Orient Technologies Ltd (NSE: ORIENTTECH) Q3 2025 Earnings Call dated Feb. 10, 2025
Corporate Participants:
Ajay Baliram Sawant — Chairman and Managing Director
Analysts:
Kunal Sharma — Analyst
Hiren — Analyst
Agastya Dave — Analyst
Lakshay Agarwal — Analyst
Heli Shah — Analyst
Tej Patel — Analyst
Ashwin R — Analyst
Vimox Shah — Analyst
Chinmay Shah — Analyst
Hari — Analyst
Presentation:
Operator
Ladies and gentlemen, good afternoon. I am Sagar, the moderator for this conference. Welcome to the conference call of Orient Technologies Limited arranged by Concept Investor Relations to discuss its Q3 and 9 months FY25 results. We have with us today Mr. Ajay Sawant, Chairman and Managing Director and Mr. Sunil Arora, Chief Financial Officer.
At this moment all participants are in a lesson only mode. Later we will conduct a question and answer session at that time. If you have question please press star and one on your telephone keypad. Please note that this conference is being recorded. I now would like to hand the conference over to Mr. Ajay Sawant. Thank you. And over to you sir.
Ajay Baliram Sawant — Chairman and Managing Director
Good evening everybody. Thank you for joining Orient Technologies Limited Q3 and 9 month FY25 earning call. We sincerely appreciate your time and interest in our company. I begin with wishing everyone with a very happy and prosperous new year 2025 as we are meeting for the first time. Firstly I would like to give a small background of our company then move on to highlight the financial and operational aspects of Q3 and 9 months of FY25 post which we shall proceed to the question and answer session wherein me and my colleagues shall do our best to answer your queries.
Your company got listed in the month of August 2024 wherein we had received an overwhelming response from the investors Orient Technologies limited Is a leading IT solution provided operating in three different verticals. Number one is IT Infrastructure products and solutions which constitutes end user computing and data center solutions. Number two is cloud and data management services which comprises of DevOps and digital transformation as you would like to categorize IT and lastly IT enabled services which consist of cyber security and infrastructure managed services.
The revenue contribution from the above vertical is as below it infrastructure products contributes to 61% of our nine months of revenue, cloud and data management services contributes to 23.21% of our nine months of revenue and IT enabled services contributes to 15.62% of the overall revenue. We continue to be strategically positioned to capitalize on the growing opportunities in IT infrastructure services, cloud computing, DevOps and data management. Our focus remains on scaling our service offerings, driving innovations and delivering long term value to all stakeholders. A key growth driver for us is IT Infrastructure products and solutions where we hold long term contracts with both corporate customers as well as government organization, state and central as well, our government business which currently contributes to 8.81% of orders is seeing increased traction as we target central government contract in addition to our established relationship with state government and public sector units.
Additionally, our expertise in public sector banking positions positions us as a key partner for migrating data centers to the cloud. We recognize that cloud is no longer a cheap alternative but a strategic imperative for enterprise it. Our partnership with AWS Cloud Wins and Azul Azure strengthen our ability to offer cost effective and scalable cloud solutions. Our order book currently stands at Rupees 124.41 crore which will be entirely billable in Q4 of FY25 with a significant portion allocated to cloud and data management projects. These projects are expected to be executed over next quarter, further solidifying our revenue revisit and our current attrition rate stands at 9.5% and we continue to invest in talent retention initiatives. Looking ahead, we are confident in our ability to sustain growth by integrating AI powered automation, advancing our multi cloud strategies and strengthening our zero trust security models. Our commitment to leveraging machine learning based threat detection and real time data intelligence will drive continued success in the coming quarter.
Additionally, we are making strategic capital expenditures of rupees 79.64 crore leveraging funds from our recent IPO to expand operations. Over the next three months we will complete the development of our SOC which is a Security operating center and NAAC which is a network operating center, a 250 seater facility designed to support enterprise security and cloud operations. This initiative will generate an additional rupees 100 crore in services revenue strengthening our long term market positioning.
Financial Performance Summary if you have to say for nine months of FY25 versus nine months of FY24, total income grew by 37.73% year on year to rupees 583.81 crore. Revenue from operations increased by 37.22% year on year to rupees five hundred and seventy eight point eight five crore. EBITDA stood at rupees 53.32 crore reflecting 29.9% year on year growth with EBITDA margin at 9.13%. Profit before tax rose by 31.32% year on year to rupees 48.99. CR profit before tax margin stands at 8.39%. Profit after tax increased by 35.80% year on year to rupees 37 crore. PAT margin stands at 6.34 crore 6.34%. Earning per share for Q3FY25 stood at rupees 9.82 compared to 7.81 in Q3FY24.
