MPS Limited (NSE: MPSLTD) Q3 2025 Earnings Call dated Jan. 23, 2025
Corporate Participants:
Rahul Arora — Chairman and CEO
Prarthana Agarwal — Chief Financial Officer
David Goodman — Managing Director, MPS North America
Archana Jayaraj — Chief Operating Officer
Narendra Kumar — Chief Technology Officer
Antony Alves — Senior Vice President and Head of Product Management at HighWire
Analysts:
Arun Maruthi — Analyst
Rahul Jain — Analyst
Gunit Singh — Analyst
Mahesh — Analyst
Karan Kapuria — Analyst
Pratik Kulkarni — Analyst
Krushi Parekh — Analyst
Navid Virani — Analyst
Unidentified Participant
Madhur Rathi — Analyst
Janish Shah — Analyst
Parimal Mithani — Analyst
Pankul Sood — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Call of MPS Limited. 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 the star then zero on your touchstone phone. Please note this conference is being recorded.
I now hand the conference over to Mr Rahul Arora, Chairman and CEO. Thank you, and over to you, sir.
Rahul Arora — Chairman and CEO
Thanks, Steve. Good evening to Singapore, and a warm welcome to our Q3 FY ’25 earnings call. Today on the call, I have with me Pratna Agarwal, CFO of MPS Limited; David Goodman, Managing Director, MPS North-America; Ashna, Chief Operating Officer of MPS Interactive and MPS Europa; Naren Kumar, CTO of MPS Limited; Tony All, Senior Vice-President and Head of Product Management at. Klasma joins us from our corporate office in Noida; David from Austin, Texas; Ashna from Dallas, Texas, from Bengaluru and Tony from the Greater Boston area. This global representation underscores our commitment to serving our diverse stakeholders across the world.
Pratna will kick things off in our opening segment today by discussing our financial performance. Then David will update us on Content solutions development with an emphasis on the education business. Will discuss a rapid transformation in our business and next, Naren and Tony will then follow-up on the impressive progress made at MBS Labs and our platform business. Finally, I will provide an update on the outcome of our Board meeting held earlier today before opening the call to questions.
Let’s keep going. Over to you. Thank you.
Prarthana Agarwal — Chief Financial Officer
Thanks, Rahul. Q3 FY ’25 delivered a strong start to the second-half of the FY. We recorded revenues of INR185.52 crores on an FX-adjusted basis, representing 38.19% year-on-year growth. EBITDA margins improved to 32.38% in Q3 FY ’25 and overall EBITDA grew by 35.17% in Q3 FY ’25 compared to the same-period last year.
Reflecting on the quarter, I would like to highlight three strategic achievements. Our top 15 customers now contribute to 58% of our revenue, a much lower customer concentration than when we started this journey in 2012. In-line with our strategic interest, the geographical diversity of the business is also improving. For example, North-America is now 45% of our revenue, while rest of the world, which is majorly APAC, is now 30% of our revenue. Revenue quality is improving with platforms responsible for 28.56% of the consolidated revenue.
I want to hand it over to David to discuss the developments in our Content Solutions business.
David Goodman — Managing Director, MPS North America
Thank you,. Revenue in the Content Solutions business grew by 38.7% in Q3 FY ’25 compared to the same-period last year. That growth was driven by the acquisition of AJE, continued expansion of the Journals business and strong upward momentum in the global Education business. I joined a little over a year-ago to lead the US operations of NPS and two main factors have contributed to the revival of the education business, operational efficiency and strategic business development.
We took purposeful intent to our diverse teams across the US, Doom, Chennai and Noida offices and alignment to create a global education practice. This led to numerous cost efficiencies as the US team took better advantage of the opportunities we have offshore. Additionally, some strategic cost reductions were needed to bring the investment in the US down to a sustainable level to match the actual requirements of the business.
From a business development standpoint, the team built above its foundational structure and best practices were set as table. We sponsored premier education events, implemented stronger marketing and branding, took a more strategic and governed approach with STAR accounts and modernized our go-to-market strategy and approach. All these efforts led to substantial growth in our pipeline and an improved win-loss ratio. We also just signed a three-year minimum volume agreement with a key client, which will serve as a model for other accounts.
To sustain this momentum, we must continue to perform the maximum amount of work possible offshore to maintain our margin targets and allow for investment in strategic initiatives. Growth will come from STAR accounts. We will also continue our efforts to build the pipeline with new opportunities through more rigor in executing our marketing strategy.
I would like to now hand it over to Archana to discuss the impressive progress made in our e-learning business.
Archana Jayaraj — Chief Operating Officer
Thanks, David. I’m pleased to report meaningful improvement in the margin profile of the e-learning business. EBITDA margins in the e-learning business came to 32.63% in the quarter. In the India entity NPS Interactive Systems, revenues were ahead of our internal estimates and EBITDA margin crossed 28% in the quarter. And while the business is still not back to previous levels, it is reassuring to note that we are ahead of our turnaround schedule and have achieved our profitability goals.
