R Systems International Limited (NSE: RSYSTEMS) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Kumar Gaurav — Assistant Vice President of Finance & Accounts
Nitesh Bansal — Chief Executive Officer and Managing Director
Nand Sardana — Chief Financial Officer
Analysts:
Mihir Manohar — Analyst
Nikhil Poptani — Analyst
Deep Modi — Deep Modi – Equirus Securities Private Limited, Analyst
Sandeep Shah — Analyst
Vijay Menon — Analyst
Nitish Rege — Analyst
Omkar Sawant — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the R Systems Q4 and CY 2024 Earnings Conference Call. 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 to assist during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Mr Kumar. Thank you, and over to you, sir.
Kumar Gaurav — Assistant Vice President of Finance & Accounts
Thank you,. I welcome all participants to R Systems earning conference call. Since our system follows calendar year as its financial year, quarter-four is even the last quarter October to December quarter is quarter-four for us. We have today with us,, Managing Director, CEOR system, our system and Lal, CFO, our system. We have shared the investor presentation this evening yesterday of everyone has received this year. We will start the call with opening remarks on the performance of the company and follow. Thereafter, we will have a new statement. Subsequently, we’ll open up for a Q&A session. Before I hand over, let me now discuss all the disclaimer statement on behalf of the company.
Investors are cautioned that this presentation contains certain forward-looking statements that involve risks and uncertainties. The company undertakes no obligation publicly to update or revise any such statements. These statements may undergo revision because of new information, future event or otherwise. Actual results or far or less achievements could differ from those express or implied in such forward-looking statements. Now I pass to Nitesh for his opening comments. Thank you. Over to you, sir.
Nitesh Bansal — Chief Executive Officer and Managing Director
Thank you. Thank you. Thank you, Kumar. Good morning, everyone, and thank you for joining this earnings call. I will start with the key highlights for the year. For those of you who are referring to the presentation, we’re starting from Slide number four. So like Kumar said, I mean, this is not only quarter-four, but also full-year earnings call for us. So I’ll be covering both the quarterly as well as the full-year highlights. To begin with, very happy to report that we closed the year with INR1,741.7 crore or $208 million in revenue, which is about a 4.6% year-on-year growth without counting the one-time fee that we got for a bott transfer last year.
Otherwise, it is a 3.4% growth year-on-year. We closed the year at INR291 crores of EBITDA, which is about $34.8 million US dollars, which is an EBITDA margin of percent. It’s — on a comparison basis, it is an expansion of about 200 basis-points or a growth of about 18.7% excluding the one-time fees. Throughout the year, not only you know from a revenue and EBITDA highlight perspective, we also strive to achieve excellence in various areas of our business and we have been, you know, very happy to receive rewards for the same. We were recognized as the best supplier of the year-by one of our key clients, the Chamberlain Group and this is across all categories of suppliers for the company.
So as a partner to Chamberlain Group, we are extremely proud to receive that award that award. We also were recognized as the top-10 leading AWS partners to watch in 2024. We were once again recognized as top 500 value creators by Dunn and Pat Street and we were also recognized as one of the best tech brands for ’24 by the Times Group. Not only that, we also significantly enhanced our status of partnership and alliances with some of our major partners. With Microsoft, we became a solution partner in three out-of-the five competency areas. With AWS, we have extended our advanced partner status from what was two to now seven more areas of partnership. In Salesforce, we moved to the Crest partner status, which gives us access to a lot more of Salesforce capabilities and the ability to pull sales force into critical projects as we need.
And we also started a new partnership and alliance with ServiceNow. In addition to this, we also participated in Everest peak metrics assessments and we were recognized as major contenders across three of their peak matrices, one for software — software platform engineering services, other specialized for ISVs and platforms and a third one in the healthcare area. So the year has been obviously extremely busy and rewarding in that sense. Moving on to — coming to the financial performance for Q4, we ended the year at INR400 — we ended the quarter at INR449 million or INR53.2 million. From an EBITDA perspective, INR80.1 million or $9.5 million, which is 17.8% of revenues. From a revenue growth and adjusted EBITDA growth perspective, our revenue grew 1.1% quarter-on-quarter and EBITDA grew by 0.6%.
And on a year-on-year basis, revenue grew by 7.8% and EBITDA by 24.6% compared to the same quarter last year. Our net profit stood at INR39 crore or 4.6 million. The bridge for EBITDA and how this change has happened quarter-on-quarter is largely INR7.1 crore addition due to better utilization and other standard operations, we got about INR1.3 crore benefit of the rupee depreciation. And we lost about INR7.9 crores because of the lower billing days. As you know, Q4 is normally a soft quarter also has two lower billing days, which typically has an impact of about 3% or $1.3 million for the quarterly revenues. And then moving to the full-year performance, like I said earlier, we closed the year at INR1,741.7 crores or $208.2 million and INR291 million — INR291 crores or $34.8 million in adjusted EBITDA, which is about 16.7% of revenues.
Compared to the last year, without the one-time BOT fee, which had a 1% impact, we moved from 14.7% to 16.7% of EBITDA on a comparable basis. So this is a revenue growth of 3.4% year-on-year 4.6% net of that one-time fee and an EBITDA growth of 18.7% net of the one-time fee. Our net profit stood at INR131.2 crore or 15.7 million. And some of the balance sheet items, equity attributable to shareholders stands at INR624.1 crore, cash and bank balances are INR196.1 crores, AR and unbilled at INR339.6 crores and our DSO stayed stable at 61 days. From an EBITDA bridge perspective, we got gains largely due to our operational efforts on improving utilization to the tune of INR44 crore or 44.4 to be precise.
Our rupee depreciation benefited us by about INR12.6 crores and other standard operating expenses increased to cover about INR11.1 crores from that resulting in that INR291 crores of reported EBITDA. Moving on to the financial trend across last eight quarters, we have — we have seen a consistent growth across the last eight quarters with momentum building up over the last 3/4 with — with reasonable volume growth coming in and we are seeing the positive movement in the market. Our revenue for the company crossed INR445 crores this quarter. So that’s a milestone and we obviously wish to keep that milestone stacking up higher and higher.
