safety, commercial and we see clients being excited.
We have multiple conversations going on. We helping clients think about their few year roadmaps. However, as we have said earlier this is a conservative industry. They are careful in terms of adopting some of these things and hence they continue to engage with us. We believe that over a medium term AI will play a very significant role in differentiating us and enabling us to take a larger market share. All our initial engagements make us excited about it and hence we are doubling down on our efforts in investing, building the products tools which we have been doing and also incorporating them in our solutions.
Now this is a good time to talking about our segmental revenues. Our Enterprise segments ECs and EMS, Enterprise Commercial and Enterprise Medical which contributed 86.6% of our revenue, grew by 3.5% quarter on quarter. We also renamed Omnichannel Activation now to be called Brand Activation to reflect the distinct nature of the engagement at the customer level in Brand Commercial Segment Visa vis the Enterprise Commercial segment Brand Activation had a degrowth of 21.6%. This is due to two reasons. First, the project went on hold and revenue got differed due to a customer’s regulatory hurdles impacting launch of its products and second, the conclusion of a project with a customer.
Both were sizable projects. The other Segment has grown 16.9% quarter on quarter but contributes only 3.5% of the overall revenue and hence will not have a material impact on a consolidation basis. Coming to our client view, our largest customer has grown by 4.3% quarter on quarter. More importantly, our transformative deal construct with them which we introduced earlier as Tectonic, has started generating revenues and should scale up over the next few quarters. The top five accounts have grown by 0.6% quarter on quarter, reversing last quarter’s trend and also signaling that past year challenges are behind us.
Top 20 is business as usual and contributed 76.2% of revenues. Accounts beyond the top 20 continue to have higher growth, growing by 5% quarter on quarter. In Q1 existing accounts contributed 92% of this while new accounts contributed 8% of this. On the existing accounts and engagement side, we do not see any significant challenges with our operations or revenues. This was a good quarter in terms of new pipeline growth which also alludes referring back to my earlier conversation of clients coming back to the table thinking about their programs. We also maintained our momentum on deal wins with two large deals and wins of 3 million plus ACV1 in ECS expected to go live in Q2 itself and the other in Brand Activation to go live in H2.
We also had four deal wins of call it in that 1 to 3 million ACV2 in Enterprise Commercial, one in Enterprise Medical Solutions and brand activation. Cash generation continues well and our cash and cash equivalence investments reached INR 17280 million, crossing $200 million. We remain committed to utilizing this in the best interest of the shareholders. M and A remains a priority for us and we have a pretty healthy M and A pipeline at this point in time at different stages and it’s progressing well. Before I wrap up I want to touch upon FY26 initiatives and strategic priorities for indigene.
FY25 was a somewhat challenging year for indigene as we had some unexpected client issues but those look like are largely behind us now. Looking at FY26, our deal pipeline has improved and we are seeing the results in our improved deal booking data, the progress on Tectonics another outcome of the same revenues from two customers and advanced stages of conversations with three more. I spoke about the traction we are seeing with customers as we incorporate more and more AI into our solutions and the value proposition we can offer because of that and hence we continue to double down on that operationally.
We have done a strategic reorg of our sales function and completed a remapping exercise to drive higher effectiveness and traction and efficiency. We’re adding senior leaders to strengthen and drive growth in our sales functions, consulting and capabilities like data analytics, content and medical affairs and regulatory affairs in EMS. These FY26 initiatives might not have near term impact but act as a bedrock for our medium to long term growth. With this I’ll pass on Mr. Suhas to get into more details on the financials.
Suhas Prabhu — Chief Financial Officer
Thank you Manish. Once again a very good morning to everyone and we appreciate your participation on this call today. Let me dive into some more details of the financial performance for the quarter. As Manish mentioned, revenues for the quarter came in at rupees 7,608 million which is up a strong 12.5% year on year and 0.7% sequentially. The growth in US dollar terms is 1.8% quarter to quarter and 0.4% quarter on quarter in constant currency terms. As Manish highlighted, our revenues would have been higher with the USD growth at 2.2% quarter on quarter but for a one time credit to a customer in settlement of unresolved project expenses.
