Ladies and gentlemen, good day, and welcome to the Indegene Limited Q4 and annual FY 2026 earnings conference call. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Abhishek Agarwal, Head of Investor Relations, Indegene Limited. Thank you, and over to you, sir.
Thank you, moderator. A very good morning to all of you, and thank you for joining us today for Indegene's earnings call conference for the fourth quarter and full year-ended financial year 2026. Today, we have with us Mr. Manish Gupta, Indegene's Chairman and CEO, and Mr. Suhas Prabhu, CFO, to share the highlights of the business and financials of the quarter. I hope you have gone through our results release and the investor presentation, which have been uploaded on our website as well as the stock exchange website.
The transcript of this call will be available in a week's time on the company's website. Please note that today's discussion will be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team. I now hand over the call to Manish to make his opening remarks.
Thank you, Abhishek. Good morning, everyone, welcome to Indegene's Q4 FY 2026 earnings call. I want to start by acknowledging what this quarter and the fiscal year represent, not just in numbers, but also in strategic progress. FY 2026 was a milestone year for Indegene. On two fronts, Q4 FY 2026 was the first-ever quarter in our history where our revenues exceeded INR 1,000 crore. For the full year, our revenues crossed INR 3,500 crore. This is another first. Two thresholds crossed in a single quarter.
More importantly, these are not isolated milestones. These are a culmination of deliberate compounding work across our customer portfolio, our domain capabilities, our technology stack, and our people. I will cover four topics today: our customer portfolio performance, our GenAI-led innovation wins, our competitive differentiator, and our forward outlook. My colleague, Suhas, will take you through financial details.
Let's get into the financial snapshot. As I said, this was our Q4, was our first INR 1,000 crore plus quarter. FY 2026, our revenues came in at INR 35 million, which was our first more than INR 3,500 crore year. Our growth for the year in terms of in INR was 23.6%, and in [inaudible] , 18.2% year-over-year. Let's talk about our customer depth and relationships. I'm gonna start off with the top 20. Across our 27 years in life sciences and as an operating partner to all 20 of the 20 global pharma companies, we have built the kind of relationship density that compounds over decades, not quarters. For our top 20 customers, FY 2026 was a year of strategic deepening.
We expanded significantly with several of our top 20 accounts. Let me start with the top customer, our largest customer. This customer was broadly stable in FY 2026. There's a bit of a hold due to a delay in a highly anticipated breakthrough as we continue to invest in the relationship. The breakthrough came at the year-end. We won a significant Tectonic engagement starting with Germany, and Suhas is gonna talk about this later when he talks about the deals in the quarter. Now, this win matters not just in its own right, but as a very important beachhead. With early results demonstrating value, we are now actively in conversations with additional markets. The potential here is pretty significant and FY 2026 is where we expect it to convert into visible growth. We are hoping this customer is gonna cross over and become our first INR 50 million+ customer.
Another milestone. A third customer account this year crossed the INR 25 million revenue threshold, reinforcing the depth and stickiness of our relationship. Finally, in Q3 of this year, we closed a multi-year omni-channel deal exceeding INR 10 million in ACV. This is a fairly strategic deal, which is gonna be a template probably for the industry with a very large company, and has positioned us very strategically in this client. The latter half of FY 2027 will see this deal converting to revenue. Across the top 20 as a group, revenue grew from INR 22.8082 million-INR 25.200 million in FY 2026. Steady compounding expansion driven by portfolio breadth and recurring engagements. With that, let me move to beyond 20.
This has been faster growth on an expanding base, and this is where I want to spend a moment. The growth beyond our top 20 tells an important story about Indegene's capability. Our total active customer base grew from 73 to 91 during the year. The number of customers contributing more than INR 1 million in annual revenue grew from 41 to 53, an approx 30% increase. Growth in this cohort outpaced the top 20 on a percentage basis, demonstrating that our land and expand model is working further down the customer pyramid.
Several of these newer relationships have already scaled to INR 5 million ACV engagements. The message here is clear. Indegene is not just a top-heavy business dependent on a handful of accounts. We are building a diversified, durable portfolio with accelerating momentum at every tier. This is the engine that compounds. The outside top 20 cohort is where today's 1 million relationships become tomorrow's 25 million relationships. FY 2026 already saw multiple new customers cross the 5 million ACV threshold.
The progress we ran inside the top 20 over the last decade is now playing out one tier down, and it is moving faster. We've got a few things. One is our own credibility and scale as a company, and also because GenAI compresses the time to value. Now, let's talk about some of our AI- led solutions, where one of our values, innovation, is truly in motion. AI has been at the core of Indegene's strategy for a decade. I remember setting up the office of CTO more than 10 years back, and starting investing heavily just in AI. The tangible proof our ability to leverage AI is visible in our industry-leading revenue per employee.
