Indegene Ltd (NSE: INDGN) Q4 2025 Earnings Call dated Apr. 29, 2025
Corporate Participants:
Abhishek Agarwal
Manish Gupta — Chairman and Chief Executive Officer
Suhas Prabhu — Chief Financial Officer
Analysts:
Shiwani — Analyst
Ajay — Analyst
Abhishek Ranade — Analyst
Surbhi Soni — Analyst
Satish Kumar — Analyst
Neha Agarwal — Analyst
Shahzad — Analyst
Prakash Kapadia — Analyst
Rohan Vora — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Indigen Limited. As a reminder, all participant lines will be in the listen or leave 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 the Star then zero on your touchstone phone.
I now hand the conference over to Mr. Abhishek Agarwal. Thank you. And over to you sir.
Abhishek Agarwal
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 fourth quarter and full year ended financial year 2025. Today we have with us Mr. Manish Gupta, Indigenes Chairman and CEO and Mr. Suhas Prabhu, 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 websites. The transcript of this call will be available in a week’s time on the company’s website. Please note that today’s discussion. May be forward looking in nature and must be viewed in relation to 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 Bishek Good morning everyone. Thank you for joining our Q4 earnings call. As we approach the end of our first year as a publicly listed company, we listed on the 13th of May, I want to express my gratitude for your support and interest in indigene after 26 years as a private company. Being a private company, we are excited to continue building Indene into a leading institution in the healthcare space as a public company.
This is our first earnings call and comes on the heels of Investor Day we held in March in our office where we showcase our business and AI based platform called Cortex. I hope that most of you understand us well now understand and are familiar with the business now. With that the saying may you live in interesting times has never been more relevant. In our call last three months we discussed the industry outlook.
Since then significant policy changes have occurred and many of you have reached out to understand the impact on this call. Apart from our Q4 and full year performance, we give you our perspective on what we are seeing with our US global customers and industry because of the US Government policies across the board. Let’s start with industry. The broad trends we spoke about last time remain in place and will do so for a long term.
Pressure on drug prices and adoption of digital technologies will be a long term trend. What changed since then last time is the macro uncertainty brought about by the US tariffs and it’s anyone’s guess what direction it will take. Obviously this is not an industry specific issue but threatens to spill over into the broader macro climate. And while pharma and life sciences have much lower direct exposure, they’re also not immune to the impact.
While we wait for the situation to unfold. What this means in the near term for our customers is juggling of multiple priorities as they focus on dealing with the tariff issues and its fallout and some of the actions they might want to take. Some of them are working on capital allocations towards investment in US manufacturing and other strategic responses. There have been public announcements some of the large pharma companies have made around this.
Now none of this could direct impact on our business. In fact, as we had mentioned, any pressure on pharma business economics acts as a tailwind for our business because we are a more efficient partner for the commercialization processes. But one impact we are seeing is. Is a slowdown in decision making processes in the near term, especially for much larger transformational initiatives where some of the senior teams approval and involvement becomes critical. Now the other impact was Significant Cut in the FDA staff on March 27, HSS announced a reduction of nearly 3,500 full time FDA employees. It is 20% of its workforce following a recent layoff of 700 staff as a part of the cost cutting effort to save around 1.8 billion annually. This has led to a removal of top scientists across key divisions including drugs and devices. Although there is uncertainty in how this will play out, discussions with clients and experts suggest potential delays in submission reviews, enhanced submission quality expectations, disruptions in meetings and early engagement, especially for biotech firms. We see this as an opportunity for us in the medium term in multiple ways. Clients may require guidance on adjusting their strategies in the new regulatory environment. They’ll have to be much more prepared. Further, they are likely to need enhanced bandwidth to counterbalance the reduction of the fda. We have an opportunity to use our AI solutions and technology to bridge some of these gaps. As of now, we don’t see our big and mid sized pharmaceutical clients being worried about this in the short term. In a short run this is a bigger issue for the biotech industry. However, in the medium to long term this might not be a great thing for innovation in general. Although we are hopeful this will get resolved, it is too critical not to. In an interview just 1012 days back, the FDA chief in fact spoke about their game plan for accelerating approvals, especially for rare diseases. He also alluded to the use of AI across the board and make things more efficient. Now that’s on fda. Let’s discuss the next big trend which a lot of you have been asking us and we have been bullish about AI. We remain bullish on the opportunities AI offers. During our Investor Day in March, our team showcased our thinking around how Genai could benefit the industry and demoed some of our solutions that already embed genai. Our clients continue to share our excitement and continue to engage with us in deploying this technology to enhance business processes. We also remain cognizant of the fact that our industry will be cautious in the speed of adoption of genai given the strict regulatory and compliance guardrails we operate in. And the onus is on domain players like us to contextualize Genai for life sciences and bring in our. Practitioner’s lens to ensure our clients get the maximum leverage from Genai while complying with all regulatory and compliance needs. With this in mind, we launch a Genai platform called Cortex that helps contextualize Genai for life science industry by bringing 26 years of our operational experience