This was for a project for an Indian affiliate of a global customer and hence the contribution of the India geographic segment in our revenues has dropped from 0.9% to 0.3% in the current quarter. Coming to the rest of the geographical segments, 95% of our revenue continues to come from the US and Euro regions. North America revenue share is north of 70% in Q1 and Europe revenue share is at 27.1% in Q1 and this is largely in line with our past trends and expectations for the future. The EBITDA margin for the quarter was stable at 20.2% and we have spoken about tectonic and our continued investments in tectonic including certain unpaid POCs.
At this point in time and at normal rates of charge out, this would have added about 0.3% to our margin. The employee expenses during the quarter were lower by 0.7% but combined with subcontracting costs which are part of our other expenses are higher by 1.2% which is in line with the growth in our revenue. Other income was negative primarily comprising of exchange loss due to foreign exchange fluctuation due to the beta US dollar against Euro and even INR. PBT came in at Rupees 15. 21 million, a strong growth of 27.1% year on year and 1.9% quarter on quarter.
And finally PAT came and met Rupees 11, 64 million, a growth of 32.7% year on year. While it’s a degrowth of 1% quarter on quarter, the patent margin for the quarter came in at 15.3%, a reduction of 30 basis points. Sequentially with the effective tax rate for quarter one recorded at 23.5% versus in the past quarter it was a lower 21.2%. That let me take a pause and move on to the questions that either Manish or Ram I can answer for you all.
Manish Gupta — Chairman and Chief Executive Officer
Shubham, we’re open for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone phone. 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 Shivani from Monarchs Network. Please go ahead. Hello Ms. Shivani.
Shiwani Kumari
Hi. Am I audible?
operator
Yes.
Shiwani Kumari
Yeah. Hi Manish. I congratulation on good set of numbers. Two questions. One is if you can touch upon omnichannel activation decline both year on year and quarter on quarter again. I also see the margin is impacted and it has decreased significantly. So can you please elaborate on this one?
Manish Gupta
Sure. Good morning Shivani. I’ll pass it on to Suaz for Gale’s. But there are two things. One is you Got to think omnichannel activation as a business and that’s the reason we are also calling it Brand activation is a brand by brand business, right? Visa vis are other business enterprise solutions whether it’s medical or commercial which is much more broad based enterprise wide engagements and nature of the business is such that some brand having an FDA issue right or engagement getting over there is slight more variability on the business. However what we also encourage all of you to think about this brand activation along with enterprise commercial solutions because I spoke about Tectonic and we are very excited about where this can go.
Tectonic as a capability, an offering we are only able to build because of our presence in brand activation. We have these capabilities in brand activation. We are combining them with our marketing, medical, global operations technology, AI skills and are able to create a proposition over here. So over time we believe the brand activation capabilities will also help us create a fairly large significant business in Tectonic. So that’s the broad strategic overview. I’ll pass it on to Suvas to double click on any numbers.
Suhas Prabhu
Sure. Thanks Maneesh. And going forward from what Manish explained on the nature of the business, more specifically during the quarter we had contracted with a customer for a brand launch program which has got deferred due to certain regulatory hurdles. FDA requirements in the US which has deferred the launch by we anticipate about 3/4 and hence the customer has put the project on hold. This meant that revenues in the range of between 0.7 to $0.8 million that we were anticipating from this engagement during the quarter has got Deferred by about 3/4. But as you would understand we continue to incur the cost and this would have adversely impacted pretty much to the same quantum the segment margins and the consolidated margins as well.
But having said that, the rest of the business, the enterprise segments and others have shown a very positive growth. Specifically enterprise segments have grown by 3.5% quarter on quarter and those contribute today to close to 87% of our business.
Shiwani Kumari
Thank you. So is this the reason why we also see the client count decreasing from 73 to 70?
Suhas Prabhu
There would be marginal variations again on a quarter on quarter basis given that they would be project based revenues from customers, some of which will cross that quarter million dollar level, which is when we consider this to be an active customer count in our list. Yes, there would be a couple from this segment as well. Having said that, holistically I wouldn’t read too much into that. We would look at this over longer tenor and when you look at this over the past three, four, five years. Also now you would see that this has grown consistently year on year.
