Ladies and gentlemen, you have been connected for CMS Info Systems Limited conference call. Please stay connected. The call will begin shortly. Ladies and gentlemen, you have been connected for CMS Info Systems Limited conference call. Please stay connected. The call will begin shortly. Ladies and gentlemen, good day and welcome to the Q1 FY 2027 earnings conference call of CMS Info Systems Limited, hosted by JM Financial. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Shalin Choksy from JM Financial. Thank you, and over to you, sir. Thank you, Manoj. Good afternoon, everyone. On behalf of JM Financial Institutional Securities, I welcome you all to the Q1 FY 2027 earnings call of CMS Info Systems. We have with us the management of the company represented by Mr. Rajiv Kaul, Executive Vice Chairman and Chief Executive Officer, Mr. Pankaj Khandelwal, Chief Financial Officer, Mr. Anush Raghavan, Chief Business Officer, and Mr. Puneet Virani, Chief Operating Officer. With this, I will hand over the call to the management for their opening remarks, post which we can open the floor for question and answers. Thank you, and over to you, Rajiv. Thank you. Thank you for joining our Q1 call. Let me take a few minutes to talk about the quarter and the year and then hand it over to the team for more details. The first thing we set out to do this year was to grow our services revenue run rate from INR 609 crores in Q4 to INR 650 crores. In Q1, we came in at INR 625 crores. This is some modest growth on Q4 but is INR 25 crores short of what we aimed for. The shortfall is entirely down to the worst cash supply squeeze this industry has seen in the last decade. Banks supplied about 70% of currency what the industry indented for on a daily basis. This is a risk we had called out in our May call, and this INR 25 crores revenue loss has an operating deleverage impact on the P&L. We believe this should normalize by the end of Q2, so we are setting our full-year services revenue goal at INR 2,650 crores to INR 2,750 crores against the INR 2,700 crores or INR 2,800 crores earlier. The total revenue, including product revenue, is estimated accordingly at INR 2,750 crores to INR 2,850 crores. Against this, we are raising our EBITDA margin guidance to about 27% from the 25%-26% we had guided in May. In summary, we have trimmed the revenue number affected by an external supply issue, but we have raised the guidance on a metric which reflects the quality of the business. The supply squeeze has been painful across the industry for banks, their customers, as much as for the ATM deployers and operators. After extensive industry representation, the Indian Banks' Association, IBA, has constituted a committee to review the situation and evaluate repricing legacy PSB contracts. Anush, our Chief Business Officer, is going to cover more on this in his commentary. A quarter like this does test how well a business can absorb a shock it did not fully see coming. In this environment, we delivered our highest-ever services revenue and expanded margins by 170 basis points while carrying higher than normal wage and fuel inflation in the cost base. This is a result of the investments we have made over the last two years in higher technology spends, which drove productivity gains, and also towards a flexible workforce model. Pricing discipline has also helped us step away from lower-yield contracts, and our shift towards fixed-price contracts while winning large private sector bank contracts has also helped. Now I would like Anush, our Chief Business Officer, to take you through more details of the business environment, the key wins, and after him, Pankaj, our CFO, will take you through the financial highlights. Thank you, Rajiv. Good day, everyone. Let me start by covering the currency supply situation, where it stands today, what are we doing about it, and the business highlights. Starting with currency, we normally see some disruptions around election cycles. This year with the four key state elections in February to April, currency movements typically come under a lot more closer scrutiny through the model code of conduct period. There are currency imbalances which strain the currency chest networks. This happens every cycle and we plan for it in advance. This year, however, saw a much larger and a longer-lasting impact on a geographically larger part of the country. When fulfillment constantly fails the levels of cash which are indented, everyone tends to behave a little differently and start indenting differently, and effectively, this creates a bullwhip effect. This is not a demand problem. Currency in circulation is up 12% year-on-year, and on the retail side of the business, our own same-store volumes have held constant. The constraint imposed around currency supply affected distribution, and it was concentrated in tier two and tier three locations, where our transaction BLA status. This has a direct impact on the operating deleverage for us on 12% of our revenue base. On per transaction contracts, an ATM which is not filled does not earn, and there is no way to offset the operating costs. Across our own estate, ATMs that stayed well-supplied saw transactions flat year-on-year. Those which saw currency supply lower at about 70% saw transactions fall by 27%. So in effect, there is almost a near one-to-one correlation between currency supply and the impact on transaction at these ATMs. This, in effect, has lowered our revenues by INR 18 crore in the BLA business and impact to us on the cash logistics side from the work that we do for other MSPs is about INR 7 crore. As of today, the currency fulfillment has recovered partially through Q2 to about 80% of indented volume. In our plan, we now assume that this should improve gradually by the end of the quarter. On the cost side, this year has seen