Infollion Research Services Limited (NSE: INFOLLION) Q4 2026 Earnings Call dated Apr. 20, 2026
Corporate Participants:
Purvangi Jain — Investor Relations
Gaurav Munjal — Managing Director
Abhishek Jha — Chief Financial Officer
Unidentified Speaker
Varun Khandelwal — VP Strategic Initiatives
Analysts:
Shikhar Munda — Analyst
Rohit Balakrishnan — Analyst
Mahesh Akhtar — Analyst
Parth Agarwal — Analyst
Saurabh Kumar — Analyst
Darshil Zaveri — Analyst
Unidentified Participant
Shalini Gupta — Analyst
Sarka — Analyst
Vikas Kasturi — Analyst
Pramod — Analyst
Shubham Jhawar — Analyst
Presentation:
Purvangi Jain — Investor Relations
Good evening everyone. My name is Purvangi Jain from Valorem Advisors.. We represent Investor Relations for Infollion Research Services Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings conference call for the second half of the financial year 2026.
Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings call is probably to educate and bring awareness about the company’s fundamental business and financials under review.
Now let me introduce you to the management participating in today’s earnings call. We have with us Mr. Gaurav Munjal, Managing Director; Mr. Varun Khandelwal, VP Strategic Initiatives; Mr. Abhay Sangal, Business Head NAMR; Mr. Abhishek Jha, CFO; and Ms. Megha Rastogi,, CS and Compliance Officer.
I now request Mr. Gaurav Munjal to start with his opening remarks. Thank you, and over to you sir.
Gaurav Munjal — Managing Director
Thank you. Thank you, Purvangi, for the introductions. A very warm welcome to all the investors. Before we get into the Q&A session I’ll just quickly browse give you a brief of what happened in this financial year. So this year we had a pretty decent execution, we on the volume front we were almost at the long term growth trends at an annual level our core India business continued to demonstrate resilience growth and so in the second half of this financial year we saw some moderation. So usually our second half of the year is almost equal to the first half of the year. But this year we saw a decrease in volumes towards second half especially in the last quarter and which kind of peaked in the, in. In March, in March there on a per day level the number of projects we received was very low, almost 25% lower than what, what was the usual run rate which kind, which almost led to a flattish annual number but at a annualized level it was almost 30% increase.
So besides that last year we had promised that you know there are at least two or three initiatives which we have taken which were out of the experiment stage. So this year we set up the teams. For Hooksa it was almost a 15 member team. Now we crossed the first crore. It is at least in the initial stages of a business no longer experiment. Our US operations, the India to US corridor increased at a steady growth from a quarter to almost one third. Now the US to India operations also recorded its first quarter and a bit of surprise and a bit of positive side was that while we started MENA much later, MENA is Middle East and North Africa much later in the essentially this year we started traveling and started maintaining a presence over there as well.
And it also, it actually grew faster than our other businesses, at least the other initial businesses primarily because it is very accessible in the time zone and presence of a lot of Indians. And we also recorded the first crore from there. So three new growth areas. We also started expanding in EU a little, but that’s probably a year away from any meaningful number.
So on the client side, especially in Hooksa, we added a lot more logos for our core India business. We have seen that our clients haven’t grown as much as they used to. So this was a relatively flat year for most of our client sets. But in Hooksa we added a lot of logos. Our target is to add a lot of clients from a perspective that once you become a registered vendor we can expect a regular flow of training from them. So which I think is going ahead well, we have been conducting a lot of trainings. We have got a reasonable number of repeat clients as well and hopefully it will become a regular business in the years down to come with very reduced CSE.
So we are not using. Social media or, or online channels too much as of now. It’s quite expensive to from a CAC perspective. But vendor registrations is our primary CAC investment investment which might release which might turn into a regular business flow down the line. So especially in Hooksa we did almost 100 plus trainings this year. We are trying to move into a managed training services model where we have built up certain internal capabilities which we can offer to our clients more on it during the presentation.
So in us we made steady progress, although it is not meaningfully big right now, but I think over a period of time once we build the expert base, they should start paying off. We have been maintaining a presence of at least a month per quarter in US at an overall operational level we added almost 70 employees. So we are 270 at the end of the year. Most of these employees have been added in relatively newer functions. So we now have a reasonable sales team. We now have a, you know, Some senior guys moving in from core businesses to newer initiatives. AB Varun and one of our senior leaders, Monica who was heading Healthcare has also moved on to to a larger role in MENA. So we would be, we would be trying to. In fact we’ve expanded the tech team as well. So Almost at almost 2025 people including a few senior guys have moved on from our core business roles to newer expansions. This has led to a bit of vacuum in the existing business and we would try to expand that team from operational level as well this year.
So on the tech front we have been building our PROC platform. I think we’re pretty happy where we are. We are one of the first networks to have completely open APIs. This year we’d probably open up our MCB server as well and in fact should be a matter of time where we also did a lot of bot moderated calls and overall most of the investments which we made in the tech front are going on at a healthy click. We expanded that team as well AI. So we have done a lot of. In fact we’ve been saying for a while that we’ve using the three pillars. In AI, we want some human in the loop logic, we want prop data and as of now we are not going very aggressive on investments on that front. We are just making sure that whatever we invest is recoverable at this stage. The kind of amounts that are needed to do anything in AI are, are substantially larger than what we can afford at this stage from a. After having ROI. I mean of course a lot of. Having said that from within the expert network world we should probably be at the leading edge on that front as well. So that’s a quick overview. My side on the financial numbers we’ve already declared there on your screen but Abhishek will browse you through with some more details.