We remain optimistic about the future and are committed to maintaining our growth momentum in the coming quarters. From the operational highlights perspective, we were awarded the contract for Managed Service provider for AWS workloads by Digital India Corporation which comes under the niti which is a Ministry of Electronics and Information Technology, Government of India. The scope of work for the same includes seamless migration, ongoing infrastructure management, cloud governance, security compliance and performance optimization. For Digilocker National Dairy Dev development Board, Umang and many more. We were also recognized by Uluk Packard Enterprise as the HP storage partner for FY24, which is an exalted award for our proficiency in providing impeccable HPE storage solutions.
With this I come to my opening remarks and open the floor for question and answer. Thank you.
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 their Touchstone phone. 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. Again, you may press star N1 to ask a question. Our first question comes from the line of Kunal Sharma from SP Capital Financing. Please go ahead.
Kunal Sharma
Yeah, hi, good evening. I hope I’m audible.
Ajay Baliram Sawant
Yeah, go ahead.
Kunal Sharma
Yeah, so actually a couple of questions that I have first actually wanted to understand the reason behind slowdown in the current quarter. So could you please elaborate more on that particular part and how the shaping up in the quarter four and beyond that?
Ajay Baliram Sawant
Okay, so Kunal, I’ll make one correction here. We are not slowing down. If you see the Q3 of FY25 and Q3 of FY24, okay. The overall revenue we have increased by 37%. Yeah. So if you see growth of nine months in FY25 and over, FY24 is 37.73%. Looking at year on year quarter growth, the growth was 34.49%. So by no means I would say that we have been slowing down as far as the revenue is concerned. Even in EBITDA percentage the growth is nine months growth was 29.9% and year on year quarter growth was 15.6%. So I think that’s a good growth considering the current market situation.
Kunal Sharma
Okay. Okay. And. And how is the demand looking at the current environment according to you as far as the US and other things are concerned?
Ajay Baliram Sawant
Okay, so nice. 99% of our revenue is domestic revenue. So I don’t see any challenge whatever happening in us is going to affect our business substantially. Okay. We are very positive each quarter on quarter and I, I find that even Q4 will be far better quarter for our organization.
Kunal Sharma
Okay, on the second question, can you please throw some light on your vertical wise and the industry wise growth during the and even 919 months basis?
Ajay Baliram Sawant
Sure. So Kunal, for last nine months, if you see the our revenue growth perspective, DHSI has contributed 19.41% of our overall revenue. Government and PSU. I already said it’s 8.81% of our revenue. Its has contributed to 10.98% of our revenue. Mid market, which is a big business for us, which contributes to around 53% of our revenue. And communication which contributes to around 6.04% of our revenue.
Kunal Sharma
No sir, actually it’s a contribution but I’m talking about growth. Like how’s the growth in the BMSI this quarter to last quarter and the Y basis as well. And the same for the invest your industry, your vertical wise growth as well?
Ajay Baliram Sawant
Yeah. So no doubt we had a major growth in government and psu. Okay. That’s the major growth area for us. Second is of course the mid market segment. Okay. And third comes the bfsi.
Kunal Sharma
Okay. Okay. And what about your vertical wise? Good. How is the growth in the cloud and management? How is the growth in the enabled service and the IT infrastructure?
Ajay Baliram Sawant
Okay. So segment wise, if you see our revenue which has come from the, you know, December perspective. Okay. IT infrastructure, products and solution contributes to around 57.76%. Cloud and data management contributes to around 26.57% whereas its services contributes to 15.67% of our overall revenue. This is for as far as the quarter goes, as far as nine months is concerned, IT infrastructure, products and solution gives us the 61.2% revenue. Cloud and data management is 23.2% and IT enabled services gives us around 15.6%.
Kunal Sharma
Is that a contribution sir you are talking about?
Ajay Baliram Sawant
Yeah. So if you see overall cloud and data management is growing quickly, quite rapidly. Okay. That’s number one area. Its is more or less constant.
Kunal Sharma
Okay. Okay. So on the margin front our margin stand is somewhere around 8 to 9% since we are focusing on the high margin business like data center and the cloud side. So where do we see a margin in three to four years down the line I think if I’m not wrong–
Ajay Baliram Sawant
Because we are in the investment mode and we are investing in the skills and building the, you know, knock and sock. So naturally for a short term you will see there’s an impact on the margin but this will eventually over a period of three to four years, the question which you have asked, I’m sure we’ll be able to get into a double digit percentage margin.
Kunal Sharma
Okay, okay. And the follow up on the same sir, in data center what exactly we do because it’s like quite hot pick today. So what are we like delivering to the data center?
Ajay Baliram Sawant
So most of the cloud service providers or a data center operators needs a lot of infrastructure and services in their data centers. And that is what we do for data center players and the cloud service providers in the market.
Kunal Sharma
Okay, okay. And the last one more question for the growth outlook for FY25 and FY26 and beyond that.
Ajay Baliram Sawant
So generally we don’t publish the futuristic numbers but looking at the market we are very optimistic on this and we should able to have a considerable amount of growth year on year.
