Design Arena, financial results for the fourth quarter of the fiscal year 2024-2025, ending 31 March 2025, and also the full year, FY2025.
Investor presentation and the press release have been sent to you and are available on our website. Our leadership team is present on the call to discuss the result. We have with us today Mr. Arun Jain, Chairman and Managing Director; Mr. Manish Maakan, CEO, iGTB; Mr. Rajesh Saxena, CEO of iGCB; Mr. Banesh Prabhu, CEO of Intellect AI; and Ms. Vasudha Subramaniam, CFO. Besides, some other senior members of the Intellect management team are present on the call. Now, I hand over to Ms. Vasudha to take you through the result. This will be followed by a Q&A session where your questions will be replied to by the management team. Once the Q&A starts, you can ask the question by clicking on "Raise Your Hand," and we will unmute you so that everyone is able to hear you.
Once they have asked, I would like to remind you that anything which we say, which refers to outlook for the future, is a forward-looking statement, which must be read in conjunction with the risk that the company faces. With this, I request Vasudha to give her briefing. Over to you, Vasudha.
Thank you, Praveen. Good evening, everyone, and thank you for joining us today for our Q4 and full year 2024-2025 earnings call. The PR and investor deck have been uploaded well in advance, and I hope you had a chance to go through the same. Let me walk you through our performance for the quarter and the full year, and then share some deeper insights into our business drivers and future trajectory. Starting with the numbers, for the fourth quarter of financial year 2025, we reported revenue of INR 749 crore, reflecting a 19% year-on-year growth, as well as a balanced performance across all geographies and products. This growth was driven by new customer acquisitions, as well as deepening client engagements driven by our eMACH.ai platforms and Purple Fabric, the Open Business Impact AI platform.
Our license-linked revenue, which includes license, AMC, cloud, and SaaS platform income, which defined the success of our IP-led monetization strategy, stood at INR 392 crore. We delivered a healthy EBITDA of INR 227 crore for the quarter, representing an EBITDA margin of 30%. Profit before tax for the quarter came in at INR 181 crore, reinforcing our continued focus on profitable, scalable growth. EBITDA grew 48% year-on-year. Collections remained strong at INR 712 crore, keeping our operating cash flow healthy and aligned with revenue recognition. We closed the year with a cash balance of over INR 1,000 crore. Now, we're looking at the full year performance. We closed financial year 2025 with a total revenue of INR 2,577 crore and a license-linked revenue contribution of INR 1,247 crore, which accounts for 50% of our revenue from operations.
As mentioned earlier, this is a significant indicator of our maturing product footprint and the increasing stickiness of our platforms. Our annual recurring revenue based on Q4 run rate stood at INR 870 crore, giving us a strong base as we enter financial year 2026. It is important to note that this is real, predictable, and sustainable revenue anchored in long-term client relationships. Our EBITDA for the year was INR 608 crore, with a PBT at INR 442 crore. Margin continues to be healthy even after absorbing key investments into Purple Fabric and new client success programs. On the commercial success and market momentum, we ended the year with 43 new customer wins and 53 successful digital go-lives, a clear demonstration of the impact of first-principles thinking-led zero-based architecture is creating amongst global financial institutions and our ability to execute at scale through composable, open architecture, and the iThermal platform.
Just in Q4, we onboarded nine new logos and executed 16 go-lives across geographies from Africa and Asia to the Middle East, U.K., and Europe. Two wins I would like to spotlight here. First, a landmark AI transformation deal with a leading London market brokerage firm. This is an INR 200 crore engagement, and it's one of the earliest real-world implementations of our new platform, Purple Fabric, combined with the two PMCI applications, Magic Submission and Exponent, that already have significant presence in the U.S. in production-grade underwriting and claims operations. Second, a multi-country wholesale banking deal with a European headquartered global bank that selected eMACH.ai to drive composable transformation across its treasury and transaction banking businesses. Both these wins underscore the confidence large institutions, which, following rigorous architecture and technology assessment, have in our ability to deliver large transformations at scale.
