Subex Ltd (NSE: SUBEX) Q4 2025 Earnings Call dated May. 03, 2025
Corporate Participants:
Ramu Akkili — Company Secretary
Nisha Dutt — Managing Director & Chief Executive Officer
Sumit Agarwal — Chief Financial Officer
Analysts:
Jitendra Bhutoria — Analyst
Mahesh Kumar — Analyst
Abhishek Kale — Analyst
Sanjyot Khare — Analyst
Darshil Jhaveri — Analyst
Sanjay Kumar Shetty — Analyst
Sagar Desai — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Q4 FY ’25 Earnings Conference Call of Subex Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I would now like to hand over the conference over to Mr. Ramu. Thank you. And over to you, sir.
Ramu Akkili — Company Secretary
Thank you very much. Good morning everyone who have joined the earnings call for the quarter and year ended March 31, 2025. Now I would like to introduce the members of the management who are attending for this call. Ms. Nisha Dutt, Managing Director and CEO; Mr. Sumit Kumar, Chief Financial Officer; and myself, Ramu Akkili, Company Secretary of the company.
I would like to start the conference by going through the Safe Harbor clause. Certain statements in this presentation concerning our future growth prospects are forward-looking statements which involve several risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to fluctuations in earnings, our ability to successfully integrate acquisitions, competition in our areas of business, client concentration, liability for damages in our contracts, withdrawal of tax incentives, political instability, unauthorized use of our intellectual property and general economic conditions affecting our industry. Thank you.
Nisha Dutt — Managing Director & Chief Executive Officer
Good morning, everyone and welcome to our investor call. Thanks for joining us today as we share updates for Q4. As you’ve seen from the results, our overall results for Q4 are below expectations. But we have managed to maintain the bottom line in our core telco business. I’ve been saying that I’m focused on bringing core telco back to profitability so we can reinvest for growth. So let me start by taking a moment to reflect on our performance for the past financial year.
As I look back, I think FY ’25 was a mixed year for us. The good news is that our core telco business remained steady. However, we did face challenges on the growth front. One of the key factors here was delayed closure of order intakes in earlier quarters. Sales cycles have become longer in telco. We have also seen slower decision making because of ongoing macro conditions and this impacted our conversion timelines. So things that we were expecting for instance to happen in Q1 ended up happening in Q3 and so on and so forth. And consequently this also affected our revenue realization. Our year-on-year revenue declined by 8%. But this decline was primarily driven by our non-core business. So our core business we were still okay. So despite this headwinds, we were able to deliver profitability which underscores the strength and focus in the organization.
On the upside, we made significant progress on cost optimization which led to an EBITDA improvement of INR22 crores. This has translated to an 8% year-on-year margin expansion on our core telco business. So we were minus 4%. We are plus 4%. So we have had 8% gain. Importantly, EBITDA has been positive in the five of the last six, so this has helped us close the year profitably. We have also seen our normalized PAT turn positive in Q4, which I know a lot of you have been asking for a while then with your bottom line being positive. So we did that in Q4. A normalized PAT was positive reflecting the momentum that we have had in, you know, from our operational improvements.
Our cash reserves remain healthy thanks to stronger collections and continued focus on financial management. This will give us the flexibility to make thoughtful decisions in an uncertain environment that a lot of us are staring at right now. We have also seen strong outcomes from our ongoing cost and productivity improvement program. So since I took over two years ago, we have driven a 31% improvement in employee productivity. This reflects our continued focus on talent effectiveness, operational discipline and digital enablement. What this also means is that our fixed cost breakeven point is significantly lower which makes us more competitive and financially resilient in the market.
As I’ve discussed on the earlier calls, we have made a conscious decision to deprioritize non-core initiatives to reduce cash flow and refocus on core growth. In the year you guys are aware, but we divested ID Central via slump sale in Q1 of FY ’25, aligning with this strategy. Our Sectrio division has continued to be a drag on our profitability this year and we are actively working to reduce the burn while we minimize customer impact. So during this quarter, based on internal assessment, the company has recognized an impairment allowance on disputed trade receivables. While companies evaluating all the possible options for recovery on a prudent basis, we have created an impairment allowance of INR16.89 crores and we’ll recognize any inflows as they come in. And this impairment is specific to Sectrio business.
Despite the challenges, I would say that there are many positives that give me great confidence in the turnaround that we are driving. In Q4 we secured some very strong wins. We added a new logo in Europe for our latest hypersense fraud management product. We extended our managed services contract with two Tier 1 customers across Europe and Middle East. These wins strengthen our recurring revenue base, but also reflect that market still has confidence in our offerings. I’m also happy to share that we achieved 100% contract renewal rate, underscoring the trust that customers place in us.
As you are aware, in early March we had MWC Barcelona. This is industry’s leading telecom event where we showcased our latest AI and gen AI enabled solutions in business assurance and fraud management including AI agents for fraud investigation. The response was very encouraging and with the rise of LLMs, agentic AI is emerging as a real productivity lever for telcos and our offerings are well aligned with that shift. So this event also allowed us to deepen our engagement with our customers and explore new opportunities. This validates that our product roadmap where we are going is in sync with where industry is heading, especially in gen AI as it becomes central to transformation agendas in telcos.
As I look ahead for this year, our priority remains to strengthen our core telco business while scaling new growth levers. And new growth levers for us are especially in fraud management. As fraud continues to grow in volume and sophistication and more players enter space, we believe differentiation through innovation will become critical. We are doubling down on embedding advanced AI and gen AI across our solutions to stay ahead of evolving threats and deliver more value. Our install base gives us a solid platform to build this from. The telecom industry, I’d like to just remind you that telecom industry is $1.7 trillion market with double-digit TAM, expansion year-on-year and we have a strong brand recall here and a solid install base. And given that we are very focused on profitable growth, I think we will have the money to reinvest in our portfolio and I’m very excited about what opportunities are ahead of us the.
So next I shall cover the consolidated financial results for quarter four. All numbers are in INR. Revenue for the quarter stood at INR706 million as against INR727 million for the previous quarter. Normalized EBITDA for the quarter is at INR53 million as against INR40 million for the previous quarter. Normalized PAT for the quarter is at plus INR66 million against negative INR17.8 million for the previous quarter. PAT for the quarter is at negative INR76 million as against negative INR33 million including exceptional items in the quarter.
Now I will cover the consolidated financials for FY ’25. The revenue for the year stood at INR2,856 million as against INR3,097 million for the previous fiscal year. Normalized EBITDA for the year is at plus INR65 million as against negative INR95 million for the previous financial year. Normalized PAT for the year is at minus INR146 million as against minus INR375 million for the previous financial year and PAT for the year is at — overall PAT for the year is at minus INR314 million as against minus INR1,917 million, including exceptional items in the previous fiscal year.
As always, thank you for your constant support and I’m happy to take your questions and comments now.
Questions and Answers:
Operator
Thank you, ma’am. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from Jitendra Bhutoria, an Individual Investor. Please go ahead.
Jitendra Bhutoria
Yeah, good morning.
Nisha Dutt
Morning.
Jitendra Bhutoria
Yeah. I remember in the last con call you had said about Subex Digital LLP wherein Sectrio rests. Now Sectrio — you said Sectrio had two big contracts which needs to be served and you’re not taking any other new contracts. Now out of those two contracts, one contract was being negotiated with the clients to close down pre-closure and this was expected to be done within the March fort itself. And the second contract you said you were negotiating and you hope to, you know, negotiate and pre-close that contract. Now my question is what is the status of those pre-closure of those contracts because we are burning a lot of cash. Now this is my first question. Yeah.
Nisha Dutt
Yeah. Please go ahead.
Jitendra Bhutoria
Yeah. My second question is I just wanted to know you have spoken about the impairment allowance for trade receivables. Now this impairment allowance wherein you have mentioned about INR16.89 crores is disputed trade receivable. Now which year to it pertains and whether I understand there was some outstanding regard to Burma receivables, you know, there was some repatriation problem. Is that this receivable relates to that?
Nisha Dutt
Okay. Okay. So are those your two questions Jitendra?
Jitendra Bhutoria
Yeah.
Nisha Dutt
Okay. So in Sectrio they were two big contracts as I’d mentioned. So one of the contracts actually we have been able to pre-close and I’d like to kind of again remind everyone that the INR16.9 crores impairment that we have taken is purely on account of Sectrio. So what that means is that the Myanmar contract that you are referring to is not a part of this impairment. So this impairment pertains specifically to Sectrio. And this impairment has one of the — one of the contracts that we have been able to pre-close, the receivables are from that contract. You know, the 16 — I mean some part of it, a large part of it is from that contract. There is another very small contract on the other side. But I think large part of contract is the one that we have pre-closed. So we have receivable spending there that we have to collect over the year.
Because you know, we had a discussion with our auditors and we said that in spirit of transparency and also because I’ve been saying this all along that you know, we are trying to negotiate out of contract, we should provide for it on a, you know, it’s more, I would say a prudence basis and abundant caution basis that we should provide for it now and we will recover the money. As we recover the money, we will recognize, you know, we’ll recognize income for it as through the year we recognize the money.
But to your question on the two contracts, the INR16 crores is from one of the contracts actually. A large part of INR16 crores rather is from one of the contracts that we have per-closed. So we have been able to close. But receivables are something that we have taken impairment for on a cautionary basis which we will continue to recover through the year. So that’s one part. The second one is second contract. I don’t think that, again we are trying our best but we may not be able to entirely exit that contract in which case we will continue to service it but with a very lean team because it’s only one contract. It’s not — we are not spread out too much. So we may not need a lot of, I would say spend not to the tune that we were actually having cash burn in Sectrio. I think that has significantly reduced and you will see a lot of impact of that in Q1, for instance. Right.