The main drivers of margin expansion in e-learning include strategic rightsizing efforts, optimizing resource allocation and gravitating towards a more flexible delivery model using outsourcing and gig workers. Operational efficiency improvements such as enhancing billable utilization, addressing project overruns and improving yield rates with customers have contributed to cost optimization and margin growth. A key focus has also been on reducing the overall cost per resource, while increasing revenue per resource through smarter people allocation or deployment and productivity enhancements to ensure cost efficiencies without compromising quality. Additionally, we are actively exploring avenues to further enhance margins by increasing the order book and expanding our revenue base. These efforts will not only allow us to better leverage resources, but also scale operations effectively.
Through continued operational improvements, scalability of our flexible workforce model, AI-enabled workflows and sustained revenue growth, these margins in the e-learning business are here to stay. Looking ahead, our focus will continue on customer satisfaction, and diversifying our customer-base, ensuring resilience and long-term value-creation.
I would like to now hand it over to to discuss all things related to MPS Labs.
Narendra Kumar — Chief Technology Officer
Thanks, gentlemen. To level-set MPS Labs is a state-of-the-art tech innovation lab having an experienced expert practice group with deep exposure to the research and learning domain and new-age technologies revolution is revolutionizing the education industry. With a 250 plus member team, Labs focuses on research and development efforts, studying market requirements, challenges, trends, designing, developing and introducing innovative solutions that introduce efficacy in the end-to-end content lifecycle. So this strategic approach combining — combines leveraging on, let’s say, AML MLP-driven solutions and cloud-based SaaS solutions with the development of proprietary tools, workflow automation, intelligence analytics and streamlined editorial processes.
MPS Labs has been working on various use cases in AIML across workflows and has recently implemented AIML-based automation for processes like content structuring, content editing using platform, accessibility, image processing and chatbots. Our most recent achievement has come in partnership with, the platform’s division of NPS. Together, we have developed and rolled-out the next-generation end-to-end publishing workforce solution that consolidates both the pre-acceptance and the post-acceptance into one single workflow, thereby reducing inefficiencies and increasing the speed of delivery.
I would now like to hand it over to Tony to discuss the developments in the platform business branded as highwire.
Antony Alves — Senior Vice President and Head of Product Management at HighWire
Thank you, Marie. As a result of the acquisition of AJE, the platform business grew by 88.9% in revenue in Q3 FY ’25 compared to the same-period last year. Additionally, Highwire’s visibility in the market has improved through thought leadership activities for participation in industry groups and organizing workshops and webinars. This has led to an increase in FRIs, IFPs and client renewals. Notably, as Mary mentioned, has launched DigitCorpro, a next-generation publishing platform-based on the principles of single-source publishing. This methodology centers on scholarly content, reducing inefficiencies and accelerating research delivery. ECP’s modular architecture and APIs support microservice integrations from NPS Labs and third-party partners. Current clients are transitioning to DCP and over a dozen prospective clients are testing the platform. We expect to have clients using the full end-to-end submission to publication workflow in 2025.
With that, I would now like to hand it back over to Rahul to conclude this opening section.
Rahul Arora — Chairman and CEO
Thank you. Thank you, Tony, and thank you for the comprehensive update team. Scaling and digitally executing our well thought through and tested this tall growth strategy continues to deliver strong business results. Our five-pronged approach has powered the recent momentum, which includes a revised go-to-market strategy, a stronger emphasis on cross-selling and upselling in star accounts, the addition of new customers across business segments, the launch of new capabilities such as AI-powered Digiticor, Pro and an unprecedented pace of integration of AJE into MPS.
Now to go over to Board outcome. I’m pleased to share that based on the robust earnings growth in the first-nine months of FY ’25, the Board of Directors has declared an interim dividend of INR33 per equity share — share of INR10 each of the company. On capital allocation, our priority is always to redistribute surplus funds to the shareholders of NPS, provided there is no eminent use of those funds over the next six to 12 months. This approach allows us to stay focused, disciplined and responsible. We believe that even after the distribution, MPS will have adequate funds for upcoming acquisitions. Our acquisition approach is now focused on acquiring healthy and growing assets as we are at compelling valuation and significantly enhancing shareholder value.
Let’s now open the call to questions.
Questions and Answers:
Operator
Thank you very much. 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 N2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Arun Maruthi from Shublal Research. Please go-ahead.
Arun Maruthi
Hello. Am I audible?
Rahul Arora
Yes, you are.
Arun Maruthi
Yeah. First of all, sir, congratulations on the stellar performance, a very excellent result. Sir, my question is with regard to the e-learning segment that in e-learning vertical, we have shown Q-on-Q revenue is almost constant. But despite that, we have encountered a very exceptional growth in the margins. I would like to know the rationale behind this exceptional performance and is it sustainable going ahead?
Rahul Arora
Sure. I’ll take a quick and I’ll request to come in and describe what has really happened here. So firstly, thank you for your kind comments on the results. So the e-learning business has been going specifically the India entity, which is the largest part of the business has been going through a transformation after the acquisition of Liberid. After we acquired — after we — majority — majorly acquired Liberate Liberate last year, we understood that there is a potential to scale margins in an earlier business as well through a flexible operating model. And we’ve brought that model to the other entities within as well. And that’s largely been the result of the margin expansion. But I’ll let expand on that.