Manish Gupta
Yes. If I just double click on the client thing. While obviously we look at the long term stuff, but we also feel fairly good that if you will see the numbers towards the end of the year, we’ll do better on the client thing. Quarter on quarter, a client dips from 0.26 million to 0.24. The numbers change. Right. It doesn’t mean much, but directionally I think we’re moving in the right way over here, even with the client number beside.
Shiwani Kumari
Sure, that was helpful. And the next question is on margin. So we see that margin remain flattish quarter on quarter, which is a good thing because quarter four is generally stronger. But what I wanted to understand is that with all the AI investment that we are doing, which will only improve our capability going forward. So how we see margin progression and how much is the margin expansion scope, if you can throw some light on that.
Suhas Prabhu
Sure. Shivani, as you rightly pointed out, margins have been stable and going over the last three quarters. So we, you know, productivity initiatives, both automation gen AI, you know, contribute to enhancement of margins and over period is offset basically due to wage bill hikes as well as, you know, annual resets of rates. And I shouldn’t say every year, but whenever there are renewals for some of the customers which happen once every three to five years. But having said that, today we are able to offset the incremental investments as well as unpaid projects or POCs that we do for customers as we push aggressively to introduce these new concepts in our client environment.
And therefore in the near term we believe that we would be able to sustain and be in the region of around 20% at a bit level on a full year basis.
Shiwani Kumari
Sure. Thank you. If I can just chip in one more which is on M and A. So we have a very strong cash balances which of 17 billion. Can we expect more acquisition to happen in the European region? Because we have been talking about diversification. So is my thinking correct or we’ll see more of, you know, combination of US and Europe acquisitions going for acquisitions going forward?
Manish Gupta
Shivank, two things actually there are a bunch of things over there. Let me unpeel those that we are looking at acquisitions from a capability perspective. Right. Of what we can do. So we are looking at to that extent. We really are not necessarily focused on any geography. Wherever we see the capability, we do strong and the company offering something, we will be interested in that M and A. So we have a Pipeline both in the US and Europe. As far as the cash part goes, I don’t think cash has been a deterrent for us to do ma.
It has been us finding the right target at the right price. Now what we are seeing over here is interesting that companies for a very long period of time had unrealistic expectations of value. They were still driven by the 2122 euphoria which had happened right in the private space. Deals haven’t happened and we clearly see that expectations coming down right and becoming more realistic and hence we are more bullish on our ability to probably get M and A done right. The engagements are becoming and the discussions are becoming much more realistic and getting to value zones which we are comfortable with.
Shiwani Kumari
Sure. Thank you. That was all from my side.
operator
Thank you. Before we take the next question, we would like to remind participants you may press star and one to ask a question. The next question comes from the line of Abhishek Bhandari from Nomura. Please go ahead.
Abhishek Bhandari
Yeah, thank you for the opportunity. Manish, I had one very basic question. You know, off late we have started shifting to POQ in terms of, you know, talking about numbers. Any reason why you shut the shift shifting towards QFP instead of ioi? Do you think now the business has become kind of a linear and we should measure it on a sequential basis.
Manish Gupta
Abhishek, first of all, good morning. I’m going to give you a very honest answer on this. I still look at business more yearly. Right. The nature of our business but have been guided that everybody, all of you want to see quarter on quarter. That’s why we have shifted to that. So there is no very well thought out reason for that. Subhaz.
Suhas Prabhu
Yes, but having said that Abhishek. Full. Year basis, 12.5% on revenue and 27% on PPT, 32% on fact. I think we would keep referring to that because we believe whatever concerns that we had expressed during our current quarter performance in the last fiscal year versus this we would want to also highlight that those challenges are behind us and maybe the quarterly commentary is more to and substantially.
Manish Gupta
Absolutely.
Abhishek Bhandari
Got it. Thank you for that. Second question Manish is we have been reading lot from outside about you know, the uncertainty what the life sciences of big pharma going through. Some of them also have been going through, you know, sea level changes of date and some of them are top your top account as well. So in your, you know, discussions with the clients do you see any, you know, hesitation for them to start on certain large projects or you Think. No, the other thing is actually true that when things are uncertain, we need to reduce cost and hence we’ll become, you know, more relevant.
