Intellect Design Arena Ltd (NSE: INTELLECT) Q4 2025 Earnings Call dated May. 09, 2025
Corporate Participants:
Praveen Malik — Investor Relations
Vasudha Subramaniam — Chief Financial Officer
Arun Jain — Founder of Polaris Group and Chairman and Managing Director
Manish Maakan — Chief Executive Officer, Global Transaction Banking
Rajesh Saxena — Chief Executive Officer, Retail & Central Banking
Analysts:
Rahul Jain — Analyst
Analyst
Nimish Soni — Analyst
Manoj Dua — Analyst
Jyoti Singh — Analyst
Umang Shah — Analyst
Sameer Dosani — Analyst
Prathamesh Dhiwar — Analyst
Presentation:
Praveen Malik — Investor Relations
Good evening and welcome everyone. Thank you for joining us today to discuss the Intellect Design Arena Limited Financial Results for the Fourth Quarter of the Fiscal Year 2024-’25 ending 31 March, 2025 and also the Full Year FY ’25. Investor Presentation and the press release has been sent to you and is available on our website.
Our leadership team is present on the call to discuss the results. We have with us today, Mr. Arun Jain, Chairman and Managing Director; Mr. Manish Maakan, CEO of iGTB; Mr. Rajesh Saxena, CEO of iGCB; Mr. Banesh Prabhu, CEO of IntelectAI; and Ms. Vasudha Subramaniam, CFO. Besides, some other senior members of the Intellect management team are present in the call.
Now I hand over to Ms. Vasudha to take you through the results. This will be followed by Q&A session, where your questions will be deployed by the management team. Once the few minutes start, you can ask the question by clicking on raise your hand and we would unmute you so that everyone is able to hear you. One day further, I would like to remind you that anything which we say refers to outlook for the future is a forward-looking statement, which must be read in conjunction with the risk that communicates it.
With this, I’d like to thank Vasudha to give that meeting. Over to you, Vasudha.
Vasudha Subramaniam — Chief Financial Officer
Thank you, Praveen. Good evening, everyone, and thank you for joining us today for our Q4 and full year ’24-’25 earnings call. The PR and investor deck have been uploaded well in advance, and I hope you had a chance to go through the same. Let me walk you through our performance for the quarter and the full year and then share some deeper insights into our business drivers and future trajectory.
Starting with the numbers. For the fourth quarter of financial year ’25, we reported revenue of INR749 crores, reflecting a 19% year-on-year growth as well as a balanced performance across all geographies and products. This growth was driven by new customer acquisitions as well as deepening client engagements driven by our eMACH.ai platforms and Purple Fabric, the open business impact AI platform.
Our license-linked revenue, which includes license, A&C, cloud and SaaS platform income, which defines the success of our IP-led monetization strategy stood at INR392 crores. We delivered a healthy EBITDA of INR227 crores for the quarter, representing an EBITDA margin of 30%. Profit before tax for the quarter came in at INR181 crores, reinforcing our continued focus on profitable, scalable growth. EBITDA grew 48% year-on-year. Collections remained strong at INR712 crores, keeping our operating cash flow healthy and aligned with revenue recognition.
We closed the year with a cash balance of over INR1,000 crores. Now we’re looking at the full year performance. We closed financial year ’25 with a total revenue of INR2,577 crores and a license deal revenue contribution of INR1,247 crores, which accounts for 50 percentage of our revenue from operations.
As mentioned earlier, this is a significant indicator of our maturing product footprint and the increasing stickiness of our platforms. Our annual recurring revenue based on Q4 run rate stood at INR870 crores, giving us a strong base as we enter financial year ’26. It is important to note that this is real predictable and sustainable revenue anchored in long-term client relationships.
Our EBITDA for the year was INR608 crores with a PBT at INR442 crores. Margin continues to be healthy even after absorbing key investments into Purple Fabric and new client success programs. On the commercial success and market momentum, we ended the year with 43 new customer wins and 53 successful digital go-lives, a clear demonstration of the impact of first principle thinking led zero-based architecture is rating amongst global financial institutions and our ability to execute at scale through composable, open architecture and the platform.