Archana Jayaraj
Thank you, Rahul. So as explained earlier, the margin expansion in e-learning was the outcome of a few initiatives we took like gravitating towards a more flexible delivery model where we use outsourcing entity workers more. And we also had strategic rightsizing efforts and we optimized resource allocation overall. So there was a key focus in terms of reducing the cost per resource overall by increasing revenue per resource through smarter people allocation and deployment into projects. And these enhancements left lead to cost efficiencies without compromising any quality.
Arun Maruthi
Okay, so I can get that there was a good amount of churning in this e-learning segment in the employee side. Am I correct?
Archana Jayaraj
Could you please elaborate on churn?
Arun Maruthi
So as you mentioned that you did the rightsizing and the right allocation. So because as the employee count is more or less same of the last quarter and this quarter also. So whether there was a good amount of charging and a good amount of recruitment.
Archana Jayaraj
The focus has been in terms of allocating people to projects depending on the cost per resource, and this has led to an optimization because we have reassigned people to projects depending on the yield rates of these projects. So our focus has been on increasing the billable utilization of the resources that we have, increasing the outsourcing efforts and also addressing project overruns, keeping it to a minimum and improving the yield rates with customers. So all of these put together have created a compounding effect in terms of enhancing margin.
Operator
Thank you. The next question is from the line of Rahul from Dolat Capital. Please go-ahead. Mr. Rahul, your line has been unmuted. Please go-ahead with your question.
Rahul Jain
Yeah. So my first of all, congrats on good performance. And the question was related to the — to the David’s comment on how we seeing the cost optimization deal as a one-off trend driving the momentum in the content side and there was a mention of a three-year volume locking, something like that, I could not get any nature of it. So any comment on how the pricing has impacted instead of you committed deals and how in general, the cost optimization trends can possibly drive that growth momentum? Any color on that would be helpful.
Rahul Arora
So I can take that. So any cost optimize — whenever we do these long-term deals, these are not just brute arrangements. Typically there’s a very clear path of where the efficiency will come from. So we have proposed the utilization of proprietary technology and optimization of workflows as we proposed this — in this three-year arrangement. And yes, the customer does — does get year-on-year cost-improvement, but we also are — have linked it to a spend increase. So our revenue is going up and our margins will only improve as the revenue goes up. So it is an exchange — it is kind of a value trade where we are improving the throughput of the system. And as we do that, we are passing on some of the efficiencies to the customer and we’re also gaining because they’re pushing more — more through the system. So that’s on the specific three-year deal.
On the — in terms of cost optimization, as David pointed out, that there has been two levers here. One is, of course, just reducing the overhead costs in the US in general. The second has been looking at new areas of offshoring where we traditionally have not offshore and that led to margin expansion as the revenue.
Rahul Jain
Got it. Got it. And any flavor you could give on how things are shaping up on the AG integration side? Is it trending on the revenue side, the way we were planning and also on the profitability, if you could share number or at least direction.
Prarthana Agarwal
Yeah. So the focus for AJ has really been around improving margins quarter-on-quarter, which we are — we have improved. We are now trending late 20s in terms of EBITDA margin. Those margins will continue to improve. In terms of growth, really the revenue has been stable. The part of the business that has started to grow has been more on the B2B side. That’s the part of the business that’s starting to grow now that the business is settling down.
Rahul Jain
Sorry, I missed the numbers and how much EBIT margin, sir?
Rahul Arora
In the late 20s, late 20%.
Rahul Jain
Okay. And revenue run-rate is in that INR225-odd crore similar to what at the time of integration or it’s a downsized or grown from that.
Rahul Arora
It’s fairly similar. I don’t want to reveal too much specifics because this is a new market. We are one of the big three, one of the big four and I’m told we are very actively tracked given that we are a listed entity, so still learning the ropes when it comes to this particular market.
Rahul Jain
Right. Just last one from my side. Any update on the managed training side of the business, how things are shaping up there? What we see generally in that market is that it’s slightly opening up on the consumption of payment side. So any progress on those front could be.
Rahul Arora
So the e-learning business continues to grow. You know, having said that, we have not made we have not gotten too many new orders around managed training. It’s pretty similar to what we reported last quarter.
Rahul Jain
Understood. Thank you and I’ll jump back.
Operator
Thank you. The next question is from the line of Kuneet Singh from Counter Cyclical PMS. Please go-ahead.
Gunit Singh
Hi, sir, you have done a great job in improving the operating margins from Q1 about early 20% to 32% this quarter. So sir, I would like to understand, is there some scope of further improvement in margins and what are the expected steady-state operating margins that we are targeting and by when can we achieve that is my first question.
And my second question would be regarding, so sir, you generally give certain guidance about the future outcomes. So would you like to provide some guidance in terms of what kind of growth we can expect in FY ’26 and how much of that would be from — would be organic and what kind of inorganic opportunities we are targeting. These would be two of my questions.