Kunal Sharma
Okay, okay. Thank you. Thank you so much.
Operator
Thank you. The next question comes from the line of Hiren, an individual investor. Please go ahead.
Hiren
Am I audible?
Ajay Baliram Sawant
Yeah, yeah.
Hiren
Yeah. Thank you for the opportunity sir. Just wanted to know two small things. One is you have been awarded this contract for that Digital India Corporation. So you know what would be the broad scope for the contract you have already mentioned but is it going to be a long term contract? So any tenure of the contract that you want to specify and also any financial implications like how big can this get?
And secondly, small observation on your margins is that you know your margins this time were in the range of 9.12% while quarter last year, corresponding quarter last year was maybe in 10% if I’m not mistaken, 10 point something. So how this could improve and why this has come down a bit. There are two questions.
Ajay Baliram Sawant
Good observation. First, let me talk about the contract from MITI which is a Ministry of Electronics and Information Technology. The contract was awarded by Digital India Corporation. Okay. Which is to provide them the managed service provider contract on the AWS workload. Okay. On you know, getting the seamless migration of the entire workload from on premise to cloud, then getting the ongoing infrastructure management, cloud governance, security and performance optimization.
This is the scope of the work which is there mentioned into the contract. And this will get into a multi million dollar contract. These are three to five years long term contracts. So naturally this is going to get us far better perspective in terms of revenue in coming year. That is answer to your first question.
Second, the margin dropped. As I already mentioned that we are in the investment mode. We are investing in building up our knock and sock where skill matters a lot. So we are investing more on people, more on technologies. And that is where for a short time you will see there is a margin drop. And you rightly mentioned the Q3 of FY25 versus Q3 of FY24. You know, our margin is dropped by, you know, 1 point from 10.5 to 9.13.
Hiren
Fine. Sir. Yeah. Thank you very much for your explanation. All the best.
Ajay Baliram Sawant
Thank you.
Operator
Thank you. The next question comes from agastya D from Cow Capital. Please go ahead.
Agastya Dave
Hi, it’s Cao Capital.com capital so I will have to again repeat the questions on the margins because the drop in the margins if I remove the impact of other income is even more dramatic. So last year without the other income you were at 10.4%. Now you are 7.9% in this quarter. And I understand the employee expenses part and why that will grow quite substantially while you are adding people. But even on the gross margin side there is quite a hefty fall, almost a 200 basis point fall in your gross margins. So are you as of now taking some businesses which are not like that, remunerative, but those businesses are more strategic in nature, or is it something that the competition in the marketplace has increased?
Can you go into a little bit more detail about that, that point, especially the gross margin part?
Ajay Baliram Sawant
Okay. So yes, there is a slight hit on the gross margin as the revenue goes up. Okay. So when the revenue goes up, certain deals we need to take more in a strategic in nature just to get acquisition of some of the new customers, new logos where you need to, you know, compromise your margin front and that is where, yes, this quarter you would see that hit. But that’s not the regular practice in nature because some of the customers, we don’t have any choice to get an entry level. That’s an entry barrier which you need to cross over. But that’s a short term, you know, understanding with the known impact on the overall balance sheet. Okay, okay. And this is being already taken care of next quarter you would see far better numbers than this.
Agastya Dave
Understood sir. And these are short duration contracts and hence as they run through your margins will recover.
Ajay Baliram Sawant
These are one time, one time deal.
Agastya Dave
One time deals. Okay, understood sir. And so you mentioned that the investment phase will continue for some time. But can you quantify that time, sir? Is it a year long process or shorter than that?
Ajay Baliram Sawant
Another two quarters.
Agastya Dave
Another two quarters?
Ajay Baliram Sawant
Yeah.
Agastya Dave
Okay. Okay. So you’re also increasing the portion of managed services. The contribution will increase the revenues going forward. So how do, how do those impact your margins going forward?Just the impact of managed services.
Ajay Baliram Sawant
So managed services will increase the bottom line for the organization. So actually it’s a highest making bottom line in the overall value chain. So the moment the focus currently is on the cloud and data management as well as on the IT enabled services. So I’m sure overall impact within next 2 to 3 quarters, if we see after, once we are engaged with all the CapEx and OpEx investment perspective, things will turn the table and you will see a huge growth in the graph margin as well as EBITDA margin.
Agastya Dave
Understood sir. So if the managed services, if I’m not mistaken, they are at around 15% today. So if they cross 20%, so what kind of that 5% incremental contribution to the margin, what will be the jump in EBITDA? Because of that.
Ajay Baliram Sawant
, EBITDA will jump by 2 to 3% more.
Agastya Dave
Okay, so if we are today, if I’m taking this quarter as the base, we are at 8%. So just because of that 5% increase we can go to 10%
Ajay Baliram Sawant
. Yeah. 5% of the overall revenue.