very steep increases in state-level minimum wages, ranging from 6% to as much as 60% in certain key large states. Fuel costs are up 8% this year. This will all necessitate a larger price increase than average. With private sector banks and our retail customers, the discussions are progressing well. As regards the public sector banks, the industry and banks are engaging through IBA, which is the Indian Banks' Association, which has set up a committee to look into this and come up with pricing to handle these large statutory increases. We hope to have an update for you on this by the end of the Q2. On the market share side, we have been able to retain our share gained over the last year. We are at 60% in ATM cash management and 38% in retail solutions. On the contract wins, we won INR 500 crore of orders in Q1. The largest of these was the HDFC Bank mandate, which we announced in May, 6,000 ATMs over five years at a TCV of INR 400 crore. This will effectively cement our market position with large long-term contract wins at all three of India's largest banks in the last 18 months. Our tech and payment segment is seeing strong traction. Over the last year, we have invested significantly in creating a world-class HAWKAI Enterprise product on the back of a large win at a large PSU bank. The demanding AI use cases developed there were tested and deployed over a national network, and this will be key for us in competing for a large pipeline of similar bids across banks in the next two years. Similarly, there are other banks also evaluating our ALGO MVS software, which is a multi-vendor software for powering their ATM networks. This has been deployed in SBI and we plan to go live at ICICI in Q3. With that, let me hand over to Pankaj, who will take you through the financial highlights. Thank you, Anush. Total revenue for the quarter was INR 635 crore, with services revenue at all-time high at INR 625 crore, up 9.3% year-on-year basis and 2.6% quarter-on-quarter basis. Rajiv and Anush has called out the currency supply impacting services revenue by INR 25 crore, out of which INR 18 crore in the managed services segment and INR 7 crore in the cash segment. EBITDA came in at INR 173 crore, up 8.9% on year-on-year basis and 6.8% sequentially, with margin expanding 170 basis points quarter-on-quarter to 27.2%. Three key drivers led to the EBITDA margin expansion. One, the automation and the technology investment for route and process automation, which have structurally lowered our unit costs. Pricing focus and yield management and increasing share of the higher margin tech and payment revenue growth in this space. We are maintaining our increased spend on tech at 1.5% of revenue, so this margin expansion comes after fully carrying that investment. At an EBIT level, managed services EBIT has impacted directly by INR 18 crore revenue drop in BLA's business. The EBIT for Q1 was INR 32 crore at 10.3% margin versus 14.1% a year ago. If not for the INR 18 crore revenue impact, the EBIT would have been 15%. As and when the supply normalize and transition come back to earlier trend, the increased revenue will have positive impacts. Depreciation in higher, mainly due to higher CapEx incurred in H2 towards HAWKAI and ALGO product development and incremental depreciation related to FSS acquisition impacting in Q1. For reference, FY 2026 saw peak CapEx of INR 350 crore as against our average CapEx run rate of INR 200 crore. For FY 2027, we currently estimate CapEx to be substantially lower at INR 100 crore to INR 125 crore range. Apart from that, synergy benefits from FSS integration should start flowing in H2. Our tax rate this quarter is lower at 20.3% due to the deferred tax gain. Our Securens acquisition turn around operationally, which allowed us to recognize the deferred tax asset. PAT for Q1 is INR 84 crore, down 10.6% year-on-year and 5.8% sequentially. PAT margin is 13.2%, down 170 basis point year-on-year, but up 70 basis point quarter-on-quarter basis. As you are aware, we completed the share buyback on June 19, 2026 for 49.39 lakh shares at INR 340 per share, totaling to INR 168 crore. With this, I would like to hand over to Rajiv for closing remarks. Thank you, Pankaj. Over the last 18 months, we have signed large long-term contracts with State Bank of India, ICICI Bank and HDFC Bank. Execution for all of these is on track. Mid-size and some large banks are preparing for a product refresh after pausing this in FY 2026. We have won two of these mandates in Q1 for ATM recyclers to be executed by the year-end. The technology and payment segment is going ahead and now a meaningful part of our revenue. All of this should help us deliver a good growth here in FY 2027. Platform-wise, we expect ATM management and the retail and currency logistics platforms to grow between 11%-14%, as supply normalizes and our pricing efforts deliver fruit. The technology and payments platform should grow between 35%-40%. Combined, the services revenue growth should be in the 15%-19% range. When it comes to profitability, we are expecting this to be stronger than what we told you in May. Last year, we invested about INR 350 crore of CapEx against an average of INR 200 crore in prior years. This investment was for large project wins and also for the product development for our HAWKAI and ALGO MVS products. The P&L now carry the full depreciation on these assets while the revenue from them is still building out, which is what you are seeing reflect in the EBITDA line this quarter. The CapEx in FY 2027 will drop to INR 100 crore to INR 125 crore, in line with our long-term average. So depreciation should normalize over FY 2027 and FY 2028. Q1 EBITDA margins are strong at 27.2%. This is something I want to reinforce. This is amongst the highest margins of any business services company in India, where the