Abhishek who is also our CFO. Abhishek, over to you.
Abhishek Jha — Chief Financial Officer
Yeah, thanks Hook. Good evening everyone. My name is Abhishek Cha, CFO at Infoline. Coming to the financial performance for the financial year 2025 and 26 Infollion has crossed the INR100 crore revenue mark this year. Celebrate stood at INR14.73 crore and PAT reported at INR12.7 crore. We were able to generate a cash flow of over INR10 crore from operations and over 8 crore for as free cash flow for this FY. Precise numbers are given in the financial statements filed with the NSE. These are also available on the company website.
Thank you. Now we can move to the Q&A session.
Questions and Answers:
Operator
Thank you. We’ll now begin the Q&A session. If you have any questions, please raise your hand. I can. Yes. Mr. Shikhar, please go ahead.
Shikhar Munda
Hello. Hi. Gaurav. J. How. You
Gaurav Munjal
Tell me.
Shikhar Munda
Yeah, so what was the volume of calls we did in H2 versus this year versus H2 last year?
Gaurav Munjal
I think that would have been disclosed. Abhishek, can you help me with that?
Abhishek Jha
Yes. So H2 in 2025 was almost 9,000 calls. And H2 is in 2026 is 9,800 calls.
Shikhar Munda
Okay. And what was the reason for this March month not being so good on the volume of calls? And are we seeing a trend reversal in April?
Gaurav Munjal
So I’m not so sure. But overall the second quarter. Oh sorry. Fourth. The second half of second half. The second quarter. Second half. Basically Q4 of this financial year we saw a bit of weakness. We were observing this weakness for a while in March. I’m not so sure what happened. To be honest. We don’t really have the detailed numbers but we saw a significant decline. We spoke to quite a few clients of ours and they have seen a flattish growth in their own numbers as well. I’m not so sure if it is the war thing which is kind of seen a decline in numbers. We have seen some improvement in April. But it is still back at a same per person level, per day level. We haven’t seen a meaningful increase at this stage.
Shikhar Munda
Got it. And regarding our employee expenses. So as of now, can we say is it safe to assume that the current employee expenses have peaked out or are we planning to add more employees for this FY27?
Gaurav Munjal
Of course we will add more people in FY27. How can they be picked up? So I’m not sure what do we mean by peaked out. But what I can say is that at least, you know, one half, two crores of employee expenses have been besides the core business. In the newer initiatives, whether it is expansion, whether it is tech, whether it is sales, whether it is Hooksa, almost a couple of crores has been spent. Had we been doing a similar in the same line of business and continued, we could have probably saved that. But we are definitely investing in future growth.
Shikhar Munda
Got it. Got it. So what I meant was is the rate of growth of this employee expenses. Will we see a slowdown over here or a similar kind of growth in the employees will be seeing going ahead in the employee expenses.
Gaurav Munjal
So employee expenses is not a monolith for us, right. So. So there are three or four parts, right. I Mean for the natural course of business, which is a core business. Let’s say if you are about, you know, 180 to 200 people doing the core India business, they would probably need not, would not see growth at the same pace as revenue. But for others, if we spot an opportunity, we’ll do that. In US we still really haven’t started recruiting. We are still just traveling. US is a very expensive market so we haven’t recruited in Europe.
MENA, we might try at a consultant commission level to begin with but for newer initiatives, sales, we would definitely add more people. Hooksa. I hope we add more people. It’s a good thing. Which is still a new building new business which is coming up. For a core India business, definitely the growth is going to be much slower in terms of how many number of people we add as opposed to the revenue growth. For US Business the growth has already come down. We went from zero to almost 3,540 in the last year.;And this year we have really, we haven’t added so many.
Shikhar Munda
Got it, got it, got it. Thank. Thank you Gauravji and all the best.
Gaurav Munjal
Thank you.
Operator
Thank you Mr. Rohit, please go ahead.
Rohit Balakrishnan
Yeah, hi. Hi Donna. So Gaurav, am I audible?
Gaurav Munjal
Yes, yes. Hi Rohit.
Rohit Balakrishnan
Yeah, yeah, hi. So few questions. So one was in terms of the note that you had shared, you talked about a specific client where we had to give out some discounts and to sort of strengthen our position and the volumes also sort of went down. So I mean in the past you also mentioned that we are probably the most competitive in terms of our positioning at level that we can operate and the kind of margin that we have. So just wanted to understand like if we, if we are already at a very strong why would we need to give out more discounts, etc.? So that was my first question.
Gaurav Munjal
Okay, so so you want to ask all the questions together or you want to continue one by one?
