Ladies and gentlemen, good day and welcome to the Q4 FY 2025 earnings conference call of CMS Info Systems, hosted by Elara Capital. 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prithvish Uppal from Elara Capital. Thank you, and over to you, sir.
Hi, thank you. Good evening, ladies and gentlemen. Thank you to the CMS team for the opportunity to host you for the Q4 and FY 2025 earnings con call. From the management team, today we have Mr. Rajiv Kaul, Executive Vice Chairman, CEO, and full-time director, Mr. Pankaj Khandelwal, President and CFO, Mr. Anush Raghavan, President, Cash Management, and Mr. Puneet Bhirani, President, Operations. We also have a webcast linked to today's call where the management will be taking us through the results highlights. Request everyone to please join the web link. I now hand over the con call to Rajiv, sir. Sir, over to you.
Thank you. Good evening, everyone. I hope you have our earnings presentation visible to you, details of which Prithwish has shared. It is also on our investor page on our website. I want to talk first about FY 2025. We entered FY 2025 fairly bullish on the back of 20% revenue growth in the prior three years and also record order wins of almost INR 1,950 crores, which we were expecting to execute in FY 2025. Unfortunately, we encountered a sequence of unanticipated events, which built into a perfect storm. We guided early in the year towards this and hoping that things would pick up in H2 and worked really hard on project execution, which was at 15% end of H1. This did ramp up to 30% in Q3, and we were hoping to close at 60% order execution by Q4. However, we fell short at 52%.
February and March, which are key months to close on projects for large PSU banks, but the large banks had to deal with severe disruption in their ATM operations due to issues at a key competitor, which we are all familiar with by now. Therefore, new projects and execution took a backseat. In fact, our team at CMS also had to jump in and help these banks navigate the situation in getting their ATM networks up and running. This has led to revenue coming in lower at INR 2,425 million against our guidance of INR 2,450 million-INR 2,500 million, which you had shared in the Q3 call. Given this situation, we sort of had to recalibrate our focus several times in the year. We decided to focus first on market consolidation and focus on gaining market share in an overall tepid market.
We have gained market position, has improved all of our business in the last year. We also decided to drive a complex reorganization, which we had deferred in FY 2024, as it would have distracted us in a year of high growth. We have more than 27,000 employees and associates, and we have brought all of them into one single operating unit across a unified structure and organization. This is already yielding good results with both improved customer satisfaction and employee satisfaction trends. We ramped up our tech and automation investments last year, keeping a focus on long-term investments and also in line with changing business mix and higher scale of operations. Both the reorganization and the tech and automation investments have helped us drive operating efficiency and enabled us to maintain a high margin profile despite an overall modest growth.
I am happy to report that the order win momentum improved significantly in H2 with INR 800 crores of wins, 2x of that in H1. In fact, Q4 had INR 500 crores of order wins. Moving to slide number four, our integrated platform approach is delivering very good results in improving the quality and visibility of our revenue streams. From less than half, from about almost half, today, 2/3 of our revenue is directly from a bank or a retail customer. Our ability to cross-sell solutions has helped us in driving both depth and breadth across key banks. In fact, end of FY 2025, we now had top 13 banks in India with more than INR 50 crore of annual revenue. A more subtle shift, which we want to point out here for you, is in the nature of this revenue.
We used to mostly be an annual revenue business, wherein the contracts are of one- to three-year duration with fairly high retention rates. We have been driving a change to our recurring revenue model, which are longer-term contracts in the nature of seven- to ten-year. In fact, our recurring revenue business is growing at more than 20% CAGR, and today accounts for more than one-third of our overall services buy. This will help us build far more predictable revenue streams quarter on quarter. If you look at the chart on the right-hand side, which shows you the change in business mix, we want to highlight the fact that our newer businesses are ramping up well, and they now contribute meaningfully to our revenue. In fact, we have been successful in ensuring that we aren't overly dependent on any one line of business.
For example, if you look at the ATM cash segment, which used to be more than 50% of revenue seven years ago, is now 1/3 of our revenue, despite growing at a 10% CAGR over the seven years. At a segment level, when we report our numbers, the split of cash business to MS and tech business, the split used to be 70/30 about four years ago. This is now at a 60/40 and could, in fact, hit a 55/45 in the next four to five quarters. Slide number five, we're quite focused on expansion and looking to identify next future engines of growth. We have shared with you earlier the sectors of our interest across payments, software, valuable logistics, and banking services. In last year, we augmented and beefed up our M&A team.