Now at approximately $75,000 per annum, up from $56,000 three years back. This is a step change in productivity driven by embedding technology and AI into how we deliver, coupled with our predominant managed output outcome pricing model. We have not stopped. We have a program called Transform AI inside the company. This program is targeting a further step change in adjusted revenue per employee as we continue to win upstream in adjacent areas and the new revenue pools opening due to AI. All this stuff while we re-engineer our own processes from the ground up. This is what gives us confidence not only in our competitiveness, but also on the operating leverage in the coming years.
What has changed in FY 2026 is the pace of customer adoption and the size of the mandates we are winning on the back of GenAI-led solutions. I will talk you through some specific wins, each demonstrating a different dimension of our capability. Let me again talk about the GenAI-powered omnichannel orchestration deal with a top five customer, which I alluded to in our customer segment just a few minutes back. This customer selected Indegene for omnichannel orchestration using our Invisage platform and Tandem data capabilities acquired through BioPharm. The mandate covers personalized GenAI targeting across a multi-product U.S. portfolio, which is north of $1 billion, approaching patent expiry.
We are deploying on an outcome-focused commercial model, maximizing the profitability window of mature assets. This is GenAI embedded directly into revenue outcomes of this client. With that, let me move to another one. This is end-to-end commercialization for a mid-sized biotech firm. A mid-sized biotech firm chose Indegene as its sole commercialization partner, entrusting us with full life cycle, CRM implementation, global marketing content creation, and multi-channel deployment. This is an integrated model that differentiates Indegene, a single partner capable of running the entire commercial engine.
Here, the client actually said, "This is not while we are doing CRM implementation, it's not just a technology implementation, it's a business transformation project and engagement, and we need somebody who understands our business well." Let me talk about another one, an emerging pharma company for a complete product launch. An emerging pharma engaged Indegene to manage an end-to-end product launch across both commercial and medical functions. This is a replicable blueprint for hundreds of mid-tier and specialty pharma companies entering commercialization, a segment we are deliberately targeting as a high-growth opportunity. Let me move to the fourth one.
AI-driven pharmacovigilance or safety. This was a large medical devices client. For a large medical devices client, we are now managing global pharmacovigilance workflows using our proprietary NAEM, NEXT Adverse Event Management technology, which is all AI-based. This has significantly reduced manual case processing volumes and accelerated aggregate reporting timelines. The win demonstrate our AI-led innovation extends into medical and regulatory domain, not just commercial.
Given I just spoke about medical and regulatory domain, let me talk about next one on the regulatory side after having spoken about safety. We set up a global innovation center model for a very fast-growing company, more than $100 billion market cap. Within our Enterprise Medical Solutions segment, we piloted a global innovation center where we are reimagining R&D operations from the ground up. We are using GenAI to accelerate FDA submissions and compress molecules speed to market. If the scales as anticipated, it represents a structural change in how pharma companies approach R&D operations.
You think about it, you're cutting down the cycle time from couple of months to filing to a few weeks and t hat is unlocking significant value for companies and of course for patients. Indegene is the one partner enabling it. The next one I'm talking about is super exciting. Although it's a pilot, very early days, but it has the potential to truly transform the industry. Agency-less AOR. Three months to three days, three months to three days. This is what we demonstrated in a top 20 company for a very strategic upstream brand work. We piloted an agency of record model without the agency.
Working with a large pharma customer, we demonstrated the ability to create scientific briefs, creatives, and new final concepts in three days with our content super agents. This is what typically agency of record in the United States, Europe typically does in a few months and a very expensive process. This included doing a quick voice of the customer research, primary research using synthetic KOLs, using our proprietary Indegene Tandem data products. This was achieved through live co-creation workshops with the clients, replacing isolated agency processes with real-time technology- enabled operating model.
This pilot, along with what I spoke about in the regulatory affairs, the global innovation model, have genuine industry transformational potential. We are watching adoption signals closely and very confident these pilots will succeed and get into real engagements in this financial year. Given the strategic nature of these engagements, we continue to over-invest in them. We are already seeing significant interest in these engagements in the industry overall, and we are talking about them with all our clients, and people are very open and receptive to learn from these. We believe this has the potential to position us very strongly for the future.