Because we were still dealing with the, I would say the aftermath of winding down and all that. So we will still have probably a very lean team that will service that second contract. We are trying to negotiate. But it’s entirely possible that we may not be able to accept that contract. So that’s the status of our Sectrio. Again, to remind everyone on the call, this impairment is not on the core business, what I call as core telco business. This impairment is purely on Sectrio actually right now, which has been taken on cautionary basis.
Does that answer your question?
Jitendra Bhutoria
This answers my question. There’s one follow up. Now I just wanted to know that regarding you said that the second contract, you may not be able to close down or pre-close it. What is the estimated cash burn you expect during the whole of this year? Because although we are trying and is there any impairment in the receivable of that contract also?
Nisha Dutt
So, again, see — okay, so in spirit of transparency, let me just put it as much as I can share with you.
Jitendra Bhutoria
Yeah, please.
Nisha Dutt
See, the cash burn for us will vary depending on what we are able to do with that contract. So in the sense that if I am able to, let’s say, do it on a very lean manner and sort of, you know, take support, some external support, and fulfill that contract, then my burn might be to the tune of, again, please remember that these are, you know, numbers that are more — estimates only. Please don’t take this as strong guidance because I’m still working these numbers out. But it might be in the range of, you know, we are thinking like a USD300,000 or something through the year.
And if we manage not, you know, if we — but we have to, there is another option that we intensely work on the contract and try and close it sooner, in which case it’s possible that we may incur a higher burn, but try and exit the contract a little sooner than we would have otherwise exited. So in which case our burn might increase but we might be able to exit it, let’s say two years sooner than we would have otherwise exited the contract. So that’s the negotiation or decision that we are trying to make right now, honestly. So that’s why I don’t have a very clear answer for you. But I think at the very bare minimum we might have a USD300,000 for sure and it may only go up depending on the decision we make on the contract. So that’s broadly where we are.
Jitendra Bhutoria
USD300,000, I would understand, crores or….
Nisha Dutt
USD. It’s USD.
Jitendra Bhutoria
Because I see that Sectrio, you have a loss for the whole year of INR25 crores now and that is outside — that is out of these two contracts only. So leaving apart the first one which is closed, what was the quantum of loss in the second out of this INR25 crores, if I may actually split that.
Nisha Dutt
Actually second contract, we have not had a loss. So there are two things that happened here and I will ask Sumit to weigh in here. So there are two things. So the overall loss is — has two components. There is a Sectrio loss of one contract which is, one largely one and a very small other one which is contributing to around INR17 crores. The other part of impairment that you are seeing is basically we internally have a financial I would say again, this is a policy that we agreed internal policy with our auditors. We didn’t have to, but we have agreed as management that any receivable that crosses a certain threshold will be provided for. So this is a regular provision that we are doing. And some of these contracts are not bad contracts or bad money. What happens is that some of the contracting that we do in our core telco business is backloaded. So what means is that the money will come a little later for us. So that gets recovered but it gets provided for. So it’s that money.
Again, Sumit, do you want to come in and maybe clarify a little bit for Jitendra?
Sumit Agarwal
Yeah, sure. Thanks, Nisha. So basically there are two sources. One, as Nisha told. So for the quarter, if you see we have provided the bulk impairment is towards the Sectrio contract, which is INR16.89 crores. Then barring that there are as a part of ECL provisioning for the receivable. So anything which is, which comes into the ECL provisioning, it keeps coming and internal policies is anything, anything greater than 365 days, which is crossing at the receipt then we provide and then obviously it’s a — it’s like a moving bucket, it comes and goes. So which is a routine kind of a thing which is there. But bulk is the Sectrio piece which we have just clarified.
Jitendra Bhutoria
Okay. Okay. Thank you so much. Thank you.
Nisha Dutt
Thank you.
Operator
Thank you. The next question comes from Mahesh Kumar, an Individual Investor. Please go ahead.
Mahesh Kumar
Yeah, good morning, Nisha. You have been telling in all the calls that telecom total addressable market is few billion dollars. A few trillion dollar. What are the products which Subex is having for that? What is the total addressable market? That is my first question. In second investor call you told you will try to address adjacencies of telco for growth. What is happening on that front?
Nisha Dutt
Sure. So basically, if you look at our products that we have for this market, as you know we are in business assurance, we are in fraud management, we do partner settlement and then we have a suite of AI products. But AI products are primarily for us geared in fraud management space. So if I were to look at the fraud management in telcos, it’s actually a $39 billion market that’s the TAM which is growing at 39% CAGR year-on-year. So we have been tracking actually and if you look at the AI agent market, which is where we are trying to position a lot of our fraud agent, AI agent market is $5 billion market as we speak today, and that is going at 45% CAGR. So these are very high growth markets actually. So that will give you a sense of the TAM.
And in terms of adjacencies, what we have done is so we are addressing telcos, of course. Telco adjacency we have picked up is primarily on I would say telco fintechs. So every telco in the market today has a wallet, right? Airtel has a wallet, Jio has a wallet and all the large telcos actually have wallets or they have their own financing arms. So we are actually doing a lot of fraud management and business assurance for their fintech product. So what we have done is we have done horizontal scaling of our products and we are addressing a lot of things.
So for instance, if I do churn management, right? At what rate do customers churn from a telco? So I can do it for telco, but I can also do it for their telco finance arm, the telco fintech that we call. So mobile money itself is growing at 22% CAGR. And the market there is $120 billion. So that’s an adjacency that we have strongly latched onto. Also because I already have relationships with telco, so it’s easier for me to kind of cross-sell into mobile money. So that’s the one adjacency that we have taken.
The other adjacency, which I wish we could have gone stronger, which we haven’t been able to go very strong at, but this year we definitely want to go there is OTT business. Your Netflix and Amazon Prime and you know, all these places. So that’s where we did not make a lot of inroad, but we made inroads in mobile money. This year we are hoping that we are able to go much stronger on OTT side as well. So these are the adjacencies and our product suite is very, very focused on fraud. So one of the largest growing frauds in the world today is account takeover. And account takeover happens in money, mobile money. It happens in your telco business, but primarily happens on OTT side. So for instance, that’s one of the problems that we are trying to solve.
Our handset fraud solution, actually the biggest fraud in the world is handset fraud and we have a solution for that. And we are servicing a lot of customers with handset fraud specifically. So we have anchored a lot of our, I would say that you know, the fraud management portfolio, which was very traditional CDR based portfolio, we have taken it and we are trying to embed a lot of AI into it and we are trying to tackle new fraud through AI actually. So a lot of robo calling, flash calling, spam, account takeover, everything that we all suffer from actually day to day basis. So we have created solutions for it and we are trying to go strongly in that. And these are the solutions that can horizontally scale. It’s not just a telco problem, it’s a data problem. It’s also a money problem. It’s also an OTT problem actually some of these things. So that’s the way that we are looking at it.
We are also looking strongly at some partnerships because we understand that time to market is very important. Right? I don’t have the time to sit and develop a solution for another two years and the market may move away from me. So places where we already have a lot of domain knowledge, we have gone faster at it. But there are places where we are going to partner with people going strongly with partnerships and see if we can white label their products or should cash become available then we can look at some inorganic path as well. But that’s the direction in which we are thinking that what we can do ourselves, we go fast at it. What we cannot do ourselves and will take us time, we go into that market with partnerships. So that’s the kind of scenario that we are kind of looking at. But I would say it’s primarily fraud. We have done mobile money to answer your question and OTT is something that we definitely plan to tackle.
Mahesh Kumar
I have a follow up question on this.
Nisha Dutt
Sure, sure.
Mahesh Kumar
What are the customers you have for AI agent? Do you get any success till now? Then you have also launched a team of LLM solution for fraud management thing. So do you get, do you have any customer for that? And how many customers are there for phone fraud management?
Nisha Dutt
Okay. So POCs for agents. The POCs, we have done actually I would say three POCs for agents and actually they are highly successful POCs and one of the places where we will probably contract. We are actually in advanced stages of converting it into a contract. So we should have our first full, full win on the agent side. LLMs, what we are doing is we are not selling LLMs like separately. So what we are doing is LLMs we have integrated into our hypersense solution for instance. So our hypersense will now be powered by LLMs. Right? So anybody who buys a new version of hypersense. Yes. Sorry, go on.
Mahesh Kumar
Yes, you had announcement of team of LLM solution.
Nisha Dutt
Correct. Yes.
Mahesh Kumar
Okay, so do you have any customer for that now?
Nisha Dutt
We do actually. So for instance, the way I solve for handset fraud, right, is a team of LLMs that’s solving for handset fraud. So, you know, one…
Mahesh Kumar
Which continents these customers are there?
Nisha Dutt
This is actually North America. We have done one in North America, one in APAC, and another one, if I’m not wrong, it’s in Middle East, North Africa, sorry, North Africa.
Mahesh Kumar
These are paid customers or only POC?
Nisha Dutt
No, one is a fully paid customer. One is actually the POCs are also paid. So it’s not that we are doing free POC.
Mahesh Kumar
Should result into a contract?
Nisha Dutt
Which we are actually negotiating right now in North America to get into a new full blown contract. So there we have, we are working with a consortium of three large telcos where we have demonstrated and they have liked our solution. It was a, and now we are talking about a commercial contract there. So some of this is not theoretical for us. What we have done is our embedded, first of all, our, we used to call it an AI first. Right. I would say hypersense is also LLM first in that sense. So we are embedding LLM strongly into our portfolio. And we also have standalone solutions that can go.
So I can sell handset fraud as a standalone solution. I can sell robo calling as a standalone solution. And these are all powered by agents actually. So this is like a agentic squad, we call it, that solves fraud management. It can do investigations and fraud. So that’s the kind of agent. And underneath you will see that there are 10 agents that are doing different tasks. One is a KYC agent, one is checking your subscription. So there are different agents that come together and solve for fraud, investigative fraud. So that’s how we have sort of architected this.
