Intellect Design Arena Ltd (NSE: INTELLECT) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Unidentified Speaker
Praveen Malik — Vice President, Investor Relations
Vasudha Subramaniam — Chief Financial Officer
Manish Maakan — Chief Executive Officer of iGTB
Analysts:
Unidentified Participant
Mihir Manohar — Analyst
Rahul Jain — Analyst
Rohit Balakrishnan — Analyst
Pawan Katariya — Analyst
Kushal Goenka — Analyst
Presentation:
Praveen Malik — Vice President, Investor Relations
Let’s cover 10 pro tips for working with the cursor agent. So I’ve got cursor open and my agent on the right and the first tip is to use plan mode. So in the agent input I’m going to hit command N to make a new chat and then I can hit shift tab to switch and. Foreign. Greetings and welcome everyone. Thank you for joining us today to discuss the Intellect Design Arena Ltd. Financial results for the third quarter of the fiscal year 202526 ending 12-31-2025. The investment presentation in press release has been sent to all of you and is available on our website.
Our leadership team is present on the call to discuss the results. Our chairman Mr. Arun Jain could not attend this call because he is in transit to attend a family exigency. Mr. Manish Makan, Executive President Group Chief Revenue Officer and CEO of Wholesale Banking Mr. Rajesh Saa, CEO of Consumer Banking Mr. Banish Prabhu, CEO of Intellect AI Ms. Vanya, CFO and Mr. Vikas Mishra, Chief Strategy Officer. Besides some other senior members of the Intellect management team are also present in the call. Now I hand it over to Ms. Rasuda to take you through the results.
This will be followed by the commentary on the business by Mr. Manish Makan. This would be followed by Q and A session where your questions would be replied by the senior members of our management team. When the Q and A starts you can ask a question by clicking on the raise your hand and we would unmute you so that everybody is able to listen you one Safe harbor. I would like to remind you that anyone, any, anything which we say which refers to our outlook for the future is a forward looking statement. This must be read in conjunction with the risk that company faces.
With this I request Vasudha to give her briefing. Over to you Vasuda.
Vasudha Subramaniam — Chief Financial Officer
Thank you Praveen. Good evening everyone and thank you for joining us on intellect Design Arena’s Q3 earnings call. It’s a pleasure to speak with you today as we share our performance for the third quarter of the financial year. So before I get into the quarter I would like to begin with the last 12 months performance. Because we believe that the LTM view best reflects the true direction and health of our business. I’m pleased to share that for the first time in our history NCLEX LTM total income has crossed 3000 crore reaching 3025 crore representing a 23% year on year growth.
This milestone is not just a scale maker, it is the outcome of a deliberate well architected growth strategy that has been executed consistently over the last decade. Platform revenue for the LTM stood at 497 crore compared to 218 crore in the previous year. Strong 128% year on year growth License linked revenue of 1595 crore compared to 1163 crore in LTMs of Q3.25 delivered a robust 37% year on year growth. Our Annual Recurring Revenue stood at 1118 crore in the LTM compared to 700 crore a year ago representing a strong 60% year on year growth. EBITDA for the last 12 months stood at 709 crore compared to 534 crore in LTM as of Q3.25, a 33% year on year growth PBT for the last 12 months grew 34% over the previous period.
Our cash position as of December 25 was 1,198 crore compared to 804 crore as of December 24, a 49% growth year on year. The strong improvement in collections also contributed meaningfully to strengthening our balance sheet and liquidity position beyond financial metrics. The LTM period also highlights the depth of market traction and execution capability that Intellect has built over the last 12 months. 53 new customers have chosen Intellect’s digital stack for their transformation journeys. In parallel, we successfully enabled 82 digital transformations where global financial institutions went live on our products and platforms. This LTM performance is the foundation on which our quarterly execution rests and it gives us strong confidence as we continue to scale responsibly and sustainably.
Our performance is anchored on three scale business engines, each built over successive growth cycles and now supported by an emerging fourth engine. The first and most mature engine is Wholesale Banking which we initiated as a scale engine in 2015. Today wholesale banking contributes around 1400 crore to our LTM revenues. The second engine is consumer Banking which became our next growth focus from 2018 onwards. This now contributes close to thousand crore in ATM revenues. The third engine is intellect AI which includes wealth insurance in AI LED platforms. This engine was deliberately seeded from 2021 onwards and has already scaled to around 500 crore in revenue.
From 2024 onwards we have begun building our fourth growth engine Purple Fabric, our Open Business Impact AI platform. Over the coming years, this will become a powerful multiplier for Intellect’s next pace of growth. Finally, our growth over the last 12 months has been supported by deliberate investments in leadership and institutional capabilities. 27 senior leaders have joined Intellect during the last 12 months. These additions strengthen our global consulting, delivery, product and go to market capabilities. In a key leadership move, Manish Markan has been elevated to Executive President and Group Chief Revenue Officer while continuing in his role as CEO of Intellect Wholesale Banking.
This step brings sharper alignment across product strategy, sales, execution and revenue ownership at an enterprise level. We are also pleased to announce that the Board of Directors have approved the appointment of Mr. D. Shivakumar as an Additional Director, designated as an Independent Director based on the recommendation of the NRCC. Mr. Shivakumar is a respected business leader with extensive experience across Indian and global organizations. He is currently an Operating Partner at Advent International, a global private equity firm. He has previously served as Group Executive President at Aditya Birla Group, Chairperson and CEO of PepsiCo India and CEO of Emerging Markets at Nokia.
As an alumnus of IIT Madras IIM Calcutta and the Wharton School, he brings a wealth of strategic and governance insight to our Board. His appointment for a five year term is subject to shareholder approval via a postal ballot. Now let me turn to the financial performance for Q3 total income for the quarter stood at 753 crore reflecting a 21% year on year growth. License linked revenue which is the platform plus license plus AMC for the quarter stood at 391 crore growing 34% year on year on profitability. EBITDA for Q3 was 122 crore translating to a margin of 16%.