The place I’m coming from is, you know, most of the investors still think that, you know, our business is tilted towards, you know, the discretionary part of this trend of life sciences. It being on S and M. If you could clarify that is the effort.
Manish Gupta
Okay, so I think first of all, let me start with the last part. The reality is that our business is not deflationary. In fact, it’s completely on the other side. If you see any pharma company, broadly, their spends on snm, regulatory, medical affairs remain in same ballpark. Right? It is. And that’s why we think about our business more. And from an annual perspective. Right. The enterprise business especially 86.64. Right. That business not discretionary. As far as the sea level changes are concerned and all this stuff, we see that as a very localized thing. Abhishek and few of our clients, and we have called that out. One of our large clients where we had challenges last year, they went through a lot of those changes. But it’s not a broad based thing. Right. It’s one or two places and one of them was a large customer. Right. We had seen that churn. But we also believe that they are also stabilizing now. Right. Finally. And we having multiple conversations even with those customers now. Right. From a pipeline perspective, which was pretty much which was a challenge till last year, but we’re seeing pipeline grow even in those customers which went through the sea level change. So two points. Business is not discretionary. It is absolutely critical and non discretionary. And second thing is we don’t see too much of those challenges right now.
Abhishek Bhandari
Got it. Thank you, Manish. And all the best for fiscal 26.
Manish Gupta
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask a question, you may press star and one, the next question comes from the line of Naman Mansali from Nine Rivers Capital. Please go ahead.
Naman Bhansali
Hi sir. Thank you for the opportunity. First question is that some of the IT companies have been talking about pricing pressures from customers and higher competition which is leading to some sort of margin erosion. So how are we seeing this and what is your take on this?
Manish Gupta
Okay, thanks. Thank you for the question. See, there are two things. One is that our industry and the kind of work we do marketing, regulatory, it’s not a back end cost element. Right. It’s super critical for our customers and hence their propensity to shift or do anything based on a Few dollars here or there is really not high. Right. And that is the reason why even some of the AI based solutions where they can get significant benefits are taking time to even get adopted. Right. Because of the risk perception. So we don’t see that. Right. On this part, of course customers are actively looking out what else can they do. Right. And from the future. Right. And especially given the possibilities AI offer. But we are not seeing that in our part of the industry.
Naman Bhansali
Got it, Got it. And second question is what is the split of the organic and inorganic growth and how has NGL impacted your numbers?
Manish Gupta
NGL is really tiny thing. It’s one of those capability acquisitions as a team we have done and this is. I’ve alluded to this many times in our one on ones and of course this whole thing that we are preparing for tectonic to be scaled up across geographies. So these tuck in acquisitions we do on the agency side will be small acquisitions which are instead of hiring people for. And given that this could scale at some point, whenever it scales. Right. You want to be prepared for that given the opportunity it presents. So it’s think about these as more as acquires.
Naman Bhansali
Got it sir. Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants you may press star and one to ask a question. The next question comes from the line of Sankar Narayan from I thought pms. Please go ahead.
Sankaranarayanan S
Good morning sir. My first question is regarding the pretend. Case and how we are getting benefited from this. So in your experience for the past 15 years, how are you benefited from this? Sor. Sorry, could you repeat the question? We couldn’t understand. Benefit from what? Patent pip side please. It wasn’t very clear. Can you just repeat once more?
operator
Sorry, sorry, you’re not audible. Your audio is very low. Mr. Sankar Nathan.
Sankaranarayanan S
Slightly better, sir. How are we getting benefited from patent clip cycle, sir.
Manish Gupta
So I would say that. And again there are two things. One is patent cliff is there. But on the other hand new launches are also stated to be very high for the industry. So overall the industry is going to be okay. Right now as far as patent cliff is concerned we have offering of providing omni channel for mature brand categories and that’s where we see a very active pipeline as a point of time where companies for mature brands are saying is there a better way to promote.
And our omnichannel business both on the combination of enterprise and brand activation side kicks in to be able to deliver those as a solution and we see bunch of that increasing in our pipeline.