codified to train AI models. This leverages the latest developments in Genai in the form of agentic workflows and also brings a platform approach to Genai development that makes it easier for our clients to drive governance and compliance checks. Now these are three things exactly our clients have been grappling with and asking us. We believe this will help put Genai in action in the life science industry. We are currently in the process of having our domain and business process experts train Genai agents in Cortex by leveraging years of data and process expertise that resides within our organization. These Genai agents are being incorporated in our existing solutions after thorough testing and validation. Meanwhile, we are also building Genai first products in the commercial and medical space by re engineering existing processes. You’ll continue to hear more from us on this in the subsequent quarters. Now with this let me come down to the business performance. Our Q4 FYI 25 revenues came in at INR7,556 million, a growth of 4.9 quarter on quarter driven primarily by higher revenues from the deals won in the last two quarters. EBITDA for Q4 came in at INR1,526 billion, a growth of 1.7 quarter on quarter. We reported Q4 PAT of INR1.176 million, a growth of 7.2% quarter on quarter. The total number of active clients for US decreased slightly from 75 to 73 mainly due to some one time revenue project completions. On the other hand, USD1 million clients grew from 38 to 41 in Q4. More than 95% of our revenues continues to come from the US and EU regions. For the full year revenue came in at INR28,393, a growth of 9.6% year on year. The growth was driven mainly by customers outside of the top 20. This was a result of growth in existing customers and also new account additions. We grew our active account from 63 from last year to 73 this year and grew our USP 1 million customers from 35 to 41. Most of these new customers are midsized pharma companies and we continue to find opportunities to deepen our engagement and relationships with them across the board and sell them more solutions. The top 20 customers grew by 2% year on year. We had good traction with many of our key customers, but also had some negative events and impacts in some accounts which we had shared with you through the year. FY25 EBITDA came in at INR5622 million, a growth of 5% year on year. Full year PAT came in at 4.067 million a growth of 20.8% year on year. Now with this if I look at the highlights for FY25 post trilogy we had been able to go to the market. This is an acquisition we made if you remember, sometime March 24th. Towards the end of March 24th. We’ve been able to go to the market with this in an integrated way and have been able to have some wins of 2 million plus ACVs for multi year engagements. Another acquisition we had made in 2022 cult has been, I would say a reasonably successful M and A and collaboration for us. We have managed to combine Indigene’s medical technology, analytics and global operations capabilities along with Cult’s significant creative capabilities to offer an integrated creators offering at the enterprise level and have successfully managed to have some customer successes in pilots here. We expect this to translate into increasing revenues in this year and the future. We launched our Genai platform Cortex which I just spoke about and have made great progress in developing AI use cases and bring them into our solutions as well as to our clients. Now going forward in FY26 we are cautiously optimistic. The positives we spoke about last time while they remain there a little tempered by the uncertainty and the hold pattern that we see in the broader macro environment and is emerging. But we remain optimistic of clarity emerging as we go through the year. We had some good wins in Q4 US$1,5,000,000, plus ACV deal with the top 10 EU headquartered companies. This customer and the deal holds potential for us and three deals of 1.5 to 3 million ACV with mid tier Pharma. These should start contributing to revenues later in the year. We have a pipeline of interesting potentially large engagements with few of our top 10 accounts as well. At the same time there have been some headwinds in some accounts. We faced headwinds in Two of our top five customers in2024 are FY25. We’ve been speaking about it through the last year. One of them has stabilized and we believe will start growing this year. The other one which we believe had stabilized, we’ll see some further reductions in volumes. With our largest customer during renewal due in March as part of engagements in our medical business, some reconsiguration of the on site offshore mix will result in a lower value and realization. Now this does not impact our margins. This onsite ratio might impact the value realization a little bit, but no impact on margin or very low impact on margin. Both. These will have approximately 1 million revenue impact each through the rest of 2025 starting towards the end of Q1. Overall, we continue to pursue strategic and transformational engagements with our customers and focus on building our pipeline and focus on converting the pipeline into wins. But given the macro environment, we are circumspect about the speed of decisions. Project Kickoffs we continue to generate good cash and maintain a healthy cash position. We ended the year with INR16, 64 crores in cash and cash equivalents providing ample liquidity for expansion. We will be prioritizing growth agenda hard. We’ll continue to pursue tuck in acquisitions to enhance, deepen and broaden our capabilities and use our cash for these acquisitions. We also believe that the current emerging macro environment will be conducive for us to be able to find the right deals. The market has been tough over the last few years on the M and A side, but we believe opportunities will start emerging and that’s where we use our cash. At the same time, as a prudent company with a very long track record of profitable growth, we believe it is a good practice and rigor to start issuing some dividends even as a young publicly listed company. On that note, I’m happy to share that the board has approved a 100% dividend subject to members consent in the AGM. Now this will be approximately 48 crores which is actually this is 48 crores which is approximately 12% of our PAT, a tad below 12% and so of our PAT and a tad below 2.9% of our cash. As I said, we continue to use our cash for acquisitions. Moving forward with that, I’ll pass on this to Suaz.
