Datamatics Global Services Limited (DATAMATICS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Datamatics Global Services Limited Q2 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Jagtap from E&Y IR. Thank you, and over to you, sir.

Thank you, Lisan. Good evening to all the participants in the call today. Welcome to Q2 FY '24 Earnings Call of Datamatics Global Services Limited. The results and presentation have been already mailed to you, and it is also available on the website of the Datamatics. In case anyone has not received a copy of press release or presentation, please do write to us, and we will be happy to send you all. To take us through the results today and to answer your questions, we have with us top management of the company represented by Rahul Kanodia, Vice Chairman and CEO; Sandeep Mantri, EVP and Chief Financial Officer; and Mitul Mehta, EVP and Chief Marketing Officer. Rahul will start the call with brief overview of the quarter on business, which will be then followed by Sandeep talking on financials. We will then open the floor for question-and-answer session. I would like to remind you that anything that is said on this call, which gives any outlook for the future, of which can be construed as forward-looking statements 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 the prospectus filed with SEBI and subsequent annual reports, which you can find on our website. With that said note, I'll now hand over the call to Mr. Rahul. Over to you, Rahul sir.

Thanks, Pratik. A very warm welcome, and thank you, everyone, for joining our call for Q2 FY '24 this evening. We're glad to have you all on the call today. I will briefly discuss some of the quarterly performance highlights, while Sandeep Mantri, our CFO, will provide an update on the financials, after which we will open the floor for question and answers. Our quarterly performance for Q2 FY '24 declined by 3.7% on a sequential basis. The decline in top line was primarily due to the premature closure of a large project with a customer in our Digital Experiences business. This also impacted the margins of that business. However, we continue to work with that customer on multiple ongoing projects and new projects. On a Y-on-Y basis, for the quarter, our revenue grew by 9.7%. On an H1 basis, H1 of FY '24, we had a robust revenue growth of about 14.6% and a notable improvement in our EBIT margins, which has risen to 14.1% from the previous year at 12.3%. Our deal pipeline increased by 99% on a year-on-year basis and 28% on a quarter-on-quarter basis. In particular, our U.S. pipeline increased by 300% over the last year. We can see that our efforts on focusing on the U.S. markets are bearing results. We are well placed in several of these deals but are witnessing slowness in decision-making, which makes it difficult for us to estimate the percentage of revenue growth in the coming quarters. Therefore, it looks unlikely that we would meet our revenue growth estimate of 14% to 15% for the financial year '24. We added 15 new customers during Q2 FY '24 with many of them being in the U.S. As a part of our AI-first strategy, we are committed to strengthening our AI capabilities and continuously infusing AI across technology, operations and experiences and the product business. We have integrated GenAI capabilities into our intelligent automation products consisting of TruBot, TruCap+ and TruBI. We have launched a range of GenAI-powered solutions such as Enterprise Content Mining, Virtual Assistants, Financial Data Analytics and Revenue Operations and are showcasing them at some of the world's leading IT shows across U.S. and Europe. Our TruCap product has been significantly enhanced and provides cognitive mining and enterprise content -- for enterprise content using GenAI. This makes the product very potent for large organizations that process high volumes of documents and in a variety of unstructured enterprise content. TruCap+ is now available on the Microsoft Azure Marketplace. This will broaden our reach to all Microsoft Azure customers worldwide. In Q2, we also introduced FINATO, a drive for finance transformation in global enterprises. It is powered by AI for contract management and will help CFOs better fulfill their KPIs. Lastly, I'm happy to share that Datamatics implemented Automatic Fare Collection and Mobile Ticketing Systems for India's #1 Namo Bharat RapidX train for Delhi-Meerut RRTS Corridor by NCRTC. It was recently flagged off by our Honorable Prime Minister, Shri Narendra Modi, and it was a proud moment for all of us at Datamatics. With that, I wish you all a very happy Diwali in advance. May Diwali bring happiness, joy and prosperity to all of you and your families. With that, I will now hand over our call to our CFO, Mr. Sandeep Mantri. Sandeep, over to you.