These apart, we have wins across North America, the U.K., Asia, and the Middle East for eMACH.ai platforms in the retail, corporate, and web space. Let me now turn to what I believe is the most exciting development this year: our launch of Purple Fabric, the world's first open business impact AI platform for the financial institutions. When most people hear AI platform, they think conversational chatbots, personal productivity tools, or isolated agents. Purple Fabric is not that. This is a purpose-built AI platform architected from the ground up to drive concrete business outcomes like enhanced customer acquisition and growth, operational excellence, more robust governance and compliance, and faster and sharper financial decisions. It is built on four foundational technologies. One, the Enterprise Knowledge Garden that combines the organizational data from structured and unstructured sources, from the ecosystem and regulatory sources to knowledge as a service.
This powers our enterprise digital experts, modular task-specific copilots that address underwriting, trade and supply chain finance, customer onboarding, fraud detection, and more. What sets Purple Fabric apart is its governance-first architecture. We have embedded 18-plus AI guardrails, ensuring explainability, fairness, and auditability of both data and decisions, apart from enforcing security entitlements at the levels of roles, workspaces, and tenants. We have also introduced a first-of-its-kind open LLM benchmarking capability, allowing institutions to choose the best-fit LLMs based on the triple constraints of cost, accuracy, latency, and interpretability for each application. As we move into the financial year 2026, our strategy focus is clear: deepen Purple Fabric deployments with several live installations and a healthy pipeline of new enterprise AI programs, and strengthen international presence. Our banking business has been very successful in Europe and is breaking new grounds in the US.
We also have a strong presence in Canada, which was significantly bolstered by the integration of Central 1. We hope to leverage these as well as the Purple Fabric presence in the US to deepen our footprint in that geography. Similar potential exists in other key geographies like Australia, Asia, and EMEA. We are entering this new fiscal year with confidence that comes from having innovated, delivered, and delighted clients consistently across product lines. Before I close, I want to thank our investors for their continued trust and our Intellect Associates worldwide for their commitment to excellence. With the twin engines of eMACH.ai and Purple Fabric, we are extremely bullish on the next phase of our growth journey. Thank you.
Thank you, Vasudha, for sharing the commentary. The results and results have been...
Can we start Q&A?
Yeah, so we can. Yeah, Praveen.
Thanks. Can we start Q&A?
Yeah, please. Because all of us are in the same room, so whatever is being declared, whatever is...
Okay.
Continuation of the AI commentary, which is going on.
Now we are opening for Q&A. Please click on Ask question. Hello. Please click on "Raise your hand" to ask a question.
Please click on "Raise your hand".
First, we have...
Yes, sir?
No, no, they have raised their hands.
First, we have...
Mr. Rahul Jain from Dolat Capital. Rahul, please ask a question. Please unmute him.
Yeah, hi. Thanks for the opportunity and congratulations on a very strong execution during the quarter. I have a few questions. Basically, this win which you have announced during this quarter, and there are mentions of these deal wins in your press release also. First of all, just from a clarification point of view, is it safer to assume that most of the deals that we have announced related to this London market brokerage firm and others have captured in the Q4 financial, or they are partially part of the results, but some of it would feature mostly in the April-May-June quarter?
Yeah, do you have a very specific question? I think that this deal of brokerage firm is not accounted for. This will be over the next three-year period. It is INR 200 crore distributed over a year period. Very small portion has been recorded in the last quarter.
Right. Our wins have come at a time when we are seeing a very dramatic shift in the macro thought process, although many companies are talking positively on the BFSI spend so far. It would be great if you could share a big picture as well as near-term thought process that you have on the demand scenario and what are the risks in that situation, the way the macros and geopolitical things are shaping?
Okay. Let me take that question on. I will just like to point out a few parameters to you. One is our strategy of Intellect Design Arena going product by product to the market and trying to create in the last 10 years the market growth opportunities. If you look at it from the last five years' journey, first, GTB was leading till 2019. GTB was the one strong engine which was there, and GCB engine started building it up. Third, now AI engine is starting building it up. There are three different trajectories which are running. The high GTB business, which is first we invested, fully invested into it, is the highest profit margin business, then GCB, and then investments are still going in AI business. That is how the overall composition of the revenue comes in. This is about my product-based revenue commentary.
If I look at geography commentary, we started from Europe first, from Canada, U.K. That business, Europe business is now a substantial business. It's the largest business in the whole business. One of the beauties of the business is that it's a very well-distributed business. If I look at it, my U.S., North America, and Europe business is close to 45% of the business comes from U.S. and North America, Canada, and Europe business. While the remaining 55% business gets distributed equally between India, EMEA, and APAC. If you look at three different geographies, they are contributing almost equally. It's a well-balanced business on dependency on the geography. Dependency on product is not there. Dependency on market is not there. We have a very well-balanced business on looking at it.
