3i Infotech Limited (3IINFOLTD) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to 3i Infotech Limited Q3 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik P. Jagtap from E&Y Investor Relations. Thank you, and over to you, sir.

Thank you, Yousuf. Good evening to all of you. Welcome to the Q3 FY '25 Earnings Call of 3i Infotech Limited. The results and investor presentation have already been mailed to you, and you can also view it on our website at www.3i-infotech.com. To take us through the results today and to answer your questions, we have the top management of 3i Infotech Limited represented by Raj Ahuja, CEO. Raj will start the call with business update. After that, we will open the floor for Q&A session. As usual, I would like to remind you that anything that is said on this call that reflects any outlook for the future or which can be construed as a forward-looking statement must be viewed in conjunction with the risks and uncertainties that we face. These risks and uncertainties are included, but not limited to what we have mentioned in prospectus filed with SEBI and subsequent annual reports that you can find it on our website. With that said, I will now hand over the call to Raj. Over to you, sir.

Thank you, Pratik. Good evening to everyone, and thank you for joining us on the quarter 3 financial year '25 earnings call. I'm glad to connect with all of you once again. I will share our financial performance and business update during the quarter. I will also share some insight into our progress, challenges and outlooks. Despite Q3 being a seasonally weak quarter for the industry, I'm pleased to report that this is one of the best quarterly performances that we as a company have reported in the recent times. We have witnessed a revenue of INR 181.4 crores, which is a growth of 2.1% on a quarter-on-quarter basis. We have seen a significant improvement in operational efficiencies, which is demonstrated in our EBITDA margin of 6.4% this quarter, up from 3.1% in the previous quarter. This improvement shows our commitment to enhance profitability while maintaining investments in innovation and talent. Our profit after tax stood at INR 40.6 crores as compared to a loss of INR 4.3 crores last quarter. This quarter, we also had ForEx gains of INR 38.9 crores, which is part of the profit after tax of INR 40.6 crores. As we have some legacy ForEx exposures because of the rupee depreciation this quarter, we have recorded this gain as the company doesn't have a hedging policy. As on December 31, 2024, our net cash position stood at around INR 7.4 crores at consolidated level. Our DSO currently is 81 days, which has improved from 98 days in FY '24 end, which is an improvement of around 17 days in the last 9 months. We are working on the business strategy for the next few years to come, and this should be showing effect in the upcoming financial year. But broadly, we would be focusing on our traditional line of businesses with our products business horizontally contributing to the growth in future. Coming to geographies, we are steadily growing in the U.S. region, and we'd like to expand our focus on the value businesses, especially AAA business, cloud, cybersecurity and the newest technologies like blockchain, AI, automation and data. In terms of our segment performance, in quarter 3 financial year '25, our AAA unit, which stands for Application, Analytics and Automation unit contributed 68% in total revenues with a gross margin of around 12%. AAA is one of the highest revenue contributors with around INR 123.2 crores during the quarter, followed by Infrastructure Services revenue of INR 37.4 crores with a gross margin of 20.5% and the Business Process Services, which reported a revenue of INR 20.7 crores with a gross margin of 18.4%. Coming to the quarterly performance of our geographies and verticals. The U.S. region posted revenue of INR 74.4 crores with a sequential growth of 21.6%. We have won many new accounts in AAA business with a favorable ForEx exposure. India region has registered revenue of INR 79 crores with a sequential degrowth of around 10%. This drop in revenue is majority from the business process services business due to regulations leading the client companies to in-source some of their operations. On the industry front, the verticals, the IT segment reported quarter-on-quarter growth of 28.2%. Business -- the BFS vertical segment reported quarterly revenue of INR 73.1 crores versus INR 79.6 crores previous quarter. During the quarter, we have secured 34 new contracts with both existing and new customers, while successfully concluding a couple of contracts with a strong focus on driving growth in the IT sector. Out of this 34, the 16 are the contracts with new customers with a total contract value of INR 12 