Thank you, Rahul. Welcome, everyone, and thank you for joining us in quarter 2 and H1 FY '24 earnings call. Let me start with financial performance for the Q2 FY '24, and then I will take through the H1 FY '24 numbers as well. Our Q2 FY '24 revenue stood at INR 376.8 crores, which is a growth of 9.7% on a yearly basis and a decline by 3.7% on a sequential basis. As Rahul highlighted, the decline in top line is primarily due to premature closure of a large project. However, we continue to engage with the customer on multiple ongoing and new projects. Our consolidated EBITDA for the quarter was at INR 58.9 crores, which is up 14.1% on a Y-o-Y basis. Our EBITDA margin for the quarter is at 15.6% as compared to 15% in the last year same quarter. Our consolidated EBIT for the quarter was at INR 49.6 crores, which is up 15.7% on a year-on-year basis. EBIT margin was at 13.2% as compared to 12.5% in the last year same quarter. Our quarterly PAT, after NCI, was at INR 49.3 crores, which is up 23.3% on a year-on-year basis. Tax rate for the quarter was at 16.4%. Primary reason for decrease in tax rate compared to last year quarter is the change in the profit mix of various geographical entity. Our EPS for the quarter was at INR 8.36 per share, which is higher than the last year same period, which was at INR 6.78 per share, however, lower than Q1 -- sequentially Q1 FY '24, which was at INR 9.34 per share. Talking about segment-wise revenue performance. Our Digital Operations revenue was at INR 164.6 crores, which is a growth of 15% on a Y-o-Y basis. Digital Operations EBIT margin was at 18.6%, and its contribution to total revenue was 44%. Digital Experiences revenue was at INR 58.5 crores for the quarter, which is a growth of 11.6% on a Y-o-Y basis. EBIT margin for the Digital Experiences in this quarter was 17.4% and contribution to total revenue was 15%. Digital Technologies revenue was at INR 153.7 crore for the quarter, a growth of 4% on a Y-o-Y basis. Digital Technologies EBIT margin remains at 5.7% and contribution to total revenue was 41%. We continue to maintain a healthy balance sheet. As of September 30, 2023, our cash and investment stood at INR 581 crores compared to INR 555 crores in the last quarter. Our DSO was at 63 days as of September 23 as compared to 60 days in the last quarter. In terms of geographical footprint, U.S. remains our largest geography with 54% coming from U.S., followed by India at 24%, the rest of the world, including U.K. and Europe, was at 22%. In terms of industries, BFSI continued to remain the largest segment for us, which include 25% of our revenue, followed by education, publishing and technology and consulting. Both segments stood at 20%, then manufacturing and logistics at 13%. Nonprofit or nongovernmental organization remains at 10% to total revenue. Retail contributed 9% of our business, and other remaining segments are 3% of our total revenue. If we talk about client concentration, very healthy with top 5, 10 and 20 clients contributing to 24%, 36% and 51%, respectively. Coming to H1 FY '24 financials, our half year revenue was at INR 767.9 crores, which is a growth of 14.6% on Y-o-Y basis. Our EBITDA was at INR 126.7 crores, which is up 27.4% as compared to last year. EBITDA margin for H1 FY '24 stood at 16.5%. Our EBIT was at INR 108.2 crores, a growth of 31.6% on a Y-o-Y basis and EBIT margin stood at 14.1%. Tax rate for the year was at 17.6% compared to 20.5% last year. And finally, our EPS for the full year was at -- for the first half was at INR 17.70 per share as compared to INR 14.14 per share in the last year same period, which is a growth of 25.2% on a Y-o-Y basis. These were the financial update. With this, I will now pass on the call to operator to open the floor for questions. Wishing you and your family a very happy and prosperous Diwali. Thank you for your patience and continued interest in Datamatics.

[Operator Instructions] The first question is from the line of Harshil Shethia from AUM Fund Advisors LLP.

What happened exactly with the client that moved out prematurely?

No, the client has not moved out prematurely, a project got over prematurely. With the client, we continue to work. In fact, we are working on several new projects with the client. So it was a premature closure of one single project. And yes, so that's really what happened, that impacted both the revenue and the margins for the Digital Experiences business.