We, in fact, screened hundreds of companies and came up with a shortlist of 65 companies with which we had meetings in these identified areas. We have earlier, as you know, incubated bullion and debt collection business. After extensive work in debt collections, we are dropping that sector from our focus for the current short to midterm. From these companies, we are identifying and working with a set of founders to look at who can align with CMS when they present us a good growth opportunity and a good ROC profile for our future business growth. Slide number six, to summarize FY 2025, while the growth rates and growth percentages are modest and under our expectations, we have managed to retain the margin profile and the cash flow generation nature of our business to build up a very robust balance sheet.
I think in the current environment, this is a great asset for any company. While the growth numbers do not do justice to the intensity of our effort, we are very certain that this will bear fruit in the coming quarters. With that, I would like to hand over to Anush to take you through our more detailed business update.
Thank you, Rajiv. Good day to everyone. I'll switch to slide eight. As Rajiv shared, despite a challenging macro environment, which was marked by several headwinds, CMS has emerged stronger across all our core businesses. This year, we won over INR 1,200 crores in new order wins, with a robust 60% coming from private banks, reinforcing our leadership in the financial sector. Execution has picked up in H2, with over half of our order wins from the prior five quarters going live. Our pending order book and the INR 500 crore of wins that we have in Q4 gives us a very healthy INR 1,400 crore of orders to be executed this year. Operationally, we grew our ATM and retail touchpoints by 9%, with our current business split of 73,000 ATMs and 77,000 retail equivalent touchpoints.
Growth has been biased towards retail, as during the year, we also saw a significant churn in the ATM network. Our CAT volumes have grown by 20%. Notably, in our cards business, we had solid growth in FY 2024, and focus in FY 2025 was to drive a contract-level-wise profitability, which we have achieved with over 1,400 basis points or a 14% margin improvement. Overall, we have gained 200 basis points market share in cash logistics, further expanding on the 150 basis points growth that we had the last quarter. Also, with growth in our integrated contracts, we are now among the top three managed service providers in India, which is a clear validation of our strategy and execution. Onto slide nine.
Our integrated contracts approach is helping drive a much deeper enterprise engagement, with a growing share of recurring revenues and an increasing number of customers contributing over INR 500 million in each annual revenue. With this change in our business mix and having a broader portfolio of revenues, we are no longer just a cash management or an ATM company. We have repositioned ourselves as one of the leading integrated business services platforms. In FY 2026, we will invest in recasting our identity and positioning, which speaks to our platform strengths. The focus is on building trusted end-to-end relationships, which spans cash logistics, managed services, automation, and digital transformation for our clients. FY 2025 saw significant disruption in the ATM ecosystem, especially with operational challenges at a large industry player.
As CMS, we were quick to respond, supporting major banks with timely cash evacuation and continuity of ATM services, effectively reinforcing our reliability in mission-critical situations. Q4, in particular, saw significant operational intensity comparable with the likes of demonetization or COVID periods. Our agility and scale ensured in winning end-to-end managed solutions for leading private banks. The recent increase in the ATM interchange fees from INR 17 to INR 19 per transaction has renewed focus among banks on expanding their ATM networks. In fact, if you read yesterday's interview with the Chairman of State Bank of India, he says that as the country's largest ATM deployer, they have seen a significant churn in their estate in FY 2025, as they are focused on redeploying their network and are now looking at augmenting the channel. In terms of our overall cash usage, amidst digital payment growth, cash continues to remain deeply relevant.
ATM dispensation on CMS managed machines has been steady year on year. Our total currency handled has grown by 5% and crossed INR 14 lakh crore, reflecting both our operational scale and the trust our clients place in us. Retail cash is growing on a same-store basis, and the throughput continues to mirror the broader growth in organized retail, e-commerce, and quick commerce, all sectors that are increasingly dependent on secure and efficient cash management. The broader story here is that behind robust cash demand, even as digital grows, CMS is at an interesting intersection, serving both traditional banking needs and the evolving requirement of newer retailers. With that, I would now invite Pankaj to share updates on our financials.
