Canarys Automations Limited (CANARYS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the H1 FY '26 Conference Call hosted by Canarys Automations Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Dhanya Dhruv from Stellar Investor Relations. Thank you, and over to you, sir.

Thank you, Steve. Good evening, everyone. I'm Dhanya Dhruv, I'm the Head Stellar Investor Relations managing Investor Relations for Canarys Automations. I would like to welcome you to the Canarys Automations Limited H1 FY '26 Earnings Conference Call. Today, we'll be sharing the key operating and financial highlights for the first half ended September 30, 2025. We are pleased to have with us today, the management of Canarys Automations Limited Mr. Raman Subba Rao, who is Chairman and Managing Director of the company; and Mr. Sheshadri Srinivas, CEO and Executive Director. Before we begin, I would like to mention that some of the statements made during this call may be forward-looking in nature. These are based on company's current beliefs, assumptions and expectations. They are not guarantees of future performance and involve certain risks and uncertainties. The company does not undertake any obligation to update these forward-looking statements to reflect any future events or developments. The financial results and investor presentation have already been uploaded to the stock exchanges and also available on the company's website. With that, I now invite Mr. Sheshadri Srinivas to share his opening remarks on the company's performance for H1 FY '26. Thank you, and over to you, sir.

Thanks, Dhanya. Good evening, everyone. Thank you for joining us today on the earnings call for Canarys Automations Limited. It's always a privilege to connect with you, our investors, analysts and stakeholders and share the progress what we have made together. As we look back on the first half of FY '26, I'm proud of how far we have come together, completing our first acquisition and launching our first products are more than just milestones. They reflect the passion, teamwork and the vision that continue to drive Canarys forward on its journey of growth and transformation. This evening, I look forward to sharing the highlights of our performance in the first half of FY '26, along with the important updates on our business strategy and steady progress that we are making on our journey of transformation and growth. Over the past 30-plus years, Canarys has grown from a small IT services company into a trusted global digital transformation partner. We now serve more than 1,000 customers across 10 countries offering innovative, reliable and future ready solutions. Our success is built on 3 core pillars, our proprietary software tools, strong alliances with global technology leaders and a talented team with expertise in AI, ML, data automation and cloud. At Canarys, our Technology Solutions vertical is where transformation begins, it brings together the best of software, AI, data, cloud and automation to help businesses work smarter, adopt faster and stay steady for what's next. Our works spans several years in digitalization and DevOps, we help companies modernize systems, automate testing and deliver updates faster. In cloud services, we assist clients in moving to and managing platforms like Azure, GCP and AWS, while optimizing performance and cost. We continue to invest in products and solutions that enhance automation, intelligence and the way businesses operate. We are also deeply focused on talent and innovation. One of our key goals for FY '26 is to train 25% of our team in AI, ML and data skills to strengthen our leadership in emerging technologies. Our legacy modernization services help customers upgrade decades old code using our proprietary tools, while our data intelligence practice enables organizations to make smarter decisions with dashboards, analytics and predictive systems. Finally, our strategic transformation services helped both start-ups and large enterprises use technology to drive meaningful change across their business. One of the most distinctive part of our technology solution is also water resource management. We have implemented U-FFEWS, Urban Flood Early Warning System solution, canal automation, flood control and smart water supply projects across 15 different states in India, using IoT and SCADA systems to help governments manage water in real time. These projects have strengthened our expertise, but given longer payment cycles, we now take a more focused approach choosing opportunities that offer speed, scale and better commercial outcomes. What drives this success is not just our execution capability, but also a continued investment in developing our own software tools that make these solution smarter and more effective. Over the years, we have built 25-plus proprietary domain-agnostic solutions that solve real challenges in DevOps, cloud migration, automation and modernization. These solutions now listed on global marketplaces like Microsoft, Azure, GitHub, SAP Cloud and our own Canarys marketplace. These solutions reflect our growing innovation and credibility. Our journey has been strengthened by 10 plus strategic partnerships, including 7 OEMs and 3 AI alliances. Among them, collaboration with Microsoft and GitHub stands out, where we hold advanced specialization and multiple solution partner designation across data, AI, digital innovation and Azure infrastructure. By combining these partnerships with our own tools and expertise, our technology solutions vertical has evolved into a powerful growth engine, one that helps clients scale faster, work smarter and stay ahead with a rapid changing digital world. H1 FY '26, marked a defining milestone in Canarys' global growth journey with the strategic acquisition of Fortira, a U.S.