Sir, you said that you might not be able to meet the revenue guidance of 14% to 15%. So what was the quantum of revenue that the client contributed? And in the coming quarters, can the manpower be replaced for another project, which will ramp up in the same...

Yes. So there are other projects that are ramping up as we speak, and we should have some bounce back for sure. So the client is still very much there, and we're talking about new projects. And yes, so we should ramp up, hopefully, towards the later part of this quarter.

Okay. So how much growth can we expect in terms of revenue, 10%, 12%?

Yes. So that's -- so we will probably not hit that 14% to 15% revenue growth that we talked about. But because the decision-making has become a little slower, we are not able to exactly predict what will happen. Having said that, as I mentioned, our pipeline has grown by about 100% over the last 12 months versus on a Y-on-Y basis and 28% on a sequential quarter basis. The pipeline is extremely robust. And therefore, I'm still confident that we'll have a good year, but I'm not able to put a number on the revenue growth in terms of percentage.

Okay. Can you just quantify the pipeline that we currently have?

I expect it's in the vicinity of about $290 million.

[Operator Instructions] The next question is from the line of [ Aditya Jhawar from AJ Capital ].

My question is specific to this deal withdrawn. So in the Digital Experiences, we are hitting a revenue of -- suppose, currently, we are doing INR 60-odd crores of revenue in the quarter, so what was the deal amount for? And because with that one deal, you were saying that we are withdrawing guidance of 15%, that is the first question. And the second question is regarding the Digital Operations and the digital tech. In the Digital Operations, what are the steady-state margins we can attain because I see every time, it is fluctuating. Is it because of the currency that we are seeing that margin improvement, whatever has happened, 23% to currently 18% in the Digital Operations? And in the digital tech, currently, we are hitting a revenue of INR 150-odd crores. Is it the plateau or the pipeline is more situated to digital tech? And where you see -- not this year, next 1 to 3 years, how do you see the shaping up of the revenue margin? Yes, could you throw some light?

So on the Digital Experiences front or the Digital Operations, maybe talk about Digital Operations first. So on the Digital Operations, we had a very healthy Q4 of last year and that's because we always have a Q4 spike because we do a lot of tax processing. And in Q3, we started ramping up. So the -- I'm not concerned on the margins of the Digital Operations although it may look a little suppressed, but it's still very robust. And I think Q3, Q4 will be healthy. So I'm not too concerned on Digital Operations from a margin point of view. To your second question on the projections of missing the 15% project target, that is not because of this one project. That is just because there's a softening of the decision-making process, and we're seeing that across the board. So it's really a combination of all of those things versus a single project driving that. So on the Digital Experiences front, we talked about that one project. But as the customers already engaged and we are already talking about additional projects, it was just one project...

What is the order value of that project?

The order value -- yes, that was me giving client-sensitive information so I'm not so sure that would be very appropriate. But rest assured, I mean if you look at the numbers, you can gauge vis-à-vis the revenue numbers that we have in our investor deck, so we can estimate through that.

Roughly, it was at some INR 30-, 40-odd crores or it was larger?

We cannot give those numbers because it is a client-sensitive information, and we don't know how to disclose too much information about...

But projections are -- I must say that the client is still there, and we're talking about additional business. In fact, we will ramp up in this quarter. It was just that one project. So there's no cause of concern on that front. And on the Digital Technologies as well, the pipeline in the U.S. has grown about 300%. So it's looking very, very promising. Having said that, because the decision-making is slow, therefore, we are sort of not able to get a very clear picture as to what the quarter -- next quarter 3 and quarter 4 will look like.

Okay. Not for this year, I'm just talking about, can you just outlay which segment you are quite bullish on from the next 1 to 3 years perspective where you can see the scale-up can happen rapidly. So not...

Actually, all the 3 segments are looking very optimistic to us, very specifically because we will be implementing a lot of AI in across the board. We will see that happening. So we -- so there's no one of the segments that is looking weak or anything that kind.