norm is single digits. We aim to maintain these levels for the year ahead of the 25%-26% we had guided in May. We have a track record of converting 65%-70% of this EBITDA into operating cash flows, as we have done for the last five years. For those of you who know us well, we run this company for margin, cash, and returns. When assets stop earning, we will act on it, and if the currency supply and the transaction levels do not improve, we will prune the persistently underperforming ATMs out of our BLA estate. On our overall direction, we are executing as per the basis we set out at the Analyst Day in September 2024 and also reinforced in my letter to shareholders in May. Sorry, that is September 2025 and our letter to shareholders in May. Technology and payment segment, which is 7% of our services revenue in FY 2022, has grown to 16% in FY 2026, is 18% in this quarter, and we expect this to cross 20% contribution by the end of Q4. The HAWKAI Enterprise product has now been proven in a very demanding national deployment at one of the largest banks in the country, and we are bidding with this experience into a strong pipeline. The competition is broadening as attractive markets will attract newer entrants. We like our position because we own the full stack of hardware and software. We are operating at national scale and our models are tuned on HAWKAI Vision AI and cash operations data over a decade, which a new entrant does not have and cannot build quickly. We were early to machine learning, and we are now using AI inside our own operations. Cash forecasting and end-to-end vault automation have gone live for us last quarter, built by our own technology teams. Some of the productivity gains which you are seeing in this quarter's margins comes from there. It is also why I am pleased to welcome Will Poole to our board. Will has co-founded and leads Capria Ventures with more than 60 investments in companies putting AI to work in the real economy. Before that, he built and scaled platform businesses at Microsoft. That is the judgment we want in the room to help scale this part of our business. Overall, FY 2027 will be a good year with strong double-digit growth rates in both revenue and profits, with margins hopefully outperforming than revenue. Thank you, and we now look forward to 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 their touch-tone 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, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to only two per participant. Should you have a follow-up question, we request you to rejoin the queue. Ladies and gentlemen, we will wait for a moment while the questions queue assemble. We have our first question from the line of [Praveen Kumar] from [Aequitas Capital Advisors]. Please go ahead. Yeah. Hi. Thanks for the opportunity. I had a couple of questions. The first one was on the cash supply crunches you talked about. The question was, how much of it do you see as being transient versus being more structural in nature? For example, do you perceive it as a behavior change from banks and RBI? Related to that is also the question on, you have put the statistics on partly supplied ATMs versus fully supplied ATMs and different transactions. The question on that was, is it possible that some of the causality is other way around? Meaning that the banks chose to supply lesser to ATMs where they saw lesser potential, right? That is my first question. Second question was on, broadly, over the last couple of years, there have been multiple, I would say, exogenous kind of shocks which have detracted from you achieving what you have set out to. My question was, what kind of changes have you made or are you currently making to your internal forecasting model to be able to give a better sense of what could happen? Yeah, those are my two questions. Thank you. Hi, Praveen. Very interesting questions. Let me tackle the first part because I think it is very interesting you are examining this from all different angles. I think as far as the transient nature of this is concerned, right now I can comment on the currency supply situation. As you would appreciate, I think there are two parts to this issue. The first is how soon do we think the currency situation will normalize, and second, what are the implications of that normalization on further ATM transaction levels? As we speak, we have already seen that the worst of the dip is behind us. Somewhere around April, May of Q1, the impact was as much as only 30% of the money that we were indenting is what we were receiving from the banks, which means there was almost a 30% dip in currency levels. That situation has improved. It has gone up from 30%, closer to 80%, 85% now. In conversation with multiple industry stakeholders, banking association, and what our association has also engaged with the regulator. We will also be able to see this in the public data of what they show as currency in circulation. You will be seeing that those levels are improving, which means there is fresh infusion of currency coming in. I think this was just a situation where I do not think anybody has a perfect answer on why and what, but we do know that unfortunately implications have been quite severe for the industry as a whole. With respect to your second part of your question on the supply of currency to ATMs of different transaction levels, I do not think there was any such, sorry to use the language, but I do not think any conspiracy theory of that nature. Banks give us currency in bulk against indents that we raise. Now, at some point from a forecasting perspective, we need to figure out what is the best way to supply that currency to ATMs. This disparity was widespread in the nature of the fact that there were geographical imbalances. So when we are comparing and looking at differences, there