Our adjusted EBITDA crossed INR80 crores from INR500 — from INR54.3 crores in the past. The quality of revenues have continued to improve, as I’ve said also in the previous earning calls with our approach to deeper relationships with clients and winning more deals and very focused on cloud data and AI type of areas, helping customers build their SaaS platforms and doing higher order platform engineering work with our clients. Just to provide EBITDA analysis, analysis because there were the one-time fee as well as the non-cash RSU charges, which we are — which we are adjusting to be able to provide the EBITDA from operations perspective. If you look at quarter-four of ’24 versus ’23, our revenue stood at INR449 crores versus INR416 crores in the same quarter last year, resulting in an operating EBITDA of INR80 crore versus INR64.3 crores last year, which is a 24.6% growth.
However, because we gave out employee — employee stocks as RSUs, the charge associated with that, which is a non-cash charge of INR7.3 crores brings down the reported EBITDA to INR72.8 crores, which is 16.2% of revenues. So on an annual basis, we enta the revenue of INR1,041.7 crores compared to INR1684 crores in FY ’23, which is inclusive of the BOT charge. So this is as-reported. And on that basis, our EBITDA — with that operating EBITDA is INR291 crores compared to INR264 crores as-reported. But when adjusted for that one-time fee, the report — the EBITDA for FY ’23 would be INR245 crores as compared to INR291 crores this year, which is a 18.7% improvement or growth. And when applying the non-cash RSU charge to it, which is INR29.9 crore almost INR30 crore, our reported EBITDA stands at INR261.1 crores, which is 15% of revenues.
So overall, we have expanded our operating EBITDA by about 200 basis-points. And as I had mentioned in some of the previous earning calls, we have consciously made this effort to grow EBITDA — to give ourselves more room for investments for growth and largely in the sales and marketing areas. Moving to the operating metrics. There is no major change in our geography split. US revenue stand close to 74.2%. Europe contributes about 9%. Southeast Asia has expanded slightly by about 50 basis-points to 13.3% and rest of the world at 3.5%. So from a client concentration perspective, when we look at the top-10 clients, our revenue contributions largely remain the same. The 1% impact that you see is because there is a 1% additional revenue, which was the one-time BOT fee, which is included in the FY ’23 numbers in the chart. Utilization is at its peak at about 82%.
We believe we’ve taken or we’ve squeezed all the juice out-of-the utilization lever. We believe we can maintain utilizations at similar levels. We’ll make some strategic investments as we go-forward in-building deeper capabilities on AI and cloud and security, which we continue to do. But we have set the operating parameters in a manner that we believe we should be able to maintain very close to this level of utilization with a few bps year or there going into some additional COE investments from time-to-time. Our days of sales outstanding has stayed consistent at about 60 or 61 days, 61 days for this quarter and we continue to maintain that. In terms of building for the future, we have significantly enhanced our go-to-market posture.
We came out with the — with a GCC offering and playbook for mid-sized enterprises where we are enabling working in partnership with enterprises to build and scale their GCCs if they — they have an intention to establish their own GCC in India. And this is an addition or advancement to something that we have been doing for years where we set-up dedicated ODCs for our customers, which houses their development teams, which is working on their R&D platforms and helping them build their platform — build their products and platforms. And in case they want that given that there is a major trend of putting GCCs in-place, if they wanted that to be a GCC setup, we can enable them to do so. We have also started doing joint go-to-markets with some of our key clients, creating 360 relationships.
What that means is that we have gone beyond just being an outsourced product development partner for these customers, we are also partnering with them in professional services and in pre-sales to enable — sell their products to their clients because a lot of those products require customizations even during the pre-sales process before they can be bought by the client or implemented by them. And this makes our relationships more sticky and deeper with the client where we are no longer just a part of the product development, but we are also part of their revenue pipelines. From a delivery priorities perspective, clearly AI has been the flavor of the day. We had launched Optima AI as our AI workbench middle of the year, which was to, one, enable our employees to start using generative AI capabilities in their day-to-day work-in the software development life-cycle.
It is now being spread across more-and-more of our engagements and both on the engineering side as well as on managed services side. So Optima AI has also now expanded to start including some of the agentic AI workflows and we are — wherever we are building agents that can handle operations that can create a quick ROI for our customers, those AI use cases have also been now included into Optima AI. So from an offerings and positioning perspective, in the last quarter or so, we actually launched three new offerings to the market. We launched an offering for modernization solutions, which is transforming monolithic products and platforms to microservices-based architectures. We launched the Chaos Engineering integrated DR model to enhance business continuity and resilience. We also — we also launched a service to migrate the reporting infrastructure from anything, whether it’s click or Tableau or anything to power BI.
We have also significantly strengthened our partnerships with the — with alliance partners, both with solutions that we’ve launched on their marketplaces as well as increasing our certifications and raising our status of partnership together with them. Thank you. From a leadership expansion perspective, in the last quarter, we added some key leaders to the team. Ashok Chawla joined us as Senior VP of Global Delivery based in Pune. Niraj joined us to lead our data and analytics practice, including AI and Suresh joined us to lead our sales force practice. With this and through the year with the leadership additions we’ve done, we’ve actually got nine key leaders added to the overall management bandwidth, increasing both our capability, positioning and engagements with our clients across the world.
That covers our Chief Customer Officer, Chief Marketing Officer, our HR Head and our CTO for Cloud and Security, along with another SVP of Delivery as well as an RMG lead, who have all been inducted during the year. With this, you know, we have — we have created a structure as well as the capability and capacity to be able to take additional business challenges and new kind of opportunities that come through as the market is opening up. Thank you. To highlight a few key wins for the quarter, a leading ESG data management platform engaged us to enhance their existing platform by providing expertise in-full stack development, data engineering, digital operations and to drive innovation and streamline the ESG compliance.
One of the leading financial services companies based in US, which specializes in trading and risk management and global payments has onboarded us for their sales force managed services, system enhancements, strategic guidance along with ensuring security and scalability. One of the large banks in the Caribbean has mandated us for their digital transformation journey and starting with the developing of a mobile app, integrating APIs and streamlining the ForEx request handling to drive operational efficiency.
We’ve also engaged with a global leader in simulation and trading — training software provided to several, you know defense organizations across Europe to accelerate their customer project deliveries and bolster the product roadmap for their flagship product. This strategic collaboration will help them realize revenues quicker and fortify their competitive advantage. We also got engaged by a US-based software product company, which has multiple products to transform some of its drafting and legal solutions from legacy to SaaS-based solutions.