-based AI data, digital engineering and IT consulting firm. Completed this acquisition in April 2025 for a 51% stake, underscored our transition from a local solutions company to a global active innovation-driven technology enterprise. Fortira brings over 100 skilled professionals, a strong portfolio spanning, banking, financial services, retail, pharmaceutical and manufacturing, and have a long-term relationship with more than 25 large enterprise clients across banking, health care, telecom and pharmaceutical sectors. With H1 FY '26 revenues exceeding USD 6.6 million and profit before tax of about USD 0.5 million, this acquisition strengthens Canarys presence in North America, enhances our capability in artificial intelligence, cybersecurity, cloud, DevOps and analytics and opens cross-selling opportunities across our client base. Advancing our innovation agenda, we launched Auryis on August 20, 2025. Our first artificial intelligence powered software product for the pharmaceutical and life sciences sector introduced simultaneously in India and North America. Auryis is an intelligent compliance assessment platform that evaluates diverse digital content against global regulation, internal policies and custom business roles. Using a blend of proprietary AI agents, advanced machine learning and large language models, it automates noncompliance detection, enables expert review and continuously learn from new regulatory updates. Designed to reduce cost, mitigate risk and ensure audit readiness, Auryis empowers organizations to achieve proactive compliance and operational excellence across markets. I'm also delighted to share that Canarys was recognized on the global stage at the GitHub Universe event in San Francisco, U.S., where we received GitHub's overall growth services and channel partners of the year 2025 award. This global recognition from GitHub, a Microsoft subsidiary underscores our strong growth, strategic impact and leadership with the DevOps and digital transformation ecosystem. H1 FY '26 represents a moment of acceleration for Canarys, where Vision, execution and performance came together to shape our next phase of growth. Let's start with what we achieved on the business side. We achieved a strong business momentum in H1 FY '26 with the successful delivery of 164 projects across diverse industries such as IT, BFSI, health care, logistics, et cetera, underscoring the growth demand for digital transformation. We welcomed 52 new customers to the Canarys family, expanding our reach across new sectors and geographies. Our order book now stands at a healthy INR 208 crores, out of which INR 151 crores from Technology Solutions vertical, a significant rise from INR 105 crores in FY '25 and INR 57 crore from Water Resource Management. This growth comes from the steady investments we have made in our people, platforms and partnerships, and it truly reflects the strength of our business model as we continue to grow. Looking at the financial performance. Now coming to our financial performance, total income for H1 '26 stood at INR 102 crores, reflecting a 166% year-on-year growth led by a strong momentum in Technology Solutions, which grew almost 200% year-on-year. Our EBITDA stood at INR 13 crores with the 13% margin. There's a slight dip in margin, which was expected as we made strategic investments in team expansion, product development and global scaling. Our profit after tax stood at INR 9 crores, reflecting a margin of 9% and demonstrating our ability to sustain healthy profitability while continuing to invest in future growth. On the balance sheet side, we remain disciplined. Our debt-to-equity ratio remains very low at 0.1x, underlying our conservative and healthy capital structure. H1 FY '26 has been a defining period for Canarys as we strengthened our global presence, deepened customer relationships and expanded our technology capabilities. The integration of Fortira in United States has added scale, talent and new opportunities across key sectors while our continued investments in product innovation and digital solution have reinforced our position as a trusted technology partner. Guided by our Vision values of integrity, innovation, sustainability and inclusivity, we continue to focus on Vision 2028, expanding our reach across North America, Europe, and Asia Pacific region, advancing our expertise in artificial intelligence, cloud and automation and driving growth through continuous learning and product development. With a strong order book, a growing customer base and dedicated teams, Canarys is well placed to sustain its momentum and deliver long-term value. With that, I would like to thank all the investors and the trust that you have really given to Canarys. I request everyone to give the continued support. With that, I conclude my remarks. Over to you, Dhanya. Maybe we can open the floor for any questions.