are differences in the way we have analyzed statistically between different ATMs of different banks, ATMs across different geographies. So I think to that extent, we have been able to sort of get to the conclusion that this is more of a supply which was impacting the growth and not the demand side of the problem. With respect to your exogenous things, I will just hand over to Rajiv for that. Yeah, Praveen, just to add to Anush's comments on this, I think the press has covered this in fair detail. So I would sort of refer to that. There is a supply issue which has got a cascade effect, which was not sort of anticipated between the currency issuing banks to the various banks which are fulfilling the currency needs of the country. A shortfall consistently overall builds more pressure in the system because indent levels just keep going up. Now, I think we are seeing this situation improve. It is not back to normal. What happens to demand? We will have to see, right? That will just play out, and we will get to know at the end of Q2. I think it will be very futile of us to try and estimate that right now. So we will just track the trends and report it as soon as it is visible to us. Going back to your other question on your point on comment you made on forecasting and how do we improve the quality of forecasting. That is a fair criticism. As I reflect, and we do reflect on this. Just to put context, I think FY 2022, 2023, 2024, were three years where we met or exceeded all forecasts and high growth. 2025, 2026, I think we have come under. Now, I think when we look at the forecast, this is a team which is trying to set good goals as per what we think our potential to perform in the market is. We do not put the highest number, but we do put a number which we think is a realistic but a stretch target. I think that is the culture. I do not want to set targets which are very safe and guide towards it. I think we will put our best foot forward. There have been some shocks. Some of them have played out differently than we anticipated when EGS impact was both positive, negative, as we have seen over the last one and a half years. I do think that we are putting in the right investments to manage the quality of the business. You think of EBITDA margins, I think we have done better. I hope we can maintain that. And we are looking at, obviously, also our forecasting and saying, how do we get back to a trend line? The year has just started. This is Q1. If you look at it last year, as soon as we felt there was going to be a dip, we were early to come and call it out. In Q1, we have seen a little dip. We have called it out. We will still put our best foot forward, hope in the next nine months, we are able to cross the growth numbers which we are indicating right now. Understood. Thanks very much. Thank you. A reminder to all participants, please restrict yourself to only two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. Next question is from the line of Umang Shah from Banyan Tree Advisors. Please go ahead. Hi, sir. Thank you for taking my question. My first question was, in Q1, how much of our revenue would be coming from FSS acquisition? Hi, Umang. Anush here. I think we have spoken about the FSS deal the last time most in terms of the overall revenue and effective valuation. As we speak right now, the contracts are in process of getting weighted. In Q1, I think it will be roughly close to a INR 20 crore accrual from FSS. Understood. Sir, any thoughts on the government introducing or planning, paving the way for introduction of MDR on UPI transactions? Any sense on how it will help increase cash transactions? Yeah. I think that is the flavor of the season right now. We have spoken to some of our direct customers to try and see, get a sense of how they are thinking about it. But I think what they tell us pretty much resonates with our own thinking and the fact is, it is a little too difficult to anticipate without knowing the specific details of how exactly they will come out. We have been hearing different media that it will be anywhere in the range of 30-50 bps. What I can try and tell you is that I think the two aspects that we are trying to keep in mind. First is we go back and look at what is the fundamental vision that we have of CMS, and what we set for ourselves when I look at from a cash perspective. Our goal has been always to try and invest in technology and process efficiency to keep the cost of cash as low as possible and to make the transaction as frictionless as possible. Ultimately, in the long run, that is what will help keep cash relevant compared to any other payment systems options. The second being, I think the fintech and the payments world has a lot more competitive intensity. It has a lot more players. How the MDR situation between what has been announced to what eventually gets effectively implemented and passed on to merchants, I think we will have to see how that goes. Right now, when you take the cost of a cash transaction to a merchant, it will be anywhere between 10 to 20 bps. I mean, to all of our current and potential customers, I think that is what we have placed to them as saying, "This is what a cash transaction costs you versus an UPI, which was historically perhaps free," which we will have to see where the cost lands. Understood. One clarification on your comment. You had mentioned that this shortage has affected 12% of your revenue base. Are you referring to the ATM logistics when you say 12% of the revenue base? No, this is the 12% of our revenue, which is from what we call the brown label estate, the transaction-linked ATM revenues. Understood. All right. Thank you so much. Thank you. We have our next question from line of Krushi Parekh from BugleRock. Please go ahead. Yeah. Hi, team. So one of my question is that you mentioned in