Ladies and gentlemen, good day and welcome to Pelatro Limited Q2 and H1 FY27 earnings conference call hosted by ORIM CONNECT. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Janhavi Patil from ORIM CONNECT. Thank you, and over to you, ma'am. Thank you. Uh, good afternoon everyone and a warm welcome to all of you. I'm Janhavi Patil from ORIM Connect representing the Investor Relations team of Pelatro Limited. On behalf of the company, I would like to thank you all for joining us for the Q2 and H1 FY27 earnings con call. We are joined today by the company senior management team, Mr. Subash Menon, who is Chairman, Managing Director, and Founder of Pelatro Limited. And Mr. Sharad Hegde, who is Chief Financial Officer. Thank you for taking the time and joining us today. I would like to hand over the call to Mr. Subash for his opening remarks. Thank you, and over to you, sir. Thanks, Janhavi. Good evening, everybody, and a very warm welcome to this, uh, investor call. Thank you very much right at the very outset for sparing your time and attending this call. As is our practice, we have a deck which is already on the website, I presume, and has also been shared with NSE. I presume all of you have been able to access that deck. We will, uh, go through each slide, and at the end of that, we will have a Q&A session. In order to have as much time as possible for the Q&A session, we will skip certain slides which are repetitive in nature as compared to the past sessions, past the calls in the past. Hope that is okay. And if you still need some clarity on those slides, please ask us during the Q&A part. Initially, first of all, I would like to state that we have had a very good quarter and a very good half year. But that is not a surprise to us. We knew this would be the case given the momentum in the business, and we are quite pleased with what we are able to share with all of you. At this point in time. The SL acquisition also has started moving forward in the right direction. As you all know, when we acquired it, there was hardly any pipeline. And the business was, uh, not growing at all. But now the first, uh, you know, agenda item that we had was to improve the pipeline. And the next one was to improve the margins and then to increase the revenue on the basis of the pipelines and new wins. The first agenda item is moving along very well. Our pipeline is good, things are moving fine. You will actually see the results of that in the coming, uh, in the future quarters. Uh, the increase in EBITDA is already seen. There may be some fluctuations from quarter to quarter, but the general direction will be an improvement in the EBITDA. So with those opening remarks, I would like to start with the deck. The 3rd slide of the deck is about the company. You already know these things. I'm skipping this one. The next slide is our global presence where we are currently having customers, several countries, 35 or 36 kind of countries. Moving forward to the business overview section. actually grown to ₹41.4 crore from ₹34 crore last year same quarter with the revenue growth of 21.6%. EBITDA, uh, stood at ₹10.14 crore for Q2 this year at a margin of 24.5% almost. The corresponding number last year Q2 was ₹7.49 crore at a margin of 22%. So there has been both growth in the absolute numbers as well as the margin, as we can see here. The growth in EBITDA has been 35.3% year on year for Q2. PAT, on the other hand, has grown by 53.5%. to ₹7.14 crore from ₹4.65 crore last year same quarter. The PAT margin too is increasing, so it's increased to 17.25% from 13.6%. I will just touch upon the— rather, I will let my colleague Sharat touch upon the numbers, and then I'll come back to you for some more details about the business. Over to you, Sharat. Thanks, SM. Good evening everyone and welcome to our con call. So to start with the numbers, we have actually given 2 slides this time of to give results highlights, one for the quarter and one for the half year, first, first half. So the first slide talks about Q2 numbers. When we look at that, Q2 revenue has Almost last year. EPS growth is also, uh, seen. So EPS have grown to ₹6.74 from ₹4.44 last Q2. Um, so this is on the quarterly number slide. The next slide gives us the half-yearly numbers, so I'll touch upon that as well. So for H1, the revenue grew by 34.4% year on year as compared to last H1. I mean, so the revenue stood at ₹81.62 crore from ₹60.7 crore last year. EBITDA grew, uh, to ₹18.27 crore from ₹13.8 crore. Um, and the PAT has also grown to ₹12.57 crore from ₹8.21 crore. The PAT growth is around 53% year on year. The PAT margin too has been increasing from 13.5% last year— last half, I mean, first half of last year to 15.4% this H1. EPS has grown naturally to ₹11.86 from ₹7.83. So as can be seen from these numbers, the profit growth has been outpacing the revenue