I also want to talk about what specific sets us apart when we win these deals and what we learned in FY 2026, because it shapes everything we do. GenAI equalizes access to technology. It does not equalize access to knowledge. Every service firm now has the same foundation models, the same APIs, the same coding copilots. What separates winners from the rest is the depth of domain knowledge they bring on top, and how systematically they convert it into agentic human-in-the-loop workflows to deliver real business outcomes.
For Indegene, with 27 years of life science expertise for a third of our workforce in deep domain roles, within medical, different therapy areas, different specializations, brand, creative, digital, analytics, tech, you name it, I can go on and on. Experiences of nuances of all the regulated and critical workflows, our own proprietary data. These things are just not relevant in the AI world, they are absolutely essential. These six wins are not isolated. They roll up into five next-generation operating models we are now actively running in the market. One-click submissions, human-less medical legal review processes, agentic AOR, AI-embedded engagement, and intelligent R&D operations.
Each one of these replaces a manual fragmented industry process with a platform-driven AI-embedded one. Each is a category we believe Indegene will define in years to come. With that, let me move to another important thing which we have been grappling with for some time, and it's important that we talk about this very directly: our category. The most common mistake we see, how we are analyzed, is the one we want to correct today. Indegene is not an IT services company that happens to serve life sciences. Indegene is a strategic operating partner for the life science industry, purpose-built over 27 years to design and run complex regulated commercial, medical, and R&D operating models that define how this industry, very important industry, works.
This distinction is not semantic, it is structural. It changes everything about how AI affects our business. This isn't a claim, it's a pattern. Every decade, one force has reshaped life sciences. In the 1990s, it was globalization. Unfortunately for the industry, we were not there as a company at that point in time. In the 2000s, it was move to digital. We are the ones who built digital field engagements very early on. In 2010s, it was content at scale, automated MLR and bunch of things like that. We built platform-driven content operations.
Now as AI is at work, we already have and continue to run embedded AI operations at scale. We've been doing this for a decade. When the industry transform, Indegene leads. We don't react. We are already running the new model. As I mentioned, and I'm gonna say again, we started a decade back. Four structural differences define our position, and let me unpack each of this. Please pay, t his is fairly critical. We are a revenue partner, not a cost partner. We are embedded in the commercial and medical functions that generate revenue for our customers. Our primary stakeholders in client organizations are Chief Marketing Officers, the brand heads, the therapy heads, Chief Medical Officers on the Medical Affairs side, Head of Regulatory, Safety.
These customers don't come to us to cut costs. They come to grow their revenue, accelerate launches, improve pipeline success, manage compliance and risk for them. AI is a growth enabler for our clients, not a signal to reduce spend on partners like Indegene. The next one, and fairly important, domain-led judgment-intensive work, t hat's the work we do. Therapeutic content strategy, regulatory submissions, pharmacovigilance, omni-channel orchestration across the globe and very different markets requires deep domain judgment that AI augments but is not replacing.
Again, I want to emphasize, these are in regulated areas, very regulated areas. This is fundamentally different from coding or infrastructure, where AI disruption is far more direct. The third one, something which I remember talking to a lot of you whom we met during our roadshows in 2023, our outcome-aligned commercial model. In an AI-enabled world, effort-based pricing is breaking down. Clients now don't pay for hours for stuff which AI does in seconds. Outcomes are becoming the new currency, we've been operating on output and outcome-based contracts for years. We did not have to convert. We are the ones who wrote this playbook.
With some of these, let me just take a step back and look at actually who plays in our space. Who are the players, competitors? Strategic advisors bring frameworks but exit before execution. Global integrators bring scale but lack life sciences depth. IT offshore scalers compete on volume efficiency, but that is a fundamentally different category from ours. Sector boutiques have depth but lack platform leverage, whether it's tech or operating model. Indegene is the only player in life sciences that combines deep domain expertise, embedded AI platforms, and outcome ownership at enterprise scale. Our true competition is agencies and CRO and w e are taking share from them accelerated by GenAI and t he pie for us itself is growing.
As we run the themes I just spoke about, we are absorbing spend pools that did not previously sit with service partners like us. Agency-created budgets, CRO clinical operations, internal regulatory costs. GenAI is just not shifting share, it grows our addressable market. With that, let me come back to FY 2026. FY 2026 is not just a financial milestone. It delivered four strategic achievements that set up Indegene's next chapter, not only for FY 2027, but beyond. We made three acquisitions. BioPharm strengthen our omnichannel data and targeting capabilities in the commercial segment, Vaughn and CAKE Communications are new market entries.
They are strategic additions of people with deep expertise and local market knowledge in key European geographies. This matters because as we take our global delivery model in Europe, credibility and relationships on the ground are decisive. We just spoke about our Tectonic engagement with the largest client in Germany, right? Now you can understand why we did CAKE as an acquisition. These teams give us exactly that, the ability to expand engagements from regional to global with local legitimacy.