America, we focused last year substantially, and we mentioned to you that America will grow. America started growing substantially, and a lot of insurance businesses which are there, which is subscription-based business, are contributing to America business. Canada business will be growing with a Central 1 investment of acquisition. That business also will grow. My Europe and America business next year will balance it out. That's very good news from the perspective of the balance sheet that next year, most likely, these two businesses of America and this may constitute 50% or more than 50% of the business will come from these geographies. That's what we are looking for. If you're tracking the company for quite some time, then we were running a quarterly revenue of INR 500 crore. Every year, if you look at the number, we moved INR 100 crore per quarter number.
I mentioned to you in the first quarter of the last year that we are targeting INR 700 crore to be the next milestone. That's what it took us some time, two, three quarters. We have not done well in the first quarter, INR 550 crore to INR 750 crore number in the same year. It is a completely bumpy business. That is the nature of business. If you look at it, last 12 months' revenue, we grew 11%. Last quarter, when we were questioning us that, "No, no, no, you will grow this much and that much," I think around 11% we could have grown in the last year, excluding GAM. That is a commentary on the overall business. Ideally, we should grow 15%. We designed the business. We achieved 11%. We achieved 12%. We achieved. Those are the numbers we achieved year on year.
My cost structures are low. If you look at the last four or five quarters, it's close to INR 500 crore average quarter cost structure: INR 480 crore, INR 490 crore, INR 510 crore this quarter. Because of the C 1 acquisition, we have an additional INR 16 crore number coming into the cost, an additional INR 16 crore number coming to the cost. Otherwise, it's in the same range. The global scenario of BFSI, I think people are looking for more modernization because Europe and America both need modernization. eMACH.ai is a great story. First-Principles Thinking is a great story. They have not seen any vendor with the First-Principles Thinking, who is saying that, "I'm reducing your cost going forward and not increasing your cost." That is the reason for winning these deals in this quarter is the outcome.
In last April, I mentioned to all of you that we are moving our eMACH.ai to the U.S. and Europe, and it will take some time for them to catch up because we started telling the story of eMACH.ai after the April conference to U.S. and Europe customers. Within nine months, we are able to see the impact of eMACH.ai, hopefully because of the disruptive technology. I'm not saying it's incremental technology. eMACH.ai is a disruptive technology, which we have. It's completely codeless. Along with that, the second platform, which is Open Business Impact AI platform, which we'll be launching on Monday morning in Financial Times in London, is one of the most suitable enterprise platforms in the AI space. There are three spaces in AI.
For all the investors, I want to say that there is a space which generates foundation models like DeepSeek or OpenAI or Bedrock are the foundation models. Then there's a second space which is to use these models to generate a specific problem solving like GAMA for generating presentations or many other applications which use a model and generate and solve a particular problem of PPT, making the PPT, making the letter writing, recording the minutes of meetings. Those are called point applications on AI, whether it's a cursor that is there for programming and software side. There's a third space, which is a platform space which enterprises want to implement. In enterprise space, there's a company called Palantir, there's a company called c3.ai, there's a company called S20. These are the three companies which are in the platform space that are still evolving.
Vasudha has highlighted we are the first company where we are creating technology stacks. All the four technology stacks are which we created. We are announcing it open with the platform, which is to increase the efficacy of it. This is the commentary, Rahul, in short, which I wanted to share.
Arun Jain, thanks for giving that flavor. Just a couple of clarifications. Basically, what you are saying is that since our business is set to is designed for that 15% growth, irrespective of the current situation, that is what one should expect. From a cost point of view, as you alluded, the current quarterly run rate of expenses is around INR 500 crore plus, now that's even part. This cost model should not increase materially. There could be a meaningful profitability improvement on an annualized basis. Is that the understanding right?
That's right. We just mentioned one is INR 100 crore investment in AI business mode. That will deplete some of the numbers. Otherwise, my regular business is stabilized at INR 500 crore plus INR 50 crore of cost of C1, INR 550 crore plus some additional cost may be there. INR 560 crore-570 crore could be the cost structure. Don't immediately look. You have to keep Purple Fabric investment separately. We are not separating the company, but we'll keep the cost separately.