Just in Q4, we onboarded 9 new logos and executed 16 go-lives across geographies from Africa and Asia to the Middle East, U.K. and Europe. Two wins I would like to spotlight here. First, a landmark AI transformation deal with a leading London market brokerage firm. This is a INR200 crore engagement that’s one of the earliest real-world implementations of our new platform, Purple Fabric, combined with the 2 P&C AI applications, Magic Submission and Exponent that already have significant presence in the U.S. in production grade underwriting and claims operations.
Second, a multi-country wholesale banking deal with a European headquartered global bank that selected eMACH.ai to drive composable transformation across its treasury and transaction banking processes businesses. Both these wins underscore the confidence large institutions, which follow a rigorous architecture and technology assessment have in our ability to deliver large transformations at scale. We have wins across North America, U.K., Asia and the Middle East for eMACH.ai platforms in the retail, corporate and wealth space.
Let me now turn to what I believe is the most exciting development this year, our launch of Purple Fabric, the world’s first open business impact AI platform for the financial institutions. When most people hear AI platform, they think conversational chatbots, personal productivity tools or isolated agents.
Purple Fabric is not that. This is a purpose-built AI platform architected from the ground up to drive concrete business outcomes like enhanced customer acquisition and growth, operational excellence, more robust governance and compliance and faster and sharper financial decisions. It is built on 4 foundational technologies: one, the enterprise knowledge Garden that combines the organizational data from structured and unstructured sources from the ecosystem and regulatory sources to knowledge as a service.
This powers our enterprise digital experts, modular task-specific copilots that addresses underwriting, trade and supply chain finance, customer onboarding, fraud detection and more. What sets Purple Fabric apart is its governance-first architecture. We have embedded plus AI guardrails, ensuring explainability, fairness and auditability of both data and decisions apart from enforcing security entitlements at the levels of roles, workspaces and tenants.
We have also introduced a first of its kind open LLM benchmarking capability, allowing institutions to choose the best fit LLMs based on the triple constraints of cost, accuracy, latency and interpretability for each application.
As we move into the financial year ’26, our strategic focus is clear: deepen Purple Fabric deployments with several live installations and a healthy pipeline of new enterprise AI programs and strengthen international presence. Our banking business has been very successful in the Europe and is breaking new grounds in the U.S. We also have a strong presence in Canada, which was significantly bolstered by the integration of Central Bank.
We hope to leverage these as well as the Purple Fabric presence in the U.S. to deepen our footprint in that geography. Similar potential exists in other key geographies like Australia, Asia and EMEA. We are entering this new fiscal year with confidence that comes from having innovated, delivered and delighted clients consistently across product lines.
Before I close, I want to thank our investors for their continued trust and our Intellect associates worldwide for their commitment to excellence. With the twin engines of eMACH.ai and Purple Fabric, we are extremely bullish on the next phase of our growth journey. Thank you.
Questions and Answers:
Praveen Malik
Now we are open for Q&A. [Operator Instructions] First we have Mr. Rahul Jain from Dolat Capital.
Rahul Jain
Congratulations on a very strong execution during the quarter. And I have a few questions. Basically, this win, which you have announced during this quarter and there are mention of these deal wins in your press release also. So first of all, just from a clarification point of view, is it safer to assume that most of the deals that we have announced related to this London market brokerage firm and others have captured in the Q4 financial or they are partially part of the results, but some of it would feature mostly in the April, May, June quarter.
Vasudha Subramaniam
Yes. Your very specific question, I think that this deal of brokerage firm is not accounted fully. This will be over the next 3-year period. It is distributed INR200 crores duted3-year period. Very small portion has been recorded in the first quarter last.
Rahul Jain
Right. And our wins have come at a time when we are seeing a very dramatic shift in the macro thought process, although many companies are talking positively on the BFSI spend so far. So it would be great if you could share a big picture as well as near-term thought process that you have on the demand scenario? And what are the risks in that situation, the way the macros and geopolitical things are shaping up?
Arun Jain
Okay. Let me take that question on — I will just like to point out a few parameters to you. One is our strategy of Intellect Design Arena going product by product to the market and trying to create in the last 10 years, the market growth opportunities. if you look at it from last 5 years journey, first, GTB was leading to ’19, 2019, GTB was one strong engine which was there and GCP engine start building it up.
