ROUTE MOBILE LTD (NSE: ROUTE) Q1 2026 Earnings Call dated Jul. 18, 2025
Corporate Participants:
Unidentified Speaker
Rajdipkumar Gupta — Chief Executive Officer
Vinay Binyala — Chief Strategy Officer
Rajeshwar Singh Gill — Chief Financial Officer
Analysts:
Unidentified Participant
Jyoti Singh — Analyst
Nikhil Chowdhury — Analyst
Nihar Mehta — Analyst
Pritesh — Analyst
Siddharth — Analyst
Dipesh Mehta — Analyst
Kaustav Babna — Analyst
Jaishree Bajaj — Analyst
Presentation:
operator
Good evening ladies and gentlemen. I am Alaric, your moderator for this conference. Welcome to the conference call of Root Mobile Limited arranged by Concept Investor Relations to discuss its Q1FY26 results. We have with us today Mr. Rajdeep Kumar Gupta, the Managing Director and Chief Executive Officer, Mr. Vinay Binyala, the Chief Strategy Officer and Investor relations officer and Mr. Raj Gill, the Group Chief Financial Officer. At this moment all participant lines are in listen only mode. Later we will conduct a question and answer session at that time. If you have a question, please press star and one on your telephone keypad.
Before we begin, I would like to remind you that some of the statements made in today’s earnings call may be forward looking in nature and may involve certain risks and uncertainties. Kindly refer to slide number two, the presentation for the detailed disclaimer. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajdeep Kumar Gupta, the Managing Director and Chief Executive Officer. Thank you. And over to you sir.
Rajdipkumar Gupta — Chief Executive Officer
Thank you. Good evening everyone and thank you for joining us today. I’m honored to be speaking with you once again. As the CEO of Root Mobile Limited it is a privilege to step back into the role at such a pivotal moment in our journey. I want to take a moment to thank our outgoing CEO Gautam Madalia for his leadership and contribution as I return to lead the company in the capacity of CEO. My focus is to enhance the core strength of the company and and drive the next phase of our growth story. While we face headwinds in the past quarter, particularly in revenue growth, I’m encouraged by the significant improvement we delivered in both gross profit margin and EBITDA margin by focusing more on profitability than volume.
Looking ahead, my priorities are clear. We will double down on our core business and serve our customer with even greater. Our primary focus will revenue diversification through expansion of our global footprint for our non SMS product portfolio such as WhatsApp and RCS voice solution along with AI driven firewall solution for MNO. We will also drive business expansion through cross sell initiative across Proxima Global. We have identified immediate area of actions which will walk you through over the course of today’s discussion. We will put more efforts in our product innovation pipeline to create differentiated solutions and stay ahead of market demands.
Further, we will sharpen our market focus to drive sustainable growth in targeted segments ensuring every initiative is aligned with delivering superior performance and shareholder value. I’m excited for what’s ahead and deeply committed to ensuring our company to emerge stronger, more agile and more innovative. With the support of our talented team and trust of our investors, I am confident we will continue to drive profitable growth and long term value. Thank you for your ongoing support. I look forward to partnering with all of you on this journey. I will now hand over this call to Vinay to run through the entire key business highlights of the past quarter and Raj to provide an overview of the financial performance.
Over to you Vinay.
Vinay Binyala — Chief Strategy Officer
Thank you Ralvi. Good evening everyone and hope all of you are doing fine. We have uploaded our quarterly earnings presentation. Hope you have had a chance to go through the same Let me start by talking about what shaped our first quarter performance. We are really seeing some significant ongoing changes across the broader CPAT industry landscape. There’s been a structural shift in certain parts of the market, particularly around how enterprises evaluate messaging channels, pricing models and delivery quality. Against this backdrop, our performance reflects both the impact of these changing dynamics and some deliberate choices we’ve made to prioritize quality of business over volume.
Now we are operating in what I would call a dynamic and rapidly evolving landscape, one that presents challenges but also opens up new opportunities for businesses like ours. The ongoing softness in a 2B SMS segment combined with shifting customer preferences has created a unique business environment. As part of our margin focused approach, we have actually consciously stepped back from certain low percentage gross profit margin opportunities in the ABC SMS business. These opportunities were not essentially aligning with our long term view of profitable growth. This recalibration, along with regional factors in a few markets contributed to a decline in our top line this quarter.
But here’s what I’m really pleased to report. Despite these revenue headwinds, our gross profit margin performance has actually improved. This really underscores our commitment to sustainable quality led growth and maintaining a strong focus on our profitability. Now, while we witnessed certain challenges around the A2P SMS, we have leveraged our omni channel capabilities to unlock business opportunities by supporting enterprises requirements across other digital communication channels which include WhatsApp, business messaging, RCS email and voice. We have onboarded several large MyKey customers through our omnichannel platform over the past quarter and are actively expanding our pipeline for these solutions.