Okay. And just on the order withdrawn, when did this happen, in October? Or which month exactly?

It was this quarter. Therefore, you see the results in this quarter.

Yes, it was in this quarter.

Yes, in this quarter, month, actually, I'm asking about it is the...

So these ramp-downs happen steadily, right? It's not like tomorrow morning, it's not. So it does squeeze down because there are several dynamics in any ramp down particularly sensitive to employees, and then there are implications on employees. So one has to -- so where we transact with customers, we've got to keep that in mind. So it's through the quarter, but it's a steady phase through the quarter because you've got...

Okay. Okay. Because it came as a shock because it was not intimated, that's why it was a surprise, but nevertheless...

You're right. The premature closure was -- it did not come with a forewarning.

[Operator Instructions] The next question is from the line of Grishma Shah from Envision Capital.

I want to know the margin for the Digital Technologies piece. Where would they settle down for the year?

I expect the Digital Technologies piece margin to actually improve over Q3 and Q4, so yes. You've got right now 5.7%; last quarter, 6.2%. They will still be in single digits for the year, but they will move up. I think probably 7% to 8% range is a good range.

Based on what initiative?

Based on the pipeline of deals that we are closing. But as I said, because there's a softness in the decision-making process, I'm not able to gauge it, but the pipeline is extremely strong.

But this also has the metro business, right?

That is correct.

So are we -- because I'm assuming there is a metro line which is going to go live.

The NCRTC in Delhi-Meerut went live already. Kolkata will go live shortly. Mumbai is continuing, yes. When it says gone live does not mean it's closed. One phase of it has gone live. The project is still continuing.

I get that, sir. But what I'm trying to understand is that now would the pricing be better compared to what we had bid initially and therefore, some margins will be better?

That is correct.

Of course, yes.

Okay. And what would be our year-end closing tax rate?

Our year-end closing tax rate will be between 20% to 21% approximately.

Okay. And what is the progress on the selling of these products in the U.S.?

Can you repeat the question?

The product business, can you highlight what is the progress?

Yes. So progress has been actually quite good in terms of, again, a pipeline increase and some of the large logos that are potentially scaling. So we -- earlier quarters, we mentioned that we closed some good logos. Now we see them scaling. So that's very promising for us, and some of them will scale quite significantly. So that's looking good. But again, right now, the whole Western world is plagued by a little bit of this decision-making because of the global uncertainties. You've got this Israel-Gaza conflict. You've got the Ukraine-Russian conflict. So a lot of that is still sort of playing out in those markets. Outside of the decision-making, we don't see a slowness in the pipeline flow. The deal flow is just as robust. In fact, it's probably better.

Okay. But what was then holding that for closure if the deal flow is so strong?

So in these markets, there's some degree of uncertainty with the slowing down of their economy. And therefore, those customers are becoming a little conservative in their decision-making because they think the economy will slow down and things like that. But other than that, from a business point of view, there is nothing.

And if you could possibly enlighten what was the reason why did the customer prematurely close the...

It was -- I don't know the detail of their business situation and their business challenges. So I'm not very privy to their business challenges, but it's something to do with their business.

Okay. And it was a top 5 or a top 10 plant?

Yes, top 10 plant.

[Operator Instructions] The next question is from the line of [ Sanjoth ], an individual investor.

Am I audible?

Yes, you're audible.

So my question is about generally, the Q4 is the biggest quarter and Q1 is really smallest quarter usually or the way...

You are not very clear. The line is a little unclear.

Can you hear me now? Is it better?

Yes, actually we are, but still a little muffled, but I can hear you.

Yes. So my question is about Q4 is the biggest quarter and generally Q1 this year is smallest quarter and then sequentially when the revenue goes on. So now Q2, there is -- I mean, it is lower because of pre-closure. How your Q3 looks like? And Q3 and Q4, are these going to be better than Q2? That's the first question.

Yes, I do expect that Q3 typically is a little bit soft across the industry because of the vacation period in the Western world. You have in the U.S. Thanksgiving and Christmas. And because that many people are on leave, and therefore your billing does come down because of the quantum of amount you deliver. So Q3 does tend to be a little soft, but I don't expect that to be worse than Q2 for sure. And Q4 should again spike up because we do have some cyclicality in our business on Q4.

