Ladies and gentlemen, good day and welcome to Alld igi Tech Limited H1 FY 2025 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 assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Balaji Subramanian from IIFL Securities Limited. Thank you, and over to you, sir. Thank you. Ladies and gentlemen, good morning, and thank you for joining us on the post-Q2 FY twenty-five results conference call for Alld igi Tech Limited. It's my pleasure to introduce the senior management team of Alld igi Tech, who are here with us today to discuss the results. We have Mr. Naozer Dalal, CEO, Mr. Avinash Jain, CFO, and Mr. Kushal Maheshwari, Head, Investor Relations, Westpark Limited. We will begin the call with opening remarks by the management team, and thereafter, we will open the call for a Q&A session. I would like to now hand over the call to Mr. Kushal Maheshwari to take the proceedings forward. Thank you, and over to you, Kushal. Thank you, Balaji. Good morning, everyone, and thank you for joining All digi Tech Q2 FY twenty-five and half year FY twenty-five earnings call. The information, data, and also shared by the management during the call is forward-looking and subject to prevailing business conditions and government policies. All forward-looking statements are subject to economic growth or other risks faced by the company. The results and presentation have been uploaded on our website for your reference. Please refer to slide number two 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. Over to you, Naozer. Thanks. Thank you so much, Balaji and Kushal. Good morning, everyone. Thank you for joining our earnings call today. I'm looking forward to interacting with each one of you. I also have with me Mr. Avinash Jain, our newly appointed CFO, to take you through the quarterly results. And of course, we'll follow it with a Q&A session. I think this one is the first interaction we're having as Alld igi Tech, and then this rebranding represents another milestone in the journey of our company. We have rebranded ourselves All digi Tech Limited, which encapsulates our commitment to cutting-edge technology, reflecting our delivery offerings for our customers. We strive to be a strategic value-added partner for our clients with our comprehensive suite of digital offerings across service lines. The prefix "All" in the new name also provides a link, you keep, with the values we have stood for over the last so many years: customer centricity and customer first. So in conclusion, the new name signifies continuity with change. Moving ahead, let me start the quarterly highlights with some banner headlines. We reported a healthy quarter with Q2 FY 2025 revenue from operations at INR 131.4 crores, up 70% YOY and 1.6% quarter on quarter, led by broad-based growth across both the verticals. It is important to consider that the YOY growth is despite selling our local statutory compliance business, which was concluded in the previous quarter. Adjusted for that, organically, we grew 24% plus YOY. CXM vertical grew at a healthy pace of 30.4% on a YOY basis and 2% on a quarter-on-quarter basis, while payroll business grew by 10.9% on a YOY and 8.7% on a QOQ basis. Our reported EBITDA was INR 30.8 crores, delivering a 21% YOY growth, also leading to marginal improvement of 80 basis points on a YOY basis. Higher cost of readiness linked to ramp-up and the BCP situation in Manila in the current quarter, and small ramp-ups in the domestic business which changed the domestic-international mix marginally, has led to our EBITDA levels remaining flat as Q1. While our PBT is at similar levels YOY, our net income is at INR 30 crores, down 25% YOY, primarily due to higher ETR on account of dividend distributing tax impact for Manila, which in the previous year, you know, was accounted in quarter three. Employee records are higher by 6% quarter on quarter and 13% year on year, having processed 4.3 million employee records in Q2, maintaining our pole position in the managed services space. Our cash position and collections continue to be strong. Our collections for quarter two, FY 2025, improved to INR 140.6 crores, also leading to improvement of the OCM generated. The share of international business in our overall revenues was 62% for H1 FY 2025, versus 56% for H1 FY 2024, an improvement of 6%. Our operational SLAs across CXM remain green as we make the journey to being more digitally enabled in our solutions for new customers and service delivery for existing customers. Accuracy in the EXM space, accuracy and on-time delivery for payroll remain close to 100% and better than Q1. We have made considerable progress on our tech projects. Our transition plan for migration to Smart Pay 4 SP4 is progressing as per schedule. Currently, we have clients live on the platform with close to one lakh pay slips count. More importantly, all new migrations since April are being done entirely onto the SP4 platform. Buzzily, our offering for the SMB space is also gaining traction with good funnel build and first deal signed in the last quarter. Moving to our business growth, overall pipeline across both CXM and EXM verticals continues to remain strong. In EXM, we signed 12 new logos with an ACV of INR 6.6 crores during the quarter. Similarly, in the half year period, we signed ACV worth INR 17 crores, a 12% increase over the same period last year. We continue to add more logos while also gaining a higher volume share from existing customers. During the period, we added 2.6 lakh employee records, closing Q2 at 43.3 lakh employee records, as I mentioned earlier, a 13% year-on-year