Tectonic at scale, that's the next one. Tectonic is our transformation model that combines GenAI with deep creative expertise to disrupt the traditional agency approach of developing creatives through effort-ins-intensive cycles that stretch over months. By the year-end, we have secured five customers. Two of them have already transitioned from pilot projects to long-term engagements. Crucially, the Q4 win in Germany with our largest customers provides strong momentum heading into FY 2027. With additional markets actively in conversation, Tectonic is on track to become a material growth driver for enterprise commercial in FY 2027. Third one, and we spoke to you about in our Q2 earnings call.
We recruited senior leadership talent and thought leaders across our commercial medical leadership, strengthening our ability to engage at the C-suite level, and we're having more and more of those conversations as we pursue more complex, larger transformational mandates for our clients. Last but not least, technology leadership. We maintained our innovation edge by embedding GenAI across the platform. Our next-generation content super app and medical writing platforms, both built by reimagining end-to-end customer workflows, are now in active deployment. Cortex is continuing to be scaled and get embedded in all the stuff which we do. These are not incremental upgrades. They're category-defining products. Together, these four moves in organic depth in Europe, Tectonic at scale, senior go-to-market bench, and category-defining platforms are what gives us conviction and growth in FY 2027 and well beyond. With that, let me pass it over to Suhas.
Thank you, Manish. Good morning, everyone. Let me dive straight into the financial performance for the quarter and medium. Quarter four revenue came in about INR 10,000 million, the first quarter in Indegene's history to cross this threshold, growing 6.5% quarter-on-quarter and a strong 32.8% year-over-year. For the full year, the revenue was INR 35,105 million, reflecting a 23.6% growth in INR terms and $18.2% in USD terms, ahead of FY 2025 on both measures. Moving on to profitability, our Q4 adjusted EBITDA came in at INR 1,889 million, growing 23.2% year-over-year. The full year adjusted EBITDA totaled INR 6,793 million, up 20.8% year-on-year.
Effective January 2026, we have categorized our forward contracts as cash flow hedges under IND AS 109. The adjustment to the EBITDA is made to reflect the impact on profitability if the contracts that were contracted between April 2025 and December 2025 were also considered as cash flow hedges effective start of the year. We had indicated this matter to be under consideration in our earlier call. The high volatility in exchange rates, especially the depreciating INR against USD towards the closing days of the quarter, has resulted in an incremental charge of INR 241 million in Q4 on the unexpired forward contracts. Therefore, this is the adjustment that we have done in the EBITDA from a like-to-like comparison.
Considering this charge, the reported EBITDA would be lower at INR 1,648 million. Moving ahead to PAT, we had a lower interest income due to lower yields and a higher amortization, as was mentioned in our Q3 earnings, re-effective the acquisitions that we concluded in the recent past. Further, we have provided INR 203 million towards the estimated cost of settling a U.S. class action lawsuit filed in 2020 alleging breach of TCPA. I will delve more on this matter a little while later. This is a one-time non-recurring provision reflected as an exceptional item, and this impacts the PAT for Q4 and FY 2026 adversely h ence, the Q4 PAT came in at INR 797 million and a full year PAT of INR 4,011 million, a 1.4% decline.
Excluding these non-operational one-time expenses and factoring retroactive adoption of the cash flow hedge accounting from the start year, PAT would be higher at INR 4,583 million, growing 12.7% year-on-year. On an adjusted basis, the underlying profitability of the business is meaningfully stronger than the reported figures suggest, and the year-on-year trajectory is firmly positive. Would re-request you to refer slide 15 of the investor deck for more details. Coming back to the exceptional item and the provision of INR 203 million. This is pertaining to a long outstanding matter, a U.S. class action lawsuit in 2020 alleging breach of the Telephone Consumer Protection Act, which we had disclosed in our DRHP, RHP and provided updates as the case made slow progress over the years in our subsequent financials.
In January 2026, both parties commenced a mediation process, as was recommended by the court. With multiple rounds of negotiations over the last three months, facilitated by the court-appointed mediator, we believe that we have now reached a stage of potential settlement and an ability to quantify the liability basis the terms laid by the mediator. As of today, the mediation process is close to completion, with the terms being drafted while the court approval is still awaited. Since we are making this provision basis such terms and the INR 203 million is the provision of the anticipated settlement. Further, the origin of this case relates to an engagement in FY 2019/2020, where we used fax as a channel for outreach. Faxes were rarely used prior to this engagement.