Profit after tax stood at 28 crore impacted by a one time gratuity provision of 30.84 crore on account of the new Labor Code and the resultant deferred tax of 7.8 crore. Collections for Q3 stood at 913 crore compared to 553 crore in Q3 as of full year 25 up by 65% year on year. EMAC continues to power composable transformation across banking domains enabling clients to modernize at speed while maintaining control and predictability. Purple Fabric, Our open business impact AI platform is increasingly embedded into live production environments. During the quarter 14 new value discovery partners joined the Purple Fabric ecosystem expanding our reach across AI led underwriting, risk claims, collections and payments use cases.
Together these platforms are enabling clients to move beyond digitization into intelligent, explainable and outcome driven transformation on the market recognition. We are proud to share that Time Magazine has recognized our Chairman and Managing Director Arun Jain as one of the global growth architects, a rare and prestigious distinction that recognizes leaders building for long term value in a world obsessed with quarterly outcomes. In addition to this, global media recognition Intellect has received strong analyst validation this quarter. Dattos Insights awarded our transaction Limits Management Solution the Gold Medal for Innovation and Operational Efficiency in their Commercial Banking and Payments impact awards.
Euromoney named Intellect the world’s best transaction banking software provider 2025 including best in Cash Management and Best Corporate Channels. Gartner acknowledged Emac AI Co Banking as a visionary in the Magic Quadrant for Retail core banking systems Europe. IDC MarketScape identified Intellect’s corporate loan lifecycle Management System as a leader in its worldwide vendor assessment for 2025 and many more. Together these recognitions reflect the depth, breadth and relevance of our platforms across CO Banking, Treasury, Risk Compliance, Transaction Banking, AI led business Intelligence to summarize, Q3 represents a quarter of structural progress for intellect. We crossed 3000 crore in LTM revenue anchored on three scale engines and an emerging fourth.
We deliver robust cash flows and balance sheet strength and we continue to execute large scale transformations with consistency and discipline as we move into the final quarter of the year. We do so with confidence backed by a strong portfolio, resilient cash flows and a repeatable growth engine design for the long term. Thank you for your continued trust and support. Over to you Manish.
Manish Maakan — Chief Executive Officer of iGTB
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Good evening everyone and thanks for attending this investor call. Let me try and summarize some of the things which Vasudha talked about into five strategic themes which we are focused on. I think an LTM growth of 3000 crores crossing 3000 crores in this quarter is really proud moment for all of us and I’m sure we’ll be equally proud for all of you being part of this journey. A 23% revenue growth 33% EBITDA growth 49% additional cash generation. I think we’re taking all the right critical parameters and clearly shows that the investment we have been putting in well orchestrated and is delivering the right results for us.
Let me briefly talk about the five salient themes that explain how this growth algorithm works. I think the first one which is we believe is a technology mode Emac AI. At the core of our model is Emac AI Our AI first composable platform architected for scale reuse and continuous evolution which is consistently being demonstrated with the wins and our ability to execute quicker and faster. I think we’re proud that we have built this system with AI first as an objective across the life cycle rather than induce it or put a bolt on on top of it while some of the my peers are doing that same thing.
This composability is driving faster time to value and helping us get better rates and a platform stickiness from us. The second pillar I want to focus upon is multiple engines like what Vasudha called out are working in one flywheel and everyone’s being able to the wholesale bank fortune I was fortunate to initiate and lead that from 2015 has crossed 1400 crores and has been a consistent growth engine. It’s a mature cash generating engine focused on long cycle transformation programs with the largest tier one banks. I think our second pillar consumer banking which we started in 2018 scaling up very proudly is crossing the thousand crore mark it and is becoming the powerhouse for digital and new age co banking which banks are looking at.
This has the robustness and the depth of capabilities and is not just a framework. I think I want to call our youngest platform wealth insurance which is solely anchored around AI a Focus started 2021 and has also now crossed 500cr LTM. All three of them I’m repeat again are powered by same AI first platform backbone purple fabric allowing reuse of capability, intelligence and operating leverage across the organization. Third engine is our markets. Our revenue is better tested in the world’s most demanding financial hubs with 62% of our revenue coming from advanced market and is also well distributed across the Americas, Europe, Middle East, APAC and India avoiding any geographic concentration any place.
Success in these high bar economies validates product maturity, regulatory robustness and delivery predictability. At the same time I think this is well set for India, APAC and Africa which are the followers and also the faster growing economies to be able to adapt to all of this. A success with tier one banks across multiple geographies has created a strong global brand. This result is the reason gives us the against the regional volatility and it’s no more a noise for us. I think the fourth dimension which is now the next growth frontier which we are embedding into our platform as well as looking at for scale is around mainframe to cloud migration and enterprise AI versus purple fabric.
In this last quarter we have signed one large global system integrator for our AI propositions taking out to the market as well as 14 value discovery partners to evangelize and help us take this to more clients across the board. On momentum we are in advanced discussion with a global mainframe infrastructure leader to jointly transition monolithic banks to emac AI based architectures from the mainframe architecture. These are not just adjacent bits, these are natural extensions of the same platform Emac AI. I think the fifth thing which is in summary is the downside protection or a risk absorption designed by intellect.
No single geography, customer or product line can materially impair our performance. Revenue is distributed across multiple buyers, regulators and decision cycle execution risk is reduced through platform reuse, standardization and delivery industrialization. So in closing, so this is not being opportunistic. This is all about engineered growth built from first principle and powered by AI first platform. This is the essence of our growth by design. And that’s why intellect is a unique asset sufficiently de risked by a matured diversified portfolio yet poised for growth through AI leadership and advanced market dominance. Thank you for listening and I’ll pass it back to Praveen for Q A.
Questions and Answers:
Praveen Malik
Thanks Manish. Now the platform is open for the Q A. Please click click. So that in case you want to ask a question first we have Mr. Garvill Goyal from Serena Alpha. Mr. Goel, Mr. Garvit Goel. I think he’s not there. Yeah. Next we have Mr. Mahir Manohar from Trust Mutual Fund Me here. Please ask your question.