So again, going back to the monolithic to SaaS-based or microservices architecture kind of things, which will offer operational efficiencies and improved document quality and accuracy. This is also a project where there is an embedded AI component into it which actually enables a lot of this natural language processing and document reading and matching and those kind of things. I think at this point, I will hand over to Mr Nansarana to take you through some of the financial highlights as covered through the press release and provide some more details on the — on the full-year P&L. Nand ji, over to you.
Nand Sardana — Chief Financial Officer
Thank you, Nitesh Ji. Good morning to all. Thank you everybody for attending the call. I’ll cover Q4 as well as year. Revenue for the quarter was INR449 crore or INR53.2 million as against INR44 crore or $53 million in last quarter. And last year same quarter, it was INR416 crore or USD50 million. And this is year-on-year growth of 7.8%, quarter-on-quarter growth of 1.1%. The quarter-on-quarter growth is impacted by lower billing days in Q4. The year volume growth is around 3%. The gross margin was 37.9% compared to 36.3% last quarter and 34% same quarter last year.
The improvement in margin is the result of operational efficiencies. Our SG&A expenses has increased from INR81.7 crore last quarter to INR90.3 crores this quarter. This is due to increased investment in the sales engine along with year-end provisions. Adjusted EBITDA is 17.8% compared to 17.9% last quarter. Net profit-after-tax was INR39 crore or USD4.6 million. Now I’ll cover the yearly numbers. The revenue for the year was INR1,741.7 crore or USD28.2 million compared to INR1,684.2 crore or USD204 million last year. Excluding the impact of beauty fee, the revenue grew at 4.6% year-on-year. The geographical — the geopolitical uncertainties and inflationary pressure impacted our revenue growth this year.
We are making focused efforts to add large accounts to have profitable growth. Now getting now to gross margin, it was at 35.9% in current year compared to 35.3% last year. The improvement in gross margins is the result of improved efficiency. Getting down to SG&A, SG&A expenses have increased by INR4.9 crore. In percentage terms, the SG&As were about 19.2% this year compared to 19.6% last year. The EBITDA before RSU cost is INR291 crore or USD34.8 million compared to INR264.5 crore or USD32 million last year. As a percent of revenue, EBITDA was 16.7% compared to 15.7% last year, 14.7% excluding one-time.
The company has been able to expand 200 basis-point EBITDA margins on the back of improved revenue mix and operational efficiencies. We are committed to upscale our investment in expanding digital competencies along with further strengthening sales, leases and marketing activities for future growth. However, we are confident of on maintaining the adjusted EBITDA margin as well. RSU cost under management incentive plan is INR30 crore. EBITDA net of RSG expenses 15%. Coming on to depreciation and amortization, the total expense was INR65.4 crore compared to INR54.4 crore last year. This includes INR24.9 crore last year INR12.4 crore for intangible capitalized on account of and acquisition.
Non-recurring cost for the year ’24 was INR2 crore compared to INR11.9 crore last year. This year, non-recurring expenses pertains to merger of with our system. Interest expenses INR8.4 crores this year compared to INR9 crore last year. This is mainly due to interest on short-term borrowings and office lease taken capitalized under IndAS crores. Other income in ’24 was INR6.2 crore compared to INR11.2 crores last year. This year, we had an exchange loss of INR1.1 crore due to a sharp depreciation of rupee compared to the exchange gain of INR2.3 crore last year. Further, the other income comprised of interest income of INR37.7 crore this year compared to INR7.2 crore last year. The average rate in 2024 was USD83.67 and 90.52 as against last year’s USD rate of 82.57 and 089.29. These are the two main for our system.
As at year end, we have total forward cover of 40.8 million with average rate of 85.28 and Europe of INR2.1 million with average rate of 94.38. This has already been mark-to-market as on the closing rate of 31st December. Our tax expense is INR60.3 crore this year as against INR60 crore last year. Effective consolidated tax-rate is 31% as against 30% during last year. Amortization intangible like customer contact and non-compete are not tax reductible. Excluding this, the effective tax-rate would be between 27% to 28%. Our net profit-after-tax was INR131.2 crores or INR57 million compared to INR140.1 crore or $70 million last year. Basic EPS for the year was INR11.09 compared to INR11.8 crore last year. Our EPS is impacted by RSU costs during the year and last year there was one-time BOT free. With that, let me hand over to Nitesh for closing remarks.
Nitesh Bansal — Chief Executive Officer and Managing Director
Thank you. So just in summing up and looking ahead, we clearly see that the deal activity has picked-up and there are a number of sizable RFPs that have been out in the Q4 2004 — 2024 and which we participated in and they’re getting decided and should result in awards during the Q1. The focus partnerships with customers, as I talked about 360 degree relationships as well as improving the status with hyperscalers is beginning to influence both stickiness in existing business as well as our ability to win new deals. So these are very heartening changes or positive movements that have taken place. Some. Some of the trends that I believe are shaping up that the coming year, the 2025.
The AI has as a discipline as a technology promises to provide better line-of-sight to ROI because these are agents that solve small repetitive operational activities. So they have much lesser adoption curve, they have much lesser cost to operate and hence have better ROI as compared to more expensive generative AI. However, there is of course debate going on with Deep, which has significantly reduced the cost of carrying out a generative AI kind of a setup. And we believe that such disruptive innovations will keep coming and they will offer more opportunities to put generative AI use cases in a more viable manner into real-life scenarios. So GCCs has been a major trend that has developed during the year and a lot of companies are looking at it to set-up their own GCCs.
And specifically for midsized clients who do not have any presence in India, it’s a great opportunity to partner with companies like our systems to help them enable — take advantage of this opportunity. We have already rolled-out our playbook. We are engaging in those RFPs or one-on-one dialogues and we’re seeing a good traction in the market with that. And despite some of the uncertainty with — because of changing policies with the new US administration, et-cetera, we are actually quite optimistic of carrying the growth momentum into 2025 and being able to take — take advantage of the same. So I will kind of pause over there not to take-away too much time from the Q&A part. I’ll hand back to Rayo for — for the Q&A portion.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Mihir Manohar from Carnelian Asset Management. Please go-ahead.
Mihir Manohar
.Yeah, hi, thanks for giving the opportunity. Am I audible? Yes. Yes, go-ahead. Yeah, sure. Congratulations on the overall utilization going up and margin improvement happening over the entire year. Sir, largely wanted to understand on the GCC strategy, you rolled-out the GCC playbook. I mean what exactly are we going to do over here? I mean what services are —
Nitesh Bansal
Sorry, may, I can’t hear you anymore.