Sorry to interrupt in between, sir. You were not audible.
Am I audible now?
Yes, sir.
Thank you. Hence, we do not believe that there are any further such liability exposures beyond the one instance that we had in 2020. With that, I would want to spend a moment on the strong cash position. Cash generation is also another way to assess the operating health of the business and not just PAT. On that measure, FY 2026 was a standout year. Operating cash flows were INR 6,508 million versus INR 4,419 million in the prior year, which is a 162% ratio on PAT. This is of course higher due to the higher non-cash expenses and amortization charges, but also an improvement in the DSOs to 63 days from 72 days in the past year.
Free cash flows were a strong INR 6,065 million versus INR 4,119 milli on in the past year. Our balance sheet at the year-end reflects this trend. We closed FY 2026 with a cash and investment position of approximately INR 15,385 million, just INR 1,258 million lower than FY 2025, despite INR 7,253 million of outflows towards the acquisitions that we made during the year. With this, let me move on to the dividend announcement. Consistent with this cash strength and reflecting the board's confidence in the business, we have proposed a final dividend of INR 2.25 per equity share for FY 2026. This compares to INR 2 per share last year, a 12.5% increase.
This recommendation is subject to shareholders' approval at the upcoming AGM and reflects both the strength of our FY 2026 earnings and our commitment to delivering consistent returns to shareholders alongside continued investments. Moving further to the segmental performance, both enterprise commercial ex- BioPharm and EMS grew by approximately 17% and 16% year-over-year, respectively. Even BioPharm, acquired in October 2025, grew by 15% sequentially in Q4. Our geographical mix remains stable, with North America at 71.6%, Europe at 25.5%, and the rest of the world at 2.9%. With North America contribution increasing marginally by approximately 2% due to BioPharm, which is entirely a U.S. focused business.
Importantly, the pace of customer conversations and AI-driven innovation is now distributed across both medical and commercial segments, and this gives us confidence that both Enterprise Commercial and Enterprise Medical will be meaningful growth contributors heading into FY 2027. Finally, coming into our Q4 deal activity. Our Q4 bookings reflect sustained deal momentum. We closed one deal of $3 million plus ACV in our clinical business with a new customer. Further, we closed seven deals of $1 million plus ACV during the quarter, four of which are from our top 20 customers, adding to the Enterprise Commercial segment, including the Tectonic engagement for Germany with our largest customer.
Further, there is an expansion of an existing omni-channel project with a mid-sized pharma company, and we signed two engagements with new customers, an engagement with a biotech player providing med info services, which is part of our Enterprise Medical Solutions, and an engagement to operationalize core digital commercial capabilities for an upcoming pharma company's new launch of the drug pre-post-launch activities. These wins confirm that our go-to-market investments are translating into consistent new pipeline generation and conversion.
These wins, combined with earlier wins, provide revenue growth momentum heading into FY 2027. Further, you will also recollect the investments that we made resulting in 150 basis points impact on our EBITDA margins that we mentioned two quarters ago. With the growth momentum, we believe that we are on track to improve our profitability and EBITDA margins in FY 2027, so t he second half of FY 2027 will see us revert back to the earlier levels of higher margins with these investments getting fully absorbed and delivering growth.
Further, we will also see a positive impact of the interest income with the high cash balances and stable yields. Amortization stabilizing and coming off towards this later half of FY 2027, and the impact of the one-off and exceptional items fading away. We believe that the impact on PAT in FY 2027 will see a significant upward movement. With that, let me pass it on back to Manish for the outlook.
Thank you again, Suhas. 12 months ago, as we entered FY 2026, I used the phrase cautiously optimistic. I want to be precise about how I would characterize the mood entering FY 2027 and why it is meaningfully different. The three concerns that warranted caution a year ago, new U.S. administrative uncertainty, regulatory policy overhang, and a macro volatility have largely been resolved. The pharma industry demonstrated resilience and strategic importance through CY current year 2025, with an industry growth of 9% versus 6.4% in CY 2024. Looking ahead, the industry is positioned to grow at a healthy 5%-8% CAGR from 2026-2028. This is our customer base, stable, funded and growing.
Against that backdrop, our own pipeline entering FY 2027 stands stronger, higher than last year, with balanced strength across both our top 20 customers and outside top 20 cohorts. The diversification of our pipeline is as important as its size. It means you're not dependent on a handful of renewals or one large deal closing. I want to be direct. We are not providing formal revenue guidance. What I will say is this: our customer portfolio is growing in both depth and breadth, and the outside top 20 segment is growing faster. Our GenAI-led solutions wins span across every customer segment and both business lines, commercial and medical, and it is gaining significant traction.
