Izmo Ltd (NSE: IZMO) Q4 2025 Earnings Call dated Jun. 06, 2025
Corporate Participants:
Unidentified Speaker
Sanjay Soni — Managing Director
Analysts:
Unidentified Participant
Sudhir Bheda — Analyst
Meherwan Kotwal — Analyst
Prasenjit Paul — Analyst
Darshil Jhaveri — Analyst
Avinash Nahata — Analyst
Amit Agicha — Analyst
Maitri Shah — Analyst
Bhavesh Chauhan — Analyst
Ganesh Rao — Analyst
Rahul Dohare — Analyst
Het Shah — Analyst
Pratik Kedia — Analyst
Vina Katani — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to ISMO Limited Q4 and FY25 earnings conference call hosted by Alfactors PR. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjay Soni, Managing Director, ISMO Ltd. Thank you and over to you Mr. Soni.
Sanjay Soni — Managing Director
Thank you. Good morning everyone. I would like to wish you all a very warm welcome to ISMU Limited’s earnings conference call for the quarter and full year ended 31st March 2025.
I would like to begin by expressing my gratitude to you all for taking the time to join us today. We have on call with us at Factors our investor relations team. I trust you all would have had the chance to go through our investor presentation and results published on the website and stock exchanges. FY25 has been a tremendous year of growth and diversification for us. For the sake of those who might be new to the company, I would like to briefly give a background of our company before getting into the majority of recent developments in the business and financial performance.
Company Background we are a premium automotive software products company with a global presence in San Francisco, Chicago, Paris and multimedia studios in Los Angeles and Brussels. With over 25 years of experience, we serve thousands of clients across the us, Europe and India including top global automotive manufacturers. We have made significant R and D investments especially in AI based products and continue to expand our product base in the US and Europe. Driven by growing demand for online automotive marketing solutions, we have recently forayed into the semiconductor sector through a wholly owned subsidiary, ISMO Microsystems wherein we are offering system in package solutions from our manufacturing facility in Bangalore.
This diversification is aimed to tap into high growth potential sectors by leveraging our domain expertise. Our software business can broadly be categorized into three core divisions 1. IsmoStudio which is Interactive Media Solutions 2 ISMO Auto Digital Retail and CRM Platform and 3 Frog Data which is the AI and data intelligence platform. Ismo Studio IsmoStudio, with State of the art facilities in Los Angeles and Brussels, is a global leader in automotive imagery licensing the world’s largest image library to clients like Hertz, Avis, Europcar, Arwal Edmonds and MSN Autos. Using advanced laser and CGI technology, we deliver cutting edge digital retail solutions.
Our flagship platform, Ismo Emporio is an interactive 3D virtual showroom for dealerships and retail apps used by Ford, Peugeot and Renault. Fully developed in house, it exemplifies the make in India vision. Building on the success, we are now working on launching immersive virtual reality solutions that connect digital retail with real world experiences. ISMO Auto, our digital Retail and CRM division operates in France, the US and India, leading the French market with major dealer groups and OEMs. To tap into the 220 billion US Hispanic automotive market, we launched a Spanish language platform www.autogozo.com, a Spanish only portal with 2,000 plus dealers supporting our US expansion.
Our CRM solutions are mandated by Stellantis for European after sales under a multi year contract with rollout planned across all brands. In France we have ISMO Consulting, a government certified training organization serving clients like Stellantis, Retail, Renault and major dealer groups with strong growth trajectory Frog Data Frog Data, our AI and data intelligence arm is a pioneer in automotive decision analytics. After seven years of investment, it helps thousands of dealerships boost profits through performance optimization. Key products is fdap, Frog Data decision analytics platform, Warranty Boost and Warranty Mind. Widely adopted, Frog Data is seeing strong growth driving increased investment in sales, engineering, delivery and marketing.
New AI tools for vehicle pricing and predictive service. Upsell will launch next year. Touching upon the industry trends and growth outlook as we move through FY26, we continue to align our strategy with key global industry trends shaping our sector. The semiconductor industry is on a strong growth trajectory with global sales expected to reach 697 billion in 2025 fueled by demand in AI data centers and automotive electronics. Industry estimates project an 11.2% market increase led by the logic and memory segments. In the electric vehicle EV market, over 4 million EVs were sold globally in the first three months of 2025, a 35% year on year increase highlighting the sector’s rapid momentum particularly in western markets like the UK.
Automotive digital retail is also evolving with 43% of buyers in 2024 using a hybrid online offline purchase process, this is expected to grow to 71% underscoring the demand for integrated digital platforms. Moreover, digital marketing software is booming, projected to grow from $92.8 billion in 2024 to $110.2 billion in 2025 at a CAGR of 18.7%, driven by mobile and social media adoption. Meanwhile, the business software and services market, valued at 584 billion in 2024, is forecasted to grow at a CAGR of 12.1% through 2030, propelled by automation and AI integration. These trends reaffirm our investment focus and position ISMO to capture long term value across these dynamic and high growth sectors now coming to some recent key developments the second half of the year has witnessed impressive strides building on the strong performance during the earlier months.
Despite global economic volatility and geopolitical challenges, ISMO has managed to maintain its growth trajectory and extend its global reach, demonstrating resilience. Our customer base and seed has seen steady growth, particularly across the United States and Europe. The Frog Data AI suite continues to lead our product portfolio in adoption, gaining increasing traction and favor among a diverse and expanding user base. Synergies from a recent strategic acquisition of Geronimo Web are coming in well. Geronimo is a UK based digital marketing powerhouse serving automotive dealers and OEMs. The acquisition has boosted our footprint across both European and Latin American markets as a leading automotive digital platform provider.