So sir, just to get the maths right, even at a INR 700 crore run rate, we are getting the INR 200 crore EBITDA. Even if we add the INR 25 crore of quarterly run rate to the cost, it should give us around close to 25% annualized run rate for the EBITDA. Is that what is basically our objective to achieve?
That's right. You don't put the words in my mouth, but you achieve it.
Yes, sir. I am just trying to understand what are.
It as a guidance. Yeah, I understand on that part. Yes, that's quite helpful. Just one or two bookkeeping questions for Vasudha. I think this quarter, in the PPT, we could not identify the breakup of the cost item. It would be great if you could share in terms of software selling and marketing and research expenses.
Sure. Because I mean, we had introduced more rows in this quarter. That is the reason I think this has been inadvertently missed out. We will update all these items.
Rahul, I'll share with you.
Okay. Okay. Got it. Just one more clarification. As Arun Jain said, that this C 1 was included in this quarter. Our understanding at that time was that it would not be a very profitable business to start with looking at the payout and payout for the transaction. It seems like we have done pretty well even including for that. Is it safer to assume that the profitability should be seen as much better even for adjusting for the Central 1? Or do you think there could be more investment which will come in the subsequent quarter? That will also add as a headwind for the profitability.
I think it's a last time you didn't pick up the right signal. We said Central 1 is one of the best acquisitions. We could have looked at it. Sometime you missed that the Central 1 becomes 70 customers. This 117 banking customer in the Canadian market is one-third of the banking market over there where we can cross-sell lending and overbanking. That is a signal last time was misinterpreted. Even one month, we started operating trade one on Capital One on 1st of March. Only one month revenue is there. And it was profitable. It's not that very high profitability, but it's not a loss-making. It's a profitable and high single-digit profit was there in this new business which we acquired. That's what currently it's not a value decorative. It's a highly value-operative acquisition with very significantly lower cost to pay for this business.
Right. I understand the potential. I was just more talking about margin. Thanks for that additional color. That is it from my side. Thank you.
Thank you, Rahul. Next, we have Mr. Bhavik Mehta. Bhavik, just unmute yourself.
Thank you very much for this opportunity. I wanted to ask that globally, Agentic AI is primarily SaaS-driven revenue or forms part of ARR. Within our ARR number, does Purple Fabric or anything related to that flow into the platform part, or does it form part of the ARR? From the previous quarter to now, our ARR has increased around INR 175 crore. Is there any part of Purple Fabric in this, or is it split into the two different verticals?
Yeah, small numbers are there right now, but I think it will grow further on ARR. Next year, it will be substantially larger.
Primarily, any contract that we have related to Purple Fabric is an ARR-driven number, right?
Most of them.
Okay. So the current deal that we have announced, it's a mix of eMACH and Purple. So even within this, what would be the component of Purple Fabric involved here?
That's right.
What would be the component of Purple Fabric in this INR 200 crore deal?
Most of it, Purple Fabric was a lent-a-Purple Fabric, and the rest of it is a platform-based from the platform, which is brokered platform. This entire INR 200 crore deal over the three-year period is increasing alpha one, alpha two, alpha three. Three-year cycle is doubling their revenue for three years. It is all classified into Purple Fabric.
Okay. So primarily, this 200 is entirely in our ARR. That's what I wanted to ask.
That's right. However, INR 200 crore is not booked into this quarter.
Yeah. I understand.
Yeah.
Forty-five days around three-year period has been booked for this.
Sure. But when we say three-year, generally, ARR contracts are annual. I'm just trying to understand that. Are we still looking at the multi-year contract format and then just bifurcating into ARR, or how are we looking into deals when it comes to Agentic ARR? Is it user-based? Is it company-level? Is it customized? Is there any understanding?
There's no standard practice right now. Practices are getting evolved over a period of time. There's an ARR deal, there's a transaction-based deal, the number of transactions, or there's a percentage of business deal. This deal is a percentage of business volume. A lot of Purple Fabric deals, we are taking percentage of basis point of the business volume. That will grow from year one to year two to year three. That is also a pattern we are looking at. Three-year value at the third-year value would be more than INR 100 crore per year. Like this deal will have a third-year value will be more than INR 100 crore.
Sir.
Yeah.
Yeah.