Sankaranarayanan S
Got it, sir. So my second question is that how are we differentiate from other players like contract sales organizations or generic IT companies in terms of services and capability?
Manish Gupta
Generic IT companies are not even in conversations wherever they’re going. Right. They’re not part of the mix as well. At least our experiences. If they’re getting an rfp, it is essential to make up the numbers. Right? Because you have to send it to whatever, five, seven people. As far as CSOs, agencies, contract research organizations, those are the ones which are the more credible competition. And there we are differentiated. You asked a specific question on CSOs, contract sales organizations. What CSOs do is that they put feet on the ground, right? Let’s take an example of what you just asked on the mature product. Now, if a product is going to go off bait in the next couple of years and pharma company says, you know what, I don’t want to spend my field force and marketing organization to manage this, why don’t I just take all these products and give it to a contract sales organization which will put feet on the ground.
Right now, as indigenous, we are going to the same guys, but with a very different value proposition that we will be able to take your products. Right. And reach out to physicians on your behalf. But rather than putting feet on the ground, we do it through digital AI. Right. And we can bend your prescription curve so that tech stack we have capabilities, we have, we have data on 2 million physicians for the digital propensities. We have algorithms to create what we call shortest path to prescription. That’s what we bring to bear to deliver solutions in this area. Right. Which is a very unique proposition. Visa vis the CSOs. Right. Vis a vis, let’s call it. And I’m just going to complete it. Although we didn’t ask for IT agencies, what we bring is very significant global operations. Combination of medical marketing capabilities, various AI based platforms to deliver stuff at faster turnaround times, lower cost Right. And quality and at scale. Right. Which agencies don’t answer your question.
Sankaranarayanan S
My last question is what is the organic revenue growth for the past three years?
Suhas Prabhu
Shankar, Again, I would like to emphasize that pretty much a large portion of our growth would be organic. The inorganic acquisitions that we have done in the current year or even the last year have been non material. As Manish mentioned, capability and credibility acquisitions which are tuck in and get quickly integrated with the existing business and therefore is very difficult to carve out. What would be organic and inorganic? We would like to emphasize that please look at these as businesses which can get integrated with the existing segments and look at it holistically.
Manish Gupta
Thank you sir and best wishes.
Suhas Prabhu
Thank you.
operator
Thank you. The next question comes from the line of Naman Bansali from Nine Rivers Capital. Please go ahead. Hello, Mr. Naman, your line has been unmuted. Please go ahead.
Naman Bhansali
Hello. Am I audible?
operator
Yes.
Naman Bhansali
So can you please provide more details. On the tectonic engagement and what kind of engagements are these? Maybe what is the outlook here? What scale are we envisaging and what are the different capabilities needed here? Maybe how much automation or AI driven is this?
Manish Gupta
So if you think about it, a lot of the work which we have been doing in enterprise commercial solutions is around downstream activities in content creation, for example, content adaptation, localization and execution, running campaigns, data analytics. These are the capabilities which we’ve been doing. So essentially agencies do a lot of the work upstream, developing the concepts, doing the market study based on that, developing the concepts, coming with the creative ideas. Right. And then starting to develop de novo content. Right. So we can come in at a later stages, which is where capabilities were getting centralized. Now in through tectonic, what we are doing is things like de novo content, right. Taking those content from one channel to the other channel. Some of the medical part, some of the creative adaptation around that rate at the higher stages, those are also getting bundled. Now from an opportunity perspective, to give you a sense, I would say what we were accessing earlier through our enterprise commercial solutions would have been 5 to 15% and these are approximate numbers, mind you over here of the marketing budgets with tectonic we believe that that 5 to 15 increases to 35 to 50 ish depending on the customer and the situation from a budget perspective. Right. So that’s the level of unlock we are talking about. Suas, you want to double click on any of this?