growth. We are adding a sales resource in South Africa, and the focus on international EXM sales will continue as more than 50% of our current sales pipeline comprises international opportunities. In CXM, we added 4 new logos and new business with existing clients, aggregating to an ACV of INR 9.6 crores. We also worked on sales partnerships to supplement on-ground sales efforts, participation in RFPs, et cetera. We have recently entered our twenty-fifth year since having commenced operations, and we will be twenty-five in twenty-five. On the employee engagement front, we keep evolving ourselves to be a better place to work. Higher ratings and positive feedback on social media, Glassdoor, AmbitionBox, et cetera, is a testament to our employee engagement. With this overview, I will now ask my colleague, Avinash, to give you a brief on the quarter's financial performance. Thank you. Thank you, Naozer, and good morning to you all. To start with, on the operational revenue, operational revenue for the quarter is 131.4 crores, a growth of 17% year-on-year and 1.6% quarter-over-quarter. We have grown across both the verticals. CXM vertical grew by 30.4% year-on-year and 2% quarter-on-quarter. Our EXM payroll reported a growth of 10.9% year-on-year and 8.7% quarter-on-quarter. In CXM, management focus is to increase reliance of international business, which is margin accretive to the overall CXM margins. International business grew by 33.7% year-over-year, and domestic business grew by 21.1% year-over-year. However, during the quarter, sequential growth was driven by domestic business at 6.9% quarter-on-quarter growth, while international business grew marginally. Within the EXM business, international business grew at 8%, while domestic business was up at 12% year-on-year. International business share within EXM payroll currently stands at about 30% level. Moving to the margin section, our EBITDA for the quarter stands at 30.8 crores, a growth of 21.3% year- over- year and down 1.2% sequentially. Our margins for the CXM business grew by 50.6% year- over+ year and declined 9.7% quarter- over- quarter. While over the years, the segment margin has expanded 180 basis points, sequentially, there was a dip as we saw growth of the domestic CXM business during the quarter. Our margins for EXM business were down 17% year- over- year, owing to change in methodology of apportioning the overhead costs. Sequentially declined by 1.6%, attributable to the non-cash forex loss in Manila geography. Our PBT stands at INR 20 crores, declined by 50.2% quarter-on-quarter due to one-time gains on the sale of the LSC business in the previous quarter. On a year-on-year basis, PBT is up by 2.6%. PAT for the quarter is INR 12.1 crores, down twenty-five point two percent year-on-year and 62% quarter-on-quarter. PAT is lower on a yearly basis, primarily due to the forex translation loss and higher effective tax rate on account of the 15% dividend, which will impact for Manila. As Naozer had updated, the dividend was paid in Q3 of previous year, and therefore, the impact came in Q3 of previous year. Now I move to the half-yearly results. Revenue for H1 FY 2025 is INR 260.8 crores, a growth of 18.6% year-over-year basis. EBITDA for the half year period is INR 62 crores, a growth of 24.2% year-on-year. Reported PBT grew by 57.2%, while PAT grew by 37.8% year-on-year. Moving to the vertical performance, CXM revenues for H1 is INR 191.5 crores at a growth of 31.5% year-on-year. International business grew at a higher rate, with international contributions currently at 74%, this was 72% last year. Consequently, CXM segment EBITDA grew at 53.3% on a year YOY basis, with margins expanding by 200 basis points to 14.4%.... Its payroll business grew by 10.9% on a YOY basis. Second, margins declined by 10.5% on a YOY. Margins continue to be above 30% levels. Employee report volumes increased by 11% on year-on-year basis. With this, I conclude the updates on the financial results. Lastly, I would like to wish you all the upcoming festive season, starting from Diwali to Christmas and New Year. With this, I pass on the mic to moderator to take up your questions. 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 the 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 Harsh Kundnani from Aionios Alpha. Please go ahead. Yeah, hi. Thanks for the opportunity. A few questions from my end. Firstly, on the EXM business, both on the revenue and margin side. So on the revenue side, you know, collection growth since the past few quarters has been strong and so has the EBITDA number. But yet, you know, if I see on a like-for-like basis, on a YOY basis, growth has been around 10%. So any thing that you would like to call out there? Secondly, even on the margin front, now that you know, in this quarter, the compliance business is not in the base, and that was a low margin business, yet on a quarter-on-quarter basis, EXM margins are down by about 70 basis points. So, just wanted to understand that also. And, lastly, would like to understand, you know, this deduction under Section 80M, which you have mentioned in the footnotes. What exactly does that pertain to, and what impact does it have on the other income? And what would be the actual other income for the quarter if you remove this impact as well as the Forex loss, hedging loss? Yeah. Yeah, thank you, Harsh. So would like to clarify that our payroll business revenue continues to show a strong uptake. You know, it's 8%, 8.8% higher quarter on quarter. In spite of, you know, I mean, and this is not adjusted for, you