Correct. Correct. And the second question is about the employee headcount. In Q2 and what is the main headcount addition or -- I mean is it -- you added or the number of your employees reduced in Q2?

I don't have that number. To the extent that the revenue declines, employees are a little sticky business because you've got a 3-month notice period. So even though the revenue may decline, you can't let go of employees. And therefore, the headcount remains steady. In fact, right now, as we speak and we talked about ramping up some projects, we are in the phase of ramping up employees on some projects. So right now, actually, we are in the growth phase. So net-net, I would say that it will be flat. Our attrition was about 8.5%, which is reasonably healthy. I mean annualized, it becomes almost 17%, which is not too bad. And we've not had a net headcount reduction.

[Operator Instructions] The next question is from the line of Pallavi Deshpande from Sameeksha Capital.

I just wanted to understand the loss of customer was from which vertical, BFSI or...

Yes. So no, so this is not -- as I said, it was not a loss of a customer, it is a project, but we are still growing with the customer. It was in the Digital Experiences space.

Yes. I understand Digital Experiences, but in terms of industry, BFSI, technology.

It was in the consumer space, consumer, retail -- consumer and retail.

And in terms of the industry, the BFSI space, how do you see that going ahead, given the issues that the banks in the U.S.?

So we've not seen issues in any projects with the BFSI segment, apart from the decision-making, which is generally slow across the board. Outside of that, we've not seen any issues.

Right. Right. Right. And sir, lastly, coming to this on the Digital Technologies piece. I understand you mentioned some -- on the hyperscalers business, if you could just throw some light how is that going?

Yes. So our relationship with Microsoft has increased quite a bit. In fact, we are now on the feature of the marketplace. We are engaging with them very actively. So that's going well. Our opportunities pipeline in the Salesforce area is also going well, likewise with ServiceNow. Our low-code, no-code business particularly with some cloud projects that's growing extremely well, and we're getting a very good inflow of these. So the hyperscaler business is kicking in well, although because it was a relatively new initiative, it was small, and therefore, it does not impact the numbers the way we would expect. But yes, we are getting very good traction on that front.

And sir, the burn in the product business, would that be continuing at the same INR 50 crores per quarter?

Yes, we -- not per quarter, it's per annum, yes. Of course, we've got to adjust a little bit for inflation and things like that. But yes, it's about at the same rate.

The next question is from the line of [ Hiten Boricha from Sequent Investments ].

Yes. Sir, my question is on margin, the decline in the margin in the Digital Experiences is largely led to the premature deal closure, but what led to the decline in the margin in other 2 segments?

So in the Digital Technologies, there's not too much of a decline there. We just -- we continue to invest in -- a lot of in the AI space, in the product space. As I mentioned in my address, we've invested in enhancing TruCap significantly and then incorporated a lot of cognitive mining into that. So Digital Technologies is fine. Digital Operations is -- we actually increased our spend on the platform. And my note does talk about us launching a platform called FINATO. So we launched FINATO, and of course, that consumed some spend. And therefore, you see the margins a little lower.

Sir, can we assume this 17% blended margin is kind of bottomed out and we'll see better [ edge to do ] in terms of margin, around 20%?

Yes, yes, yes. You will see improved margins. Also, the other thing that's happened is that we have increased our spend by design for marketing. And we've actively participated in several events in the U.S. and in Europe. And therefore, our marketing spend has gone up, and therefore, you see the margins being a little more squeezed because we substantially increased it. But that increase in marketing has resulted in better pipeline. So it is showing results, but there's a lag between your marketing spend and the deal closure. So the marketing activities that we are investing in is showing some good results because our pipeline has really grown significantly.

So sir, when you say we're going to see better margins in the second half, so we are -- I'm assuming that it will be in all the 3 segments, right, around 20%, 20%?

That is correct.

Okay. And sir, my second question is on your comment on we have seen the slowdown in decision-making. So this is related only to the U.S. market or the Indian as well as other market as well?