Operator
We seem to have lost the line for me. We’ll move to the next question. Next question is from Nikhil from Kirsuma Wealth. Please go-ahead.
Nikhil Poptani
Yeah, hi, sir. Thank you for giving me the opportunity and congratulations on great utilization numbers and margin improvement. Sir, my first question is like, can you give us a highlight on how the ACEP and TCV has grown both as a qualitative metric and a qualitative manner? And sir, now you are saying that pipeline is looking really good. So have we signed any large deals or we are still looking at the smaller deals coming in? And have we signed any new client in the ISV verticals?
Nitesh Bansal
I’m sorry, Nikhil, what was the third-part of your question? Have we signed any?
Nikhil Poptani
Any new client in ISV vertical or has — have we grown our wallet share in any kind of new client?
Nitesh Bansal
All right. So Nikhil, on a qualitative basis, our ACV and TCV have grown. If we look at it from a perspective of number of — number of deals that we signed during the year, which within the year or with the opening deal gave us over $0.5 million of revenue that has grown more than double-digit percentages. Actually, actually we’ve over 50% growth in those kind of deals. Our pipeline also is — while the pipeline is made-up of all kinds of deals because we are not saying no two small deals. So there are plenty of small deals, but the number of larger deals in the pipeline has certainly gone up.
And we have also seen that now we are — as our systems, we get invited to a lot more RFPs. If I just compare with, let’s say, two years ago, the number of RFPs we would respond to were in single-digits. Now we are responding to more than double-digit RFPs each quarter, right? So that has been a significant — which is I think a combined result of both improved positioning, working with hyperscalers and partners as well as the kind of kind of propositions we are taking to the market. In terms of client signings, yes, we have signed a number of new ISV customers. The ESG company example that we took is a platform company which has a ESG platform and they provide — so they are a data platform as a service kind of a company who provide ESG reportings services to their clients.
Similarly, we signed-up a health tech platform in the ISV space, which is specifically focused on behavioral health, behavioral health services and we are enhancing and modernizing their platform. So we have signed-up a significant number of ISV, new ISP clients, some of whom are actually greater than $1 billion companies, which also has been one of the focus areas to move our business towards larger client sizes to get more, you know, meaningful wallet share from them. So, yes, I think on all the three parameters, we’ve seen the leading indicators move-in a positive direction.
Nikhil Poptani
So yes, sir. That’s great to hear and very positive to you. Sir, second that we are focusing on the GCC trend that is catching-up. So sir, what — like how are we supposed to partner with the mid-sized clients over there? And what kind of services are we going to provide and what is like this — can you elaborate on that strategy over there on the GCC one?
Nitesh Bansal
Right. So — and I think was asking a similar question when his line dropped off. So if he’s back online, maybe this answers part of his question as well. So look, setting up centers for development is nothing new for us. We’ve always been working with product and platform companies doing their R&D and their extended product development. We set-up dedicated teams for them in an ODC format and those are dedicated teams. They work only for that client and continue to deliver on that platform for year-after year. GCC is a construct where certain clients believe that they can do more R&D work or they can put more of their IP into development in India Center if they had ownership of it, right?
So for us from an operational perspective, setting up a dedicated ODC, putting a team together, putting the right methodology, tools, delivery capabilities, putting up the delivery pipelines and all of those things in-place is nothing new. The only thing new is to work with the client on a — on the basis where potentially down the line, they may want to own a part of that center and Call-IT their own, right? And that is mostly a contractual construct where after a certain number of years, if they wanted, they could — they could take-away a part of that which is core to them, which gives them more confidence to put more work into India.
And for us, we believe that it is a win-win proposition because not only we participate in setting it up for them, we benefit from the scale of the operations. And even when they take-away, let’s say, are part of it, which is core to them, they continue to work with us because we are a scale partner for them. And if you look at the GCC trends in India, across the — 1,700 odd GCCs that exist already, you look at those that have grown successfully over the course of last five or seven years, you will find that they typically use anywhere between 25% to 45% of the total capacity as an extended capacity from partners, right? So being a part of that play, growing with them, doing more strategic work and continue to reap the benefits is the play for us.
From a services perspective, we are offering end-to-end services. When they want to own the company or own the setup that is core to them, we would enable their entity setup and hiring their key leaders, et-cetera, do an EOR for them, which is all paid services. We’ll obviously work with our partners for legal and other things behind us and be able to offer a one-stop solution for them?
Nikhil Poptani
Yes, sir. That’s great to hear. Now sir, how are we looking at the growth for CY ’25? Like are we looking at targeting for double-digit, high double-digit growth? Like how can you just provide a quantitative perspective to the growth?
Nitesh Bansal
So Nikhil, while you know historically and now also we haven’t provided guidance, but I’ve always maintained that our ambition is to is to hit market-leading growth. And with some of the tailwinds if they happen well within the beginning of the year, then we will certainly look at creating that kind of a growth trajectory. Right now, it may be too early to say because we are coming out of a lean year. We’ve seen the deal activity and we are very positive about it. But yeah, I mean, all efforts in-building up the company, the capability and are postering to the market is to target towards a market-leading growth of delivery for the year.
Nikhil Poptani
That’s great to hear. And sir, are we looking for any kind of acquisitions going-forward to enhance our growth?
Nitesh Bansal
So Nikhil, we have always been open to acquisition. It is a core part of the thesis that we will grow both organically as well as inorganically. Last year also, we have actively looked at several opportunities. We have our areas earmarked where we want to do inorganic acquisitions. If the — if the target is right with the right kind of valuation, we are absolutely geared up to do that. And we continue to be actively engaged in some of those conversations even now.
So yes, it is on the cards, but like you know, acquisition is like a — you know, it’s a — you look at many and then maybe one will happen. So, yeah, we are working towards it and when the right opportunity is there, we’ll certainly make a move.
Nikhil Poptani
So that’s great to you. And sir, how will this acquisition will be like funded?
Nitesh Bansal
So we have all the options of being able to fund it, thanks to being backed by a very large private-equity like Blackstone and being part of the Blackstone portfolio gives us immense amounts of access to both the ability to scout those acquisitions and value them right, but also in the — in terms of funding, right from using our own funds to borrowing to, you know, getting more capital infusion, all sorts of options are open. So we are not restricted by any.
Nikhil Poptani
Okay, sir, that’s great to hear. So I will join by the queue. Yes. Thank you, sir.
Nitesh Bansal
Thank you.