Last question around.
It's okay. Go ahead. Go ahead.
Yeah. The last question was around that we have a very commendable target for Purple Fabric growing in the next five years. Is there any yearly plan around that by 2026? What do we expect from Purple Fabric specifically in terms of ARR addition?
We don't want to give any numbers on that. I think the potential is very large. We don't know how it will pan out. Let's see as it comes out. We'll share with you.
Sure. Thank you.
Thank you, Bhavik. Next, we have Mr. Sushovan Naik from Anand Rathi Securities. Sushovan, please unmute yourself.
Is my voice audible?
Yeah. Yeah, Sushovan. Please go ahead.
Yeah. Thank you so much for the opportunity and congratulations on a great set of numbers. Before I ask the question, I would really like to thank Praveen Sir and Vasudha Ma'am for giving us a very detailed explanation on the walkthrough of the company. Thanks a lot for that. Two questions, sir. Basically, we have seen historically whenever the implementation revenues have come down as a percentage of revenues, we see an exponential growth in the profitability. SG&A also reduces because your tech subcontractor costs reduce in the SG&A. This quarter, I think we have seen a 400-500 basis points improvement in the mix. I just wanted to understand for FY 2026 and FY 2027, what do you envisage the licensing or the implementation revenue to become as a percentage of revenues? I just wanted to get your feedback.
I have another question, but we'll ask after your response.
I think we don't define too many things in each quarter. It's so variable. That's why we don't predict any number. We just license linked revenue, which is more than 50%. I believe our target is to make it 60% in the next two-three years. My license linked revenue, if it's 60%, obviously the margin will go back 10 percentage points. That's how we will be comparing ourselves to all the best-in-class product companies. Individually, product-wise, we have the same best-in-class product margins. On a consolidated basis, because we have an innovation engine which will drive the sustained growth, it's a different strategy. A lot of times, a product company doesn't have so much innovation coming from a single company. We have a well-tested product now playing very good in the market.
We are playing wholesale banking is coming up great after the core banking and the lending of the last year. I think the whole capacity of company to keep on investing. There are three cycles: Horizon One, Horizon Two, Horizon Three. Horizon One cycle becomes 30% margin business, 35% margin business. Horizon Two becomes 20%, 25% margin business. Horizon Three, which is an investment business, will be operating at a 5%-10% margin business. Now we are adding a new segment called direct-to-corporate from banking. We are moving to corporate segment. We started the entire GEM force, which was there working with us. We launched three products: GPX, which is a government procurement exchange; CPX, which is a corporate procurement exchange; and Accounts Payable, which is APX. These three products are run by the direct-to-corporate.
Now, this business in 2028 and 2029 will be a very flourishing business as we are going in this business line. All the cost has been invested already into the business. We are investing close to INR 40 crore per annum for building the capacity in. The GEM team was there who has built it up. GPX, using my eMACH architecture, they could build these three products in less than 12 months. That is the capacity of our innovation engine, which is driving the value. The margin will grow, but I cannot say in the next 12 months what will the margin be. That I am not able to comment.
Understood. Any views on how much would be the CapEx investments for this year and the next year? When I say this year, I mean 2026 and 2027. Any views on that?
CapEx investment on capitalization will be doing between INR 170 crore. Last year, we were doing INR 140 crore. This year should be same number, $20 million. So $20 million will be my CapEx investment. INR 160 crore-INR 170 crore will be my CapEx investment on product side, which will be capitalized.
Understood. Thank you so much for the opportunity.
Thanks, Sushovan. Next, we have Mr. Vivek Kumar from VISPL. Vivek, please unmute yourself.
Audible, sir?
Yes, please go on.
Thanks for the opportunity. Given that we have now become multi-product and not many products are in that very, like, Horizon Three, most should be in Horizon One, Two. Given we are in multi-geography and the kind of outlook and being a disruptive technology, should we assume that this INR 700 crore-INR 720 crore-INR 750 crore run rate should be maintained in the next three, four, five quarters? That is just that question. Second, margin, I am not asking margin, but we can assume around 20%-24%-25%. Can we assume and model for the next year? First question is this, sir. We are not going back from INR 720 crore-INR 750 crore to again into INR 600s crore, right? That is one question.