[Operator Instructions] The first question comes from the line of Rahil Dasani with MAPL.

Am I audible?

Yes, sir.

First of all, congratulations on the good set of numbers. My first question is I wanted to understand how much of our revenue is recurring and annual in our base business and also the same question for Fortira?

Sure. Canarys India, we have -- the repeat business of about 35% comes from the repeat orders and the long-term contracts what we have. And with Fortira, we have 75% to 80% is a repeat order because we have long-term contracts for Fortira.

And now, sir, continuing with Fortira, a few more questions there. Margins in Fortira seem to have improved compared to last year based on our investor presentation, EBITDA margins in FY '24 were less than 9%. And now -- and secondly, going ahead, what sort of margins can be possible in Fortira, can Fortira also touch Indian business margins that we achieved close to 20% like we have said, in the next 1 to 2 years?

The objective is to invest and grow Fortira as well. We are also taking our solutions into Fortira's customer, and we are also trying to build these similar margins there. Yes, it takes some time because we need to integrate and take our solutions and get new business delivered and also consolidate. But the objective is definitely to improve the margins, both Fortira and Canarys. And I see that is quite possible.

So is it fair to assume that 18% to 20% is achievable in Fortira in the near term in the next 1 to 2 years, maybe?

Should be achievable, yes.

And like we established that 75% to 80% of the Fortira business is recurring, and they already have an order book of close to $15 million as of March '25. So what sort of growth can Fortira see now with new management and focus, can we see INR 180 crores, INR 200 crores from this business since we already have an established order book with an established recurring business? What sort of growth can we see in this part of the business?

To consolidated, you're talking or just the Fortira?

Just Fortira.

Fortira been just 6, 7 months since we acquired, and we are trying to take our solutions to the existing customers. So the objective is in the last presentation also, we mentioned it's a land and expand. So we landed with the acquisition. So we have reached out to the customers, the existing customers, and we are trying to socialize the solutions what we provide here. Since we have long-term contracts with them and with the kind of solutions, what we are trying to pitch to the existing customers. So because they are all enterprise customers, right? So they also take a little time to digest these new solutions and release the new work orders. We see there is some good interest, and the queries coming from the existing customers on the Canarys solutions, especially now. So we start the conversation from again next year because December, most of the U.S., they don't really operate. So from next year, the promise to continue the conversation. We see that we can expand first is the existing accounts business. And then we approach the new customers with the overall Fortira plus Canarys solutions together. So that is the approach that we are taking. So it takes some time to grow that. But I see it's a gradual increment in the next 24 months.

So just to summarize this a bit, what I was trying to understand, is this stand-alone Fortira growth? And what you shared is right now, the focus is to cross-sell Canarys product to Fortira customers rather than expanding the Fortira customer base and scaling that stand-alone business more, right? Right now, the focus is to cross-sell the Canarys products.

Yes, there is an addition, right? I think first, you're right? We need to not sell the solution to the existing customers. And the new customers, we go with the Canarys plus Fortira solution. So we have the expanded solution catalog that we are taking to the new customer base. So that is the approach in acquiring new customer base, but with the existing, you're right, cross-sell the Canarys solution.

And sir, just to understand our product business better, we have recently launched Auryis. So I know it is too early to judge it. But in terms of scale and customers, how is it scaling up? And what sort of feedback are we getting on this product from our customers?

The product feedback has been fantastic. We're working with a couple of pilot customers still not commercialized because we want to test the waters. So we are working with the pilot customers to start with. But the feedback has been fantastic. They also appreciate because it is the AI based, and we are also introducing our own proprietary language model now. The work is still in progress. So once that is available, I think that adds as a proprietary tool or model. So that will drive even more in terms of the flexibility and scalability. But yes, the feedback has been pretty good so far.