Tectonic has customer validation and is set to generate meaningful FY 2027 revenues. Our pipeline is larger, more balanced and better qualified than at any prior year-end. Our competitive position is strengthening significantly in context of AI industry trends. In an AI-led world, the competitive structure of our market is being rewritten in our favor. Agency CRO and CRO spend consolidating into specialized technology-led partners. Indegene is the most credible such partner in life sciences. This trajectory extends well beyond 2027.
We believe Tectonic, AI-led omnichannel deals, AI embedded medical operating models, top 20 cohort, outside top 20, all will continue to mint new 25 million+ relationships and have the potential to drive multi-year growth. With that, I would say we enter FY 2027 not cautiously optimistic, but excited and confident. Confident to convert pilots into platforms into operating models and operating models into the industry's new default. This has been Indegene's pattern across every prior inflection in life sciences, and it is the pattern we are running now from promise to performance. That is what we believe FY 2027 and the years beyond will demonstrate. That's all I had. We can open it for questions. Thank you.
Thank you very much. We will now begin with the question- and-a nswer session. Anyone who wishes to ask a question may press star and then one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and then two. Participants, you are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star and then one on your touchstone telephone to ask a question.
We can start the questions. We can start the questions, please.
We will take the first question from the line of Prakash Kapadia from Kapadia Financial Services. Please go ahead.
Yeah, thanks for the opportunity. I had two questions. Revenue per employee has increased to around $75,000 from, you know, $67,000 last year. Is it just onsite mix increase or there is something else or any other metrics which you can highlight? Secondly, you know, if I look at more than INR 10 million revenues, there are, you know, 10 clients which are same as compared to last year. Is there a, you know, product life cycle for larger clients, which is, you know, showing up there? Because, you know, we've not seen any increase in number of clients in that cohort. These are my two questions. Thank you.
I'll start off with the latter one and pass it on to Suhas. We heard that cohort, you're right, it's stable. It's also a function that at least one of our clients was just tagged below that INR 10 million, right? From a categorization perspective, INR 9.9 million- something, right, falls into the other bucket. These customers are taking a bit more time to change their operating model, adopt some of the platforms and discussions we've been having with them. Having said that, we are very bullish that this cohort also will increase. It's just a matter of cycle times and they doing change management internally. Suhas.
Yeah. Thank you, Manish. Moving to the first question on the revenue per employee. In our fact sheet, the KPIs, you'll observe that our on-site/offshore mix has remained fairly stable over the past many years. Actually, on-site increasing marginally over the last couple of years. Having said that, I would like to highlight that over the last five years, our fees have consistently grown from $51,000 to close to $75,000 today, and also from $66,000 to $75,000 on a year-over-year basis.
There is a sustained effort to increase this in combination with the technology impacting our operations positively, combined with the outcome or output-based pricing model in our engagements, which helps us retain the benefits of the productivity increase without being dependent on timesheet-based or input pricing.
I would actually just add one more line. As I said earlier, in this world, the competitive structure of the market is being rewritten. Right now, all the directions, it looks like that it's being written in our favor. Hence the quality of the kind of engagements we are running with our customers are much more strategic, which also is resulting in the kind of contracts we drive.
Sure, sure. Lastly, Suhas, is it fair to assume, debtor days will be more or less stable at these levels and we can have growth also or any major change envisaged going forward?
Debtors have of course, reduced significantly, resulting in higher cash flows. We are seeing a trend reducing from the 80s about five years ago, to the 60s as we speak. Having said that, I would guide towards mid to mid-60s- 70 days on a steady basis.
Sure. Sure. That's helpful. Thank you so much, and all the best.
Thank you.
Thank you.
Thank you. We will take the next question from the line of Prolin Nandu from Edelweiss Public Alternatives. Please go ahead.
Yeah. Hi, Manish and Suhas. Thank you so much for giving me the opportunity. Just two questions from my side. One is on this AI initiative that you have talked about. Now what I gather is that what is our defendable—I mean, what is it that works in our favor is the domain knowledge and the regulatory aspect of the industry in which we deal with. Just wanted your thoughts on how defendable are these moats, so to say. Don't you think that over the period of time, maybe this domain knowledge can also be commoditized by some of the, you know, some of the large LLM players like they have been doing in other industry? Why do you think that cannot happen in our industry? That's my first question on the AI side.