Agastya Dave
Yes. Correct, correct, correct, correct. 5% of the overall revenue has increased contribution from the managed services can bump up the margins for 2%.
Ajay Baliram Sawant
Exactly.
Agastya Dave
Okay, so sir, once the, the strategic entry level projects that you are doing and, and once the managed services contribution increases, both these things play out plus your growth, the normal operating leverage which will, which will happen because of that. Can we expect like 11 12% margins going forward then? Let’s say two to three years on the line.
Ajay Baliram Sawant
That’s a wish list.
Agastya Dave
Okay, so is there a ceiling to the EBITDA margins?
Ajay Baliram Sawant
There’s a ceiling as such but idea here is to increase quarter once the investment phase is over.
Agastya Dave
Understood sir. So in terms of your capex for the year sir, do you have a number with you how much you have done for the year so far in the nine months and what is the overall CapEx plan for this year and the next two years?
Ajay Baliram Sawant
So my major investment is going to be setting up the knock and sock. That’s from a capex perspective. And then definitely for a DAS business we’ll be investing 69 crore rupees of our revenue for a dash. And you know we already taken a premise in New Bombay so hopefully we should get position of that very soon. And then we’ll set up the SOC and not there. So that will be another 10 crore rupees of a investment that in the form of capex.
Agastya Dave
So overall put together sir, can we assume 100 crores.
Ajay Baliram Sawant
80 crore you can say in capex.
Agastya Dave
Okay. And all of that will happen in FY25 in the current financial year.
Ajay Baliram Sawant
No, as I said we’ll do it in two to three, max quarter.
Agastya Dave
Okay, so some of it will spill over to the next year.
Ajay Baliram Sawant
Yeah.
Agastya Dave
Understood sir. And so once these, these capital expenditure exercises are done what would be the maintenance capex? Is that a substantial number sir?
Ajay Baliram Sawant
No. So that’s a normal day to day OPEX which will be taken care from our day to day expenses.
Agastya Dave
Okay. That will be a more PNL thing rather than a capital expense–
Ajay Baliram Sawant
Yeah.
Agastya Dave
Understood. One final question sir. In terms of new hirings, so the scale that you have in mind, where the company would be in 2 to 3 years sir, by when can we expect the full hiring to be over and when will we see the peak employee expenses and what kind of levels will we see? So historically you have been at around six, six and a half percent.
Ajay Baliram Sawant
There is no peak hiring is over. The reason being as we keep on getting more and more employees the revenue contribution will keep on increasing.
Agastya Dave
Understood.
Ajay Baliram Sawant
Until under I, I stop hiring means my business will be standstill.
Agastya Dave
Understood. So. So for you. So, so what you described as the opportunity set for the company in the last concord, that three year trajectory you continue to see, I mean there is no slowdown that you are witnessing.
Ajay Baliram Sawant
Absolutely.
Agastya Dave
So you need to then continue building on your capacities and capabilities and then harvest more and more of the of the time that is available to you.
Ajay Baliram Sawant
Absolutely right.
Agastya Dave
Understood sir. Thank you very much sir. All the best.
Ajay Baliram Sawant
Thank you.
Operator
Thank you. Next question comes from Lakshay Agarwal from Growth Sphere Ventures llp. Please go ahead.
Lakshay Agarwal
Hello sir. Thanks for taking my question. So I have a few questions. So firstly like we want to focus more on the managed services part and like I see that currently we are at 15% and managed services is part of our IT enabled service if I’m not wrong. So in the next three years we are planning to take it around 20 to 25%. So I just want firstly I want to understand that what exactly do we do here and how are we planning to increase this part of our segment?
Ajay Baliram Sawant
Okay, so infrastructure managed services IMs that we called it as consists of lot of services. This comes with the multi vendor support facility management services, subscription services, sustainability services. This comes with you on a managed services like backup as a service or security as a service, storage as a service. So there are a lot of services comes under the umbrella for infrastructure managed services and it has a huge scope to grow and we see in India being a labor centric in nature, we can able to take it to the next level.
So our idea is to increase this IM its services that we call it that risen 15% to you know another level which is 20 to 22% in next, you know, two to three years. Okay. Overall revenue I’m talking about.
Lakshay Agarwal
Understood, understood. So but I just had one question because in terms of the managed services that you talked about here and we also have a different segment, the cloud and data management service which has the infra platform software so storage as a service like these different services. So who is our technology partner over here and for which we help our customers implement the same.
Ajay Baliram Sawant
Okay, so on the IMS front we give lot of on premise services which are delivered, whereas in cloud and data management we give more of a services on cloud which are like a FinOps, SecOps and DevOps, whereby we give not only the services on infrastructure, but even software as a service, platform as a service and infrastructure as a service as well.
Lakshay Agarwal
Yeah, right. Actually my question was that. So all of these different solutions which we have, we must have a technology partner for like for these solutions or is our own solution?