And third, now AI engine start building it up. So there are 3 different trajectory, which is running. The GTB business, which is first, we invested, fully invested into it is the highest profit margin business than GCP and then investments are still going in AI business. So that’s how the overall composition of the revenue comes in.
This is about my product-based revenue commentary. If I look at geography commentary, we started from Europe first from Canada, U.K., that business, Europe business is now a substantial business. It’s the largest business in our — the whole business. So one of the beauty of the business is that it’s a very well distributed business. So if I look at it, my U.S., North America and Europe business is close to 45% of the business comes from U.S. and North America Canada and Europe business.
While remaining 55% business gets distributed equally between India, EMEA and APAC. So if you look at 3 different geographies, they are contributing almost equally. So it’s a well-balanced business on dependency on the geographies. So dependency on product is not there, dependency on market is not there. So we have very well balanced business on looking at it.
Americas, we focused last year substantially, and we mentioned to you that America will grow. America started growing substantially and a lot of insurance businesses, which are there, which is subscription-based business are contributing to America business. And Canada business will be growing with the Capital One investment of acquisition, that business also will grow.
So my Europe and America business next year will balance it out. That’s a very good news from the perspective of the balance sheet that next year, most likely these 2 businesses of Americas and this may constitute 50% or more than 50% of the business will come from these geographies. That’s what we are looking for. We — if you’re tracking the company for quite some time, then we were running at quarterly revenue of INR500 crores. Then we — every year, if you move — look at the number, we moved INR100 crores per quarter number.
And I mentioned to you in first quarter of the last year that we are targeting INR700 crores to be next milestone. And that’s what it took us some time, 2, 3 quarters, we have not did well in first quarter, INR550 crores to INR750 crore number in same year is a completely bumpy business, and that’s what is the nature of business. If you look at it last 12 months revenue, we grew 11%.
So last quarter, when we are pushing us that no, no, no, you will grow this much and that. I’m saying around 11% we could able to grow in last year, excluding — so that’s a commentary on the overall business. Ideally, we should grow 15% we designed the business. We achieved 11%, we achieved 12% we achieved. So those are the numbers we achieved year-on-year.
My cost structures are — if you look at the last 4, 5 quarters, it’s close to INR500 crores average quarter cost structure, INR480 crores, INR490 crores, INR510 crores. This quarter, because of the C1 acquisition, we have an additional INR16 crore number coming into the cost, additional INR16 crore number coming to the cost. Otherwise, it’s in the same range.
The global scenario of BFSI, I think — so people are looking for more modernization because Europe and America both need modernization. eMACH.ai is a great story. First principle thinking is a great story. They have not seen any vendor with the first principle thinking with who is saying that I’m reducing your cost going forward and not increasing your cost.
And that’s the reason for winning these deals in this quarter is the outcome. In last April, I mentioned to all of you is that we are moving our eMACH.ai to U.S. and Europe, and it will take some time for them to catch up because they start telling the story of eMACH.ai after April conference to U.S. and Europe customers. And within 9 months, we are able to see the impact of eMACH.ai.
Hopefully, because of the disruptive technology, so I’m not saying it’s incremental technology, eMACH.ai technology that we have. It’s completely codeless. And along with that, the second platform, which is open business impact AI platform, which we’ll be launching on Monday morning in Financial Times in London is one of the most suitable enterprise platform in AI space. So there are 3 spaces in AI. So for all the investors, I want to say that there is a space which generates foundation model like DeepSeq or OpenAI or Bedrock are the foundation model.
Then the second space which is use these models to generate a specific problem solving like gamma for generating presentation or many other applications which use a model and generate and solve a particular problem of PPT, making the PPT, making the letter writing, recording the minutes of meeting.
So those are called point application on AI. whether it is there for programming and software side. And there’s a third space, which is a platform space, which enterprise wants to implement and enterprise space, the company called A, there’s a company called C3.ai.
There is a company called H2O. These are 3 companies which are in platform space. They are still evolving. Vasudha highlighted, we are the first company where we have technology stack and all the 4 technology stacks are. And we are announcing it open platform, which is to increase the efficacy of it. So this is the commentary Rahul in short, which I wanted to share.