growth both at Q2 level as well as H1 level, which basically reaffirms the non-linearity present in our business, which we have been highlighting for past some time now. The profit margins too are steadily expanding, as can be seen. So while these are on the numbers at company level, the next slide gives us numbers at segment level. As you all know, we operate into 2— as 2 different divisions. One is the CBM division, which is the continuing business, and the Airtel division, which we acquired last year. So, uh, on the— I mean, uh, on this, uh, when we look at the overall, uh, contribution from both the divisions, uh, ₹65.77 crore of revenue has contributed to CBM division. While SL contributed 11 point— sorry, 15.85 crore. CBM revenue has grown year on year by 22%, uh, which was 53.8 crore last year for H1. Airtel division only started from Q2 last year, so the first half may not be a right comparison. So apt would be to compare it year on year for Q2 numbers. alone. So when we look at Q2 numbers for Airtel division, there has been a growth of almost 30% as compared to Q2 last year, which was ₹6.9 crore, which is now ₹9 crore plus. EBITDA contribution from CBM was ₹15.07 crore at a margin of almost 23%, while Airtel's contribution to EBITDA is ₹3.2 crore at a margin of around 20%. So Airtel's EBITDA margin too is increasing steadily, uh, with respect to, uh, I mean, which is, uh, what we can see here, and we expect this margin, the Airtel division's EBITDA margin, also to reach the levels of CBM division or in about 12 months from now. Um, so these are on the segmental numbers. The next slide gives us certain key financial ratios which are basically return on net worth, return on capital employed, both of which are steadily growing and which is a healthy growth. The debt-equity ratio has been sliding down naturally because, I mean, we have not been adding any significant— any debt for H1. We did not add anything, and there has been in a significant addition as well. So, uh, these are on the, uh, the ratios. So with this, I think we have touched upon all the financial numbers, the key numbers. Um, over to you, Sam, on the rest of the slides. Thanks, uh, Sharad. The next, uh, 3 slides essentially talk about the AI part of our work. Now artificial intelligence, particularly understood as agentic AI or LLM, uh, is a very, very critical portion of our business at this point in time. Which is the case with many businesses, and the same with our business as well. We, uh, started looking at this quite early on. We took the, you know, bull by the horns there. And we started deploying AI in 2 areas. One is in the feature function— on the feature functionality side of our product. So various advanced AI capabilities have already been brought in, including LLM usage, agentic AI, and all that. In our product already. But that's not the end of the road. There is much more to be done. We have got a 3-year pipeline, uh, 3-year roadmap at this point in time where several, uh, new capabilities particularly leveraging AI technology, will be rolled out in our product to ensure that we maintain product leadership. The second aspect is with respect to using AI in our own, uh, inner development and testing and implementation and different areas. There also we have significantly, uh, you know, deployed AI, different tools, and the result is seen in the head— the growth of our, uh, you know, headcount. In the past 6 months, I think our headcount grew only in, uh, single digits. It was like 5-6 people or something like very less than 10 people. That was our total growth in headcount. In 6 months, while business, as you have seen, has grown much more. How have we managed to do that? Through the utilization, extensive utilization of AI in our daily operations, in our development and coding and all— I mean, coding and testing and all that kind of stuff. So that's what we're talking about in these 3 slides. One is about the product features, and slide 12 talks about the impact of AI and LLM and all that in our software development. So, uh, when we use these capabilities, these AI technologies in our internal activities like coding and testing and implementation, what happens is One, the time to market reduces significantly. 