Mihir Manohar
Thank you. The next question is from Manoar from Asset Management. Please go-ahead. Yeah, hi, am I audible? Yes. Thanks for giving the opportunity. On this GCC side, I mean, are we seeing larger RFPs coming around this particular piece? And any meaningful conversations happening around that?
Nitesh Bansal
Yeah. Sumeer, yes, I mean this is — it’s an opportunity which is — which is kind of growing and we have ourselves seen a few RFPs in the space. Typically, the RFPs and GCC are clearly larger because they come with a — with also a certain commitment of number of years of engagement, et-cetera. So we’ve seen that. We are responding to a few and so they are in the works. And like I was mentioning to Nikhil earlier, I mean it’s doing the GCC setups is not new for us as we have done ODCs for a long-time.
And we have also done — I mean we talked about during the results, we talked about the one-time BOTC in 2023, etc. So we’ve done GCCs in the past as well. So we have a pedigree and a successful track-record of having done them in the past too.
Mihir Manohar
Two. Sure. How would be the realizations in margin for this business?
Nitesh Bansal
I’m sorry, how is the realization for margin for — for GCCs?
Mihir Manohar
Yes, yes. I mean, how was the realizations and margins for this frame of business for you?
Nitesh Bansal
So if I’m understanding your question, you’re saying is the margin — is there a different kind of a margin profile for GCC versus the others?
Mihir Manohar
Correct.
Nitesh Bansal
And the simple answer is, look, larger deals do come with slightly lower margins, which gets made-up with the upfront commitments, et-cetera, that they made. But we are not seeing total revenue from GCCs to suddenly become so big that it has a material margin impact on the overall company’s performance. But deal-by-deal, even otherwise, right, in our normal business, there are deals which get us much higher-margin than others, which don’t. But overall, we continue to look at our margin profile as a company as a whole and we’re quite confident that we can manage that.
Mihir Manohar
Sure. My second question was on this productivity benefits which are getting passed on in different companies. So are we facing similar kind of pressure from any high-tech client that we are having either Google or Microsoft or Amazon for that matter, you know, any thought to pass the to the benefits around that?
Nitesh Bansal
And so-far not and I think there is a clear distinction to be made because the productivity benefits and expectation of passing on productivity benefits largely exists in a managed services space where people are doing more support and maintenance work. Bulk of our work happens to be product dev and product R&D or re-platforming or modernization, which are all projects in nature. So they are usually contracted based on what it will take to deliver the project, whether you work on-time material or fixed-price, but you’re making that upfront assessment and putting up a cost for it, right? So there is no element of that productivity because year-on-year, you’re continuing to do the same work because we’re doing — we’re doing new development works.
Now having said that, we’ve — we mentioned earlier, we prepared our organization for using generative AI to bring in whatever tools we can to gain benefits or advantages of productivity where we can. Currently, you know, it’s nascent or in early stages and our customers are also not looking for it. But if it truly becomes pervasive and we see significant benefits, we might end-up sharing some of that with our clients. But in effect, it should still have a margin improvement impact on us because if we save something and pass part of it to the client, we still gain in terms of margins.
Mihir Manohar
Understood. Sure. So to put it, I mean, you are not facing the kind of pressure which you’re hearing managed services space?
Nitesh Bansal
No, not that kind of pressure clearly.
Mihir Manohar
Understood, sir. And my last question was on this, I mean, now it has been almost two five, six quarters post we had been a change in management and also the there. So any thoughts around
Nitesh Bansal
Mihir, Mihir your voice — sorry, I can’t — your voice got garbled. I couldn’t get out any word of it.
Mihir Manohar
It is audible now?
Nitesh Bansal
I can hear you. I can hear you, but if you just speak slightly slowly, maybe I’ll make out the words more.
Mihir Manohar
Sure, sure. So basically broadly, wanted to understand, it has been last six quarters, we have been trying to get the market-leading growth. I mean after the change in management and change in shareholding which has been there. Any broader thought that any fixes utilization has gone up pretty well, margins have gone up pretty well but when should we see the growth once again kicking back for us?
How should one pan-out? What — are there incremental fixes that are required from the company perspective, any capability, capability filling up or is it largely related to-market? And if you can throw some color around the top-10 client conversations, what kind of conversations are you having which potentially can indicate some growth for CY25, some directional color around that quantitative color that will be really helpful.
Nitesh Bansal
Thank you.. So I mean, short answer is, it is largely market-related because of our business is largely project-based and based on discretionary spend. And that is — that is a prime reason why we are so dependent on the market sentiment for being able to get that kind of growth. Last full-year, we’ve experienced some amount of churn, which happened in the market. We still managed to add enough number of clients and new logos to be able to make-up for the churn and still post a certain amount of growth into the system.
Also from a management perspective, wherever we’ve identified gaps or new capabilities that we need to build and add. We have continued to do that. So from that perspective, we haven’t left any glaring hole to be plugged as such. But we’ll continue to look — I mean new opportunities come by and we’ll continue to look at those and wherever we need, we’ll get additional capabilities wherever we need, we will — we will invest as per our plan also, we will invest more in the sales and marketing side to improve the number of you know, like the feet on-the-ground and number of people walking the corridors with the clients.
From a top-10 client perspective, well, we don’t look at it as top-10 alone because if you look at our exposure to top-10 clients is really not that big. We don’t have a client concentration, neither as a risk or as an advantage as such because the total contribution of top-10 clients is hardly 22% 23%. We look at top-50 clients where all of those clients are pretty much at a stage that any of them can grow or most of them can grow. And our discussions with them have been focused on how we increase the wallet share with them. Some of the 360 partnership discussions and relationships are developing towards those. So those have been some of the key discussions taking over some of their product portfolios.
Now that they’ve seen us work with us, they know our capabilities, maybe they can trust us with a lot more ownership. And those are the kind of discussions shaping up. And we — internally we are aiming at seeing how we can move many more of those clients to the two-plus and $5 plus million dollar categories so that we can build a deeper book of business with each of them.
Mihir Manohar
Sure, yeah. That’s it from my side. Thank you.
Operator
Thank you. Next question is from Deep Modi from Equirus Securities. Please go-ahead.
Deep Modi
Thanks for the opportunity. Congratulations on maintaining healthy margin. So most of questions already taken. So I need what would be the portion of outsourced product development for which our system is known for versus other offerings in our total revenue?