crores. We have won 10 accounts in the U.S. region, 4 in India and 2 in EMEA region. As mentioned in my previous calls, our primary focus is on maintaining our scale and driving organic growth within existing accounts. At the same time, we are restructuring and enhancing our sales strategy to expand our reach and drive growth in the new accounts. We are also making significant progress in strengthening our partnerships with technology providers and co-innovating with clients to deliver differentiated solutions. Coming to the quick -- some important business updates. I would like to update you on a very important topic on forensic audit on legacy matters, which was initiated at the Board meeting held on January 31, 2024, by the company's Board. For this audit, external consultants were engaged for the review and their final report was submitted to the Board on January 29, 2025. Following a comprehensive evaluation, the Board has reviewed, accepted and approved the report, which confirms that there are no further implications or adverse financial impact on the company. This is a very positive news for our stakeholders as well as for 3i employees. The next very important update is on the dilution of our 3i Infotech stake in our subsidiary, NuRe MediaTech Limited. I'm pleased to announce a partnership with some strategic investors marking a significant milestone in the monetization of our RailTel project. This investment reinforces 3i Infotech's position as a key player in public and private digital infrastructure and accelerates its efforts in digital innovation. The total consideration for the transaction is INR 17.5 crores and expected completion of sale is on or before 31st March 2025. With this new investment, 3i Infotech is poised to enhance the project's scalability, drive greater connectivity and deliver long-term value. This partnership underscores the company's commitment to advancing digital infrastructure and maximizing growth opportunities in this sector. As a part of our strategy of global restructuring of our entities to optimize operations and enhance efficiencies, we have decided to voluntarily liquidate two of our direct subsidiaries, 3i Infotech Saudi Arabia and NuRe Infotech Solutions Singapore. Also, significant progress has been made on the restructuring of our U.S. and U.K. step-down subsidiaries, and we are actively working on a few other regions as part of this strategic initiative. I'm also pleased to report some small additions to the management team in this quarter. I'm pleased to welcome Vaibhav Somani as our new acting Chief Financial Officer; and Navneesh Sarin as the Business Head, Business Process Services. Their extensive experience and strategic leadership will be very instrumental in driving our financial growth and business expansion. Vaibhav, a qualified chartered accountant, brings extensive experience in financial management across various industries. He has a strong track record in leading finance teams, implementing internal controls and overseeing key functions such as accounts finalization, Ind AS conversions, audit and compliance. Navneesh brings over 30 years of global delivery experience in banking and financial services. He has worked with companies like GE Capital, Bank of America, Genpact. He has held leadership roles across operations, business development, transformation and M&A, managing large team across multiple countries. With expertise in operations, technology, risk and compliance, he has led teams of over 8,000 associates worldwide. We look forward to both of their contributions as we continue our journey towards innovation and excellence. Please join us in extending a warm welcome to the team. Looking ahead, we remain optimistic about our long-term growth trajectory. But for this year, we anticipated a decline in top line year-on-year, primarily due to our strategic decision to exit some low-margin and loss-making deals, the details of which we had discussed in our last call also. However, as our growth initiatives gain traction, we expect to see positive momentum by year-end with fair growth projected to begin in FY '26. Our EBITDA and PAT has already turned positive this year and expect it to sustain and grow in the quarters to come. In conclusion, I would like to express my gratitude to our employees, clients and partners for their continued support and trust in us. While we acknowledge the challenges ahead, we are confident that our strategic initiatives, strong execution capabilities and dedicated teams will enable us to deliver sustainable growth and value creation in the coming quarters. Thank you. I will now hand over the floor to moderator for the Q&A session.

[Operator Instructions] First question is from the line of Harish, an individual investor.

[Foreign Language].