As mentioned in the past, the deal brought Ford into our client roster, opening new avenues for cross selling a wider suite of solutions to this major industry player. A major milestone this year has been the operational launch of our cutting edge system in package SIP manufacturing facility in Bangalore under our subsidiary ISMO Microsystems Private Limited. This state of the art facility is central to our expansion into high performance SIP solutions targeting key sectors such as automotive, consumer electronics, telecom and EVs. Equipped with advanced technologies like 3D die stacking, fine pitch wire bonding and Flip chip and housed in a Class 1000 cleanroom environment, the facility enables compact, power efficient and highly reliable semiconductor solution by integrating multiple functions into a single package.
It supports rapid prototyping and faster time to market, essential for innovation driven industries. This strategic investment not only aligns with our push into the growing EV segment, but also positions as a serious contender in the global semiconductor ecosystem. We have already engaged with an automotive partner and are exploring further collaborations. Encouragingly, this new vertical has started contributing to our revenue since a couple of quarters. Significantly, we partnered with IIT Madras as the sole industry partner for a pioneering initiative in photonic chip packaging at the center for Programmable Photonic Integrated Circuits and Systems cppix under the leadership of Professor Bijoy Krishna das.
Established in 2021 with support from the Government of India and an in kind contribution from ISMO agrisystems, the center leverages over a decade of research in silicon photonics. The partnership focuses on developing programmable photonic processor cores through cutting edge silicon photonics targeting applications in microwave and quantum technologies. ISMO is lending its expertise in system and package solutions to support the Center’s goals, reinforcing India’s momentum in semiconductor and photonics innovation. This collaboration comes as the global silicon photonics market rapidly grows, projected to hit 4.6 billion by 2.2027, driven by rising demand in AI, quantum computing and advanced data communication.
ISMO is well positioned to capitalize on this trend with its precision chip packaging and advanced photonic integration abilities. Moreover, we recently received ISO 270012022 certification, an internationally recognized standard for information security management systems for all our products, platforms and consulting services. This testifies to our commitment to data security. These are indeed exciting times for our industry as we continue to harness our deep domain expertise to innovate and maintain a strong market presence. Our seamless integration with core data systems and the automotive space including dms, CRM, IMS and digital retail platforms gives us a unique edge.
This interconnected ecosystem enables us to deliver end to end data rich solutions that empower our automotive clients to streamline operations and achieve stronger business outcomes. Now turning to our financial performance fourth quarter Q4FY25 we reported rupees 59.81 crore in revenues during Q4FY25 and 18.9% year on year rise. Revenue growth was driven by expanding clientele across the US and Europe supported by higher average sales prices. Our EBITDA including other income for the quarter stands at rupees 12.09 crores while corresponding EBITDA margin is 20.22%. Our patent during this quarter is 6.89 crores as against 9.04 crores in the fourth quarter.
FY24 PAT margin stood at 11.52%. EPS for this quarter is rupees 4.63 Coming to the full year FY25 we reported 224.61 crores in revenues during FY25, a robust 20.27 year on year rise. New client additions were supported by synergies from Geronimo and Ismo Microsystems driving top line growth. Our EBITDA including other income for the full year grows 70.14% y on y to Rs 73.57 crore and corresponding EBITDA margin is 32.75%. We continue to invest in our workforce and ramping up operations at ISMO Micro which had a bearing on the EBITDA margin. Our PAT during the year grew 87.6% Y on Y to Rs.
48.88 crores as against 26.05 crores in FY24. PAT margin improved 781 bips to 21.76%. EPS for the full year is rupees 33.90. That is all from our side. We are now happy to take questions. Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question comes from the line of Sudhir Bheda with Bheda Family office. Please go ahead.
Sudhir Bheda
Hi Yasir. Good morning.
Sanjay Soni
Good morning.
Sudhir Bheda
And very elaborative information you have given in the opening remarks and various businesses you are pursuing particularly high growth semiconductors and others. So sir, wanted to ask your top line is growing well but salary and other expenses is raising because of the new verticals that you are entering into. But when it will be reflected in the PAT growth like Q4 was subdued in terms of PAT growth. So what is the outlook for 26?
Sanjay Soni
So this year we will break even in ISMO Micro operations in the current financial year.
So you’ll start seeing the pad growth happening from say Q3 of this year where it will start contributing to the PAT as well as the EBITDA being a new business. We are still having expenses there but that was the minimum bear required to build up a very strong team. We have our technical team has more than 150 managers of experience in semiconductor packaging. So we have brought in very very highly talented individuals. We are also investing in the CP PICS project with the government of India and IIT Madras and all those will start bearing fruit in the current year.
We already have signed up few clients. In fact very big automotive client. We have Bel as a client now for our packaging business which is doing. They are ramping up. They’re talking of much bigger numbers because they don’t have any other partner for this kind of business. So we are looking at multiple sectors and clients are coming on board And I think from Q3 onwards you start seeing the results of that.
Sudhir Bheda
And what would be the top line of this business, particularly semiconductor, if you can.
Sanjay Soni
I would. In three years we should be doing at least 200 crores if not more.
Sudhir Bheda
Yeah, yeah. And other businesses also. What kind of growth you are pursuing this for? For the year 26, there’s a console business entity as a whole and…
Sanjay Soni
We are looking at around between 25 to 30% overall growth.
Sudhir Bheda
And it will reflect in the bottom line also, right? This year?