Nitesh Bansal
Sandeep, hey, thanks for joining in. And for our systems, we are really — you know, we specialize in doing platform builds and developments and specially SaaS platforms and vertical SaaS for companies. So when it comes to product development where we really excel, it is the products that get platformized have a component of cloud because they need scale and they are SaaS based, have an integrated data pipeline and data elements because again, it’s SaaS or vertical SaaS and requires — requires a real-life data analytics, et-cetera, integrated into it.
And increasingly what we are doing is where the products need and have the — have the capability to then integrating ML pipes into it. So that’s been our niche, but you know, most of the times, customers want to try us out for things first before getting on to that place. So it always is like a journey. But we are doing a lot more of these SaaS platforms as we talk and lot of them are AI first platforms that we’re working with.
Deep Modi
Okay. Okay, noted. And my last question is, are we seeing any addition in the clients from Blackstone channels?
Nitesh Bansal
So from Blackstone channel, the client addition has been a consistent thing. Every quarter, we add at least one or two clients from the channel. And by the end of Q4, we already have worked with, you know, we had about 11 active clients in Q3. Now we have about 14 active clients. We have totally worked with about 16 clients, two of which we did projects, one-off projects, etc.
So that number continues to increase and I think I had mentioned in the last earnings call as well. At any point of time, we have at least a dozen conversations, which are also going on. So our pipeline also remains active with a lot of those Blackstone portfolio companies.
Deep Modi
Okay. Thank you very much and all the best. Thank you.
Operator
Thank you. Thank you. Next question is from Sandeep Shah from Equirus Securities. Please go-ahead.
Sandeep Shah
Yeah. Thanks for the opportunity. Nitesh ji, I just wanted to understand if I have heard correctly, the Q4 growth has been impacted by close to 3% because of the furlough. So is it fair to assume most of these furloughs can recoup in the first-quarter of calendar year CY ’25 and there could be some additional ramp-ups. So the start of CY ’25 could be on a good growth momentum and if we maintain that achieving a double-digit at least in terms of the growth rate may not be a big task in CY25?
Nitesh Bansal
So Sandeep, first and foremost, let me correct the point that we have a 3% impact due to lower number of working days and not furloughs. Our furloughs impact is limited because we don’t have a very big US onsite. Most of our work happens offshore and with most of our clients since we are doing discretionary work, we have taken and we have got permissions to continue that. Our teams continue working. They don’t go on furloughs when they are on holidays in the US. So it’s not a furlough impact. It’s a lower number of working days compared to Q3. Q1 actually has the same number of working days as Q4. So Q1 calendar year ’25 has the same number of working days.
So it’s — so the volume growth will obviously continue or reflect, but it does not add anything because the number of working days doesn’t go up. Having said that, rest of the extrapolation, I’ll leave to you, because I’m just continuing to focus on making sure that all the — all the deals that we have participated in that those decisions come in quickly and then the clients gear up to start them quickly because, you know, while RFPs are a great leading indicator, but ultimately, revenue happens when the rubber hits the road when we have one and the customer has actually started the engagement.
And January has been busy with some of those and we’ll obviously look at the outcomes during the quarter.
Sandeep Shah
Okay. Just the follow-up in terms of growth in the top clients in Q4 has been really very strong. If you look at growth in large clients, two to three clients, four, two, five clients across buckets, we have hit more than double-digit. So what has led this and do you believe these are one-time projects or this may continue going-forward as well?
Nitesh Bansal
So you know, most of it is still discretionary spend, so this is project-based spend, which is true. But if you look at the nature of the business, because we are working on their product developments or you know, doing some of the data or AI-related work, they typically tend to continue because you know it goes from one feature set to another feature set to another feature set, unless it was just a one-off migration of your legacy platform to new platforms, so you can bucket the project into a limited time and just do it, deliver and move on.
So I think our — you know there is a bit of both in that, but we believe that the Q4 was a reflection of some of the decisions which were pending through Q2 and Q3 and I kept on giving the commentary that we are waiting for decisions. Some of those decisions came through, which has reflected in that. And we hope that if that is an indicative of their budgets opening up, then we should continue to see that in future as well.
Sandeep Shah
Okay. And just last, it is the — just wanted to understand your understanding of a demand shaping up in our verticals. If you can give some color in terms of how demand is shaping up across most of our verticals. And Nanji, is it fair to assume the 4th-quarter adjusted EBITDA margin can continue going-forward or you are saying the yearly 16.7% will continue going-forward. And one has to take effective tax-rate as 28% 27% for CY ’25-’26 or it can be higher because the amortization of the acquired subsidiary may continue in the coming years as well.
Nitesh Bansal
So let me quickly give the first part — let me quickly give the first part of the answer and then I’ll hand it over to Nanji. So from a vertical perspective, you know, even in the last year, we saw healthcare and services and manufacturing in some of those verticals give us the resilience or makeup for what we saw as, let’s say, a little bit of slowdown in the ISV or the tech and the telecom side. From a leading indicator perspective, we’re seeing tech opening up a bit, telco not yet.
Other verticals, including healthcare, banking as well as services, etc., continue to be promising. So I think the positive impact or what we are looking at is that tech should open up slightly more and that will give us good tailwinds. And if telco opens up and starts on a positive note, then of course, nothing like it. So I’ll pause there and let Sanjee answer the other part of the question.
Nand Sardana
Sure. So, Sandeep, on the EBITDA front, the yearly EBITDA before RSV is 16.7%, as ji and I have mentioned that you know, we are investing in sales and marketing and that is the primary aim to get into the growth momentum. So from a model perspective, you can assume around the same 16.7%. On the effective tax-rate, as I said that because of this video show amortization, it increases by 2% approximate. So — but from a — from a business point-of-view, I think 27.5% or 28 is the right as of now.
Sandeep Shah
Yeah. Okay. But sir, Nanji, if I look at the difference between full-year adjusted margin and Q4, the difference is as big as 110 bps. So is it fair to assume 16.7 is the worst-case kind of a margin which we can maintain and it could be slightly better because of the strong exit on the adjusted EBITDA in CY ’24?
Nand Sardana
I think 16.7%, as I said is the endeavor to maintain. Anything add would be a bonus.
Sandeep Shah
Okay, thanks and all the best. Thank you.
Operator
The next question is from Vijay Menon from Monarch Capital. Please go-ahead.
Vijay Menon
Hi, sir. Hi, hi. So I have a few questions. One, sir, so you said that in Q4, we had lower number of days and that impacted our volume growth by 3% to 4%. So in Q1, will we — will we that?