Mahesh Kumar
So this team of LLMs basically are collaborating for a solution. Am I right?
Nisha Dutt
That’s correct. That’s correct. That’s correct.
Mahesh Kumar
Okay. See all these new developments which are happening? Yeah, Just, just a suggestion. I have one suggestion for Nisha. See all these new development like AI agent and team of LLM and phone fraud management. These all you should communicate regularly with the investor. See we are not getting this information anywhere. Last time also I sent you mail on this team of LLM.
Nisha Dutt
Correct. So I thought that in MWC communication goes out often. But I think one of the maybe misses that we have had is we do a lot of LinkedIn communication. I think we are not sending like releases on this but…
Mahesh Kumar
Many investors are not there on LinkedIn.
Nisha Dutt
Yeah, you’re right about that. But we do actually communicate.
Mahesh Kumar
So these are very good development happening. This will change the perception about Subex.
Nisha Dutt
Right.
Mahesh Kumar
See AI agent will take you to the next orbit in the perception.
Nisha Dutt
Okay.
Mahesh Kumar
See perception also matters.
Nisha Dutt
Matters a lot I would say. Completely agree with you.
Mahesh Kumar
See today Subex perception is very bad among the investor fraternity and you are doing all the developments. So we need to communicate more with the exchanges. You have done POC. All these companies listed on Indian exchanges, they communicate if they do POC.
Nisha Dutt
Okay, maybe Ramu, can we make a note of this?
Ramu Akkili
Yes ma’am, I made a note of it.
Nisha Dutt
Let’s see do some more proactive. See we do — actually we do a lot of marketing collateral. I just, I think we have not kind of specifically targeted stock exchanges but we do quite a bit of collateral actually. I would say that on the average maybe one post goes out every day and there’s a strong frequency. But you are right. Yeah.
Mahesh Kumar
On LinkedIn you will get accolades from the professional peers. But you also have a responsibility to investors.
Nisha Dutt
Agree. Agree. Okay, sure. Point well taken. What I will do is — maybe Ramu, we really need to get a cadence set for this.
Mahesh Kumar
So all this — you should communicate. How many companies India are working on AI agents?
Nisha Dutt
Actually I would say very few. There is a lot of noise around this.
Mahesh Kumar
So that’s why you have to communicate. See in US many companies are trying AI and Google is trying, Meta is trying. But in India very few are there. So you should communicate. People should come to know that you are doing such cutting edge technology development.
Nisha Dutt
Right.
Mahesh Kumar
Okay. I have another question. I will join the queue after some time.
Nisha Dutt
Okay.
Mahesh Kumar
Okay. Thank you.
Nisha Dutt
Thank you.
Operator
Thank you. [Operator Instructions] The next question comes from Abhishek Kale, an Individual Investor. Please go ahead.
Abhishek Kale
Good morning. Am I audible?
Nisha Dutt
Yes you are.
Abhishek Kale
I think what Mahesh said the previous caller said. I’ve been saying the same thing over and over for the last two conference calls that we have had. I mean high time. So last time Ramu was just, he just got into the company. But now, I mean we cannot continue going on the same path. It’s high time we just put our act together. Okay?
Nisha Dutt
But Abhishek, did make a lot of announcements on the wins and all that. No, you are good on LinkedIn. Again, Nisha… I think we are starting to get. Not LinkedIn. We did stock exchanges. No, the wins that we have had on the…
Abhishek Kale
Yeah, yeah, so you did with deals. I’m saying overall, whatever we are doing, if you think that people should know about it, right, then it should go out to the exchanges. I mean, when you are putting it on LinkedIn, your marketing team is very regularly putting things on LinkedIn. I have, I follow your company on LinkedIn, so I know what is happening. But if I were to just not sign up on LinkedIn, I have zero visibility as to what is going on apart from the deal wins that we have had. The European deal that we have had which was communicated timely by the organization. I appreciate that, but we need to communicate more.
So I mean high time. Then another question. I mean what was this need for impairment, the provision that we made, right? You said that as a matter of caution. Okay. And bear with me, the moment you use the term caution, right, it to me, I hear it as we have doubts whether we will receive the money or we have at least the slightest of the doubts wherein we have talked out of that contract and we think that the customer might not pay and that’s what maybe the reason for exercising the caution. Is that right assumption or am I off base here?
Nisha Dutt
So that is not correct. So I will tell you why we have taken the cautionary impairment. So one is that, see when you are — one is our own accounting policy, right, that we have decided on internally like even Sumit was explaining. When a receivable crosses a 365-day threshold, we do provide for it. So I didn’t have to take this provision honestly for another quarter. I could have sat on this and my Q4 results would have looked great. In fact, I was disappointed that I would, we had to take this and I said we will take it. But if you look at the normalized EBITDA impact, we are actually PAT positive this quarter, right?
I mean, what is not to like here? And I am, you know, I would say slapped with this kind of an impairment which nobody likes. You don’t like. I dislike it even more than you. So the thing is that though that, but we have created a policy, right? And we have said that, look, we will do the right thing so that we don’t end up having reversals like we have had. If you remember, we have taken huge revenue reversal in past. To avoid any of that we said that we will cautionary basis, we will just provide for things and we will collect them. As we collect, we will recognize.
The reason why we have also taken — I use the word caution is, because once you discontinue a contract, your ability to recover money, right, becomes a little bit tricky. I would not say till it will not come, but it becomes a little tricky nevertheless. Because when you are engaged with the customer and you are working with them on a day to day basis, you can press upon them the urgency to pay. But when you are sort of telling also negotiating with the customer that look, I need to kind of discontinue this, I’m winding this down, I’m not going to service this, in that scenario, what happens is that the things are not as clean as servicing a contract, right? So that’s why we thought that we should provide for it.
And as we collect, we will kind of, keep recognizing income for it through the year. And I will try all means possible and whatever it takes, we will go and collect this money. So, we have decided that we will go to the end of this earth if we have to, to collect this money. So, if it means that at some point of time we have to do disputes, whatever it is, we will do it. But this money, willy-nilly, we will go and collect one way or another. So that is the reason why we said that let’s provide for it, but let’s also be transparent that you will see in disclosure, we have said all means possible. We will use every possible tool with us, right? If it will be negotiation, arbitration, legal, whatever I have to do. But I will try and go get this receivables.
Abhishek Kale
So probably then this question is more a Ramu question than Nisha question. Do we have our contract written in a way which protects our interest or have we managed to write this contract which we have walked out in a way which benefits the customer and puts us in a big hole? Because I think one of the contracts, the one where we are seeing a $3,000 cash burn is of that nature, where we have no control of walking away from that contract. There is nothing in it for us in terms of what we can do. We are only obliged to service. We cannot walk away. We don’t have any levers. Is that something that is baked into this particular contract?
See, Nisha, I mean nothing against what you said, I understand that you will follow up and we will see what happens in the future. But right now, to me, I mean, the more you spoke about it, that since your engagement is not to that level, right? I mean that is raising a bit of a red flag for me right now. I will put an amber, not a red right now. But I mean that is doubtful that how much of it of the INR16 crores will get realized. I will be the happiest person. I’m a shareholder. I’ll be the happiest person if we get all INR16 crores and some interest on it. But right now it’s an amber flag for me, probably for you as well. I don’t know.
So question again…
Nisha Dutt
We are sitting on some information that gives us a — this is a disputed trade receivable right now. Right. That’s why we are providing for it. But we do have some, we are sitting internally on some information which might make it a good case for actually going and getting our receivables here. So we do have some information that we are sitting on internally. The provision is perfectly, but provision is more a matter of, I would say principle, policy, and I would say caution and prudence. Right? I mean, then I always feel that, if the policy demands it, do it. When in doubt, be conservative. There is no point in us coming back and telling you guys the same thing. I could have actually done it next quarter. I didn’t have to do it this quarter. But we just, in fact, we were the ones who approached auditors and we said that let’s just do it because we think that yes, it will make results look bad, but I do think that we have otherwise delivered actually on everything.
Abhishek Kale
Point taken. And again, see, Nisha, what has happened if you see last year, the same time we decided with that goodwill impairment. That’s your first bouncer, I mean, which broke my head, then this second bouncer. I mean, you don’t give a chance for us to duck under the bouncer, because IPL is going on and I’m a cricket fan, so I’m using this term. So — but I mean, you can see it from an investor’s perspective. And again, for the moderator, I’m going to probably continue with my questions. Please don’t kick me out because most of the questions I’m going to ask others will have the same ones.
So point is, these bouncers or these shocks continue to hit us and we don’t know what next landmine we are going to hit or step onto as an investor, maybe the company is privy to and you will disclose as things come or as we step onto that landmine and our necks get blown apart, then we will know about it because you disclose it. I mean, these things are actually driving the investors away from the company. The credibility is really, really, really low at this point in time. I mean, I don’t know as an investor tomorrow what is going to happen. Right. And for me as an investor, being in this predicament is like, what. Do I stay with this company invested or not? I think you probably would see through what I’m trying to say. Right?
Nisha Dutt
No, no, I do. And see, the irony of it is not lost on me. In fact, when we decided to take this impairment in Q4, the irony was very clear to me that we did that last Q4 and impairment, and that was Google. But this time we are doing a trade receivable impairment. So the irony is not lost on me at all. Believe me. That, you know, I felt the pinch a lot. But I think also I would say now, to be fair to the management Abhishek, we have been flagging Sectrio issues, at least I’ve been flagging for the last two or three investor calls that this is a little bit messy. We are trying to exit few things. So some of it, I wouldn’t say that. Okay, we didn’t say that something like this might hit us. But I think I’ve been giving fair warning that this is something that we are trying to sort of untangle right now. And some of the mess comes with it, which we will, I think we will get through it. It’s, you know, I’m very confident we’ll get through it. But I’ve been flagging for a while, right?
