ROUTE MOBILE LTD (NSE: ROUTE) Q4 FY23 Earnings Concall dated May. 19, 2023
Corporate Participants:
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Analysts:
Vikram — Route Mobile Ltd — Analyst
Anil Nahata — — Analyst
Nikhil Chaudhary — Nuvama — Analyst
Dipesh Mehta — Emkay Global — Analyst
Mohit Motwani — Nuvama — Analyst
Moez Chandani — Centrum Broking — Analyst
Vivek N — — Analyst
Keval Shah — Banyan Tree Advisors — Analyst
Vivek Sethia — HDFC Securities — Analyst
Adithya Jhawar — — Analyst
Suresh Kumar — — Analyst
Presentation:
Vikram — Route Mobile Ltd — Analyst
Good evening, ladies and gentlemen. I’m Vikram moderator for this conference today. Welcome to the Conference Call of Route Mobile Limited arranged by Concept Investor Relations to discuss its Q4 and FY’ 23 results. We have with us today Mr. Rajdipkumar Gupta, Managing Director and Group CEO; Mr. Gautam Badalia, Group Chief Strategy Officer and Chief Investor Relations Officer; and Mr. Suresh Jankar, Chief Financial Officer. At this moment, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions]
Before we begin, I’d like to remind you that some of the statements made in today’s earnings call the forward-looking in nature and may involve certain risks and uncertainties. Kindly refer to Slide number 2 of the presentation for the detailed disclaimer. Please note this conference call is being recorded. I now hand the conference over to M. Rajdipkumar Gupta. Thank you and over to you sir.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Thank you. Good evening everyone. I will just start by wishing all of you good health and prosperity. As we close out FY’ 23, it is my pleasure to share that Route Mobile has reached a significant milestone, achieving an annual run-rate of $0.5 billion in revenue. Our ambition does not stop here as we expect to become a $1 billion revenue Company over next three to four years through a strategic blend of organic and inorganic growth. Our impressive performance in Q4 FY ’23 has helped us end the year with a high mode with the quarters revenue being the highest we have ever achieved for eight consecutive quarter we have delivered increased revenue and adjusted profit after tax, despite geopolitical challenges and other headwinds. I am delighted to share that we have surpassed most of the guidance we set for FY’23, whether it’s a revenue growth, margin improvement or payout ratio to our expected shareholder. Our performance in terms of revenue growth has exceeded expectations with industry leading growth rate of 78% in FY’23, even after accounting for acquisition, our organic revenue has seen a year-on year growth of 41% as we move on FY’24r. Our strong growth momentum give us the confidence to project at least 20% year-on year growth and so on. With overall reported EBITDA margin is expected to be in the range of 12.5% to 13%. In light of the robust [indecipherable] our new product has beginning we have established dedicated SBU for each unit, which includes TruSense. TruSense, this strategic division headquartered in UK is dedicated to addressing mobile identity and digital fraud. In an era where digital threats such as sim swap and phising are increasingly disturbing the digital landscape TrueSense step up to the challenge.
Our intent is to offer enterprise and mobile network operator crucial, actionable, insight through and sophisticated AI ML framework. This enables them to proactively mitigate the digital fraud. Further, we are piloting efforts in password less authentication, another way key focus on this vertical. I mean sharing on the new level of security and convenience. Apart from true sales, we have established dedicated SBU for email and conversational bot framework. For FY’24, we plan to establish a dedicate SBU for voice and virtual contact center and we have already all onboarded senior resources to spearhead this initiative.
Key highlights from the last quarter includes with regard to three new firewall contracts in Q3 FY 22 with several other significant deal in pipeline. Additionally, we deployed our first UCaaS solutions for Robi Axiata to cater the need of enterprise customers, supporting their customer care and marketing operation. I’d like to take a moment to acknowledge the contribution of our esteemed colleague John Owen. After a successful tenure of 2 years with Route Mobile, John has decided to move on. During his time with us, he played a pivotal role in the integration of two strategic acquisition Masivian and Mr Messaging. These entities integral to our value proposition in the CPasS market place. In terms of recognition, we are proud to share that Route Mobile was awarded best use of cloud services by telecom company and the best enterprise cloud offering in IT sector by ET Ascent Business Leader of the Year Award ’23. In conclusion, in recognition on, of our commendable performance of FY22-FY23, the Board of Director has put forward recommendations for a final dividend of INR2 per share. I will now turn it over to Gautam, to take us through the financial. Thank you for your continuous faith in our vision and strategy and yes to plan even more successful FY24.