Mihir Manohar
Yeah hi. Thanks for giving the opportunity and congratulations on crossing the 3000 crore mark and 3000 cr LTM number. So congratulations for that sir. Largely wanted to understand on the cloud side I mean you know there is a lot, there are a lot of talks that anthropic AI cloud is getting introduced into the USBFSI side.
Uh not on the core operations but yes middle office, back office and also on the insurance underwriting process. If you can provide some clarity what you are. How is the. Is anthropic cloud AI becoming a competition for us and how to understand this. You want to maybe take this?
Vasudha Subramaniam
Yeah. So you know there is obviously different LLMs continuously upgrading in the market and I think we are, we basically utilize for our purple fabric platform has the ability to optimize the right LLM that a customer needs for each use case. So you know we are not really, we don’t believe that they are really our competition in that sense because we orchestrate financial services AI first products end to end for our customers and we optimize the right LLM.
So LLMs will continue to improve as we sort of as the purple fabric platform is only a consumer of these LLMs. So I think we are not really concerned and we are not finding that they are actually coming and occupying a place where purple fabric is placed. The other thing I wanted to state is that a lot of them are focused right now in the assistant area. Well, we actually have digital experts which is on the agentic side of multiple agents working together to make use cases more successful for customers. In the agentic side we still believe our full stack which you all are fully aware of, both what we call the knowledge garden where we vectorize data from multiple data sources.
We have digital experts that work on that data but we have the optimization hub which is quite unique because the user continuously needs to ensure that the digital experts is using the best LLMs to achieve their objective of outcomes for the customers. And I think fundamentally the big difference between us is not just orchestrating use cases but orchestrating multiple use cases for our customers. And therefore the fourth part of the purple fabric stack is really the the governance part of purple fabric. And we are seeing more and more governments paying a lot of attention to ensuring that we follow an ethical AI standard which ensures that we can actually manage to govern different digital experts in a way in which we can get the best performance from them.
So to answer your question, I think there will definitely be competition, there will be definitely different people doing things. But the combination of what we bring along with our leadership in financial services products makes most of our Emac platforms today completely AI native and AI first. So I hope that answers the question. Absolutely. I mean it is very difficult to displace cbs. That’s the core of the part. Second question was on the purple fabric, what would be the purple fabric revenue for nine months? Because for full year we were roughly looking at looking at 200 crores kind of a number.
Some clarity around that will be helpful. May we run track for what we are forecasting for the 200 crore number? I think we’re reasonably confident of coming close to that number for the year.
Mihir Manohar
Sure. Understood. Last question was on the SGNA side. I see SGNA QQ some increase. So I mean any hiring around the foreign geographies, any incremental differential hiring on foreign geographies.
Manish Maakan
I think Vasuda shared that we have been investing for distribution for the market in a planned way of what we had planned for. That’s also evident in the growth we are seeing. So it’s a planned capacity addition.
Mihir Manohar
Sure, yeah. That’s it for my side. Thank you. Very much.
Praveen Malik
Thanks Mihir. Next we have Mr. Jatinder Agrawal from Relax Capital. Mr. Jitendra Agrawal from Relax Capital.
Unidentified Participant
Yes. Hi, good evening. I’m sorry, I don’t have a question but it is an observation. So if you look at your shares that were outstanding at a corporate level, right. We were in December 2020 we had about 13 crore 26 lakh 64,000 shares outstanding. December 25th that number has increased to 13 crore 93 lakhs and about 15,000. So there’s about a 5% dilution in a period of about 5 years.
You look at our market cap somewhere about 12 and a half 13,000 crores. That’s a float of anywhere about 500 to 600 crores in the market just because of ESOPs. And if you actually look at the promoter shareholding, right. That has also gone down in that period by almost the same percentage. We seem to be very comfortable in terms of our cash balance. Given the way the business is doing. It seems that in the foreseeable future also the cash generation should be good. My request or suggestion would be that instead of paying it out as dividends can you please consider buyback internally.
That’s it from me. Thank you.
Praveen Malik
Thank you. Praveen. We can go to the next. Thanks. Thanks Jazendra. Next we have Mr. Rahul Jain from Dalat Capital. Rahul.
Rahul Jain
Yeah. I hope my line is okay. Yeah, so yeah, my question was related to the fourth pillar point that Manish articulated. If you could elaborate more. What I could understand was about building the SI ecosystem. So if you could go deeper into that thought. And secondly on the similar line since we have built roughly 1400 or crore of GTB business does that mean it would at that scale you may see a significant SI contribution in terms of new client on as well.
Or we are still not that point where we get a lot of data message.
Manish Maakan
No. Rahul, thanks for the question. On the fourth pillar. What I’m talking about is I think we’ve been talking about purple fabric and getting partnership development. So we have finally now executing with one of the largest global system integrator and we taking this out to the customer. Other than that we have also signed 14 value discovery partners across the globe to take purple fabric out. That was the first piece of it where we were doing the work for last two quarters which you are aware in the last quarter we have additionally now tied up with an infrastructure leader which is focused on mainframes so that we can help transition mainframe loads to emac cloud loads, banks are looking for solutions.
That’s where our composability of a solution is not a ripple replace. It’s not just pick up the load and deploy somewhere else. We’ve done multiple mainframe to cloud migrations and we see this as a natural alliance whereby working together we can take it forward. Your third question around wholesale banking touching 1400 crores and we’re already working with publicly we have shared along with Accenture in some of the implementations and I’m continuing to grow along with our multiple other partners where the large transformations we can take along. We are doing big scale wholesale banking transformation. We have got core lending payments, the full corporate stack and we’ve got a couple of other SI partners already working around them.
We’ll hopefully announce some of these partnerships also publicly Mashed potatoes, my favorite. Mac and cheese, my favorite. Pancakes, my favorite. My favorite. If you have a tuition monster, we have a way to tame them. With over 20 investment options there’s a plan for everyone. Visit invest529.com tacos my favorite. The fun just keeps going. The new subaru solterra dog tested dog approved get 0% apr for 72 months on a new 2026 subaru solterra ev. Sure Manish, when we say about the mainframe player are you referring something like the IBM of the world who would have that core infrastructure and they may also need some application to do the workload shift? Yeah, this partner supports quite a bit of mainframe infrastructure at this stage. I want to keep it there significantly larger. But these are. Yes. Yeah. So these are. These are the SI guy or these are the main frame. They focus on mainframes support significantly.