U.S. and Europe. Largely, U.S. and Europe.

Okay. Okay. So are we seeing any kind of improvement here now? Or is it...

It's still soft. It's still -- the jury is still out. The only -- what does give me the confidence is that because the pipeline is so strong, I'm sure some will materialize for sure. But yes, it is going, for sure.

This slowdown is seen in mainly top 20 clients, right?

No, no. It's the industry. And therefore, across the board, we see slow decision-making, both for new logos and even ramp-up of projects.

[Operator Instructions] The next question is from the line of Harshil Shethia from AUM Fund Advisors LLP.

Sir, just a question, actually a clarification from the last question. The EBITDA margins for the second half, you stated that to be about 20%, is that...

Sorry to interrupt, sir. Sir, your audio is running very soft. Can you speak a bit louder?

Just a clarification from the earlier question. For the second half, do you expect EBITDA margins across the company to be in the region of 20%? Is that what was...

No. No. No, that was the previous speaker mentioned. So I -- no, so that's not correct. They will be healthier, but certainly not 20%, no.

Okay. Sir, second thing was just a question again to go back to the plant, which as you said, slow down on one aspect of the business. So if you just kind of negate that, assuming that the ramp-up for the client had not changed, then what kind of numbers -- so I'm just trying to estimate what the onetime impact is. So what would be -- whatever have been our numbers for the quarter, we have seen some growth? Or how would it have looked at? As you said, [ kind of maintain this ] anticipated rates.

Yes, yes. that's a tough one. You're asking the same question that the previous -- one of the earlier people had asked in terms of what is the revenue loss, but I don't think we are going to talk about that. But yes, it certainly had been better than what it is. We are also not happy with the kind of situation.

Okay. But would it have been kind of more in the period of growing on the sale basis? Or was that even without a specific client issue, there was a slowdown across other client...

No. So you see a slight slowdown as you see across all the segments. So that's really -- it's not that one project that has impacted everything. If you look at our investor deck, every segment has a marginal slowdown. The maximum you see that is in Digital Experiences, but the others also have had very marginal slowdown.

And as you said steady month after the end of the quarter. For the next 6 months, do you see any such significant slowdown? Any conversations, maybe not for your business, but for either competitors or other people on the same lines?

No. I can't comment on the competitors because I really don't know what's going on in their business, but we don't see any such issue coming up in the next 6 months.

The next question is from the line of Pallavi Deshpande from Sameeksha Capital.

Yes. So you mentioned about this increased marketing spend. Would it be possible to quantify them?

I don't have the numbers in my fingertips right now, but yes, approximately double. Sandeep Mantri is sitting in front of me...

Almost doubled from last year, yes.

Right. Sir, in terms of the hiring plan, any numbers?

Nothing right now, but I do know that we are ramping up for some projects. So you will see an increase in hiring anyway. But I don't have numbers with me because we have been cautious given the decision-making is a little slow, even though the customers -- some customers have said that they would like to start ramping up, still it doesn't happen. We're not onboarding people. So we are in the ramp-up phase, but I don't have a number for you on that.

And between the three segments, would it be fair to say that we want to see softness, it would be more in the Digital Experiences space going ahead?

Can you repeat the question, please?

Yes. Just in terms of your 3 segments, would it be fair to say that the Digital Experiences side would continue to remain softer?

No, no. In fact, we're ramping up there as well. No, I don't see softness there.

Okay. I just thought that's more discretionary answer from that angle.

Yes. But given that we are in the ramp-up phase, I don't see the softness.

The next question is from the line of Aditya Jhawar from AJ Capital.

Sir, I wanted to understand on the platform you have mentioned, right, FINATO on the digital side. So currently, we have a good revenue there, but our margins are roughly 7%. In next suppose 1 or 2 years, where do you see that margins trending towards?

You're talking about FINATO, right? You are talking about FINATO?

Yes.

FINATO is part of Digital Operations.

Okay. I'm talking about digital tech. There, I think we have invested on auto fare, right? It comes into that part of it, right?

There is fare collection, TruFare.