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 start off by getting into the details of the financial performance for the quarter. The revenues for the quarter came in at INR7,556 million, up 12.3% year on year and 4.9% sequentially driven by growth in all the major segments of our business. The core. Enterprise businesses both commercial and medical together growing at a healthy rate of 5.1% and omni channel activation business at 8.6%. The omnichannel activation segment has seen some wins and growth coming from the brand side of the business. EBITDA margins for the quarter stood at 20.2%, a drop of 60 basis points sequentially. The drop in margins is due to a higher wage bill consisting of seasonal trends in vacation, accrual and payroll taxes in the US and also mid year increments and off cycle increments applicable to a subset of employees. The PAC margin for the quarter came in at 15.6%, an increase of 30 basis points sequentially. This is on account of a lower tax rate in Q4 due to favorable deferred tax adjustments in the U.S. on a full year basis revenue came in at INR28,393 million, a growth of 9.6% year on year. EBITDA came in at INR5006.22 million, a growth of 5% year on year. EBITDA margin on a full year basis reduced by 90bps to 19.8% mainly due to a higher on site employee mix and certain increases in the non employee expenses related to technology both having almost an equal impact on the margin rate. Drop pat came in at INR4067 million, a growth of 20.8% year on year. PAT margin improved by 130bps to 14.3% driven by reduction in finance and interest costs and growth also in the interest income. Our geographical split this is location of origin has seen some changes in Q4. North America revenue share has increased to 71.9% versus 69.3% in Q3 and Europe revenue share is at 24.6% versus 27.9% in Q3. The jump in North America revenue is due to consolidation at a US headquartered customer with the expansion of the enterprise relationship in the enterprise commercial segment which started in the European region to now a larger multi geographical coverage including US and this happened during. The renewal in January of 2025. Our cash position remains strong and we continue to actively scout for M and A opportunity. We also concluded a small acquisition. Towards the end of March 25th we acquired MJL Communications Group, a UK based digital life sciences agency on a debt free cash free basis for an amount not exceeding GBP3.4 million including earnouts. There is no impact on our Q4 performance due to this acquisition as the effective date is end of March 2025. This acquisition strengthens our creative presence and capabilities in UK and is in line with one of the stated M and A opportunity areas for us. With that, let me take a pause and move on to the questions that either Manish or I can answer for all of you.
Questions and Answers:
Abhishek Agarwal
See we can open the Q and A.
Operator
Yes Sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star. Enter. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Shivani from Monarch Network Capital. Please go ahead.
Shiwani
Hi, am I audible?
Manish Gupta
Yes you are.
Shiwani
Hi. Thank you for the opportunity. So I have two questions. One is on the segment revenue. So the growth in enterprise commercial segment, which used to be a high growth segment has come down to low single digit. So I just wanted to understand that what’s the underlying reason for the same and when we can expect the growth to pick up.
Manish Gupta
Shivani, you are right. The growth has come down last year and that is primarily due to the impact of these two customers which we alluded to in our calls last year. That’s these two customers were large customers for the enterprise commercial segment and the entire hit, or I would say most of their hit has been for the enterprise commercial segment. Right on this part we believe that as I mentioned, one of these customers has stabilized and will start growing. Even for enterprise commercial solutions, the other one might take a little bit more hit. There’s some process which the company was doing. Which we’ll not be doing. Right. But beyond this now we believe all the new wins will start adding up to growth in this region. Last year all the new business coming in was going to plug in the revenue leakage for these two customers. That’s going to reverse this year itself.