Suhas Prabhu
Yeah. And you also spoke about, you know, technology and that’s a key part of what, what we bring to the table versus agencies which would throw people led expertise into the mix. Whereas we are able to blend that combined with modern technologies and platforms, the new platforms, gen AI led platforms that we are contextualizing for this industry is the value that we bring to the table. The generative element, wherein learning from the creative aspects that are done continually day in, day out helps us make. The. Content, the campaign a lot more effective and the entire execution a lot more efficient in relation to what was possible in the past. And you know, harnessing that, you know, power is what we bring to the table through technology. And that is why we are very excited that this possibility throws up for us in the future. And from a revenue perspective, it’s already started generating revenue. Manish mentioned earlier in the call, already $1 million of revenue during the quarter. While we continue to do unpaid PoCs to prove the strength and power of this to our customers.
And we believe we are well positioned to keep gaining on this front as we make more progress.
Naman Bhansali
Got it, Got it. Very helpful. Thank you.
operator
Thank you. The next question comes from the line of Mohammed Patel from Edelweiss Public Arts. Please go ahead.
Mohammed Patel
I hope I’m audible.
operator
Yes.
Mohammed Patel
So in the questions on the near term, how should we think of headcount additions and wage hikes?
Suhas Prabhu
Yes. So in the near term, wage hikes for us are effective July 1st in the current quarter. If you would also seen our past few years of quarterly performance, the wage hikes are impacted. The largest cycle is July every year there’s a mid year cycle in January, but that has a very small impact. The near term impact on wage hikes will be seen on the margins in the next quarter. But having said that, you would have also seen that our headcount has remained fairly stable and also marginally degrowth over the past few quarters while the revenue continued to be stable and growing.
But having said that, we would say that in the longer run the revenue growth and the headcount growth would be in the same direction. Though the pace of addition of headcount versus the pace of growth in revenue need not be at the same rate. And I would say so that while there is a correlation between headcount growth and revenue wouldn’t necessarily mean that both are growing at the same pace.
Manish Gupta
Yeah. And our revenue per employee is showing that trend. Right. If I look at the last quarter, it was 67 point so per employee.
Mohammed Patel
Okay. And so should we expect high single digit percentage on an annualized basis?
Suhas Prabhu
So it varies between geographies since we also have more than 16% of our staff outside India, country by country, it would vary. But in rupee terms on a full year basis, wage hikes tend to be in the 6 to 8% range. From a full year perspective and what we’ve done successfully, as you would see in the quarterly margin rate is while Q2 tends to be the the tends to show a dip in the EBITDA margin. Right. It grows through the next three quarters. And on a full year basis we’ve been fairly stable to growing on a EBITDA margin and therefore fat also.
Mohammed Patel
Okay. And I wanted to understand the operating leverage in the business. So is the revenues grow 15%. Should we expect other expenses to grow 50 basis, 50 to 100 basis point lower?
Suhas Prabhu
Yes, from an operating leverage perspective. But at the same time what we would guide in the near term is that we would continue to reinvest the incremental dollars that we earn for, you know, the future tectonic gen AI as well as expansion of capabilities organically which will play into the growth over the medium term to even longer term. So three years, five years down the line and therefore we are comfortable to operate consolidated basis at the levels that we are at today.
Manish Gupta
Yeah, I think that’s an important point because now we are seeing customers coming back, as I said, looking at where they want to go. Right. And in that context our priority is going to be growth rather than expansion of margins.
Mohammed Patel
Okay, sir, understood. The last question is, I just wanted to confirm that you are seeing all top 320 client accounts are expected to do well going forward.
Manish Gupta
I would never say all 20, but overall as a segment it will grow difficult to call out all, to give a commitment on all each one of the 20.
Mohammed Patel
But it shouldn’t have an impact like it had last year.
Manish Gupta
Yeah, absolutely, absolutely.
Mohammed Patel
Thank you.
operator
Thank you. The next question comes from the line of Rohan Vora from Envision Capital. Please go ahead.
Rohan Vora
Hello. Thank you for the opportunity. So the first question was on the our journey and we’ve been saying that we want the clients in the 10 to 25 million buckets to move up to 25 plus million buckets and then on to which million plus. So where are we in that journey? You know, just a broad idea on that. I know you know you’ve been putting efforts in that direction. So that was the first question.