Sanjay Soni
Yes, this year it will because the other businesses which are, which were burning cash last year will stop burning and start contributing. That’s why I said from Q3 and Q4 you start seeing the results coming in the bottom line.
Sudhir Bheda
What is the outlook for this year?
Sanjay Soni
It is good. It’s slow, it’s steadily growing. We are getting more client acquisitions and we are adding more salespeople also. So we are seeing steady growth in Frog data.
Sudhir Bheda
And the routine question, sir, that every phone call people ask is are you still pursuing the divers line or…
Sanjay Soni
Yes, we are, but we will do it by end of, I mean sometime by end of this year because by then the numbers will be exciting enough for a large investors to come in rather than small investors. So as I’d explained, we wanted to reach a certain top line to attract a better listing of investors and that’s why we had postponed the divestment. Not divestment, I would say investment. Getting an investment. It’s not a divestment. It will be a small outside investment coming. So that’s as per plan.
Sudhir Bheda
Also will be better what you were…
Sanjay Soni
We expect the valuation to be better. Of course, AI is becoming very now mainstream. Everybody’s including AI and in fact every product today is talking of AI. So I think definitely valuations will be better. We can’t give a number right now. Let us come to that point before we talk specific numbers. I think it’s too early to discuss.
Sudhir Bheda
Year and calendar year you are talking, I think.
Sanjay Soni
Calendar year end or maybe financial year end because…
Sudhir Bheda
Okay, sir, thank you for the opportunity.
Sanjay Soni
Thank you.
operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Meherwan Kotwal, an individual minister. Please go ahead.
Meherwan Kotwal
Good morning sir. Just wanted to check on our revenue status with respect to Geronimo because I think that did not form part of the presentation. I think we were guiding for close to 20 to 25 crores for the year. So how have we progressed with respect to that acquisition?
Sanjay Soni
We have broken through in Geronimo. We had a success in Germany that that contract has been signed in the current financial year. That’s why it’s not reflecting in the previous. We will be announcing that soon once we are able to make the announcement and the client lets us announce it. But it’s a new country and a big client. So Geronimo is picking up. Well, there was a time of consolidation. So which is always there when you do an acquisition. We have brought down the cost there. Now do the cross sell and upsell training for the various sales people has been completed.
They are now very familiar with Ismo’s products which can be upsold to the existing client base of Geronimo. And plus we are also offering Geronimo’s products in our to our client base. So all that has taken a year, which is quite normal. And this year we shall start seeing. We are already seeing the results coming in and you see it also coming in the results.
Meherwan Kotwal
So how much revenue could we expect for that for FY26 from Geronimo?
Sanjay Soni
I think around 3 million euros is what we expect to close this year.
Meherwan Kotwal
So for the current year, this wasn’t there in our revenue mix basically?
Sanjay Soni
No, it was much less.
Meherwan Kotwal
Okay. And is it included in is more cars or something this revenue or…
Sanjay Soni
Yeah, it comes in Ismo cars.
Meherwan Kotwal
Right, right. So how much would that be for this current year?
Sanjay Soni
I think we have given the numbers. I don’t have it offhand, but you can reach out to the IR team and they’ll give you all the breakup. I mean it’s there in our presentation. So.
Meherwan Kotwal
Right. Second thing is that I was also noticing that our working capital has increased to a certain extent. Is it more a function of the incubation of the new businesses or is it…
Sanjay Soni
Yeah, it is partly that and partly clients are taking longer to pay. Slightly longer. So.
Meherwan Kotwal
Okay.
Sanjay Soni
Especially the big clients like herd service. They have their own cycles and it’s getting a bit longer, but that’s about it. But we have no delinquency going past I think 90 days. That’s not a concern.
Meherwan Kotwal
And we’ve done close to 65 crore on frog data. Would it be possible to like close the next year? Maybe close to 100 crore or will be a little.
Sanjay Soni
That’s our internal target. That’s our internal target. Let’s see how much we can do. But internal target is 100 crores.
Meherwan Kotwal
Right? Right. Overall for the company, what would be a EBITDA margin guidance for FY26? Because there was a little bit of dip this year as compared to the last year.
Sanjay Soni
Yeah, that was because of the cost coming in from Ismo Micro and Geronimo. So if you remove those costs, we will go back to the last year’s EBITDA margin which was healthier. So we would look at say between 35 to 40% at least.
Meherwan Kotwal
Right. I’ll get back into the queue for questions. Thank you, sir.
Sanjay Soni
Thank you.
operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes to the line of Prasenjit with 129 wealth. Please go ahead.
Prasenjit Paul
Good morning, sir.
Sanjay Soni
Good morning, Prasanji.
Prasenjit Paul
Yeah, so sir, my question is in your consolidated financials in Q4, the employee cost stands at 28.27 crore. So can we expect any further increase or will it remain same in the say in the current quarter or in the next quarter? So just…
Sanjay Soni
No, there will be an increase in the current quarter because we do appraisals in April.
Prasenjit Paul
Okay. So normally yearly appraisal happens in April.
Sanjay Soni
Correct. So that you will see that. And then it stabilizes.
Prasenjit Paul
Okay, and what’s the, I mean what kind of increment happens in April? Like as you mentioned that…
Sanjay Soni
Within 10 to 12% aggregate across average.
Prasenjit Paul
10 to 12%. Okay. And can you give us some any idea about the margin figure of Frog Data AI segment?
Sanjay Soni
We don’t separate this thing by division as of now. But if you write to us then we can give it to you. That can be worked out.
Prasenjit Paul
Okay. Okay. Okay. Thank you. And also right now you have clients in Ismo Car and also you have clients in Frog Data. So can you give any idea, any approximate number, how many clients you have in the Ismo card and how many of them in the Frog Data division?