the presentation that our touchpoints are currently somewhere around 155,000. What is the growth trajectory when it comes to these touchpoints? Because the data that I have, last June, we had somewhere around 153,000. So first of all, including acquisitions and excluding acquisition, what kind of growth are we witnessing in our touchpoints? Krushi, I think we keep updating this number on a quarterly basis. I think right now we are sort of about 70,000 ATMs and 65,000 retail. Let me tell you about in the last 12 months, we have last quarter told you that on the basis of a 4% sequential growth in the cash business, we used that opportunity to also try and do a little bit of spring cleaning on our, specifically retail business, which is to try to weed out some of the lower yield long tail businesses that has induced certain churn. And second is when you look at this through, not the lens of just your touchpoints, but also through the lens of overall the platform business, which we have introduced in our September annual call, and we said we look at ATM business, for example. It's no longer about discrete revenues lying in managed service contracts versus ATM cash management contracts. A lot of the business that we are incrementally winning are integrated end-to-end contracts where a customer doesn't discern between managed service and cash management. As we speak, more than 50% of our overall ATM touchpoints are today from those end-to-end integrated ATM contracts. I think Rajiv had mentioned in the beginning part of his commentary that overall, across both ATM as well as retail, we expect to grow between 10%-13% on both those platforms, and closer to 30% on the payments and tech. Okay. My second question is related to the HAWKAI. We are talking about a TAM of INR 3,000 crores for BFSI, INR 5,000 crores for non-BFSI. First of all, how are we estimating this TAM for ourselves? Is it some kind of an existing market which is there that we are looking to replace with the HAWKAI? Is it some kind of an internal study or an extrapolation of what is the current market share and extrapolate it to the existing number of the retail stores or the ATMs, et cetera? I think on the BFSI it's a lot easier because we've been a lot more proximate to that, and that's exactly the customer set where we started incubating HAWKAI four years back. Also the one where we've had the fastest historical growth rate, just because of our presence, size, and the customer accounts, or being part of the broader ATM and branch ecosystem. In those cases, I think when we look at it, there are roughly close to about 400,000 ATMs and bank branches in the country today, of which the current outsourced market is anywhere between 100,000 to 120,000. So our estimate of the opportunity sizing is really saying in some time frame of the next five to seven years. We anticipate the ones which are not covered under the HAWKAI model, which is using AI-based remote monitoring and visual surveillance, for the banks to start outsourcing more and more into those. Right now, we see a very healthy pipeline of banks wanting to start implementing this, either by way of helping set up a command center for them, or also helping them with the branch surveillance, and the RFP pipeline is quite healthy for the next 18 to 24 months. On the non-BFSI, when we talk about those opportunities, I think it still sort of goes back to the sets of businesses where we have a use case or we've done certain pilots or POCs. These could be gold loan branches, these could be dark stores and warehouses. So in a way, it's sort of qualified by the set of industry that we're familiar with. Beyond this, there could be a much larger use case, but we don't know because we haven't done some of those things. But incrementally, we've been having a lot of people talking to us. Just to give you an example, this could be around border fencing. This could be around monitoring and supervising how exams are conducted and to sort of weed out potential discrepancies in those. So I think there's a world of opportunity for that. We just need to pick and choose where we are the best positioned, where we have the video libraries which have been created, which have a high degree of accuracy, and where we are confident on backing ourselves. Okay. Just one thing. What was the currency handled this quarter and the corresponding quarter of the June last year? We'll just pull out the data and come back to you at the end of this call. Okay. Sure. Thank you. Thank you. A reminder to all participants, please restrict yourself to only two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. Next question is from line of Ankit Kanodia from Zen Nivesh. Please go ahead. Yeah, thank you for taking my question. I just have one simple question. One of our competitors, they're probably much smaller than us, but they have applied for payment aggregator license. Do we have something on this line as to are we keeping that as an option for us, or have we looked at it in the past? Any color on that would be very helpful. Thank you. That is my only question. As of now, we don't have any plans to be in the merchant acquiring space. We find that space to be very competitive and very difficult to make any money. In the past, we've looked at companies which have licenses, including a PA license, but it's not something which has attracted our focus and attention right now. I think the market leadership there is clearly established, and not a space we think competitively makes sense. Thank you so much. Thank you. We have our next question from line of Kush Shah from Vivro Financial Services. Please go ahead. Ankit, congratulations with the good set of numbers. Sorry to interrupt you, Kush. Can you please speak a little louder? Hello. Yeah, hi. My question would be related to the future outlook