Shiwani
Understood. So can we expect the growth to come back in like double digit?
Manish Gupta
I won’t call out the numbers over here, but we expect growth to come back.
Shiwani
Okay, sure. And the next is on margin. So I think in the first question you partly answered that why the ECS segment was hit. But at the same time we are seeing that the margin in omnichannel segment has kind of has increased to 13.2% this quarter versus 8% last quarter. And also on year, on year basis we have seen the improvement in the margin. So what is the driver of this margin, and can we sustain this margin going forward?
Suhas Prabhu
Yes, thanks Shivani Suhas here. So the omnichannel activation business and we had provided some commentary in some of our earlier earnings call as well, you know, the increase in margin is a factor of, you know, growth in top line. There are certain costs that remain constant irrespective of the volume. And at the current scale that is a major driver.
Having said that, deeper engagements, longer term projects is the other driver which helps us plan better and utilize our resources better. So I would say between both these factors we’ve seen a growth in the margin and we believe this will be the key drivers in the coming future also for this segment.
Shiwani
Sure. Thank you. And this last question, if I can chip in. So I just wanted to understand more on the NPL Communication acquisition. What’s the revenue potential and how can we see its contribution to the Overall business in FY26 and 27?
Manish Gupta
So first of all, MGL Communications is a very small company and from our perspective, the reason we have done this deal is that our creative capabilities which we had established through Cult, we believe that, and I spoke about it, that we are seeing Cult capabilities plus indigene capabilities together creating a very compelling solution for our customers at enterprise level. And we are working on that now. Typically Cult was till now focused in the United States. Right. Whereas our deals at the enterprise level are global in nature, we are seeing a need emerge for global deals involving content, sorry, creative and content creating. Together to that extent, we had to increase our execution capabilities in multiple regions, Europe being the highest priority and MGL contributes at that level. So from our perspective, the logic is our ability to do larger enterprise deals which are slightly more upstream than what we’ve been doing in ECS till now. Right. And that’s the rationale of MGL communication. The rational of MGL communications. And we had spoken about this earlier. Also
Shiwani
Understood. Thank you so much. All the best.
Manish Gupta
Thank you.
Operator
Thank you. Before taking the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Ajay from Blue Argon Capital. Please go ahead.
Ajay
Good morning, sir. Thank you for the opportunity and congrats on a good set of numbers given the environment. I had two questions. One is regarding your top 10 versus rest of the business. Your top 10 accounts are declining. Can you give us some color on what’s the cause and when did that decline stop so that we can see better top line growth?
Manish Gupta
Sure, sure, sure. Ajay. Actually the reason for. Again this is. I alluded to that in my earlier comment, right. Just these two customers, two customers have contributed to a significant decline in the total number for us. Right. If I just put in fact I had spoken about this earlier, these two customers, what we lost in revenue had impacted our overall growth by somewhere in that region of 6%. Right. Which is what shows up in the top 10 customers itself.
We believe that’s more or less behind us. As I said, apart from the fact of the impact we might have in one of these two customers, a little bit negative, which might happen overall, things will be better. And one of the deals we won, which I spoke about, 5 million ACV, again, as a top 10 customer. Suvas, you want to add on anything to this?
Suhas Prabhu
Thanks Ajay for your question. And more specifically I would like to draw your attention to the quarter on quarter contribution of our top 10, which is in line with what we had mentioned during our last earnings call that the decline of those two customers is behind us and has stabilized. And therefore when you look at our quarter on quarter, you can see a marginal increase in the contribution of our top five from 56.6.3, 6.4. This one has got a bit more the company’s recent history for last.
Ajay
Five or seven years. How many times have you seen and what’s the reason? Like if this customer set some line of business, like five years, you know, five years backstream, the business might have contracted significantly. And if you’re supplying to that, that could have been the reason. But if you can give some color on why these two customers are deploying and how, how common was that in last five, seven years for the company?
Manish Gupta
It wasn’t very common in the last five years, if you think about it. Because five years, at least from 2020 to 2023. Right. Our growth was very significant. We grew from, in dollar terms, approximately 89, $90 million to 287. Right. So pretty much everything was growing. Now coming back to what is the reason? It’s a function of two things.
On one hand, one of our customers there, they changed their operating methodologies, which resulted in broad leakage. They realized that wasn’t the right model for them because they were losing a lot in that perspective. And they’ve corrected that, their internal operating model, how they charge centrally versus countries and stuff like that. And we, again, we alluded to this in our earlier calls.