Over to you Gautam.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Thank you, thank you Rajdip. Good evening, everyone, hope you and your family are safe and fine. We have already uploaded our quarterly earnings presentation on our website as well as on the stock exchange website. Hope you had a chance to go through the presentation. I’ll quickly summarize our financial and operating performance during Q4 FY 23 and for the full-year FY 23 before opening the floor for Q&A. The key takeaways from our financial performance in Q4 FY 23 has been best in revenue growth. We recorded Y-o-Y revenue growth up 61% and Q-o-Q revenue growth of 2.3%. Q4 is historically slightly muted in Q3 point to seasonality and to lesser days is in the GSM quarter. Yet we have surpassed our Q3 FY23 revenue in Q4 FY23. We believe that we have demonstrated industry-leading growth coupled with expansion of operating margins during the quarter gone by. With such a superlative performance, we believe we are today one of the largest and the most diversified global CPaaS player focused on emerging markets, if not the largest emerging market focused CPaaS equity. In volume terms we registered over 107 billion transactions in FY23, a growth of over and 106% on in FY23. Effective tax-rate for the full-year was around 13%, adjusted profit per tax grew by 92% on a Y-o-Y basis to INR4007 million in FY23 PAT margin roved to 11.2%k. Net cash was [indecipherable] million as on March 31, 2023. Average receivable and payable days were around 62 days in the year gone by.
With this we open the floor for Q&A.
Questions and Answers:
Operator
Thank you very much, sir. Ladies and gentlemen we will now begin the question-and-answer session [Operator instructions].We will take our first question from the line of Anil Nahata an investor. Please go-ahead. Mr. Nahata you, your question, you can please ask your question.
Anil Nahata — — Analyst
So, that’s a good set of numbers this quarter. And congratulations for that. I wanted to ask the question regarding the area that has opened up in terms of the AI filtering and other security-related platforms that you had developed. So just wanted some color as to what is the size of market size that you see in India, which kind of products in year or two and also abroad. That is the first question that I have.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Hello, hi Rajdip here. Anil right.
Anil Nahata — — Analyst
Yes Anil, right.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Anil, so the market size, I think we are still, the entire product itself, you know it’s very early-stage. Honestly, if you talk about market size, what is the current market India or abroad. I think it’s a very early-stage of VOC with multiple operators what we are doing. I think we cannot, we may not be able to give you any kind of market sizing at this point of time, but probably by next quarter, next call we can give you some kind of number for sure.
Anil Nahata — — Analyst
Which will be the kind of business model that you will follow in this. Is this something like we will deploy a telco and raise the telco or we will be going directly to the enterprises for a mix of both.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
So our if you see our, the entire security product Route Mobile already has a company called as 365squared, they’ve specialized themselves for firewall solution and with this current deployment solution which we built for anti-phishing is something for operator as well as for enterprise. So our focus is definitely going to be both the side of the business. So just to answer your question it’s operator as well as enterprise.
Anil Nahata — — Analyst
Okay Rajdip I will look-forward to some more details in the next quarter or the quarter after when you have a better opportunity to explore the market. The other question. I have is in terms of, I request that if you can going-forward start putting your market share numbers for the Indian market particularly in terms of what is your market share for the domestic as well as the international kind of business. That will be a very good parameter to judge like how Route is going vis-a-vis the the competitor, competition. And if you can give some numbers around that it will be great right now.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
So India itself is a very fragmented market right. Tier 1, Tier 2, and then there are lots of there are lots of [Technical issue] and there is also lots of double counting happens within, because some retailer using another retailer. So, sir. I think honestly to be honest with you, it is impossible to give some kind of market share, but yes, we believe ourselves with our total market share for India domestic traffic is about 20% as of now.
Operator
Thank you. We’ll take our next question from the line of Nikhil Choudhary from Nuvama. Please go-ahead.
Nikhil Chaudhary — Nuvama — Analyst
Hi, thanks for the opportunity and congratulation on the such a good result. First question for me is. I want a bit of understanding on what led to such a strong revenue growth in this quarter despite of seasonality, so. I just wanted to understand what were the triggers and with such a strong exit rate coming in FY23, what kind of revenue growth do you expect in FY24.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Nikhil let me just start with the question.
Nikhil Chaudhary — Nuvama — Analyst
Sure, sure.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
I think we have already given a guidance of 20% growth for the next year. And I think in last quarter as we were already talking about onboarding few large banks and I think all those banks are already onboarded, not only in India but in Ghana and Nigeria also we onboarded two large bank as a customer. Apart from that there is a lots of actually we have been in the this market and the LatAm market as well. So I think it’s the overall combined growth in all the market where we operate and some of the large bank has contributed a lot in last quarter. It’s four banks.