know, the LSC business, which we had, for a month in the month of April. So if I adjust that, you know, the growth goes in the 10-12% range. And, I mean, I think that's a pretty decent growth, you know, for a quarter on quarter. But yes, we don't, but then, as I mentioned last time, there were certain additional costs which we had to take, you know, which continued for some time in July, you know, and that is the notice period of senior resources who continued to be with us till thirty-first of July. So as far as revenues are concerned, I think we are in the right direction. As I mentioned, we continue to have a strong pipeline, and we'll continue to convert that into the rest of the year. On the specific question on the tax rate, you know, I'll hand over back to Avinash. Yeah. So, basically, the dividend tax, which is withheld in Manila, we take it as an expense in the quarter in which it occurs, and during the year-end, we file it in the income tax return for a refund, and in the year when the refund comes, then that income will be recognized in the books of accounts, so hope this clarifies your question, Harsh. So just to follow up on that, so when does this happen exactly? I didn't understand the timeline for it. See, typically, the income tax assessments take one to two year time for the refund to come. So there would be a lag of one to two years for this money to be received back. Right. And that would be reflected in the other income line item, is it? Yeah. Good. Just to follow up on the EXM bit, Naozer said that, you know, there was some additional expense that would go away from the next quarter, and we should see margins trending to the 33%-35% levels in EXM? So there was a one-time initiative which we had done, you know. So, as we said, I mean, there is certain methodology in terms of how we were, you know, allocating corporate overheads across the company. So that impact of, you know, about one and a half percent will continue to remain going forward, but that's just an internal, you know, internal left pocket, right pocket adjustment. So I would say that the margins, yes, I mean, you know, we would bring it back to about 32%, you know, I mean, going forward, I mean, between 31% and 32% going forward. Because the change is there, you know. You know, I mean, has been embedded now into our numbers, and will continue for the future also. Understood. Understood. Thanks. Thanks for this. Thank you. Thank you so much, Harsh. Thank you. The next question is from the line of Ankit Manocha from Aideci Ventures Family Office. Please go ahead. Yeah. Hi, am I audible? If you can speak a bit louder, sir. Yeah. Am I audible now? Yes, please go ahead. Yeah. So, we're new to the business, good morning. But, we just wanted to understand the longevity of the business more than anything else. So on both your domains, firstly, when you look at EXM, would we be right to suppose that SaaS companies that are coming in the HR payroll space those are a threat to the EXM business. That is an assumption, and we just want you to comment on that. And secondly, in the CXM, I mean, the growth trends are strong right now, but considering that you're filling up on capacity, then do we see growth as a constraint one year down the line? So, these are slightly antithesis pointers for us, but we just wanted to get clarity on the same. Sure. No, no, no. Yeah, thanks, thanks. Valid questions, so on the EXM front, I just want to draw a distinction, so I mean, our current offerings and our current business model is in the managed payroll services space, you know, which is suitable for the large enterprises, you know? So we are a leader in managing complex payrolls. We are a leader in integrating across, say, blue-collar and white-collar payrolls, and we are the market leader in that, you know. I mean, at you know, about 15 million paychecks per month, you know, I mean, we are about 50% higher than our two nearest competitors. But valid point, I mean, there is a large SME market in India, and the SME market in India would prefer, you know, running payroll on a SaaS model, and that's the tech investment which we have made over the past couple of years into a product called Verdi. And we are, we are in the market. We have hired a resource, which are offshore resource, to sort of help us, you know, build the funnel. We have built a reasonable funnel in the last one quarter, and we will continue to, you know, I mean, be out there and, you know, I mean, and sell Verdi, which is going to be our SaaS offering for the SME market. So we are pivoting in this. We continue to, you know, invest in and grow our managed payroll services business, and we continue to sort of, you know, invest and build into the SaaS business. But as we all know and, you know, I mean, all the SaaS companies which you mentioned, you know, I mean, are value-destroying in a sense because they all come with negative EBITDA. So what we will continue to focus on is profitable growth in the SaaS market, as also continuing to, you know, invest in and build the managed services payroll market. On CXM, yes, we are close to filling our Manila center capacity. In this quarter, we have added about two hundred and fifty seats in our China operation, and we will continue to invest in capacity, you know, marginally ahead of time as we continue to get clarity on new orders and new order bookings, so as to not carry any significant cost of spare capacity for any elongated period of time. Okay, thank you. And, my second question pertains to a little bit more of what the previous participant was asking. So