Rahul Arora
Yeah, on the margin front, we are pretty happy with where we are right now. We could see additional depreciation because historically, our lens on e-learning has been 25% type of margin. And as you can see, we’ve crossed that 30% hurdle that we’ve been trying to cross now for two or three years for the first time. So our goal really is now — and I’m specifically focusing on e-learning because that traditionally has been kind of the lower-margin business. Now that business has crossed 30%, I think our first goal is to make sure we keep repeating this level of margin and profitability. And of course, as revenue grows, given the operating leverage in the business, margins will continue to grow. So at this point, we will really look at revenue growth to drive margin expansion and that’s really the thinking. Yeah, have we maximized the operating leverage? Absolutely no that still as revenue grows, margins do expand. So that will continue to happen.
In terms of our guidance, we took a call last quarter that we have a very, you know good North star in Vision 2027, which is INR500 crores in revenue at similar margins by FY ’28. We feel comfortable as a management team that, that Northstar is something that we like-to-like to move toward and we no longer wish to provide any quarterly or short-term guidance because we feel it’s more a distraction from that Northstar. I had shared that in the last quarter as well. So we will going-forward abstain from any short-term guidance because we feel it is a distraction and does not add any value to the business.
In terms of acquisitions, you know, we are essentially looking more at education plays given the — given that the last few plays have been across corporate and research. So we are specifically looking at more education plays given that our last acquisition in the education world go back-in 2015. So education is really the focus. Within education, we’re looking at some adjacent markets where there are plays where we are getting closer to the end-consumer as well as looking at platform plays. So we are not looking to do more of the same within education. We’re looking to diversify both in terms of capabilities as well as geography.
Gunit Singh
So thank you very much. I got it. I’ll join the queue back.
Rahul Arora
Thank you.
Operator
Thank you. The next question is from the line of Mahesh, an Individual Investor. Please go-ahead.
Mahesh
Hi, Rahul, can you hear me?
Rahul Arora
Yes, I can.
Mahesh
Now two questions from one. What is the update on the 15 new logos that you won in Q2 of FY ’25?
Rahul Arora
Sure, thank you. So the 15 logos we had won was in the first-half, not Q2, but that was a good observation. I let who runs that business talk a little bit about how those 15 logos are progressing.
Archana Jayaraj
Thank you, Rahul. So we have completed some of the projects and are in the process of delivering other pilot projects with the new logos. And I’m happy to report that the feedback so-far has been encouraging and we are optimistic about our long-term potential with these new accounts.
Mahesh
Okay. The second question on, what are your thoughts on acquiring firms with AI capabilities in specifically.
Rahul Arora
So you know, the way we look at AI specifically is more around operational efficiency or you know, so-far that’s really been the focus. We do have some AI-based revenue streams now as well. So there aren’t too many scaled players that we have been able to evaluate of what you described. These — what you’ve seen so-far are opportunities that are sub-5 million in revenue. And as a result, we have not so-far looked at those type of opportunities because there are subscale opportunities. Having said that, if something does come our way that’s more scale, we will obviously look at those kind of opportunities about.
Mahesh
But just one follow-up question now that you mentioned using as revenue swing, and can you describe the kind of you have made on this?
Rahul Arora
Yes, sure. So we — and as I have pointed out in a previous discussion, the — we historically were doing more small consulting project less than less than $50,000 per project. We are doing POCs for virtual reality. In the last couple of quarters, specifically in the education business, we’ve been able to win some large contracts, within translation, AI power translation, we won contracts over 3 million. Similarly on the accessili side, we’ve won contracts over — over 1.5 million that AI-enabled projects. Additionally, we’ve done some software development upward upwards of $250,000 as well. So the AI workstream is now becoming — the value stream rather is becoming a reality for NPS. So I would say overall, it’s still sub-5 million, but getting closer to 5 million.
Mahesh
Okay. Thank you. I’ll come back-in the queue for my questions.
Rahul Arora
Thank you.
Operator
The next question is from the line of Karan Kapuria, an individual investor. Please go-ahead.
Karan Kapuria
Am I audible?
Operator
Yes, sir.
Karan Kapuria
I have two questions. I want to check first thing about the next acquisition planning. So do you think there will be a requirement of any debt for our internal if internal cash will be enough.
Rahul Arora
Thank you for your question. As I was sharing, the next set of acquisition plays are mostly going to be in the education space. We can’t really provide any forward guidance on what those are. What I can share is, you know, if we do have to take on debt, we are comfortable taking on INR150 crores. But at this point in time, we don’t have such and such a requirement.
Karan Kapuria
Understood. I want to check one more question. So in the last con-call, so Tony mentioned about there is a risk of security of copyrights and data privacy of the — our customers right. So while we unrace artificial intelligence and ML. So how do we see that kind of risk coming? And can you elaborate on that to get more insights into that.
Rahul Arora
Tony, you want to take that? Is there some risk linked to data privacy and customer data with AI?
Antony Alves
Yes, sure non. Yeah. So in terms of — no, definitely, yes, there are client concerns on this area as well. So we take a lot of precautions on this and we do have — we are IFMS certified and you know, in terms of data privacy, we ensure that all adequate safeguards and protocols are followed while we implement and develop the AI-based solutions within our platforms and workflows. So for example, we try to ensure that we don’t use any customers content in the AI models without their permissions. So, and all our AI-based models are privately hosted and only exposed to us, so we don’t expose anything outside for the, for the upfront.
