Fidel Softech Limited ($FIDEL)

Good day, and welcome to Quarter 4 FY '26 Earnings Call for Finance Optic Limited. We appreciate your participation as we review the company's operational and financial performance for the quarter as well as our strategic outlook moving forward. Today's call aims to provide an update on the company's progress and address any questions from investors and stakeholders. Please note that this call is being recorded, and some statements may be forward-looking based on the current assumptions. These statements are subject to risks, uncertainties and actual results will be different. The company does not commit to update forward-looking statements unless as required by law. We advise participants to consider these factors and differ from reliance solely on forward-looking information. Representing Finite Limited. Today, we have Mr. Sunil Kulkarni, Founder and Managing Director. I will now hand over the floor to the management team for their opening remarks. Following their address, we will open the floor for Q&A session. Thank you, and over to you, sir.

[Foreign Language] Thanks a lot, Mike. I really appreciate -- good afternoon, everyone, and thanks for joining our Fidel Q4 and FY '26 earnings call. It's a pleasure to connect with all of you, and I sincerely appreciate your continued trust and support in our journey. Today, I have with me in this room, my colleagues, Mandar Inamdar, who is our CFO; our adviser, Anil Patwardhan, Finance Controller; [indiscernible]. I'll start with many of you already know about Fidel but I'll just start with a brief on that. Fidel Softech, we are in IT solutions and services firm with the ability to deliver last mile in local languages. Our core lines of business are IT consulting services, language localization services, Japan, India consulting services and the new unit that we have started, which is high-tech solutions and services. Over last few years, we have strengthened our portfolio of services of solutions such as Spoggle.ai, which is into data analytics, Lingify, language localization, fixed testing and simulation. We have also strengthened our services deliveries, where we are known as a leading art in language delivery and complex language engineering solutions. Our bilingual managed infrastructure support services and recently around Japan in their consulting services. So over the years, we have built these solutions and Honda services. Over the last 4 years, we have transformed feel from a INR 25 crore company into a INR 100 crore enterprise from a INR 6 crore per quarter to now INR 36 crores approx per quarter. What is equally important is that this growth has not been sporadic. It has been consistent, disciplined and sustained over 16 consecutive quarters of growth. Of course, while we work, it's got grace and support. Today, we will now share our financial performance, key business developments and are cautious but optimistic outlook for the future. I'll start with results. Coming to Q4, this has been a breakout quarter for Fidel. Revenue grew to INR 37.27 crores, up 47% quarter-on-quarter and 155% year-on-year. On a year-on-year basis, we have moved from INR 14.6 crores to now INR 37.27 crores. And on a quarter-on-quarter basis, we moved from INR 25.29 crores to INR 37.27 crores. EBITDA grew 18% from INR 4.75 crores to INR 5.85 crores. And PAT increased 32% Q-on-Q from INR 4.5 crores to INR 5.37 crores. Let me share the full year performance. For FY '26, we reported a revenue of INR 102.35 crores, a strong 85% year-on-year growth, EDITDA of INR 19.29 crores, up 52%; profit before tax of INR 18.3 crores, up 46%. Profit after tax of INR 14.05 crores, growing 50%, and EPS at 10.02%, also up 47%. This performance reflects not just skill, but quality of earnings and operational discipline. This is a 16 quarter where we continue to better ourselves from last quarter and from a year-on-year basis. While percentages are good, when we look at absolute terms, just 16 quarters back, we were generating around INR 4 crores in yearly PAT, and now we are generating around INR 14 crores in yearly pad. This allows us to invest more in different initiatives. A key aspect to highlight is our balanced revenue mix. APAC brings in around around 55%, U.S. around 27% and EMEA 18%. 70% of our revenues come from IT consulting services while 30% come from language localization business. Over the period, when we look at the revenue breakup and the margins, 57% -53% of the revenue that comes from -- especially from the U.S. and Japan, where we are currently in a scale-up phase is around single-digit margins. While the remaining 47% delivers strong double-digit margins, forming our profitability backbone. This positions us well for future margin expansion as our international business will mature. We are seeing high growth with controlled margin moderation, which we believe is our current focus and also a healthy sign in a scaling up business. I also would like to touch upon our cash flow and financial discipline. Our growth is backed by strong financial discipline. We continue to maintain a healthy cash flow position, ensuring adequate liquidity for operations, capacity to invest in growth opportunities and stability in uncertain macro conditions. Our cash reserves have gone up to INR 32.5 crores from the opening position of INR 30 crores, increasing the same up by around approx INR 2 crores after utilization of almost INR 6 crores towards payout from our internal accruals for the deals. So around total of INR 8 crores of positive cash was generated this year. We have also taken a measured and strategic approach to capital allocation. Debt has been used only as a growth enabler, primarily, especially for acquisitions. Our borrowings are low cost, around 2% to 3.5% JPY loans, long tenure, 5 to 8 years and naturally hedged through our Japan revenues. Importantly, we have achieved this growth without equity dilution, ensuring value creation for our existing shareholders. We also remain committed to our shareholders. We have maintained a consistent dividend payout since listing. Dividend for FY '26 has been recommended by the Board subject to shareholder approval at the AGM. While we continue to give this dividend, we also see that we are deploying the remaining into R&D and new business initiatives. This also reflects our confidence in cash flows and long-term sustainability. As we scale, we are equally focused on strengthening business controls and governance frameworks, investing in talent, advisory for some key areas, delivery capabilities and systems, ensuring scalable and sustainable growth. Our approaches grow fast but grow responsibly. While every time we are growing, we also try to ensure that we are at least sustaining the basic current levels. This year, we saw some good opportunities. We saw increased demand from our own existing customers in Japan and U.S. as they now know that we have an on-site facility to deliver as well. We saw some traction in IT services as well as language localization services. We had acquisitions in Japan and U.S. We delivered the railway localization project, some anime-related projects, where the Japan teams were equally surprised with the quality and the overall delivery. Earlier, the anime project was delivered from offshore. But in Q3 and Q4, the client preferred an on-site in Japan is engagement. We also delivered some integration projects for a global solution firm. for and implemented their solution for a leading e-commerce firm in India. We also landed with a JPY 100 million managed services business in Japan, where the full effect will be seen in the next fiscal year. For this RFP, we were pitted against top-tier system integrated firms. We also delivered fixed connectivity, fixed is a kind of protocol in capital markets, fixed connectivity and testing, related training and services to a which is another began exchange, and we got some good appreciation from their team. We also developed some AI productivity tools and a new version of our fixed connected testing solution, which we