Nikhil Chaudhary — Nuvama — Analyst
Thanks Rajdip. Just one more, can you give us some color on the geopolitical impact on Masivian what basically happening there. And when do you believe that could get resolved. Thank you.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
It was not in the season. If I’m not, Gautam if you’re… [Speaker overlap]
Nikhil Chaudhary — Nuvama — Analyst
Yes. Yes.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Gautam, if you can just.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Yes. So for MR Messaging I mean, they had the traditionally have been terminating quite a bit of their communication messages into Russia. So that has got impacted quite a bit in the last quarter. And again I mean, not [Technical Issues]. So things to go normal. I mean, we’ll have to just wait it out, but for the current month I think for the month of April I mean we have insights into MR Messaging messaging number and I think things are coming back to normalcy. I mean the growth coming from other markets, while Russia is still impacted, but some of the other markets have started to pickup for them.
Nikhil Chaudhary — Nuvama — Analyst
All right, thanks Gautam. That’s it from my side. Thanks for the opportunity.
Operator
Thank you. We take the next question from the line of Dipesh Mehta from Emkay Global. Please go ahead.
Dipesh Mehta — Emkay Global — Analyst
Thanks for the opportunity. Couple of questions, first of all, just want to get sense about new product revenue growth. We have said total number, but can you share what would be the organic revenue growth for the year in new product. If I do some working about sequential revenue growth, it seems to be muted on quarter-on-quarter, rather it is quarter-on-quarter decline seems to be the case. So just wanted to get a sense on from you about new product perspective, because earlier we indicated new product likely to be higher share of revenue. So far it remaining in single digit kind of number low single digit kind of percentage mix. So if you can give some sense of it is likely to play out for us. And if you can break of it for the INR8 crores products, how the growth is playing out. Second question is about price hike. Can you provide some sense about NLD, ILD as well as international market. How the pricing is behaving. If you can give some sense or any changes in pricing playing out for us. And last question is about gross margin. Earlier we indicated about over next couple of years. Our gross margins would expand and we give aspirational target of $1 billion revenue. So if you can provide some stands once we hit, let’s say $1 billion mark, what kind of gross margin one should expect. Thanks.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Dipesh Hi. Let me just start with second question first and then Gautam, you can add. So the first I think honestly as we see the digital adoption and penetration is increasing day-by-day, but any new product has its own life cycle, and it really two to three months before performance also for deployment. And I think we have seen a very good traction in last financial year, where we have grow. I think on the overall volume on WhatsApp, RCS, when email has grown multiport, but if it comes at the same time our revenue for SMS also grew multifold well right. So if you talk about if we hit INR1 billion, what could be my gross margin, but honestly we have exploration of to hit of about 25% plus in my more than 25%, that’s what I can tell you right now, but I think it’s a three years horizon, which may change the product mix a lot, it can go over 30% also.
And what your first question. About NLD, price, right.
Dipesh Mehta — Emkay Global — Analyst
Yes, NLD and ILD.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
ILD price, yes, I think there is a price increase in India, which has happened I think for the month of April 22 onwards. And so, but again, how much is going to impact the revenue of overall in coming quarters. We have no idea because it mainly we have seen, if there is a price increase in market. There is definitely deep in the volume. So we want to just wait and see how this quarter goes, but as for the last one month, we have seen I think we have not lost single customer because of price hike. But we are able to maintain our revenue run-rate.
Dipesh Mehta — Emkay Global — Analyst
And any changes in international market because we operate in multiple market, India is roughly 45%.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Yes sir, yes, yes. Yes, there is definitely our firewall is going live in Sri Lanka from May 21 and there is [Technical issue] of price increase going to happen. We are increasing price to almost $0.15, so that is one thing. Apart from that I think, various other market where there is a firewall getting deployed, prices are getting increase, but we have seen most of the OTT players adopting this prices and they’re happy to pay and we still serving them as a customer. So we don’t see any impact, but there are few countries where we have exclusive firewall deal, one of them is like moved to Sri Lanka, which is going live on May 21. I hope I’m able to answer your question.
Dipesh Mehta — Emkay Global — Analyst
Yes. Thank you.
Operator
Thank you. We take the next question from the line of Mohit Motwani from Nuvama. Please go ahead.
Mohit Motwani — Nuvama — Analyst
Hi, thanks for the opportunity and congratulations for a great set of numbers. I just had two questions, one on what was a massive amount of messaging revenue for the quarter and how much of performance linked payout be spending and what will be the a quantum in FY ’24 and FY’25 that you expecting. Thank you.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes, so the revenue MR Messaging is for the quarter, right.
Mohit Motwani — Nuvama — Analyst
Yes, for the quarter.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
So I have it in INR147 crores was the revenue of MR Messaging.
Mohit Motwani — Nuvama — Analyst
Okay, and Masivian.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Masivian was one second INR50 crores.