Quarter on quarter. We went into INR 550 crore and then come back to INR 700 crore. I will not comment on the INR 700 crore is sacrosanct. Obviously, our target now is to move INR 800 crore. Next four quarters, we should be crossing INR 800 crore. That should be our target. That is what we will be striving for.
Can we assume 24%-25% margin for next year?
That's right. That's okay.
Oh. Thank you, sir. Thank you very much. Thank you. All the best, sir.
Thanks, Vivek. Next, we have Mr. Nimish Soni from Carnelian Capital.
I'm audible?
Yeah, Nimish. Please go on.
Yeah. First of all, very, very congratulations to the management for a good set of numbers. My question would be that about the R&D capitalization, how do you define what is the new product and what is the existing one?
Sorry, can you please come again?
Sorry.
Yeah. About the R&D capitalization, how do you define what is going into the new product and what is for the existing one?
What is the question? I think the point is we are putting two expenses. One is R&D expenses. R&D expenses are close to INR 200 crore, which goes for maintaining the existing products, which we take a write-off.
Which are basically the research phase. Whatever is in the research phase is actually charged off to the P&L. That is what you see, something close to INR 200 crore for the year. Wherever we develop the functionalities or release any major versions, that is where it is getting capitalized. That is about INR 140 crore per year.
Okay. Okay. Thank you so much.
Thank you. Now we have Mr. Manoj Dua from Geometric. Manoj?
Audible, sir?
Yeah, yeah.
Am I audible, sir? Okay.
Yes, please go on.
Okay. Are you seeing some trend where the revenue is based on the outcome rather than license or transaction-based? That if we implement your software, the kind of output or saving or deals we will get, is there a trend like that?
We are not accepting that. We do not take that risk right now. We'll be doing it afterwards.
Okay. Thank you. Best of luck.
Okay.
You can open the next question.
Yeah, sir. Praveen, we went into view.
Next, we have Mr. Pawan Kattaria. Mr. Pawan Kattaria from Bhulzai. Mr. Pawan Kattaria, not there?
Next year.
Next, we have Mr. Vipul Kumar Shah from Sumangal Capital. Mr. Vipul Kumar Shah, Sumangal Investment.
Thanks for the opportunity. My question is the funnel which we have shown in our presentation. This funnel, can you say how many deals are for pure Purple Fabric or every deal includes some portion of Purple Fabric? Your comments are welcome, sir.
I would say the funnel has 10%-15% component is from Purple Fabric. The more components getting builter. So that's how you can look at it.
Every deal will have 10%-15% of Purple Fabric. Okay. Thank you, sir.
Thank you, Vipul. Next, we have Ms. Jyoti Singh from Arihant Capital.
Yeah. Thank you so much, sir. And congratulations on the good set of number and execution. Sir, my question basically on the margin side, like you mentioned on the earlier participant 24%-25% margin for the next year. Overall, we are targeting in this range going forward. Or earlier, we mentioned 30% plus operating margin going forward. Just clarification on that side. Also, like a lot of traction on AI front and earlier you discussed with some of the participants. What are target on the AI side and how much we are seeing it will be benefit on the revenue front?
Two things are there. In the long run, our margin is 30%, which we are still staying because you have demonstrated this quarter, our margin is 30%. If you look at the margin of this quarter alone, it is 30%. On annualized, it is around 24%.
23%.
23% is annualized basis. Obviously, this will grow year on year as more license-linked revenue grows as the previous person asked that question. This margin should grow year on year to 3% year- on- year. If you're looking for a three-year perspective, definitely margin may increase towards 27%-30% kind of range depending upon how the license works and how the Purple Fabric comes. I mentioned during the 18 December Purple Fabric conversation for investor that this is a business which can be INR 1,000 crore to INR 5,000 crore business. We are quite sure of INR 1,000 crore. We are now in the last four-five months, we built it up entire use cases, the business cases to make it a INR 1,000 crore business.
INR 1,000 crore business is the in the next three years for Purple Fabric is almost we have created a complete pipeline market strategy around INR 1,000 crore business. Next milestone is can we make it a INR 5,000 crore business? That's what our efforts are where my Banesh, me are working along with Manish and Rajesh to make this as the greatest AI product in the world which can challenge Palantir, which can challenge c3.ai. That's the dream that we are running.
Thank you, sir.