The second one is a company which has had multiple internal issues, right? Declining revenues, pressures on margins, some products going, which they had major revenues coming from, day falling of the cliff. Right. So those things come together for that customer. If I may, one more question.
Ajay
Is there. How should you look at your profitability line of business the right way? Or is your, you know, your customer engagement sort of your sows, when you do sows, are they sort of for different lines of business or are they combined? And you look at profitability of the whole account or that line of business accounts versus your lines of business? Yes. My question is, should we look at, yeah, profitability by large versus small accounts or by year line for business? We can talk about that.
Manish Gupta
Yeah. So, Ajay, our profitability for both the large segments, enterprise commercial and enterprise medical, you know, are fairly stable. And there we look at profitability at a customer engagement level and not at a project level. So there will be sometimes projects which may have lower margins and higher margins, but we look at it at a combined engagement level. Right. And there could also be periods, especially when we get into a new engagement. When the margins may be lower at the start because we may start with a slightly higher on site mix and over period ramp that up. But largely stable margins. Now coming to the other two segments again at a gross margin or a unit economics level, these are not priced very different from the other two segments. But having said that, at the current levels of business, certain minimum operating costs, non-billable costs and certain fixed resource costs would mean that the segment margins look different. But at scale these would also have a similar margin profile as the rest of our business.
Ajay
Thank you so much.
Manish Gupta
Thank you.
Operator
Thank you. Participants who wish to ask a question star and 1. The next question is from the line of Abhishek Ranaude from Oakland Capital. Please go ahead.
Abhishek Ranade
Hello? Yeah, hello. Thank you for taking my question. Actually I joined this call little late. I have one question about the patent Plenty pipeline which your client are having. So how long this so the impact of this patent Plenty will go on. And like what is the first of all, what is the impact of this patent plenty and how long it will go on?
Manish Gupta
Do you mean patent cliff
Abhishek Ranade
Patent plenty for the clients, the patents which are like the products which are going off patent for your client which is reducing their revenue and paying capabilities?
Manish Gupta
Yes, we have spoken about in the past. If you think about it at the industry level, there is over the next three years there are a bunch of patents which are expiring, but there are also a bunch of new launches that are slated to happen. So the expectation is the industry will be overall positive and growing reasonably well. That’s the broad outlook. Now as far as this, if you’re talking about that one customer where we had an issue, this customer customer has gone through significant challenges and has a very strong pipeline at the early stage level, but not such a great one at the late stage level. And they’ve also done M and A and stuff like that. So I would say this customer might be in somewhat of a doldrums some more time right over here. But that’s just one customer overall that the industry. Level. I think we are okay right now.
Abhishek Ranade
Okay. And like do you think there is any pattern that once the patent plaintiff effect goes down so there are other players who try to launch their products and which creates a good base for your company that patent printed years? No. Creates a book that.
Manish Gupta
No. Mishek. I think what you understand is our business is focused on innovator products. Right. When there is science to differentiate, once a patent expires, the generic companies come in and especially in the United States and I would say most of Europe, that’s sales which happen to trade trade channels and that’s not the segment which we operate in. So I think our involvement will be with patented products.
Abhishek Ranade
Okay. Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The next question is from the line of Surabhi from Bellwether Capital. Please go ahead.
Surbhi Soni
My question is on the enterprise medical division. We’ve seen very strong growth here. Could you spray some light on what are the key factors which we joined? The same growth. Also, if you can allude to what percentage, just qualitatively, what portion of the revenue is more like a one time engagement with the client versus what portion of revenue is coming from a more longer term engagement with our clients?
Manish Gupta
So let me start with the latter question. Most of our business in these two segments, I would say enterprise commercial and enterprise medical are regular recurring type of engagements. Right. There’s a very small percentage of business which is one time type of stuff that those project by project businesses for us typically sit in the omnichannel activation part of our business where these two segments are fairly robust long term engagements.
Some of our capabilities on the medical side, we’ve been able to craft I would say a fairly robust joint solution on the medical writing and medical writing across the board with the Trilogy acquisition. And that is one thing which has given a bit of a uptake in revenues. I also spoke about some of the wins we have had with Trilogy is known in the marketplace as a very high end, specialized, very high expertise medical writing submission kind of company that added with indigene’s operational capability. Right. And scale processes technology has created a compelling solution. Right. And we won on the back of it. But most of the. The revenue is recurring. Suvhas, you want to add anything to this?