Rahul Jain
Arunji, thanks for giving that flavor. Just a couple of clarifications. So basically, what you are saying is that since our business is set to — is designed for that 15% growth, irrespective of the current situation, that is what one should expect to achieve. And from a cost point of view, as you alluded that the current run rate of — quarterly run rate of expenses is around INR500 crores plus now that’s even part. This cost model should not increase materially. So there could be a meaningful profitability improvement on an annualized basis. Is that the understanding right?
Arun Jain
That’s right. So we just mentioned one is INR100 crore investment in AI business mode. So that will de some of the numbers. But otherwise, my regular business is stabilized at INR500 crores plus INR50 crores of cost of C1, INR550 crores plus some additional cost may be there. So INR560 crores, INR570 crores could be the cost structure. So we don’t immediately look, you have to keep Purple Fabric investment separately. We are not separating the company, but we keep the cost separately.
Rahul Jain
So sir, just to get the math right, so even at a INR700 crore run rate, we are getting that INR200 crores EBITDA, even if we add the INR25 crores of quarterly run rate to the cost, it should give us around close to 25% annualized run rate for the EBITDA. So is that what is basically our objective to achieve.
Arun Jain
That’s right. Don’t put the words in your mouth, but.
Rahul Jain
But yes, sir, I am just trying to understand what are as a guidance. I understand on that part. But yes, that’s quite helpful. And just 1 or 2 bookkeeping questions for Vasudha. I think this quarter in the PPT, we could not identify the breakup of the cost item. It would be great if you could share in terms of software, selling and marketing and research expenses.
Vasudha Subramaniam
Yes, because I mean, we had introduced more in this quarter. That is the reason I think it has been — we will update on the.
Praveen Malik
Rahul, I’ll share with you.
Rahul Jain
Okay. Okay. Got it. And just one more clarification. As Arun said that this C1 was included in this quarter and our understanding at that time was that it would not be a very profitable business to start with looking at the payout and payout for the transaction. But it seems like we have done pretty well even including for that. So is it safer to assume that the profitability should be seen as much better even for adjusting for the Central one? Or you think there could be more investment which will come in the subsequent quarter, and that will also add as a headwind for the profitability?
Arun Jain
I think it’s last time we didn’t pick up the right signal. We said Central is one of the best acquisition we could have looked at it. Sometimes you missed 70 customers. This 117 banking customer in the Indian market is 1/3 of the banking market over there, where we can cross-sell and core banking. So that is a signal was misinterpreted.
Even 1 month, we started operating credit on Capital One on 1st of March, only 1 month revenue is there. And it was profitable. It’s not that very high profitability, but it’s not a loss-making. So it’s a profitable and high single-digit profit was there in this new business which we acquired that’s what currently it’s not a value accretive, it’s a value — highly value accretive acquisition with very significantly lower cost to pay for this business.
Rahul Jain
Right. I understand the potential. I was just more talking about.
Praveen Malik
Next, we have Mr. Bhavik Mehta.
Analyst
So I wanted to ask globally, Agent AI is primarily SaaS-driven revenue or forms part of AR. So within our ARR number, does Purple Fabric or anything related to that flows into the platform part? Or does it form part of the ARR? So from the previous quarter to now, our ARR has increased around INR175 crores. So is there any part of Purple Fabric in this or it’s split into the 2 different verticals?
Arun Jain
Yes, small number of AR right now, but I think it will grow further on ARR. Next year, it will substantially larger.
Analyst
So — but primarily, any contract that we have related to Purple Fabric is an ARR driven number, right?
Arun Jain
Most of that.
Analyst
Okay. So the current deal that we have announced, it’s a mix of VM. So even within this, what would be the component of Purple fabric involved?
Arun Jain
That’s right.
Analyst
So what would be the component of Purple fabric in this INR200 crore deal?
Arun Jain
Most of it Purple Fabric was Purple Fabric and rest of it is a platform from the platform, which is broker platform. So this entire INR200 crore deal over the 3-year period is it’s increasing alpha 1, alpha 2 alpha 3-year cycle is doubling their revenue for 3 years. And it’s all classified into Purple Fabric.