Rahul Jain
Understood. Thanks for that color. And just last bit from my side, the growth in this quarter in particular was not pretty exciting. Our investment in terms of marketing and go to market has been pretty strong. So is it just like one off quarter in between where we are seeing this kind of a dip or it’s. It’s more of a some kind of an economic factor that you’re seeing in the market causing a slower ramp up in particular markets. And with those thoughts how you see you know Current year or Q4 panning up? No. So Raul, the key thing is we’ve said we have designed for a 20% growth company on an LTM basis.
Manish Maakan
Right now we’re demonstrating that we not from quarter to quarter we had said at the beginning of the year that we have to stay above 700 first 3/4 we have stayed above 700 crores now is about in between Q4 and Q1 how do we go above above 800 crores revenue? That’s what us, all of us as leadership team are working. So that’s a very nice momentum from that perspective. Cumulatively if you look at the pressure of signing a deal distress because I have a quarter ending. We’re building a robust business. Sometimes quarters is not what we look at.
The yearly is where we are committed to demonstrate performance. And I think and we said measuring at an absolute level up stay above 700 quad 700 crores and in the next two quarters see how between Q4 and Q1 how we can go above 800 crore revenue. So we are all working towards that. I’m still confident. Okay. Okay. Thanks for that color. Thanks a lot. Best wishes for the time. Thanks Rahul.
Praveen Malik
Next we have Mr. Rohit Balakrishnan from I Thought PMS. Rohit, please ask your question.
Rohit Balakrishnan
Yeah. Hi. Good evening everybody. So sir, my question was I think go ahead.
Are you there? Yes, we can hear. We can hear him. Praveen, can you guys hear me? Yes, hello. Yeah, go at work. Okay, thank you. Thank you very much. So my question was I think so we had I think talked about these accelerated investments in Q3 and Q4. So if you could maybe I think if my memory serves right we had talked about around 40 to 45 crores in Q3 and another I think a similar number in Q4 in terms of market investment towards both popper fabric and emac AI. So maybe can you just call out what the number was in this quarter and what do you think would be the number in Q4? That was one.
And the second question was. So we saw license revenue come down, you know 100 crores after almost six, seven quarters. I know this is very lumpy. So anything you want to call out in terms of the, the delay that is happening and and like are there any deals which sort of fell through this quarter or will get covered up in the next quarter? Anything you want to call out? And I have one more question which maybe you can answer that and I’ll come, I’ll ask the next question. I’ll go reverse order. I think like I said please don’t ask which quarter.
Manish Maakan
100 crore more 100 quarter LTM basis consistently remain focused. We’re showing good results. I think it’s a proud moment to be above 3,000 crore from that perspective on a run rate basis. And we driving towards, we said we will stay above 700 crore mark. We’ve remained above 700 crore mark. I’m already saying that we’re targeting in the next two quarters to cross the 800 crore mark. That speaks of everything of what you wanted to ask from your second question perspective. Could you repeat your first question? On the cost side I think the cost is primarily around the 3 dimension.
Basa can give color to the absolute numbers. It’s around purple fabric, it’s around bit of distribution. Plus given what I am seeing in coming in the next two quarters we’ve also invested right now on our delivery execution capability side because we need to be ready and we need to have these people not being joining the day before one or two quarters before we make that investment on the delivery side. So these are the three elements of where the cost has gone. Yeah. Just to add last quarter we said we made an incremental investment of 15 crores. And similarly this quarter also we have made similar investments between 10 to 15 crores. That’s an incremental investment this quarter.
Rohit Balakrishnan
Got it. And Manish, I think just from the ATM point of view, I think we had said that we’ll be despite all these investments will be at 20% kind of margins adjusted for these investments. I mean after these investments. So do we still hold on to that number for this financial year? FY26 I think look at consistent 700 crores investing towards 800 crores. Those are very, very positive metrics. The quarter. Don’t look at quarter on quarter. Look at, I’m asking for the entire year not looking at this quarter asset but I’m saying for the entire.
Unidentified Speaker
Okay Manish, let me answer. So like Manish said it’s always better to look at LTM performance and if you look at our LTM EBITDA, LTM EBITAS has fetched us about 23.8 percentage. So going by that, yes we are very highly hopeful that we’ll also end up in a similar number as we close this financial year.
Rohit Balakrishnan
Got it. And last question was on the US expansion. So any, any qualitative commentary you can give like how are you seeing the this calendar year or next financial year in terms of the growth there? We were expecting very high growth for this year as well. So maybe you can comment how US has been for this year and, and how do you expect next year?
Manish Maakan
I think I want to maybe just quantitatively share one more forward thing. I think across North America I’m not far from start touching thousand crore revenue. It’s, it’s been a good North America growth for us this year.
That’s why we, across Canada and US we are investing some Parts of execution happens out of Toronto, some happens out of New York. Purple fabric has been helping us grow significantly. Payments has our liquidity and CTX platform was a growth platform. Payments is where we are now making multiple breakthroughs. So we’re investing over there. Corporate core is something which we have been winning over there. So if you see multiple levers are firing over there. So we happy that with PF also we’re now expanding our distribution across multiple hubs. And if I can just add in Canada we are also seeing significant growth in credit union space both in our digital engagement platform as well as now we just also getting some success in our loan lending platform.
So we able to cross sell into the same segment. Got it. I’ll join back. I have one more question but I’ll join back in the queue. Sure. Thanks Rohit. Next we have Mr. Vivek Kumar from West Paul Research. Vivek, please ask your question. Vivek, are you there? Looks like Vivek is not there. Vivek is there. You can unmute and ask the question. Am I audible sir? Yep. Yeah, please. Thank you. Manishi, just if you can throw qualitative light on are you facing tailwinds or headwinds in terms of. If you just 3/4 back Arunji was explaining about sales cycle.