I think, I understand that with regard to CXM, there is a SaaS in the business and, there is ten percent growth, which I thought was a decent quarter on quarter. But from what I believe two quarters back, we were envisaging around, twenty percent growth for the CXM business, for the year. So is that something that we have now relatively, lower expectations on? Or do we think that this will kind of come in in the latter half of the year? No, we are confident with the CXM business, by the time we end the year, you know, growth has in excess of 20% growth for the year-end. So, I mean, there's no change from the initial estimate which we had provided. Okay. So you mean the profit revenue for the year would be 20% higher than the last year, right? No, I'm sorry. I thought you were asking on the revenue growth, right? Yes, correct. Yeah, that's what I'm saying. So the revenue growth will be, you know, definitely 20% + by the time we close financially at twenty-five. Okay, thank you. Thank you. The next question is from the line of Raghuram NS from Euri ndia Ventures. Please go ahead. Yeah, hi, Naozer. I have many, many hearty congratulations and a warm welcome to the Alldigi Tech team. I had three, four questions. First one was on the new client additions on CXM. Obviously, there has been some additions, but I would imagine if we have to sustain a significant growth, about 20%, our ACVs have to really ramp up over the next couple of quarters. So any plans for that? That was the first question. Second, yeah, great to see 2.6 lakh payroll additions for this quarter. I think it's been a very significant addition. You, I just heard you mention that you will end the year at about 20% growth on EXM also. So that is something that is very, very heartening. And, if you can just help us with whether that will be led by international payroll revenue growth or by even kind of a mix of international and domestic. The second thing that. The third thing I wanted to. You did mention about the methodology of apportioning overhead costs. I think there is a lot of, you can say, questions that you can maybe see on the EBITDA margin trend for EXM. So if that is put back to the old methodology, what would have been the EBITDA margin? It was trending at about 33.5%, even including compliance. But now, without compliance, it is still down to about 31%. So if you can just help us with what will be the trend if you revert back to the methodology. You did mention one and a half percent, but in terms of overall numbers, what would that be? And basically on CXM International, obviously 74% is the revenue now going on a quarter-on-quarter basis. Is that something that is sustainable as a distribution of revenue percentages, or will it even increase further? So if you can please- Sorry, I didn't understand your last question. About 74% is what now it has come to, CXM International income. Yes. Yes, yes. So is that something that is going to increase even further? Is that, or is this a level where you expect it to be sustainable? And recruitment charges one-off, is that something that was just only for this quarter, or do you expect that to continue maybe going into one more quarter? Sure. I'll take both your CXM questions together because both are linked in a sense. So I think we have had a good, you know, addition of new logos. We've added three new logos in CXM. Post quarter end, we have added one e-commerce logo, which is again international, you know, it's going to be sizable ACV, and we'll announce it in this quarter. We have grown from mining of existing customers, so we have grown additional LOBs and growth in existing LOBs from the healthcare client which we serve with. As I mentioned in my speech, we are trying to do, you know, alternate channels of growth over and above, you know, having people on the ground in the U.S. So we are looking at partnerships. We have tied up with, you know, consulting firms who can, you know, support and find leads for us on a variable basis, who can guide and drive relevant RFPs to our doors. So we are doing a lot of different stuff which we haven't done in the past, with a view to improve the channel, the quantum and the channel mix of the leads, which we generate. Raghu, as you know, within CXM, the domestic play is, you know, we don't go out selling domestic business. So, like this quarter, you know, I mean, there could be some ramp up for our existing customers, which we'll definitely service. That could change the domestic-international mix very, very briefly in a particular quarter, as happened in the last quarter, where we saw slightly higher growth in domestic than international. Directionally, you know, international is what we focus on and always will. Definitely, the 74% mark, which you see, I mean, we continue to have an upward spiral into the future also. Coming back to your EXM question. Again, EXM, within EXM also, the direction is clear that we will continue to focus on the international business. When we started the year, we had taken an internal target of the new sales, at least 60% of the new sales should be international, and we continue to, you know, continue to go there. In fact, on a YTD basis, of the new sales booked, we are at about 74% international new sales, but that is also because of a one-off large deal which we got in Q1. The direction is pretty clear, and as I also mentioned in my speech, the current pipeline has about 55% of leads which are international. There is no going back to the strategic direction that we'll continue to focus on incremental international business. As far as the