Ajay Baliram Sawant
No, these are. There are technology partners involved in each of these services. The only FMS and multi vendor support is where we have our own support. Okay, where is the orient branded services which we give it for all others we use some or other technology partners. So say for example cloud. Okay, we use AWS as well as Azure. Okay, These are our two technology partners. But backup as a services we use veeam. So for a managed services on backup we do it with the Veeam. For storage as a services we use NetApp and HPE. So for various solutions we use, you know, different technology partners.
Lakshay Agarwal
Understood. And lastly like, we are providing all of these different services, but the competitive landscape is also a lot in our segment. So how do we place ourselves differently from our competitors? Because as we also want like our aspiration is to increase our margins by 200 to 300 basis points. So how, how are we positioning ourselves over here?
Ajay Baliram Sawant
Okay, so our competitiveness comes from the skills that we hire and keep on making sure that they keep on learning new age technologies. So our focus always remains on the new age technologies which are coming in the market, which gives a big operational efficiency and we try and adopt them, become an early bird adopter of those technologies and try and propose it to our customers, which in turn benefits to them as well.
Lakshay Agarwal
Okay, got it. So just a follow up on the previous question. So in the data center segment, which contributes 20 to 25% and you have mentioned earlier also that we would be maintaining the same percentage going forward. So the solution that we provide over here is that we buy the different servers and storage solutions and all of it and then we give it to our data center customers or there is something else also which we provide.
Ajay Baliram Sawant
Yeah, so what we do is in terms of data center solutions, all those servers, storage, networking, virtualization, we bundle it as a service to the customer, so all these cloud server service providers or the data center service providers, we give them the complete stack of infrastructure plus the services along with it.
Lakshay Agarwal
Understood? Okay, got it. So thank you. All the best.
Ajay Baliram Sawant
Thank you.
Operator
Thank you. Next question comes from Halisha from PI Square Investments. Please go ahead.
Heli Shah
Hello. I hope I’m audible.
Ajay Baliram Sawant
Yeah, you are audible, ma’am.
Heli Shah
Yeah. So the order book that you just mentioned that is this, the current order book is 120 workload which should be delivered by, you know, Q4 SI25. So is it possible for you to break it down? Break the order book down among cloud, cloud infra its and infra products and services. The segment breakup, basically.
Ajay Baliram Sawant
So as on December 31st we have a order in hand of around 124.41 cr. Okay. Which is all billable in Q4, that is before March. The majority of these orders are from the you know it infrastructure solutions perspective. So approximately to the tune of around 75cr is coming only from you know IT infrastructure solutions perspective. Around 35cr is coming from the cloud and data management and 15cr is coming around services IT enabled services perspective.
Heli Shah
All right. And how are you seeing the Q4 growth? Like are we expecting it above the Q2 level or. It will be still a degrowth quarter on quarter.
Ajay Baliram Sawant
So I feel that Q4 will be a bumper quarter for all of us. But I will not able to share the exact numbers of Q4 because generally we do not give any futuristic numbers.
Heli Shah
Understood. Thank you.
Operator
Thank you. Next question comes from page from Niveshai. Please go ahead.
Tej Patel
Hello. Am I audible?
Ajay Baliram Sawant
Yeah, go ahead.
Tej Patel
Yeah. Thank you so much for the opportunity. So my question is on recently bidded for a 10,000 GPU standard that was, you know, floated by Ministry of IT and we participated I guess with a bit of about thousand AMU GPUs. Yeah. So. So what’s the status of that? Have we won any order? I. I know we were. We were. We were on the L1 in that. But then, have we won any order a portion of it and what was your thought process? I mean are we venturing into, you know, the owning data centers or you know, venturing into this space as well? If you just throw some light on this.
Ajay Baliram Sawant
Sure. So as I mentioned that MITI has already awarded us the contract for this AI enabled workloads which are basically we hosted out of aws. So all those AWS workloads that we are talking about with the Digital India Corporation. Okay. Of MITI where we all use DigiLocker. Right. So all those digilocker workload will be managing it, securing it and making sure that there’s a proper cloud governance is there and the optimum performance is being taken care of. So whether it’s a digital locker or woman or National Dairy Development Board, there are a lot of contracts which will be keep on coming and which are a long term contract. So we are working very closely with the NITI and Digital India Corporation to get more and more contracts from this initiative of government.
Tej Patel
So the capex for this GPUs for that project will be done by you only.
Ajay Baliram Sawant
So it’s a AWS workload. So what we are saying is that it’s a pay per use as and when government needs it. I don’t think there is a capex involved. AWS has already invested in the business and we’ll be using as and when we consume the workload.