And what would be the commercialization timeline for this product?

It will take another at least 6 to 8 months to start the first commercial engagement.

You said 6 to 8 months?

Correct.

And sir, in this year's Annual Report, we have mentioned about -- sure, I'll get back in the queue.

The next question comes from the line of Akshay Thakur with PICO Capital.

Sir, I have 2 questions primarily. And one question is on industry. So I'll go with the first one. So it was said that in year 2015 to '17 that cloud-based services would be -- would act like a disruptor. And what we saw is basically all the IT service companies were the solution providers in that. So do you see the same trend happening with AI and -- if yes, how are you strategizing to provide the products as in what proportion of the new clients you're getting are asking for the similar services?

Good question. AI, it's a disruption happening in the market. And any new customers, the first thing they ask is, do you have AI practice? And if yes, what kind of practice, right? So even if you've gone through my presentation, 25% of the Canaryians, we have really upgraded capabilities into AI, ML and data. So how cloud interrupted the entire business and the infra side, right? So the scaling part, AI is interrupting the automation and early to market. So the customers prefer to be on AI because you can deliver much faster, pretest it, and quality is much, much better. And the cost wise is also optimized. So it is inhibitor at least for now, it is difficult to sustain without the AI capabilities. So we are investing constantly on the AI skills, upgrading our staff, upgrading our solutions. So more than 25% of the Canaryians have already upgraded. We had a lot of training programs for them certifications. So most of the projects are AI-driven today whatever we delivered.

Okay. One more question. Sir, what proportion of your revenues would be proprietary products? And are they like a paper use basis or annuity model for those products?

Proprietary solutions, I would call rather than products, right? Product we are just released Auryis is the first product that we have released. I had to commercialize as I mentioned, it takes some more time. Solutions are not paperized. It is all frameworks that we use. We use this solution as framework to deliver. So when I say framework, it is faster delivery cycles and it's a pretested, right? So that is the framework that we use. So most of them are the frameworks and of course, it will also sign up on the annuity business because moment you deliver the solution, they would also sign up on the support and the extensions and the enhancement. So you would end up signing the annual -- annuity business.

Sir, one last question on -- so your presentation says that 7% of the workforce is working in the Water Resource Management services. I was just wondering what type of qualification would be required for this type of services. And as a company, are you building up the technical know-how or the knowledge required for this? And how the stronger moat that can be when it comes to this type of services?

See, WRM is also a software solution that we provide. It integrates with the hardware. So the person has to understand the hardware of the IoT devices to an extent where integration is possible. And we have SMEs. The subject matter experts are different. So they come from the industry and they understand the water business, the problem, what government is facing on the site level. But from the technology perspective, yes, it again falls under the 4 engines of the framework that we built, and they qualify as per a regular talent acquisition.

The next question comes from the line of Divyansh Thakur with Finterest Capital.

Congratulations on the great results. Sir, I wanted to ask like what specific segments or geographies that will drive the future growth? And like what are we looking in the next 3 to 4 years? How large can this business will become?

So the typical sectors that we operate, we call it as BRIMPH, banking, retail, insurance, manufacturing, pharmaceutical and health care. And of course, the IT sector is always there because most of the large enterprise customers. So these are the segments that we operate and we provide solutions. And these sectors are ever growing, right. I mean, look at the banking, insurance, pharma, manufacturing is always in the growth journey. So we intend to invest, develop solutions, which can cater to these sectors. So that's the idea. If you look at the product, what we have invested Auryis to start with, we are providing to pharmaceutical industry. So the focus has been on the BRIMPH and we continue to do that. And I don't see any challenge in these sectors on the growth side.

Sir, when do we expect to migrate to the main board? Like is there something pending from our side to complete the transition?

Plans are on the cards. But I don't know, like it will not be a good one to reveal the timeline at the moment because there are -- we are also evaluating ourselves on both. One is on the preparedness and the eligibility and benefits. All of that are getting discussed internally, once things are finalized and once we decide, yes, definitely announcements will be done.