Abhishek Kale
No, no, no. I I don’t deny that you have been flagging the Sectrio issues. It was only the quantum of it, which I don’t think we were privy to. Maybe you were because I mean you obviously know the numbers, but we were not privy to the numbers. I hope you see that point. Right?
Nisha Dutt
No, I see your point.
Abhishek Kale
Right. Now a couple of more questions and quick ones. The two deals which we have closed, right? One is a renewable, we have renewed a contract and one is the new, the deal in Europe. What it is going to contribute on a quarterly basis to our numbers and when would it start?
Nisha Dutt
So on the MS renewal deals, wherever the renewal of MS has happened on two days, that contributes to the quarter immediately because there is not — on the net new. Like when I say that I sold a hypersense fraud management solution, this is also to kind of explain to everyone how you should interpret the numbers. So whenever it’s a managed services deal or a renewal, the revenue continues, so there is no lag. But when it comes to a new implementation, when I sell a new fraud management or revenue assurance solution, there, there is a implementation period. So the moment my implementation of that project ends, that’s when my subscription starts. So I will recognize some money in the beginning, which is more a setup, some license and all that. But bulk of it comes a little later once the implementation is done.
And for us, our fraud management solutions typically take, I would say around nine months implementation cycle. So depending on the complexity of it. So it takes between six to nine months of implementation. So once the implementation is done, the subscription revenue comes in. So you should expect it, let’s say a win that has happened in Q4 probably starts accruing for us in Q3 of this year. So that’s broadly the timeline. On renewals that’s why renewals we are very bullish on because one is it gives us recurring revenue base. Also, it’s the quality of, I think revenue is very high. Right? Always MS revenue is very high quality revenue. So that’s why we are bullish on that. But yeah, that’s the way to interpret those numbers broadly.
Abhishek Kale
Okay. One last question. The cost optimization you said, which saved us about INR22 crores. Could you please elaborate on that?
Nisha Dutt
That was primarily done on few aspects. One is obviously we do manpower optimization. So that is, the way that we have done cost framework is just to explain to everyone is what we do is we, we kind of, took a look at our gross margin, we looked at below the line items, we looked at what our S&M cost is, sales and marketing cost is, what our, let’s say G&A is. So we took our cost base and we benchmarked against some of the best in the industry where I would say which are similar size, some really big ones, some small ones, some similar size. So we did some sort of benchmarking actually when I came in. That was one of the big exercises we did.
So when we benchmarked we realized that is our gross margin broadly aligned with what it should be industry wise? Is my R&D spend aligned? So we did a lot of alignment internally and there were buckets where we found that our spend was way off when I compare it to my competitors. And that’s where we sort of took a, I would say a stronger gut saying that, if others are able to do it, let’s say, in a certain percentage, why am I so off actually? What is causing this for me? So that is the, I would say the cost wise, that’s the structural correction that we have been doing which has actually led to this. So it’s not just manpower, it’s also facilities, for instance. Right. So we also decided that we went and looked at the unused facility or is it underutilized. Can I kind of collapse it and bring it on one floor?
So in Bangalore office for instance, we have done some trade offs where we are giving up a floor and bringing everyone down to sort of one floor. So we are doing some of those facilities adjustments. So there is — so when we did this, we did this on G&A, we did it on S&M, we did the gross margin level, we did on R&D spend, we did it on our delivery utilization. So we have benchmarked everything. So this is broadly a part of that framework. So it’s very systematic. So EBITDA has not come because it suddenly just happened because, growth has been a challenge yet we have, delivered the bottom line. So there has been a very systematic approach to this. We keep kind of doing this every six months we go and measure how are we doing, is the cost drifting and if it does, then we take another sort of, swipe at it. So it’s not just people, it’s also facilities. It’s also things like travel expenses. And there are other things, you know, there are most of costs in a company, hidden cost. So we take a cut at everything actually across. So that’s what contributed to this honestly.
Abhishek Kale
Okay. And one last question.
Operator
Can you join the queue, please?
Abhishek Kale
Sure, sure, sure. I will, I will. Thank you.
Nisha Dutt
Thank you.
Operator
Thank you. The next question comes from Sagar Desai from Crown Capital. Please go ahead. There is no response. And the next question comes from Sanjay Kumar, an Individual Investor. Please go ahead. There is no response. And the next question comes from Sanjyot Khare, an Individual Investor. Please go ahead.
Sanjyot Khare
Hello. Am I audible?
Operator
Yes, sir.
Nisha Dutt
Yes you are. Hi. Go ahead.
Sanjyot Khare
Hi. Good morning, Nisha and Sumit, congratulations and good operational performance. And finally, we could see positive PAT. So well done on that. I mean I can understand in this difficult business scenario, doing these things are difficult. You guys have done it. Definitely would have been happy to see more improvement on top line. So hoping things get better on top line side.
So my question is about one is like how the business scenario looks like region wise now from the Americas, Europe and Asia, APAC, since January this year or since March and the trading talks are started and things have started. So how are we seeing now the business scenario? Are we seeing there are opportunities there? Opportunities are growing? And are we getting a chance to participate in more RFPs? Proposals moving to L2s and L1s? And what differentiators we are building to get the contracts? Because just start of the call you mentioned that there was a delay in closures. I mean so it means that you have reached to L1s and now the closures are pending. So are we seeing that some closures will be happening in Q1 quickly? That’s the first question.
And the second is about definitely the things are getting better slowly on that. So do you have any plans to work with analysts and investor community and then see this more presenting about how the company is doing and then getting more visibility into this investment community and any plans for that?
Nisha Dutt
Okay. So on the first question I think what we are seeing is you’re right actually a lot of our deals moved. I think the only good news there was we didn’t lose any deal. It was just moving quarter-on-quarter. In fact there’s one deal that almost moved by four quarters, honestly. So it’s just, this is because people what happens is that when some, some global leaders, political leaders, micro economics, when people start exercising caution, then they start looking at spends a little bit more carefully, right. They start delaying it. Not that they are not spending, but they are delaying their decisions. So you are right. Actually a lot of contracts that got moved for us. We are expecting a lot of closures in H1 this year. So we are expecting that some of that has — and there were two, three things. One was this happened, there was a micro environment climate, there was something brewing there.
The other issue was that in, right in March when there is expected to be some closure activity. Middle East and good parts of APAC where we work, right. Major markets, they went for EiD holidays for four weeks. So then what happens is that work just stalls actually. For instance, Europe will now go for, you know, we all know, July and August, Europe will stop working. So there is a lot of psychical things that we have to catch up on and we have to time. So you are right that we are seeing some of the contracts that were moved should happen in H1, manifest for us in H1. So that’s one thing.
The second is in terms of geographies we are seeing a lot of interest and from APAC, APAC has always been a very good market for us. Africa for, you know, Africa was sort of, I would say up and down market for us. But this year we do have some good ones that we are changing actually. Some very good contracts that we are trying to close in Africa. So if Africa we are able to really be bullish on this year, I think we should do well. Europe again, I think it does what it does. Americas, we are trying to — Americas, we are positioning more with our new products because America is a market that can actually absorb a lot of, I would say agents and everything else that we were talking about, right. That we are really positioning in Americas markets for us. So that’s why we are looking at this.
But overall, you know, telcos have generally been hit with, you know, if tariffs come then what will happen is their investment, their network investments are very big, right. It’s a big part of telco business and capex is very high. So with tariffs, what will happen is that this bucket will really balloon for them if actually it becomes real. In which case a lot of other spends that they do, they will start putting it on hold even more. So that’s the, I would say if I had to ring a warning bell a little bit. That’s the one that we are seeing might have an impact on our business. But that’s, we’ll see how it plays out. For now, it’s on pause. The tariffs are on pause. But we will see. But you are seeing that some effect of that will happen actually for telcos, it’s an indirect impact, but we might get hit by it. For now, we are okay, but we shall see how it plans, I would say, pans out. We will see it in this quarter. But as we stand, we are expecting the deals that moved to happen close in H1 of this year. So that’s — as we stand, that’s what will happen.
The other decision that we are seeing telcos make a lot, which is kind of interesting development for us, is that while we are selling hypersense, we have a large install base of ROC [Phonetic] implementations, our older products. So there are telcos where we have gone and the customers are telling us that our mandate is very clear. We can’t spend, let’s say, on new, but we want to sweat this asset a lot more. So can you then do a lot more work, do a lot more enhancements and you know, AI and agents, everything that you wanted to take to hypersense, can you put it on ROC and make me sweat my asset a lot more. That’s become like an interesting development for us because — and if you’re able to deliver to that, I think that will unlock a very big market for us because ROC actually has a huge install base compared to even hypersense. Right. I would say it’s like 4 times, 5 times of hypersense right now. So if you are able to kind of grab onto that opportunity and more and more telco start thinking that I want to sweat my asset, then I think it might become a opportunity that we were not actively tracking. But we are seeing market pull for it. So that will be an interesting one for us. That’s again the other one we are tracking.
On your second question on analysts and investors, honestly I thought that sometime last year I would start that outreach and start the conversations, but I have been a little bit conservative in my thinking also think — I always thought that I have to deliver some numbers before you can actually stand up in front of someone and have a good conversation. Right? But now I think that maybe the time is there where I feel that yeah, we have some drag that’s getting caused by a non-core portfolio. But I think core is sort of, we have, I would say that we have fortified our core quite a bit and this might be a good time for us to go back and test waters with analysts and investors. So maybe, Q2 of this year we will start that activity as well. But to be honest, I’ve been a little bit away from it, thinking that the work has to speak first before we go and start speaking. So I think somewhere we have some fortification now. And now I feel that, maybe the time has come for us to test waters. So we’ll up our engagement in Q2 or starting Q2 of this year.