Let me talk about our partnership model for a moment. We are actively engaging with global system integrators to accelerate our go to market approach. We are deeply integrating our only channel platform with such global system integrators to reduce the time to market for these solutions. For instance, we recently completed the integration of our RCS platform with one of the largest players across the globe. On the product innovation front, we continue to focus on enhancements to our existing platform. We have for instance we’ve integrated WhatsApp voice capabilities into our platform which enables us to cater to an expanded set of use cases for our enterprise customers.
And then there’s our firewall solutions. We recently onboarded one of the largest mobile network operators in Latin America and we will be deploying our AI powered firewall and spam protection solutions across various countries where this operator has presence. We have also witnessed green shoots of cross sell opportunities where the Proxima’s global group companies have started creating sales pipeline for root mobile omnichannel communication solutions and this is currently more towards the APAC market. Certain regions within the APAC market we are also leveraging the extensive reach of Pix, which is a part of the Proximus Global Group to strengthen our relationship with telecom operators across the globe.
We are approaching several global operators to expand the sales footprint of our firewall solutions and map solutions. Finally, let me touch upon something that’s really exciting for us. We are shaping our approach to the telecom API opportunity by participating actively in the broader API ecosystem. We are looking to create new revenue streams for digital service delivery. This will also help future proof our business for opportunities ahead. Now let me walk you through some key numbers and really tell the story of our performance last quarter. During the quarter we processed 39.3 billion billable transactions which is actually similar to the volumes we processed in the first quarter last year and marginally higher than what we saw last quarter.
The average realization per transaction was 27 paise and this was largely influenced by a shift in our traffic composition, particularly a higher share of domestic messaging in India. India continues to be the largest market by termination and contributes 46% of our total overall revenue. We have maintained a stable trajectory across our next generation product portfolio and we are continuing to support enterprise use cases across these channels. We have witnessed growth of 11.4% year on year. In this segment. We have onboarded several marquee enterprises with evolved customer engagement use cases that we support through the IP based messaging solutions.
On the strategic side we we continue to deepen our analytics based firewall solutions integrated with telecom operators globally. On the people front, we added 26 new employees during the quarter and saw 63 exits. Operationally we maintained continuity and execution strength across our delivery teams even as we continued internal efforts to improve processes, automate workflows and strengthen alignment across functions. We are actively evaluating deployment of AI solutions to automate several processes and enhance efficiency overall, while Q1 reflects the combined effect of industry shifts and our internal choices, the core of our business remains strong with the right capabilities, partnerships and relationships in place.
We remain committed to disciplined execution and strategic focus as we move forward, while our primary focus is on revising top line growth and hence drive higher gross profits. With that, I will now hand it over to Raj to take you through the financials in more detail. Over to you guys.
Rajeshwar Singh Gill — Chief Financial Officer
Thank you Vinay and good evening everybody. I’ll summarize our financial and operating performance during the quarter ending June 25th before opening the call to Q and A. While our year on year performance was impacted by industry dynamics, our sequential quarterly results are encouraging as we delivered good gross margin expansion. Our Q1 revenue from operations was 10,508 million INR which is a reduction of 4.8% year on year. This is largely due to the structural SMS market volume impacts in parts of our business. This is partially offset by continued growth in routing synergies and non SMS products.
Gross profit in Q1 is 2,251,000,000 INR which is in line with the previous quarter. Gross Profit margin is 21.4% which is sequentially higher than the 19.3% delivered in the previous quarter but marginally down 0.3% year on year. The upward trend on margins reflects our focus on customer mix and new higher margin customers. Operating costs year on year after adjusting for FX impact and non core items is constrained to only 4% growth. Salary increments and one off trade receivable write offs are offset by non recurrence of prior year incentives. Adjusted EBITDA for Q1 decreased by 16.3% year on year to 1.154 million 3.9% versus the previous quarter.
The year on year decline is primarily due to the revenue impacts described earlier. This all contributes to an adjusted EBITDA margin of 11% which again is sequentially higher than the 10.2% seen in the previous quarter. Profit after adjusting for exceptional items and FX was 835 million INR which is down 10.3% year on year mainly due to the flow through of the impacts of impacting reported ebitda. With that I will now hand over to the Q and A section.
Questions and Answers:
operator
Thank you sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. If you wish to remove yourself from the question queue, please press star and 2. Participants are requested to use handsets while asking a question Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Jyoti Singh from arihant Capital Markets Ltd. Please go ahead.
Jyoti Singh
Yeah, thank you for the opportunity. Just wanted to ask few questions that what are the reasons for the higher Aadhaar expenses and the increase in the tax rate and about Proxima synergy, like you mentioned during the management commentary that it is playing out well. So just wanted deep down on that side and another when we can expect good growth and better margin expansion in the future. And also if you can provide some color on the messaging volume side which is a continuous decline till earlier quarter and then I will ask more questions.