Nitesh Bansal
Sorry,, last part of your question was not clear to me.
Vijay Menon
Yeah. So basically I’m asking that in Q1 compared to Q4, will we have more days or you know, like is it going to be similar to Q4? Like just wanted to do that.
Nitesh Bansal
So it’s the same number of days Q1 and Q4, both have exactly the same number of days. So when you said in Q4, number of days impacted our volume growth, no, that’s not correct. We actually had volume growth, but it impacted the revenue because of two lesser number of days versus Q3. So, but Q1 has the same number of days, so we will not get any — any uplift of revenue of the same volumes, but whatever new volume growth we get is what will get reflected.
Vijay Menon
Okay, okay. And as I should — and the employees. So do we have any targets on what kind of employee addition are we looking at for CY ’25?
Nitesh Bansal
Yeah. So look, you know we are obviously — and we have seen positive addition or net employee growth in ’24, which is, you know, a certain number. We are looking at employee growth in ’25. We are already hiring quite a bit of people during the quarter. Again, giving guidance in one form or the other, it’s — it will kind of amount to the same thing. But you know, volume growth will be or rather our headcount growth will be in-line with the revenue growth. We’re not looking at building a huge bench.
So whatever revenue growth we are looking at, we will be adding more people. We are utilized to a level where we will have to hire and we continue to hire as we are adding revenue to — to the company. In the interest of time. In the interest of time, I’ll request that we restrict our question to one. We are extending the call by another 10-15 minutes, so we have to win the next 15 minutes.
Vijay Menon
Just two small questions, so that I’ll be. And sir, IT margins — IT services margins were 11.5% this time, which is higher than our 10% to 10.5%. So can we expect this momentum to continue or was there any one-offs there?
Nitesh Bansal
So this year’s 2024 reported margins do not have one-offs and like Nanjee answered in the previous question to Sandeep, from an annual exit perspective, we do expect and want to maintain margins at those levels. And we do not expect surprises to that. But Ranji, I do not know from a net margin perspective, you want to add anything to that?
Nand Sardana
Not? Not really actually — I mean there is a slightly INR2 crore of one-off, which we have taken below EBITDA, otherwise it’s business as you know.
Vijay Menon
Okay. And one last thing, sir, we had a $500 million targeted the next three to four years. So are we still in-line with that or are we adjusting that in any way because of the guided growth we see?
Nitesh Bansal
We’re not adjusting that because that has been — that has been sort of the goalpost that we’ve created for ourselves and we know that once we pick-up momentum, then we’re not limited by how much growth can we — can we accommodate. So what we are focused on is continuing to develop the momentum and continue to raise it as we go through the quarters. And then we will get to that and combination of organic, inorganic, you know, all levers put together, we’ll certainly try to you know, go towards our goal.
Vijay Menon
Okay. Thank you so much.
Operator
Thank you. Next question is from Nitesh from Cris Capital. Please go-ahead.
Nitish Rege
Hi, thank you for the opportunity. My question is on the revenue growth. So this year revenue growth has been a challenge. So in FY ’25 now this year, what kind of visibility do we have? You know, do you think we can do an early teens kind of dollar growth in FY ’25. Just as investors, what do we assume considering we only grew 3% industry terms in FY ’24? It would be helpful if you could just give a range or even an indication like early teens, mid-teens, high-teens if possible?
Nitesh Bansal
On you know, last year, we know the entire industry had seen the challenge and for almost the entire industry, some of the COVID-induced growth that came in previous years in ’22, ’21, etc., that got eroded. And for all midsized players, you know from our peer category, they saw oil and saw a challenge from that perspective. And in that environment, we have kept our head-down, worked on the core competencies, built the capability and capacity and the partnerships to be able to take advantage of as every opportunity that comes through and the market opens. We are obviously, like I talked about earlier through some of the questions, we are seeing those leading indicators.
We, you know, do not provide the guidance, so that’s where saying early teens, mid-teens, high-teens, et-cetera will again be a question of do we give a guidance. But we are absolutely our ambition is to is to be in the in the market-leading growth category with some amount of whatever help from the opening of the market and the sentiment improving. We believe we should — we should get there. We are working towards it and hopefully you know we will see — we will see some of the outcomes.
Nitish Rege
So when we see the market, how do you exactly define market? There are some companies which are growing 15% plus, there are some companies which are also doing around 5%. So what exactly do we — when we say market, what is our definition for this?
Nitesh Bansal
So when — when I say market, I’m looking at my client base market and not doing a peer group from a market perspective because you know, there are certain companies in our peer group, which are much larger than us and do a lot of outsourcing business, et-cetera, which is, you know, consolidation deals and those kind of things. For us, it is largely the verticals that we play in, which is the tech, Internet and platforms or ISVs, whichever name you want to call them, the telecom and media as well as healthcare, which are our primary verticals.
And that too mostly focused on their tech platform space. And that is — that is what we look at as our primary market and that to a lot of the US clients because US still remains the prime geography for us to target. So — and that is where we had seen a significant contraction of spend during the course of last 12 months or so, which we believe should open up, whatever early signs we’re seeing look promising and that’s where we are focused.
Nitish Rege
Okay. So just you’ve been in the system for now around 18 plus months and there’s been considerable amount of new hirings in the last 12 months. So where do you think where we can accelerate growth or how can you reduce the dependencies on our overall market?
Nitesh Bansal
Where we can accelerate growth is by being in tune with the market needs or market narratives because the market — market continues to shift, right? And last year we saw so much of a noise around AI and data and other things. What that clearly means is that — and when we look at our customer set and based on the conversations we are having, customers are no longer looking at, you know, adding small teams or doing those 1, 2, 5, 10 FTEs type of thing to just enhance a certain capability or add a few people because again in US also with all the layoffs that happened in the beginning of the year, the amount of talent availability has actually gone up. So those needs don’t come through.
What they are looking for is really differentiated capabilities and doing that platform there, being able to integrate AI pipelines, being able to work with cloud providers to actually create their SaaS platforms. And that’s where all the effort that we’ve put in-place to have those capabilities, to be in the Everest peak metrics or being identified as a top-10 AWS partner, et-cetera, are all the moves that are to enable exactly that kind of a shift. So we have — we have done our bet, we are being recognized, we are seeing that. And that is what we believe should give us — give us the leg-up to be able to grow in that space.