Mohit Motwani — Nuvama — Analyst
INR50 crores right.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes. Yes.
Mohit Motwani — Nuvama — Analyst
And how much of the payout for the acquisition that you made and there were some performance-linked payout right rate. So how much of that could be coming in kicking-in FY’24 and FY25.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes, so for the current year I think we have a payout of about 6 million to Masivian in this month and from the earn-out, it’s about $2.36 million that we have to pay to Masivian at the end of this month and the subsequent months, we have a payout MR Messaging of around EUR6 million.
Mohit Motwani — Nuvama — Analyst
Any color on what we will end in FY ’24 for the full-year. Any color on that.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
So for the full-year the Masivian balance payout of INR6 million I think will be done in November. There is no other payout that is due in the financial year FY24.
Mohit Motwani — Nuvama — Analyst
Okay sure. Thank you so much for answering the question.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Thank you.
Operator
Thank you. We take the next question from the line of Moez Chandani from Centrum Broking. Please go ahead.
Moez Chandani — Centrum Broking — Analyst
Yes. Thank you for taking my question. My first question was that, I noticed that you’ve done some borrowings of about INR100 crores this FY. So can I understand what this is far and what how you plan to utilize that debt.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yeah, so I mean, this borrowings are more from our treasury management standpoint. So it’s backed by cash collateral, so to say. And the borrowing has been done in the UK Entity. And against the cash collateral that we have as deposits. So this would be positive carry transactions from our perspective.
Moez Chandani — Centrum Broking — Analyst
Alright, understood. And also I noticed reduced called out a few about six industries in your revenue contribution from select industries. So those six come to about 63%. Can I understand what constitutes the other 37% and how you see those industry mix moving in FY’24 for any particular industry that you want to call out.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes. So from our perspective I mean, we have a very long tail and we do this analysis only for the top 150 clients. And within that I mean we call out in the key sectors, so to say. And at this point in time considering the new products and the strategic business units that has created for some of these new products like $0.02 we believe that BFSI and Fintech will be a very key industry vertical that we’ll be focusing on in a big way along with e-commerce.
Moez Chandani — Centrum Broking — Analyst
Perfect. All right. Great. Okay. Thank you. Thank you so much.
Operator
So, thank you. [Operator Instructions] Take our next question from the line of Yash Tiwari from [indecipherable]. Please go-ahead.
Unidentified Speaker —
[Foreign Speech] Rahidip and the entire team of Route. The journey from $2000 $5 billion is really phenomenal. I have two questions.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Thank you.
Unidentified Speaker —
As much as we have got to see Mr Gupta following to Gupta on different interviews [Foreign Speech] I believe [Foreign Speech] how much do you expect the potential is unrealized potential. And secondly, in terms of the South American market, there have been quite a number of acquisitions in the set of SDS subsidiaries as well. So do you see upside significant upside from there on the activity happening in so they make market.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes, first of all, thank you very much. Definitely, yes, of course the question was [Foreign Speech] our firewall solution is one of the very unique solution which we have built from last so many years and is deployed in multiple operators globally and somehow I think I don’t want to talk about what would have but indirectly. I think it is definitely adding lots of value to our overall growth as a company and this particular year I think we as a team have taken a target to close at least eight operators. That’s the only thing I can tell you, but there are already deal which is getting closed in next one or two weeks that we already in a process of that and maybe we I can just give a guidance, about six to eight operators to be closed this year globally on our firewall side. Indirectly, all these firewall deals are linked with the Route Mobile revenue also because 365squared put their firewall and they become the exclusive gateway, which means that every single SMS has to flow-through our platform. In that case we have an advantage of setting the price for the market since we work very closely with all the OTT player. I really don’t need to go in-market to starts for a customer because the customers are already there as a part of Route Mobile customer, what we need is just open a gateway for them at the moment we have exclusive partnership with this kind of operators.
And. I think this year is definitely is a year for us, which is where. I would have at least eight operators for sure. And with that — and. I think that’s what the like when we, when I talk about my roadmap for a one billion-dollar revenue. I think the firewall build will definitely contribute a lot in next three years down the line in our that journey. That’s the thing I can share right now with you. And in terms of our strategy in Latin-America. I think we have recently acquired a license in I think in Chile, with that we have access of all the operators as a direct connectivity. Now we can start selling those connectivity to OTT players all across the globe, along with the domestic customer base out of Chile. We already set-up was just in Peru and in the Mexico now. We believe in next three years down the line, contribution coming from Latin-America is also going to be. In only substantial in terms of what it is today. I hope I’m able to answer your question.
Unidentified Speaker —
Very well sir. As a retail investor, it brings a lot of confidence and. I wish you all the best. We continue to stay-in this journey with you. [Foreign Speech].