Rajeshwar Singh Gill
Should I say the one or other expenses? Yeah, so other expenses was mainly driven by some large foreign exchange losses on remeasurements. So again non cash items primarily from our UK entity. And from a tax perspective, the slightly higher tax rate is a function of our kind of different profit geographies and some good profit generated in some of the domestic markets which impact the effective tax rate.
Vinay Binyala
Sure. So Jyoti, touching on the question regarding synergies. So as we mentioned in the opening comments, we have seen some initial traction around synergies. On the sales synergies we’ve always had the cost, as we refer to as the cost of goods sold synergies which we have realized within the group. So that has been active for over a year now. But on the sales synergies we are recently seeing traction especially in the Asian market. In certain countries within the market we are seeing one of the group companies within the proximity global ecosystem which is able to create a reasonable pipeline for the omnichannel solutions that Strute Mobile offers.
So in terms of monetization we may see some of these opportunities starting to contribute in terms of revenue. But these are interesting green shoots where we are seeing success of what we had initially planned as part of the acquisition. Besides that, on the other front, on the telecom operator side, we have certain areas where we are collaborating with bix which is again part of the proximal global group and we are leveraging. So BIX is one of the largest voice operators globally and they have very deep relationships with telecom operators across the globe. So the objective there is for our firewall solutions we are leveraging the reach that BIC has and it is supporting our sales team in creating opportunities for the firewall solutions that 365 square part of root Mobile offers.
Further, what we are also doing is there are some innovative solutions which are being developed and offered to operators. For example, the MAP system which is supporting RCS messaging. So once again we are leveraging pixreach to reach out to operators and deploy these kind of solutions for them. So these are some of the areas where we are working closely within the group to unlock opportunities and hopefully we should see revenue momentum coming out of these opportunities in the near term. I think the next question you had was around growth and margin expansion. So unfortunately in terms of revenue growth, in terms of revenue, we witnessed a little bit of decline in the last quarter which was primarily due to certain customer situations which we experienced.
However, we were able to sustain or rather improve the gross profit margin that we were making on the business. This was essentially because some of the business that we lost was not really the highest gross profit margin business for us. So in that sense the mix changed within the business and we experienced direct, sorry, gross profit margin expansion. You had a question on volume decline. Can you please repeat that? I don’t think I got that very clearly.
Jyoti Singh
On the messaging volume which was earlier quarter, it was declining. So what’s the situation now
Vinay Binyala
on the volumes? I think we are flat. We are at slightly higher level than last quarter and we are at the level where we were last year. So I think in terms of volume. We are not seeing a hit. The issue we are experiencing is that some of the international volumes have been impacted which has been replaced by domestic volumes. So the pricing average pricing has moved which has resulted in the revenue decline. So we don’t really have a significant issue on the volume side. The challenge rather is in terms of the realization and the revenue.
Jyoti Singh
Okay, and one last question sir. Like it mentioned in the PPT that this time 26 new employees had joined compared to 63 employees left. So just want your commentary on that side by so much, you know, a higher number of employee leaving comparatively joining. So is there the synergy which is not playing out very well with the proximals and what is the issue exactly?
Vinay Binyala
No, rather you know, this is acquisitions that Root Mobile had affected over the past several years. So you know, we have been rationalizing some of the teams across the companies that we have acquired and we have identified roles or responsibilities which can be centralized within India or any other region where we have operational presence. So you know, for example, finance and accounting can be supported from one region and we have done some rationalization on that front. But you know, there were certain businesses which did not deliver the level of performance that was expected. And you know, so basically, but what we would like to Assert is, you know the team which we have today, as we also mentioned in the commentary, is able to support all the business processes and is driving the business at the scale and level that we are expecting it to drive.
So we are not experiencing any challenges in terms of business continuity or operations. It’s more of rationalization or natural attrition that we are facing.
Jyoti Singh
Okay, thank you sir, I’ll meet you.
operator
Thank you. The next question comes from the line of Nikhil Chowdhury from Nuvama. Please go ahead.
Nikhil Chowdhury
Yeah, thanks for the opportunity. My first question is on revenue decline. In your presentation you have mentioned that you lost one large digital native enterprises which started directly sourcing from MNO because we haven’t seen client directly partnering with MNO in past especially the large client. Is it a new trend which is starting and can you quantify the impact in this quarter?
Rajdipkumar Gupta
So hi Nikhil, I can see this a customer which we’re talking about has it now new trend. They would love to. There are few customers like they love to work with the operator. Not everyone one of them and I think the reason they wanted to move to operator directly because they have a new ecosystem within their company which believes that having direct partnership with operators where they’re not just talking about SMS as one option with operator, they’re talking about data, they’re talking about other what do you call services of operator to be used as a bundle deal with them.