Tej Patel
Got it, Got it. And I mean you already touched upon this point but then again if you. I just wanted, I mean what I’ve observed is since you know our majority of revenue comes from the IT infrast base and you know, if you look at the industry as a whole, this space is quite crowded than other niche solutions. Let’s say like a cloud management or let’s say security system. Right. So my question is, I mean you already touched upon, probably you will move to, you know, more of managed services but then if you could just you know, give a more detailed answer on what are your steps and what market are you targeting and then what are your views on you know, the IT infra has a business for you going forward, would it reduce.
My question is, I mean overall are we trying to move more towards a value add service than a top line driven service which is the IT infra where margins are low and the crowd. The space is also really covered. Right. And in the last phone call also I remember you said the cloud space is growing fast for us. So if you could just throw some light how big the cloud space could become for us because a lot of, let’s say mid to large enterprises are moving from on prem to cloud. And are we a preferred player or there’s a, there’s much competitiveness in this on you know, players providing services to companies from moving from on prem to cloud. If you could just throw some light on competitiveness intensity in that area also.
Ajay Baliram Sawant
Okay. So as far as IT infrastructure business is concerned, definitely it’s a competitive in nature. Especially end user computing is a very competitive in nature. Okay. But whereas it goes to value added services, okay. Which are more of a managed services, more of a cloud service management, security and anything like finops or secops. Okay. These are the value added services where the you require a skill and the competition is pretty low. So the margin is far better. So we are focusing more on those value added services on cloud or even on premise infrastructure as well. So all these value added services will give us not only the top line but a better bottom line and that is what we are focusing on.
Currently cloud and data management is at 23.2% and quarter on quarter. I’m sure it will increase it because we are focusing more on cloud and data management and its that is IT enabled services lov which is giving us two benefit. Number one bottom line is definitely better. Second is it’s an annual recurring revenue. So what happens is these are long term contracts for three to five years. So for next financial year my numbers are already been taken care of.
Tej Patel
Got it. So but then the shift you said would probably take two, three years, right? You said from 15 to 20 it will take two, three years, right.
Ajay Baliram Sawant
Pardon me, I’m not understood.
Tej Patel
You say the shift for let’s say right now managed service is about 15% of your revenue, right?
Ajay Baliram Sawant
Correct.
Tej Patel
It will take two, three years to move to the 20% mark.
Ajay Baliram Sawant
Yeah, 20 to 22% of the overall revenue percentage. If I have to have it will take you know, two to three years.
Tej Patel
Okay, so that’s all from my side. Thank you.
Operator
Thank you. Next question comes from the line of Ashwin Ram Rathi Nam for NHNI Investor. Please go ahead sir.
Ashwin R
Am I audible?
Ajay Baliram Sawant
Yes.
Ashwin R
Hello. Okay, so two questions, the first one being what is the current debt on your book, sir?
Ajay Baliram Sawant
Okay, so there’s a very minuscule depth on our book. Okay. So I don’t see it’s any large value just to the tune of two point crore currently but which is a basically a interest free loan. So I don’t, I’m not so much concerned about those value.
Ashwin R
Okay so going forward how much time will you take it to make it zero debt?
Ajay Baliram Sawant
It’s a matter of six quarters that I can make it zero because it’s a interest free loan and I have too much not concerned about it. We are quarter on quarter that emi. We are paying it to the female which has been having you know, arrangement with the Cisco. Okay. And for which we have taken this.
Ashwin R
Okay sir, the second question is what was the revenue split between government and corporate contracts?
Ajay Baliram Sawant
So 8.81% is the government contracts that so far we are billing it to. But balance is all about corporate and there are huge number of corporates which we have in various different, different segments. So you know BFSI contributes to around 19%. Mid market contributes to around 53% its contributes to around 11%. So I think we are having a better split against most of the vertical segment and our presence is relatively felt in that particular vertical.
Ashwin R
Okay, okay, that’s it from my answer. Thank you.
Ajay Baliram Sawant
Thank you dear.
Operator
Thank you. The next question comes from Vimok Shah from Goyam Labhi Fintech Private Limited. Please go ahead.
Vimox Shah
Yeah, thank you for the opportunity. I wanted to know that that company ventured into the dashlight device as a service. Can you share some insight that will be the target customers for this and how are you planning to scale this business?
Ajay Baliram Sawant
Okay, so device as a service is a new offering from Orient. Okay. But this is actually very famous across the globe and Most of the MNCs are adopting to this. If you see HP, HP is providing Greenlake, Dell is providing Apex which is nothing but a device as a service. What it gives us is a stickiness with the customer because you are not only doing a one time deal with it, you are actually getting a contract which is three to five years of a contract for the customer and which will keep on doing it again and again.
After three years he’s going to once again sign up the same contract with the new configuration or the latest technology which is available with us. So that customer stickiness is more important in this. Of course the flip side of it is that the investment is done by us. But the entire infrastructure product and the services bundled along with it will be provided by us.
So generally we are struggling to get a better profitability as far as the IT infrastructure, products and solutions are concerned. But services gives me the better margin. So overall combination of products and services gives me a better profitability stickiness and my EBITDA will be better on, you know, you know, quarter on quarter.