Thank you, Harish ji. I think it was a very long list of questions. But I must say that I think you have been -- looks like a great admirer of our company, and thanks for that, that you have done so much of in-depth analysis and so much relevant questions, which I keep handling on a day-to-day basis even internally. So I'd like to give whatever I can readily give in this call, both from a readiness point of view and from the legality point of view, whatever I can share, I'll try to share transparently as much information as I can. First point, I think I take your feedback. I fully agree that there was a delay in uploading of the press release and the investor presentation, which was done, I think, around half an hour just before this call. There were some last-minute changes, which we were doing. We had -- every quarter for the last 2, 3 quarters since I've been here, we are trying to improve the quality and improve -- try to improve the coverage of our presentations. And there are some information which still flows a little late. But we'll ensure that next time -- and since this call was already scheduled, we couldn't have shifted this call to a later date because people would have blocked their calendars. So we take your point. So one, we will keep a little bit of a buffer between the release of the financial and this call from next quarter so that we have a reasonably good time to create some analytics for the investor presentations. And we'll try to -- not to have any delay in the release before the call. And you are anyway welcome. Even if you have some questions after you have gone through this presentation and press release later, you can reach out through our Investor Relations cell, and we'll be able to give you those queries. If you have any additional queries, we'll be able to answer it to you separately. Number of share is high. I think if you are following the company, you know that a lot of these shares have been issued as a part of our debt restructuring in 2021, where we had converted our liabilities, long-term liabilities to the equity capital, and that's why our number of share is quite high. And I agree with your analysis. But the restructuring of the capital structure is not an easy process, especially share buyback because that will entail availability of liquidity in the company, which currently we need that liquidity for our growth purposes, and we'll not like to use that for the reduction in the share capital. And we are very clear that we should be working more towards enhancing and increasing our revenues and profits so that we can justify paid-up capital rather than decreasing capital and getting lesser profits. So anyway, point taken, and we will see if there is some opportunities still exist, we will evaluate that, and thanks for that feedback. New client disclosure, yes, that was your third question. So new client disclosure, we have not been doing very aggressively in the past. I think even in the past, before I had joined, I think there has not been enough focus on disclosing and making deal-specific disclosures to the stock exchange. And I think that's a part of our DNA or strategy, whatever you call it. And again, in this point also, we will discuss internally, and then we'll see that if some of the deals we can disclose, subject to obviously our confidentiality agreement with the clients, we will be happy to disclose. And it's not that we are trying to hide, but I think it's more of the approach we had taken in the past that continues even now. Question number four on the RTA. We internally -- and I think some of our press release this time, including the stock exchange, you would have seen, we are trying to simplify our entity structures, subsidiary structures. At this point of time, all the businesses we are trying to bring to a common company, our main common company or one operating company. And we have no intention to hive off separate businesses as separate subsidiaries as of now, and that includes RTA. Though the size and the profitability of RTA business is reasonably good, there is no intention to separate out that business as a separate company even in future. The company continues as one of our existing offerings out of the list rather than being a separate subsidiary company. Fifth point, I think I take your feedback. I have Varika also in the room, who is the Company Secretary, and this point is for her feedback that we should be uploading the shareholding pattern much earlier than the due date of 20th. We can do it. There is no challenge. I think as a matter of practice, it has become 20th, but we will advance it. So there is no challenge there. DeepSeek, AI market disruption, I agree that there's a lot of disruption happening in the market. Our services are a little different than the services of what the AI and DeepSeek is doing. We are into -- if you see investor presentation and you have been following our company, we are the people who are helping others to do what DeepSeek and AI is doing. Like we are the technology partner or technology provider for the IT companies, for banking companies, for manufacturing companies to do their automations. So when you say that the AI is helping the general public in so many ways, the people behind are the companies whom we are supporting today. So the 5,000 people are -- now it is 4,800 this quarter. The number of people what we have, they are the people who are actually creating these technologies and helping our clients to create these technologies. So cutting down this number is of no -- let's say, it's not a right suggestion because most of our clients -- most of our employees are billable resources. and working with the clients to automate and to create these new technologies. And hence, each and every employee is an inventory for me, like an inventory for me, whom I use for providing services to the clients and create my revenue. So cutting down employee count means actually cutting down my revenue. Having said that, obviously, we have around 10% of our staff, 11% of our staff, which is non-billable, which