The second question is on the margin guide, where you have talked about some of the investments that you are making, and you coming back to your previous high sometime in the second half of FY 2027. My question here is that what is the risk that, you know, this could probably catch up, to stay relevant in the AI world. We continue our investment part and not bear the fruits of that operating leverage that we are envisaging. Yeah, pretty much the questions are more on a medium-term outlook, and to do with AI.
That's a fair, that's a fair question. Thank you. Let me start with the first one. Our real moat over here, which we continue to invest and solidify every day is domain expertise, right? Domain expertise is just not a very broad term, right? For example, when I spoke about this, the whole three day, three months to three days thing, that required therapeutic area expertise, that required broader medical expertise, that required your creative expertise, right? A very market nuance expertise for different market. It also used our own proprietary data sources. Along with domain expertise, we are also bringing in our proprietary data sources.
We believe the LLMs and most of the cases we are seeing those, that whenever we are building our tech products, LLMs on their own are not solving for a problem. We are using all the LLMs, all the frontier models. We are working with AI labs, names which you might not have heard of, but are cutting-edge labs in the different parts of the world but w e have to bring couple of them together along what our technologies start to solve different problems o n top. The reason why we are able to articulate that well is again, the domain expertise. At least, in a medium term, call it three to five years, we don't see LLMs having the ability to do this. LLMs are not still operating.
They don't have the reliability in when you're talking about them in operating grade, right? The human loop is gonna be actually even more important. By the way, there has been an FDA, kind of a call-out to one of the companies within just last two weeks, right? A warning letter that looks AI generated. Now what happens in the medium to long term? That jury is still out. Domain, domain expertise and data, right, embedded in these platforms, which are gonna be a combination of multi-platforms, is the approach we are taking, and we believe they are fairly defensible in the medium term. The second question was the AI investment. You're absolutely right over here.
The reason why you see us talking about this, our margins recovering over a couple of quarters is because we continue to invest. We have baked in a bunch of investments. This year, our R&D cost, as we call it, right, has gone up. It's tad above 2% of our revenues. We are making those investments. We have made GTM investments, right? We are increasing those investments as well, and a bunch of areas in the domain expertise, because customers also need much more hand-holding when they're going through this turn. Those investments have been factored in.
One more reason why we are not saying that our margins will expand beyond what they used to be, while there might be leverage over there, is because we believe that anything above, let's call that range which we are operating in, we are gonna reinvest in the business. Maintaining this broad range is very doable as we see it today.
Thank you, Manish, and all the very best. I'll join back in the queue if I have more questions.
Thank you.
Thank you. We will take the next question from the line of Raghav Maheshwari from KamayaKya Wealth Management Private Limited. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity, and congratulations on a good top-line growth. Sir, my first question, building up on the question that the last participant had. I just wanted to get into a bit of a technicality here. Sir, we talk about Generative AI, we talk about, you know, Cortex AI. Just wanted to understand, what kind of AI is that? Is it like a in-house trained LLM that is, you know, or it is like a wrapper with proper roles defined by your domain expertise? Just wanted to understand what kind of AI we are into.
What we are doing is, let's think about it. There are frontier models, right? There are lots of them, right? There are obviously the large language ones. There are much more specialized ones, right? We are using those along with a bunch of very specialized things. For example, computer vision, right? That we partner with somebody. Large action models, right? That's another category. I can go on and on. There are a bunch of these very specialized things. Along with the large frontier models, we are partnering a bunch of those things, right? We have our own engineering team, which is building various stuff. Those are the platforms which we are integrating from a pure tech perspective, and we realize different combinations work well for different use cases, right? Now, what is Cortex?
Cortex is a knowledge engineering platform, right? Which is meant for developing agentic workflows with all the security, enterprise security, scalability, right? Meant for life sciences. That enables us to build agents quickly using a knowledge engineering approach. We have also decoupled the domain layer from the technology layer, right? So that we can very quickly scale up many use cases, which is what Cortex has enabled, right? That's the broad approach. We continue to build agents, right? And by the way, agents is just one part of it. How do you reconfigure workflows? How do you think about skills in context of that workflows? All that stuff is up for change, right? So those new skill sets, new workflows along with these agents, that's the direction the industry is moving in. Of course, these agents are using all the platforms I spoke about.
Right, sir. That was quite informative. Sir, second thing which I wanted to ask was, a little bit, you know, if you can throw light on FY 2027. As in, what's gonna be some, you know, growth drivers for the year? What kind of, you know, the revenue trajectory are we looking for? Most importantly, what are we planning to do differently than what we did in FY 2026?