Thank you, Anush. Good afternoon, everyone. Moving to slide 13, financial summary of the year. After three years of the strong growth of 20% between FY 2021 -FY 2024, FY 2025 was a consolidation year with a moderate revenue growth of 7%. However, we continue to maintain our strong margin profile with a PET margin of 15.4%. On slide 14, it is Q4 financial summary. In Q4, we picked up momentum on our order book execution, with execution inching up to 52%. However, it is lower than the target of 60%, given that most of the large banks' bandwidth was occupied dealing with the disruptions of one of the industry players. The execution inch helped us to deliver sequential revenue and PET growth of 6% and 5%, respectively. In Q4, FY 2025 results were impacted on account of full provisioning for the service provided to one of the industry competitors.
Moving to slide 15, talking about our ELD segment financials, both cash and managed services business reported revenue growth of 8%. EBIT of cash business grew at 4% to INR 401 crore, whereas the EBIT of the managed services business remained flat at INR 157 crore. Slide 16, talking about our quarterly segmental financial, cash business revenue grew at 2% on quarter-on-quarter basis and 7% on year-on-year basis. Managed services reported strong quarter-on-quarter growth of 16%. However, on year-on-year basis, there is a decline of 8%, given that in Q4, FY 2024 was an exceptional quarter with 56% year-on-year growth. The segmental margin impact of the provisioning, which I spoke about earlier, as well as the cost incurred for helping banks streamlining their operation, are disturbed due to issues at one of the industry competitors.
Slide 17, coming to balance sheet and cash flow, we continue to maintain strong financial discipline, focusing on the cash flow and strong ROC. Despite overall liquidity crunch, our OCF to EBIT improved to 76%, resulting in OCF generation of INR 482 crore. We continue to operate at a high ROC at 25% plus. High OCF and ROC help us to expand our cash and cash equivalent to INR 1,000 crore plus from INR 784 crore last year. This year, in addition to interim dividend, which we have declared in Q2, I'm sorry, Q3, we also declared a special interim dividend of INR 3 and proposed to final dividend of INR 25, taking the total payout ratio to 42% of the PAT. With this, now I would like to hand over to Anush to talk about the future outlook.
Thank you, Pankaj. Switching to slide 19, there are two areas which we see as very interesting areas of opportunity for us. The first being retail opportunity. I had covered this briefly in our last call, but I would like to take this opportunity to reiterate some of the key points. India's organized retail sector is at a very key inflection point. Of the roughly 3 million retail touchpoints, only about 550,000 are organized, and roughly one-third of these have outsourced their cash logistics. This signals a massive untapped potential for CMS. We see strong demand for payment automation, secure cash logistics, and a real-time store-level reconciliation as retailers look to drive efficiency and transparency.
Our 360-degree retail solution is designed for this environment, which integrates cash logistics with AIoT-based remote monitoring and unified settlement processes, serving not just retail, but also adjacent sectors like fuel, automotive, government, e-comm logistics, and healthcare. This segment will be a key growth driver for us over the next few years, both in terms of the cash business as well as remote monitoring, as we become the platform of choice for modern retail in India. Moving to slide 20, coming to remote monitoring, our remote monitoring business, which we now refer to as Vision AI Platform, has rapidly scaled to becoming the number one platform in India's ATM space. This year, one of the key milestones was that we completed our in-house proprietary tech stack.
This enables us to roll out multiple new AI modules, which are key to winning mandates with leading banks for their branch network and large new economy clients. Less than 20% of India's 140,000 branch network is outsourced for monitoring, and our marquee solution, win, with one of the leading banks to build and operate a large and very complex monitoring solution, which will go live soon, will be a key tech demonstrator to win similar such mandates. Last call, we shared our breakthrough win on the retail side with a quick commerce client. Our implementation is underway, and the dark store count has increased from the initial estimate to now. We're also running further pilots with them on using our solution for the delivery vans, ambulances, and also in-store AIoT integration.
We have an aggressive goal of growing our business from the cu rrent 30,000 sites to 50,000 in the near future. With that, I would request Rajiv for his closing comments.
Thank you, Anush. I think for a summary and to close out our presentation today, I will focus on the midterm FY2025- FY 2027 opportunity. If I look out for these two years, we are, as a team, aiming for robust growth in line with our historical growth rate. The drivers for this will be, first and foremost, we aim to and we hope to finish our order book execution in H1. This will be a key pillar for our growth in the near term. The market for us is consolidating. If you look at cash management, there are really two scale companies and a couple of smaller ones. From an end-to-end integrated player, instead of three, there are only two companies now. It'll be very difficult for any third player to build this set of services now.