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Thank you.
Unidentified Speaker —
Thank you. We’ll take our next question from the line of Vivek N an investor please go ahead.
Vivek N — — Analyst
[indecipherable].
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
There is a….
Operator
Hello sorry to interrupt. Yes, Mr Vivek, you may have to come a little away from the device and then you mouth to speak, because there is lot of disturbance from your background.
Vivek N — — Analyst
Okay. is it better now.
Operator
Yes, please go ahead.
Vivek N — — Analyst
My query is, what are the comparable companies in the Indian and international landscape against which Route competes. Thank you.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
It’s a good question. Honestly, like for us, we compete with ourselves every single day. There is a huge market of over $60 billion and. I think we, everyone has their pie in this market. As a company, we don’t want to get compared with anyone. I think we want to focus more on our roadmap, which we have defined and if talk about comparison, there are definitely companies available in India for the domestic market. But again, as I said Route Mobile is a global company. We built the entire platform to serve the global customer and we connect with over 1,000 operators, which means that there are only few set of Tier 1 aggregator in the world, we have this kind of quality and we are one of them. Okay, and every single market If I go there will be some kind of a competition. So we operate from 22 countries. And each country, we may have Q4 domestic competitor where at the same time we have in India as well. And you must be knowing all the names.
Vivek N — — Analyst
Thank you.
Operator
Thank you.[Operator instructions] Take the next question from the line of Abhishek Sharda[Phonetic] from[indecipherable] Securities, please go-ahead.
Unidentified Speaker —
Yes sir, thank you for the opportunity and congratulations for good set of numbers. Sir, my first question is regarding your guidance that you mentioned that FY24 we will be able to achieve at least 20% growth. So. Is it fair to understand that this 20% is organic growth or it is a mix of both organic and inorganic.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
It is completely organic growth.
Unidentified Speaker —
Okay, and we have plans for acquisitions also, right.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Gautam can you just answer this. question.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
So, that is Route Mobile always believe that, like if you want to grow multi country and you need to set our teams all across the globe acquisition could be. It is always a good option, right. But right now I think we are in process of integrating all the acquisitions in which we have done in past, and I think integration is also very key for Route Mobile to make sure all the companies, which we acquired are well integrated and I think we are fairly successful in those integration as of now, but yes you are right, we are definitely looking out for certain acquisition and maybe we cannot give any kind of a timeline. It may happen in six months also or it may happen in one year also or maybe three months also. But as a company, we always believe that we, our, we can grow multi-fold If you really want to be global by acquiring certain local companies and we may don’t, we don’t want to shy away with that, but right now I think we don’t have anything in our plate to look for. But yes, incoming quarters or years, we’ll definitely look into that for sure.
Unidentified Speaker —
Understood. And sir, secondly I just want to understand about hiring plans. What are your hiring plans and what is the current attrition rate.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
So I think the attrition rate is already mentioned the presentation as a company we are definitely looking out to build some product in-house and as a normal company requirement against attrition we keep on hiring and we are looking out to add more people, but how many people probably I cannot answer that right now, but we do have a plan to hire. In fact we are already hiring people as of now also. But how many we need I cannot quantify as of this moment.
Unidentified Speaker —
Okay sir, thank you for the responses, I’ll jump back into the queue.
Operator
Thank you. We’ll take our next question from the line of Keval Shah from Banyan Tree Advisors. Please go-ahead.
Keval Shah — Banyan Tree Advisors — Analyst
Yes, hi, thanks for the opportunity. So I have two, three questions. Could you share what was the organic and inorganic revenue for the Q4 FY23.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
One second. So, organic revenue growth was 53%.
Keval Shah — Banyan Tree Advisors — Analyst
Okay.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
And the rest was inorganic.
Keval Shah — Banyan Tree Advisors — Analyst
Okay, and you just mentioned there was a hike in ILD prices. So could you quantify the amount like percentage-wise, what was the hike in April.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
I can tell you about India. I think it has increased by 25%.
Keval Shah — Banyan Tree Advisors — Analyst
Okay. In India 25%. Okay sure. Thanks.
Operator
Thank you. We take the next question from the line of Vivek Sethia from HDFC Securities, please go-ahead.
Vivek Sethia — HDFC Securities — Analyst
Hi, sir, congratulations on a good set of numbers. So I had a couple of questions. Before those couple of questions. Just wanted to continue on the previous question about the NLD ILD pricing. So if you could just highlight if like what has been the — when was the last hike taken in India early and going forward like how do you expect the rate to move. Yes, if you could answer then maybe I’ll move forward to my next two questions.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Well I think honestly, it is all dependent operator. Right. We have nothing to increase or decrease price, because for us, this is a pass-on. So pass-through price, like the last price increase happened. I think one year back and exactly after one year, the operator in India, they have increased by 25%. So that’s the only thing and we are. No way we go and influence operator to increase or decrease. But it is completely depend on the operators like I said.