Suhas Prabhu
Yeah. Ash mentioned maybe providing a bit of numbers context, typically in the enterprise businesses. And this would be consistent across both enterprise commercial and Enterprise Medical. About 75% of our business would be recurring. About another 11 12% would be what we would call reoccurring. It may not be the same kind of business, but coming from the same customer under the same master service agreement year on year and therefore it would tend to get into the high 80s percentage as what you would call as the repeatable business.
Surbhi Soni
Okay. And is it fair to assume that large part of growth is coming beyond top 10 plans?
Suhas Prabhu
No. In the medical segment the growth is consistent both in our top 20 as well as if you were to also look at top 20 as globally ranked top 20 as well as beyond. So we’re seeing traction on both sides. What Manish mentioned earlier is opening remarks, a couple of large deals which were in the order of about $2 million ACV in medical were both from our top 20 globally ranked top 20 pharma companies. But at the same time we’ve seen good traction and wins with the mid tier companies which are beyond the top 20. So we’re seeing traction on both sides, especially in enterprise.
Surbhi Soni
Okay, thank you so much.
Operator
Thank you. The next question is from the line of Satish from Kotak Securities. Please go ahead.
Satish Kumar
Hi. I had a couple of questions. The first one is you have indicated a possibility of divisions being slowed due to macro impact. And did we see any of that impact in impacting revenues in 4Q and maybe divisions as well? That’s number one. And second is what’s the margin outlook for FY26? Should we expect a margin profile similar to FY25 excluding other income?
Manish Gupta
Sure. Talk about this. There are have been some, I would say reasonable size engagements and very different engagements which we were hoping. Would have closed. Right. They’re very active and we’re optimistic about them, but they’ve taken a bit more time to close. Right. So that’s one of the reasons why we called this out. And so that’s one. I’ll pass it on to Suhas for the margin commentary.
Suhas Prabhu
Yeah. And Satish, more specifically for especially one of these larger deals in the pipeline, we have already started incurring some costs which has had a very small impact in Q4 and may also impact in the near future till the engagement goes live and we start realizing revenue. But having said that would say that the margin outlook would be fairly stable even in the coming periods and we will continue to strive to improve this as the as we grow because we would get more operating leverage which should add to the margins nothing which you see from a customer pricing or you know, impacting our margins materially as we speak today.
Satish Kumar
Thanks Manish. I just had one more follow up. If I look at the other service line, well, the contribution to revenues is not very significant. There is still a significant impact on margins because of the loss in the business. So should we expect a similar loss going ahead or do you expect losses to be recouped by better operating levels?
Manish Gupta
Yeah. In the other segment, as you rightly pointed out, Satish, higher volumes would result in better margins. Given that as I said, the gross margin profile, pricing and unit economics there is not too different from the rest of the business at indigene. However, we during our annual exercise planning exercise do look at opportunities to look at efficiency and productivity initiatives which cover those businesses also. But given the current size, those impacts may not be material. It would largely come out of volume growth and revenue growth in the others business segment which would impact the gross margins and therefore margins at a consolidated level also.
Satish Kumar
Got it sir, Thanks a lot for your response.
Manish Gupta
Thanks.
Operator
The next question is from the line of Nia Agarwal from Sage One. Please go ahead.
Neha Agarwal
Thank you so much. I just had one question pertaining to our new gen AI and LLM-based solutions which we have been introduced. So is there any initial reaction from clients with respect to those any specific new business opportunity that we got an account of it.
Manish Gupta
So it’s still early is for that. We have, I would say a very positive reaction from our clients and we have multiple conversations going on with our customers right now. Right. Where these opportunities range all the way from building agents for them to using this as a broader platform for them to outsource some of their work in different areas as well. Right. So it’s a broad range of conversations, slightly strategic conversations, that’s where we are.
But apart from the pilots and spoke about, I won’t say that there are any big closures behind this right now.
Neha Agarwal
So can we market them in a way that, you know, will this be largely a part of BAU or we expect any material recognizable impact from such solutions in future.
Manish Gupta
So I would say that we are not going to, unlike other companies, try to break this up because one of our propositions from very early on has been that we bring technology as a big differentiator to deliver superior outcomes. Right. Our offering and our value proposition to clients are not FTEs or bodies. It’s been always business outcomes, right on how we think and technology has been a key driver for that and AI has been for a very long period of time a driver for that. All we are saying is that given that we’ve been doing this for you for a long period of time and Genai has come in right? So we are the best partners for Genai also because of XYZ reasons.