Thank you, Jyoti. Next, we have Mr. Jitinder Agarwal from Relax Capital. Jitinder, please unmute yourself. Jitinder? Jitinder Agarwal from Relax Capital. I think Jitinder is not there, it looks like. Can we go to the next? Next, we have Mr. Umang Shah from Banyan Tree Advisors. Mr. Umang Shah?
Sorry?
Mr. Umang Shah? Yeah.
Hi. Thank you for the opportunity. Glad you shared the results much earlier and both the results and the presentation. We could go through it really well. One question that I had was, while with the use of AI, you are able to create more use cases for your technology. Just wanted to understand internally how is it helping us with respect to employee productivity? If it is, then do we plan to how do we plan to grow the employee base that we have?
Yeah. So employee, if you observe that cost of INR 500 crore remained constant in spite of the salary raises, is directly attributable to the productivity. If the revenue has grown from excluding GEM from almost 11%, that 11% increase has not translated into the cost structure. That's the productivity gain. More productivity will come with more and more implementation of Purple Fabric within implement. AI does not give clearly only the productivity. It gives you accuracy and better success chances. First of all, I want to clarify the role of AI is to augment the capability of the manager in the company, not replacing him. There is a myth over there that AI will replace people. AI will make the people more efficient and effective. That's what we are making at Intellect, that our deliveries are on time. We did 16 transformations last quarter.
We can be able to complete those transformations faster. Our collection can be better. These are the objectives of the AI, not just the headcount reduction.
Great, sir. And just, sir, one more question. One more question was, you had started putting up a front end for selling Purple Fabric, I think, six months back. That is when you had started talking about it. Where are we on that journey? Do we have a sales force now in Europe and North America, or is it still a work in progress? If it is already there, how is the response so far?
Yeah, we are still building the sales force. The partnership network is already there. Some of the partnership is working right now. Some of the players are working on Europe. And Europe's sales force is still there. New America we are still doing our.
What is the size of the sales force, if you're okay to?
Today, it's an integrated sales force. Because all the sales force is not separate for Purple Fabric. Because all the sales force, which is more than 100-plus sales force, is selling Purple Fabric along with their current portfolio.
Great, sir. Thank you so much, sir. All the best.
Thank you, Umang. Now, next, we have Mr. Sameer Dosani from ICICI Mutual Fund. Sameer Dosani.
Yeah, am I audible?
Yeah, Sameer. Please go on.
Yes. Congratulations on a great set of numbers, sir. Can you share qualitative feedback, qualitative comments around the progress on the U.S. business? I think we started speaking about it in the last six, nine months when you developed the U.S. business. Any qualitative comments, how is it going? I think you had a target of that it will become X % of your revenue in three, four years. Where are we on that journey?
Qualitative comments we have already given. What is the question? Initially, maybe you can listen to this conversation because qualitative conversation we have given that time.
Okay, sir. Okay. So we already have a sales force on ground. We are growing in line with our expectation. I think that's there, right?
Yeah, yeah.
Okay. Okay. There were two deal wins, sir, two large deal wins. One of it, I think, is INR 200 crore Fabric deal win. You said it will start coming in from Q1. The other large deal, is it already part of Q4, sir? Or will it yet to be accounted for?
That is already accounted.
Sorry?
That is already accounted.
Okay, sir. Okay. Thanks. Thanks. That's it from my side. All the best.
You are on mute.
Thanks, Sameer. Next, we have Mr. Srinivasu from TIA. Srinivasu, you are there? Srinivasu, are you there?
Hi, sir. Am I audible?
Yeah, yeah. Please go on.
Thanks for the opportunity, sir. Congratulations for the strong set of quarterly numbers. My question is about looking at the deals that you signed in Q4. We can clearly see that there is a shift from the traditional digital transformation deals to AI-driven transformation deals. Are you seeing increasingly clients moving towards these kinds of nudging use cases?
Yes, definitely. There's a big trend on AI plus eMACH.ai. So the complete two kinds of deals are there, eMACH deals and the AI deals. The second large deal is not Manish. If you want to share the second large deal, what is the trend of eMACH.ai on transformation, that will be helpful for the.