This will lead to, naturally, market share gains for leading companies in the coming years. The retail section, Anush already mentioned the opportunity and took you through it. We have been executing very strongly in this sector for the last two years. We have regained our market leadership, and we have momentum in the sector. In our Vision AI business, we crossed 30,000 sites, and it's poised for rapid growth. In fact, our overall software business, which is 7% of our revenue, should cross 10% of our revenue by FY 2027, as we have guided to earlier. The ATM interchange increase is going to lead to an increase in the ATM network. In fact, the Chairman of State Bank of India has already alluded to the fact that State Bank of India is looking to expand its ATM base in the coming year.
The ATM base does see a lot of churn basis usage, but I think the sites are set to grow. On an overall segment basis, we feel that the cash-related businesses should grow at the 10%-13% CAGR, and the MS and tech BU should get back to a strong 25%-30% growth rate. Blended, this should lead to a services revenue CAGR of 14%-17% in the coming two years. We also, last call, had alluded to mention to the fact that we would like to do an analyst event and investor meeting at the end of the full year results. However, when we are planning for this, given the whole geopolitical scenario a couple of weeks ago, we decided it's best to wait and do this when things are calmer.
In fact, also, the dust would have also settled by then in terms of the ATM operations, which banks are trying to take over from a competitor, and we will see how that business pans out. Hopefully, by then, we also have to, we have other interesting updates to report to you on. We will keep you posted. We aim to do this meeting in the next three to four months. Thank you for your patience, and thank you for your support.
Sir, should we open the floor for the Q&A session now?
Sure, please.
Thank you very much, sir. We will now begin with a question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only 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 Praveen Kumar from Equitas Capital Advisors. Please go ahead.
Yeah, hello. Thanks for the opportunity. I had a couple of questions. First one was on your cards for business. If I look at FY 2024 numbers, the size of the cards business is fairly modest, maybe looks like some INR 100 crore kind of a top line, right? When I refer to one of the recent large competitors in this space who filed for prospectus a few months back, their numbers seem to be much higher in this space. Just wanted to get an understanding how do you approach this space, and especially given the strong relationships that you have with banks across the public and private side, one would expect that you would be able to make a larger foray into this space. I wanted to understand how do we approach this space, how do we see ourselves in this space? Yeah.
Is that the only question? You said there are two.
The second question was on the Vision AI part of your business. Just wanted to get an understanding of what is the differentiation that we offer in this space to the clients.
Sure. Okay. Great questions, especially on the card side. It's not a business which people normally ask too much about. I think if you go back to what we have said earlier, our goal as a company is to operate in sectors where we can be a clear market leader unless we, I mean, there are some sectors we can't be a market leader, but then we make it a very profitable niche. In the card business, we focus on a niche. In fact, if you think of the business last year or this year, it may have degrown in revenue by 20%, but the EBITDA margins and EBIT margins have grown significantly. We clearly focus on working with fewer clients, high quality, good pricing, and good margins.
The company you are referring to has more of an integrated play where they do everything from card manufacture to stationery to card supply to personalization, which has a very different level of capital intensity and ROC metrics, which we clearly did not take that approach to compete in that business on that basis. We continue to focus on this being a higher ROC business, working with clients for decades in areas where they feel very confident to work with us. Very different strategy out here. Therefore, the scale of the business is more modest compared to the companies you may be referring to. On the Vision AI business, I think it is a few things. We have sort of come in almost in the end of the sector last. We launched this in 2021, 2022, and we sort of scaled this to 25,000-30,000 sites.
I think what we bring to the table is, first and foremost, any large enterprise, let's take a bank that's very working with, especially ATM. This is a very distributed network in remote parts of the country. There are different types of Vision AI solutions, which could be from bare minimum to more high-end using AI and ML. I think our approach has been to use more machine learning-based approach to manage this. Also, our field force and our engineering teams on the ground are able to address any local issues when they do always come up in the remote parts of the country. Being able to manage scale along with a technology platform, which is iterating and learning and being invested into to learn by itself, rather than having thousands of eyeballs looking at each site, I think has been an approach we have taken.