Sanjay Soni
Frog Data I know is around 800 plus is more should be also similar spread across Europe and US and Latin America.
Prasenjit Paul
Okay.
Sanjay Soni
So we have a lot of clients. So it’s very difficult for keeping track each one. But yeah, it’s around that number last I checked.
Prasenjit Paul
Okay, so I just wanted to understand, is there any further option to penetrate the Ismo Car customers?
Sanjay Soni
Oh yeah. T he US is 16000 dealers, another 19,000. So that we have a lot of room to grow.
Prasenjit Paul
Okay, so you mean to say so there are a lot of dealers who are till now not the customer of from data.
Sanjay Soni
That’s correct. So we still have a very large room to grow there.
Prasenjit Paul
Okay. Okay.
Sanjay Soni
But we need more feet on the street, which is what we are adding slowly.
Prasenjit Paul
Okay, okay. And also in this, you know, in your financial statement we can see there are some income tax due from the assessment year of, you know, 17, 18, 14, 15. So there are very long like 7, 8 years old amount figure of like 5.1 crore, 1.47 crore. Can you help us to understand like what is their status like even in the future? Really?
Sanjay Soni
Most of them are in the tribunal waiting the judgment. And if you look at any Indian company, you can pick up any balance sheet, any company more than 10 years old, you’ll find this in every balance sheet. The tax disputes are part of our Indian corporate culture. We cannot help it. So…
Prasenjit Paul
Any kind of like future liability that might come due to those…
Sanjay Soni
I don’t think so. We have a very good case in most of them. Most of these are transfer pricing issues. And in two or three places we also got a positive judgment from the tribunals where they’ve had to reverse it. So we are quite hopeful that the liability, if any, which come will be very nominal.
Prasenjit Paul
Okay, and what would be the last, is the last question, like what would be the approximate tax rate for this FY26 and 27. Because you know, last few years or tax rate…
Sanjay Soni
Remain low till around 2030. After that it will start going up. We still have enough tax shelter in the US so.
Prasenjit Paul
So till 2030 it will remain low. But you have, you know, India operation where you need to, must need to pay tax at the normal rate.
Sanjay Soni
Yes, but India, the profit is very low. We hardly. The main profits are in the subsidiaries where there is enough tax shelter.
So it’s not an issue.
Prasenjit Paul
Okay, so in US and in eu, European market, you are saying there is enough tax filter. So can you expect that again the tax rate won’t move up above 4, 5% like as it was in the last one, two year.
Sanjay Soni
Yeah. So we’ll continue for like I said, till 2030.
Prasenjit Paul
If you don’t mind. Can you explain like what kind of cash tax shield you enjoy?
Sanjay Soni
No, that we will not like to explain because it’s a public call and that’s something we don’t want to talk about. It’s confidential.
Prasenjit Paul
Okay. Okay. Okay.
Okay. Thanks a lot. That’s from my side.
operator
Thank you. Next question comes from the line of Darshil Jhaveri with Crown Capital. Please go ahead.
Darshil Jhaveri
Hello. Good afternoon, sir. Thank you so much for taking my question. Firstly, congratulations on a great set of results, sir. Hopefully I’m audible.
Sanjay Soni
Thank you. Yeah, yeah, I can hear you clearly.
Darshil Jhaveri
Yeah, yeah. Yes, sir. So, sir, sorry I had, I kind of missed Your opening statement. So just pardon me if there are some repetitive questions. So just want you to know, like I think. Yeah, so I think if we just split up our current business into two parts, one would be the semiconductor opportunity, one would be the AI and one would be the other businesses.
So I think other businesses, I think we were saying around 25, 30% growth will be there and the semiconductor, which I think right now is 2 crores quarter, we want to be able to scale like up to 200 crores. Did I use that correctly?
Sanjay Soni
Yeah, in the next three years. Because…
Darshil Jhaveri
Yeah, in the next three years, in the next three years look like would it be linear or you know every year there’s some increment or would it be more back ended? So you know, could you just, you know, how does the flow of, flow of revenue work? Would that be possible?
Sanjay Soni
Linear with some jumps in between.
Because like when we are releasing the first product on the photonics chip, which should happen soon, that will give a big bump but otherwise it’ll be linear. As we bring on more clients and we get more orders from these clients, we’ll, you’ll see a linear growth coming in there.
Darshil Jhaveri
Oh, okay. This one is a lower. Like right now overall on the FY26 on a consolidated basis, what kind of revenue can we expect? Because I think the last quarter we exited at a 600, 600 million run rate. So just wanted to, you know, how do we look at it and the margins, I think you were saying from Q3 will be, you know, back to normal.
So like what can we expect like overall in terms of consolidated margins?
Sanjay Soni
See like you said, we will have a top line. I can’t give quarter on quarter because that’s very difficult to predict. But we are looking at overall 25 to 30% growth in the top line. And like I said Q3 and Q4, you should start seeing positive EBITDA contributions from the new businesses, Geronimo as well as Ismo Micro. So looking at that, we are looking at better EBITDA margins coming in.
Darshil Jhaveri
Okay, okay. So could you just quantify if possible, what is the burn rate for Geromino and Microo currently in the quarter?
Sanjay Soni
I can’t give you that number.
You have to send us a mail. We’ll give you the number. I don’t have it offhand.
Darshil Jhaveri
Oh, okay, okay, fair enough, sir. Yeah, yeah, that’s it. From my side, sir. Thank you so much. All the best.