The ability to do the second large deal is a fairly large U.K. bank for their wholesale bank transformation across all their international franchises. This is the capability to integrate and compose using eMACH.ai. I think you have been seeing that we are winning large transformation destiny deals. What is changing now is the embedded AI inside the platform is giving the right excitement to the banks that we are not just doing a patch on Copilots, which give you a momentary high, but do not show the business impact. I think that is a differentiation which really the market is looking for. With the work we had done on Purple Fabric and in the last 24 months on eMACH, the combined power of them to be able to make this impact out is very exciting right now.
Okay. Which verticals are you seeing more demand for this Purple Fabric? Is it insurance underwriting or finance and accounting, back office operations or document processing? Where exactly are you seeing demand?
If you look at, we have started this journey with insurance, and that's where we really cut our teeth onto this technology. It's gone into lending. It's gone into payments. It's getting into trade and supply chain finance. We are, I think there are two things. One, we are embedding this in our standard platform like Arun called out. Second, we're building it as an independent platform, which can sit across whatever knowledge bases you have and how we build an enterprise knowledge garden and how we build digital experts on top of that. You go look at the world's got excited with Copilots and everything. What's it delivered? Go ask any CFO, how much is your cost reduced genuinely, net of Azure cost added onto it? You will find very different answers because it was not a holistic design.
You were just looking at a structured data component of the data lakes, and you were not harmonizing along with the unstructured data. That is what we started doing with insurance. Now it is a global launch to be able to take it across all products. We have embedded it already into a number of platforms. We have about 68 digital experts available already. That is what Arun said. We are formally announcing it on Monday globally. The following week, Arun and I and Banesh, we are in London and we are rolling it out and then doing a global roadshow behind it. We have this confidence with the INR 200 crore deal, which we have announced, the scale of transformations we can actually do.
When we are able to say we are going to take basis, the impact we created, that is truly, it is not just saying hopefully, wishy-washy, some cost will reduce. We have really put our stakes on the ground on the business impact, and that is why we are calling it business impact AI.
Yeah. Just to add to what Manish said to your question, it is a combination of eMACH and AI coming together. Even the big deal we won is a combination of eMACH insurance product along with AI that is coming together. It is impacting both operations and the actual business delivery overall because that combination is what makes it give the final business impact to the customer.
Thank you, sir. Just to follow up on that, when you say productivity improvement to clients, what kind of ROI is expected for clients, say, three years for especially these AI deals? Is it 10%, 15%, or 20%?
I think very difficult to, yeah, very difficult to give a percentage like that. For every use case in every business, we show improvement in risk. We show improvement in compliance. Some of them is cost. Some of them is improving the quality of their risk decisions. It is very difficult to give that kind of an impact. For one of the deals that we had won with the largest wealth manager in the U.K., there we had a significant improvement in turnaround time for complaints. What used to be five weeks was being done at a fraction of the time. Almost it runs into something like 30-45 minutes. I think there are different ways in which we measure it. Eventually, of course, it reduces risk or compliance risks or even potentially cost of operations.
Thank you, sir. Best of luck.
Thanks, Srinivasu. Next, we have Mr. Prathmesh Deva from Tiger Assets, I said. Mr. Prathmesh Deva. Prathmesh? Prathmesh, please unmute yourself.
Yeah, sir. Just one question from my side. As we have grown Purple Fabric as of now till INR 1,000 crore, sir, so any timeline we would like to give so by when we can reach Purple Fabric to INR 5,000 crore?
Definitely. I think we are looking to think INR 1,000 crore also will reach in three years. I think I have a visibility of INR 1,000 crore. INR 5,000 crore is what we are attempting to make with the brand and Financial Times and the branding we are doing. That's the potential we are looking at it. Because if Purple Fabric alone, you have INR 5,000 crore in banking, you have INR 5,000 crore, we have INR 10,000 crore of fee.
Got it, sir. Thank you so much and all the best.
Thanks, Prathmesh. I think we do not have anybody else, sir. Arun?
It's a very tight time to close the questions. Thank you for being here.
Yeah, yeah.
Who raised hand?
Somebody raised hand.
Can we close it, Arun?
I think nobody's there.
Somebody raised a hand right now. It's showing on the screen, five participants.
Yes, some of you are there. You talk number, just check.
Doesn't seem to be any.
Okay.
Nobody's there, Arun.
Thank you.
Okay. Thank you, everybody, for participating in the call. In case any more questions are there, you can just write to us, and we'll be replying. Thanks for joining the call today. Thank you, Alper Ilkbahar. Thank you. Now you can log.