Analyst
So primly this INR200 crores is entirely in our ARR. That’s what I want to know.
Arun Jain
That’s right. But INR200 crores is not booked into this quarter. 45 days a 3-year period has been booked for this.
Analyst
Sure. So — but when we say 3 years, generally, ARR contracts are annual. So I’m just trying to understand that are we still looking at the multiyear contract format and then just bifurcating into ARR? Or how are we looking into deals when it comes to ARR? Is it user base? Is it company level? Is it customized? Is there any understandable?
Arun Jain
There’s no standard practice. So practices are getting evolved over a period of time. So there’s a ARR deal a transaction-based deal, number of transactions or there’s a percentage of business deal. So this deal is a percentage of business volume. So a lot of Purple fabric deals we are taking percentage of basis point of the business volume. So that will grow from year 1 to year 2 to year 3. So that is also a pattern we are looking at it. So 3-year value at a year value would be more than INR100 crores per year. Like this deal will have a value will be more than INR100 crores. Go ahead.
Analyst
Yes. So the last question was around that we have a very commendable target for Purple Fabric growing in the next 5 years. So is there any yearly plan around that FY ’26, what do we expect from Purple Fabric specifically in terms of ARR.
Arun Jain
We don’t want to give any numbers on that. I think the potential is very large. We don’t know how it pan out. Let’s see. As it comes out, we’ll share with you.
Praveen Malik
Next, we have Mr. Sushovan Nayak from Anand Rathi Securities.
Analyst
Congratulations on a great set of numbers. Before I ask the question, I’d really like to thank Praveen sir and Vasudha ma’am for giving us a very detailed explanation on the walk-through of the company. So thanks a lot for that. So 2 questions, sir.
Basically, we have seen historically whenever the implementation revenues have come down as a percentage of revenues, then we see an exponential growth in the profitability and SG&A also reduces because your tech subcontractor cost reduces in the SG&A. And this quarter, I think we have seen 500 — 400 to 500 bps improvement in the mix.
So just wanted to understand FY ’26 and FY ’27, what do you envisage the licensing or the implementation revenue to become as a percentage of revenues? Just wanted to get your feedback. And I have another question, but I’ll ask after your response.
Arun Jain
I think we don’t define too many things and each quarter is so variable. So that’s why we don’t predict any number. License-led revenue, which is more than 50% our target is to make it 60% in the next 2, 3 years. So my license revenue, if it’s 60%, obviously, the margin will go back 10 percentage points.
So that’s how — then we’ll be comparing ourselves to the — all the best-in-class product company. Individually, product-wise, we have seen best-in-class product margins. But in a consolidated basis because we have an innovation engine, which will drive the sustained growth is a different strategy.
A lot of times, product company doesn’t have so much innovations coming from a single company. We have a well product now playing very good in the market. Then we are playing — the wholesale banking is coming up great after the core banking and the lending of the last year.
So I think that whole capacity of company to keep on investing — so there are 3 cycles, Horizon 1, Horizon 2, Horizon 3. Horizon 1 cycle become 30% margin business, 35% margin business. Horizon 2 become 20%, 25% margin business. Horizon 3, which is the investment business will be operating at a 5% to 10% margin business.
So now we are adding a new segment called direct to corporate from banking, we are moving to corporate segment, and then we started the entire GEM force, which was there working with us. We have launched 3 products: GPX, which is a government procurement exchange, CPX, which is a corporate procurement exchange and accounts payable, which is APX. Now these 3 products are run by the direct to corporate.
Now this business in 2028 and ’29 will be very flourishing business as we are going in this business line. But all the cost has been invested already into the business. We are investing close to INR40 crores per annum for building the capacity. But GM team was there who has built it up GPX using eMACH architecture, they could build the 3 products in less than 12 months. So that’s the capacity of our innovation in India, which is driving this value. So margin will grow, but I cannot say in the next 12 months, what will be the margin. So that I’m not able to comment.
Analyst
And any views on how much would be the capex investments for this year and next year, when I say this year, FY ’26 and ’27, any views on that?
Arun Jain
Capex investment on capitalization will be doing between 17. So last year, we were doing for $140 million this year should be same number, $20 million. So $20 million will be my capex investment, INR160 crores, INR170 crores will be my capex investment on product side, which will be.