Sanjay Soni
Thank you.
operator
Thank you. Next question comes to the line of Avinash Nahata Parami Financial Services Please go.
Avinash Nahata
Yeah. Hi. So my first question is regarding Frog Data. So what kind of sales business on the business side we have beefed up as in terms of employees across Frog Data. Where were we 15, 18 months back and where are we and what kind of further investment we want to do as far as the sales and business development is concerned?
Sanjay Soni
So we were at around eight to nine employees, say 18 months back.
Today we are at 15 employees and by end of this year we should be at 25 employees in sales and business development specifically. So we are focusing on increasing, ramping up that sales team. But getting good people is not easy. So it takes time to get the right people and then train them. So that’s why it’s a slow process.
Avinash Nahata
And this is primarily in us.
Sanjay Soni
Yeah. Yes. Frog Data right now is only in the US There we still have a lot of penetration, this thing to go. So that’s why we have not thought of any other market at this time till we don’t penetrate that properly.
Avinash Nahata
And Sanjay, when you’re saying 25, 30% overall growth in business. So Frog Data will grow higher than the overall company growth.
Sanjay Soni
Yeah, because other divisions grow slightly slower. Gizmo Studio is not such a high growth because it’s steady business. Old clients, even Gizmo Cars is say, I would say between 15 to 20%. So this would definitely be slightly higher than the rest in terms of growth rate.
Avinash Nahata
If you can just spend one time and explain the value addition, what we are going to do in this is no microsystem business. I mean, if you can slightly simplify and make us understand what kind, what is the inward, what is the value addition we will do? And you have of course explained that it’s going to be linear once the customer addition is there.
Sanjay Soni
See, what we do in is more micro is something called semiconductor packaging. But we don’t do the regular OSAT work, which is like hundred machines and you know, just people working and dishing them out millions at a time. That’s the regular packaging work which is done in China and other places. And we are not trying to do that. We are trying to do very specialized, complex packaging like 3D packaging, which is done probably today only four countries in the world. So we are designing packages which can miniaturize, which can protect your IP and which can also do multiple functions within the same package.
Now when you do a semiconductor package, it’s only a chip inside, which means it’s only digital. When we do a package, we can put a lens, we can put a sensor we can put a three chips, multiple chips inside the package so your and it looks, from outside it look the same. So we can actually do a pin to pin replacement on your existing board and give you much more functionality on the same product with no changes in the layout and everything. So you don’t need to go back to the drawing board to redo it.
We do it for you. And this is becoming more and more popular because your time to market comes down drastically. So it helps companies first of all react much faster to changes in the market and also come out with much better products very quickly. So like we are doing tire pressure sensors which are very complex which are now being done for a client. We are doing some.
Avinash Nahata
Sorry, tire pressure.
Sanjay Soni
Yeah. So we have miniaturized it, made it much smaller, much more robust. They were having issues with them getting spoiled. Then we are doing RF radio frequency modules for a client which is again we have been able to miniaturize it and they had some issues with heat and emi.
We have eliminated that. So it’s real complex stuff which needs a lot of knowledge and engineering. It’s just on manufacturing. So manufacturing is only I would say 20% of cost of the final product. It’s more to do with intellectual property going in. So that’s the space where we are.
Avinash Nahata
And who will be our customers most for the initial 12, 24 months which is the industry.
Sanjay Soni
Automotive. And we have defense because the RF is all going towards commercial and defense solutions both it can be used in either.
Avinash Nahata
And within automotive. Who would be our customers?
Sanjay Soni
That we don’t. We can’t disclose.
Avinash Nahata
No, no. And I’m not asking about you. The names, I mean they would be…
Sanjay Soni
No, these are not the manufacturers. These are people supplying to the manufacturers.
Avinash Nahata
Yeah, that’s what I’m asking a tier one suppliers, Tier two suppliers. Who will be our…
Sanjay Soni
Tier one. We would be working with the tier one supplier. These are big companies actually international companies who have come to India and whom we have helped to actually improve their product.
Avinash Nahata
Thanks a lot.
Sanjay Soni
So tier one, not tier two or tier three. Because they when we are working at the product level has to be tier one or the oem. It can’t be at any other level.
operator
Thank you. Next question comes from the line of Amit Agicha HG Hawa. Please go ahead.
Amit Agicha
Good morning sir. Am I audible?
Sanjay Soni
Yeah, good morning Amit. I can hear you.
Amit Agicha
Thank you for the opportunity, sir. Most of the questions have already been answered. So like after different questions like sir, can you share any one key insight which you must have discovered in the past three to five years, which is very unique to understanding the business.
Sanjay Soni
Very interesting question. I would think in our journey till now, it’s a long journey. One thing we have realized is innovation is the key to survival.
So we have always been trying to come out with innovative products. Sometimes we are ahead of our time but eventually customers realize that what we have come out with is something that needed all this while. So that has been the key to our survival for so long, despite adverse conditions in between. And we have come back. I would say innovation and coming up with new products all the time is the key.
Amit Agicha
Okay, sir, and any last question. Any inorganic acquisition plan similar to Germany move.
Sanjay Soni
We are always in the lookout. But unless we find something really compelling, which right now there is nothing in our horizon.
Amit Agicha
Last question. The CAPEX plan.
Sanjay Soni
Our CAPEX is never very high. We have done capex last year for ISMO Micro and regular capex keeps happening at the ISMO cars distinct because we replace servers, we replace computers with high end computing. AI needs now much more powerful computing systems. But that’s part of the regular capex. No specific capex plan. Big capex spend.
Amit Agicha
So would it be possible for you to share any number of capex?