Operator
Does that answer your question, Mr Karan?
Karan Kapuria
Yes, yes, thanks.
Operator
The next question is from the line of Prateek Kulkarni from Wealth Management. Please go-ahead.
Pratik Kulkarni
That’s a very good set business. Congratulations on that.
Operator
I’m sorry to interrupt, Mr Pratik, your voice is coming very low. Hello, is it?
Pratik Kulkarni
Hello, hello. How are you okay?
Operator
Yeah, sir, please go-ahead.
Pratik Kulkarni
Yeah. So I just wanted to know that you know last year you were saying that the market is quite fragmented and currently, there is consideration phase going on where-is also playing a role of the consolidator. So just wanted to know the outlook on the market and how is it currently?.
Rahul Arora
So all the markets that we operate in three core markets, research, you know, education and corporate, all three markets are quite fragmented. You know there is consolidation as you rightly pointed out going across all key markets in different ways. Within research, you know, we have customers entering the supply-chain side, we have competitors buying each other out. On the education side, there are multiple private-equity exits happening on the corporate side as well, the exits happening. So the market keeps consolidating and is growing. So overall, education is growing at, 30% 14%, corporate is growing at 11% 12%, research is grow at about 8%. So yes, pretty much same commentary from last-time in terms of the market and how it’s progressing.
Pratik Kulkarni
Yes. Okay, thanks. And one more question is that if the market is like you said is quite fragmented, so how are we able to maintain such good margins and do we have some pricing power regarding to that so a couple of things.
Rahul Arora
I think one, our value — value proposition in terms of corporate strategy is really around operational excellence. We drive operational excellence through smarter workflows. We tend to throw technology as a problem rather than throwing people at the problem. So we’re constantly looking at MPS Labs and the team are constantly looking to automate tasks and also reduce the number of touch points in any workflow. And thirdly, we tend to — our teams tend to be present more in Tier-2 and Tier-3 cities, which also — and that’s not just in India, that’s across the globe that also allows us an additional competitive advantage. So typically we tend to — we tend to do things in a more process and technology-driven way in a world where most people are showing people at the problem and that’s really what’s different about NPS is, you know our level of operational excellence.
If you look at the organization of when — while the employee costs have gone up over the last 30, 14 years, when ABI had acquired MPS back-in 2012, we had 3,500 employees and our revenue was over INR120 crores. Today, our revenue is 6, seven times of that and we have less employees, 3,000 employees. So that just shows a level of, you know efficiency that we are unlocking to the various methods I required.
Pratik Kulkarni
Okay, sir. Thank you so much.
Operator
The next question is from the line of Kushi Parik from Bugal Rock. Please go-ahead.
Krushi Parekh
Yeah, hi, can you hear me? Hello.
Operator
Yes, sir, we can hear you.
Krushi Parekh
Yeah. Hi. So my question is that we have been talking about the growth available in the industry and we just also mentioned about the corporate sector and all growing at about 10% and all. But when we look at our e-learning segment, for last 10 quarters, it has stagnated at about INR34 crores INR35-odd crores. So is it like the revenue has undergone certain structural changes within over this period? And is the cost optimization period over for us now and can we look for revenue growth here onwards more versus cost optimization?
Rahul Arora
Yes, sir, I’ll quickly address that and that’s why I want to add anything please. So overall, having done — having turnaround businesses over the last 10, 12 years, one of the things our management team has learned is that you can either chase a margin expansion of especially when you’re doing a turnaround or you can chase organic growth. Typically, if you tend to chase both you don’t achieve either. And really one of the big asks that we’ve had of the team is to get e-learning of rather corporate learning over the 30% margin because that’s that is the average margin of the total company. Now we’ve achieved that. The goal will be to repeat that in Q4 and really take-off from FY ’26 in terms of organic growth. So we felt that we needed to be fit first before we could run faster. But, feel free-to add more on the organic growth.
Archana Jayaraj
Thank you, Rahul. So as discussed, the focus was primarily on improving the health of the business and strengthening our fundamentals from an ops efficiency standpoint. But having said that, we will continue to focus on new logo acquisition and also enhancing business with the existing accounts that we have. So this will impact the focus in this area is a logical next step for us now that we have achieved stability from an op standpoint, the logical next step will be the growth and expansion.
Krushi Parekh
Got it. So FY ’26 onwards, we can — we are likely to focus on the growth and we are done with our cost optimization phases, what the — if I can summarize that.
Archana Jayaraj
Absolutely.
Krushi Parekh
Also just one more suggestion, if it may be possible. So we have this target of INR1,500 crores by FY ’27, the ambitions. What I recollect is that about 60% of that will be organic growth to inorganic. Presentation if we can also get a split between the organic and inorganic growth as well?
Rahul Arora
Yeah, thank you. Thank you for that observation and suggestion. Please also realize that you’re well wisher, please also realize that we are in a highly competitive market and we are one of the few listed plays. So our competitors are tracking us and some of the information is counterproductive. So for that reason, that’s one of the reasons why we have not shared many of the cuts that have been sought in the call today because it’s a competitive market and really focus on growing the business. Yeah.
