Ladies and gentlemen, good day and welcome to Allsec Technologies Limited Q2 FY24 earnings conference call, hosted by IIFL Securities 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. Should you need any assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Balaji Subramanian from IIFL Securities Limited. Thank you, Malcolm. Ladies and gentlemen, good day, and thank you for joining us on the post-results conference call of Allsec Technologies Limited. It's my pleasure to introduce the senior management team of Allsec, who are here with us today to discuss the results. We have with us Mr. Naozer Dalal, CEO, Mr. Gaurav Mehra, CFO, and Mr. Kushal Maheshwari, Investor Relations. We will begin the call with opening remarks by the management team, and after that, we will open the call for a Q&A session. I would now like to hand over the call to Kushal to take the proceedings forward. Thank you, and over to you, Kushal. Thank you, Balaji. Good evening, everyone, and thank you for joining our Allsec Q2 FY24 earnings call. The information, data, and outlook shared by the management during the call is forward-looking but subject to prevailing business conditions and government policy. All forward-looking statements are subject to economic growth or other risks faced by the company. The results and the presentation have been uploaded on our website. Please refer to slide number 2 of investor presentation for the safe harbor clause. With that safe harbor, I will now hand over the call to our CEO, Mr. Naozer Dalal, for his opening statement. Thank you so much, Balaji and Kushal. Good evening, everyone. Thank you for joining our earnings call today. I'm looking forward to interacting with each one of you. For those who don't know me, just a quick introduction. It's been my privilege to help lead Allsec over the last 8 months. Prior to this, I've been a part of the banking and process outsourcing industry, with experience in excess of 33 years with leading names like Standard Chartered Bank, the Prudential Back Office in India, and the Tata Group. With my immediately just prior role being with our group company, Conneqt Business Solutions, as its Deputy CEO. I have with me Mr. Gaurav Mehra, Chief Financial Officer, who will twin with me in interacting with yourselves. As a start, I am happy to announce that your company has declared an interim dividend of INR 45.7 crore, that is INR 30 per share, for the current financial year. Another key highlight for this quarter is that we have rebranded our two lines of businesses. The digital business services is now Customer Experience Management, CXM, and Human Resources Operations is Employee Experience Management, EXM. This reflects our value-added role of providing superior experience both to your end customers and employees via our interactions and services. We'll give you a brief business overview, updates covering both our LOBs, and follow it up with the detailed financial performance. Post that, we'll be happy to take your questions. So to start with some banner headlines. Quarter 2 FY 2024 revenues from operations stands at INR 112 crores, up 4.5% quarter-on-quarter and 19.3% year-on-year, driven by growth in both verticals. CXM by 3.9% and 18.3% respectively, and EXM by 5.8% and 21.2% respectively. Our PAT at INR 16.2 crores for the quarter is up 3% year-on-year and 2.3% quarter-on-quarter. We added new employee records in excess of 1.3 lakhs in H1 and now process 1.3 million employee records at the end of September, remaining the clear market leader in the managed services space, continuing to be about 20%-30% higher than competition volumes. We have added additional seat capacity in Manila, nearly doubling the same. Our staff attrition has been maintained at 8.1% for quarter two, which continues to be near best in class in the domestic outsourcing industry. Our cash position and collections continue to be strong. Our collections for Q2 2024 were maintained at INR 111 crores, in spite of one-off challenges in the US market collections. I will now provide a progress update on the two tech projects, SmartPay4 version four, and the new HRMS we have been working on being key strategic initiatives. Last two quarters, we have been working hard to cross the finishing line, and happy to share that we have capitalized both SP4 and the new HRMS costs as on thirtieth September. We have completed parallel runs for our upgraded payroll engine, which is PHP four, for a few of our strategic customers, and the results have been encouraging. Phase one of our new HRMS platform, too, has passed the milestone of user acceptance testing. We are in the process of drawing up transition plans to migrate our existing customers to SP4 over the next couple of quarters, and we'll also be approaching the market in H2 to pilot sales, of the HRMS platform on a SaaS basis. There were a couple of questions around this in the previous conference call, and this will open up a new market segment for us. Though I would like to state that profitable client acquisition would continue to be a key consideration