Sir, just one last question. What are the main reasons for the margin decline? And do we expect to be back on the historic levels?

The margin decline, as I read out during my presentation as well, we constantly investing on people, products and the expansion. So when you are at the growth phase, 2 things can happen, right? So one, whatever the profits we generate, you can invest back into the system and then grow or you can raise money through other systems, meaning it can be debt or equity or any other means. We're not taking the letters out. So we are investing from our profit margins and then growing for now. And this would continue for at least next few quarters. And then once we get into that autopilot mode then we can see there will be a change in the margin as well. But we are cautious on given the investments and how we want to really scale this.

Sir, one last question, sir, what is the sustainable margins are we looking at for this year and for the coming next year? Yes. And to scale up in the year?

So we continue to deliver the same amount of margins what we are doing today. So that will allow us to sustain and also grow. We don't mean to go down below what we have delivered now. So that's the plan for now.

The next question comes from the line of Murtaza with PinPoint X Capital.

Congratulations on a good set of numbers. I just had -- I had 3 questions. First of all is like on consolidated basis on H1, we saw about a growth of -- on Y-on-Y growth of 160% plus, and which was largely driven by Technology Solutions and Fortira consolidation. And so it's like -- so like how much of the growth is organic in terms of -- organic? And what kind of normalized organic run rate can we like assume going forward, like on a ballpark basis?

Okay. Thanks for that. Definitely, if you look at the organic growth also we're able to grow year-on-year and been focusing on the IT solutions quite a lot, have grown almost 200% from what we reported last year. So organic this one also the product and solutions, what we are delivering, it helps our organic growth and these acquisitions are identifying some other means is our inorganic plan. But if you ask me proper number or a guidance, yes, we have not built a practice of giving forward-looking guidance for now. But definitely, the plan is to grow organically and wherever opportunity comes in organic as such.

Sir, another question I had was our order book has scaled up to about INR 2,000 million. And so like can you please give a breakdown in terms of like what part of that order book as of now is in like a multiyear annuity? And was this onetime projects like a ballpark figure would work?

WRM, definitely one a multiyear contract because we sign up minimum 3 years and it goes up to 3 years. So it is a 3- to 5-year contract with WRM, so it's all multiyear. With IT solution also, as I mentioned, about 35% to 40% is on a multiyear contracts. And rest on chart, I mean, midterm to long time, I would say, like 6 months, 12 months, 15 months kind of stuff contract...

And one final question I had. I saw in H1, our attrition rate has dropped to 5%, which is kind of very low for the sector as well as our past experience in our company as well. So like is it due to the shift on on-site and off-site mix or maybe some other initiatives we have taken? like how sustainable is it?

Yes. As I mentioned, we have given a lot of importance on the skill upgrade capabilities, and we have opened quite a lot of training programs for our employees, especially on the AI/ML. And they're all working on the cutting edge technologies, delivering quite a lot of good projects. So that has really reflected on the attrition rate. And also, company is growing, and they are both organic and inorganic growth happening and the culture, what we are working internally to get them aligned, so that has motivated them and has helped to maintain the attrition rate. We are working towards just happened hope and we'll be able to achieve it.

The next question comes from the line of Rahil Dasani with MAPL.

Yes. Just to continue on the questions that I have regarding our product business. In this year's Annual Report, you mentioned about the first platform product we were to launch it in this year once the testing phase is completed. So if you want to share more on this?

CMH is a framework. It's a modernization framework, which we are using to deliver to our existing customers and to the new customers already. So that framework, it keeps evolving as we progress. The CMH is already available as part of our solution now...

This is not a product. It's a solution you are saying?

Correct. It's a solution.

Okay. So the INR 7 crores to INR 8 crores of intangible...

No, there are two, your are talking about the migration hub or the modernization. If you're talking about the migration hub?

I'm talking about modernization.

Modernization is a framework. We also have migration hub, which is that is also CMH, Canarys Migration Hub, that is a product, which is already available in the market. It's available in both GitHub, Microsoft and Canarys marketplace. That is targeted towards Dev 2 and modernization framework is targeted on the digital transformation.