So I think also SMS is a part of the entire bundle deal when they go to the operator. So I think they want to just get more leverage on their relationship with the operator so that they can buy and sell more product offering with this operator. So that’s a new trend but it’s not with almost all the customers, it’s one of two customers only.
Nikhil Chowdhury
I mean let’s say one large customer can do it. What stops other customer from following the same channel? I mean it will impact our business model.
Rajdipkumar Gupta
No, not at all. I think we need to also understand Nikhil when I think I have already mentioned this in past when when there’s a large customer who’s using our platform for routable they’re not using for one destination. Right? And they use for 30 destination for various reasons and plus they don’t want to go and do a tire with all the operators globally to get into those legal framework understand the legal regularity issues over there. So I think most of the customer they prefer to work with aggregator and that is a trend and I think this one customer who has definitely changed their mindset because of that multiple services they which they are using from the operator right now.
But there’s no trend from any other such customers.
Nikhil Chowdhury
We have seen similar things happening with our peers. What we understood is there is some level of compensation or referral decade, right. When there is a transfer of first large customer to telecom operator. Did we get a certain amount for this transaction? Any benefit or is, I mean.
Rajdipkumar Gupta
Yes, yes, no, there is a benefit because our firewall, suppose our firewall is there with an operator and that particular customer moved to say operator directly, indirectly. We also make margin because of our firewall place within that operator and there is a revenue share understanding we already have with operators. So we will definitely get little higher DM direct margin with that customer indirectly.
Nikhil Chowdhury
Got it. And can you quantify the impact both on revenue as well as margin from this customized changing structure of contract?
Rajdipkumar Gupta
If you want to quantify that, yes.
Vinay Binyala
Sorry Nikhil. So we don’t want to call out specific customer level information. So that’d be difficult to share publicly because it becomes a new competitive intelligence. So we want to refrain from sharing customer specific details.
Nikhil Chowdhury
Got it. The last one is on new product revenue. New product growth had been simply coming down. It reached a low double digit now, one of the lowest since COVID I mean what’s happening? It actually declined Q and Q this quarter. So what’s the pipeline and what’s the outlook in that particular segment?
Vinay Binyala
So Nikhil, that’s a fair question. Now the thing to Understand there is WhatsApp is a significant component of the new product revenue segment and WhatsApp, a lot of that business we do within India. Now WhatsApp has revised their pricing for the market which also results in us revising the selling price to remain competitive. So on the volume front we have definitely seen growth but on the pricing front there’s been dilution of almost 12, 13% on the pricing. So that is where despite volume growth, you will not see commensurate revenue growth. But once the pricing stabilizes, we will again see higher percentage revenue growth as well on that segment of the business.
Nikhil Chowdhury
Yeah, I understand Vinay, but I think the pricing revised division happened about 2, 3/4 back if I’m not wrong. So what justified decline on Q basis? Why it is not picking up up when the volume is improving.
Vinay Binyala
So you know there’s a little bit of timing effect as to when we need to pass on the changes to the customers. So we have been kind of managing the pricing and gradually passing on the benefit to the clients and that is where you know, to stay competitive and retain the business. We had to take that hit in this quarter.
Nikhil Chowdhury
Last one gazit just on yearly guidance. I mean we started with a relatively weak note. Can you give us some color about the growth in the net margin in FY26? Thank you.
Rajdipkumar Gupta
So Nikhil, I think we are not sharing any guidance if you see even last quarter But I think one thing I can assure you about me coming back as a CEO of Route Mobile and I think there are three areas which I really want to focus now is one is growth cost optimization and the synergies. So I think we definitely have these three stories which I’m leading now myself and I want to make sure there is a definitely a synergy between Proxima Global and Rotobile to create more value at Rotobile cost. Synergies definitely. Yes because we are a platform play company and we really need to understand how many people plus the AI implementation within the our ecosystem needs to be done and growth is something which I’m working on with a special focus on the new logos and new customer especially on telco product and rcs.
So I think these three things I can assure to you all but in terms of guidance probably I might not give the guidance.
Nikhil Chowdhury
Got it. Thanks a lot for taking my question and congratulations and better luck for your new journey.
Vinay Binyala
Thanks. Thanks.
operator
Thank you. The next question comes from the line of Nihar Mehta from B Capital. Please go ahead.
Nihar Mehta
Hi, I just wanted one question on the slide on customer cohort. Right. The tofu, the top of the funnel of large deal size 15 million and 10 million there has been a significant decline from 8 customers to 5 and from 9 to 7. So is there a specific churn that has happened there or what are the causes of such a decline?