Sales cycle being long and in next 2, 3 quarters we will convert a lot of deals. So can you like qualitative outlook on like different revenue streams that you have violated in your presentations like consume, GTB, GCB and A& wealth. If you can talk in terms of tailwinds and headwinds. So that. And also anyway even given all these things you are still confident on 20% growth on an LTM basis, right? So this, these two are. No, I think talk about tailwinds and admin because what are the tailwinds which. Which are the products which are like really having lots of tailwinds.
Because that would give us more qualitative picture on if you can give us I think the multiple products under each of this wholesale banking, consumer banking, wealth insurance which are now getting scaled. So which is a good news for us. It’s not just firing on one or two products or one or two lines of business. Clear evidence we have shared with you 500 crores, thousand crores and 1400 crores. So that is helping us. A balanced portfolio approach helps us to deal with any market volatility. I think that’s why we continuing to say we’ve designed for 20%.
This balanced portfolio approach across markets and across product lines is Helping us manage it. Our technology moat is the big differentiator out which I’m most proud of. With emac AI I am I’m able to grow the size of the deals also with this. Because what people see is this is a desired architecture state where everyone would want to be from the composability and the scalability and resilience perspective. And bank after bank the largest tier ones consistently signing is just giving us that confidence. There’s always headwinds of. You hear noise of politics, different things we got to deal with that.
That’s what we design business for. So there’s nothing right now material of headwinds or material tailwinds. I think a balanced growth is. I’m feeling good and confident. So we are feeling good about 20% growth on a yearly basis. I’m not talking about quarters. That’s what we are designed for. That’s what we are looking at. The goal is how quickly with next quarter or the following quarter. How do I cross 800 crore revenue and then run it for three four quarters there and then look at 900 crores this 100 crore consistent growth in three to four quarters if we can drive it.
I think that’s the evidence because three years back we were very convinced on quantum central banking. So just any Rajesh ji any like any outlook on quantum as a product central banking? Sure. I think as you are aware that we are one of the only companies which has a core banking for central banks. Right. And this comes from our legacy of RBI because we run the central banking for Reserve bank of India. So as you know if you look at the tam right the TAM of this market is limited because there are only that many central banks.
And these are. There are a couple of opportunities that we are chasing with central banking. But it will always be a limited market by the design as compared to let’s say a core banking etc. But we continue to be the market leaders in this market and we continue to be consistently rated in T1 as T1 in this space. And we are as we speak in a couple of opportunities with large central banks. Thank you. And small suggestion like what Jatinder Agarwal has cited your equity dilution because now we are generating cash and you already sitting on 1200 close to 1200 crore cash.
I think can please ask suggest to consider buyback because there’s lot of you almost 1% is entering float every year. Right. We’ll record your. Just let me cool. I just want to cool. You know that story where slow and steady wins that’s terrible advice. Things move fast in the modern workforce. I’m at University of Phoenix where I. Earn skills and courses I can put to use right away. Earn career relevant skills in weeks not. Years at University of Phoenix. Thank you Manishi. Thank you very much. Thanks Vivek.
Pawan Katariya
Then we have next Mr. Pawan Kataria. Mr. Pavan Kataria from Bullseye. Yes. Can you hear me? Yep. Yeah, yeah. Please go on. Yeah. So as Manishar said we saw sharp Q3 compression in the margins. Right. So can we. So monies are already broke it down but how much are we heading back to 20. 25% margins for the year given that the margins for Q3 has been out of 15%. That’s what Vasuda just now also confirmed that we’re driving towards 20% plus margin for the full year.
Manish Maakan
We have done it in LTM basis for the last 12 so for the financial year also that’s what we’re driving towards. That’s why the balanced investment is there. We’re not going aggressive. We’re not shying away from right investments when we see opportunity. Okay sir. And so another question sir last in the last con call Arun sir said key we’ll have. We are striving towards 25 margins. Right. So do we see that happening somewhere in FY27? No. I think if you go back study some of the peer companies it’s about getting to scale at 3000 crore.
The profitability is X at 4000 it moves to Y at 5000 crore. So it’s about I think we we should all be looking towards consistent and more growth and right investments to balance to drive that growth. I think that’s most important. We would all want it is it’s naturally going to come. The leverage keeps coming as the more license comes in. Got it? Got it sir. Thank you sir. That was one of my side. Thanks Paan. Next we have Mr. Engine Purani. Puranik G. You are there. Looks like dog. No, I think it’s Dro. Then next we have Ms.
Cat, Mr. Van Shanda from Invest Analytics.
Unidentified Participant
Hi. Am I audible? Yes. Yeah yeah please. So I have a question like I noticed the course escalations apart from the exceptional items during quarter three that appears to have impacted overall profitability. So could you help us to understand that what are the key drivers behind that increase in course and also like this is not clarified in any of. The presentation or management commentary. Can you help me with that cost escalation?
Manish Maakan
So the okay one if you are talking about the exceptional item. Sorry if I have got your question right. That is related to the gratuity provision, the one time provision that we have considered in our books on account of the new labor code. And that’s about 31 crores. And also there is a resultant deferred tax that we have considered for about 8 crores. So that has pulled our pat down by close to 24 crores. Yeah. And just to add, I’m not talking about this exceptional items but if you look before profit, before exceptional item also it has impacted from 900 millions to like 671 million this quarter. So. So one, just to add to what Wasuda is saying and what Manish also alluded to. See, if you look at the current quarter, there has been significant investments in terms of capacity building. Whether it is capacity building from a sales and marketing perspective or capacity building in anticipation of the deals we are planning to close in the. In the current and the next quarter.
So that is primarily the reason for us for a cost to go up. Okay. Okay. Okay, sir. Thank you. Thanks. Thanks. Vans. Next we have Prem Doshi from ACE Securities. Prem Doshi, am I audible? Yeah. Yeah. Please go on. Yes, sir. So I have two questions. One is that in particular for this quarter, as we have already discussed that some of the cost escalations were there and for some other reasons the profit was muted. Right. So what we are looking at, what is are we looking to close the quarter as you said, close, close the year at 3000 cover plus that you have already guided for for the financial year.