are now taking to the clients. We see this as our IP. Based on the current momentum and pipeline visibility, we have planned up an internal slogan of 5x in 5 years. When we started around 4 years back, we had coined this slogan for ourselves, 5x in 5 years, and almost we have done 4x in now 4 years. Now again, as a season 2, we have started -- we are saying again 5x in 5 years while targeting double-digit PAT margins. While 5 years in a long-term kind of a duration, our midterm vision is achieved INR 300 crores in 3 to 3.5 years. The Margins are expected to improve steadily with scale and operating leverage. We are also seeing some midsized deals where like recently, we tied up with a leading OTT player in India, and providing multilingual localization services to them around subtitling. This includes automating using AI as well as developing some proprietary tools. Besides this, we see AI-enabled services, small and contracts coming our way. We also have partnered with Tech Solutions partners like Rhythm Flow, Himizu Labs in AI or banking space in data analytics and in ERP. We continuously explore opportunities. We have also set up a small division to focus on digital transformation around SME manufacturing. These days, when we are battling the perception battle around AI, and see growth in manufacturing. Many of these SME manufacturers more than smart or anything they want manufacturing to be visible, data to be visible, and there we are focusing. We are also looking at R&D areas, which will connect us to future revenues. We have strengthened our presence in U.S. and Japan and see opportunities to cross-sell. One of our clients, NTT Communications in Japan referred us to their office in U.S. And for those requirements, now Techwin is supporting them from the U.S. geography, showing a good opportunity to cross-sell. Our Japan business remains a niche strength with high entry barriers and strong differentiation. This gives us some unique position compared to peers. That said, we remain mindful that geopolitical factors may influence near-term outcome, and we continue to monitor that. Before I conclude, I want to also touch upon some few topics. An important theme is artificial intelligence. There is a broader perception that AI could potentially reduce demand for traditional IT services. However, based on what we are seeing on ground, especially in Japan, we believe that reality is quite the opposite. Japanese companies are currently in an exploratory phase when it comes to AI. Their approach is very structured, and they prefer to first experiment with AI through pilot programs, understand its impact in the specific business context and then only move towards full-scale implementation and investments. Their approach -- this approach is especially working in our favor. We are increasingly being asked to support AI-led proof of concepts and pilot projects, provide consulting and language location support around AI adoption and enable integration of AI into existing workflows. What this means for us is AI is not reducing demand, it is expanding our scope of services. So we see AI as a multiplier for our capabilities and enabler for next phase of growth. We also want to preempt some questions. If you have seen, we have put an FAQ on our website as well in the Investors section, where we continue to update about our thoughts, our approach, our business so that you get a peak idea about how we run our business and so on. So we want to preempt some of these points where let me briefly also address the -- some of you which might see as a decline in stand-alone India revenues. So for us, this is not a demand issue but more of a structural shift following our Japan and U.S. acquisition, where some clients have moved on site or prefer giving on-site work. Overall, for us, the demand from existing customers remains strong as reflected in our 85% consolidated growth, and we have expanded our valid share with them. This is a transition for us to a hybrid delivery model like on-site offshore, and strengthening our global capability. And over time, we also can see that offshore will scale up and supporting growth as well as margin expansion. Our anime project, our entity-related project are the leading portal project, which was -- which we were doing offshore are now being supported on site based on client requirements. From our perspective, instead of approaching a customer with what we have we prefer what they want or what are their pain points and then addressing those. We also want to address a point about our M&A approach, which we see as disciplined and strategy led, not driven by revenue alone. We focus on a few factors such as capability, something that will enhance our capability or competency, market access, clients and talent, ensuring that there is a strategic fit with the acquisition. For instance, Tech win added upstream consulting strength, whereas we were always into downstream, say, implementation or coding or development, whereas they brought in the upstream this thing. IM was our own client they brought local presence and talent in Japan with access to 40-plus clients. These are great clients from our perspective. These are platform building moves for us that enhance our ability to deliver end-to-end solutions and scale globally. We will continue to pursue such strategic opportunities with a clear focus on long-term value creation. All these steps will help us to scale in our next phase of growth. Over the last few years -- last 4 years, we have evolved from a small SME into a global relevant technology services company with presence in India, U.S., Japan. Basically, when we look at just the numbers, that gives us a story. But as a company, we have changed in these 4 years. We are now recognized as a leader in language localaztion and engineering with a unique on-ground delivery strength in Japan. Our deal sizes and client profile has significantly matured supported by expanded capabilities in areas like AI, data analytics, BFSI and managed services. At the same time, we have strengthened our leadership, governance, sales engine, while building new growth Earlier, just showing our financials are reporting would take almost 2 months or 1.5 months for us. Now within first 3 to 4 weeks, we are taking our results to our investors and the market. So overall, we have not just grown financially but have built a strong -- or in process to build a strong scalable foundation for long-term growth and cautiously optimistic about the future. To summarize, we have delivered strong, consistent and scalable growth, maintained financial discipline and shareholder returns, built a globally diversified and resilient business model. At the start year start, we had mentioned that we will strive for double-digit EPS to grow the company at 30% to 40% rate to maintain profitability and profitable growth or positive cash flows to be on the list of dividend giving companies. And I am happy to share that we were able to deliver or work on most of these parameters outlined by us beginning of the year. Could we have done better of course. There is always scope for improvement. That said, for us, these numbers are milestone in a long journey where we continue to learn and implement. We still have to work on areas like automation further sharpen our focus on business units and capabilities, hiring to suit our growth ambition, develop new competencies, better communicate our activities to investors and stakeholders, and contribute to the community and nation at large. All this wouldn't have been possible without the backing and support of our team. I'm thankful to our entire team members are past alumina clients, partners, freelancers, shareholders, our well wishers who have helped us reach her. We are also thankful to government authorities, auditors for support and continuously guiding us. We are confident about the future and remain committed to creating long-term value for our stakeholders. Thank you once again for your continued trust. I will now open the floor for questions. Thanks a lot. Yes.