Sanjay Soni
Like I said, we don’t have a capex. This thing 5 to 7 crores. I don’t expect it more than that.
Amit Agicha
Thank you sir. All the best for the opportunity.
Sanjay Soni
Thank you.
operator
Thank you. Next question comes to the line of with Maitri Shah Sapphire Capital. Please go ahead.
Maitri Shah
Yeah, hello, I’m audible.
Sanjay Soni
Good morning Maitri. Yes, I can hear you.
Maitri Shah
Congratulations on the result. I just have a few questions. So with ISMO Microsystem starting the production or we get we launching the photonic circuits and then also journey more contributing ahead. What sort of margins are we looking at for FY26?
Sanjay Soni
Like I said, EBITDA should improve from the current level to between 35 to 40%. So there’ll be a growth of 35 to 40%.
Maitri Shah
Okay, and the reason for the high other income? Could I ask?
Sanjay Soni
We had sold a property in. I think it was Q2 or Q3. Q2 I think Q3, which the company owned. So that major chunk comes from there. I think 31.5 crores if I recall.
Maitri Shah
Okay, and when are the circuits gonna be launched from instrument microsystem? Any like timeline? Do we have.
Sanjay Soni
Sorry.
Maitri Shah
To the photonic circuit. When are we planning on launching?
Sanjay Soni
Yeah, yeah we are. It should be Q3 this year. The first product should be coming out based on the chip.
Maitri Shah
Okay, and do we have…
Sanjay Soni
We are Looking at a quantum number generator. Random quantum. The quantum random number generator which is used in banking and many other applications. So it’s huge.
Maitri Shah
And do we have any orders for that already?
Sanjay Soni
No. It’s something which is so new and so revolutionary that you can’t go and get audit and you don’t have it. People will not believe it’s possible, but it is. So that’s what the photonics makes it possible. Otherwise using regular technology you can’t achieve this. So photonics is the only way which is using light you can achieve something like this.
So they’re waiting for it to come out with a proof of concept is shown to them and then we’ll have the orders coming in. There are only three countries in the world working at photonics today. That’s what you have to understand. Maximum of course is being done in the us. The second is Spain and the third is India which is IIT Madras. So these three countries are spending very heavily on photonics because that’s where the future is. You have Nvidia coming out with new chips for AI, but the data is not flowing in for the AI chip to actually process it.
So with the photonics chips coming in that will enable all the data to reach the AI chip faster and then you’ll find the power of the Nvidia chip even increasing. Hello.
Maitri Shah
Oh yeah, yeah, hello.
Sanjay Soni
So this is part of the entire AI. It’s going to revolutionize AI in a much bigger way and help companies like Nvidia all achieve bigger things when it comes to throughput on their AI chips. So that’s why photonics has become so critical all of a sudden because otherwise AI is going to play to at a certain level unless the chip technology keeps up.
Maitri Shah
That’s great. Just one last question. So with our microsystem business going to like a 200 crore top line in three years, what sort of split do we expect is the microsystem?
Sanjay Soni
What sort of sorry?
Maitri Shah
Revenue split do we expect? So going ahead. So currently that 4% at revenue generating just 4% contribution. So maybe in FY 2728 how much contribution will…
Sanjay Soni
40%. 40 to 50. I mean 40% to 50% should be a good number or no less It’ll be around 30%. Sorry.
Maitri Shah
30 to 40%.
Sanjay Soni
I haven’t really thought it through. Basically we are looking at each business growing well but of course that will grow much faster.
operator
Thank you Ms. Shah, Please rejoin the queue for more questions. Next question comes from the line of Bhavesh Chauhan, an Individual messer, please go ahead.
Bhavesh Chauhan
Sir, I missed your number on EBITDA margin guidance. Was it around 30, 35%?
Sanjay Soni
I said 35 to 40% will be where we should be this year.
Bhavesh Chauhan
Okay. And in terms of sales growth, sir, are we looking at that 25% mark growth?
Sanjay Soni
25 to 30.
Bhavesh Chauhan
Right. 25 to 30% over the next three years also.
Sanjay Soni
Yeah, I don’t want to comment about three years, but internally we have a much more aggressive growth plan. But we would be happy with 25, 30 when next three years.
operator
Thank you Mr. Chauhan. Please rejoin the queue for more questions. Next question comes from the line of Ganesh Rao with Rupani Capital. Please go ahead.
Ganesh Rao
Thank you for the opportunity. Sir, I have a question on competition. Right, so from a competition perspective, in regards to probe data for data integration from dms, CRM and ims, if a competitor has funds to back him, how hard would it be for him to integrate into the systems and provide what we have? Because in one of the previous phone calls you had stated that, you know, you integrate and plug and plug in all these data points and provide it to the dealer.
Right. And many of the competitors do similarly. Right. I’m trying to gauge if the competition can quickly catch up, if they have sufficient funds to back them.
Sanjay Soni
Yeah, not quickly, but yes, you can recreate anything. You can even make a new Microsoft Windows if you have enough money and time. The fact is that why we have been able to come out with Frog data and make it successful is the domain knowledge which we have of being in the automotive industry for more than 25 years. So that domain knowledge helps you come out with a. We actually came out with Frog data 10 years back, but four years was spent only in working with the dealers to fine tune it.
So we actually spent four years after the product was ready in making it smarter, making it easier to use, making it more functional and giving them what they need. Because we engage with the dealers in every level from so many years, we understand the automotive business. So it’s not just the software that oh, I can create the software, anybody can make a software, it’s not impossible. But understanding the business, understanding what the dealers need, understanding how to help them, comes from the core of our every product because that knowledge base is within the company. So that’s what sets us apart from a software company trying to do what we do.