It's not an approach which cannot be copied easily, but I think what we are trying to do is, with our resources, keep investing in customizing and creating new use cases so that we are ahead of the competitors by just able to offer customers more bang for the money they spend on this. Finally, I think you can measure in terms of uptime and how many incidents you prevent. I think that's the Holy Grail and the gold standard for this. I think really making sure that the estate of places we are managing with the remote AI solution with a machine learning solution has almost zero incidents per month remains the goal for our operating teams.
Thanks. That's very useful to know. Just wanted to expand that second question a little bit and understand.
You have addressed Vision AI as applied to bank ATMs and branches, etc., but I just wanted to get a flavor of what is our offering. For example, you won a recent big deal with a quick commerce player, right, which you had alluded to last quarter. I just wanted to understand what do we offer there in terms of what's the differentiation we offer, and what kind of relationship are we building there?
Yeah. I think Anush is going to tell you more on the quick commerce, but I just wanted to clarify. The Vision AI platform in the business for us is mostly in the ATM business today. In fact, the bank branches, the solution is far more complex, right? Securing an entire branch and branch operations has a lot more nitty-gritty than just a small ATM site could have.
Therefore, that is still, if you look at it in our slide, less than 20% of bank branches today have an AIoT-like solution. That is the solution in progress. I think we've made tremendous progress in building a good platform there. I think there is significant opportunity as that business comes up for, hopefully, for bids and coverage in the coming years. Let me now pass the mantle on to Anush to give you the quick commerce details.
Sure. I think if you look at the curve of what started as remote monitoring and why we are calling it Vision AI, it is really sort of about eight years back when banks decided to eliminate man guarding at ATMs and move in the direction of cameras using the footage on the cloud. The idea was to sort of create a replica of man surveillance to e-surveillance. As the technology has progressed and as Rajiv said, we have been investing in creating further use cases and becoming a lot more tightly integrated with our customers using machine learning and AI. It is sort of taking the form of being able to craft more and more AI-based use cases to detect alerts and almost act as a sort of a business insights and partner the key business and operations team.
As we moved from ATMs to bank branches, and now last year, during several calls we had shared with you, a lot of the type of use cases and pilots that we are doing with different broader set of retail customers. In quick commerce, it really started off as saying, how does a brand, for example, have access to even knowing what is typically happening in a dark store? Other than having two, three, or four people working in the store, how do you really know what is truly happening there? How do you create a single command and control monitoring platform which gives them an insight into the SOPs being followed, the hygiene? In order to do all that, the first thing is to just have them onboarded onto our monitoring network.
The incremental pilots that we have been doing all sort of have indicated that once we achieve the rollout to the entire dark store network, at that point to start working at that point to rollout additional AI use cases. Now, these could be around achieving greater operational efficiency wherein we do an AIoT integration with several other operational processes of this and other sensors which are already there in the dark store. It could be towards helping them with loss prevention, for instance, or, for example, creating a tightly integrated solution between the fleet as well as the dark store network. I think the possibilities are quite tremendous. It is only after creating some of these use cases they decided to work with us.
Thank you. That was very useful.
Thank you. A reminder to all the participants that you may please press star and one to ask questions. Also, for the participants who are connected on the webcast page, you may also type in your questions on the Ask a Question tab. We'll take the next question from the line of Krushi Parekh from Bugle Rock PMS. Please go ahead.
Yeah, hi. My first question is related to some of the new businesses that you have incubated. I recollect that in Q1 FY 2023 call, you were looking to spend more time, more management bandwidth to incubate some of these businesses so that we can generate some new revenue streams between FY 2025 and FY 2030. I understand that the collection business is shelved as of now, but can you just touch upon where we are when it comes to these businesses that can help us expand our TAM or expand our revenue stream?
Hi. I think at some point, I know earlier calls you have shared that one of our goals or one of our constant goals is always to keep expanding our portfolio of solution-based offerings. Last year or two years back, we shared with you that we are planning to incubate two new businesses, Collections and Bullion. I think Rajiv covered the detail on Collections, which is we did extensive efforts to incubate the business and also did a fairly detailed diligence over one of the companies that we had shortlisted. Currently, and post that, we decided to drop it. Several concerns with respect to the fact, I mean, which basically indicate that relative to the effort that goes into running the business, the returns aren't really proportionate yet. It's still a relatively unorganized market. We will keep a wait-and-watch approach.