Rohit Balakrishnan
Maybe one by one would be better because I think the volume growth
Gaurav Munjal
One I just said that, you know, we’ve of bit of decline in March, specifically in the last quarter. Probably it is related to, you know, the overall economy and the clients not growing at the speed at which we expected. Plus our baseline of US growth was much, much lower in the previous year and this year it was much higher. So growth wasn’t that high in the, in the second half. Next, I think your question was around discounts, right? So there is no specific client per se whom we give discounts to.
To be honest, we are leading the charge. We are actually offering. We don’t offer upfront discounts for sure. So what we typically do is whenever someone is pitching to their client, we join them at the early stage and then we say that we would help you out with the scoping initial calls, which is known as corporate development calls for them. And then if the project converts over a period of time, we try to recover. For newer geographies, the CD calls are offered at a higher number. But we do not have the capability to service at this stage.
It is more like a relationship building exercise that you know, whenever you are pitching into a new client, we would be happy to be a part of that investment, right? Any service business pitching to a new client in itself is an investment. Sometimes it may translate into an immediate revenue, sometimes it takes months or years to really build a relationship with the client. If the client project doesn’t convert, then it kind of goes to waste. Regarding the second point which you mentioned on why do we need to offer discounts?
We don’t really need to offer discounts. We have been very aggressive in the sense that if you do so and so if you continue. So we operate in a multi, multi vendor environment. So what happens is in that environment, if you want some kind of client stickiness, we say that if you complete a certain amount of calls with us towards the end we would reward you or we would waive off the charges of the last few. So that kind of concentrates the calls with you as opposed to your peers in a multi vendor setup.
So that’s the only point. We believe that structurally we have the capability to offer those discounts even at these margins. But that’s a leverage which we have in our business. It’s usually not very price sensitive. So it’s not like that. It is a commoditized product where you give discounts and the volume increases and you remove discounts and the volume goes down. So it’s usually a long term building exercise for us at this stage.
Rohit Balakrishnan
Understood. And just related to this then I think, I mean of course the gross margin impact was pretty sharp this year. We’ve been operating at about 45, 46% very consistently. So I think you called out that around 3 crore was an impact of these two things which you mentioned. So if I were to like just remove the new initiatives and you look at the domestic, I mean the domestic calls business, whether these calls are arising from us or India, just the US Your core business as you, if you will, what is the gross margin level that you think that we should look at?
I’m saying that let’s. Let’s remove the expansion, whatever you are doing in terms of. And the free call etc. So if you were to sort of just give a rough broad number, we were at 45, 46%. Do you get back to that number or because the growth has come down and because of other things now maybe that 45, 46% is not possible. Just highlighting again not talking about the new initiatives at this point of time.
Gaurav Munjal
So if we remove the new initiative couple of crores out of these 3 crores. So we are at a similar net margin, right? So. So at least less than a crore kind of a number. So even if you’re spending let’s say two, two and a half crores on something which is not giving us immediate business, a reduction of about 3 crores in net in overall gross is not meaningful enough. It’s barely left with. In absolute terms it’s just about a crore and a half. A few trips to us. Just basic stuff. You know, if we end up hiring couple of people in US it will probably be 3% of our net margins.
So we have to also keep that in perspective that in absolute terms it is not very substantial. Even if you hire one person at let’s say 120, 130K in sales and if we have two people on east and west coast that will amount to almost three and a half crores. So coming back to your question, that is it entirely the gross margin. So if you remove the initiative part even after reducing the gross margin it would not have been 3.534%. It would have probably been 1.2%. Having said that in our business 1 2% is not substantial. You can easily increase the price if we go into the consolidation model.
Rohit Balakrishnan
Got it. And this last is
Gaurav Munjal
Not very price sensitive. At a very broad level it is price. I mean a lot of you would have done calls. People do pay at pay. Peoples will notice the price range. But at 1 or 2% it’s. It doesn’t really matter. It has. The other things matter far more in rich.
Rohit Balakrishnan
No, no fair. I think I understand. So just two more things. Please
Unidentified Speaker
Come back in the queue. We have a long line of questions.
Rohit Balakrishnan
Okay,
Mahesh Akhtar
Thank you. [Operator Instructions] Mr. Parth Agarwal, please go ahead.
Parth Agarwal
Hi. Thank you for the opportunity and hi. So first is more of a clerical error. Just I wanted to point out in the presentation, I think you Know if you, you mentioned the presentation, total number of Experts, that’s at 1:36,461. And I think in the subsequent slides you also shared the breakup between domestic and international. But if you total the domestic and international, it will not add up. So probably you can just check internally and maybe one of
Gaurav Munjal
Them is not updated. Yeah.
Parth Agarwal
Okay, coming to the question. So since, you know we are focusing towards US market, my question is like, you know, what kind of customers are we targeting and what is the strategy there? Basically, are we targeting customers who are new to the export network industry or are we essentially trying to gain market share from our competitors in the U.S.
Gaurav Munjal
Competitors in the U.S.
Parth Agarwal
And then
Gaurav Munjal
So we, we have mostly our own. We have converted most of our contracts to global contracts. Most of our clients are global. So we are targeting to expand within that.
Parth Agarwal
So how, so how does that.
Gaurav Munjal
And of Course we are targeting new, new customers as well, but most of them are well aware of the network industry.
Parth Agarwal
Got it. So then how does the value proposition work? So for the exit, so what value proposition?