Vivek Sethia — HDFC Securities — Analyst
And this last price increase which you talked about is just NLD or is it for ILD also.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
ILD, ILD.
Vivek Sethia — HDFC Securities — Analyst
Okay this is ILD.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Domestic and whatever price increase I’m talking about right now is only ILD, NLD I have no idea, because there were some kind of discussion, but nothing happened. So I’m looking forward for it because as of today, we have no intimation from operator to increase the price, NLD price as we speak, but on ILD It is definitely increased in month of April.
Vivek Sethia — HDFC Securities — Analyst
Okay, so the 25% is for ILD.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes, yes it was ILD only. Just price not able to maintain correctly what it is just only for ILD.
Vivek Sethia — HDFC Securities — Analyst
Okay, so coming to my next question. I just wanted to understand like any particular reason for the decline in new product sales. And going-forward how do you see that pan-out. And also if you could provide me with the number for the new customers on-boarded. I thinkl I couldn’t find it in the PPT.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Decline in, Gautam.’
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
So 135 new customers were on-boarded.
Vivek Sethia — HDFC Securities — Analyst
Okay. And any particular reason for the decline in new product sales during the quarter.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
It’s more to do with seasonality. I think Q3 happens to be our best quarter. And Q4 there is a seasonality impact that is there. On a Y-o-Y basis there was a 24% growth in new products.
Vivek Sethia — HDFC Securities — Analyst
Okay.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Yes in the quarter gone by.
Vivek Sethia — HDFC Securities — Analyst
Okay, and you spoke about Masivian and MRM having some issues with regard due which we see gross margin under pressure like and like how do you see that panning out going forward. Is it something long-term like it was just a one-off for this quarter.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
No-no, no, it’s a seasonality. I mean for Masivian it’s a seasonal seasonally weak quarter, even last year, so calendar year JFM, that’s January, February, March, typically is the weakest quarter for Masivian and as the year kind of progresses into subsequent quarters their revenues and margins profiling improves dramatically, right. And we’ve seen that trend for the last two years as well from a calendar year standpoint. So it is not a surprise. I mean from a Masivian standpoint I mean, the numbers for Mr Messaging for MR Messaging to impact was largely more to do with their traffic getting impacted into the Russian for, so for termination into Russia. Other than that. I mean, the business continues to be as robust and we, April kind of a run-rate. Things are again back to normal. So that seasonality aspect has to be kind of accounted for every year for Masivian at least.
Vivek Sethia — HDFC Securities — Analyst
So for MRM you’re saying that that’s political issue is resolved now. There is no such issue.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Not resolved, Russian continues to be very low. In terms of, the revenue contribution. It is the other markets that have picked up well further.
Vivek Sethia — HDFC Securities — Analyst
Okay. Okay, okay. Thank you so much.
Operator
Thank you.[Operator instructions]. We take our next question from the line of Dipesh Mehta from Emkay Global. Please go-ahead.
Dipesh Mehta — Emkay Global — Analyst
Yes, thanks for the opportunity. Just one data point rRelated question, can you share Revenue from firewall business and coal to connect for the year or quarter whichever you can say.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
I think Dipesh, Gautam can you send you offline. Is that okay.
Dipesh Mehta — Emkay Global — Analyst
No issues, thank you.
Operator
Thank you. We have next question from the line of Aditya Jhawar, an investor. Please go-ahead.
Adithya Jhawar — — Analyst
Thank you for the opportunity. So could you explain about the cash-flow why an IT Company product based company have a cash flows [Technical issue] Could you explain please.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Your voice is not clear, I don’t know.
Adithya Jhawar — — Analyst
Hello. Now is it clear. Hello.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
No-no, it’s not clear. Last, I’m sorry to interrupt, sir, there is a wind blowing pride from behind. So that’s, you’re not able to understand the question, you may want to come little aside and then ask the question again.
Adithya Jhawar — — Analyst
Yes,I’m closed. Yes, is it okay now.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes. okay.