So my question is actually for the next financial year after we cross say 3,000 crores in terms of revenue and we maintain a 20% margin, are we looking at on such a high base to continue growing at 20% for the next fiscal or you expect some moderation in the guidance for the next fiscal. In that case, Prem, I will stay away from guidance. On next financial year. We very Simply get to 800 crores. Then we’ll stay there a few quarters and then get to 900 crores. We’re building the business 100 crores at a time. And right now we feel good about what we are doing.
So from a guidance, I’ll stay away. Okay. Okay. And so earlier we have read up stuff that we want to position ourselves like the top AI companies such as Palantir. Right. So how is the plan faring? Is the management satisfied with how the overall positioning that we are doing in the AI space? Like are you personally satisfied with how the segment for us is moving towards? I think we had Said up front that we’re going to drive towards the 200 crore revenue on this. So from that perspective, if you look at iu, satisfied, are you headed towards that? I think we are in the right direction.
We are consistently amongst the top three players along with Palantir. So that’s not a concern right now. Right. Thank you so much, sir. Thanks, Prem. Next we have Keshav Surika from na, from Navesha. Hello. I think my question was already answered. Thank you. Okay. Okay. Thank you. Thank you. Next we have Mr. Krish Jain. Mr. Krish Jain from Nafa Asset Managers. Yeah. Hi. Thank you for taking my question. So my question is regarding purple fabric. So what I can see from the presentation is that your LTM revenue from operations is 2919 crores. Out of that wholesale, retail and AI business put together is around 2900 crores.
Am I correct in understanding that purple fabric in last 12 months has contributed only 19 crores? And since you’ve reiterated that you’re on track to hit 200 crores this financial year to understand how is that possible in the next three months. Now purple fabric is embedded across the businesses on wealth, insurance and everything. So we’re not looking at like that. When we look at segmented purple fabric, that’s where we are saying we are good for 200 crores. Okay, got it. So next question is, you mentioned Palantir and C3AI as our main competitors for purple fabric.
Are we still sticking to that or do you see any new competitors entering this space? You want to help in this? Please. Yeah. I mean, you know, I think Palantir and C3AI are our fundamental main competitors. The way we see it, there will be lots of noise with small players coming and doing use cases in different areas. But when you actually look at end to end orchestration and enterprise level AI deployment, I think those two would be our primary sort of competitors. When we look at orchestrating different type of use cases. And what Manish mentioned is that a lot of our existing products also have moved to AI first.
So a lot of the purple fabric capabilities of orchestrating AI is getting embedded into everything we do. So I think frankly, you know, other than those two, there are various other, you know, people we run across but we haven’t found somebody who orchestrates end to end use cases the way, you know, anybody other than those two. Okay, got it. Just. I’ll squeeze in the last question regarding central one, the acquisition that happened a few months back. So they are still reporting revenues in the digital banking segment. And they mentioned There’s a transition period as well.
As well as the reporting losses. So my question is how long is this transition period and what are the losses we are bearing in the business that we’ve taken over from Central One and how are we going to make it profitable? We are already making profit on Central 1. Single digit profit that we are making. In fact initially we said it’s going to be margin neutral but. But we are making some profits out of it.
Unidentified Participant
And how long is the transition period? What do you mean by transition period? Krish?
Manish Maakan
The transaction is completed and it’s now.
Unidentified Participant
Okay. Yeah, go on.
Manish Maakan
Yeah. When you say yeah, are you talking about transition from to our digital engagement platform? No, I am taking this from Central One’s quarterly report. Actually in their Q3, it’s calendar year Q3 which is our Q2 of the financial year. They have reported 4.5 million Canadian dollars as non interest income. So revenue and they’ve mentioned revenue has gone down because the business is being transitioned to intellect. So. Yeah. Yeah. Rajesh, please answer that. Yeah. Yeah. So Krish, let me just explain this to you. So what we did was we acquired Forge business from Central One which is.
Which was, which is the digital business from them. That business as Vasudha confirmed is already giving us a single digit margin business. Initially we had said it would be margin neutral but we are actually seeing a single digit margin business. Now. Central One is providing us some support. For example, they are the cloud infrastructure of. On. What this Forge business works on is still provided by Central One for which we are paying them a certain cost. That is what they are showing it. Otherwise the business has completely transitioned into intellect. I hope that helps to explain your query.
Yeah, yeah, that helps. Yeah.
Unidentified Participant
Thank you for taking my question.
Praveen Malik
Thanks, Chris. Yeah. Next we have Mr. Kushal Goenka. Mr. Kushal Goenka from Mangal Keshav Financial. Yeah, hi sir, can you hear me? Yeah, yeah. Please go on. Yeah.
Kushal Goenka
Yeah. So my question was on the gross profit margin. Like I’m not trying to analyze quarter on quarter, year on year basis. But I just want to understand that if we offer more say specialized products like purple fabric integrated to our other services. So shouldn’t our gross profit margin should increase? Because I think so. We saw around 300 basis point blip cotton quarter and year on year also. So just wanted your thoughts on the same.
Vasudha Subramaniam
No, that. That is already happening. In addition to that as Manish had mentioned in the beginning, we are also capacitizing. So we are also building capacity in anticipation of the work to be completed in the coming quarters and that’s why you are seeing some DEP over there.
Kushal Goenka
So ma’, am, if you can just elude what exactly are the item line in the gross profit then then. So isn’t that the people.
Vasudha Subramaniam
Yeah, it is the people that we take.
Kushal Goenka
Doesn’t it come under the.
Vasudha Subramaniam
No, no. See for computing the gross margin the cost that we consider are those which are directly attributable to the projects. Okay so and also people sometimes work on you know proof of concept and proof of delivery and those costs are also build part of those SDE cost and that’s how you compute your gross margins.
Kushal Goenka
Okay so if I may ask in another way. So like what can be a sustainable at least a gross margin basis. I’m not going to the EBITDA part but like 54.
Vasudha Subramaniam
I guess this if you, if you look at our trend maybe again in the last 12 months and then even in the previous last one 12 months it was hoarding around 57 percentage.