regulatory concerns are concerned, I think more to add to that. We will see how do we come back. As I said, you know, we have the that is completely settled, so there were regulatory charges, you know, all the business in Q2. We'll have to wait and see. But overall, that's, that's valid on the trend, that we have 31% and we'll try to improve on that margin. Yeah. So as I said, you know, To be statistically, your query, Raghu, against 30.5%, it would have been 31.6%. Oh, okay. Okay, understood. Understood. All right. Got it. Thank you. The next question is from the line of Bhavin Shah from Latent Advisors. Please go ahead. Hi, good morning, Naozer. Again, I think couple of questions from my side. I mean, while going back on the margin, still trying to understand, and I know you mentioned it twice in the call earlier, the reduction in EXM despite compliance being out, coming to 31.5%. Is that, is it because of ramp up, or is... and can we expect it to go back to 33-34%, or because of the adjustments that you've done, it will remain at around 31, odd percent? That's one. The second question is, EXM side, I think one of the notes had mentioned there's been a one-time cost of recruitment leading to lower margins, around 13.5. Can we expect that for the rest of the year to go back to 15% +, or because of the change in mix, it will remain around where it is right now? And the third is, despite margin correction in both the segments, even an unallocated costs have gone up. What would kind of have an overall level, we are seeing a triple impact, both in each segment as well as unallocated expenses. Wanted to understand if one could get a sense on the unallocated expenses that are coming up. Those are the questions from my side. Bhavin, we could just catch first two questions up to the recruitment call. Yeah. After that, we could catch up whatever- That's it. The next question. ... The third one is around the unallocated expenses, which have also trended up in the current quarter. Wanted to know, is it a result of some realignment of expenses and recognition, or is it some one-time expense, or do we expect some higher unallocated expenses as well, going higher? Coming back, you know, probably, I mean, as I first said, I'll again say that we will get back to, you know, the EBITDA margins, you know, somewhere between 32% and 32.5%, you know, very soon. As I said, the one-time impact of this change has been 1.1%, and that will continue to remain. I'm not sure which unallocated expenses you are talking about, so I'll... I'm gonna... And then the last bit before I hand over is, you know, on the recruitment charges, yes, it's linked to the growth which we expect in Manila. So whilst we had it last quarter, and we, whilst we are trying to control it, you know, we will see some overhang over in this quarter also. You know, before we are constantly trying to improve our free channels of recruitment. As you know, in every business, we encourage direct walk-ins and internal referrals, employee referrals. So we'll continue to do that. But it's a question of balancing revenue realization and the recruitment cost. So I think it's a mix of that. So we will continue to walk a very, very well-controlled fine line on that and see how we continue to optimize revenues and minimize recruitment costs going forward also. So do we expect margins to move back to? Which unallocated costs you're referring to? Sorry, just on CX, do we expect the margins to move back to the 15%? Yes. Yes, definitely. Definitely. On the unallocated cost, I'm looking at your presentation and refer to from your financial results, where on the segment-wise, your unallocated costs for the quarter are around three odd crores, I would say. Hmm. Can you give us this question separately over email? Yeah, that'd be better. I will do that. I will do that, yeah. We want to actually. Absolutely. Yeah. Any other questions? Let me tell you, Naozer. That's all. That's all from my side. Just one last question is, if I look at our new logo wins and the ACV, I think this seems to kind of suggest that our ACV per client seems to have reduced substantially in this quarter for the new logo. Is that because of this shift towards clients, or is it more of the nature of the market? No, in fact, if I take the EXM business specifically, we had one large deal, you know, in the Q1, you know, which was uncharacteristic and, you know, tilted the ACV. Right. So you are right that, you know, I mean, against an average ticket size of just about a crore in quarter one, in quarter two, we are at fifty-five lakhs. But if you go back to quarter two of last year, you know, we were at ninety-one lakhs. If you look at H1 of last year, we were forty-three lakhs, and in H1 this year, we are seventy-seven lakhs. So definitely this will not be impacted by the fact. As I As I said, on stats, we have just booked one deal. While of course we desire is to sort of, you know, I mean, go after large deals, but it does get, you know, it does move a little bit up or down quarter on quarter, you know, or H1, half year on half year, depending on, you know, the nature and composition of the deals which come in. So just to reiterate, for the H1 to H1, we were 53 lakhs last year, and we were about 114, 1.1 crore average ticket size this year. Okay. That's all from my side. Thank you, Naozer. Thank you. Thank you. The next question is from the line of Kumar Saurabh from Scientific Investing. Please go ahead. Hello, am I audible? Yes, please. So I have, sir, three, four questions. One, in both lines of business, who are our competitors, and