includes people like me and my team in the corporate offices and the LOB-wise management teams. So those are the people who support this balance 90% people to provide services to our clients. And we continue to review and optimize that 11%. This number used to be around 14% 6 months back. We have brought it down to around 10% -- a little higher than 10%. And we continue to monitor and bring down the non-billable resources by automating, by optimizing processes and by taking care of their productivity so that we can invest lesser and lesser on the non-billable resources. Seventh point was on our presence in digital media. I think this point came last quarter also. Obviously, in the last 1, 2 quarters, we have not been very active on the digital media. And that is also because of our business model, which is more B2B. Our B2B clients, though it is still important for the brand building, but most of our -- the platforms which you talked about, which include Facebook, YouTube, X, Instagram, they are more for the retail customers and not for B2B kind of promotions. where -- so our clients are like banks and IT companies and manufacturing units. And for that, these social media is not a right method for creating a brand. For awareness, yes, I understand some of these employees in these companies are also on the social media. So from awareness and brand building, yes, it is important. And that point, I have noted, and we'll see that what best we can do in those platforms to improve our presence. But we'll never be using these platforms for active marketing. They remain as a more brand building and awareness initiatives. On 1st of January 2025, there was a one block deal, which has happened, not in the form of block deal, but a big -- where one of our existing shareholder, which was a bank, they have transferred the shareholding from within their company, from one holding company to one another group company. And that had gone through, obviously, this -- I think the person in between. And suddenly, you will see -- you would have seen a little surge in the price as well as on the volumes in that particular day. But that was just -- nobody has really bought the shares or sold the shares at a bulk other than this share transfer, which has happened from one group company to another group company or one stakeholder. And we have not gone into the depth because like I mentioned last time, we don't control or we don't like say, influence anything which is happening in the stock market, whether it's a large deal sales or this transfer of shareholding from one company to another company or price movements. We use that as a barometer, but we don't intervene in any of those things. So this was completely out of our control. Question number nine, we are not expecting any negative surprise from here onwards. I think our major concern until now and also all of the stakeholders, including you, would have been the forensic audit, which was initiated around a year back. That report has been received. That report has been accepted by the Board and reviewed. And there is no -- like we have already disclosed, there is no material -- not even material. There is no negative like the implication of that report into the financial positions and the operational position of the company. And other than the normal business risk and business surprises, which any company can expect, we are not expecting any negative surprises from here onwards. On the -- giving the outlook and the strategy, I think, again, this point was also discussed in the last meeting. We had committed that along with the quarter 4 results, we'll be presenting our strategy with or without management team. So it was not waiting for the management team to come. It was for me to settle down, clean up some of those things, which has been haunting us in the last few quarters and then think about the strategy. And that's why we had promised that we will -- as a part of our quarter 4 closure, we'll be presenting our next few years strategy. Whether numbers or no numbers, at least a strategic direction we'll be setting for the company, and we'll be coming back to the stakeholder of whatever we can share out of that. And that is committed and that will be done. So we are internally ready with a lot of thoughts on that. We are just trying to consol everything into one place and also take the Board and other senior Board members into confidence before we make that public. There is no talks as of now with any private investor or a private equity player or any other such investor. There have been a couple of meetings, which is more of our introduction to the group and like say, more evaluations as of now, but there are no active discussions happening on any of our further capital enhancements. I don't have this last information. I don't have readily with me the precise book value. And maybe I think we'll -- we can do one thing that we can do the exact math, and we can make it as a part of investor presentation PPT and we can upload it in the next few days, one more version of it, including the book value of the group. And why we have not uploaded the balance sheet and cash flow is because of the LODR requirements, this is a limited review quarter. So quarter 1 and quarter 3 are limited review quarters where only the financials are audited, not the complete financial statements. And quarter 2 and quarter 4 is that when we release the complete financial set, which includes balance sheet and cash flow. Having said that, we will see that if some portions of our top items in the balance sheet, if we can cover it as a part of the investor presentation sometime in future. Quarter 4 anyway, you'll be getting the full view of the balance sheet. Quarter 2, we had released the balance sheet also along with the financials. And in future, next year, we will see that if we can do a little bit on the balance sheet also in the Investor Relations -- investor presentations. I hope I have covered all the points and not missed out the points or the intention behind the point. Thank you.