There is a change in the broader economy's credit cycles. We'll sort of wait in the short to midterm to see how things change before we exercise a point of view on that. The Collections is something that we are dropping for now. On the Bullion side, our in-house business is doing fairly well. We're scaling up quite rapidly. Relative to overall contribution to some of the other businesses, it's still very small at about 1% of our overall revenues. We'll keep coming back and constantly updating you on how that is fading out. The other exercise that we had or the other initiative that we had was also to sort of broaden our retail efforts and retail outreach. Two years back, we had almost 100% of our retail cash business coming to us from banks.
Today, we have onboarded more than 100 customers with whom we are working directly, with whom we have achieved a very high degree of tech integration, wherein it is our cash ERP solution and mobile app which is fully integrated into their sales cycle and their settlement cycles. Today, that represents anywhere between 20%-25% of our overall retail cash business. I think doing that was extremely important for us to be able to tap into the broader addressable market of retail in India.
Okay. My second question is that we have generally refrained from giving margin guidance in the history in the past. Given that long-term.
Mr. Parekh, I'm sorry to interrupt you. Your voice is breaking, sir.
Is it better now?
Yes, please continue.
Okay. My another question is that we have generally refrained from signing any margin-related conversations. Given the annuity-type businesses that we enjoy, the long-term nature of the contract that we have, is there a kind of a range that the management is comfortable having internally, or is it something that how do we approach when it comes to margins across businesses? I understand there is a complexity involved in this, but it's coming more from the annuity-type business, the long-term nature of the contract that we have, that we are in a position to plan out our expenditure as well. Can I have some thoughts on this?
If we had a choice, we would not even give a revenue guidance.
Given that IPO, nobody thought the sector in this company could grow, I think we were forced to come up with the revenue guidance to give people some belief in what we can do and what the opportunity is. I think margins we will refrain from simply because, one, I think we are operating at fairly good healthy margins. You have the results of our margins in the last three years post-listing in both high growth and modest growth environments. Our aim will always be to focus on ROC. I think we said that our goal will be to focus on ROC. We are maintaining consistently a 25%+ ROC profile. Going back to some of the earlier calls, our first priority as a team is to focus on market share, revenue growth, and margin profile.
In that sort of order, we ideally like to get all of them right, but maybe not possible every quarter. I think we, and that's the reason we don't give margin profile guidance. Very difficult to estimate impact of anything from oil price to people cost and whatever may happen out there. We keep constantly driving a lot of automation and efficiency to make sure that we can keep growing our productivity in line with our expansion and our market growth.
All right. Appreciate this. Yeah, definitely, we can see the productivity gains over the years. Thank you so much.
Thank you. Participants, you may please press star and one to ask questions. We will take the next text question from Sonal Gandhi from Asian Market Securities. The questions are, what led to margin decline in managed services business? The second one is, CapEx guidance for FY 2026.
I think from a CapEx, I think first we'll talk about the margin guidance. We have been reporting segmental EBITs, but as our business is changing, I think it's important to share this nuance. I think you should look at the overall EBIT for the company as a trend line. Almost 20% of our managed services service revenue is captured as a revenue in a cash BU. And that we eliminate through inter-BU recognition out there. It's difficult to capture the cost of the contract by BU. It's actually a merged and fungible cost. Therefore, if you look at our EBIT margin overall at 19%-20%, I think that's the range of business you should think about.
Having said that, I think the last one to two years, there was a mixed change with more sales of product automation, which comes in at a lower EBIT percentage, which may have an impact on the EBIT margin perspective. From a CapEx perspective, I'll have Pankaj answer your question.
CapEx for FY 2025 was approximately INR 130 crore. It was significantly lower than the guidance we have given of INR 300 crore, considering the large order book we have got in FY 2024 and 2025. Our CapEx will remain, as we have guided earlier, at INR 200 crore per year. We are expecting that in FY 2026, the CapEx will be INR 300-INR 325 crore. That includes around INR 163 crore, which is lying in the CWIP in FY 2025.
Thank you, sir. We'll take the next question from the line of Amish Kanani from Knowise Investment Managers. Please go ahead.
Hi, sir. Am I heard well?
Amish, your audio is not that clear. I would request you to use the hands if you can.
Hi.
Thank you, sir.
Is it better?
Yes, much better. Thank you. Please proceed.