and would drive our SaaS strategy. We will now move to our new sales achievements. We have signed EXM sales with ACV of INR 17 crores in H1 FY 2023, which is up about 40% compared to the previous H2 FY 2023. We have added marquee logos, including targeted conversion of mapped competitor logos, besides focusing on mining of existing accounts, including accounts acquired in FY 23. Separately, we will accelerate the focus on international EXM sales for the remainder of this financial year and into FY 25. In CXM, we have added two new LOBs in the healthcare account, which we had won at the end of the last financial year, and also added two new logos in Q2 with an ACV in excess of INR 5 crore. You'd recollect that in my last call, I had shared two key initiatives planned for this financial year in the EXM space. The first being increasing the ticket size of new EXM sales, the second being shortening transition timelines. I'm happy to report that we have made good progress in both of the above goals. Our ticket size of new sales is 2.4x in Q2 as compared to what we were in Q1, which is INR 46 lakh in Q2. We also, as I mentioned earlier, transitioned 1.3 lakh payslips in H1 itself, as against 87,000 in the whole of FY 2023. Additionally, we have embarked on a journey of operational and cost efficiencies earlier in this financial year, with focus on the key metric of payslips processed per employee, which has improved by 4.5% year-on-year. All of the above has enabled us to demonstrate an uptick in the EXM segment margins by 2.6% quarter-on-quarter and 1.8% year-on-year for Q2 2024. Our CXM margin, though, has got impacted by the delinquency of a U.S. customer under Chapter 11 during this quarter. Adjusting for this, our CXM margin too is about 0.7% higher than the previous quarter. Coming to our operational performance, our meeting of operational KPIs remained strong for both CXM and EXM, including being named as the best partner in some of our customers' league tables. We continue to provide value-added services to our customers, including, but not limited to, point automations, bundling RPA in our solution, et cetera. We again continue to receive high ratings and increasingly positive feedback on social media, Glassdoor, AmbitionBox, et cetera, a direct outcome of our continued focus on employee engagement. We also continue to encourage our employees to participate in the corporate social responsibility activities of the company. With this, I now turn to the detailed financial performance, for which I will ask my colleague, Gaurav, to brief you on the same. Thank you. Thank you, Naozer, and good evening to you all. It's a pleasure to connect with you all for H1 earnings update. I will share quarterly and half-yearly financial results. To start with, on the operational revenue. Operational revenue for the quarter is INR 112.4 crore, a growth of 19.3% year-over-year and 4.5% quarter-over-quarter. We have a growth across both the verticals. CXM vertical grew by 18.3% year-over-year and 3.9% quarter-over-quarter. Our EXM business shown a growth of 21.2% year-over-year and 5.8% quarter-over-quarter. In CXM, management focus is more on the international business, which is the higher margin business. International business grew by the 21.4% year-over-year, and domestic business grew by 11.6% year-over-year. We have a quarterly growth of 4.6% for international business and 2.1% for domestic business. Within the EXM business, our EXM payroll business grew by 22.5% year-over-year and 8.7% quarter-over-quarter. EXM compliance business, which is more of the statutory compliance, that business grew by the 16.2% year-over-year, and we have seen a softness of 4.5% quarter-over-quarter. Moving to the margin section, our EBITDA for the quarter stands at INR 25.4 crores, a growth of 17.4% year-over-year and 3.5% quarter-over-quarter. Our margins for the CXM business grew by 8.8% year-over-year and 6.4% quarter-over-quarter. Our margins for EXM business grew by 28.2% year-over-year and 14.7% quarter-over-quarter. Moving to the margins, our PBT increased by 5.3% year-over-year and 3.9% quarter-over-quarter, and PAT has grown by 2.3% year-over-year and 3% quarter-over-quarter. We have growth across both the verticals. Now I move to the half-yearly results. Revenue for H1 2024 is INR 220 crores, a growth of 20.6% year-over-year basis. EBITDA for H1 2024 is INR 50 crores, a growth of 19.3% year-over-year basis. Our PBT grew by 8.5% and PAT grew by 8.4% on year-over-year basis. Our PBT and PAT percentage partially impacted by Chapter 11 delinquencies, as said by Naozer. Moving to the vertical performance, EXM revenue for the H1 is INR 146 crore, and there is a growth of 24.7% for the international business, which is the higher margin business. Our margins growth is the international business has leading a marginal growth of 18.9% on the year-over-year basis. H1 2024 CXM margin stand at 12.3% for H1 2024 versus 12.7% for the last year. Margins are partially impacted by the Chapter 11 delinquencies. EXM payroll business grew by 19.7%, and staff business for the H1 grew by 10.4%. Margin for the H1 EXM consolidated business is 32.2%, which is better by 0.8% on the year-over-year basis. Employee records for the employee record volumes increased by 12.5% on year-over-year basis. With this all, I conclude the update on the financial results. I wish you all happy upcoming festival season, and wish you in advance a Diwali, Christmas, and coming New Year. With this, I pass on to the moderator to take up your call. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Raghuram N from Eurindia Ventures. Please go ahead. Yeah. Hi, Naozer and Gaurav. This is Raghuram here. Just had 3, 4 questions. First one, obviously on the Chapter 11 that has happened this quarter. So is that, if you can just give us some color on that, is that something that was cooking, and we had some risk mitigation that we had done before, so that this was at least the financial impact was minimal? And, if you can also just tell us whether if there are any further risks on that, on that count in the coming quarters, or is this something which has already been completely provided for? That was the first question. Second, on, there are obviously some observations on the trade receivables and the CXM segment assets going up significantly. For example, segment assets in CXM for this quarter seem to be at about INR 60 crores versus INR 50 crores for the previous quarter. Segment liabilities also has significantly increased, nearly 20%-25% kind of increase. Employees in the international business has jumped nearly 15%, 1553 versus 1361. And DSO, you have mentioned 81 days. Typically, your DSOs would be in the 50-52 kind of days. Is this something that suddenly has changed? What exactly is the reason for that? And the last question, I think last quarter or during the Quess call also, they had mentioned, your Mr. Guruprasad and Pinaki Kar had mentioned that there was going to be a doubling of the seats in Manila. Now, in your presentation, latest one, you say 1,500+ seats. Is this something that, that's, further got added to? Because what I could understand was about 1,200 seats. Now, this is a further increase of around 300 seats. So just if you can just please update on that. So three questions, you have. Sure, sure. Thanks, Raghu. Yeah, so the Chapter 11 proceedings, you know, I mean, did come in early July. It links to one of the midsize Fintech companies we are working with. Thanks for bringing this out. I would, I would say it in my concluding statements anyway. To recollect, my concluding statements in the last call in May was that, you know, that we continue to, you know, be a little mindful of the, you know, the headwinds, particularly in the U.S. economy and the potential impact on Pfizer, because that's where the largest vertical concentration for also is. You know, I mean, we did see, you know, that risk crystallizing. To your question of whether we are anything proactive, yes. The moment we sort of came to know about this, we started downsizing our you know the number of people we work for this very immediately. We have been very diligent in you know both billing and collections. The client collection record also was you know has been extremely precise. But still conservatively you know we have made a 100% provision on this account, and so therefore there should be no residuary impact of this account you know in the coming or future quarters. The Chapter 11 proceedings will continue. Administrator has been appointed you know and we are giving our inputs to the administrator, and we will you know come in line after the secured client creditors and the other secured creditors. On the financial related questions, I'll sort of hand it over to Gaurav to take. Thanks, Raghu. Raghu, on your two questions that whether we have factored the delinquency full risk or whether there is anything to come. So that has already been factored completely into this quarter. Moving to the next question, you said that there is some increase into the, our receivable part, which is a part of our better international business growth, which is happening. A large part of our new trade receivables is in the no due category or within a very close category of our, due period, credit period. Our DSO remains same, for the quarter-over-quarter and, very close in the year-over-year. That is in line to the track. I hope that I addressed that right. Well, I think it's also 81 days, Raghu, which sort of covers both, build plus and bill. Maybe you are comparing only one component when you say that earlier you used to see a number at 54. Yeah. The build plus and bill continues to remain at 81, and it's been pretty flat over the last both Q2 FY 2023 and also Q4 FY 2023. DSO remains at about 51 days or something? Yeah, in that same ballpark. Yes. Okay. Just the last question on the employees growth and the seats in Manila. Yeah. So I'm not too sure where you're seeing the 1,500 seats, but yeah, it pretty much is consistent with what Mr. Guruprasad and Mr. Kar would have told you. So the operational seats have, you know, I