[Foreign Language] the worst is over.

I think I won't be able to use these words exactly, but I think I have said that as a part of your question on what is the negative expected. I think I've covered that well in that point because you'll always have the business risk and business things in any business. So to the best of our knowledge, there is nothing which is like say, left. There is nothing hidden as of now. Everything transparently has been disclosed. And I'm not expecting anything further there. But there are unforeseen circumstances which keep happening in the market and elsewhere, which can impact. So I think this is what I can say as of now.

Next question is from the line of Kiran Rao, an individual investor.

Congrats on the good set of numbers. So I went through some of the companies that we have had tie-up with on the RailTel project. But I see most of them are basically very new. Some -- one company is as new as about 8 months. So I don't know if they really have a track record. Can you please throw some light on this? Second question is, a couple of years back, we had tied up with the IIT Research Park Chennai to establish a FutureTech business lab. Is it still in place? Are we trying to leverage some technology out of this tie-up? This is the second question. So now that we're liquidating two of the subsidiaries, will there be any savings in the -- are we going to cut down the losses? Or is it going to be of any use to us, or say it is just no profit, no loss on the balance sheet? And the final question is, do we have a clear roadmap now that we are EBITDA-positive, the earnings per share has improved, do we have a clear roadmap on the guidance or things like that? Or the future target of setting?

Thank you, Mr. Kiran. First, on the RailTel project, there are four parties in the on -- who are in partnership with us for this RailTel project. Three of the entities are more financial investor. And there, we have seen their the financial strength of supporting this project. And we have not done a full diligence on them from nonfinancial point of view about their credentials. Obviously, we have done the complete KYC and we have done the [ UPOs ] and everything else. But -- the main party, which is the key party here is the [ Kanterra ]. They are into the digital media space. They have presence across. And they have been working on a lot of projects on the digital media side, both in terms of their expertise with the past, with bigger clients as well as their financial powers. I think [ Kanterra ] Group is -- we have done the due diligence from whether they can manage this whole project for us and whether they have expertise and people to manage it. So that's what has been done. The other three investors are more financial partners for [ Kanterra ] Group. And so we have done our due diligence. We have done the due diligence through an independent -- the firm also, lawyer firms also who has done the complete due diligence on these parties about their credential. The companies would have been -- some of these companies have been set up specifically for taking care of the RailTel project because they wanted more like an SPV structure. So the companies you might feel are new, but if you go through the UBO, the ultimate beneficiary ownership, they have a lot of experience and expertise in managing these kind of projects. On the IIT Research Park, yes, you are absolutely right. We had a tie-up with IIT. I think we did it around 3 years back, if I remember correctly, where we had housed our FutureTech subsidiary employees over there, which is I think around 550 employees who are working on developing new age products. And those are the -- that team was housed in IIT Research Park. And in collaboration with a lot of this innovation and the start-up labs and all were there. And in collaboration of that, we were supposed to get a lot of mileage and give a lot of experience and expertise to the start-ups. So it was more like helping this whole research park to create new-age technology and products. But if you are following us for a couple of quarters now, our focus, we have been reviewing all our product portfolios. In the last quarter, I think we had made it generally -- like informed everybody that we will not be focusing on product development anymore because we used to be a product company. Now we want to continue into the services space. And our focus is more on IT solutions and services. And that's why in the last 6 months, our Board has taken a conscious call of cutting down on our investment into the products and focus on IT services and solutions. As a part of that, we have partially dismantled our products portfolio with FutureTech. And this quarter, we'll also be giving up that IT Research Park space. So we'll be exiting out of that collaboration because of our strategic decision to focus more on the services and not on creating new products. On the liquidation front, the whole purpose of this entity restructuring was that in the past, we have set up many companies and subsidiaries across the globe. And now we are refocusing on which are the geographies we want to focus. And accordingly, we want to cut down certain companies in some particular regions where we don't have a strategic focus now. And that includes some of those companies which we have announced that we will be closing. In KSA, especially Saudi, we have business. We -- and it's a profitable business, but not hugely profitable. But there, the reason of exit is very different, which we had made it public through the stock exchange notifications a couple of weeks back that there is an old tax matter with the authorities over there, which is almost to the tune of around INR 25 crores, which we had gone back to the government for a settlement, and the government has not agreed for any kind of a settlement. And the current status of that company does not support us to make a payment of INR 25 crores. So we had decided to close down that company. And so the KSA liquidation is purely commercial driven. And while other companies like what we have reported in U.K., U.S., we are doing some bit of restructuring in Malaysia, Singapore and a couple of African countries. Those are purely because of the efficiencies which we are trying to create where we had 0 or no business. And those entities were set up for some specific purposes at that point of time in last, whatever, 15, 20 years. And so that will obviously bring us a lot of cost saving in terms of the management of those companies, the filings, the directors, the auditors. So that will obviously give us the cost savings. I already covered your first point, which you asked about the roadmap guidance that we have committed that quarter 4, we are going to give a detailed strategic roadmap and the guidance, and we are committed to that. Thank you.