Vinay Binyala
Sure. So one of the largest customers is as we mentioned one of the digital native customers which we had where they are going direct to the operator and unfortunately we lost that revenue so it’s become a significantly smaller customer now another one was one of the large financial services client that we had in India where we had repricing.
So this is typically done through a bid process and in terms of the competitive landscape the pricing was revised and accordingly our revenues were impacted because of the revised pricing. These are two large ones that we had and other than this there were certain aggregators where we had a revenue decline. So you know Mr. Messaging, which is one of our portfolio companies, caters largely to aggregators and some of those aggregators are contributing significant revenue and their revenues got impacted with their end customers probably transiting lower volumes to those aggregators. So these are primarily the reasons.
The one which is difficult to recover is the large digital native which has gone direct. But on the others, you know, we have, we have an opportunity. I mean it’s a difficult market but we can create opportunities where we can have a plan to create a recovery plan around that lost revenue and gross profit margin.
Nihar Mehta
Okay, understood. Thank you.
operator
Thank you. The next question comes from the line of Pritesh from Lucky Investments. Please go ahead.
Pritesh
I didn’t understand one comment of yours about the GP improvement with the. With giving away certain, certain business which were low margin. You know, when you see your EBITDA on a yoy basis, GP number, the GP has declined more than the volume. More than the volume decline. So I was wondering, how should I understand this?
Vinay Binyala
Are you referring to message volume or the revenue as volume? Sorry.
Pritesh
So you guys are given a billable volume number. Correct. And relevant volume are.
Vinay Binyala
Yeah, sorry, go ahead. Yeah. So basically the way to look at it is the billable volume does not directly translate into revenue or GP because the volume in every country comes at a different selling price and the cost price in every region and country will be different. So the mix of the volume which country is contributing, how much volume will drive the revenue and how much margin or you know, how much markup we are able to do in that specific country. And that volume will define the gp. So directly linking the volume growth to gp.
Pritesh
There has been a significant change in the volume.
Vinay Binyala
Sir, your voice is not very clear. Can you just make it loud and clear please?
Pritesh
I said for, for the answer that you posted. Yeah, you can hear me now?
Vinay Binyala
Yes, if you can talk slow, if you can talk little slower, it will be good for us. Okay.
Pritesh
Yeah, I think this must be better. Yeah.
operator
Pradesh, please go ahead with your question and unmute yourself in case if you’re on mute.
Pritesh
Hello, can you hear me?
operator
Yes, yes, please go ahead.
Pritesh
So I’m just so in this interpretation of yours, which means there has to be.
operator
Sorry to interrupt. Pritish, you’re breaking up again. Please, you know, relocate yourself to place where you’d get better cellular network and use your handset mode in case if you are using the speaker mode. Thank you. Okay, please go ahead with your question.
Pritesh
Then in this answer that you posted then there has to be a significant shift in the volume mix between quarter one and quarter to country volume. Is that the case
Vinay Binyala
within country it’s a little bit more complicated because within the country also there are two price points. Most of you know, some of the countries Like India, we have a different price point for international. Different
Pritesh
why I’m highlighting there’s a plus 5% YoY volume growth but there’s a minus 10% GP in absolute terms. So I am posting the question from the time
Vinay Binyala
you’re seeing biowai, right? Biowai.
One big impact is the digital native client which was an international client. Plus we had, plus we also had a contract which we signed with Vodafone idea in India where we had a discounted pricing which was not available. So we went live only in July, around August and that is where we got the benefit in FY25 which was not there in the previous year. So last if you compare YM Y we do not have the Vodafone idea benefit in that quarter. So that again contributed to the direct margin expansion. Okay.
operator
Does that answer your question? Pritesh?
Pritesh
Yeah. Thank you.
operator
Thank you. A reminder to all participants, please press star and one to ask a question. The next question comes from the line of Siddharth from Vitae Mani. Please go ahead.
Siddharth
Hello, good evening. Thanks a lot for the opportunity. So my thing would be, you know, as you stressed and highlighted on multiple, you know, previous con calls that I’ve been a part of is that the global C industry is going through a downturn and you know, when industry was doing well, you are the one who was, you know, outperforming and since the broad industry is not doing that well, you’ve been not able to be been that competent. So just want to understand, you know, how the industry would play around going forward and how the trajectory would be for route mobile and a potential rebound or you know, could just give us, you know, some awareness and it.
Rajdipkumar Gupta
Yeah, I think it’s a good question Siddharth. Let me just talk about root mobile and probably I will not talk about the competition about the industry as a proximus global. If you see the kind of combination we have between Tennessee and Root Ovile and Bix and we definitely talk about new product line platform play as a company where we’re talking about RCS as a one solution along with the MAP server, we’re talking about the Oak omnichannel solution along with firewall solution. I think probably we are now going reaching out to multiple customer operators where we are not looking at this enterprise as one segment for our growth.