Praveen Malik
Next, we have Mr. Vivek Kumar from West Pole.
Analyst
So given that we have now become multiproduct and not many products are in like that very like Horizon 3, most of should be in Horizon 1, 2. So — and given we are in multi-geography and the kind of outlook and being a disruptive technology, so should we assume that 700, 720, 750 run rate should be maintained in the next 3, 4, 5 quarters versus that question? Second, margin, I’m not asking margin, but we can assume around 24%, 25% — can we assume and model for the next year? First question is this, sir, this — we’re not going back from 720, 750 to again into 600, right? So that’s one question.
Arun Jain
Quarter-on-quarter. So we went up to INR50 crores and then come back to 700. So I will not commit on the 700 but obviously, our target now is to move 800. So next 4 quarter, we should be crossing INR800 crores. That should be our target, and that’s what we’ll be striving for.
Analyst
And can we assume 24%, 25% margin for next year?
Arun Jain
That’s right.
Praveen Malik
Next, we have Mr. Nimish Soni from Carnelian Capital.
Nimish Soni
Yes. So first of all, very, very congratulations to the management for a good set of numbers. My question would be that about the R&D capitalization, like how do you define that what is the new product and what is the existing one?
Vasudha Subramaniam
Can you please come again? You question.
Nimish Soni
About the R&D capitalization, like how do you define what is going into the new product and what is for the existing one?
Arun Jain
The question I think the point is we are putting 2 expenses. One is R&D expenses and R&D expenses are close to INR200 crores, which goes for maintaining the existing products, which we take a write-off.
Vasudha Subramaniam
Which are basically in the research phase. So whatever is in the research phase is actually charged off to the P&L. That’s what you see something close to INR200 crores for the year. And wherever we develop the functionalities or release any major versions, and that’s where it’s getting capitalized. That’s about INR140 crores for the year.
Praveen Malik
Now we have Mr. Manoj Dua from Geometric.
Manoj Dua
Okay. Are you seeing some trend where the revenue is based on the outcome rather than license or transaction based that if you implement your software, the kind of output or saving or deals we will get? Is there a trend like that?
Arun Jain
We are not accepting that. We do not take that risk right now. We’ll be doing it afterwards.
Praveen Malik
Next, we have Mr. Pawan Khatari. Next, we have Mr. Vipulkumar Shah from Sumangal Capital.
Analyst
So my question is the funnel which we have shown in our presentation. So this funnel, can you say how much deals are for pure purple fabrics or every deal includes some portion of Purple fabrics? Your comments are welcome, sir.
Arun Jain
Funnel has 10% to 15% component is from Purple fabric, more components getting better. So that’s how you can look at it.
Analyst
Every deal will have 10% to 15% of.
Praveen Malik
Next, we have Ms. Jyoti Singh from Arihant Capital.
Jyoti Singh
Congratulation on the good set of numbers and execution. Sir, my question basically on the margin side. Like you mentioned on the earlier participant 24% to 25% margin for the next year. So overall, we are targeting in this range going forward. Or earlier, we mentioned 30% plus operating margin going forward. Just clarification on that side. And also like a lot of traction on AI front and earlier you discussed with some of the participants. So what our target on the AI side? And how much we are seeing it will be a benefit on the revenue front?
Arun Jain
Two things are there. In the long run, our margin is 30%, which we are still saying because we have demonstrated this quarter, our margins are 30%. So if you look at the margin of this quarter alone is 30% is a 23% is an annualized basis. So obviously, this will grow year-on-year as more license-linked revenue growth as the previous person asked that portion. So this margin should grow year-on-year, 2%, 3% year-on-year.
So if you’re looking for a 3-year perspective, definitely margin may inch towards 27%, 28%, 29%, 30% kind of depending upon how the license works and how the Purple Fabric comes. I mentioned during the 18 December Purple Fabric conversation by investor that this is a business which can be INR1,000 crores to INR5,000 crores business. We are quite sure of INR1,000 crores. We are now in last 4, 5 months, we built it up the entire use cases, the business cases to make it INR1,000 crores business.