Adithya Jhawar — — Analyst
I was asking that do you provide this company and the IT in the industry, why are the cash flows at 40% or 50% or banks like 70% odd percent year, could you explain about that and how can we improve going forward. That’s my doubt.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes. So I think, I did talk about it during my commentary about that initiatives that management will be taking. I mean, there is definitely an increased focus to improve operating cash flow of the company. There were certain prior period payments that was done in the year gone by that had in some years historically, we have also delivered over 100% EBITDA to cash flow conversion. So, so there are some strategic investments that we’re making in terms of some of these firewall leads, which warrants security deposits to be given. Now, from our perspective, as I said, we consider that as capital employed this return on such capital employed potential being as high as 25% to 50%. And as the business I mean, the business is also kind of growing at a superlative growth rate and some of the Enterprise business in India and middle East has working capital requirements. But again, as I said, most of these clients are and some of these large clients are even have sovereign graduating, right, so you can always get this factored and realize better operating cash flows. So it is just that I mean that the business is self sustaining and we’ve been able to kind of meet our working capital requirements through the regular the monthly cash flows that we are able to generate and hence there was no reason for us to kind of get into such factoring arrangements. In our case, unlike most of the other IT companies one significant part of our cost of goods sold is paid to the operators, whereas in most of the IT, ITES companies we have to look at it. It only the human capital cost that is kind of there. So that is the degree of difference between an and IT company versus how are CPaaS company should be looked at. Happy to kind of also maybe circling back offline to kind of give you more color to the analyst.
Adithya Jhawar — — Analyst
Yes, I recollect you often, and another question I have sir regarding the product revenue. Okay, we have been maintaining growth rate like INR30 odd crores for the quarter and INR40 odd crores. Then, at which point of time, can we see a jump here that is kind of like any product based company due to huge revenue growth here. I’m asking about any two or three years.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Yes. Definitely, as I said I think it all depend upon the adoption ratio and the most of the adoption ratio is happening now, most of the enterprise customers are now getting well educated to understand the advantage of using the digital platform, we’re talking about new products. So I think we see a lot of traction happening right now, we are doing lot of POC with the customers, large bank like large enterprise customer, those POC still going on as this speak and probably in coming quarters, you will see the growth, but it’s at the same time, we need to also understand adoption of SMS itself is so high right now in India even discussing example of our Google Pay, people are paying 5 Rupees using Google Pay notice, which means ability in that transaction, SMS is also going to grow multi-fold. Even we do sell a one billion-dollar revenue in next three years down the line and out of that probably you will see INR7,000 crore coming from SMS only. So we cannot just avoid SMS side of business, which is growing at the simultaneously along with additional new channels of communication. What we are very confident, like what we have billed as a product as a portfolio as entire stag which has email, SMS, voice, RCS, you name it right, right now every single product, which we were have a live customer and paid customer and we are very happy to say that every single channel, which we have built-in house are generating revenue for us and which also has a great pipeline for the coming quarters to come.
Adithya Jhawar — — Analyst
Okay. So firewall business also comes inside this product revenue or..
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
No -no, definitely yes [Speech overlap].
Unidentified Speaker —
That is [indecipherable].
Adithya Jhawar — — Analyst
Okay and the last question I have regarding the next year cadence, right. So how much we can expect from the organic, because I see this year we have done pretty good in the organic side and in organic also we had a pretty good, but the next year you are giving guidance of 20%. So majority the higher ratio yes.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
So the idea is very simple, even I have given 70% growth last year and we did 78%, right. It is always good to be conservative than over achieve. So I think based on the current INR370 crore or is it 25%, 20% growth is definitely a good growth guidance to the market, but we have always overachieved our guidance in past so many years and you will try to do the same thing this year also.
Adithya Jhawar — — Analyst
It will be from the organic or the more from inorganic.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Organic completely organic.
Adithya Jhawar — — Analyst
Okay sir, all the best. Wish you all the best. Thank you.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Thank you.
Operator
Thank you. We take the next question from the line of Mohit Motwani from Nuvama. Please go ahead.
Mohit Motwani — Nuvama — Analyst
Hello, hi, thanks for the follow-up. Just wanted to I guess, your thoughts on the acquisitions that we spoke about you will be evaluating. So just wanted to understand this will be more a buyout kind of transactions, where you will look at some players like Masivian and Mr. Messaging or more like bolton acquisitions and any amount that you were earmarked for these sense you can give on that will be helpful, thank you.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Yes, so at this point in time. I think there are put in certain product capabilities that we have been kind of starting for some time. So we come to continue to kind of look for quality asset on virtual contact center with a strong voice tag. So that is one area which is kind of whitespace and which definitely look at opportunities. I mean if that comes up in that space. Besides that we have aspirations to get into US, but again it’s where he drawing board stays right now. So, nothing, nothing has kind of reached a stage where we can, we can kind of come and give you some sense of how things are shaping up from an inorganic. acquisition standpoint. At this point in time, I think on the organic front itself there are lot of opportunities that are coming up, not only from an enterprise CPaaS standpoint, but also from a lot of this firewall deals that are kind of. They are under big opportunities from a size and scale standpoint. So the focus right now is to focus on some of these organic opportunities in a big way. And some of the new strategic business units that we have created for the product-specific approach a essentially TrueSense is very,very bullish on TrueSense and at this point in time I think we are building a very strong foundation for that product. And the intend to at this point in time to do a lot of POC with as many enterprises as possible and ticket live in some of these larger are densely populated countries like India and some of their joining market share. The product is already live tested in Colombia, with a lot of market enterprises, including the largest banks in those countries. So we see a lot of potential for such products. Especially into FinTech, BFSI and e-commerce domain. So that’s a significant chunk of our energy today is now focused on some of these organic initiatives and for the inorganic opportunities. I mean, will see I mean it’s a better quality assets that come by I mean we will not shy away from evaluating and contributing sustained actions.