Krushi Parekh
Okay, got it. And just one simple question. So is the out — I mean, so we are now also working with the gate workers, the expenditure of that will not be part of your employee expenditure, right, or it will be — is it under some other expenses.
Rahul Arora
It’s on the outsourcing. So, you could correct me which line-item is outsourcing on the income statement.
Prarthana Agarwal
So if you look at the financial statement, it comes under other expenses. It’s outsourcing cost, but other expenses is subcategory of the other expenses.
Krushi Parekh
Okay. Thanks, Prarthana.
Operator
The next question is from the line of Navid Virani from Bastian Research. Please go-ahead.
Navid Virani
Hello. Thank you for the opportunity and congratulations on the incredible homalgamation of and its turnaround. So I have a few questions. First one is on the geographic mix. And also now that the rest of the world part has become a major chunk of the business. Can you share a more nuanced view about what is the kind of work which we are doing there? What is the kind of customer profile, which are the regions — I understand it’s APAC, but which are the regions you know under APAC which are driving growth. If you can share a more nuanced view on the rest of the world business, it would be helpful, sir.
Rahul Arora
Sure. Yeah, I think just before I do that, I think the overall commentary that we are — MPS as an organization is very bullish on APAC and I personally have relocated to Singapore earlier this month because that’s how serious we are about the. As you know previously based out-of-the US. You know the — for us, the biggest markets within APAC really today are China and Australia. Those are the two big markets. India is also an important market for us, but currently it’s fairly small. So currently our biggest market are China and Australia within APAC.
Within China, our focus today is mostly on working with researchers in helping them get published and recognized by the Western world, which includes not just improvement of language but you know improvement in terms of how they submit the papers to an organization for it to get published. It also includes some technology that we license to this customer-base. We also work with funding bodies and universities as we’re looking to advance research in the region.
Within Australia, the play is more around e-learning both for corporates as well as for educational institutes and that business is also rapidly-growing. Within India our play is mostly around corporate learning and more-and-more to do with more on the marketing side, but we are also actively looking to scale the researcher business within India through our Qurie platform, which we are rebranding as lubric. So currently the plays really are China, Australia, India, but we are looking at the region space strategically. South Korea and Japan are two markets that we want to enter. We know our competitors have enjoyed very good market-share for the past decade or so and we want to challenge that market-share going-forward.
Navid Virani
Thank you. Thank you for that elaborate answer. Next up, I want to understand more on platform. So in my understanding, platform is a very strong business, both from a recurring nature of a revenue point-of-view as well as very strong profitability point-of-view. So what I want you know you to share is what is the growth plan for platforms going-forward, if you can give some more information there.
Rahul Arora
Yeah, I would say, I think there are the — there are three types of plays that we have within the platform business. The first play is what Lauren and Tony described at the top of the call, which is launch of the next-generation of a workflow solution that essentially unifies a broken workflow which ideally should have ever been broken and basically improves the throughput of that system. So that’s called DigiCo Pro.
As Tony was describing, we have current customers who want to migrate and we have a dozen customers that are currently playing around in a sandbox environment of that platform. So that’s one big play. Our competitors are north of INR50 million in revenue in this type of product alone, our revenue is much lower. So this is one play that we’re very, very bullish about and we are now in active discussions with many customers of how we can transition them in.
The second big play for us is advancing the Qurie platform. The way Qurie came to us was an AI writing assistant. We are now pushing the boundaries of Qurie to not just be a writing assistant but kind of be a companion to a researcher who is attempting to get published in a reputed journal. This companion tool will improve the language, will improve the probability of the researcher getting published, but also recommend to the researcher where they should submit their articles so that they can actually get published. And once they accept — and also help them manage that journey from submission to acceptance. So basically advancing Qurie into the world or you know, getting published. So those are kind of the two plays that we’re looking at, you know from the scholarly side.
The third play is more around, you know on the education side, where we are trying to basically reconfigure a lot of the technology that we have through and other acquisitions and trying to reconfigure that for the education marketplace. That particular initiative is still under the works and is going to be launched later this year. So I don’t want to undercut that go-to-market plan. So we will share that update with you when the time comes. But essentially, we’re looking at an opportunity to expand the market through entering a new category, but also taking some of the existing capabilities and opening them into adjacent markets. Thank you. And the next question is from the line of Naredi from Naredi Investments. Please go-ahead.
Unidentified Participant
Rahul, you are — you and your team are doing the well since last few quarters and we wish all the best to you and your team. My point is, so which country you find no new business as our rest of the world business right there 27%.
Rahul Arora
Sorry, sir, I didn’t understand the question. Can you repeat that?
Unidentified Participant
Sir, which country you find now, one for business is aware, rest of the world percentage rise 27% versus 8% last year.
Rahul Arora
Yeah. So like I was explaining earlier, it’s mostly China and Australia.
Unidentified Participant
China and Australia. Second, headcount are interchangeable, this content to platform to a learning, e-learning and vice-versa.
Rahul Arora
So not like-to-like. There’s some fungibility between content and within platform solutions and MPS Labs, but yeah, it’s not like-to-like. It’s not that straightforward.