Right now what Genai does is offers, enables us to do 4 more things. If I doing XYZ things for you now because of gen AI, I can also do ABC, right? And add stuff to that so that extend breaking it up separately might we believe is not a great idea,
Neha Agarwal
Just one follow up on the same thing. In that scenario I understand there could be a long discussion period for such deals and ideally an impact of such development to a year or so to start coming in by when do you think we can expect some meaningful incremental contribution in terms of maybe expansion in single client contribution itself? Single client size increasing from a couple of million to north of $10 million and above. So that kind of an impact because of these developments, is there a timeline for that we have in mind or where we think that impact should come?
Manish Gupta
So your question was more about Genai impact?
Neha Agarwal
Yeah, yeah, impact. Basically the new solutions that we have been developing and working on on the overall single client wallet size or contribution to our revenue.
Manish Gupta
Yes, Neha, I would say it’s a little too early to call that out because this is also significant change management for our customers.
Suhas Prabhu
But having said that, as Manish mentioned, the way we engage with our customers is bringing technology contextualized to the industry combined with the expertise and therefore some of the use cases while we showcase to our customers for expansion or newer customer acquisition would also get embedded into our existing engagements and therefore while that might not necessarily show up as incremental business would still start impacting the way we operate and over period. Margins from an internal perspective but at the same time external, you know, validation from a customer acquisition or expansion, I would say it’s a little too early to do.
Neha Agarwal
Understood, that’s helpful, thank you.
Operator
The next question is from the line of Shahzad Shra from Dmeta Advisors. Please go ahead.
Shahzad
Yeah, thank you for the opportunity. A couple of questions. Number one, from a medium to long term perspective, do you see any risks to our business from gccs? Do you see companies having more conversations around insourcing some of the services that they outsource to us? That was number one. Number two, possibly we could be in a environment going forward where the dollar is depreciating. So in that case that would mean lesser realizations for us. So how does that impact us? Do we adjust our pricing or there will be some impact on our margins? Yeah, that’s it.
Manish Gupta
Yeah. So maybe I’ll take the latter one first. Shahzad. So you’re right, the depreciating dollar would impact our realizations given that almost 80% of our realizations are in US dollar terms. But having said that, we maintain a healthy. Hedged position through plain vanilla forwards and rail forward. So you know typically in the range of 75 to 80% on a 12 month forward the net realizations are hedged so we don’t anticipate a near term impact on the due to a dollar depreciation itself. And I’ll pass it on to Manish for the first question on gcc.
Shahzad
Yes, as far as GCC is concerned again we have spoken about this in the past. What we see is that GCCs are typically being used for slightly more homogeneous capabilities by our clients but there is a certain type of a skill set in large numbers right? That’s where we see our clients drive more insourcing in GCC. Some of the sometimes AmuleTech those are the areas which we see given the same type of profiles. But if you think about our engagements especially on enterprise commercial and all of them in omnichannel activation is around multiple skill sets coming together across multiple geographies. Those are just not conducive to a pure play out of shoring or GCC type of concept.
And hence we see our clients even who are setting up GCCs and scaling them up do both. For example, this 5 million ACV deal I spoke about which we won has that potential to scale. That deal is with a client which has a GCC and is serious about their GCC strategy. Our largest customer on one hand pursues bunch of things in the GCC but continues to engage with us the slightly more complex global multi capability engagement.
Right. So we would see this in playing out in in a similar way we believe.
Got it. Thank you.
Operator
Thank you. The next question is from the line of Prakash Kapadia from Spark PMS. Please go ahead.
Prakash Kapadia
A couple of questions from my end. You have given the environment Manish, which you alluded to in the opening comments in terms of you know, some of the FDA related challenges or issues which could slow decision making in terms of you know, AI getting production being slower or decision making being slower. So you know, in this environment what kind of organic revenue growth could we expect in FY26? And you know if you could give some insights into specific geographies US or Europe, that would be helpful.