Adithya Jhawar — — Analyst
Thank you Gautam for the details for response.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Thank you.
Operator
We take the next question from the line of Suresh Kumar, an Investor. Please go ahead.
Suresh Kumar — — Analyst
Hello. Good evening. Sir, I have two questions. Regarding this acquisition side, anything is planned in this financial year, particularly in next quarter or so. How many companies are being planned for acquisition and what will be the growth expected from those Company. The second question is regarding your market share in India.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Can you just repeat the question please.
Suresh Kumar — — Analyst
I said in the inorganic growth, you will be accruing companies no sir, for this financially year ’23-‘ 24, how much acquisitions, or how much is planned for this financial year and what is the growth we expected out of those acquisition.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Let me just answer this question. As I said before also, we are not right now in a looking out for any acquisition. But as I said, we will look for it, if there is a right company eventually we want to which is matching with our like DNA right now there is no plan of acquisition as we speak, but we are definitely looking out, it may take 2-year, it may take one year, but I cannot quantify what kind of revenue and what kind of margin right now. I think you can just take it as a statement. We are not looking for an acquisition. We are integrating and we are building product in house and I think we are on the right track of doing that thing right now.
Suresh Kumar — — Analyst
Okay, okay, sir. My second question sir in that inorganic growth, what is the guidance or any growth for this financial year.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
So we are giving the oral growth guidance of 20%, as a company.
Suresh Kumar — — Analyst
That was told by organic growth for this inorganic around 30% is contributed from this acquisition partner or any growth data for the financial year only for those part.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Yes, so everything will become organic from first of April because at most all the companies that we acquired was fully integrated for the last year. So everything is organic and 20% organic growth rate that we have kind of given a guidance for includes all the companies, including the companies that get acquired in the past.
Suresh Kumar — — Analyst
Okay. Sir my third question sir, sir, regarding in the Indian market you said your market share is around 20% any plan of increasing that or how you are planning to increase that market share sir, any.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
Yes, it’s a good question. I think my market share India’s over 20% now as you speak we can definitely, as I said, there are fewer number of large banks where we are already doing out POC and we are in talks with them. There are large enterprise customers, e-commerce customer where our team is focused working with their. So, I think we are looking-forward to increase our market share to 25% this financial year, that is something which we as a company have taken a target internally and we want to make sure that our market share to growth by one was 25% this year in India.
Suresh Kumar — — Analyst
Well. Thank you.
Operator
Thank you.. To take the next question from the line of Vivek Sethia from HDFC Securities. Please go ahead.
Vivek Sethia — HDFC Securities — Analyst
Hi sir, thanks for the follow-up, just– I just had one question on the borrowings part, if you could please repeat like what are the INR100 crores borrowings pertaining to as it was zero in FY22 now I see it’s INR100 crores more short-term and long-term so if you could throw some light on it.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
No, no, sir, as we have net cash of INR737 odd crores and some of these borrowings are essentially more treasury management, wherein we are getting it’s positive carry. So, these are backed by cash collaterals.
Vivek Sethia — HDFC Securities — Analyst
Okay, and just to confirm, and I lead price hike, which you said this was done last year April, right.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
No-no, this April.
Vivek Sethia — HDFC Securities — Analyst
April 22, okay. So like a month back you are saying.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
That’s okay.
Vivek Sethia — HDFC Securities — Analyst
. Okay, okay, okay. Thank you.
Gautam Badalia — Group Chief Strategy Officer and Chief Investor Relations
And just to add, last April 22 will also the same time when they increase the pricing.
Vivek Sethia — HDFC Securities — Analyst
Right, right, so that was the confusion, which I had, okay yes. Thanks for the clarification.
Operator
Thank you, ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments. Over to you gentlemen.
Rajdipkumar Gupta — Managing Director and Group Chief Executive Officer
Thank you. Everyone have a great evening. Take care bye.
Operator
[Operator Closing Remarks]