We’re definitely looking out telecom operator also as a growth area for us.
Siddharth
Okay, and that works for you or if you’re not fine sharing, can you give us an, you know, outlook of how it could be Going forward.
Rajdipkumar Gupta
Vinay has already mentioned there was a large firewall deal we won in Latin America I think and probably there are many more discussions we are having with multiple operators towards RCS and MAP servers. So these deals are going to be finalized in coming quarters and you will see the impact of these in terms of our revenue and margin as well.
Siddharth
Okay. Okay. And I’ll just end my convoy for the follow up of two questions. So the last quarter you mentioned that you know the 365 squared has rolled out and you know it is, it is expected to do well you know, since it has a lot of synergy from proximal global set of customers. Just want to understand how it is going and how you know, could be going forward and the revenue contribution.
Rajdipkumar Gupta
So this, this firewall deal which we have won is a combination of BICs and 365 squared. So it’s a relationship of BICs which has helped us to win this contract. And I think365 is doing fantastically with the great pipeline they have right now. And I think they’re also closing some large accounts very soon.
Siddharth
Okay, okay. And what is the percentage of revenue that potentially contributes the top line of price.
Rajdipkumar Gupta
That. Do we have that number right now?
Siddharth
We have not disclosed in the past in public domain. But just, but just hold on.
Unidentified Speaker
I think we would still not prefer not to disclose but as I mentioned there are certain large contracts which we are going to, we’ve already won and there are certain pipeline which we have will definitely contribute in overall growth of Root mobile. So that’s what I can share with you right now.
Siddharth
Okay. Okay. And I’ll end my question with the last question that I have. So the recent management changes is something that I have a query on where we want to understand how the you know person who has currently released how has routes management performed on an overall under his governance and how the more recent changes in the corporate, you know, management could, you know signal future of the route mobile as a thing.
Rajdipkumar Gupta
Siddharth, I think I’m back as a CEO and I think I know this ecosystem from last 21 years and Gautam has done fantastic job in last 7 years with Root mobile in various role and I think whatever he has delivered as a individual capacity is fantastic for the group and I think I’m very thankful to Gautam and what his role and responsibility which he has delivered in last seven years with us. As far as the new management is concerned, I think the new management is very much capable, smart and they all have a simple approach of growth.
And they believe that the company which we have as a route mobile has a huge potential in the current scenario where the markets there is a headwind. But in spite of this headwinds we believe that the kind of product line which we have, we will definitely emerge as a winner. But it may take some time because it may take some time but definitely we have a vision to achieve new heights.
Siddharth
Okay. Okay, thank you.
operator
Thank you. The next question comes from the line of Dipesh Mehta from MK Global Financial Services. Please go ahead.
Dipesh Mehta
Yeah, thanks for the opportunity. A couple of questions. First about the ILD business in some sense how ILB business is playing out. It remains weak but if you can give some more details around it on IND business. Second question is about sequential. Are we confident sequential revenue growth returning in the business? Because now we are in yoy down. So just to get sense about some of the factors admin, which you said from sequential perspective, I think some of the factors unlikely to have any incremental headwinds, particularly with the large account where you said it is moving to direct to telco.
So unlikely to have incremental impact. If you can give some sense on sequential growth preparation. Third question is about case generation. If you can give some sense about operating case flow or operating case generated during the quarter.
Rajdipkumar Gupta
On ild, I’ll start off and then Rajdee, please add in. So ild, as we discussed there was one key customer where we were impacted. But other than that we’ve not seen real challenges with the other large ILD customers that we have. We’ve onboarded a few new clients as well where we are seeing revenue trickling in now. But these are large clients who can contribute significant volumes moving forward. So although there has been an impact in the last quarter, we believe it’s not like it’s end of the story, but we need to replace it with other customers who still are sending communication into the Indian market through traditional channels.
And also we are opening up the other channels as well for some of these clients. So although we’ve had impact on certain select customers, there is still potential and we are tapping into new customers to cover up those gaps. Rajiv, you want to add to that?
Unidentified Speaker
No, I think it’s well covered.
Rajdipkumar Gupta
On the operating cash flow which is the easier one. So on a normalized basis we would have done around 120 odd percent of CFO to EBITDA in the last quarter. That is where we are and in terms of the return of revenue growth. So we believe we’ve had significant impact in the current quarter sequentially and as Rajeep already highlighted and we covered in some of the opening comments, we are working on a pipeline. We have several initiatives which are in progress. For example the firewall initiatives, the MAP server and other initiatives around the telecom solutions.
The benefit we get from the telecom solution is that there is also potential to generate on the back of it a 2p SMS revenue because we can position to be a preferred partner on XQ or an exclusive partner when we deploy these solutions. So we have certain levels that we are pressing for reviving revenue growth or in whatever shape and form it comes. But we hopefully should not have sudden decline from the area. We should see revival there in terms of but you know what we are fairly confident about or what we believe should hold up gross profit margin percentage that we have.