Which is why we have a consulting division in Ismo, France where we actually consult and help dealers improve their operations. Because we bring in a lot of knowledge from our other markets and help Them improve their business processes using it as a tool. So the key is actually the domain knowledge, not the software expertise. Software expertise can be hired but unless you don’t know what to build, it’s no use.
operator
Thank you Mr. Rao. Please rejoin the queue for more questions. Also a reminder to all the participants, please restrict yourself to one question. Next question comes to the line of Rahul Dohare with and individual mess.
So please go ahead.
Rahul Dohare
Hi, can I just check on the seasonality in the revenue? I see Q2 there was a big jump in revenue because of Geronimo acquisition I believe. But Q3 and Q4 was relatively in line with Q2. But generally you have second half much stronger than the first half given the fact that there was contribution from Ismo Micro as well. So I just wanted to see. Just wanted your comment.
Sanjay Soni
There is some seasonality in the Q4 because we get some projects from customer. Like last year Q4 was a higher number in terms of profit because we had delivered one project in that quarter which was a project based solution.
So it otherwise you will not find any big up and down in our revenues. It’s quite steady because most of it is on a SaaS model. So unless there are some projects which come in which skew the numbers a bit, we don’t expect much of seasonality to be there. And billing in the last quarter is always high because lot of our contracts get billed out in the last quarter so it’s traditionally higher than the rest. That’s about it.
operator
Thank you Mr. Dohare. Please rejoin the queue for more questions. Next question comes from the line of Het Shah with LD Ventures LLP. Please go ahead.
Het Shah
Hi, am I audible?
Sanjay Soni
Yes, yes, I can hear you.
Het Shah
Yeah, so I don’t know. I joined in late so I don’t really know if this question has been answered. I just want to know that with all the developments in generative AI and generative images within the AI domain, how does that either affect your business or how does that help your business grow in the future?
Sanjay Soni
Generative AI right now in terms of imaging is not affecting our business. Maybe in three to five years it may. Because what AI does is it searches for images already there online and then modifies them to a certain extent which are not copyrighted.
Of course our images are shot in the studio, very high, very, very high quality. And as of now we are not seeing any threat from generative AI. Maybe in the next three years it may come, we don’t know. But as of now it’s not there.
operator
Thank you Mr. Shah, please rejoin the queue for more questions. Next question comes from the line of Pratik Kedia, an Indus investor. Please come in
Pratik Kedia
. Yeah, hi. Am I audible?
Sanjay Soni
Yes. There’s some background noise coming from your side. I don’t know.
Pratik Kedia
Yeah, I’ll still try. So my question was more from photonic side.
What kind of end use application do you see? You mentioned about data getting faster to the AI chips. Are there any other end use cases as well?
Sanjay Soni
Like we are doing a quantum random number generators using the photonics will be much faster generation of a quantum number and much basically totally secure. So that’s one. And there are a lot of other applications which we are working on with IIT Madras one by one.
operator
Thank you Mr. Kedia, please rejoin the queue for more questions. Next question comes from the line of Darshil Jhaveri with Crown Capital. Please go ahead.
Darshil Jhaveri
Hello. Thank you so much for taking my question again, sir. So just one small clarification I wanted to just you know, ask for like our, I think semiconductor. We want some, you know, linear growth. We have, you know, quite ambitious. Target and other businesses will also grow around 20%. So on a console basis is it possible that we can grow over 30%? Because that’s what if I could just, you know, segment as I’m doing that how I’m getting there. So just wanted to know.
Sanjay Soni
I think you will. You’re right. What is. You’re correct. It will automatically translate into higher overall growth because if Ismo Micro grows faster and the rest grow at that, so overall growth will be more.
You’re correct. I agree with you in that we didn’t want to throw out very big numbers.
Darshil Jhaveri
Very fair. That’s a really great way to do because it’s much better to you know, deliver higher numbers than what expectation. So that’s really great of you. So there’s one more question in the semiconductor business, does it work on an order book or you know, how does that just, you know, revenue flowing? Is it like a monthly order will be given or you know, it’s a long term order book? Like how does that work?
Sanjay Soni
It’s more project based and which also translates into an order book.
So first there’s a development of a product for the client which we work along with them and then there’s continuous orders coming for that product. So we have already done two products for a client which is now steady stream revenues. We have done one for another client which has also gone into steady stream. So that’s how it initially comes as a. It will start off slow and Then builds up and then it becomes a steady revenue stream.
Darshil Jhaveri
So do we have any…
Sanjay Soni
Manufacturing. So we do the design, we do the prototyping and the manufacturing. So we have a long term revenue stream coming with any customer engagement.
Darshil Jhaveri
Okay. In this part like in general, like not currently. But what is the product level margin if we could you know, expect going ahead in the future?
Sanjay Soni
60 to 70%.
Darshil Jhaveri
Oh, 60 to 70% margin, that’s really great to yourself.
Sanjay Soni
Yeah. Because the BOM cost is only 20% in any IT driven product.
Darshil Jhaveri
Okay, okay, okay, okay, okay. That’s, that’s, that’s really great. And any order book we have…
Sanjay Soni
That’s why we chose this, we have around 25 crores in hand. So.
Darshil Jhaveri
And that’s for this year, correct, sir?
Sanjay Soni
Yeah, yeah, yeah.
Darshil Jhaveri
Okay. Okay, that’s great for you. Thank you so much.