Gaurav Munjal
So we are focusing on two or three specific domains where we want to go deep before we start expanding into other domains. So, so what we are trying to do is we are going to offer two hooks. One is extreme custom recruitments, even at the cost. So custom recruitment is usually a high cost affair. So we will do custom recruitments and even if we have to take the cost on the chain, we’ll do that in order to establish the relationship. Second, once we have the network done, we believe we are structurally in a very good position if we are able to concentrate our capabilities into one or two domains.
Parth Agarwal
But it’s essentially you’re trying to break into a couple of domains to gain foothold into the US we
Gaurav Munjal
Will not go very wide initially, we might go wide in the custom part, but we will try to focus all our resources into one or two domains to, to really gain market share.
Parth Agarwal
But then how does the value proposition work? Let’s say you say life science. May I have this, you know, expertise and I have deep domain expertise. So
Gaurav Munjal
Structurally, we think we have a fair amount of research capabilities. We would be able to gain market share.
Parth Agarwal
Got it. And just one last question. So you mentioned about acquisition in your press release that you have released. So are you looking more like key any opportunity the US market to expand to get. Yes, we have evaluated
Gaurav Munjal
Yes, we evaluated that as well. To be honest. Either they are too expensive and if they are not expensive, we haven’t really found value in them. But as of now in US we are inclined more towards build. But we are actively exploring if we are. If we are able to get something. We have filed our. How do we perceive the entire MNA bit and each and every segment we have. Given that. What is our interest level? Given that we have added almost 10 crores of cash flow we are in a far stronger position than last year as well.
Parth Agarwal
Got it. Got it. And just to confirm our unit economic, Sir,
Operator
Please come back in retreat.
Parth Agarwal
Thank you.
Operator
Mr. Saurabh Kumar, please go ahead.
Saurabh Kumar
Hi Gaurav. Hope I’m audible.
Gaurav Munjal
Yes. Hi sir.
Saurabh Kumar
So my question is around all these three new businesses where currently we are at around 1 crore mark. At what revenue level we expect these businesses to break even. And do you have any timelines or aspirations in mind for each of these three businesses to break even?
Gaurav Munjal
So first things first. MENA and US are not really separate businesses. They are just leveraging our existing core. If we include the India to US corridor, probably US business is already breakeven. The key point is at what point of time do we have a network deep enough to justify investments in us? So I think roughly a million dollar mark should be there. If we get to about 8, 10 crores we should start hiring in US. That’s the idea. Meena. I don’t think we would be doing a separate hiring. We can easily service that from India.
Maybe a bit of sales hiring Hooksa, it is new to us. We don’t know how it will pan out. At this stage I think we have enough number of people to take it to the next level. The mrrs or at least the. In fact Hooksa has been a completely different trend. What was there in the first month versus what there in 12 months is much, much different. From April 2025 to March 2026, if we continue with the numbers which we have seen in the last two, three months of March 26th of Q4, we should be in a good position in OSA at this stage if required we would add more people. But at this stage maybe
Saurabh Kumar
So the margin drag which has come like will it take 3 quarters, 4 quarters, 5 quarters. Do you have any rough idea where we expect these margins to bottom out? In how many quarters?
Gaurav Munjal
I just cannot. Even if I try to, even with the best of my abilities, I cannot predict it in quarters. In the longer run I know what’s going on. But in 3/4, 4/4, 5/4, I just don’t know what will pan out. How the war is going to pan out, what impact AI will have, how many new clients will Be able to get how India. There are just too many variables for me to try and predict even if I do my best. But in the longer run we still believe that we would be a derivative of India economy given that it is structurally a network business and if we can keep on harnessing the existing data capabilities, we should be able to concentrate and kick in the network effects.
Margin, I have already given a sense that margin contraction. There are three or four conditions at play. One is we became aggressive on gross. Two is we added almost a couple of crores of extra costs in the net margin play. And even in the gross margin play, had we had a good Feb in March or specifically March, even just 500 calls more or 100 calls a week extra would have given almost a crore and a half crore, crore and a half kind of extra number. So there are three different plays happening at a margin compression. When are they likely to come back to normal? I can’t predict in quarters for sure but in the longer run we definitely have capabilities of higher gross margins.
Saurabh Kumar
Sure, Gaurav, thanks. And last question on the current H2 India’s performance. I mean it could be war with the war going on. But are there any chances that structurally in India the growth has matured out or you don’t see any such chances. You see more it like a one off event or some kind of cyclicity or have you seen in the past these kind of cyclicities where one or two quarters were flat?
Gaurav Munjal
Yes, yes, yes. Every now and then it can happen that you could have a extended period. Having said that, most of our clients witnessed exceptionally good growth in the early years in the last six, seven, eight years. I would say at some point of time they would also take a breather. Consulting industry in fact in the entire financial industry which also feeds into the consulting industry, it is nothing but a derivative of the broader economy. And if that’s taking a breather, we can’t really do much about it. We’ve seen our conversion rates are still similar but our inflow of projects did come down a little towards the end of the year. So maybe since most of our clients are either LLPs or private, we would get to know by October, November that what was their growth rates this year. But my bet is they were probably lower than the previous years.