We do not have any one times or any items which will reverse or which will fall out in the future. So we believe this should hopefully be sustainable as we move forward. Does that answer your question?
Dipesh Mehta
Just on the revenue part I think I request some more this year. We might have a more latest performance considering where we are in Q1. But if one look let’s say next two, three are perspective growth projects in the business. If you have we can maybe come in and give some sense. Are we confident we are returning back to like the mid 10 kind of growth profile in this business or considering some of the structural changes which are playing out even next three years as likely? This seems to be more optimistic. I can say.
Rajdipkumar Gupta
Definitely yes Dipesh. I think there is a definitely a plan and I think I joined back as a CEO of Brutal. While I think I do have some synergies and plans now to execute. You will definitely see some growth coming up in coming quarters that I can assure you. And there is a lot larger synergies. We are working with Proximals Global as a group. You know being a partnership with the salesforce or larger companies like Infosys or techm. I think these companies also going to contribute big way in terms of our revenue growth and I think we are working very closely with companies like these where we believe that we can be the partners for digital communication and we can serve their customers.
I think these alignments are very much there and I think we are now at the final stage of some of integration which we are already doing with them. I think we are definitely looking forward with growth and I think that some some of the customers, some of the pipeline and some of the synergies which we have is definitely going to drive Our growth story.
Dipesh Mehta
Understand. And lastly about the new product. Now partly you answered one of the earlier question but the way I look, let’s say what’s their pricing correction and volume. Typically when some of these channels which are relatively new, even volume pricing decreasing changes, underlying growth should not have any material challenge. Right. It might be let’s say slower than earlier. So just want to get RCS let’s say which we indicated even two years there whether we are able to monetize it well across countries.
Rajdipkumar Gupta
We are indeed deepesh. I think that is exactly where we as a company when we talk about the platform agnostic company and any customer coming to me has option to choose channel which they want to communicate with. Right. And if the customer is willing to use RCS to experience instead of sms, I think we as a platform we already have the option for him. You know. And at the same time we have a WhatsApp email other solutions. Also there is a some kind of a trend which is happening right now in the market where customers are trying to evaluate different channels and probably they are finding more outcomes with new channels where they say most customer engagement through these channels.
And I think we are a very early stage still on these new channels adoption and probably I think this awareness in the market About RCS and WhatsApp is growing fairly well. And that is exactly where we look at in coming quarters how the entire ecosystem is going to drive the volume and the revenue growth.
Dipesh Mehta
Thank you.
operator
Thank you. A reminder to all participants, please press star and one to ask a question. The next question comes from the line of Kaustav Babna from Boundless Management Solutions. Please go ahead.
Kaustav Babna
Yeah, so you know on the previous call the management spoke about two plays in this business really the messaging appeasement, the platform play. And you know, this spoke about how the platform play is a future high margin driver. So could you, could you explain really in detail to a layman understanding this platform play exactly what it is and how it will become a high margin play? In detail, as much detail as you can. Yeah.
Rajdipkumar Gupta
Okay, I will try to explain this. So when I talk about firewall solution, Costco firewall solution we deploy with operator and where we charge based on managed services along with per transaction, where operator pays, pay us per transaction basis plus managed services charges, which is complete DM to us, which is a complete SaaS module. At the same time when we talk about RCS platform, that’s again a managed services and plus a SaaS model for us. So when we talk about CPAC in a box kind of solution where a single operator looking out to enable their customers to offer WhatsApp for business or other channels, we can deploy the entire solution within on prem within the operator so that operator can enable their customers for use to start using these channels under their white label platform.
So these are the sudden solution which is completely 100% margin kind of a game where we believe that more deployment of this solution will definitely be to help proto while to increase our margins.
Kaustav Babna
Okay, okay. So you’re talking like the platform plays mainly of firewall solutions, rcs, what’s in a box, all of these things. And if we, and if you. And, and I mean just a general question, you know, I know you all are for some reason refraining from talking about what’s happening in the feedback industry because I guess we’ve already spoken about it in the past and there’s no point wasting time on that. Just wanted to understand for this core business, the business, the CPAAS SMS business, which saw I guess was also mentioned in earlier call, unrealistic realizations in the past due to whatever issues that were going on in the industry.
How now with that leveling out and coming back to realistic levels, I mean your new business would have to grow meaningfully for you to show incremental growth. So I understand you’re not giving numbers, but in this new business, these firewall deals, what else is there? I mean, could you give some sort of more clarity in terms of how this shift in business will actually end up leading to overall growth in the business?