2, the quality improves because of the sheer volume we are able to handle by way of testing, for example. So if, uh, you know, if something would take us, say, 25 days in the past Uh, it would now take us probably 3 days. And with enhanced volume, it will probably take us 5 days still. So time is saved and there are more tests happening on the product before it is launched, before it is sent out. So quality also gets, uh, gets better. So on, on all fronts, we are Yeah, we are actually riding the AI wave. We are riding the agentic AI and LLM wave. We have— you are— we are using that to our advantage where in, in 2 key areas. Which is where they matter. The next, uh, 2 slides are about our products. Slide 13 is, uh, you know, it lists the products in the CBM division, and slide 14, that in the SL division. These are old slides. I will wait for Q&A session if anybody wants any explanation about the products. Uh, the next slide is, uh, the next couple of slides will be handled by my colleague before I come back. Over to you, Sharad. Um, so the next slide gives us our revenue model. So I mean, this has been same, there hasn't been any change since past few years. So Uh, the revenue model, as you can see, is basically split into recurring and recurring— I mean, the repeat and one-time revenue. Repeat revenue is further split into recurring and recurring. Recurring revenues are those which are contracted and which are recurring at every fixed interval, while recurring— recurring revenue are basically change requests, uh, which are customizations that the customers would need every now and then. So recurring revenue further has a monthly fixed license fee. AMC and the Managed Services Suite. Managed Services Suite basically contains IT operations, business planning, and business operations. Uh, this is on the repeat revenue side, and on the one-time revenue, it is basically the one-time license and any implementation relating that license. So these are the revenue model items. And so I mean, as we have been telling, as long as the repeat revenue I mean, a higher repeat revenue basically gives us a better revenue visibility. And as long as the repeat revenue is upwards 70 to 75%, that's a very good, uh, indicator for the business. And the next slide basically gives us the actual split of these various revenue components. And as we can see, the repeat revenue, that is recurring and recurring revenue put together, is around 94% for the first half, and the one-time is around 6%. So this 94% could go down, up and down slightly depending on what kind of CRs or licenses we have for the period. However, we expect it to be upwards of 70 to 75%, uh, every time, which is what is a good thing. So with that, the revenue part is discussed. Back to you, Sam, on the rest of it. Um, now it's about the number of customers. That's also a repeat slide. I will not spend time on that. That's slide 17. Slide 18 talks about the significant market opportunity that we have. Uh, we currently have about 10% market penetration with respect to the number of telcos that we are serving. And we, we believe that with the current products that we have, we have an opportunity of something like ₹12,000 crores to go after. And, uh, currently our penetration in the market is only about 1.3 products out of 8. So we've got multiple levers here— sell more products, sell more services, go after more telcos. So all of those will help us to grow, uh, in a very good manner in the coming years. The next slide is about a key strength. Uh, this is also a repeat slide. Um, the, the kind of technology that we have, the patented technology that we are, that we are using, uh, the ability to handle very high volume transactions, uh, extremely large telcos whom we work with. All of that is helping us to gain over our competition and maintain that lead over the competition. This is why we are, uh, in our space, in the CBM space, we are the largest player in Asia today. And that's because of this reason. Uh, moving over to the investment rationale. Um, I, I missed out one element, sorry, in the key strength. There's one small addition there. As a product company, we have to invest a lot in R&D, and at this point in time, our investment in R&D is about 31% of the total expenses. If you look at the global, uh, you know, standards it is anywhere between 25% and 40%. So in global companies, when you look and you benchmark against them, you'll see that they will fall in the 25% to 40% range. With respect to R&D, R&D, uh, spend as a percentage of total expenses, we are at 31%, so we are almost like in the middle. So we are in line with the global standard. And the interesting thing is that not even ₹1 of this is capitalized. Everything is expensed. So Uh, if we are to, you know, there are some companies who capitalize. If you have to capitalize it, then we'll have an even higher EBITDA, but that's not, uh, what we believe in. We think it should all be capital, you know, expensed. And so the entire thing is expensed at this point in time. That's 31% of the total expenses that you are seeing. Um, The next slide, investment rationale. Uh, this is also an old slide. We expect to see good growth in revenue. We've, uh, you know, we are, as, as we say, we are really on the leading edge of AI. Uh, we've got a fairly high barrier in our target market, which means that competition finds it difficult to enter. Uh, we've got good market penetration, but there's