So if you can maybe share that the INR 7 crores, INR 8 crores of intangible that I'm seeing in the CWIP is that -- for which product are we seeing this? Or are we working on multiple products?

This is combination of the plan. Combination of Auryis, and quite a lot of products, CMH, even on WRM, we have the solution. All of that combined together.

And how much more can this amount further increase to? Because it has already increased from INR 3 crores to INR 5 crores to now INR 8 crores.

As the product development is done, we are trying to commercialize that and that will be taken out. So there is a constant investment required for us to really grow in the transformation, right? So if you look at services to solutions to product transformation. So IT, there is a value chain, right? It starts from your consulting staffing and then services, then solutions and the product. So we are moving higher the value chain. So when you want to move higher the value chain, there is good amount of investments required. At the same time, good amount of returns are also expected. So that is where we are moving today. We are now in the cusp of both solutions and product, so higher -- on the value chain and higher return. So as I mentioned earlier, as well, the investment will be there for next 12 to 18 months and then once starts commercializing, yes, then it is self-sustainable.

I'll tell you why I'm asking this is because as of date, our company is not generating cash flow. So any and all amount that we invest in product development that will show up in our debt on the balance sheet. So that's why I was trying to understand how much more are we planning to spend on product development in the next 1 to 2 years because that's the exact number that will add to our debt because as of date, we are cash flow negative.

Correct. We are working towards that. Yes. Thanks for that. Yes.

Sorry?

No, we are working towards that. Thanks for that input and the question definitely. That helps us through...

Fair enough. And sir, regarding the margin for reasoning, employee cost is when you said that one of the reasons is employee cost and we are hiring for that investment phase for the last few years, employee cost has been growing at the pace of sales growth. So it is not outpacing sales growth. So what particular cost or head has impacted the margin post 2023 when we achieved close to 17%. If you can share more specifically because there has been some sort of a gap because in our con calls also, we used to say that both our businesses can do 20% to 25% operating margins.

Correct. Because we are also bringing quite a lot of senior leaders into the system, as we grow, right? You also need a senior leaders into the system. These senior leaders you know the cost, right? So today, they're expensive. And for a reason and the cost, they join companies like us. So we are attracting good seniors and the leaders from the market. So that is one of the specific costs because they cannot be a direct billable role, right? Because they come for certain initiatives, they come to drive certain business. So their cost to be amortized in the entire system. And the second, definitely, on the scaling part because when you acquire companies in North America and then you want to scale business there. So there is a lot of travel and sales marketing campaigning efforts and money to be invested. So we're also investing in that. And of course, on the solution front as we grow, there is an investments. So these are the 3 main buckets for the investments.

And sir, just last question from my side. This is a rather basic question since I'm new to the industry. So maybe you can help me out. In our last 2 con calls, we shared about adding 73 and 63 new logos individually in the last 2 con calls. And based on our investor presentation, our customer base is 100 to 120 customers in our base business. So how I'm thinking about is that even after adding such a large number of customers, our turnover isn't increasing as much in base business. So if you can explain why is that? Or am I missing something here?

Yes. Good question. And also, let me make you understand that one of the core business segment in our business is DevOps, what we call, but DevOps is related to Microsoft and GitHub partnership and DevOps stands [indiscernible] in the IT industry, just at a very high level. This DevOps business, what happens, there's a lot of customers they come for short-term engagements. And the delivery cycles are also pretty short. And the contract value will also be not a big contract value that we get signed up with such engagement. So that's the reason if you look at the direct proportion between the number of customers, what we add and the revenue, yes, it looks a little skewed. That's because of this. But the strategy now is, say, for example, when you acquire some large enterprise customers through DevOps, it opens gate for you. So it also allows us to mine that account and then grow deep into the account and get more business, so that's the reason DevOps business help us in terms of customer acquisition and the scale. But also -- it also creates little confusion like what you have. That's a good question, and I think it's a good response to everyone, so...