Rajdipkumar Gupta
Kaufman, you need to understand one thing. The digital landscape itself. Digital payment landscape or digital platform landscape. I think digital adoption is growing multifold every single country right now. Okay. But there are multiple channels being used to serve the digital requirement for the customer. Right. Whether it’s WhatsApp, RCS or SMS. So there is no more SMS as just one single channel anymore. There is a WhatsApp and RCS because people prefer conversational based channel more than SMS. But SMS is still have a lot of relevance where people still believe that SMS can be used for their use cases.
But there are many use cases which are getting emerged on WhatsApp and RCS. So that is the entire growth story. And I still believe that we are very early stage on RCS as well as on WhatsApp. Okay. And these channels will definitely see every single customer required one mode of channel for better communication with their end users. So that is where I think that option ratios are growing and that is where we believe that this more useful of these channels will help Protobile to grow in terms of firewall solution. In terms of our other solution I think as I already mentioned the synergies with BICs where they are one of the second largest in terms of roaming business in the global market where they have relationship with almost 400 operators globally.
I think we want to leverage those partnership and connection with them so that we can reach out to all these operators directly as one of the partner with them so that we can sell our product directly to this customer. And I think one of the firewall which we won recently is because of this energy and that is exactly where we are trying to build overall GTM for Root mobile right now. Okay.
Kaustav Babna
And this digital identity piece which is for fraud, digital fraud etc which. Which basically Telesign has got the big portfolio there, correct?
Rajdipkumar Gupta
Yeah we do. As I think as Vinay has already mentioned about the telecom API play right. And that’s a very big initiative we have in house now at root mobile as well as Proximals Global. I think the Telco Telco API is one initiative for digital fraud. I think we are already working with Telesign to get those API in Indian market. We really need to understand the current market scenario how the customers are looking out this API to be used. We are definitely in touch with various customer. We are doing some pilot testing. There are some sandbox installation is already been done in India with few customers.
Those testings are getting done but it’s a longer process because there are lots of security aspects we have to clear and to close the customer sometime takes three to six months or maybe nine months. So there are certain things which is we already working on right now. We really don’t want to call it out the revenue and the potential. But yes as a requirement is concerned as a company we are very much focused on digital identity product which Telesign as a suite.
Kaustav Babna
Okay, great. Thank you. Thank you. Thank you.
operator
Thank you. The next question comes from the line of Jaishree Bajaj from Trinetra Asset Managers. Please go ahead.
Jaishree Bajaj
Thank you for the opportunity. My question is with growing diversification especially in America and Europe how are you managing the regulatory and compliance and localization data sensitive segments like BFSI and all. And is this adding to the cost structure?
Rajdipkumar Gupta
Materially Root is GDPR compliant company and we are server installation to every single aspect. As far as the customers are concerned I think we are 100% GDPR compliant company from last so many years. So I don’t see there’s any challenge and I don’t think there’s A cost impact or involved anything on that to.
Vinay Binyala
Add to what Ranbir is saying, we have been operating in various geographies with customers across different industry verticals. So you know, we cater to banks in Middle east, banks in Latin America, banks in India which are the most rigorous in terms of compliance requirements. And you know, the fact that we are able to serve these customers over the years, we are able to comply with regulatory requirements in these different countries where we are operating. So I think we understand that part of the business and we have been able to operate in complete compliance with all these multi geography jurisdictions.
Jaishree Bajaj
Okay, thank you. And my second question is the revenue generated from the retail and travel and hospitality is approximate to 2%. So are there any specific efforts to diversify the industry mix or we are just focus on focusing on BFSI digital native and CPAs partner ecosystem.
Vinay Binyala
So our product is, you know, fairly industry agnostic. The split that you see there is more in terms of which industries are really using that communication more aggressively or you know, the ones who are using our platform more aggressively. So we do have a few solutions which are verticalized. So for example banking, we have developed certain plugins and layers which can be used by banks. But largely it’s not like a solution or platform cannot be used by a particular industry or would require a lot of customization or specialization for a particular industry. But rightly pointed out internally also we are looking at designing these vertical components which then make the product more compelling for those industry verticals.
But other than that, within the retail space as well, we have some of the largest global brands who are using our platform. And even within travel and hospitality we have some really recruited brands who are using the platform. So it’s more about where we have had success, but it does not really hold us out of any vertical in terms of deploying the platform.
Jaishree Bajaj
Okay, thank you. And all the best for the future.
Vinay Binyala
Thank you.
operator
Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Mr. Raj Gill, the group chief financial officer for the closing remarks.
Rajeshwar Singh Gill
That’s great. Thank you, operator. So firstly, thank you for all your questions. So we appreciate your continued support and we look forward to engaging with you again. Have a good weekend everybody and bye for now.
operator
Thank you gentlemen. Ladies and gentlemen, on behalf of Root Mobile limited and concept investor relations, that concludes this conference. Thank you for joining us and you may now disconnect your lines.