Saurabh Kumar
So should we benchmark like we can take big four like KPMG Eye and all and we can see at what rate these big fours are growing and is your growth could be a proxy of that. I mean just to correlate
Gaurav Munjal
So not the big Fours but the strategy consulting arms or big fours, other consulting arms, private equity investments, public market investments. I explicitly said that we are nothing but a derivative of these three or four categories.
Saurabh Kumar
Got it, thanks. Wish you all the best. Thanks.
Operator
Mr. Darshil Zaveri, go ahead please.
Darshil Zaveri
Hello. Yeah, good evening. So thank you so much for taking my question. So just wanted to you know, ask about our growth perspective. As you said, you don’t want to predict something quarters down the line. But if we had a broad medium term guidance like how would we see that and what would be the biggest growth vectors for us? Like would be the growth drivers? Like which part will you know kick in more growth? Like what conditions will be there which we can, you know, rely on. So we are
Gaurav Munjal
Hoping our international business growth is going to be better than our core India growth, India growth is going to be dependent on the three factors which I just stated. How does the, you know, overall strategy consulting grow, how do the overall private equity investments go and how do public markets grow? So these are the three growth drivers for our core India business. India to US business. It will probably dependent on how soon we are able to build, build out the network in US. Besides that, if we are able to crack the LND market that’s a much bigger market At this stage it is still speculative. So I would not be able to point out that what can be the growth in the LND market where it still business. To be honest, at this stage it is too early to say anything. It might take years to even pan out.
Darshil Zaveri
With regards to like our volume, you know, we just wanted to understand is it that the research that you know, maybe there would be levels to high level of medium term, level of resource required. Is it that some part of our clients are using AI for it and maybe they’re just coming to us for verification. Whereas previously they would come to us with four to five calls and now they’re just coming with, coming to us or asking our services. Last one, two calls where they just validating the data or research that they’ve gotten from AI. Like how do you look at it? Have we had any, you know, customer interaction there where, where you can see the volumes of calls and is that a reason, you know something that we can assume that is this a hit because of AI? Because personally I feel there can be some hit because of that sir. So any kind of idea that you’ve got and feedback from client or something that you.
Gaurav Munjal
Yeah, we collect this kind of feedback a lot with our client. At this stage, the ratio of projects to clients and their revenue still remains the same, whatever numbers we had. But it’s a very dynamic number. We don’t know how it will pan out. But what I believe is that with the advent of AI, primary data rarely gets impacted. It is the secondary data which is likely to get impacted. For the simple logic that unstructured data, available data, available reports, you know, things which were usually done by research reports for a few thousand dollars, all this will get collated and get discoverable.
So whenever someone is doing shallow and wide research, trying to understand the basics of the market, they’ll do it. But our business has never been that. So while you may classify us as a research business, but no one pays 500 an hour for basic research which is available. So your point is that they would be just validating. Maybe not. But if everyone has access to all the data, then all the more reason that primary data becomes far more valuable. But the data which has never been written down is what we bring on the table.
And it is not that we have been saying this after AI started, you know, when, you know, these LLMs turned up. We have been saying this right from our 3, 4 IP, 34 year IPO roadshow days that the reason we exist is because this information and human in the loop and that intuitive ability of experts is what we bring on the table. So AI is definitely going to reshape the research setup. How will it pan out? Your guess is as good as mine. But what I believe is that we would like to be at the forefront of it.
We will definitely try to procure best ways of primary data. AI has helped us a lot. We see it both as a threat and opportunity. And in fact a lot of other things have opened up. As I mentioned, bot moderated interview. So instead of four or five interviews, some clients have started taking 30 minutes, lots of interviews with bots. Because the limiting factor in some cases was not just the price, sometimes it was also about analyst time and the ability to synthesize. So which also means that they can probably collect more data. So there are both positive and negative drivers. Having said that, shallow and wide research is definitely going to be impacted, but primary research not. And there are enough opportunities as well for it to cover up.
Darshil Zaveri
Okay, fair enough. And this is the first question. Hello?
Gaurav Munjal
Yes, go ahead, Darshil.
Darshil Zaveri
Yeah, I was asking in terms of medium term growth, like even if you don’t want to comment a year to your basis, like any kind of like a broad growth guidance that you know, you would be like to give. Sir,
Gaurav Munjal
I can Just think of it in a, you know, three to five year perspective. I’ve already explained everything I could. I can’t really put a number at this stage. Let it stabilize and we will be able to do that. The new businesses, they are too small to really, you know, share a sample at this stage and the old business, there are too many. It’s a bit volatile to predict. So even year on year level, I, I, I don’t know. But in at a five year level I probably know that this business is going to be larger.
Darshil Zaveri
Fair. Fair. Thank you sir.
Gaurav Munjal
We do not have the capability to do that to be honest.
Darshil Zaveri
Fair. Fair. Thank you.
Operator
Thank you. Mr. Sarka, please go ahead.
Unidentified Participant
Hi Gaurav JI. In the previous call you had mentioned that you’ll be disclosing the data for free calls and total paying claims. Could you please quantify these for the current period? Also help us to understand how these.
Gaurav Munjal
So free calls.