what is the competitive advantage we have? Second is on the opportunities and risks which have emerged with the progression of GenAI and NLP. And third, do you still see operating leverage possibility in the EXM business? These are the three questions I have. Sorry, can you repeat your third question, please? Do you see further operating leverage possibilities in the EXM business? Yeah, sure. No, I've answered the first question already. I think, you know, this is the third or fourth time I'm answering. Yes, we definitely see operating leverage, you know, in the EXM business, you know, as going forward. Coming back to the first question, as I mentioned, we are in a market, you know, in the managed payroll services market. So we are pretty uniquely positioned there. So the other notable names in the market are some of the, you know, the multinationals who operate in India, you know, ADP, Ceridian. There are domestic players, you know, like, AGGS, you know, I mean, who are there. So those are who we compete with in the EXM space. On the CXM space, you know, we are pretty unique positioning. So, we do not compete directly, you know, with the big names like the TCS or the Wipro or an Infosys, you know, for the international business. So I would say our competitors, you know, are similar kinds of companies, you know, like it could be a Fusion BPO or twenty-four seven AI, and those would be the names of our competitors. See, what I would like to reiterate is that on the CXM side, we are definitely a value for money and a value-adding niche player. Yeah. So-... In terms of size, you know, I mean, there are significantly larger players, but I think the important part to know is that once we win our customer, we are able to, you know, establish our credentials and our operating credentials very, very quickly. We are able to grow with that customer, you know, very significantly in a short period of time, and we're able to retain our customers. So both on the international, there are customers who have been with us for the last twenty-plus years, pretty much similar to the time we have been operating. Our customer retention rates are significant. So those are the values which we bring, you know, on the CXM side. Sir, what are the opportunities and risks with GenAI and NLP technology? So again, we have modified our position in the market. We are looking at a wrapper of six to seven bolt-on solutions, you know, which sort of we are happy to work with our customers. So those solutions range from, you know, I mean, quality monitoring, you know, how do we improve sales conversions? How do we ensure, you know, that internal AHTs are a bit faster so that, you know, I mean, the number of calls a person can take goes up. So we are mindful of that, and we believe that a man plus machine model would be the way to go forward. We also run several businesses which give us an internal moat. So for example, the sales business, you know, where we do a lot of cross-sell, upsell for some of the large customers or the collections business, you know, which does... You know, whereas even collections is sort of, you know, part of collections has become low touch, no touch. So there is a certain amount of human touch required for some of the higher pockets, you know, and some of the written off cases. So the kind of businesses we run are approached to sort of look at a man plus machine model. We believe that, you know, we are, you know, reasonably well poised into the medium term. Okay, so you don't see any risk on the CXM business in terms of growth or margin because of these technologies disrupting the industry? No, nothing significantly, yeah. Okay. Okay, thank you, sir. I'll go back in the queue, and best wishes. Sure. Thank you so much. Thank you. Thanks again. Thank you. The next question is from the line of Ankit Manocha from Aideci Ventures Family Office. Please go ahead. Yeah. Thanks for taking my question again. So, firstly, if I was a client, and if I was comparing your offering to, say, the offering of a Workday or a Taleo, would that be a right comparison? And secondly, are you a much superior value proposition versus them? I mean, what would be our selling point versus, say, to these competitive softwares? Yeah. So I think our largest USP, you know, well, of course, you know, on a product by product or module by module, the jury could be out. You know, I mean, we may be better in some, you know, the names you mentioned could be better in others. But I think what we bring to the table is our ability to customize, yeah. Because many of the products which you mentioned, I mean, come as a package, very, very difficult to customize or it may take a long time at a significant cost. So I think our ability to customize, our ability to be agile, I think, are, you know, are USPs, you know, compared to, you know, the products you have named. Understood. And from the value proposition, what would be your take on that? Our value proposition on the managed payroll, so the earlier question related to the HR, HR/HRMS side. Our value proposition on the payroll side, as I said, you know, is value for money in terms of pricing and, again, our ability to handle complex payroll, which may require significant customization, which may require significant. You know, so for example, you know, I mean, for one of our facilities management clients, you know, I mean, they in turn have deployments at maybe say 30, 40, 50 of their customers. So each customer has a different method of capturing a timesheet. Each customer has a different holiday list. Each customer