No, got it. That makes a lot of sense. So sir, considering that we have onboarded so many -- just in continuation to the current question. Yes. Since we have already onboarded so many new customers and we just need to cross them -- cross-sell them higher value products now. Is -- that's my understanding from what you said. So what sort of growth can our old base business that we have currently where we are doing close to INR 80 crores and INR 90 crores as of FY '25, what sort of growth can that business see since last 2, 3 years have been rather flat for us. So now that the customer induction is done, what sort of growth can we see in the base business?

We are seeing some of the accounts grow 100%, 200%. And there are some customers like especially in the banking and insurance, it takes time because every solution, it has to run through a lot of audits and processes because of the security and other aspects. But we have seen good growth in some of the customers. In some of the insurance customers where we have seen 150% growth in the last 24 -- I mean, 18 months. So with that, there are combinations. But our intent is constantly mind the account and keep the relationship very strong.

The next question comes from the line of Niraj Chhajer with Pransh.

With regards to your further acquisition, when you have to purchase the balance 49% and at what valuation?

So we have 3 years to the deal. So we have time next 2.5 years, 2 years, 3 months. So the initial valuation was done at $5 million and 51% acquired on the $5 million valuation. Rest 49% is on the EBITDA multiple. So -- yes, we have to see where we stand at the end of the third year, but we also have the option to go little clear to that.

And what's the EBITDA multiple range at which you have to pursue?

See, whatever the valuation that we have done, it's the same EBITDA multiples, but we have to see what is the EBITDA that will be there on that particular period.

Secondly, with regards to your Water Resource Management revenue dropping now, which is a conscious decision to improve your working capital line, working capital will be kind of things. So is it like dropping from 34% to 2%? Is it because of the H1 full year basis because most of the revenue gets booked in H2 or that's how it's going to be there, Water Resource Management becomes in this, very, very small, miniscule portion of the total revenue?

No. Definitely, there is some traction in the H2. So we are looking at 80-20 ratio, 80% coming from the IT solutions and 20% from the Water Resource Management. And that 20% we target to complete in the H2.

So considering that, there will be even significant growth, one, because of the base effect itself or your acquisition that you have done plus Water Resource Management revenue coming in into the H2 because the technology solution is fairly constant. So we will be seeing stronger H2, I guess.

Correct. All the technology solutions, we have focused more, and there's also a good growth even at a consolidated level and at the stand-alone level. So that will continue to grow. Now whereas 20% contribution we expect from the WRM.

One another thing is with regards to the order announcement, while I see the order book increasing out there, but under the SEBI rules, you have to announce any large orders, so what's the threshold of the order that you have kept on which you have to make those announcements because I don't see any order announcement coming up from the company website, but when the quarterly or half yearly numbers come, that time only we see the growth in the order book.

I'd love to check on the threshold, it's not on top of my head, but I can definitely check and maybe Stellar Group Investor Relations...

The order company, if you keep a lower threshold, so we keep on getting a regular update on to the order book because whenever you will be announcing a new order, you get to know what's the outstanding order book or the total order book...

I get it, yes. I don't know, I'd have to check whether we have the flexibility of defining the threshold or I'm not too sure because I'm not an expert in that. But I can definitely take this input.

No, no, what is a major order -- that is what you need to do, whatever is the UPS, you have to decide, and then I have to go ahead and announce it out there. Lastly sir, housekeeping. What portion of warrants have been already exercised what is pending by when that needs to be exercised?

No, 100% is exercised.

100% exercised. Okay.

Yes, yes.

Mr. Niraj, does that answer your question?

Yes, I don't have any other questions.

The next question comes from the line of Divyansh Thakur with Finterest Capital.

Sir, am I audible?

Yes, you are.

Sir, I wanted to ask, sir, what is the growth rate that we can expect going forward after the acquisition, like it was much -- and like if you can tell it on a blended basis going forward...