still a long way to go, which we'll— where we'll continue to do that. And we have got very good visibility and predictability in our business. Uh, so in, in a nutshell, I mean, the rest are numbers. Uh, I'm sure you've already gone through the financials, cash flow, balance sheet, and P&L. So we can, we can get into Q&A shortly, but before we do that, I would like to once again repeat that on both, uh, sides, be it CBM or, or the SL side, on both sides we are absolutely performing to— in line with our expectation. We— our pipeline is growing steadily on— in for both divisions. We are able to execute well and, uh, you know, get revenues in, in the door. Uh, the margin, the profitability is improving, which is, which is seen, which means non-linearity is, uh, in operation in the business. Uh, we are able to control our headcount quite significantly by using technology, advanced technology. We are able to maintain a lead in our products and keep keep, uh, you know, uh, improving the, uh, the level of our product, the features and functionalities, the capabilities of our product quite significantly once again with the latest technology. So I think we are, we are doing well on all areas and we are continuing to pull all levers with respect to, uh, more customers. More products in each customer, more services in each customer. So on, on the whole, we are very, very happy with the way things are progressing, and we expect to see a similar progression in the coming quarters. With that, I would like to throw the floor open. Questions? At this point in time. Thank you very much. Ladies and gentlemen, we'll now begin the question and answer session. Anyone who wishes to ask a question, may press star and 1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and 1 to ask a question. First question is from the line of Subramanyam from Economic Capital, please go ahead. Uh, hello, this is Subramanyam from Economic Capital. I have a question, uh, given 34.37% in H1 revenue growth against the company's 5-line growth outlook of approximately 15%. What is the management outlook for FY27 in next 2 to 3 years? FY27 in the next 2 to 3 years? I didn't understand that. FY27 and next 2 to 3 years, I presume? Yeah, sorry. Yeah, okay. FY— see, we would in the public, uh, you know, when it comes to announcing a number, we first of all, we don't like to give forward-looking, uh, statements. Uh, we don't give guidance. However, we have just merely indicated that we are looking at at least 15% growth every year. We do not want— we are not comfortable, uh, to tell you what it would be in the next 6 months. You can go by the track record of the business in the past. And what it would be in the next 2-3 years. I'm afraid— my apologies, I'm not able to share any more information other than what's there at this point in time. But I stated that we will, we will have, uh, good growth in the coming years as well. Uh, in the, uh, for the warrants, when, when we came out with the news, we had clearly mentioned what the application of those funds will be. So that, that will continue to be the case. Other than that, Uh, there is no further, uh, you know, clarity which can be given at this point in time. So whatever has been put out in the public market, that's what it is at this point. Okay, uh, following question. The company recently raised funds through the issuance of warrants. Uh, what could be— what, uh, management elaborate on the key objective behind this fundraise? And the area proceedings are expected to be deployed Um, it is difficult to say only from an AI perspective, but we have stated in the past that our target is to get to 30% EBITDA for the whole company, not just for this division or that division. But for the whole company, 30% EBITDA is our target when he— when we hope to get there in the next couple of years. Okay, and last question, sir. Uh, can management provide an indicative view of the cost of saving and EBITDA margin improvement expected the internal AI-led development initiative Okay, uh, sir, our AI, uh, agent Copilot and zero-touch campaign already generating incremental revenue, or should we consider the FY Uh, '27 is the beginning of the meaningful AI monetization. Uh, Copilot and AI agents are already operational with some of our customers, and we are already getting revenues from that. Zero-touch campaigning is not in the market as yet. We will be launching that next year. Okay. Uh, would be 100% of FY27 revenue contracted, or is the visibility of FY28 revenue particularly from the existing customer renewal? New product development and fresh customer additions. It is, it is quite significant. I don't want to put a number to it at this point in time, but it is very, very significant. The visibility for FY28. So what are the initiatives to bring extra EBITDA margin and CPM and expect the convergence