Sanjyot Khare
Sure. And the last question is about are we seeing that the top line now this revenue is now bottomed now and it’s going forward now. Are we seeing it will be incremental from Q1 onwards so that it will keep going up, it’s not going to go down.
Nisha Dutt
That’s my ambition for sure. I can say that that’s my ambition that it should start. See because growth has been a challenge last year and while I have been able to fix the bottom line, I always tell that there is a cost of doing business right. So how much can you play with bottom line beyond the point, right? I still think that we have room but beyond the point your top line has to grow. So definitely, a lot of effort has gone in last year to see how we could sort of go back and grow our top line. I’m hoping some of it yields results this year also because the deals that got shifted if they manifest in H1 of this year then it should start having an impact on our top line almost right away. So definitely this year I think as we continue to improve EBITDA, the fight is going to be on the top line.
And the other is we are also going to reinvest in new areas, right? Because EBITDA was important only because if you are able to release some cash, I can go back and reinvest in new areas. So we have been able to release some cash, right. So I think also with tax refund and all that. So what we will do is we will go back and reinvest in the new areas and see if we can build a net new pipeline which did not exist earlier for Subex. So one of my big goals this year is to build a pipeline that would otherwise not exist for Subex, which means net new offerings, net new pipeline. So there is a lot of effort that we are going to make in that direction and hopefully this will all yield results. But yeah, ambition is definitely growth, but yeah.
Sanjyot Khare
All right. Thank you and wishing you all the best.
Nisha Dutt
Thank you so much.
Operator
Thank you. The next question comes from Darshil Jhaveri from Crown Capital. Please go ahead.
Darshil Jhaveri
Hello, good morning, ma’am. Hope I’m audible. Yes you are. Yes, please go ahead. Hi. So ma’am, I’m a bit new to the company so pardon my questions if they’re a bit naive. So just wanted to firstly ask like in the Q4 we finally achieved a normalized PAT but then we had to take an impairment. Now I get the reasoning for impairment because we want to be more prudent. But the following quarters, right, like now in Q1, it’s a month has already gone by so you know, can we expect the similar run rate in terms of our EBITDA or PAT? And just one more bookkeeping question element to it. We’ve had suffered losses in the past, so how does a tax rate work out? Because can we get a set off of those losses? Because you know that will also kind of help us our PBT to PAT conversion will be better that way. So just wanted to ask a bit about that.
Nisha Dutt
Yeah, maybe. Okay, maybe I’ll ask Sumit to sort of take your — yeah, Sumit, can you answer the question on the tax?
Sumit Agarwal
Yeah, on the tax bit, the answer is yes. So any carry forward losses that we have because again PBT is not considered as a tax base. It is just a provisioning in the accounting side. But having said that we do have some lot of carry forward losses and that future taxes can be — future profit can be offset with the gains which we have. Apart from that, to be very honest, given it’s a global company, we do have some sort of a foreign withholding happen, okay. And that is only allowed to the extent of the gain. So there will be always a bit of a tax leakage keeps happening because of the various jurisdiction around. But broadly, in a plain vanilla answer, yes, the carry forward losses which we have can be sufficient to or gain.
Darshil Jhaveri
So how much losses do we really have? Like because even this year we provided for some taxes. Right? Like or just wanted to ask a bit about that.
Sumit Agarwal
Right. So again as I mentioned we have a foreign withholding taxes are there because it’s in our — so what is the thing is, in case you have, if I have a foreign withholding, the taxes to the extent of gain it is allowed and balance it is basically, it is the tax. So that is what we keep provisioning for. In case the company turn positive to the extent of that. Otherwise it’s a tax leakage. So that is…
Darshil Jhaveri
Yeah, okay, fair enough. Got it. And my question — okay, okay. And my question regarding our, normalized quarter, like we have PAT, we finally turned positive on that front. So how do we see now going forward? Like firstly, are there going to be some impairment — because it’s like this impairment. And if not like how do we see FY ’26 panning out? Because I think in terms of revenue also we’ve kind of, I think come near the bottom and now I think things can pick up with the deal. And we worked a lot on bottom line initiatives. So just if on a broad base what is — no one’s going to hold you to it if you begin to. There can be a range also ma’am, just want to know like what is our target? Like can we like maybe just giving an out, INR350 crores, INR400 crores of revenue and any kind of EBITDA that you would want to, you know, just achieve.
Nisha Dutt
So basically, as I mentioned Darshil, see the cost restructuring has been done, right? So some amount of cost restructuring we have already done and we will continue to do it. But so those gains should carry forward for us, right? I mean it’s not one time. When you do the restructuring, some of it stays with you. So like productivity enhancement, I was talking about, 31%. Right. So that can only go, it can only get better. It doesn’t get worse, it can’t get much worse than that. So those gains we will continue to make. So when you restructure cost in a more systematic manner, then those gains will continue.
Now on some, additional or unexpected cost, will it hit us in terms of? Today, as I sit, I can’t foresee anything. But we’ll see if it, if it happens, then we will let you know. But again I don’t foresee it. So I think some of the cost restructuring initiatives should continue and continue to give us gains. But in terms of top line, you are right. We have had a decline in the top line from I would say INR300 crores plus — INR300 crores plus top line to, a decline this year. But a lot of the decline, like I said, has happened from the non-core business. Right. So from core we should start building up from here. I think because you were seeing consol numbers, you are — most of the, most of you haven’t seen the split. We have seen the split internally.
I think where we are are, our core is still, I wouldn’t say it has grown tremendously, but I would say it’s broadly flat. So — but it’s not degrowth. There is no degrowth in core at all actually. So I think where we are, we are in a solid position, we should be able to grow from here. So there’ll be no degrowth in core actually on the top line also. So my disappointment is that we didn’t grow very fast or not even fast, but I would say that at least we didn’t grow as much as we wanted to. But rest assured there has been no degrowth actually in core business.
So non-core burn reduction will continue through the year also. We will try to control that because we are still carrying some of that. I would say a lot of it is behind us, but there is still some to be cleaned up this year which we will continue to clean, but that burn should continue to reduce. So I would say the bottom line benefits should keep accruing unless there is untoward event, but that should continue to accrue. Growth will be the something that will get focused on. While we didn’t degrow, we didn’t grow also very well. I would say we were broadly flat. So that’s one challenge that we have to tackle this year in my opinion. So yeah, I mean if I were to give you at least, I wouldn’t call it guidance but at least, that’s my definitely aspiration for the year that we do much better on top line. Like I was saying, bottom line restructure has happened. We will continue to restructure it even more.
But like I also mentioned earlier, there is a cost of doing business. Right. So sometimes there is a certain cost that you will end up carrying regardless no matter what you do. You cannot go down to a zero base. Right. So there is certain cost that we will end up carrying which means the only way for us to generate more and more healthy bottom line is to grow our top line. Beyond a point, top line has to kick in. So. And that’s the effort that we are on this year. Yeah. But inshallah we’ll go back to, we should go back to our previous glory.
Darshil Jhaveri
Yeah, yeah ma’am. Just two questions on my end. Like just number one, like when you’re mentioning this core and non-core, it would really helpful if, in your PPT you could mention that. For me as a layman I would not for which part of managed services is core and non-core. That would really be helpful from the next quarter where you can just you know mention okay this is our core business and this is the business we are you know trying to discontinue. We also know okay, a certain bottom line, top line hit will be that this part is going to get discontinue but consequently because the burn of this will also get you know discontinued bottom line should keep on getting better.
And just like on this core and non-core. So in a core businesses what is the margin that we try to when we are making the product for what is the minimum margin that we try keeping when you’re doing this services of core business. So you know at least from our core business that we are going to try going forward increasing. So what’s the margin that as our business Subex we can aspire to be? I’m not saying it’ll happen next year or maybe next to next year but if that is what we are building into our contract right. So what kind of margins are we just as it is building into the contracts that we have.
Nisha Dutt
So first of all, going forward you will see that when I report top line numbers it will only be core. So that I wanted to kind of tell the broader investor community you will have some burn. So in cost side you might have some non-core elements sitting there like I was saying, to the tune of $300,000 or even more depending on how we land. But on the top line, rest assured, you will see only core in all investor presentations and everything. Going forward it’s only core that you will see because there is no top line that we expect to accrue from any of the non-core. So that’s one.
The second point is that I would say that if you look at all the telco vendors, right, and we keep benchmarking, like I was saying, it’s not just cost, we also benchmark margins. So in benchmarking I have seen that all telco vendors are currently benchmarked in the range and it’s a wide range but we have seen telco vendors at around 10% to 17% is the benchmark actually and — op margin, yes, op margin. So our — my aspiration is to get to the benchmark first. So you know, because if there are other telco vendors who are able to get to that op margin, right, I think then we should have a path to that off margin. So that’s how we have thought about it. And I mean if you think about it, even this year there’s been an 8% gain on the op margin. We were at minus 4%. We are at plus 4% now. So there has been an 8% gain on the off margin.
So if we continue to do things well and if you’re able to, you know, we are able to grow our top line and continue on the restructuring that we are doing, I think we should be at least my first aspiration is to get to the benchmark which is in the range of 10% to 17%. So that’s where we are. Currently at 4%, but trying to see if we can, get closer and closer to the benchmark levels. Our framework is created with the benchmarks in mind. Like I was saying, all the cost have been benchmarked to that, all op margins. Everything is benchmarked to what telco vendors are and we are kind of tracked, many actually. So we track quite a few telco vendors and we have been benchmarking to them. So that’s generally the framework.
Darshil Jhaveri
Perfect. I’m sorry, the $300,000 is like $300,000 per month or per quarter?