has a different, you know, part-time, full-time. So, as one example, the ability to sort of, you know, integrate, to take, you know, data from multiple sources seamlessly to run payrolls at different timelines, you know, for permanent staff, temporary staff. So any kind of complexity which is there, any organization which is facing complexity in its payroll, I mean, you know, and that also brings us the benefit that we can look at getting large organizations reaching out to us. So, that's where we come in, you know, customization, agility, and the ability to operate. Understood. Thanks for the color. Secondly, I mean, there was other income of around INR 17-18 crores, I think, in Q1. I assume that that would be a one-time, and what would be the guidance for the other income, you know, for this year? No, so the other income in quarter one was largely, you know, the profit on sale of our local statutory compliance business to majors upper inter services. So that is clearly a one-time, you know, and then it's not going to be repeated in any large measure. Right. And finally, what would be your, the guidance, that you kind of stated maybe in, maybe two quarters back? What would be your guidance for this year in terms of, growth and margins? And do you see any impact generally, does the, strengthening US dollar, impact your margins? We continue to... I mean, as I said in the past too, we believe that we continue to, you know, close the year overall in terms of, you know, growth in excess of 20%, 20% or marginally higher... that is where that continues. There is no change to that. On margin, yes, we will continue to improve margin, as I said in the past too by about, you know, 1%-1.5% year on year on an overall basis. And does a strengthening dollar usually impact your margins? It should actually be a benefit to us only if the dollar strengthens. So, I mean, it could be an upside, but I mean, difficult to predict, you know, in terms of how that would grow. Right. Thank you. Thank you. The next question is from the line of Jyoti Singh from Arihant Capital Markets. Please go ahead. Yeah, thank you for the opportunity. So just wanted to understand, like, we are, we have, 230 seats, 250 seats for China. And, also we are focusing more on the international side. So like earlier, we did it in Manila. So now we are targeting to expand more on the international side, or we are still looking to expand more on the domestic side, like Bangalore and China? Yeah, no, thanks. I mean, yeah, it's good. I'll clarify this. So our international operations have always been delivered out of China and Manila. And a broad brush classification is that we do the back office out of China, and we do the voice operations out of Manila. Yep, so as far as that's a given. As far as the domestic business is concerned, we will technically continue to support our existing customers. You know, if they have growth. To reiterate, we are not in the market selling fresh domestic business. So the size which we have taken in China is we are not doing any domestic business. It is for, you know, some domestic growth, but more some international growth which we have got on the back office, which we will deliver out of China. Okay. Thank you, sir. Sir, just another question on the overall industry side. Like more of concern on the industry, because now this business, people expecting it will not grow that much, that it was earlier because of a lot of new technology and, more of, more competition in the business and industry. So what, what are your perspective overall industry view, if you can give us? Jyoti, I've already answered the previous question on technology, so I don't think I should repeat that. But and I also answered the growth question, saying that we'll continue to grow at least at 20%, now. I mean, by the time we sort of come to the end of this financial year, so. Sure. Competition, yes, competition is there, but as I said, we have a pretty niche space in the CXM space. We are a market leader in the CXM space, so, we continue to sort of manage the competitive pressures and see how we can continue to get that 20% growth. Okay. Thank you, sir. So, sir, just another question on the quarter on quarter basis. So, like, seasonally, we have a strong Q4. So what are expectation from the Q2 and Q3, if you can explain it? Any guidance that you would like to give? Yeah, I mean, you're right. Quarter four is typically our strongest quarter, and, I mean, I would expect that to happen this year also. But what I would also like to highlight is, you know, that we were able to actually hold Q1 revenues this year, you know, and we did not really see a dip from Q4. So that's the business growth which we had actually pulled forward into Q2. And therefore, the growth in Q2 looks a little muted. But, I mean, as we all know, we actually de-grow in Q1, and then again start the year. But this year, our Q1 revenues were same as Q4 revenues at about 129 crores. So thank you so much. Thank you. Thank you. The next question is from the line of Ravi Mehta from Deep Financials. Please go ahead. Yeah, hi, thanks for the call. Just wanted to check that the headcount in the CXM business has increased by close to 500 seats, whereas the revenues have not grown that much. So, what is the usual lag when you add headcounts and to see that traction in revenue? And was this the only reason why the margins of that segment had dropped? Because you had to... You created a bench and it didn't reflect in revenues. Yeah, you're spot on. That's primarily the reason. Our typical lead time in the business, you