No, no, the growth rate, how do we -- as I said, we have not really built that forward-looking or the practice of the guidance. See, we are -- if you look at the last 2 years history, right? So 20% we are growing. And this year, the H1 results are pretty much above the last 2 years' results as well. So maybe you should extrapolate at this and then arrive at some kind of a calculation, but we are also working towards how do we give some kind of a guidance. But we have that kind of policy. Definitely, I love to share the futuristic numbers. But now -- we are pretty much in the growth phase, and we are excited about the journey. So you can extrapolate that product.

The next question comes from the line of Rahil Dasani with MAPL.

Sir, just to continue on the previous participant's question regarding the order book. One observation that I had was that our order book has not been growing as much. We had one large order in May '24 last year of approximately $30 million, close to INR 100 crores, INR 120 crores. And post that, we haven't been able to win any significant orders, there are a few smaller INR 2 crores to INR 3 crores order, but there has not been any large significant win, which is helping scale up on our order book. So how should we think about this?

See, if look at the current order book is also pretty much healthy. It's over INR 200 crores. And probably the threshold level orders may not be there, but overall order book looks pretty healthy, right? I mean INR 208 crores, it's a pretty good order book what we have. And the split between IT solutions and even the WRM looks pretty healthy, INR 50-odd crores from WRM and INR 150-odd crores from the IT solutions is a pretty healthy order book what we have. But yes, as I mentioned earlier as well, I'll have to check on the threshold and see how do we start announcing and other stuff. But yes, but looks pretty good.

So why I was asking this is because when we are seeing this INR 200 crore order book, I believe the $15 million from Fortira is also included into this. So in March '24, that's kind of order book...

No, no, no. So INR 200 odd crores is stand-alone.

And what would be the order book in Fortira right now?

No, Fortira also, we have given the order book, right?

Actually, in this investor PPT, we didn't have that number, and I was a bit confused if the $15 million is also included in the INR 200 crores order book.

No, no, no. 15 -- see, Fortira already have similar kind of an order book, around $13 million -- $12 million, $13 million order book.

Okay. So you were saying that the base business, old business has INR 208 crores order book and Fortira excluding that has another INR 130 crores or INR 120 crores order book roughly?

No, INR 150 crores is the IT solution's order book, which included Canarys Automation Limited and Canarys Car and Fortira as a separate, and WRM has INR 50-plus crores of order book.

And sir, a few questions around the numbers. I can see a large increase in our other current assets. Is this because of the unbilled revenues? Or is there some other reason for this?

It is because of the unbilled revenues, you're right.

And from the INR 16 crores in stand-alone in the total other current assets, how much would be the unbilled revenue?

INR 14 crores will be unbilled.

So that number is scaling at a big pace, okay? And the same number in...

Post I think around September 30 that is build. I mean we have that 30, 45 days window, right? So we can't say it.

This would be all water business, right?

No, no, no, it's all IT solutions.

So unbilled revenue is for IT Solutions?

Correct.

And the similar number is INR 24 crores, so additional INR 10 crores in subsidiary?

Additional INR 10 crores in subsidiary.

Because what I'm saying, the other current assets stand-alone is INR 16 crores and INR 24 crores in consolidated.

Correct, correct. You're right.

What is the reason for this unbilled revenues because usually in IT companies, we don't see unbilled revenues at such a significant number usually.

See, generally, what happens even to bill, right? You need an approval mechanism. Generally, you get the approvals, the deliverable milestones achieved in the first, second, third week of the following month. But in this case, we had to close the books, right? So we have to consider that as well because the work completed and delivered, but we were waiting for the customer approval. So it had to be booked, otherwise expenses gets booked and then there's no revenue accounted for that, right? So that's the reason there will be a slight delay of 2, 3 weeks, and that happens immediately post we close the books.

Ladies and gentlemen, due to time constraint, this was the last question. I now hand the conference over to Mr. Sheshadri Srinivas for closing comments.

Thank you. Thank you all for being part of our conference call and for actively participating in the call. We appreciate your support and trust in us. We hope we have been able to address most of your queries. In case of further queries, you may reach out to our Investor Relation adviser, Stellar Investor Relations. Thank you, and have a good day, and please continue to provide the same amount of support and encouragement.

Thank you. On behalf of Canarys Automation Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.