Kushal Goenka
Yeah. Okay. So we can expect at least we come back to 57% from the 54%.
Vasudha Subramaniam
Yes.
Unidentified Participant
Okay. Okay. Thanks Vishal. Next we have Mr. Ravi Mehta. Mr. Ravi Mehta from One Up. Ravi. Yeah. Hi, I’m Martin. Please ask me a question. Dr. Scott Spray the ODIN is the best areas end all and not to mention it’s natural and smells absolutely incredible. Feel like a man, smell like a champion. With Dr. Squatch. Doctors, it’s time to talk about dry eyes. Your patients don’t have to live with dry eyes or anything that’s itchy, burning or dry stop the vicious cycle of inflammation with the IPL that 95% of doctors agree is the treatment of choice. Optilite the first and only FDA approved light based treatment for dry eyes. Yeah. Come on. I just wanted to check you mentioned. That you know this quarter there was an incremental investment of 15 crores. If you can help us, you know split in which headline items it was being split whether it was software development, SGNA because I’m just trying to see how the impact is playing out on EBITDA and on gross margin just to understand how the normalized course can be.
Manish Maakan
I don’t think so. We need to get into that level of nitty gritty. So anyway the amount is not that much for a 15 crore value. So is it in SGNA is what I wanted to understand. So yeah, predominantly in SGA that you can see and we also had some global events this quarter which also contributed to the increase in SG and A cost. There were some partner commission which got included. So the investments mostly went into ST&A and some bit of it also into product development. Yeah, no, it’s reflecting in sgna. I just thought I will confirm it here. Yes, sure.
Unidentified Participant
Okay, thanks Ravi. Then we have Mr. Drove Shah. Mr. Drove Shah from Omika Fincap. Yeah. Am I audible? Yes. Hello Manish. I have two questions. One is we won eight deal this quarter which is lowest in eight quarters. Is there something to read into it or is that a seasonality? Do you want to just.
Unidentified Speaker
No, I’m not reading too much into it because it’s the lowest in eight quarters. That’s why it came up. But because we just launched Power Fabric and we have done a lot of investment. That’s the, that’s why it popped up that that’s the lowest in eight quarters.
Oh, it is from account. It is low. But I am right now not concerned. Like I said Drew, I’m looking at crossing 800 crores and it’s one or two quarters away. So Manish, should we see that going forward? Will we be chasing larger amount destiny deals compared to lower low ticket size and that’s why the deal wins. Will be lower going ahead. No, it’s a, it’s a very good, fairly balanced mix. One thing good is happening is we getting more of the large big deals also we’re playing in there. See with Purple Fabric what will happen is they will start small but suddenly they will start showing big results in year two, year three as the consumption grows.
So that’s a consumption based business. Right. Okay. And my second question is on the press release we did last week on adding 14 value discovery partners. So are this mainly SIS or are they distributors for Power Fabric? These are smaller techno mid sized technology companies which we are helping to take us forward. Okay, understood. Great. Thank you so much. In each of the group there are people with 300, 400 people who really are entrenched in one or two different banks. So leverage that relationship and capacity gives them an opportunity to grow and it’s in a connected field.
So fair enough. Okay, thanks. Thanks Dr. Next we have Mr. PR Jain from Banyan Tree Advisors. Please ask your question. Can you hear me? Yeah, yeah, please. So one question I had on Purple fabric. Whenever you, whenever we are going to, you know, to our clients, whenever we are trying to close deals, what has been the key differentiating factor for us in terms of client adopting something that is fresh in the market? So that would be my first question and then I have a couple of smaller Questions as well. You know, we’ve been having a lot of discussions with different clients.
I think our key differentiation, as I said earlier, is the ability for us to be able to help the customer achieve business impact. There’s been a lot of work that people have done using the chatgpts and assistants and copilots. But when it comes to business impact, a lot of what we can orchestrate at end to end journeys actually helps the customer either improve their cost and productivity or improve their revenue or their customer experience or you know, or fundamentally a lot of our customers in certain markets, in wealth and other areas also focus a lot on compliance and regulatory stuff.
So what we are seeing is the ability to understand the leadership and the thought leadership in particular lines of business and actually achieve business impact for them. Clearly that is something that in 2025 a lot of people believe has not been achieved so much which is where our platform positions ourselves best to do. And I think we are seeing that as something that’s attracting a lot of attention. We must remember that AI is still at an early stage of adoption in the agentic and the digital expert space and therefore adoption will take time. But actually when we run these pilots, they can actually start seeing business impact and we have a lot of customers we’ve already been doing that for because we started earlier with insurance and certain product lines here.
Got it. That’s helpful. The second question that I have is whenever we are doing large Destiny deals, are they typically front loaded in terms of revenue recognition or do they ramp up gradually over multiple years? It’s multiple models. Okay, so there’ll be a mix of both. Mix of like front loading and like annuity tail kind of thing as well. Annuity based on variability. Understood. Got it. Yeah, that’s it. Thank you. Thanks PR. Next we have Mr. Krishna Agra from Mangal Keshav. Mr. Krishna Agrawal from Mangal Keshav Secured. Hello. Hello. Hello. Yes, I am. Audible. Yeah, it is just a follow up question regarding our competitors.
Sir, as you said that you only consider Palantir and C3 as your major competitor. But I still wanted to get some light on Indian competitors. Sir, currently in the Indian banking technology ecosystem there are multiple players offering AI led solution for banks such as TCS banks, Orient Pro, AI NPSD and AI Compass. So sir, how does Intellect differentiate itself from these competitors in terms of depth of AI capabilities and platform maturity in the long term? And sir, additionally, how close are these players to Intellect’s current level of AI led banking technology? And what is the Intellect strategy outlook to Maintain and extend its competitive, a competitive edge going forward with these Indian competitors.
Thank you. I think there are, there are a lot of SI players like TCS and others like you mentioned. I think as I said earlier, a big differentiation is our full purple fabric stack which where we have invested significant amount of effort over the last seven, eight years going all the way back from, from the early models of machine learning to the large language models. Right now I think that learning and experience for our product lines, I think compared to a lot of people coming and offering use cases or and a lot of the people are actually building SI type of work for customers to be able to do things that can help them achieve some level of AI independence.