Nisha Dutt
For the year.
Darshil Jhaveri
Okay. For the year, right? Okay. Perfect. Perfect. Thank you so much, ma’am. All the best.
Nisha Dutt
Thank you so much.
Operator
Thank you. The next question comes from Sanjay Kumar Shetty, an Individual Investor. Please go ahead.
Sanjay Kumar Shetty
Yeah. Good morning. Can you hear me, ma’am?
Nisha Dutt
Yes, I can hear you, Sanjay. Go ahead.
Sanjay Kumar Shetty
Yeah. See, actually I invest in big potential companies. And this company is basically like, I like this company because my children are in the same — they are working in USA. I just wanted to ask you one thing. I don’t want to go into any technical deals, what are you doing and what is your passion and what the company will do? I just want to ask you one thing. When the company is doing very good now, all your ESOP, you know, all the ESOP you provided to the employees, they come and sell around INR30, INR40 [Phonetic]. So do you have any provision — do you have any provisions where you can inform SEBI and if you’re so confident about the company, why is the top management — is the top management buying at this rate?
Because you know, it is INR11.36 all the way from top level. I think there should be something where, you know, you put SIP of some salary part and tell your company employees to buy these shares. Only then there will be a shareholder confidence because we normally go and check promoters and promoters holding. Whenever the links are not good, promoter come back and buy back the shares. So this is the only way, best way you can do something for shareholder, ma’am. You keep on working hard, that’s not going to work. Something out of the box you have to do where shareholder will feel, no, the company promoter is also increasing the stake. I want to — just help me on that part, ma’am.
Nisha Dutt
So, Sanjay, there are two, three things, right? So one is all the selling that you see a lot of people who have sold, right, they have left actually the company. They are currently not with us. So I would actually tell you that the current management and you can probably, you know, go to the website and see what the current leadership is. Current leadership is not selling actually. I can very confidently say that because all the shares come to us for approvals before selling. So current management is not selling actually. So this is all people who have left us subsequently and who were given shares at a low price. So this is all I would say.
Again, I forget to remember the — pardon me if I’m not remembering this correctly, but maybe it was, the share allocation, ESOP allocation, which sort of continues to sort of raise a lot of flags with investors. This happened, I think in 2017 or 2019. I’m kind of, missing the — it happened sometime during then. Okay? So that’s why a lot of people sold from that time. So most of them are not with the company anymore. Actually they are not our KMPs. They are not people who are working with us anymore. And there is no way that I can stop them from selling actually. The shares were given to them as a part of compensation. Buyback. I need money to buy back. I don’t think I have enough to buy back right now.
Sanjay Kumar Shetty
Suppose you are earning whatever your salary, you start pouring 10% of your earning into the company. It’s a positive gesture. [Foreign Speech] Try to understand. How will I gain confidence. I’m holding [Speech Overlap].
Nisha Dutt
[Foreign Speech]
Sanjay Kumar Shetty
[Foreign Speech] I want to tell all the investor I have confidence and start putting more money. Why you’re worrying about it? When the company is doing good.
Nisha Dutt
Actually that has been the thing, Sanjay, we have been trying to bring the confidence back but we thought [Foreign Speech].
Sanjay Kumar Shetty
[Foreign Speech] You take my word and you see the company will go to 50, 60, 70. Investor will start — everybody will be happy. [Foreign Speech]
Nisha Dutt
[Foreign Speech]
Sanjay Kumar Shetty
[Foreign Speech] Other companies are not doing so bad, ma’am. [Foreign Speech].
Nisha Dutt
Thank you so much, Sanjay. Thank you.
Sanjay Kumar Shetty
Thank you. Bye.
Operator
Thank you. The next question comes from Sanjyot Khare, an Individual Investor. Please go ahead.
Sanjyot Khare
Hello. Thanks for the opportunity. I just one question about the income tax refund which is I think you mentioned INR34 crore is something they expected to be coming and even till last quarter it was some INR8 crore was spending. So it’s INR8 crore already come and this INR34 crore in addition to INR8 crore.
Sumit Agarwal
No, no, no. So INR34 crore includes INR8 crore because this the new INR34 crore is, so income tax has adjusted that and this INR34 crore includes INR8 crore. And we are in actively talking to the department. Our case is currently into 45-2 [Phonetic] which is as a new provision it goes and there’s a process and it will come roughly in like 60, 70 days. There’s a process around on that. So we are hoping this money should come at any time and yeah.
Sanjyot Khare
Yeah because that’s a big amount and that’s what I would just.
Sumit Agarwal
And we are totally tracking actually, yeah.
Sanjay Kumar Shetty
Yeah I just listened to the previous person and then definitely that amount — even if you try to use an amount for the buyback you can just buy back 3 crores plus shares. That’s one of the opportunity. I mean just suggestion for that. But yeah definitely it should be used for the right purpose. And looking forward to how things will be changing after getting more cash in hand. Yeah.
Sumit Agarwal
Yeah, yeah. Sure.
Sanjay Kumar Shetty
Thank you.
Nisha Dutt
Thank you.
Operator
Thank you. We have a follow up question from Sagar Desai from Crown Capital. Please go ahead.
Sagar Desai
Hello? Am I audible?
Nisha Dutt
Yes, you are.
Sagar Desai
Yeah, just wanted to check on this investor meet kind of thing. Can you organize every quarter or every six months in Bombay for few hours or even we can come down to Bangalore and have a look at the facilities and all?
Nisha Dutt
Sure, I think we can. I mean honestly we haven’t thought about it, but I don’t see any reason why we can’t, so sure. I think on a six-month basis or something we can think about it. No, thanks for the suggestion. I’ll kind of, you know work on this. We can do an Investor Day or something where you know we can invite all the investors to walk through the facilities. It’d be good if you also come and see your company. Right? So you can walk through the facilities. You can see what we do. So we can do like an Investor Day or something. That’s a good suggestion. We will do it.
Sagar Desai
We can do it in May itself, that is one. Second is on the current receivables which are getting reflected in books and the goodwill amount which is substantial. Do you foresee any further possibilities of impairment or riders?
Nisha Dutt
Sumit, you want to take?
Sumit Agarwal
Yeah. So again, as we speak, again this is the — we don’t foresee any kind of impairment around on the receivables or goodwill. And as you know that goodwill is — goodwill impairment is a yearly exercise. So based on the current assessment around we have a sufficient headroom on that. So we don’t expect that. On the receivable, again our DSO right now stands at 87 days. So — and we all are — all receivables are the good receivables and actively collected. So we don’t feel any sort of impairment on both the subjects.
Sagar Desai
Sure. And this — with this non-telco business coming negligible or becoming zero. So the balance of the top line, what we had done like in the current year we could see INR5 crore is the only — this is for the first quarter I could see you had given that breakup between telco and non-telco. So Sectrio, hopefully falls in the non-telco, correct?
Nisha Dutt
Yes. The degrowth has come from non-telco.
Sagar Desai
No degrowth. My question is very specific. Whether Sectrio is included in telco or non-teleco.
Nisha Dutt
Sectrio you mean?
Sagar Desai
Yeah. Sectrio.
Nisha Dutt
Sectrio is non-telco. Non-core.
Sagar Desai
So then that the revenue what he had given for the fourth quarter is just INR5 crore. So can we say that the top line is only INR5 crore of this business?
Nisha Dutt
No, no. So it was more than that. But what has happened is through the year we made a decision.
Sagar Desai
Correct.
Nisha Dutt
Sorry, go ahead, Sumit.
Sumit Agarwal
Yeah, yeah, sorry, Nisha. So if you see the investor deck actually quarter four of 2024, the non-telco component was a INR14 crore. Okay. And then this year obviously it is only like a INR5 crore, roughly INR5 crore. So this is that — this entire impairment and towards that because non-telco was in negligible I will say till the, till the last year and only last year quarter four as something has come in and then is obviously gone into this entire impairment exercise. So yeah.
Sagar Desai
No, my specific question is like you said there is a hit of $300,000 which is roughly INR2.5 crore. So on a running rate of INR5 crore and for the exit, quarter exit of quarter three and four it is negligible, not even INR50 lakhs. So where is this, where is this INR2.5 crore it is going to come regularly. So if my exit for the last two quarter is INR5 lakhs and INR34 lakhs, where is the question of INR2.5 crore running hit?
Nisha Dutt
That is for servicing the contracts actually. So see the — what happens is that you meet a milestone, you take the money in, right? But there are, there is still work that has to be — so when you install a box somewhere you still have to service that box, right? You cannot leave a — so that’s our challenge on exiting the contract where if I have made an installation, I need to still run that installation, right? Otherwise the customer does not get any benefit from it. He has paid me but what’s his benefit? So I still have to run it and sort of, make sure that he’s getting his value for money. So the burn comes from actually servicing. The revenue that we have recognized we have to service that also. So the burn that we are talking about through the year will be the service, servicing component that we still have to do. And that is something that we are not able to back out of right now.
Sagar Desai
So on the telco side of it you don’t have anything which is any contracts or any such big chunk of business which is running at a loss, correct?
Nisha Dutt
No, not at all. Telco is all good right now. Like I said, we have turned, PAT positive, EBITDA has been, six — five out of six quarters have been positive actually. So telco business, we are, I think we have fixed the fundamentals. That’s been the big effort somehow to fix the fundamentals. But the degrowth also in the top line that you’re talking about, only INR5 crores is because early in the year we made a decision to wind down the business. Right. We sold one and we decided to wind down the other one. So we decided to stop taking any new money in contracts and all that because that keeps increasing your liability if you do that. So when we decided to sort of wind down we stopped taking new money in. And that’s the reason why you don’t see any top line that happened on the non-telco side. Right. The top line we were trying to restrict actually. And see there is some burn that we are carrying which we will have to service some of the revenue that we have taken in past, so that servicing of contracts will happen. So that’s the burn that we are anticipating right now.