mean, are just under 1,200, and it has gone up from 600. If you've seen another number, I'm not sure where that is coming from, but yes, that. No, it is. Okay. Yeah, that includes the non-operational seats also, the support seats. Yeah. Oh, okay. Yeah. Oh. That's part of our, that's part of our investment. Okay, okay. Pretty consistent. Yeah, so there is no further growth than from what we had already announced, both in our projected, both projected, both in our earlier call and, and the Quess call, which you mentioned. Okay. So the employee business, employees in the international business is in line with what you had mentioned. That's what you mentioned. Yes. Okay. Thank you so much. Thank you. Thank you very much. A gentle reminder to all the participants, you may press star and one to ask a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and one to ask a question. Our next question is from the line of Guneet Singh from Counter Cyclical PMS. Please go ahead, sir. Hi, sir. So, what is the outlook for H2 FY 2024 in terms of, top line and bottom line? I mean, will you be able to improve significantly over a performance in this quarter, or what do we expect? And also, what kind of growth are we looking at in FY 2025, and, what are the main growth drivers in future? Guneet, as you would appreciate, you know, we do not release, you know, precise financial numbers in terms of, you know, future guidance. But what I can state and assure is that we'll continue on the path which we set for ourselves in March, April this year. Which is primarily, you know, incremental sales. Within sales, focus on the international business. Continue to look at operational efficiencies very closely. Continue to look at operational service excellence very closely, because that helps us retain and, you know, mine existing customers. The last bit is, of course, as we have commented, you know, I mean, our platform and tech upgrades, which we have completed, you know, in September, and you know, are ready to sort of go to market, you know, particularly on the HRMS side. That should hold us in good stead for the remainder of this financial year and into FY 25 also. All right. That's all, Sunipai. Thank you. Thank you. Thank you. Thank you very much. The next question is from Raghuram, and it's from Eurindia Ventures. Please go ahead. Yeah, sorry to be back again. I just had one more question which I left out. Obviously, Naozer, you mentioned that both SP4 and the HRMS platform has now been capitalized, and it's no longer under the on VIP kind of thing. So if you can give us some guidance on the or how the depreciation numbers will forward in the next couple of quarters, and what will be the kind of increase that we will have to provide for in our in our bal- in our workings? Raghu, we are still going through a technical evaluation in terms of, you know, both the useful life of the asset and, you know, keeping market benchmarks, you know, and feedback in mind for similar kind of assets. As I mentioned, we have only capitalized it on thirtieth September, so we have not completed that process. And of course, consultations and, you know, consensus with the statutory auditors would be a key part of that process. So unfortunately, not able to give you a precise number at this point, and I think we'll have to wait it out, you know, till we announce the Q3 results in January, unfortunately. Okay. So that's something that, at some point of time, we will get to know later. Yeah. As I said, you will get to know when we announce the Q3 results in the month of January 2024. Okay. Okay. And just one more question on the sales. The EXM sales have been clearly significantly higher than what it used to be in the previous year. So is this something that is indicative of the kind of momentum kept, being kept up? Last year, we ended with about nearly 17%-18% growth. So taking into account the ACVs, which are literally about 100% kind of up YOY. So is this indicative of, indicative of the kind of growth that we will end up for the financial year? Yeah. So last year, I mean, the full year ACV was about INR 25-26 crore in terms of what we did for EXM sales. Oh. You know, we definitely sort of will look to sort of, you know, exceed that number this year. What I can confirm is that, yes, we have definitely increased the sales rigor. You know, we have increased, you know, the channels who we work with, the channel partners who we work with, particularly on the international side. What we have also done is, you know, looked at augmenting our sales capacity. So we are actually getting into a planning phase for FY 2025, where we will see where we need to augment our sales capacity, both locally and internationally. Yes, I can definitely confirm that the rigor will continue and, you know, with that, the growth which we have seen. I mean, it should continue, and we will definitely year end the full year, you know, better than where we were in FY 2023. Okay. Just a related question to that. Obviously, international sales is something that, that you guys have mentioned across 