So INR1,000 crores business in next 3 years total Purple Fabric is almost we have created a complete pipeline, market strategy around INR1,000 crores business. Next milestone is can we make it a INR5,000 crore business? That’s what our efforts are, where Manish, me are working along with Manish and Rajesh to make this the greatest AI product in the world which can challenge parent, which can challenge C3O3.ai. That’s a dream that we are running.
Praveen Malik
Next, we have Mr. Jitendra Agarwal from Reliance Capital. Next, we have Mr. Umang Shah from Banyantree Advisors.
Umang Shah
Glad you shared the results much earlier in both the results and the presentation. We could go through it really well. One question that I had was, while — with the use of AI, you are able to create more use cases for your technology. Just wanted to understand internally, how is it helping us with respect to employee productivity? And if it is, then do we plan to — how do we plan to grow the employee base that we have?
Arun Jain
Yes. So employee, if you observe that cost of INR500 crores remain constant in spite of the salary raises is directly attributable to the productivity. If the revenue have grown from — excluding GeM from almost 11%, that 11% increase has not translated into cost structure. That’s where productivity gain. The more productivity will come with more and more implementation of Purple Fabric within Intellect.
And AI doesn’t give — clearly only the productivity it gives you accuracy and better success chances. So first of all, I want to clarify the role of AI is to augment the capability of the manager in the company, not replacing him. So there’s a myth over there that AI will replace people. AI will make the people more efficient and effective. And that’s what we are making Intellect that our deliveries are on time. We did 16 transformation last quarter, so we can able to complete those transformations faster. Our collection can be better. These are the objective of the AI, not just the headcount reduction.
Umang Shah
Great, sir. And just, sir, one more question was you had started putting up a front end for selling Purple Fabric, I think, 6 months back. That’s when you had started talking about it. So where are we on that journey? Do we have a sales force now in Europe and North America? Or is it still work in progress? And if it’s already there, how is the response so far?
Arun Jain
Yes, we’re still building the sales force. The partnership network is already there. Some of the partnership is working right now. So some of the service players are working on Europe and Europe sales force is still there. America, we are building up.
Umang Shah
What is the size of the sales force, if you’re okay to?
Arun Jain
Today, it’s an integrated sales force because all the sales force is not separate for Purple Fabric because all the sales force, which is more than 100-plus sales force is selling Purple Fabric along with their current portfolio.
Praveen Malik
Now next, we have Mr. Sameer Dosani from ICICI Mutual Fund.
Sameer Dosani
Congrats on a great set of numbers, sir. Can you share qualitative feedback or qualitative comments around the progress on the U.S. business? I think we started speaking about it in last 6, 9 months to develop. business. So any qualitative comments, how is it going? And I think you had a target of that it will become percentage of your revenue in 3, 4 years. So where are we on that journey?
Arun Jain
We have already given — so what is the question? Initially, maybe you can listen to this conversation because given that.
Sameer Dosani
Okay, sir. So we already have a sales force on ground. We are growing in line with our expectation. That’s clear, right? And there were 2 large deal wins of it, I think, is INR200 crores deal. You said it will start coming in from Q1. The other large deal, is it already part of Q4, sir? Yet to be accounted for.
Arun Jain
They are already accounted.
Sameer Dosani
Sorry.
Arun Jain
They are already accounted.
Praveen Malik
Next, we have Mr. Srinivas from TIA.
Analyst
Congratulations for the strong set of quarterly numbers. My question is about looking at the deals that you signed in Q4, we can clearly see that there is a shift from the traditional digital transformation deals to AI-driven transformation deals. Are you seeing increasingly clients moving towards this kind of nudging use cases?
Arun Jain
Yes, definitely, there’s a big trend on AI plus email.aI. So the complete of deals are there and AI deals. Second large deal Manish, if you want to share the second large deal, what is the trend of eMACH.ai transformation, that will be helpful further.
Manish Maakan
It’s the ability to — so the second large deal is a fairly large U.K. bank for their wholesale bank transformation across all their international franchises. And this is the capability to integrate and compose using eMACH.ai. I think you’ve been seeing that we are winning large transformation destiny deals.