Sagar Desai
Within telco or outside telco?
Nisha Dutt
Outside, outside. Within telco, we are good. Yes.
Sagar Desai
So on a quarterly basis INR50 lakhs is that burn, nothing else, correct?
Nisha Dutt
That’s correct, yes. As things currently stand, that’s the case. Like I was saying that if we decide to sort of, accelerate some of the events that can I do more and sort of exit a little sooner then that burn might increase a little bit. But that’s a call that we will make as and when they get to it. But currently the way we have at least budgeted for it, that’s what we have budgeted. We have budgeted a $300,000 or so.
Sagar Desai
Yeah. So the first contract where the burn was high, you are anyway out.
Nisha Dutt
We are anyway out but for receivables. There we have receivables that we provided for.
Sagar Desai
That is done. Yeah. So what is left out is the second small contract with whatever burn we talked about. Correct?
Nisha Dutt
Correct. Yes, exactly.
Sagar Desai
So now on a steady state of affairs from quarter one onwards assuming INR75 crores of run rate of top line with the kind of EBITDA what you had projected, you know like 4%, 5% or 7%, 8% kind of an EBITDA. That is the kind of steady state of business we are looking out for?
Nisha Dutt
In the near term I would say that’s our, like I always say no guidance but at least ambition is to in near term to stabilize to something around that. But obviously we want to kind of grow the top line a lot more aggressively. In fact one of my personal ambitions which I keep telling in company also is that I want to see INR100 crore quarter. So which was my ambition last year as well, so that continues to be something that I totally aspire to do. I want to see INR100 crore quarter. I am hoping that we are able to deliver to that. But yeah, on a steady state basis, it will take us some time to get there. But on a steady state basis, yes, on core, that’s where we are.
Sagar Desai
So I think we are here to go and talk to institutional investors and participate in many conferences so that this visibility comes in. And probably the HNIs and the retail investors who has — who are in this, who are invested gets a proper price, valuation particularly. So I think some time if you can spend on meeting investors and trying to educate them about the things going forward.
Nisha Dutt
Sure. Yeah. I like you mentioned, right. We will try and do an Investor Day. We’ll try and do a lot more outreach starting Q2. So yeah, I think it’s a fair ask.
Sagar Desai
Sure. Thank you so much.
Nisha Dutt
Thank you, Sagar.
Operator
Thank you. We have a follow up question from Mahesh Kumar, an Individual Investor. Please go ahead.
Mahesh Kumar
Yeah, Nisha. See for last 12 years or plus Subex performance is stagnated and during that period you were Independent Director on the Board. So you have a macro view of the company which is called Garuda Drishti. Now last two years you are MD of the company. So you have micro view of the company, which is called Sarpa Drishti. So from your view you can give a very genuine answer. What is the root cause of this poor performance for 12 years? 12 years is a very long time. Is it products are not relevant? Is it poor talent in the company? Is it faulty process and system? Or is it mindset of the organization is not conducive for growth? Please be genuine and answer.
Nisha Dutt
No, no, I will and I will honestly answer this. So Mahesh, like all problems in life, right. I mean you can usually not root cause it to one thing. It’s usually a combination of factors and so it’s the case here. So I think I’ll tell you, see, from my perspective, one of the things that I didn’t realize when I was on the Board and which sort of hit me when I joined is the amount of tech lag that we had accumulated actually. I would purely call it tech lag because the time, I would say the five, six years, which was very turbulent right from I think 2012 to 2018 or so where we were like majorly embroiled in the balance sheet issues with bondholders. What that did was that’s when a lot of our competitors were making gains, right, technically.
See in a product business, in a technology business, tech investment is something that you must keep doing, right? Like there is an R&D spend that even we carry even now, right? It’s non-negotiable in a tech business. And tech is moving very fast. You can’t sit on a tech stack which is five years old, right? And when I came in, that’s one of the things that I realized quickly that the tech lag was, I would say it’s a significant lag actually that we had to catch up on. So how do you catch up on tech lag? Right? You have to invest. Where is the money to invest? And that’s where the challenge starts. Right? Then you are on a treadmill. So that’s when we said that we will have to fix the fundamentals, which means that I need to generate the bottom line. I need to get some money, I need free cash to go back and invest.
I don’t have enough money to properly invest. I didn’t have enough money to acquire anything or add on to my portfolio. Right. So it’s one of the situations where I think you don’t appreciate it fully until you are in this seat. From a Board perspective, you cannot appreciate it actually. That’s how bad it can be when you are in front of a customer. Because all our business is RFP business, right? The bulk of it is competitive or RFPs. In competitive RFPs, what matters, first your tech matters. Even before the money. First, tech matters. And then you need to be able to show gains. So that’s one challenge that I found which was kind of, took us some time honestly. And I wouldn’t say that we are completely out of the woods now, but I think we have made a huge progress there. Then we had made some commitments, right? Like I would say Sectrio over IDC and all that. So there were commitments that we were carrying in the company which I think was slowly bleeding us actually. It’s a slow, I call it the death by thousand cuts. Nobody’s killing you in one shot. It’s a death by thousand cuts. [Foreign Speech]
Mahesh Kumar
Sectrio, when they brought to the Board, did they mention that this market is OEM dominated market to the Board.
Nisha Dutt
So you have to remember that when it came to the Board, it was an IoT business. It was not an OT business. [Foreign Speech] But then they pivoted actually. After two years trying to make it in IoT, the management decided to pivot into OT. So that is not something they explicitly. Yeah, I mean that’s, that’s called a business pivot. No, they will not come to us for approval for those things. So OT pivot [Foreign Speech] and OT pivot, you also know, you are very well aware because you write to me, I know that you know this market, this is an OEM dominated market and you need deep pockets to fight in this market. This market is not fought with, you know, $10 million or $8 million. This market requires significant money or you need to be able to show significant growth to do huge fund raise, which was our attempt. When I came in, I said that let’s see if we can get money into this actually. Before winding down, the attempt was to see if we could raise money into this, which we failed to do. Right. We were able to do for one IDC, we weren’t successful in the other one, in which case we said that okay, then we will have to reduce the burn.
So there are things or decisions that were made which were causing a drag on the core. Right? So one is [Foreign Speech]. So these are things I think you appreciate only when you sit in the seat. And this is hot seat truly for that reason, because you come in and you realize the amount of, I would say, cleanup or untangling that you have to do. And that’s exactly the journey I got on. Right. I mean, two years ago. So I would say that from Board perspective, you are thinking that, see, if I go to the Board today, technically, and stand in front of the Board and say that I have a great business idea, I think I should get into, for example, utilities market, because my products have great utilities market.
Now, from a Board perspective, how do they know? They are expecting that the management has done the diligence. Right. When you are proposing something, you have done the time analysis, you have done all the analysis, market analysis, you know what your product fitment is and if you have both. So Board also goes with some bit of, you know, management confidence, faith and see Board I, till the time I was there we were always thought that, you know, you want to back management, you want to hold them accountable, you want to be also champions of management. Right? So that’s the spirit in which you do it. But then some bets take, you know, some bets pay off, some bets don’t. And I think in Subex’s case what has happened is more bets didn’t pay off than it did.
Mahesh Kumar
See, Board can be independent. They should not have any emotional backing requirement.
Nisha Dutt
There is no emotional backing,
Mahesh Kumar
They have a judicial responsibility.
Nisha Dutt
Exactly. And see, we always saw business cases and all that. Right. But if somebody shows you a business case that will work technically and see Subex, I also know that because I’ve been on the Board, I remember if you, you will also remember this history. There was always an ask on the Subex’s management, right that you should diversify out of telco. Don’t just stick in telco. Can you diversify out of it? There was a strong ask, I remember and that’s why that management decided that, let’s take some bets outside of it. See, intentions were right, the ideas were right or at least I would say the spirit of it was correct. It didn’t just pan out actually. Right?
Because I think one of the issues is your idea may be best in the world but your execution has to be very strong. Right? All startups also fail on that. The best ideas don’t take off because the execution is not very strong behind it and I think Subex had an execution issue. If I look back honestly you ask for an answer, I would give you an honest answer. Execution was a very, very big challenge actually. And that is something I still think is a little bit challenging for us. Execution is something that I keep telling internally also. You can, it does not matter what your idea is. If your execution like, you can take a B idea and make it work if you have a A team executing it, but you can have an A idea but if you have a B team executing it, you are definitely going to fail. So it’s one of those conundrums that Subex has always been in and today also I will say that, you know, I would say that I have — yeah.
Mahesh Kumar
Are you saying that quality of talent is not good enough or…
Nisha Dutt
Wasn’t good enough? We try to fix it. No. Actually it wasn’t the best. But see, today you will see that, there has been a big change in management also, leadership also. Right. So you continuously find. See, there are people who are very good at what they did at some point of time. Right. But what you what works once doesn’t always work again. Right. So you have to sort of start cleaning it up.
Mahesh Kumar
You have to be relevant to the current trend.
Nisha Dutt
Exactly. So that’s what the cleanup we have done. You are right. So that’s the cleanup we have been doing.
Mahesh Kumar
What is your view about mindset of the organization?
Nisha Dutt
Mindset, I think, see, there are two types of mindset that prevail in the organization. Again from, you know, because I’ve the privilege of having a little bit of — I’m not an outsider. Correct. Mindset of the organization is two, I think. One is I see a lot of people who are very driven because they feel that there is a lot of cutting edge work that we do here which they want to be part of. Right? So there is a lot of excitement, but there is also…
Mahesh Kumar
So that is on development front. What about sales front?