Yeah. Sir, if you can give us some sense on the ground about the disruption that has happened because of one of our peers going on default. I understand you said that a few months after, the situation will be much better. Just to understand whether you mentioned banks are taking over those operations, and maybe it will come up for bidding in future and something like that. Is there a possibility that the competitor's business will be up for sale and something like that? If you can give us some flavor, that will be helpful to understand whether there is an increase in market share at play or how are banks dealing with this problem? Because you also mentioned that we have had some cost related to managing banks to see through this transaction.
Sure. Let me give you some broader points in terms of what's happening and how we end up piecing it all together. I think, as Rajiv said, we'll wait for a quarter or so once the dust settles. As I sort of alluded in the backdrop of our last call, we had sort of been seeing an increasing disruption to the ATM networks on the back of liquidity issues, but eventually resulting in employees not being paid. I think by the time we were working with the banks to help them out, the mandate is really for two things, right? Which is how do you ensure that there's an evacuation of all the currency in the ATM? Because the first and foremost thing for everyone is how do you handle the risk associated with all this?
Cash is lying in the ATM and cash is lying in the vault. All of this needs to be evacuated. Extremely operationally complex simply because there are way too many stakeholders and too many moving pieces. Given that a large majority of this network was actually transaction-oriented and had assets which did not belong to the bank, were in fact mortgaged to various other leaseholders, it made the ownership and identification of the assets. Landlords have not been paid for rental dues for many months now. Electricity bills were not paid, so ATM was not even up and running. We had to sort of figure out a way to get them live to be able to access them and open them in the first place. It has been a crazy task so far in just being able to help banks with reconciling what are their effective dues.
I think that we've sort of had the lion's share of the responsibility just by being the largest partner to them. The second and the more onerous task which falls onto them is to figure out how do you ensure a resumption of activities on these networks and ensure that customer service gets back to, limps back to, normal. That is where I think banks are taking a little bit of time. A significant chunk of ATMs in this network was, well, not just transaction-oriented, but also was quite old. For banks to think about transitioning this to someone else and for someone to pay the respective values, it doesn't really make sense. Most of them are looking at options around what is the best way to refresh this estate.
As we shared with you in the slide, at least with two of the largest private sector banks, we've been able to win the contract to do that. Yeah, I think that's primarily that. Thank you.
Sure, sir. In that context, as the order book, we have mentioned that the rate of winning of order book is increasing in the second half as well as in the fourth quarter. Again, the execution of the old order book was not up to the desired extent is what was mentioned. The question is, one, between the two, sorry for my ignorance of the business, but which business is this order book? How is it kind of getting executed? Whether this disruption, is there any way to kind of correlate to the disruption that is happening at the, is the market share win already reflected in the order book is a question then. Thanks.
I think just to sort of summarize for everyone's benefit, what exactly happened with order book in FY 2025, if you go back and look at our earlier conversations, we had won about INR 1,900-INR 1,950 crores of order wins in FY 2024. The bulk of these wins were RFP-led around public sector banks. Given the longish election cycle and just the sort of execution delays and being able to get testing approvals and go ahead from the bank to implement order book, it led to a significant time delay in just being able to roll out these contracts and recognize the revenue for it. What was about 15% of execution in H1 has increased to 52% right now. Why do we feel FY 2026 should be different? For two reasons. One, as Pankaj alluded, first of all, we've got 52% execution done.
Second, there is a large increase in our CWIP in our end of FY 2025 financials and the balance sheet, if you look at it, which basically reflects orders which are in stage of being rolled out and delivered to the banks. Third, the order wins that we had in FY 2025 have been more biased towards private sector banks, wherein we hope we should be able to work with them to get a faster execution done. The other part of the question with respect to our order book, historically, we always referred to the growth potential around our managed services and technology business. That's a business where we are building out longer-term recurring revenues.
It's not in the context of the cash business, but given the fact that most of our wins are integrated contracts, it will have a bearing on the cash business as well as far as the ATM growth is concerned.
Sure, sir. One last question on this extended part. Is there an execution timeline of this order book which we can understand? How long is this, you said?
No, I think for the order book which we are talking about, where we are done 52% end of March, we expect to finish it all by September this year.
Okay. Okay. Thanks a lot and all the best, sir.
Thank you.
Thank you. Ladies and gentlemen, please press star and one to ask questions. You may also type in your text questions on the webcast page. We will take the next text question from Sheel Shah from Sameeksha Capital. The questions are, the first one, EBITDA drag FY 2025 because of our debt collection pilot. The second one is balance sheet, what is the capital WIP of INR 152 crore? Within current liabilities, other financial liabilities increased from INR 60 crores in FY 2024 to INR 193 crores in FY 2025. What is driving that?