What’s changing now is the embedded AI inside the platform is giving the right excitement to the banks that we are not just doing a patch on copilots, which give you momentarily high, but do not show the business impact. I think that’s a differentiation which really the market is looking for. And with the work we had done on Purple Fabric and in the last 24 months on EMA, the combined power of them to be able to make this impact out is very exciting right now.
Analyst
Okay. And which verticals are you seeing more demand for this Purple fabric? Is it insurance underwriting or finance and accounting, back-office operations or document processing? Where exactly you are seeing demand?
Manish Maakan
So if you look at, we have started this journey with insurance, and that’s where we really cut our teeth on to this technology. It’s gone into lending, it’s gone into payments. It’s getting into trade and supply chain finance. So we are I think there are 2 things.
One, we are embedding this in our standard platform like Arun called out. And second, we’re building it as an independent platform, which can sit across whatever knowledge bases you have and how we build an enterprise knowledge garden and how we build digital experts on top of that. You go look at — the world’s got excited with copilots and everything. What’s it delivered?
Go ask any CFO, how much is your cost reduced genuinely, net of Azure cost added on to it. And you will find very different answers because it was not a holistic design. You were just looking at a structured data component of the data lakes and you are not harmonizing along with the unstructured data. And that’s what — we started doing with insurance, and now it’s a global launch to be able to take it across all products.
We have embedded it already into a number of platforms. We’ve got about 68 digital experts available already, and that’s what Arun said, we’re formally announcing it on Monday globally. And the following week, Arun and I and Banesh, we are in London, and we’re rolling it out and then doing a global roadshow behind it. We’ve got this confidence with the INR200 crore deal, which we have announced, the scale of transformations we can actually do.
And when we are able to say we’re going to take basis the impact we created, that’s truly — it’s not just saying, hopefully, Wishiwashi, some costs will reduce. We’ve really put our stakes on the ground on the business impact, and that’s why we’re calling it business impact AI.
Rajesh Saxena
Just to add to what Manish said to your question, it is a combination of EMAC and AI coming together. So even the big deal we won is a combination of EMAC insurance product along with AI that’s coming together, and it is impacting both operations and the actual business delivery overall because that combination is what makes it give the final business impact to the customer.
Analyst
Just a follow-up on that. When you say productivity improvement to clients, what kind of ROA is expected for clients, say, 3 years, especially the AI deals? Is it 10%, 15%, 20% ballpark?
Rajesh Saxena
I think Yes, very difficult to give a percentage like that. For every use case, in every business, we show improvement in risk, we show improvement in compliance. Some of them is cost, some of them is improving the quality of their risk decisions. So it’s very difficult to give that kind of an impact.
But for one of the deals that we had won with the largest wealth manager in the U.K., there, we had a significant improvement in turnaround time for complaints. What used to be 5 weeks was being done at a fraction of the time, almost it runs into something like 30 to 45 minutes. So I think there are different ways in which we measure it. And eventually, of course, it reduces risk or compliance risks or even potentially cost of operations.
Praveen Malik
Next, we have Mr. Prathamesh Dhiwar from Tiger Assets.
Prathamesh Dhiwar
Yes, just one question from my side. As we have grown Purple Fabric as of now INR1,000 crores. Sir, any time line would you like to give so by when we can reach fabric to INR5,000 crores?
Arun Jain
That’s a difficult thing INR1,000 crores also will reach in 3 years. I think I have visibility of INR1,000 crores. INR5,000 crores is what we are attempting to make with the brand in Financial Times and the branding we are doing. That’s the potential we are looking at it because Purple Fabric is alone INR5,000 crores and banking give INR5,000 crores, we are INR10,000 crores company.
Praveen Malik
I think we don’t have anybody else, Arun?
Arun Jain
It’s very right time to close the questions. Thank you.
Praveen Malik
Yes.
Arun Jain
Somebody raised the hand.
Praveen Malik
Can we close it, Arun? I think nobody is there.
Arun Jain
Somebody raised the hand right now showing on five participant,
Praveen Malik
Doesn’t seem to be any.
Manish Maakan
Nobody is there, Arun.
Arun Jain
Thank you. Okay. Thank you, everybody, for participating in the call. In case any more questions are there, you can just write to us, and we’ll be replying to you. Thanks for joining the call today. Thank you and my teams. Now you can logoff.