of the polymer, as there has been news by the government, or in the news that there has been roll out of new polymer sheets of the cash. I just want to understand the future outlook of what would be the polymer, as you are seeing, for your view as a cash logistics business. I think right now, from what we've read publicly, again, I believe the polymer notes are right now being planned for what we call the lower denomination, which is the 10, 20s, 50s, and may possibly include 100s, but particularly 10, 20s, and 50s. Generally, the industry's experience in sort of when I look at the life of a currency note is that, and this is a little dated information, but last time I read an RBI statistic, they said the life of an Indian currency note is about 11 months on average. Which means the 100s, 200s, and 500s possibly last a little bit longer because the frequency of handling is a little lesser and the lower denomination extinguish a lot sooner. I think polymer is a great innovation to help try and extend the lifespan of that currency note. It has also been seen internationally that polymer notes tend to have a lower life cycle cost of currency printing and handling. Right now, if India is incurring roughly about INR 5,000 crores in currency printing annually, polymer may have a slightly higher upfront cost, but over a longer term period, it should reduce this. To us, I think the implications are a lot lesser because ATMs are still not configured for doing some of the lower denomination. They're still 100, 200 and 500. But in terms of some of the work that we do for our CIT work and the currency chest work, I think there may be some incremental opportunities, especially by way of helping with the transaction and the processing work that we do. Maybe around three to five years, I guess, it would take time. More or less three to five years or more than five years from your point of view. Sorry, can't help you on that, Kush, because I think that's more a matter for the regulators to decide what time frame. But I think this has been in the talks for a while. It just seems to be picking up momentum now. Okay. Thank you so much. That's all my side. Thank you. We have our next question from the line of [Manav Batra] from [Jeswel Alo Advisory]. Please go ahead. Hi. I am audible? Yes. Hello. Please go ahead with the questions. Yeah. Thank you for the presentation. I just had one question around the CapEx. The FY 2026 CapEx was around INR 350 crore and the guidance for FY 2027 is around INR 100 crore to INR 125 crore. Does that mean that the CapEx that has already been done in 2026, is it enough for FY 2027? Or are you becoming more selective on the incremental deployment? The FY 2026 CapEx was mainly for the order execution, but we won around INR 2,000 crore of order. This year, as we have earlier also explained that we are not going for the transaction-based BLA model, et cetera. We are focusing more on the HAWKAI and ALGOs platform, where the investment we are looking for and that is the reason the CapEx investment has reduced to INR 100 crore to INR 125 crore. Okay. Understood, sir. Thank you. Thank you for the clear answer. Thank you. We have our next question from the line of [Priyam Srivastava] from [Maechap Free]. Please go ahead. Hi. Thank you so much for the opportunity. I understand there are 100,000 ATMs that have not yet outsourced cash logistics. So what would you expect the pace of outsourcing for those ATMs to be? And also, are there any ongoing tenders or advanced negotiations for outsourcing these? Sorry, could you repeat the last part of your question? It wasn't very clear. Yeah. Ongoing tenders then? I wanted to ask if there are any ongoing tenders or advanced negotiations for these outsourcing deals. If they were, I don't think I would be able to talk about them, given that ultimately there's a competitive element to it. But in all seriousness, I think if you look at the longer-term trend of what the outsource market has been, go back 10 years, I think it was closer to about 50%. Right now, I think it's closer to 60%, 65%. Generally, the theory is that as and when the public sector banks primarily, and when I look at these 100,000 ATMs, they would be primarily split into two cohorts. There will be the public sector banks, where the on-site ATMs, which are co-located at the bank branch, are serviced by themselves. Then you have the white label ATM companies, which typically fulfill a bulk of their ATMs through what we call the franchisee model, where effectively, it is managed in a much more decentralized manner. I think the public sector bank number will be closer to 70,000-75,000, which are managed by themselves. And with each RFP cycle, a larger percentage of this keeps getting outsourced. And I think that's a trend that we've been seeing, and we'll continue to sort of see that. Coming to your second part of your question, from an industry RFP pipeline, I think two things I would call out. The first is FY 2026 was mostly when RFPs had taken a pause. In 2027, we started seeing the banks get back into the refresh cycle. In Q1, we won two of those RFPs for replacement and growth of about 1,000 recyclers for banks. Between Q2 to Q4, we continue to see a fairly healthy RFP pipeline on the recycler side. The other area where I think we are quite excited looking at the RFP pipeline is especially in our payments and technology parts of the business, where across both HAWKAI, the enterprise solution, which is what we sell into the bank branches, and the ALGO MVS, both of those seem to be having a fair degree of activity. Okay, got it. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one on your touchtone phone. We have our next question from the line of [Praveen Kumar] from Equitas Capital Advisors. Please go ahead. Yeah, hi. Thanks again for the opportunity. My question was on the EBIT margins. While on a year-over-year basis EBITDA margins are better, due to the higher depreciation, EBIT margins have been low. Just want to get a sense of where do you see the fruits of the investment coming through and improving our EBIT margins back, hopefully back to the FY 2025 levels? This quarter, the depreciation was higher due to the FSS acquisition and the higher CapEx we have done in Q4, mainly in the HAWKAI and the ALGO product development. We believe that the FSS integration and the synergy benefit will start from H2 onwards, as well as the HAWKAI and the ALGO product development, the costs that we have incurred. There is a lot of pipeline which are there, and Rajiv has mentioned that we are expecting a high degree of growth in that particular segment, which will give us better results and in the H2 or the coming year, the benefit will come. I think, [Rohit], just to summarize your answer, the depreciation as a ratio should trend back to a better level in FY 2028. By H2, you should start seeing a lesser percentage and then getting better in FY 2028. I think the way you should think about it, there is an acquisition link cost where the returns will come in, hopefully in H2 itself. That is the track record we had when we did Securens. As for HAWKAI, there are a couple of large bid pipelines right now. Depending on bidding process and if we win them, I think that will help us get good revenue where the development cost has already been mostly entailed. Understood. My next question was broadly on capital allocation. I just want to get a sense of how are you thinking about capital allocation at this point in time. I understand that you have referred to spending more on technology and investments in technology from here on. But given that we had already done a buyback few months back and the stock, if at all, is somewhat cheaper compared to then. I understand that you cannot do a buyback for some more time, but wanted to get your broad thoughts on how you are looking at capital allocation right now. As a board, we discussed both capital allocation plans, our thinking, and the buyback as a result of that at the last quarter. Buybacks at that time were done at some premium to market prices. Where we stand right now, I think we have roughly about INR 400 crores of cash on books. Looking at our cash flow generating capacity at the end of the year, I would see that we will always keep a buffer with us to invest for inorganic opportunities. That we have been working in inorganic opportunities to diversify the business and also move more into tech and payments. That is an area of serious interest. That is something which we have maintained. There are opportunities there, but the pricing and the value is what we keep focusing on. I think anything which is surplus other than what we think we need realistically in the next one and a half years, would already return through a mix of dividend and if needed, a buyback at that period of time. I think I would refer to my letter, which I wrote two, three months ago. I think that's the principle we'll follow. I don't think every quarter there'll be a dramatic change to the way we think. I think we'll look at it only towards the end of the year. Understood. Thank you. Thank you. We have our next question from the line of Amit, an individual investor. Please go ahead. Hi. Am I audible? Yes, Amit. Please proceed with your question. Just a data keeping question. What was the CapEx for Q1 net of CWIP? Also if we were to look at CapEx, since historically we have talked about CapEx as a block of two to three years. What is the CapEx plan for, let us say, the FY 2027 to FY 2029 block, and how much of this is estimated to be towards growth? Last year we have done a CapEx of INR 350 crore. The year before, the CapEx was much lower. That is the reason that it was INR 350 crore. We have explained that we are expecting a CapEx of around INR 200 crore year on year basis, if you will see over the last four to five years. This year, we are giving a guidance of around CapEx of INR 100-INR 125 crore, mainly in the tech business. Right now, based on how there is a lot of opportunity, especially in the tech and ALGO MVS side. If that comes, right now what other visibility we have, we have given the estimate based on that. If that comes, the CapEx may increase, but right now looking to that, it should not cross more than INR 200 crore. Okay. Thanks. That is quite helpful. Thank you. Thank you. We have our next question from the line of [Shivaram Prasad], an individual investor. Please go ahead. Shivaram, are you there? We have our next question from the line of Dhruv, an individual investor. Please go ahead. Thank you. The answer goes along the lines of capital allocation. I think one of the things that I was concerned about being an individual investor is that despite the company doing well and producing strong cash flows, I think the stock is trading at extremely low multiples, forward multiples of almost about 10x to 12x on a PE basis. So I was just wondering, how is the management thinking about rewarding shareholders, especially given the fact that there was a buyback which was done right now, and the stock reaction and the market reaction to that, it's still not very positive. So just wondering if there are any further thoughts on that. I think that's a tricky question for our management to answer. We will obviously focus on what we can do, which is run a good quality business and deliver growth in line with it. Markets over time should hopefully normalize. Thank you for your patience on holding the stock. I don't think you should think in terms of the buyback as a reward. I think you should think of it just as a way to give back the capital which we don't need, either through a dividend or a buyback format