Next question is from the line of Ramalingam, an individual investor.

First of all, congratulate to the team for the better -- good results in the third quarter. So my point is that we had the same result of good PAT in the last, I think it is financial year 2022, if my guess is right. But in Q4, we ended up with the loss -- whatever that we received as a profit after tax, we ended up with the loss in the fourth quarter. So my concern is, is it due to only some seasonal reasons or will it persist in the fourth quarter also? That is my first question. And the second question is so for the top sales -- top line, how we are going to improve? So is there any strategy that we are going to focus 3i Infotech? And that is my next question, how we were going to -- because last -- as of now, you are focusing on only how to increase the PAT, restructuring and entire run rate. So after that, what is the strategy that 3i Infotech is going to focus?

Okay. Thanks, Mr. Ramalingam. First of all, there is no seasonality as of now in the financials. We have shown a consistent top line in the last 3 quarters, which is in the range of around INR 180 crores. And the focus, you are absolutely right, and we have also discussed it in the last meeting that the focus for the last 6 months mostly has been on cleaning up of all the past issues, including the forensic audit legacy issues and taking control of whatever has happened in the past. And thirdly, how do we restructure our business to make it more efficient operationally by cutting down wastages, cutting down like people who is not productive and so many other initiatives, transformational initiatives which we have taken in the last 6 months. While we are doing it, one is that there is no like onetime seasonal impact. These are sustainable revenues and sustainable profits, which we have been gathering. So in any of the financials, we have not taken a onetime gain or onetime hit or no seasonal variations we have encountered in our financial in the last 3 quarters. Whether the quarter 4 will be like, say, a reputation of FY '22 is your worry. And I have already told in the first part when I was replying to Mr. Harish that we are not expecting any negative surprises other than whatever happens in the market. We are not expecting any negative surprises which will take us back to those FY '22 days. So our trajectory is expected to continue. We already finished 1 month of the quarter. We have not seen any negative like results as of now in the first month of the quarter, and we are not expecting also in the next 2 months. So I don't see a repetition of FY '22, but there are still 60 days left. So we have to keep working hard towards ensuring that we deliver what we commit. Top line improvement, it's not that -- if you have noticed, if you see business-wise numbers, you will see that it is not that the business has been very smooth and stable. There are second level details, whatever we operate with, there are ups and downs in the businesses. And the fact that the top line is sustained at the similar levels and this quarter anyway we have even got a 3% increase in the revenue. It's mainly because of the fact that while some obviously, contracts will -- you lose certain contracts, and that's very common in the market. But you also have a good sales pipeline to replace those lost deals so that you can continue not only to sustain, but also grow the top line. This quarter, especially the focus has started on the sales -- building sales funnel. The focus has been on fixing up the right geographies and right product mixes, so which we have done in the last 3 months. That -- and that's part of my other transcript was also that we were -- we are focusing on the U.S. as a market. We have started focusing on value-added businesses like application development, maintenance, testing automation, cybersecurity, cloud, AI. We have started doing some bit of investment in those technologies as well as the resources to understand those technologies for good customer interactions. And like any B2B business, it takes time to convert a customer into a sales. And that's the process which started. So I think it should start yielding results, maybe some in quarter 4 and quarter 1 onwards. We have a good sales funnel, and we continue to build more sales funnel, while in parallel, we try to create a management team of -- even the sales, we are looking for some good, strong sales team, which will happen in quarter 4 and quarter 1. And that should help us in building up a good sales top line. So from -- so this trajectory will continue. And this trajectory on the top line, obviously, will get more speeded up starting from quarter 1 when we'll start seeing the results of the new sales team and the new priorities and strategy, which we have set for ourselves. I hope I was able to answer your question, Mr. Ramalingam.

Yes.

Next question is from the line of Sanjay Khare, an individual investor.

Congratulations, Raj, for good -- pardon me for some background noise. Good to see a sequential improvement in top line as well as operational profit for this quarter. And I hope this thing continues in Q4 as well. As 1 month is already over and considering the deals in hand, are we seeing that there will be a sequential improvement in both revenue as well as bottom line for the Q4? That is the first question. Second question is about in Q3, the other expenses have gone down almost to INR 9 crores from INR 15 crores compared to last quarter and about INR 25 crores compared to last year's Q3. So what are these other expenses, and are we going to see that other expenses are going to be in the same range or it will be going again up?