I will take the second question first. About the CWIP, CWIP is related to the project that we are executing. We have executed around 52% of our new contract we have won. We expect that everything will go live by end of September. CWIP is related to those execution of those contracts. The current liabilities, which have gone up from INR 60 crore to INR 193 crore, are related to capital creditors which are mostly related to this CWIP. If you net it up, the amount is not significant.
If you could repeat the first question, I think that was on the debt collection business.
Is there EBITDA drag on FY 2025 because of our debt collection pilot?
Yeah. Yeah, I think this was more relevant in FY 2024, wherein we were investing to incubate the business, not so much in FY 2025. FY 2025 is really a function of just investing in for the recurring contracts we have to ramp up for project execution. You do not necessarily control when the projects will go live because that is still dependent on the banks, but you have to ramp up your internal resources. Also, therefore there is always a catch-up on revenue to cost given the nature of these large complex integrated contracts. They make up in the after the first year of fully operational, it starts making up and paying for itself.
Thank you, sir. We'll take the next text question from Sumangal Pugalia from Snap Securities LLP. The question is, what is the amount of provisioning done for competitor receivables in current quarter?
Single digits.
We have made an adequate provision in FY 2025 and this quarter. However, we have made whatever the legal recourse available with us to recover that money. We are fully provided for whatever is receivable from that competitor.
Thank you, sir. Participants, you may please press star and one to ask questions. Next text question is from Govindarajan Shelappa from CSIM. The question is, do the challenges faced by your competitor change the nature of the ATM business transaction versus fixed price BLA? Or the pricing is renegotiation possible? How are you changing your own business model, if at all? The third one is, how much provision was made due to the problems with your competitor?
Very complex. I want to be both respectful and careful in answering this question in terms of just making sure that we are sharing just the right amount of information as to our playbook here. Our overall approach in BLA, irrespective of what happens when you compare to our remains, as of now, to focus on fixed price contracts. We are bearish on transaction-based contracts historically. We had guided earlier, much earlier, that we will keep this as less than 15% of revenue. Now we drop that to less than 10% of revenue, saying we will position size BLA based on transactions to a smaller percentage of our overall business. Therefore our focus will remain on clients and banks which are focused on uptime and are willing to work on a fixed price model.
On the transaction side, we will generally stay away unless there is enough buffer to take care of any drop in transaction in the coming years. From a perspective of any orders or projects which may get re-RFPed or bid out, I think the same strategy will flow. We will prioritize working with clients that are willing to work on a fixed price model and be very competitive given we have the best cost structure in the industry. Some clients, some banks will prefer to continue working on a per transaction basis. We will mostly give it a pass unless there is a very good margin of safety. The third question, I think we've already answered about the impact on our financials.
Thank you very much, sir. We'll take the next question from the line of Pratham Kankariya from Quantum AMC Private Limited. Please go ahead. Pratham, I have unmuted your line. Please proceed with the question. Pratham, I'm sorry we are unable to hear you. Can you please unmute yourself and speak? I would request you to kindly rejoin the queue. Participants, you may please press star and one to ask questions. You may also type in your text questions on the webcast page. Next question is from the line of Savi Kumar Jain from 2Point2 Capital. Please go ahead.
Hi, can you hear me?
Yes, sir. Please proceed.
Any update on the Bullion business? Where are we at? What is the scale? How is that growing?
Savi Bullion, Anush has referred to it, right? Currently, it's an internal incubation. We have built a team. We have up and running. It's contributing to about 1% overall revenue. Our strategy to scale this will finally be through M&A ideally. We are waiting for the right opportunity and the right company to look at it. Meanwhile, I mean, it's a small base. It's going to grow rapidly. Right now, contribution to overall total company revenues is less than 1%. Almost 1%. I think 1%, roughly 1%.
Got it. Got it. Thank you.
Thank you. You may please press star and one to ask questions. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to Mr. Rajiv Kaul for closing comments. Thank you and over to you, sir.
Thank you so much for your time today. Look forward to connecting in the next three months at the end of Q1 to update you on our progress on our FY 2026, FY 2027 goals. Good evening.
Thank you very much, sir. Thank you, members of the management. On behalf of Elara Capital, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.