Actually, FY 2027, I think, is gonna be more a year of scaling what we did in FY 2026. FY 2026, we did a bunch of things which are different. We made investments in talent, we crystallized on solutions, right, with a bunch of our clients and whether across the board medical. We won some of very marquee engagements I spoke about earlier. I don't think we are in a mode to do anything different from a scale perspective, right? In this, everything which we started on FY 2026, we feel vindicated that we are moving in the right direction, right? FY 2027 is gonna be doubling, tripling down on them, right, to scale. Whether it's on the customer side, engagement side, revenue front, r ejigging our own internal ops and ways of doing things. You wanna add on, Suhas?
Yes. Maybe, to put a little bit more color to that, Raghav. You know, what Manish mentioned on the GenAI leg wins, right? Our customer engagements which have moved from experimentation, you know, certain free, kind of, POCs, to hard dollars and long-term engagements and commitments. That combined with also the Tectonic investments that we have been doing over the past many quarters are now getting crystallized with two customers moving into long-term engagements. More specifically, even our largest customer signing up, with Germany as a region, but also active and very high probable pipeline for many other regions with the same customer.
Finally, I would add the consistent $1 million+ wins that we have been talking about for the past few quarters give us the confidence of the strength of the revenue visibility, combined with the strong pipeline that we continue to generate and carry as we speak. One last final comment. The $10 million win that we had mentioned in quarter three, while has kicked off and started from a revenue recognition perspective, the revenue recognition is deferred because this is an outcome-based pricing model and will be entirely recognized in FY 2027. These are some of the specifics of why we feel confident as we move into FY 2027.
Thank you. We will take the next question from the line of Lakshminarayanan from Tunga Investments. Please go ahead.
Yeah. Hi, good evening to half of you. Two questions from my side. I understand that we work with top innovator companies. Just want to understand, you know, what kind of solutions we have for generic companies or even mid and small case companies. They may find it difficult to afford, you know, INR 70,000+ revenue per person, right? What kind of, you know, is it a market that exists or do we intend to expand it to either generic companies as well as small or mid-sized companies in the pharma?
Thank you. Thank you, [Arun], for your question. Midsize and small companies is something which we are expanding rapidly. We are seeing very significant traction. In fact, I spoke about some of the deals where we are launching a product for a small biotech, right? Our model of launch is becoming the way to go for a lot of these companies. We have a customer talking about us in public domain, that they were planning to hire a bunch, lot of reps, but then [Okstivi] showed up. They hired only 25 reps and getting everything amplified by our omni-channel engagement, right? There's another customer where we are doing pretty much end-to-end medical and commercial functions.
The whole, let's call it biotech, smaller segment, that's an attractive segment for us, and we believe we'll scale over there. That segment also seems to be getting tailwinds in general, right? The biotech environment in the U.S. had become very tough from a funding environment. It's coming up now, right, and it's been on the upswing. That is one part. As far as generics are concerned, we do some work with them, right? We have some revenues coming from generics. If I just contrast the opportunity we have with innovative pharma companies, where, as I mentioned earlier, that we believe we will have $100 billion dollar clients in some years, right? Versus, let's say, the other part. We wanna prioritize our resources accordingly.
Thank you.
Yes. Yeah.
We will take the next question from the line of Yash Mehta from ASK Ventures. Please go ahead.
Good morning. Am I audible?
Yes, you are.
Yes, you are.
Sir, I wanted to ask what has been the organic growth in constant currency terms, in Q4 FY 2026?
Constant currency terms year-on-year growth has been 12% organic and little north of 3%. You can look at even our financial disclosures in the investor presentation where we have provided the ex-BioPharm pro forma provisional financials. That provides more details beyond the revenue growth.
Okay. Sir, how will the margins turn out in FY 2023 considering the integration of BioPharm?
The integration of BioPharm was successfully completed actually ahead of schedule towards the end of February. The transition services from the seller was originally planned to get concluded as of end of March. This transition, completion of the transition would be adding two basically synergies on the GMA side. As we speak, we are also looking at synergies on the data subscriptions on the business operations and eventually go to market. These would progressively start impacting us through the quarters in FY 2027 more positively. GMA would be the immediate impact that we anticipate to see coming in in the next quarter itself.
Okay. Thank you.
Thank you very much. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to Mr. Manish Gupta for closing comments.
Thank you. I want to close by thanking all our 5,000+ colleagues globally, whose dedication and expertise make every one of these wins possible. I also want to thank our customers for the trust they have placed in Indegene, and of course, our investors and analysts for their continuous engagement and support. Thank you so much.
Thank you, members of the management. On behalf of Indegene Limited, that concludes this conference. Thank you all for joining with us today, and you may now disconnect your lines. Thank you.
Thank you.x