Thank you, Sanjay. Thanks for the questions, and thanks for your wishes. And obviously, we have done a lot of hard work to get out to these results. And I think the trajectory will continue. That's what the efforts are. Quarter 4 outlook, as of now, we are not given a formal outlook, but we are looking -- obviously improving from quarter 3 as of now, both in top line and on the bottom line, and that's what we have been targeting. So this trajectory is expected to be continued. I'm not able to comment as of now on the numbers or the guidance or the range even, but our endeavor is to continue to improve from here quarter-on-quarter basis. The -- in terms of the other expenses dropped to a lowest level. The number which is there in the quarter 3, except for some few small exceptional items, which is immaterial, these numbers will continue. We are not expecting this number to go up. And that is one of the efforts which we have done in the past few quarters of reducing the other overheads, which was also some portion of that was investment into whole product creations, some bit of work on this infrastructure where we had taken a lot of initiatives in cutting down a lot of costs by closing some offices, by merging some offices and moving to different locations and a lot of rejigging in the operation structure, manpower structures, non-billable resources cut down, advisers and professional consultants cut down. So I think there's a lot of initiatives which has been taken to bring these cost levels to these levels. Is it sustainable? To the extent of maybe 90%. Some portions will keep going up as we go back to our growth trajectory, we might have to do more investments in future. But it will not be disproportionate to the revenue line item. So if my revenue is going up, obviously, this cost line also will go up, not in the same proportion, but it will continue to go up anyway. We will have to sustain as of now the similar parameters in terms of operating cost percentages. I think that's what we are working on.

I have a question related to NuRe MediaTech. Now this is -- the dilution is happening. So are we seeing any impact -- like any impact to the revenue as well as cost savings in Q4 because of this dilution or the impact will come only from the Q1 onwards?

Since we have signed the definitive agreement, we will see the impact in this quarter itself. Currently, we have been spending an amount of roughly around INR 3 crores to INR 4 crores every quarter in this -- on the RailTel project to keep it live, while there was not much of revenue, very negligible revenue. Now from this quarter onwards, because we have signed the agreement, the cost will get into this subsidiary where you will also have a partner, which means that your cost will proportionately reduce. On the other hand, since we have like established partner with us, we are expecting the revenues to start going up now. We have already started talking about the sales funnel in the digital media space, which will work on the RailTel project and that we have started working on. So our revenues will start accruing to us in quarter 4 to some extent, but quarter 1, obviously, full quarter impact will come in next quarter. But you will see the impact of the RailTel in this quarter itself because this is actually effective 1st of September, the deal. So you will have a cumulative impact of the September till March in quarter 4 results. So where the cost, obviously, we will get into the subsidiary where we'll have 51% partnership and revenues will start in the coming quarter. So it will have a positive impact on the overall financials.

And just last question that 3i Infotech has invested into Exium or Exium Company, I think, 2 years back. So it has investment in there, any returns we got on the investment back or the investment is already forgo?

No. So this investment is still live. We had done this investment as a part of our product expansion in the cloud and security space, cloud -- the cybersecurity space. We had jointly developed a product called NuRe Edge, which is basically because of our investment in Exium. As a part of the deal, we were supposed to do that investment in that company, and they were supposed to help us in this product called NuRe Edge, the details of which there on the investor presentation, the NuRe Edge product details. That product is already live and accruing us a lot of revenue. So there's an indirect benefit out of that investment. That investment is still live. It is actually a start-up company, which has created this product. And the valuation also has gone up in the last 3, 4 quarters. The valuation of that company also has gone up. And we are not looking to exit as of now. We continue to stay invested because of this investment, we have this partnership with the partner for our NuRe Edge product.

Ladies and gentlemen, as there are no further questions, I now hand the conference over to the management for closing comments.

Thank you once again to everybody for joining this call. I think the questions were really, I think, looks like that people have been, like say, going into the best, and they have a lot of expectation. And we assure that whatever we need to do to come up to the expectation, we'll try our level best. Thank you for supporting us and expect that support to continue. Thank you.

On behalf of 3i Infotech Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.