Nisha Dutt
No. And there is also a group that feels that the organization is a little bit aging, old. Right? So there is, there is that sentiment as well actually. So in sales, I think they are generally gung-ho also because sales is always one step removed from the core organization in the sense that our sales is global, right. So people are sitting in Middle East, they are sitting in Morocco, they’re sitting in the US. So I think they are one step removed in the sense. So they are excited about, their pressure on us is always the same, [Foreign Speech] which I think is great pressure. Right? I mean, I think it’s a positive pressure. So sales that way has been, I would say good for us. Again, we have had churn in sales also where we have, you know, gotten new blood and fresh blood, fresh thinking. But there’s always that pressure that they create on us, which I think is very good for the organization. [Foreign Speech]
So I think those conversations are constantly happening, which I think is the culture and spirit of it is good. I think now I think we are at a point, I think since last one year I have seen Subex internally, you know, which I think I always feel some tension, should have tension, right? [Foreign Speech] People should have tension. And I think that’s playing out in Subex. I see people, [Foreign Speech] which is actually very good, which is people should push each other a little bit. Not all of us should not sit back and say that [Foreign Speech]. So I think that culture change has seen, Mahesh, where people are starting to engage with each other, challenge each other. Leadership also gets into hot debate, which I actually personally I enjoy. So I think it’s good.
Mahesh Kumar
See is organization mindset positive for growth?
Nisha Dutt
It’s positive, it’s positive. See, this change would not have happened if it were not positive. I think that mindset is positive, at least that’s the sense I have. But it’s positive. There are always pockets of skepticism in every organization, [Foreign Speech] but I would say that broadly it’s positive also because there is a lot of fresh flood and new energy in the organization. So, you know, people see the positivity.
Mahesh Kumar
See selling AI agent and team of LLMs, you will need a different kind of talent. The talent which old existing products will not be good enough for selling AI agent and team of LLMs. So how you are going to address that issue?
Nisha Dutt
You are bang on. And we are hiring differently actually. So what we have decided is that people who can sell a certain kind of enterprise sale product are not the people who can sell something which is new age. So we are actually hiring differently. So this is correct. So we have segregated actually our sales into bread and butter sales, which is, I need to get the hypersense. And I need to get fraud management. Then there is — there are people who need to get focused on to be able to you know, generate quick POCs, to be able to take customer. Because this is unknown territory. Right. Customer also doesn’t know. You are also sort of discovering a lot. So there is a different team that has been formed that will do this part. So you are bang on. You’re absolutely right.
Mahesh Kumar
Are you getting talent from Google, Meta or companies like this. See it will be costly talent but it will set up a system and processes for selling such products and solutions.
Nisha Dutt
I am trying very hard I can tell you. It’s hard to hire as you can imagine. The salaries are completely off track. But we are trying, Mahesh. We are trying. Sales team is, you know there is quite a bit of churn in sales team. So we are formulating a new sales team. So you are right, but [Foreign Speech] only because…
Mahesh Kumar
Getting people from FMCG to sell this technology product is not going to work.
Nisha Dutt
[Foreign Speech] it won’t work. Maybe always hire from the domain only. We don’t hire from…
Mahesh Kumar
Your Sectrio team was FMCG. Correct? Because I have personally interacted with them.
Nisha Dutt
We are not making those mistakes. We are getting global talent. Actually. You’re right. See a lot of our sales team actually I would say maybe two or three people are in India. [Foreign Speech] They are in the regions also. We don’t run deals from sitting in India. So like Middle East team runs its own deals. North Africa, Middle East is covered from Dubai actually. Europe is covered from UK.
Mahesh Kumar
So proximity to local customer is okay. But the leader should come from companies like this. So that he will…
Nisha Dutt
No, you have a fair point.
Mahesh Kumar
[Foreign Speech] So that you have to work. See, it may cost slightly higher amount but it will create a platform for the company to jump from that position.
Nisha Dutt
You are right actually. Yeah. Yeah. See not for the lack of trying. We have been trying very hard to hire from global companies. But as you can imagine, [Foreign Speech] challenging, because the costs are completely out of rack. Right? So but you are right. Maybe one or two people we still need from that pool, you are right.
Mahesh Kumar
Yeah. Your sell side should be from companies like this. Then only you can create a pipeline for new products and technology. Because he will have the network connection in US and Europe. So getting POC is easy with his help. Otherwise you will face same problem like Sectrio and this ID Central.
Nisha Dutt
Right, Right. [Foreign Speech]
Mahesh Kumar
Late entry people or organization, AI agent and team of LLM, they will capture the market. See even TCS and all these big companies are trying for this AI agent.
Nisha Dutt
Yeah. And why shouldn’t they? This is the hot property. Everyone will. So that’s why. Speed matters here. Speed matters and ability to go fast really matters here. No, no, I completely aware of that.
Mahesh Kumar
Yeah, you focus on that and go and get it. I’m expecting that announcement that you will get people from Google, Meta and some other companies.
Nisha Dutt
I am going to get my HR right away on it. Thank you, Mahesh.
Mahesh Kumar
Thank you.
Nisha Dutt
Thank you.
Operator
Thank you. We have a follow up question from Abhishek Kale, an Individual Investor. Please go ahead.
Abhishek Kale
Hey, Nisha, just one follow up regarding the cash burn we were talking about for that one contract. So it’s going to be INR5 crores at max for two years. I mean total, in total, INR5 crores, right? $300,000 for one year. Two years at max is what we are looking at that the contract duration is. Right?
Nisha Dutt
So correct. If we end up taking the path that we are taking now. But it’s entirely possible that — see that contract is actually not just two year contract, it’s a much longer contract. So what we might try to do is to do some development early upfront and to see if we can exit the contract a little sooner than you know, the five-year tenure that we have there. In which case we might end up burning a little bit more this year to sort of, service some of the pending items. So that’s the evaluation stage that we are in. So that’s why I was saying that at the minimum, INR16 crores [Phonetic]. It might become a little high depending on the call we make. But net-net it won’t make a difference.
I mean if I were to take a two year, three year view, it won’t make a difference because we may bring some of the costs forward and spend little less later. So it may, that’s a trade off we will have to see. What we wanted to do or how much we want to bite this year. But net-net it won’t change. But this year it’s possible that we might make a decision to pull some development effort upfront. So that’s a decision that we are still trying to sort of negotiate and find out from the client. But yeah, that’s the one.
Abhishek Kale
And Nisha, the Barcelona event where we showcased some of our products. Right? Did we receive any orders or RFI/RFPs after that event?
Nisha Dutt
We did not receive RFI/RFPs. We got POCs.
Abhishek Kale
Okay, we got POCs. Like you said they are paid POCs at this moment, right?
Nisha Dutt
Yes, we generally refrain from going free POC unless it’s a very like, you know, three week effort or something. They refrain from doing free POCs because obviously you can imagine if the customer has no skin in the game, then they will sit on the decision and take their own sweet time. If there is skin in the game, there is also seriousness from us and them. So that’s why we usually insist on paid POCs.
Abhishek Kale
So I mean I’m just trying to put some numbers together in my head. Assuming we don’t get the INR16 crores, the, the ones which we had talked about. I’m just being very pessimistic at this very moment. I don’t get the INR16 crore provision plus say I take what INR10 crore hit on this contract worst case, I’m just talking about worst case. So INR26 crores gone, but I have about a INR32 crore income tax refund. So net-net my impact is about INR6 crores which will show up positive in my account. Am I right in reading between the line? I’m just trying to see the positive from, I don’t know…
Nisha Dutt
Broadly, yes. What do you think Sumit?
Sumit Agarwal
See from a cash flow, yes. Because income tax refund is not a P&L item, it’s a cash. So yes.
Abhishek Kale
I mean for me the way I’m looking at [Foreign Speech].
Sumit Agarwal
That’s why I told cash flow year.
Nisha Dutt
P&L will show differently. But cash flow…
Abhishek Kale
[Foreign Speech]
Sumit Agarwal
Correct.
Abhishek Kale
Point taken. Thank you guys.
Nisha Dutt
Okay.
Operator
There are no further questions. Now I hand over the floor to management for closing comments.
Nisha Dutt
No. Thank you, all for joining. I know you know it was supposed to be an hour call but almost ended up being two hours. But thank you for being patient staying with us. But again my emphasize, I know the numbers sometimes don’t give the right picture. So again, just to tell you that you know I feel that we are on the journey to fix fundamentals. We wanted to fix core business and I think that’s broadly and essentially what we have done in the last two years. The numbers will bear that story. So I would again urge that always see a little bit and if you, if the numbers don’t give you the right context, please reach out to us. I’m happy to talk to you and tell you what we are doing exactly.
But there is some drag that has been caused which we may continue to have some drive but rest assured the business fundamentals are solid. We are going to free up some cash and start reinvesting in the core business. I think we have the right ideas and you know this year my big challenge I think will be growth because I think bottom line somewhere we have started fixing so that’s a journey that we have to be on. But growth is one big lever that’s missing right now for the last one year. So this year definitely I hope to get back on that, you know, somehow make sure that growth comes back so that we are all looking at a company that’s much more healthier. Right. That has some growth that you can see on the top line. You are consistently seeing a bottom line. So that’s really where we are.
Again, non-core, please, always, when you see the numbers, just make sure that you see it in the right context of what is the non-core versus core. Core is where we are focused right now and that’s going to be my focus going forward. So that’s all I wanted to say. Thank you again and I really appreciate you taking the time to come to the call and I look forward to speaking to you next quarter. And I think one of the investors made the suggestion of an Investor Day. I think I like the idea. So we’ll try and get that organized, so we get to meet all of you one of the days in Bangalore office.
So thanks again and I look forward to seeing you in Q1 earnings call. Thank you.
Ramu Akkili
Thank you.
Sumit Agarwal
Thank you.
Operator
[Operator Closing Remarks]