Purvangi Jain
Yes, yes. Free calls and paying like so conversion of these recalls into Bitcoin,
Gaurav Munjal
I’m not sure we would be, we, we don’t have it ourselves. I’m not sure we could disclose it. But overall how it works is that we give CD calls from the projects, get converted, they become a part of it and the volume discount happen at the end of the project. So it’s never that this call is free or this call is not free. It’s usually the project which gets compressed in the last few calls. We give a, you know, a 2% or 3% volume discount or something like that for CD calls. Again, some of them, you know. So you could assume that CD calls in India will probably be doing about 10 lakh a month of sorts. I mean never more than that.
Unidentified Participant
Oh, thank you sir.
Operator
Thank you. Ms. Shalini Gupta. Please go ahead.
Shalini Gupta
Yeah, can you hear me?
Operator
Yes, ma’. Am.
Shalini Gupta
Okay, great. So sir, I just wanted to ask if you can just please repeat why the gross margins in this quarter have been hit. I, you said that. You’ve said it before. If you can please explain yourself again.
Gaurav Munjal
Okay, so. So you’ve actually given that in the commentary. Is there, if there is specific question, I would happily be happy to answer that.
Shalini Gupta
No, if. No, it’s okay. If you can just, just. I just, I’ll just read
Gaurav Munjal
Out the same thing. So, so gross margin. So. No, we have been trying to expand into newer businesses, especially newer Geos outside India. And we would like to build up relationships or long term relationships with newer partners and newer companies. Plus we would like to become quite aggressive from a pricing perspective within the industry. We believe that structurally we are very well capable of absorbing that and we want to lead that thing rather than being driven by competitors. In fact, it makes it difficult for competitors to match those kind of gross.
Structurally, we are at a very good position at a per person, per call level, especially in the India business we have a lot of data capabilities which we can harness. So we are very aggressive. We want to be dominant within our India market. We want to gain market share. Maybe just three years ago or even five years ago, we were amongst the top one, top two kind of a number. We are probably equal to the next two or three combined now. So we are gaining market share at a steady state. I mean, amongst the India group players, we are gaining that at a steady state. And we believe that, you know, we can easily work with those kind of gross margins at this stage. And along with it we can offer, you know, relationship based discounts or, you know, to build relationships with our newer clients or in a multi vendor setup, try to get the relationships more sticky by offering, you know, volume based discounts towards the end of the projects.
Shalini Gupta
So, so is my understanding correct that you’re saying that these gross margins are what are, what are likely in the next maybe one year or two years. Is that correct?
Gaurav Munjal
No, I never said that. I said it depends. I mean, it depends on a lot of factors. If we go move into the consolidation phase, then probably we can increase the price. But if we keep on moving into the growth phase as well within India market as well, you could probably keep that. It depends. I mean, there are too many variables. But structurally we have the capability to increase the margins. There is a leverage. I’m not really predicting anything at this stage. But what I can say is that we’re pretty happy with the, with the overall numbers and in the sense that we can easily work with these gross margins and if we wish, structurally we have, in the entire market, I think we have the capability to work at the lowest margins and still be far more profitable at a net level while expanding. So even if we just stop expanding, we can add 2, 3% of our expense.
Sarka
Okay. And so my second question is,
Operator
Mr. Shalini I request you to come back.
Shalini Gupta
Second question I’m just asking myself.
Operator
We have a lot of participants over here.
Shalini Gupta
Okay,
Mahesh Akhtar
Thank you. Mr. Mahesh Akhtar, please go ahead. Yeah, hi, Gaurav. So Gaurav just would like to know, how do we see your business coming to employee expenses? For example, the employee expenses have gone up by 25% in last financial year, whereas the business has gone up by 30%. So how do you actually look into, you know, Addition of employees. Is there any productive analysis, productivity analysis that we have done? Like suppose if the employees go up by this percentage, the business has to go up by that percentage. Or maybe and I also would like to address you on the cost of sales. So what constitutes this cost of sales? Because I could see that it has gone up from 54 to 59 year on year and as a percentage of sale, of course. So how do we take this going ahead? I mean in the next financial year or maybe couple of years down the line, what could be the standard in this particular ratios?
Gaurav Munjal
This is a very similar question just answered in the previous one. So cost of sales is just the reverse of gross margin. So, so I would skip that the first question employee bit. I think as I said, just, you know, someone asked the same question. So it is not a monolith, it is not going in a percentage. There are three aspects to it. One is our core India business. Second is the, you know, somewhat predictable core but other geo business. And the third is Hooksa. So it at a, at a top level we are trying to expand sales capabilities.
UKSA is almost from scratch. So we don’t know how it will pan out. In our core India business, the rate of addition of employees for the rate of increase in volumes is not proportional at all. In fact, if we go into the consolidation phase, it can actually, we can actually be at far more productive. So at the overall percentage level, as I said, almost a couple of crores is less. Could have almost led to a similar number of revenues.
Mahesh Akhtar
But Gaurav just wanted to know why do we need employees? Actually, I’m not, I’m just trying to understand because you’re just adding, you have a digital network. Right. And you get lot of repeat business also. So where are you adding these employees into? Like, I mean, I mean if it’s a digital platform, I think the serviceability of one employee to all, there could be like much many of the clients which, which can be serviced by a single employee. Right. I mean I just want to understand how exactly you go ahead and do the recruitment.