Nitish Rege
Okay. And just what is the status of M&A? There have been a number of deals in this space in the last two years and it’s very surprising that we haven’t been able to close even one deal after our acquisition.
Nitesh Bansal
Yeah. So Nitesh, this is you know we can’t — we can’t be caught in a, right? I mean, acquisitions is obviously, if you get it right, it’s great. When you get it wrong, it does erode a lot of value for the company. So being very, very cautious and making sure that we’re doing the right due-diligence before we take that step is very important. We are obviously significantly, you know, helped by Blackstone as well in doing those evaluations and assessing the right opportunities and right valuations.
So it’s not really a question of we haven’t been able to do one. You know, we’re confident if you know we like an asset enough and for the right value, we will not stop, we’ll not be shy of making an acquisition. But you know it will happen whenever we have the right asset?
Nitish Rege
So just because the Blackstone team is not on the call, if you can just provide some insight into what is your thought process when they look at M&A for us?
Nitesh Bansal
But I mean more than more than Blackstone’s thought process. I mean we have — we have a very clear thesis. We stay true to our swing lane of being a product engineering platform engineering and digital services provider. So we continue to look for the right kind of opportunities in that space, especially if they — if there are companies that come with a certain kind of niche, which adds or complements our capability and we obviously are looking for growth accretive and margin-accretive companies so that we don’t erode any shareholder value with the acquisition that we made.
And then there are, of course, you know deal-by-deal, those parameters may — you know, not every parameter stacks up, so they may be they may be slightly here or there and those are all part of the end due-diligence that we do together with Blackstone.
Nitish Rege
Okay, okay. So I believe that at some point of time, you’ll have to start giving some organic growth, right, like investors and management teams are currently in different silos and we assume growth. So do you think in the future, you’d be looking at guiding on organic growth?
Nitesh Bansal
So giving organic growth, absolutely, yes, that’s what we are here for and that’s what we’re working towards. Providing guidance for organic growth is something you know, we haven’t done so-far and we — we still do not believe we are kind of ready for that, but this is something that we’ll take on-board and we’ll continue to, you know, assess if we have the A, the confidence to and B, we feel that it is really necessary to provide guidance, then maybe we will look at it. So-far, at least our understanding or our internal resolution has been that we’re not providing guidance.
We are providing as much transparency as we can and we have also entertained a lot of one-on-one discussions where we do provide a answers to a lot more questions. Throughout the last year also, we’ve met investors and has been quite open to providing data whenever somebody is creating models, etc. So we’re doing our bit to provide every — every bit of confidence we can. And do let us know if you’re looking for any additional inputs or information we can engage. But we are not — we’re not providing guidance yet.
Nitish Rege
And not even on the guidance side, but if you could just start sharing the ACVA, which is shared by other customer companies and that would really be helpful for us when the company.
Nitesh Bansal
So we’ll take that on-board.
Nitish Rege
And just one last question is, just wanted to understand on the tax-rate side, why is there so much volatility in the tax-rate?
Nitesh Bansal
Pass back to Manji, that’s his area of —
Nand Sardana
Yeah. So there is not such volatility in the sense, if you see that as I explained that our effective tax-rate is 27% to 28%, since we are providing and amortizing the Valotio non-compete and client acquisition, which is close to INR6 crores per quarter, that kind of adds another 2%. But once the merger and all that happens, more clarity will come. But I think from a model perspective, as I mentioned to the others at the time also, it’s 27% to 28% is our effective tax-rate.
Thank you so much. That’s all from my side. So this will be the last — I think maybe the last question, I think whosever is there, we will just — and then we have to close it. It’s too late for Mr Nit already I think past midnight in Dallas.
Operator
Yeah, last question please. Sure. We’ll take the last question from Omkar Sawan from Investment Managers. Please go-ahead.
Omkar Sawant
Yeah. Hi, Nitesh. In terms of the key trends that you said were shaping up in 2025, another theme which is going on is the vendor consolidation, right, the consolidation deals. And looking at our client concentration, it also doesn’t seem that we have any scaled relationships. So how do we ensure that we aren’t caught on the wrong side of vendor consolidation in general?
Nitesh Bansal
Omkar. Thanks for the question. So like I’ve mentioned earlier, there is the nature of work that we do is platform product development being part of an R&D team. So if we look at you know what happens in vendor consolidation deals and what kind of deals typically get consolidated are either BPO or managed services, which are mostly business-as-usual type of services, run and maintain applications or infrastructure. Those are the most common type of vendor consolidation deals because there is no or limited new development involved. There is no IP involved and most of the work is already second-gen or third-gen. So the processes have been set.
The whole idea is that earlier five people or five companies were doing this work, now one company is ready to do it and offer me more discounts. So the second, third, fourth generation deals which usually are highly margin-dilutive coming with consolidation and they happen. While we don’t have a client concentration risk of — and the clients are not that big, but we are still slightly, or I would say, largely shielded from a vendor consolidation risk because of the nature of work.
Once our teams have engaged on somebody’s product dev and we’ve learned the company’s product architecture, we’re working with their teams in developing their product and being part of the roadmap, chances that somebody can just come and replace us is difficult, right? I won’t — I never — you know, never would say no, but it would require significant amount of effort, investment, transition, transition of knowledge, etc. And it could be disruptive for the clients as well.
Omkar Sawant
Okay. And we were also getting into the product sustenance part of it, right? How is that evolved?
Nitesh Bansal
So that dialogue is shaping up when I talked about doing 360 degree relations with our clients and somebody else had asked the question about the nature of conversation with top-10 or top-20 clients. In most cases, our push is towards, you know, deepening the relationship by taking ownership of some of the products. Typically, how that starts and wherever we’ve seen success in a few cases is clients want to hand over their end-of-life products or products where they have stopped, while they’re not end-of-life, but they have stopped doing any fresh feature releases, et-cetera, to put them in sustenance mode and hand them over to us to provide that kind of services.
And so those discussions are progressing well, being received well by the clients. As our number of case examples are developing in this space, we are seeing — we are seeing better reception and outcomes.
Nand Sardana
Okay. Thank you, sir. So considering that there are few more questions, we will host another call and we’ll intimate accordingly. But in the meantime, feel free-to write to me for any specific queries and we will be happy to answer those queries. I think we can close the call.
Operator
Sure. Thank you very much. On behalf of our Systems International, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.
Nitesh Bansal
Thank you.
Nand Sardana
Thank you.