Everybody says AI right now, but nobody really has a full end to end platform. And I’ve already covered the four sort of stacks that make up our platform. I think that combination and the most important thing that we are seeing is when customers want to scale multiple use cases, they need to govern them. The ethical AI stack of governing our platform is fundamentally very different from what anybody else does. Because when you know, when you implement these use cases, that ethical AI stack gives you the ability to govern digital experts. You got to think of this as human and digital experts working together in an operational role in that model.
The digital expert really needs to be managed on a regular basis because of the continuous changing language models, the continuous changing data that is fed into those digital experts. So think of it, that governing digital experts is a very, very detailed part of the purple fabric stack which not, you know, you won’t find this in most of the other people. They are still talking about doing small use cases here and there of doing SI work. So I think that’s the fundamental difference with most of the, most of the Indian players in my mind. So. Okay sir, thank you.
Thanks Krishna. Next we have Sonal Minhas from present capital. Sonal. Hi sir, this is Sonal Minas. I hope I’m audible. Yep, yeah, please go on. I want to continue from the question the last participant asked some of the players, as you mentioned, they, you mentioned that they don’t have a full stack. And I think having attended some of these calls of these players, they also mentioned that the real ROI of AI showing its value add in productivity or similar matrices basically is something which is still at the proof of concept stage. So, so we wanted, given the fact that you say that the purple fabric project has linkage to close to 200 crore of top line, are there early signs for you guys where this is showing up in terms of how you bill a particular client or in terms of you having better margins for some of the use cases where you’ve implemented purple fabric or is this early days for us right now? That’s, that’s about you.
Yeah, you know, adoption of AI, it is still at an early stage. Having said that, I think the opportunity for us to be able to bring productivity would mean a different way of working because we are seeing significant impact on operational work, on compliance work that we are beginning to see in our pilots and, and already in production for our insurance business. We’ve seen significant impact on the same work being done by the human through a BPO type process versus the way we do it using AI end to end. So I think it is therefore important for us to keep in mind that this is early stage adoption, the agentic actual work which is something uniquely put together on purple fabric, which is why it’s a multiple agents coming together.
Very few of our of our competitors have multiple agents coming together and we refer to that as digital experts in different areas coming together. I think that piece has not taken off as fast as we, you know, we believe it sort of will in the future. I think it’ll change fundamentally the way in which we operate or you know, we often call it the future of work will change quite significantly. And I think we are actually experiencing the early stages of that and some product lines where this has been AI first like the insurance and I just love watching the graduates walk across that stage.
It’s magical. You know this is an elementary school graduation. Right. Give the gift of education@invest529.com. Some areas in, in wealth and now some areas in trade and some areas in payments. I think that will actually go much faster as the adoption starts taking place. So you know, there is obviously ROI challenges in, in the industry which normally happens when you start something like this new as it happened, you know, 25 years back with the dot com. So it’ll happen that we will stabilize but fundamentally new business models using AI will appear and we are well positioned for that.
Got it. So thanks for explaining this in detail. I also have a follow up. I think a couple of my other colleagues were also asking the margin profile and you were mentioning that companies have a different margin profile at 700 crore run rate, 800 crore run rate, maybe 900,000 are there. And this is similar to let’s say what a SaaS company does talk about in the US. My understanding is that, please correct me if I’m wrong on that. Are there some companies which are into Banking software which have scaled up where we could refer to understand the margin profile of businesses as they scale up and as they mature.
Are there some peers would you refer to in the us I think go back and look at from India Flexcube and Oracle. So we have a combination of that as a business model as well as SaaS. So we have a dual engine firing. Look at what was Flex cube’s margin at? 300 million, 400 million, 500 million 600 million. You’ll find a good story. Got it. Thank you. Thanks Anil Manish There is one more and then a lot of re raised hands so one we can take. I think you can take one and then write back to you and we can reply to them.
Yeah please the persons who are really raising the hand please write to me. We’ll get back to you then. Last we have Sameer Dosani from ICICI Proof. Sameer. Yeah I hope I am audible. Yeah please go. Yeah I. I’m not sure whether it’s clarified but our original plan was to ramp up investment through the. Through the year and obviously it’s needed for the business so it’s good but just want to understand 225 crores of SGNA like will we see further ramp up from here on in and then it will settle there. That is the plan.
Or you know there are some programs as you mentioned we had some marketing programs and roadshows etc so you know how to think about this SGNA for maybe next 12 to 18 months from here on Samir quarter, this quarter, the last quarter is typically when we have more road shows and more events large events which happens every year. So that’s from an annual cycle perspective. Rest is calibrated based on when we see opportunities as we are growing in like right now you see us is a big focus. We’re driving growth in North America. So a very large market from a size as well as geography but we’re keeping it calibrated to ensure we don’t run ahead of ourselves.
That’s. That’s fine and it’s needed for the business but our original plan was to ramp up like 100 crore annualized HGN. If I’m not wrong that we wanted to ramp up through the year so it’s that ramp up step, step up in terms of SGN is already done. Isn’t that I should think of and then maybe gradual investment here and there. Whatever is needed it should. That is how I should think about it now. See if you as soon right now like we said beginning of year 700, 800 crores. As we stabilize at 800, when we say 900 or thousand we will have to add more.
So it’s a cycle. Okay. So this level. Yeah. So this level of investment is okay for 700. 800 crore of revenues. 800 crore revenue. That’s right. Okay. And obviously proper fabric required software, software development and. And related expenses so that. That step up in terms of investment in software development expenses is also done. Right. We should think of an year on incremental. You know, increase is. Is what I should think of. Yes. Okay. Okay. That. That’s it from my side and good luck. Thanks for taking my questions. Thanks for supporting. Thank you everybody for joining today.
In case any questions you have you can just write back to us and we’ll reply accordingly. Thank you.
Unidentified Participant
Thank you.
Praveen Malik
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