within the, let's say, Various things. One is the general nonlinearity in the business itself. I mean, in a product business, that's what happens. You develop once, you sell it to multiple people, automatically leads to nonlinearity. The second is the AI utilization. Uh, sir, with the average presence of 1.3 products per customer against the portfolio of 8 products, what is the potential to increase revenue per customer. Uh, see, we, we are not giving you specific percentages or numbers, absolute numbers for increase in revenue per customer, but that is definitely happening. What we'll be targeting is increasing the number of products per customer as well. Currently 1.3. Over the next 3 to 4 years, my expectation is to get to— get it to about 2.5 or so. Not yet, sir. Not yet. Thank you. Thank you. Participants, you may press star and 1 to ask the question. Ladies and gentlemen, You may press star and 1. To ask a question. Next question is from Nanav Parth Patel from EPC Capital. Please go ahead. Um, hello sir. So I have a question, uh, like receivable have increased to like ₹57 crore. Is this primarily due to business growth and unbilled revenue, or are there any Are there any delays in collections? What is the expected normalization timeline? Sharat Hegde. Uh, yeah, so, uh, the revenue is a combination of both billed and unbilled revenue, and the DSO currently stands somewhere around 126-127 days. Mainly because, uh, I mean, few of these revenues would have been booked by end of the quarter or end of half year, which we are collecting, uh, in— I mean, which we'll be collecting in the subsequent months. So we are collecting in October, November, etc. That's how it is. And, uh, so in our kind of business, the, uh, normal DSO is anywhere between, uh, 110 to 120 days. 30. So we are kind of within that range as of now. Okay. Uh, one more question, sir, uh, that like with increasing 5G adoption and digital payments, mobile data consumption, and I mean demand for personalized customer experience How does management see the opportunity for Pelatro's solution evolving? Could this industry trend become an additional growth catalyst? As I stated, uh, earlier, we are using AI quite extensively already, and that includes, you know, AI agents and Copilot and all that kind of stuff. So as the technology evolves, I believe that would— we will keep taking advantage of those technologies, and that will be to our advantage in the years to come as well. Um, one more question, sir. Uh, Pelatro has a presence across multiple emerging markets, particularly in Africa. The Middle East, uh, and Asia. Which geography currently, like, offer the strongest business opportunities? We do have opportunities in pretty much all of them, but Africa and Middle East, uh, primarily because we are not as present there as we are in Asia. Because of that, I would think at this point in time, that's where the biggest opportunity is. Okay, sir. And are there any plans to like expand into new markets? नहीं ना दिख ना दिख रहा है Uh, yes, we, uh, we will continue to— I mean, uh, in within Africa itself, there are lots of countries that we are looking at. But other than that, if you're talking about continents Uh, we are a bit— we are present to some extent in, uh, Caribbean, and we are looking at Latin America as well. Sorry. Did you say something? Yeah, okay. Um, one last question I have, uh, is like the presentation highlights, uh, and like an increase in total customers from 36 in 2024 to 46 in 2025. So what is the company's current acquisition pipeline and how many new customer additions or network deployments are targeted over the next 12 to 18 months? On an annual basis, we typically have about 4 or 5 new customers coming in. This growth that you're seeing is because of the acquisition of Estelle as well. So it should not be taken, uh, you know, straightforward for future years. On an organic basis, when we look, it's about 4 or 5 new customers every year. Okay, sir. Thank you. Thank you. Participants, you may press star and 1 to ask the question. Ladies and gentlemen, you may press star and 1 to ask the question. Anyone who wishes to ask a question may press star and 1. Is there no further questions? And now hand the conference over to the management for closing comments. Once again, thanks everybody for attending the, the call. I really appreciate that. And, uh, we— you can look forward to a continuation of our growth improvement in, uh, apart from revenue increase in EBITDA margin and, uh, you know, continuing investment in R&D. Leading to a continuing leadership in the product categories that we operate in. So we look forward to similar times or even better times in the future. Thanks everybody. Thank you very much. Thank you very much. Thank you. On behalf of ORIM CONNECT, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.