Manish Gupta
Yes, I think we’re progressing well on that. I can’t call out exactly when you start seeing those numbers, but I, we feel good about, let’s say call it a few quarters down the line. Our client pyramid is going to start looking stronger. Right. 10 to 25, moving to 25 plus. Fingers crossed. We’re also hoping to break the 50 mark having a customer move over there. The number of million dollar customers should increase. Right. And of course the number of active customers also should go up. So this whole chain we believe good right now, from what we see is going to be stronger in a few quarters.
Rohan Vora
Absolutely. So. No, I get your point. I’m just saying ballpark, we start seeing some of this in, in a few quarters. Right. So that is what I was trying to get. Yeah. And second was on the cortex part. So you know, AI side of it. So how Is the traction there and you know, what can one extract from that early a year from there, five years from now?
Manish Gupta
There are two things. One is Cortex as a platform, right. Is enabling us to make quickly incorporate AI or Genai in a lot of our solutions. And I alluded to that, that medical writing, MLR across the board, right. Commercial content, some of our clinical processes. We are incorporating AI and taking the Cortex based approach. Approach, which gives clients lot of confidence that the whole Genai based approach we’re taking is for them de risk. Right. Because our clients are very concerned about many things like security, confidentiality, bunch of other things, scalability of platforms, how they plug in with other systems they might have invested in.
So on one hand we’re seeing a lot of comfort over there. Right. And hence these discussions are progressing well. On the other hand we also see, while it’s still early days, we also seeing Cortex being customers themselves, saying that they would want to use pure for their internal purposes, Cortex based platforms and services. Right. Which is not necessarily incorporated in our operations today, but is a standalone offering by itself.
Rohan Vora
Absolutely. And will you be able to, you know, sometimes in future give a measurable number, you know, contribution from Cortex or some sort of a number in future?
Manish Gupta
We are not, we’re not sure about that because that’s honestly not a very. That’s not a priority for us. Right. The priority is.
Rohan Vora
Okay, okay.
Manish Gupta
Transition our offerings to be Genia enabled and we will encourage you. This is a quarter where we all have our indigenous digital summit and I’m hoping that we’ll also be able to do a stream of. This used to be one of those marquee events in the industry. This year we’re going in person for the event in Philadelphia. I think it’s September 24th. Right. So we’ll send a link to all of you, have a look at what our customers are saying, what industry people are saying. Right. You’ll have a lot of marquee people coming in that context. Conference customers will be talking. And our CTO also presented a bunch of things on Cortex and where we think Genai is going to be going. So that’s on September.
Rohan Vora
Yeah, absolutely.
operator
Thank you. The next question comes from the line of Om Kar Sawant from Marcellus Investment Managers. Please go.
Omkar Sawant
Hi, am I audible?
operator
Yes.
Omkar Sawant
I had two questions, both on Tectonic. So first, Tectonic, how does this complement our cult health services? Because even that was our effort to move up the marketing value chain. And the second question is that as we are moving up the marketing value chain and competing with these specialized healthcare marketing agencies. The reason that these marketing agencies exist is that they do a lot of customized work. They have local understanding and local nuance. And for our context, which is global operations, centralized operations which we cater to, how does that fit in when we compete with these marketing agencies?
Manish Gupta
So that’s a great question. Now if you think about it and you rightly, as you rightly said, the whole omnichannel brand activation as we call it now, was meant to go upstream and we did acquire that capability, establish our credentials in the space and I think we have done well on that. However, that business is a brand by brand type of a business, right? We believe, and our view was, and that’s the reason we take the thing is that technology enabled and global operations enabled creation of all this material, right? Is the way to go.
Now what we have been able to do using cult, right? And the capabilities we have had, take some of these capabilities and think about reimagine them on an enterprise basis, right? That if you strip off some of the work which was being done by agencies and consolidate into global operations, how will that look like and incorporate and pretty much think about it melded that with enterprise commercial solutions as a capability. It’s taking time for us to do that. We acquired in 2022, we made, I think it took us one and a half, two years to get all this sorted out.