where we felt the stock was very cheap and therefore it made sense to invest in own stock. If we are able to perform on a journey and as the business continues to grow, we hope the stock price will reflect a fair multiple in the coming year. Got it. Thank you. Thank you. We have our next question from the line of Umang Shah from Banyan Tree Advisors. Please go ahead. Hi. Thank you for the opportunity again. Sir, we are guiding for strong double-digit growth. In this, I am understanding that HAWKAI and ALGO MVS will be having a larger chunk of growth. Would we also have a similar growth in brown label ATM product business also? Hi, Anush here. No, I think our capital allocation from a business perspective, I think we are fairly clear on where we want to focus and where we would not want to invest incremental capital. The transaction ATM BLA business is clearly one. I think we have been very vocal about this in the past, and we continue to maintain the same position going forward. This is not an area we would look at investing our capital at all. I think if there are interesting opportunities around fixed fee outsourcing and working with high-quality banks, we will look at it. But from a business and growth, I think we will be very choosy and try to direct an outsized proportion of our investment towards tech and payments. Understood. Second question here was, we also see consolidation happening in the managed services space with you guys via re-acquiring FSS. With this consolidation also happening, do you see more Public Sector Banks looking to outsource their ATMs to players like us? When you think managed services, there are multiple types of orders and deals which come up there. We've said this before, we will see a big shift in newer contracts to either fixed-fee models, because I don't think the industry is going to be bidding for transaction models anymore. When they come to fixed fee, these will be integrated contracts right from supply to management of managed services, cash management, whatnot. We are amongst one of the two players who have these services in-house. Will that result in a bigger win rate? Logically, yes. But again, we don't know how people will compete or what prices. The fact that we've had a fairly decent track record in the last 12, 18 months in the wins is a reflection of the nature of the services being offered from us and the quality and also the pricing. Over time, do we see fewer companies doing majority of the work? I do think so. But let's see how these RFPs come and how the win rate is. Got it. Just last clarification. You mentioned that private sector renegotiation will end by Q2. We are targeting closure by Q2. Public sector banks, you mentioned that IBA is constituting a committee. Any idea by when can the rates be transitioned or by when can we get the rates increased? From our side, I think the ideal goal is to have it happen as soon as possible. But again, given the nuances of managing a complex set of customers with multiple legacy contracts and RFPs which are fairly binding on them, I think we're just being a little cognizant of that and still hoping to close as soon as possible. But, I think why don't we come back to you and hope that by end of Q2, we should have a more positive update. Understood. Thank you so much. All the best. Thank you. We have a follow-up question from the line of Krushi Parekh from BugleRock. Please go ahead. Hi. I guess, if you guys can give a sense on when most of the contracts are coming up for the renewals over next two, three years, whereby, we may look for upgradation cycle and maybe even integrate our managed services along with those contracts. That is the first question. For the contracts which CMS Info Systems is directly servicing as a managed services partner, I think those are fairly long-term contracts. Given that this is a business that has just scaled up in the last two, three years, I think we are some time away from having a cliff in terms of that renewal cycle. As far as some of the other banks are concerned, I think they've sort of are more spread out and come up as different opportunities through the year. Again, our goal is simple, which is being one of the largest market participants with an ability to deliver into an integrated service of a very high quality. We just continually keep betting on the fact that our incremental wins should be higher than our current market share, leading to continuing to grow our share of the business. Okay. Secondly, in terms of gaining share in the retail sector, especially when it comes to our direct efforts, how are we doing there right now? What is it that we are looking to do in the near future, which is one year? I specifically remember we were looking to gain share. Aggression was our strategy to gain volumes over the year. No change in the strategy or approach, Krushi. I think we continue to be very focused on that. I think if I look at our current number of logos, there will be around 170 to 175 logos that we are working with. So every quarter, every month, we continue to chip away and keep adding to our set of customers that we work with. I think the solution and the offering that we have there is fairly compelling and quite solid. Having said that, there is also a constant effort to try and work on improving overall yield and realization. Simply put, as we keep widening the base of the pyramid, you will tend to sort of pick up a mix of businesses. It takes a while, six months, one year, or maybe longer to evaluate what is really fitting into our core thesis versus not. We continue to be very focused and very aggressive on that. Thank you, Anush. Thank you. Ladies and gentlemen, thank you for joining the call. That was the last question of the day. On behalf of JM Financial, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.