Manish Gupta
So all I can say is we are not giving guidance and we’ll stay with that. Right. And as I mentioned that we still remain cautiously optimistic. Right in this, even in this. Environment. And the reason is the following, that while there are lot of headlines, right. Being created and we also see that at least right now, there is not too much effect on our clients business and hence our business. Right. That’s one part. Of course the reason I spoke about the decision making is if you’re a senior management in some of these largest companies, you are spending a bit of time to figure out what’s going on, dealing with those uncertainties. And hence some of the larger engagements are getting essentially or might have the potential to get pushed out a little bit here or there along with that. Let’s be very clear, the biggest impact which a company like us or for the industry is really not these tariffs and stuff like that. Right. It’s going to be the drug pricing which we have alluded to. And we believe that is going to continue to be under pressure over time in a secular way. And that is what is going to lead to pharma companies continue to be more efficient and effective. Right. And so, and that’s where we step in. If you think about it, even the FDA cuts, right. As a pharma company you need to be submitting sometimes with as much data, right. Being more comprehensive, which means that you need to do a better job. Right. And cost effectively, which is the AI and solutions which we offer are useful. So we remain, I would say cautiously optimistic in the short term and optimistic in the medium to long term,
Suhas Prabhu
Maybe also adding onto that on the geographical part. And if I were to read it more, as you know, impact on customers who are headquartered in Europe versus those in US I would say no significant difference there because end of the day for the large or mid sized pharma segments, which is where we derive most of our revenues from, end of the day, the market, the largest market continues to be US typically 50% for some may be even higher than 50% of revenues with respect to where they’re headquartered. And therefore we see similar behavior and patterns irrespective of whether it’s a European customer or American customer.
Prakash Kapadia
Okay. And what kind of capex are you know, we planning to do in FY26 and what could be technology spend if you could share that number?
Suhas Prabhu
Sure. And I would also request you to look at our RHP as well as past financials. We’re not a capex heavy. Organization. So from an investment in fixed assets and capital expenditure, I would say we would be in line with what we have we had planned and was disclosed in the RHP actually for the year ending March 25th. There’s been a little bit of spends which were under the plan as per what we had disclosed in the rsp. The spillover of that would potentially get consumed in the current fiscal year. But again nothing material. Yeah, typically that one odd percent of our revenues, the capital expenditure. Having said that, technology as investment in terms of our workforce that works on our internal IT development, what we call the office of the cto, you can call this our R and D team because these are not billable resources. That continues to be a focus area for that. That continues to be one of the reasons, you know, why our margins this year came in a little lower because higher non employee costs. Also because it’s not just the people but also investment in infrastructure as well as the tokens and other costs of the gen AI platforms that we use and work with in our IP development that would continue to remain. But you know, consistently over the past four, five years that has been in the vicinity of 2% of our revenue would be in that 1.7, 1.8% going towards 2% but would not be materially different from our plan going forward.
Prakash Kapadia
Thank you.
Operator
Thank you. The next question is from the line of Rohan Vora from Envision Capital. Please go ahead.
Rohan Vora
No, am I audible?
Manish Gupta
Yes.
Rohan Vora
Yeah. Thank you for the opportunity. So two questions here. So first was after, after a couple of quarters we’ve seen a number of employees go up space actually on the delivery side. In addition to this, what we are constantly also seeing is that specialized employees, the domain expertise that we have, that percentage is going up. So strategically how does one treat this? This was first question and the second question was this year. The clients that are beyond 10 and then beyond 20, those have contributed largely to the growth that we’ve had. So. And you also alluded that you know, some of the large deals are taking time. So if this were to continue for this year as well. So what would be the impact of margins given that, you know, the tail is contributing to the larger growth. So these are the two questions. Thank you.
Manish Gupta
The margin profile is not too different between these customers, so I don’t think that’s going to be an impact. And we also believe some of the large teams we are talking about, it’s not that they’re getting pushed out by years. Right. It’s a matter of months and quarters of the max. Right. So that we’re not too worried about at least right now. With that, I’ll pass it on to you Swaswari to employ
Suhas Prabhu
Yes on the employee count directionally, as we grow, our people account would tend to grow but there would be an offset because technology does play an impact in our operations on a continual basis and it would not necessarily be pro rate. Other employee addition would not necessarily be prorata to be incremental revenue on an ongoing basis this year. As I also mentioned during my opening remarks, we have also onboarded people for potentially large deal with one of our top 10 customers but it’s still awaiting the closure of that pipeline. The other remark that you had was query that you had was on the domain specialized people. Domain specialization is required across all segments of our business. But there would be a marginally higher impact if the enterprise medical segment grows at a pace faster than the rest of the business, which has been the case in the fiscal year gone by FY25 we have seen a marginal higher growth on the domain enterprise led employee base. But having said that, around that 21 to 24% would continue to be the domain layer given that it would be slightly varied between various business segments.
Rohan Vora
Sure. Thank you.
Operator
Thank you ladies and gentlemen. That was the last question for today’s conference. I would now like to hand the conference over to the management for closing comments.
Manish Gupta
Thank you everyone for your participation and continued interest at Indigene. We also thank you for your participation in March when you came in to our offices in Bangalore and participated in the Investor Day. We look forward to your participation in such engagements as well as the next earnings call. Thanks and have a good day.
Suhas Prabhu
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.