Operator
Thank you. The next question is from the line of Madhur Rathi from Counter Cyclical Investments. Please go-ahead.
Madhur Rathi
Sir, I’m trying to understand that in our Platform Solutions division, there has been a degrowth in the EVIT quarter-on-quarter from 20.0% to INR17.9 crores. So is this a blip or is this a trend and sir, going-forward, what is the expectation from this division?
Prarthana Agarwal
Is your question around margin contraction in platforms?
Madhur Rathi
Yes.
Rahul Arora
That’s largely, that’s entirely on the account of AJE and of course that will continue to improve. So standalone the margins have in fact improved the erosion is entirely because of AJE and you know that will improve every quarter.
Madhur Rathi
Sir, and like you mentioned that last year that there are more cost efficiencies on the AJEE side. So have all of them been realized in the 3rd-quarter or is there still more to go?
Rahul Arora
Still more to go. We haven’t realized all of it.
Madhur Rathi
Thank you very much. And sir, any light you want to shed on the inorganic acquisition scenario, sir, have the valuations come down or are they going up and what kind of opportunities are you basically evaluating? So any light on that?
Rahul Arora
Yeah, I think so FY ’25 has been a record year in terms of the number of deals we’ve looked at valuations will go up and up or down. Finally, you know us, we are very disciplined. So we won’t drop it down real-estate strong and we continue to be highly disciplined in our approach and we are casting a buyback to make sure that we continue to be consistent in our acquisitive execution. Like I said, year in terms of number of deals evaluated still haven’t concluded one yet, so yeah, maybe that helps you understand the situation.
Madhur Rathi
Great, sir. Thank you very much and best of luck.
Operator
The next question is from the line of Janish Shah from JS Equity Invest. Please go-ahead. Yes, sir, congratulations on good set of numbers. Just a couple of questions on the acquisitions. First on acquisitions and maybe a little bit on the operation or the business environment. Sorry to interrupt, sir. Your voice is coming muffled.
Janish Shah
Is it better?
Operator
Yeah, yes, better.
Janish Shah
So just wanted to understand on the — on the acquisition side, I think last-time you mentioned that I think there was a road-map which was given with regard to how the acquisitions would be funded. So for first couple of acquisition, it was more through the internal accruals and the debt leveraging. And then thereafter, you always wanted to go for an equity for last option. Given — and I think now the way the AJEE is shaping up, how is the roadmap you’re looking at for the acquisitions — for future acquisitions situations for funding those how do you see the funding or is there a change in the plan do you see whether it is like either of going or slipping more into an equity dilution or maybe through funding through internal accruals, how do you see the situation. That is first.
Second, on the operating — you are looking at — I mean, you’ve already acquired a few of the logos and remaining optimal, our focus is more on the growth. But if you can just paint the external environment, how does it look like? Since you’re not guiding — I mean not going to guide for a short-term, I mean a the growth numbers. Just if you can give some flavor as to how do you see the operating environment given the external environment is being, that can give a little bit of an understanding on how — I mean how the company is going to navigate for next one year or so. Thanks.
Rahul Arora
Thank you. Yeah, I think you know, given — given the type of balance sheet that we have, the high-margin business and high cash-flow business. So from our perspective, the funding is not going to — it’s going to be a non-issue for us at least the way things are situated today. So for us, it really is more important to figure out what acquisition target that we actually then trigger, because as you’re seeing, the size of acquisitions, the scale of acquisitions is increasing every year. AG was you know, while it was not a big bite in terms of you know purchase price by the end of it, but you know from a revenue standpoint, a fairly sizable bite that purchase price was more a negotiation thing, but we are — the bikes are getting meatier. So I think the focus on our end is more to make sure that we get it right. You get it right firstly by not overpaying. That’s the first fundamental. And the second fundamental is you’re buying something that you can then grow and it just — it’s not something that declined or still is flat.
So most of our focus on the acquisition is — acquisition side is getting that piece — that piece right. We are also looking to see if we can extend the owners who currently are running some of these organizations forward like we’ve done with and liberate. That model has worked really well for us. So funding for us, you know, the way we look at it, accruals first, debt second, if and only if there’s no other option available, we get to equity. So that remains there, but I think it’s just — those are the principles. We’re not really spending too much time on that because for us, getting it right is more important.
Coming to your next question on external environment, like I said, there are three markets, there’s research, there’s education, there’s corporate. The search is a steady-state market that doesn’t — doesn’t grow rapidly, but also doesn’t decline in recession. In this market, our opportunity is of four types. The first type is to work with the funding body and the researcher to help them get published. The second type is to consolidate the supply-chain for, you know, an institution that’s either a publisher or is involved in publishing in some form. The third is being a software provider. But the fourth, which is the most interesting play is being a managed services provider that combines all these three activities. So we tend to have — within research, we tend to have three types of competitors. We are the only play in the market that has all three capabilities that I described. So we are opening up a fourth play, which is consolidation of the value chain on behalf of the customer.
The second market for us is education. Here our play is slightly different where we are looking to get closer to the end-consumer, but in a end learner, but more in a B2B way. So we don’t want to deviate from B2B, but we’re trying to get as close as we can to the end learner as a result are moving forward in the education value chain. What that is doing for us is giving us access to larger opportunities, be it also giving us access to a market that’s growing faster compared to the market, the education market is operating in previously.