Yes. So there, suppose if we get more sales because currently, we are doing INR 160-odd crores per quarter, right, INR 150 crores to INR 160 crores.

That is not only fare collection, but there are many other things in that.

Many of those products, yes, yes. But we have clubbed under digital tech, so currently there the margins are like 5% to 7%, right? But our -- in one of -- where can we see that margins is trending towards?

Of course. Yes. So this 6 months -- over the next 6 months of this financial year, we should see that margin improve. We talked about 7% to 8% in this year.

You're talking about 1 or 2 years, right?

1 or 2 years, not this year, this year...

Yes. So that should improve. Over the next 2 years, that would improve quite a bit.

What targets do you have in mind, like 14%, 15% you have?

So one of the reasons why that will change is that we are focusing more on the U.S. market and the U.S. market has better margins than the Indian market. So as the business grows there, I think if you're looking at 2 years, we should be in the low teens, 12%, 13%, 14% range.

Low teens, low teens. Right. Right. Okay. The next question, for this year, I guess, what can I gauge is there is a slowness, but what are the positive signs for this year for the company?

The positive signs are that, a, our pipeline has grown substantially. This is on a quarter-on-quarter basis, we've grown 100%.

When you say pipeline, it is an order book or it is just in the finalizing stage?

It is the final stage where we submit a proposal and the customers have to decide. But when you submitted proposals, which are almost 100% more than what you did last year, that shows that you will probably close more deals this year. The other element that is very positive is the whole push towards AI-first. AI-first strategy, I think, will start showing some results. Our hyperscaler has already started showing some results, so that's looking very good. And AI and the financial launch of the FINATO product also, I'm very confident that will give us some. We also have -- I don't know if you've tracked it, but in the technology business, we brought in senior leadership, and we are doing some organization restructuring, and that will help. I'm sure it will show results fairly soon.

Okay. Okay. So based on your order pipeline since it is robust, right, how much percentage you have the hit ratio here?

So it varies by segment. It varies by existing customers and new logos, by geography. So -- but it's very healthy. So that's not -- it's not a straight answer. But it varies anywhere from 30%, 40% to as high as 80%, depending on...

Since we have traveled to -- like you have said that you personally traveled to U.S.A. or some other countries for marketing events, right?

Definitely.

In which space do you find as our products, right, we have a lot of things to offer, which they are mostly interested in the customers?

So when you -- we participate across multiple lines of businesses across technologies, operations and experiences. And across all the 3, we've seen opportunities. Technologies right now with AI, there is a lot of inquisitiveness among enterprises to see how they can use AI for better productivity and for better customer experience. So AI right now, there's a lot of interest in AI and what AI can do for the overall business.

However, I must say that right now, the interest in AI there's a lot of curiosity so because people are still trying to figure out what this new animal is and they don't know much about it. So there's a very high degree of curiosity and therefore, the interest. So one has to take that with a pinch of salt in terms of deal closures.

Okay. Then with the pipeline, it is -- majority which segment we have got the traction there?

The highest traction is in the Digital Technologies space, but it's quite good also in the operation...

Digital Technologies and Digital Operations, both are fairly good.

The next question is from the line of Sanjoth, an individual investor.

Generally, you announce a number of deals won in the quarter in the PR. However, I missed that. So how many deals won in this quarter? And was any multimillion dollar to gain in the quarter?

Yes. So we announced a number of new logos. And this quarter, we had 15 new logos. So that's say that run rate remains roughly steady.

And most of them are in the U.S. and the European markets, so which is also a very healthy sign.

[Operator Instructions] As there are no further questions, I now hand the conference over to the management for the closing comments.

Thank you all for being on the call today. I know we've not had the best quarter, but I am still very hopeful that going forward, we will have a good run this year because the business is there and we've got a very good customer equation. So thank you very much for being on the call, and I look forward to speaking to you next quarter. Wishing you all a very happy Diwali in advance, and hope you have a good festive season. Thank you all.

Thank you.

Thank you, members of the management team. Ladies and gentlemen, on behalf of Datamatics Global Services Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.