Vimox Shah
Okay. Okay, got it. Yeah. So next question is like what is the potential revenue from the e protect360 acquisition?
Ajay Baliram Sawant
Okay, so the acquisition is not complete yet. Okay. But there are a lot of potential which we see in the E Protect solutions. This company which we have acquired is a more of a tuck in acquisition which is more in strategic in nature because we want to build some of the IPs along with them and that is why we are planning to acquire it. The more, you know, details I can able to provide it once we have a definitive sign up with them, which is we are planning to do it very soon. The board has already approved this with a mutual agreeable terms and conditions. Okay. Based on that we’ve got a sanction. So the moment we sign a definitive agreement I can able to disclose all other terms.
Vimox Shah
Okay. Okay, got it. And one last question is like what is the current revenue per employee right now?
Ajay Baliram Sawant
Okay, so we divide the employees in two buckets. One is of course the in house bucket and another is basically a facility management which we say outsource employees. Now my outsourced employees are approximately to the tune of 1100 whereas you know, in house is around 350 to 375 and it’s growing. So if I have to say my per employee capita, generally we calculate as per in house resources and not as a outsourced resources. So with that it will come to around you know, 3 crore per person you can say.
Vimox Shah
Okay. Okay. And what is the current attrition rate?
Ajay Baliram Sawant
Currently we are at 9.5% for this quarter.
Vimox Shah
Okay, got it. Thank you and all the best.
Ajay Baliram Sawant
Thank you.
Operator
Thank you. Next question comes from Chinmay Shah, an investor. Please go ahead.
Chinmay Shah
Hello. Am I audible?
Ajay Baliram Sawant
Yeah, Chinmay, good.
Chinmay Shah
Thanks for the opportunity sir. NZC or nine month end in result there is almost 30 to 37% increase in top line and bottom line which is very impressive sir. So should we assume that it will continue for next two, three years?
Ajay Baliram Sawant
My wish list is that or rather we are planning to do it, you know consecutive this for continue this for another three to five years. Yes, the market will support us for sure because India is growing very fast with the current GDP rate and with the current this thing. Unfortunately what we hear from us is not a good sign. But that doesn’t hamper our business so much.
Chinmay Shah
Okay. And sir, one more question sir, in future as a device, as a service, what we expect the revenue contribution and how much margin improvement it will help us?
Ajay Baliram Sawant
The device as a service is basically what we do is the investment. The capex investment is done by us and the customer only pays me on a quarterly basis. So which is my service revenue. So against that service it’s only the interest is what I have to consider as my, you know incoming cost balance all comes under the fixed asset. So you know, that’s all my everything is my income only.
Chinmay Shah
Okay, so it will help to boost the margin as well. Right? From current single digit to maybe high.
Ajay Baliram Sawant
Yeah, yeah, yeah, that’s true.
Chinmay Shah
Okay, thank you.
Operator
Thank you. The next follow up question comes from Laksha Yagarwal from Growthsphere Ventures llp. Please go ahead.
Lakshay Agarwal
Yes, hello sir. Thanks for taking my question. So just one follow up question regarding the order book that currently we have an order book of 124crores of block which is executable this quarter like you had mentioned. So I wanted to understand that how does like how is a pipeline looking like and generally how much time does it take for that pipeline to convert into an order book?
Ajay Baliram Sawant
Okay, our sales pipeline between three to six months it gets converted into order book. Okay so the sales cycle if you say it varies between product to product and technology to technology perspective. But end user computing and data center solution happens within three months time. Cloud and data management probably happens in three to six months time. Services happens between 60 to 120 days time. So that’s where the sales cycle we call it as so most of the time we get the order in three months time. That what we say from the day we start working on the deal. Okay, but this is as an average, I’m just talking about getting the order from billing perspective. It’s generally, you know, if it’s a long term contract then quarter on quarter we bill. If it’s a one time contract then it’s between three months we bill it out.
As I said, 124.41 is a order book which is all billable in Q4.
Lakshay Agarwal
Then how are we positioned for our FY26 order book? Like how much of the total revenue we can say is recurring going forward.
Ajay Baliram Sawant
So on the 31st of March I will come back to you on the my FY26 in ARR value. Okay. Which you know, I’ll able to disclose only at that particular time.
Lakshay Agarwal
Okay, understood. And also in terms of our recurring revenue, any idea on that?
Ajay Baliram Sawant
So all the cloud and data management and the IT enabled services is all about recurring revenue.
Lakshay Agarwal
Okay. Only the data center part is the one time.
Ajay Baliram Sawant
Yeah. End user computing and data center part is only a one time piece.
Lakshay Agarwal
Okay, understood. So thank you.
Ajay Baliram Sawant
But moment I convert that business into a dash that becomes a recurring revenue.
Lakshay Agarwal
Got it? Got it.