50% of total new sales. So is this something that's a, that's a clear trend which will continue into the near future? Or is this something that's a one-off kind of thing? No. Focus on. As I mentioned in my response to the earlier question also, was that focus on international sales, you know, equally in EXM, while, you know, on CXM, of course, you know, I mean, we focus only on international as part of a strategic call. But focus on international sales within EXM also has been identified as one of the strategic initiatives earlier this year, and will definitely continue to FY 25 also. Where we, you know, we'll want to continue to look at, you know, working with our existing customers into sort of the newer geographies where they operate as a first step. Then looking at existing customers and, you know, start building capabilities into the newer geographies. And then, of course, you know, newer customers and newer geographies, you know, so that continuum has been planned. And, you know, we'll continue to sort of focus on, on international sales, you know, for EXM also. Any update on the acquisition side, Nagar? Obviously, you guys have given out an interim dividend, and I still can see that the cash and liquid funds are up to about INR 151 crore as given in your PPT. We are still, even after the INR 47.5 crore payout, which will happen over the next, whatever, 40 days or 50 days, we'll still be left with more than INR 100 crore. Is that something that you believe is going to be a working factor for you going into the next couple of quarters? Or is that something that you believe is not so much on the. No, I think acquisition for niche skills, acquisition for, you know, niche vertical, acquisition for certain geographic presence, you know, in the U.S. Those are some of the strategic drivers which continue to look at it. You know, we continue to look at opportunities both in CXM and EXM, but there is nothing, nothing concrete on the table at the moment, yeah. Okay. So this INR 100 crore will continue to. You believe that that's a good number to have? That's something that I wanted to just check. It's a, it's a pretty significant number from a perspective of our overall balance sheet size. It does impact the return percentages also significantly on the downside, because we have, we have such a large cash balance. So is this something that you believe is something that you will be able to carry it forward, going forward? No, we continue to evaluate, you know, I mean, the most optimum use of the cash. Whether it's maximizing the internal returns from cash, whether investing in, you know, in newer capabilities, you know, organically. As I had mentioned, inorganic also is an option on the table. So, you know, the dividend which has been declared yesterday, you know, I mean, continues to seek, you know, strive to balance, you know, all of these factors. You know, besides giving, and besides working on a sustainable dividend policy, which I've also mentioned. So we continue to evaluate this. I mean, every quarter, when an opportunity gets provided. We continue to embark on this journey, you know, in terms of constant evaluation, balancing out inorganic, possibly organic, and, you know, maximizing the returns, you know, within the, you know, current available investment policies which we have. Just to add one point to that, Nagar, that out of this INR 100 crore, INR 45 crore, INR 46 crore is invested in terms of the mutual fund, which is. Yeah. Kind of giving some reasonable return on the investment. Okay. How much of this would be sitting in Manila? Not handy with me, Raghuram. We can get back to you on that particular point. Yeah, I ask that because obviously when you bring that back, there will be a tax in- withholding tax impact. So that is something that has been a bit of a one-time phenomenon that happens. So I was just wondering what should be provided for from our calculation perspective, that's all. All right. Thank you. Okay. Thank you, thank you. Thank you so much. All the best, guys. Yeah. Thank you. Thank you very much. A gentle reminder to all the participants, you may press star and then one to ask a question. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments. Thanks. Thank you. Thank you so much. I would like to thank all of you for the time that you have given us today, and for, you know, supporting us over the years by being invested in our journey. We are at a good trajectory in our journey and are well poised to capitalize on both the market opportunity and also some of the investments we have made in people, process, and technology over the past few years. We continue to monitor our risks closely and also before closing, I would like to wish each of you and your dear ones best wishes for the festive season, which will soon be upon us, starting with Diwali and leading up to Christmas and New Year. With this, we would like to close the call and look forward to interacting with all of you sometime again in the near future. Thank you so much. Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.