And it started resounding with our clients where they see clear benefits of consistency, cost benefits, right? Obviously, if they have to drive AI across their marketing operations, the only way they can do it is with centralized things, right? If you’re working with 20 agencies as a company, there’s no way you’re able to get the benefits of AI, whereas the central operations enables that. Right? So that is the path we are taking now. We’re not saying agencies won’t be there, agencies will continue to play a role, right? They will still be the ideation guys, right? They will still be the guys who are coming to the creative concepts, at least right now, right. And. But some of the execution work which they are doing, we are taking a lot of that earlier. But there are other things which we believe could have been centralized, which is what we wanted to do. Now we got the credibility because of cult, right? To even have that conversation.
And we’ve used that effectively.
Omkar Sawant
Yes, yes it does. And just a follow up to this in the investor day you mentioned that for any tech technology that you Launch, you track three critical KPIs, right? Reduction in time to market, resource optimization and the number of use cases that you address. Can you help me understand how does Tectonic cater to all three KPIs some color on that.
Manish Gupta
So tectonic is. Is not. You have to delink our what you heard on the investor day on the CTO office. Right. All the work which we are doing on AI from Tectonic. Right. Tectonic is very specific to commercial operations. Right. And think about it as a cross between enterprise commercial solutions and brand activation from a capability perspective. When we are talking about Cortex and the use cases, those are much broad based. There are multiple use cases of Cortex in enterprise Commission solutions. There are multiple use cases in brand activation as well as clinical and enterprise medical solutions within enterprise medical solutions also. Right. The point solutions of which where we are using Cortex and are are a lot. Right. As I said mlr various medical writing documents. Right. Clinical study reports, PSU rs. I can go on and on on that piece. Right. Safety. So we’re using Genai in a much more broader way. Tectonic is one instance of that. A large one though.
Omkar Sawant
Okay, thank you.
operator
Thank you. The last question of the day comes from the line of Vineet Manik from Karma Capital Advisors. Please go ahead.
Vinit Manek
Good morning Manish and team and it’s good to see the growth coming back especially from the last difficulty of everything. Just two questions from my side. One is pertaining to that we were at about a high single digit kind of a USD this quarter from top line perspective. So should we assume that the worst is behind us and we are seeing that acceleration in the launches and spends on the top lines coming back, would we accelerate this to a double digit kind of growth or meeting kind of growth by the end of this year? And my second question comes to the margin.
So as we have upped the efforts on Tectonics and other value added services, so should we assume that with the portion of this going up in the medium term it will be more margin accretive from the EBITDA perspective or how should we look at that effort?
Manish Gupta
Sure, I’ll pass it on to suvas to your deep dive. But we don’t like giving exact numbers and guidance. But we feel comfortable and good of where we are right now right in terms of our engagements pipeline and we believe we are on the right trajectory as a company from a growth perspective. So that’s one our priority from a reinvestment investment perspective is also going to be growth. As I said, after the frantic activity during COVID time right till 2023 we saw the industry consolidating customer going slow because of what happened during COVID and also some of the pressures we see that easing right now.
Right. Customers coming back in terms of where they want to go, all this stuff. So in that context our investment in growth becomes paramount. So that’s going to be our priority as a company. But the specifics I’ll pass it on to Suhas to comment on.
Suhas Prabhu
Thanks Manish Vineet Again to re emphasize why we don’t give out guidance for the year, the factors that you yourself alluded, you know, the existing customers are top five top 20 customers stable and growing. You know deal wins that we have spoken about not just this quarter but I think last few earnings calls converting to revenue which you are also seeing in the quarterly numbers now and the client conversations changing to overall pipeline line for us are positive indicators. And on the margin front while we scale there is opportunity to scale margin disproportionately operating leverage kicking in.
But having said that in the near term we would look at investment doubling down on some of the the things while balancing out the margins and therefore I would say margins in the near term in the vicinity of 20% at a bit level. But in the medium term expansion is certainly a possibility.
Vinit Manek
Got it sir. Got it. Thank you. Thank you for answering my question.
operator
Thank you. Ladies and gentlemen, in the interest of time. That was the last question. I would now like to hand the conference over to management for closing comments. Thank you. And over to you sir.
Suhas Prabhu
Thank you everybody for your participation and continued interest in Indigene value. These interactions and conversations with the entire investor community and look forward to to continuing this level of engagement. Thanks once again and have a good day.
Manish Gupta
Thank you.
operator
Thank you. On behalf of Indigen limited That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.