Within — within corporate, you know, our focus has now — is now moving towards signing global agreements given that we are one of the few plays in the market that has not just the Americas and Europe and UK covered, but we also have China, Australia and APAC covered. That’s generally not the case with most suppliers in corporate. So we’re trying to go get to more global type of with our customers with some of it includes managed training, but some of it just includes global e-learning so overall, three different markets, different types of plays and that’s really how our management team is also structured now where we have dedicated teams focusing on some of these players.
Operator
Mr. Jinesh, does that answer your question?
Janish Shah
Yeah. Just the last one. On the overall the longer-term guidance which we are looking at for INR1,500 crore by FY ’28. I think the last-time you indicated that the progress has been ahead of the schedule. I mean, how do you want to evaluate that? Is it still the case or do you think it’s too early to really make any changes on those timelines for the Board?
Rahul Arora
Yeah, I think we stay consistent. We made the error of sharing guidance at the beginning of the year. Having said that, we are hitting the guidance. So FY ’25 is going to be the halfway mark. So we hit halfway at the end of this year. We confirmed the guidance that we’ve already shared. In terms of what happens after FY ’25, you know like I said, it’s three years. So from — it’s not like we’re talking — we’re not talking 10 years, three years. And for me, what’s important is that for my team and I to get it right in those three years, whether it takes one, two or three is unimportant, what should happen is that we get it right by the end-of-the year.
Janish Shah
Okay. Okay. Okay. Thanks. Thank you.
Operator
Thank you. The next question is from the line of Parimal Mithani from Credential Investments. Please go-ahead.
Parimal Mithani
Can you hear me?
Operator
Yes, we can.
Parimal Mithani
Yeah, yeah. Congratulations on good numbers, Rahul. I just wanted to know in terms of margin profile, is it going to be same at similar levels on a yearly basis or is it going to change a lot?
Rahul Arora
Yeah, I think we’re very happy with this level of margin. I think like I was explaining on to earlier on an earlier question was, there is operating leverage in the business. So if there is organic growth, margins will expand. What we tend to see is that for every 10% of organic growth, you see a margin expansion. But yeah, I think we feel comfortable that these margins are repeatable and specifically with e-learnings now going north of 13%. So as long as you know, that business continues to operate the way it’s supposed to operate, we feel very comfortable at this level of margins.
Parimal Mithani
Okay. Thank you. And all the best. Thank you.
Operator
We take the last question. It’s from the line of Pakul Su from Satya Wealth. Please go-ahead.
Pankul Sood
Yeah, hi, everyone. Congratulations on a good set of numbers. So I just had one observation that if I see the results for the quarter ended in nine months, so revenue has outpaced the EBITDA growth. So when does your rating leverage come in. So if you could just give a view on that.
Rahul Arora
Sure. So like I can explain, we — when we acquired AJE, it was supposed to be a larger bite in terms of purchase price. At the very final end-of-the transaction, we proposed an idea that instead of the seller turning around the business and then giving it to us, we would save them the trouble because they went through an IPO of last year and they obviously didn’t want any bad press. So we offered to them that whatever plans you have in terms of turning this around, we will take that pain on. But let’s reduce the purchase price. And I think we — as good partners, we came to a good solution. So Q1 for us was soft as you see and a large part of that was, you know, all of it impact was AJE.
Even now, we do see the platform business since that business is margins getting affected by the AGE business. So if you look at like-to-like, there is margin expansion. It’s just that we onboarded AJE in this financial year, which hit us in Q1 and which will continue to improve. So we still not at the full potential of the AGE margin, which is operating margin in late 20s.
Pankul Sood
Okay. And another thing is, what would be our cash balance after this dividend payout?
Rahul Arora
Prarthana, that’s the question for you.
Prarthana Agarwal
Yeah. So the existing cash balance is around INR124 crores after the dividend payout, the same would be around INR68.
Rahul Arora
And just to clarify that the cash balance that talked about was as of December 31st, we obviously every month — every month we get INR15 crores more of free-cash flow.
Prarthana Agarwal
Yeah, this was as on 31.
Pankul Sood
And when going-forward, do we see like the dividend payment sold or do we also consider buybacks on our path?
Rahul Arora
So-far, we’ve only been looking at as a Board at dividend payments. There are discussions around all opportunities, but we don’t see much value in doing anything complicated. So we’ve kept it simple.
Pankul Sood
Okay, great. That’s all from me. Thanks lot.
Operator
Thank you. Ladies and gentlemen, that was the last question for today’s conference call. I would now like to hand the conference over to Mr Rahul Arora for closing comments.
Rahul Arora
Thank you. Thank you for your active participation in our earnings call. We appreciate all your thoughtful questions. Your unique outside-in perspective helps us learn and improve. I want to thank all our stakeholders for their continued support in this remarkable journey. We have a tremendous opportunity ahead of us and we look-forward to your continued support, feedback and partnership mindset as we all march towards begin 2027. Thank you so much.
Operator
On behalf of MPS Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.