Gaurav Munjal
Sure. So we are adding a fair number of employees in sales. We are adding people who work on us time zones for adding experts in us. And besides that, we have just built up a new vertical called hosa which is the LND vertical. So as I said, in our core business the ratio of increase in sales or revenue is not proportional to the added number of employees which you also pointed out. But we’re trying to do a lot of newer things in our course business when we are in the expansion phase, we increase the customer panel calls where our employees speak to a lot of experts.
There are very few self registered experts. We do not encourage self experts, self registrations. We are very curated platform both on a client as well as a export side and that’s where. So almost 50% of our employees are on the research side where they’re aggregating and getting good experts. About 20, 25% would probably be the servicing side and rest of it is sales and sales HR finance support. Now the ratio varies a little across that. That ratio has been mentioned in our DRHPs and this almost the same in our core India business but outside India and newer businesses is where we are adding most of the employees.
Mahesh Akhtar
Do you also incentivize your sales team when they get more experts enrolled? Is there any, is there any incentive?
Gaurav Munjal
Sales team is not the team which works with experts. Sales team is the one which works with newer clients and farming any…
Mahesh Akhtar
Incentivization that happens at an internal level to these guys.
Gaurav Munjal
Of course. So sales never works without incentives. But in our scenarios the incentives are geared more towards servicing than newer sales.
Mahesh Akhtar
Okay, so not addition. So only the service?
Gaurav Munjal
No, both. But I’m saying the servicing part and the expert part is also incentivized a little. But in our scenario we don’t have a ready product which you just go and sell. It’s in a multi vendor setup. You can easily add on to a project. But how do you service the project is where the real incentive takes.
Mahesh Akhtar
Do this sales also have.
Operator
Mr. Mahesh
Mahesh Akhtar
All right, thank you. Mr. Vikas Kasturi, go ahead sir.
Vikas Kasturi
Yeah. Hi Gauravs. So I had some questions regarding Hooksa. So these learning content that gets, that gets created. So is there, so do you look for repeatability of that particular ID and is it like targeted or is it generic? By generic I mean like something that gets created for one client can be used for another client. If you could just help me understand that part,
Gaurav Munjal
I’ll just quickly say a line and then I’ll hand over to VK. So yes, we are working, we are building the entire thing at a modular level. At least the first. The way we are envisioning Hooksa at the first level is that we’re definitely building modules. They would be repeatable. I’m not sure at what stage will that repeatability kick in, but at this stage we are just picking up whatever possible to have a reasonable level of data on which to build on. But yes, there is a fair amount of repeat rate. To tell you more about hooksa, the repeatability, the kind of clients, everything. I’ll hand it over to Varun, feel free. Varun, please go ahead.
Varun Khandelwal
Sure. Thanks Gaurav. So yeah, I think you’re right. What we are trying to do is we’re trying to capture both of these segments. You know, while we are very conscious about repeatability of our L and D programs and specifically the modules that we are creating, we’re also concentrating on providing customer bespoke solutions to our clients which are not generic or readily available in the market. That acts as a very good entry point for us. Right. So we do both. We’ve got a good level of programs on our website that are around IP.
We work with our experts to create these programs which can be a bit generic and repeatable. We’ve already done a lot of repeat programs. A lot of our clients have seen some of our programs and requested the same programs for their teams. What we are essentially gonna look at is we’re not gonna discount the fact that our clients would still need some bespoke solutions and how we can be more efficient with our sales is the repeatability angle of it. So where we are cognitive of both of it.
Vikas Kasturi
So at some point in future could you provide some more color around it like how much is repeatable and how much is like one off and what are the economics of both these kinds of.
Varun Khandelwal
Probably maybe I might have some answers for you.
Vikas Kasturi
Thank you.
Varun Khandelwal
The sample is still very small.
Vikas Kasturi
Got it. Thank you.
Mahesh Akhtar
Thank you. Mr. Pramod, please go ahead. Mr. Pramod, Mr. Please go ahead, sir.
Pramod
Yeah, hi, I just have one question like that. Following the increase in the authorized capital in last AGM up to INR50 crore and given that the company is in SME segment only with the paid up capital constraint, could the management clarify you are preparing for a potential main board migration, merger inorgan opportunity or any fundraising. Thank you
Gaurav Munjal
So much. We do have, I mean whenever the main board allows, whenever the. We cleared all the criteria, we would like to move to the main board if required. And at this stage I think we clear most of the criteria except a few. I’m not sure what would be the right number, but whenever appropriate we would definitely move to that and we’ll take care of rest of the formalities as well
Pramod
Because we are needed three years to be in this SME segment and 100 karo turnover which we have achieved this year.
Gaurav Munjal
Yes, three years and INR100 crores is done. There is I think thousand shareholders and there’s a few other things as well which need to be taken care of. We, I think we clear most of It. Some of it. If, if not then next year. If, if everything. I think there is some net worth create the number of shares criteria as well the overall. So. So probably Abhishek would be able to give you a better answer. But the short answer is that whenever required you at appropriate time will definitely shift.
Operator
Mr. Shubham Jhawar.