Ajay Baliram Sawant
So dash has been introduced within our organization is to convert those one time revenue into a annual recurring revenue. And that is what we are targeting that our maximum revenue has to happen from the annual recurring revenue. That’s the idea and it should.
Lakshay Agarwal
Thank you.
Ajay Baliram Sawant
That’s it from India.
Operator
Thank you. A reminder to all the participants, if you wish to register for a question you may press star. And one next question comes from Hari, an individual investor. Please go ahead.
Hari
Hello. Am I audible?
Ajay Baliram Sawant
Yeah. Good.
Hari
Sir, I have one question related to the revenue. Okay, so you’re saying quarter Iran here. There is a quite improvement. Okay. But if you compare to the sequential basis there is a slight dip. Okay. In the revenue. So I just want to understand is the kind of seasonal impact if it is not, if it is not a seasonal impact, what is the reason behind it?
And you also said that squad report will not bust record. That’s is clear. For me that is first question and the second question from my side is what is the impact of Deep Seek? Okay. Why I’m asking is recently because of that reason, most of the data center stocks are getting hampered. So I just want to understand what is the impact of Deep Seek for in technologies and yeah, that is the second question sir. And my request first is why we so as soon as this impact of deep sea came, okay, so all got hampered. But some of the companies, okay, they give the clarity about the big business impact due to the deep sea. And they started signing a sign of recovery. So that kind of clarity something is missed from your side. That’s one kind of request. Why asking future suppose something hampering kind of this kind of information, right? Please give us some information that builds our conference. US conference. That’s only from my side.
Ajay Baliram Sawant
Good question. Hari, let me answer your first question. Q2 and Q3 comparison. Okay. Our business in India basically is driven more by the companies corporates as a governance perspective. And Q2 is always far higher than Q3. Because people can claim 100% depreciation in Q2 whereas only they can claim 50% depreciation in Q3. So most of the investment which happens from the corporate segment is in Q2 and less in Q3. But once again higher in Q4. So please understan d the cyclic nature of the business. Q1 is always less because the budget is not approved for the corporate by the corporate. So Q1 is pretty less. Q2 is goes up, Q3 again goes down and Q4 again comes up. That’s the cyclic in nature which I’m talking about.
In our case if you would have seen the numbers, you know revenue from operations in Q2 or 223 crore and we marginally lower in Q3 which is 206.85 crore. Okay. So I’m not too much concerned that my revenue has dropped. But if you see year on year we have grown by you know 33.01%. So I think year on year we have shown a massive growth. Okay. Quarter on quarter our deep is only minus 7% and which are for a multiple reason. One reason as I said Q3 there is a less depreciation. So people do not like to you know invest in Q3. But Q4 they want to utilize all their budgets and take get whatever depreciation benefits from government which they get it in Q4. So Q4 again once again goes up. That’s to answer number question to one.
Answer to question number two is on deep seq. Now entire it evolves around some buzzwords and today AI is a big buzzword today and Gen AI is a part of it. Just to compete with the gen AI, China has come out with a deep seq, okay. Which will, you know, definitely save cost to the customer and use a better performance. But will it affect the businesses? I don’t think so much. Because adopting any Chinese technology is something which is a big question mark. Okay.
Currently in the market people are not accepting it until unless it’s been proven right. Okay. And to prove this right, we need to have lot of use cases today. Currently I see not so much of use cases in various segments, vertical segments, I.e. bFSI, its healthcare pharma and you know, various other listings they are trying to portray it will save cost and give a better performance. But until unless I see the use cases and the skills developed on those technologies, that technology is not going to be the run of the mill product. Okay. Until that’s been taken care, which I see another four to six quarters it will take. And after that nobody knows how the it changes. You know, it changes very fast. You may find some new technology coming in which will even better than Deep Seq. But yes, AI is going to be there. AI is going to rule the market. AI people have started finding out various use cases, especially on gen AI. Okay. So you will see a lot of good momentum coming from JN initiative perspective.
Hari
Okay. So what I understood is there is no impact on Deep Seq from forwarding technology?
Ajay Baliram Sawant
Until the use cases get developed.
Hari
Okay. So you are not in my request. No sir. So, but please take up the request. I’m going to say if any kind of impact comes right, Try to give this impact on me.
Ajay Baliram Sawant
Yeah.
Hari
Thank you so much. That’s all I have. Thank you.
Ajay Baliram Sawant
Thank you. Thank you.
Operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Ajay Sawant for closing comments.
Ajay Baliram Sawant
So thank you dear. And thank you Gaurav from Concept IR for organizing this call. We truly appreciate all the participants for taking the time to join us today. If you have any further queries, please feel free to reach out to us. We will be happy to address them. Thank you once again for your continued support and interest in our company. Thank you.
Operator
Thank you. On behalf of Concept investor relations. That concludes this conference. Thank you for joining us. You may now disconnect your lines.