Sanjay Soni
Thank you.
operator
Thank you. Next question comes from the line of Vina Katani with Paul Asset Consultant Private limited. Please go ahead.
Vina Katani
Yes, sir. So thank you for the opportunity, Sir. My first question would be. Sir, like you earlier said, your income taxes will increase from the financial year 2030. But sir, I have attended your earlier concourse and you have said that we, you know your, your sales in Europe will end in, in each financial year. So sir, what is the correct will increase from financial year or as you have mentioned earlier, sir.
Sanjay Soni
No, it continued.
The US is 2030. I’m quite sure of that. Europe maybe a couple, it’s not ending this year. I think end another two years at least. So we have time.
Vina Katani
Okay. Europe, it will end in this financial year.
Sanjay Soni
No, I would say 2027.
Vina Katani
Okay. So the income tax rate will increase from there on
Sanjay Soni
Slightly because Europe contribution to the overall business is quite small.
Vina Katani
Okay. So the high percentage revenue comes from us. So. Yes. Okay.
Sanjay Soni
That’s right.
Vina Katani
Okay, I can ask one more question.
Sanjay Soni
Sure, go ahead.
Vina Katani
Okay sir, like you have said that your CAGR will be, you know, for the ongoing financial year will be 25 to 30%.
So do you see any risk involved in you know achieving that growth
Sanjay Soni
Everywhere. Risks in all businesses. Particularly geopolitical situation right now is very unstable. We don’t know what’s going to happen. But this is a manageable risk. We are, we try to mitigate risks at all times but you never know. Third World war breaks out, everything goes out of the window. Other than that we don’t see anything significant.
Vina Katani
Okay so but other players might also present know their sizing may be lower than yours from other players.
Sanjay Soni
Yeah, we are always abreast of the competition. We know what is in the horizon.
We know what is coming and like I said, we keep innovating, we keep upgrading our product portfolio and that is we spend a lot of money on R and D precisely because we have to be ready for the next requirement of the customer before someone else comes out with it and we become redundant. That is part of the management’s. Like I said, for us innovation is the key. And we have been following that philosophy since the last 20 years. And that’s why we are not afraid of competition. Because we ourselves actually create new products before the competitors do.
And that’s one of our strengths. So yes, competition will always be there. New competitors will come, old ones will go. It’s a constant exercise in every sector, not only ours. You could look at any sector. That’s part of the what we need to be always cognizant about and make sure that we are ahead of the competition. I think that’s our job.
operator
Thank you. Ms. Kathani, please rejoin the queue for more questions. Next question comes to the line of Rahul Dohari. An individual mess up. Please go ahead.
Rahul Dohare
Hello sir, can you comment on Ismo Micro’s competition landscape right now and how it is going to evolve once your new new products are launched in few quarters time.
Thank you.
Sanjay Soni
As of now we don’t have any competition in India because nobody does 3D packaging or sip packaging in India internationally. Yes, Korea is one of the countries. US, France, they do 3D packaging. Evolution will, I mean devol competitors will come but everybody is looking at OSAT and high volume production laws and the niche area where we have chosen to be in. So our idea is higher value additions rather than higher top line. So we have chosen, we have taken a different path.
Rahul Dohare
Once your new products are launched in Q3, do you think that will have significant competition later or…
Sanjay Soni
No. Like I said Photonics, there are just three major players today in the world which is us, Spain and India.
Nobody is there in Photonics because it’s such A. And IIT Madras has been working on this for 12 years. It’s not just something we started last year and that’s the reason why METI funded it and we are also funding this project is because we see a huge amount of IP which has gone into it from IIT and I think that will be a huge game changer in the international market. That India coming out with something like this, they could never have imagined.
Rahul Dohare
Okay, I guess all the best for that then.
Sanjay Soni
It’s like we spend very less money going to Mars whereas others are spending or going to the moon much less.
And same thing has happened in photonics companies in USA investing hundreds of million. India is investing much less. But because of the intellectual power available with Indian engineers, we are able to do much more with that little bit of money. So I think that will definitely make a big difference.
Rahul Dohare
I think all the best to the management.
Sanjay Soni
Thank you. Thank you very much.
Rahul Dohare
Thank you. Thank you.
operator
Thank you. Next question comes to the line of Het Shah LD Ventures LLP. Please go ahead.
Het Shah
Hi, I just had one more question regarding the current assets that we have.
I’m seeing that we have around short term investments and cash of around 50 crores which is I think the highest it’s ever been. Do we have a roadmap of how we are going to use this cash or what’s the purpose of having so much cash on the balance sheet?
Sanjay Soni
We are just being cautious because times are uncertain. Plus we are keeping cash to see if we get a good opportunity in organic. And like I said, we are in the investment mode in terms of innovation. And so that’s where the cash is there. Anything which happens if the world goes haywire, you should be in cash.
Het Shah
Agreed. Agreed. But do you have any other plans of either share buybacks or dividends or making some other use of this cash?
Sanjay Soni
Not at the moment. We don’t believe in share buybacks because I think we have enough areas to invest in. So I would not do that at this stage of the company.
Het Shah
Understood. Thank you.
Sanjay Soni
Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. We have reached the end of question and answer session. I would now like to hand the conference over to Sanjay Soni for closing comments.
Sanjay Soni
Thank you everyone.
I thank the entire team of ISMU for their hard work and dedication which moves the company forward. Thank you all for taking the time to participate in our conference call. Conference call. Please do get in touch with our investor relations team for any further questions. Have a nice day and take care. Thank you.
operator
Thank you. On behalf of ISMO limited. That concludes this conference. Thank you for joining us. You may now disconnect your lines.