know, which is where the growth is and the higher costs are, is about 45 days. So the training actually ranges for 45 days. For, you know, which is unpaid training, and that's the cost of readiness, which I referred to in my earlier call. So we will see some of that coming back in Q3 and Q4. We also, you know, did have a bit of a slightly higher attrition in Manila in the last quarter, as we grew. So to that extent, you know, we have to again backfill and retrain. So there was some bit of element of that, but we have actually sort of, you know, I mean, we have been able to largely fix that as we go into Q3. But yeah, the cost of readiness, you know, where the revenue lags the costs which you have to take up front. Okay, so margins can scale back and the revenue traction will be visible from Q3? Should be, yes. Should be. Yeah. Okay, thanks. Thank you. The next question is from the line of Raghuram NS from Eurindia Ventures. Please go ahead. Hello. Sir, thank you for accepting my follow-on question. I can see very significant high-profile additions on the West GBS side now, Mr. Paresh Vankar who was the Chief Marketing of LTIMindtree, Mr. Gurmeet Chahal, who was with Genpact, and very significant additions. How do you see them in terms of how they can impact the kind of growth and the kind of clients that can come into the Alld igi and Digitide, you can say, family? No, no, of course, we will bank on their significant wealth of experience and their guidance to see how we can, you know, I mean, continue to grow or do things differently or accelerate growth. Okay, but in terms of any clients that they bring, any new early indications in terms of what kind of significantly overall growth numbers? No, I mean, those are things any senior leader would do, you know, and we'll continue, as I said, to bank on their experience, and of course, the CMO is just about two weeks into the system, so we'll give him time to settle down and, you know, then we can brainstorm in terms of what we can do differently. Okay. Okay, hopefully next quarter. Okay. Thank you. The next question is from the line of Kumar Saurabh from Scientific Investing. Please go ahead. Hello. Thanks, sir, again for the opportunity. And my question is on the employee experience management, and I'm new to the company. So my understanding is it's basically a software product business. So correct me if I'm wrong, and, like, the thing I want to know is how much annually we spend on the, you know, product enhancement, whether you call it R&D cost or a product enhancement cost? And also four, five years down the line between these two business lines, how do you see the revenue, so how do you see the profit mix changing? I think right now we are at around fifty-five, forty-five. Do you see employee experience taking a significant lead or how it will shift over a long period of time? Typically, we don't give long-term guidance, but what I can say is, I think that the... I mean, we are looking to grow the EXM business at a couple of percentage points more than the CXM business. So yes, it will be a gradual change in terms of, you know, I mean, how the CXM and EXM proportion pan out in the future. But that said, CXM, you know, being the larger scale size, you know, business, you know, we continue to play a significant role in terms of our growth going further also. Okay, and how much do you spend on- We are a product company in that sense, you know, so we are a product services company. So on the payroll side, as I said, we have an internal product which runs payroll, but that's an internal product, you know, and the customer is pretty agnostic to it. So we do managed payroll services. We also have a HRIS product, you know, which is well regarded in the market in terms of, you know, in terms of its UI, UX, and you know, the kind of, as I said, the customization flexibility it provides. We have invested in a, you know, a product for the SME space. So I think we are gladly done for the investments, you know, for the foreseeable future. Yes, of course, we will continue to explore, you know, small incremental investments as required to ensure, you know, that our market products remain market relevant. So, sir, how much do we spend on this as a part of revenue on sales and marketing as well as on product enhancement? Difficult for me to give a number top of the mind, but I think what I'll say is that we continue to make investments as relevant. Yeah, so whatever can help us grow, whatever can help us keep our, you know, competitive position in the market intact, whatever keeps our product market relevant, we'll continue to make those investments in the future also. Okay. Okay. Thank you, sir. That's all, sir. Thank you. As this was the last question for today, I now hand the conference over to the management for closing comments. Sure. Thank you, thank you, thank you so much for engaging our, you know, and I'd like to thank all of you for the time that you've given us today. Our strong sales pipeline, laser-sharp focus on operational efficiencies, and, you know, the increasing share of international business makes us remain confident that we'll continue to deliver superior financial and operational performance in the future, too. Before we close, we'd like to thank each one of you for the support of your company, and here's wishing each of you and your family members a Happy Diwali and prosperous New Year. With this, we would like to close the call and look forward to interacting with all of you again in the future. Thank you. Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.