Shubham Jhawar
Yeah. Hi. Am I audible?
Mahesh Akhtar
Yes, sir.
Shubham Jhawar
Yeah. Hi Gaurav. Thanks for the opportunity. My first question was on the salary expenses that are getting capitalized. What would like, would this be a recurring expense and what would be the quantum for the same?
Gaurav Munjal
You mean the tech expenses, right?
Shubham Jhawar
Yes. Yes.
Gaurav Munjal
Abhishek, would you be able to help me with that?
Abhishek Jha
Yeah. Shubham, these are purely the salaries given to the tech team who are involved in developing the internal intangible that you have seen in the balance sheet. And that is purely that only.
Shubham Jhawar
No, like is this going to be recurring from now onwards? And what would be the…
Abhishek Jha
I think you are asking about when will it be? When. When will we start amortization of this?
Shubham Jhawar
No, what I’m asking is what would be the quantum for these expenses? The salary for tech teams that that is getting used for the platform that you are building. Right. Like the quantum be increasing next year onwards for the capitalization or how would it be?
Abhishek Jha
Yes. Once it goes into maintenance phase, the salaries spent on these tech teams will be on a recurring basis and we’ll hit the end.
Shubham Jhawar
Okay. And Gaurav, my second question was regarding the client development course that we are doing. Right. I understand that we have to give these out in higher numbers in newer geographies like us and Mena to garner our foot in those markets. However, for our India business, have they increased per project compared to previous years? And in general, are we facing any competitive intensity due to which we have had to reduce pricing to maintain client stickiness?
Gaurav Munjal
We haven’t really reduced the pricing equally to really change that. But we have gone aggressive voluntarily. CD calls, they’ve been in a similar range for a long time. Although we have kind of increased a bit. We became a little aggressive especially in newer geographies and within larger clients. To increase stickiness, we obviously give volume discounts. We are in a multi vendor setup. And I think. What was the last point which you raised?
Shubham Jhawar
Yeah. So basically in our India business. Right, I get your point that geographies we have had to give money.
Gaurav Munjal
We do give a few CD calls in India business as well. But that’s usually controllable. I mean, and have
Shubham Jhawar
They increased in the previous years? For example? Let’s say per project level. May. Have you guys been doing more videos? Not really. So basically to call it out, our India business remains as it is with regards to our previous years in terms of our India business
Gaurav Munjal
Became a problem but from a volume perspective a little bit in the last quarter. But otherwise most of the dynamics are similar. We’ve given volume discounts. Yes. But CD calls are broadly in the same range.
Shubham Jhawar
So basically our competitive stance in India business remains the same, right? It is just because of the newer geography CD calls that we are doing. Our gross margin is looking a bit lower compared to previous years. Would that understanding be correct?
Gaurav Munjal
Yeah, to a very large extent, yes. But yes, we have become aggressive in India as well. I’m not sure it is entirely because of competitive intensity but we are rather leading the charge there.
Shubham Jhawar
Got it. Yeah, I think. Yeah, that’s. That’s it from my end. Also, just one last question. What are the finance charges of 45 lakhs this year in the P L?
Abhishek Jha
These are purely bank charges.
Shubham Jhawar
What are the bank charges? I don’t see any borrowings in our balance sheet.
Abhishek Jha
Yeah, the bank charges the basic. The transaction. Transaction fees that we pay on international payments.
Shubham Jhawar
Entire INR45 lakhs is of transaction charges.
Abhishek Jha
Yes.
Shubham Jhawar
Okay,
Operator
Sure. Thank you. Thank you. That was the last question for today. I now hand it over to you for your closing remarks.
Gaurav Munjal
So that should be it. I mean I can see a few more hands. I’m not sure we should continue but I hope I have addressed all the questions. If not, feel free to reach out. Happy to answer all the questions. I. I can see, I just had. I’m just quickly going through all the questions which were sent to me offline in case I have missed any.
I think a quick question which I saw was, you know, how soon do CD calls convert to projects?
So it depends on which geography we operate. If in India geography it is, you know, relatively few months in geographies outside India. It depends on our strength of the network. CD calls are usually done to build long term relationships as opposed to a only project based thing. So once a long term relationship is built, we typically get more projects from those teams. So but that doesn’t necessarily mean that it will convert right then and there. If you have the capability to service, it will convert over a period of time and it becomes deeper into a. And the relationship become deeper with those respective teams. So any other. Let me just check if I have anything.
So just the closing remarks. No. So overall we understand that this year has been a bit subdued towards the second half. Having said that, in the longer run like from a five year perspective, almost nothing changes for us. We still remain as a derivative of overall India economy. In the shorter run we are likely to remain aggressive a this stage. We might consolidate a little over the next year but on the newer fronts we’ll definitely remain aggressive. We have added meaningfully large amount of cash, you know, free cash flow to our kitty and hopefully we would be able to press the accelerator and we have all the wherewithal to do it whenever you find the relevant opportunities.
So that’s it from my side. Thank you so much for believing in us. Thank you for attending the call. If there’s still any more questions feel free to reach out to the Valorem team or us directly.
Operator
Thank you so much for attending the call.
Gaurav Munjal
Thank you everyone. Thank you Lord sir, Thank you.