Thank you so much, sir, for the insightful introduction and detailed outlook about the company. [Operator Instructions] Raghav sir, you can go ahead with your question.

Yes. Am I audible?

Yes, yes. Yes.

Really congratulations on set of numbers. Sir, I wanted your commentary on margins and any forward guidance you'd like to give for the coming year. And also, sir, I had a question on AI but I can't do that in the later part.

Okay. From a guidance perspective, we have always kind of not given any direct guidance as such, like, as I mentioned, we are looking at a fisting. What we are always trying is to maintain whatever we are currently doing. At least so idea is ,let's sustain whatever we are doing now. and then try to build over that. So currently, let's say, we did around INR 37 crores of top line this year. So our idea is that can we maintain that. So from, let's say, INR 35 crores to INR 40 crore also, we are able to maintain many of this. So it comes to around, say, INR 140 crores per annum to INR 160 crores even if we just maintain this and slightly grow. And of course, we want to grow faster and all that. But given -- so this is the kind of what we are looking at. Of course, as I mentioned, our 5x plan, which is -- which means INR 100 crores to crores 500 crores journey, where we see at least we'll shoot for in 3.5 years. Of course, if it takes 4 years, will not jump from the mid assets, but we want to see how we can experience how we can do this. From a margin perspective, as I had mentioned in the last few calls as well, earlier what had used to happen is we were trying to maintain both growth as well as the margins. And that we started confusing our team members as well. So what we said is, first, at least in absolute terms, when we look at 20% margin of INR 50 crore business versus even, let's say, 10% to 12% margin of INR 500 crores, INR 300 crore business, what is better. And let's -- from that perspective, we took a slight shift or deviation in our mindset and started growing more faster. That said, we always want to be at least making like profitable money or cash flow. While we are adding business in Japan or in U.S. domestic also in India, what we are seeing is every region, every business has a different or new clients coming at a different profitability and so on. So we want to maintain healthy margins, but whether we'll be able to maintain 14%, 15% is something that, to be honest, I will not be able to say much. At least we want to maintain. And again, when it comes to quarter level, it might differ. But at a yearly level, at least we want to maintain what we are seeing today yes. I hope it might not be a direct answer, but yes.

Yes, sir. I got it, sir. And sir, my next question was around the employee addition as I saw in the PPT as well. And sir, at the same point of time, we are seeing that efficiency or output per employee is growing because of AI. And in fact, we also saw some AI services adding revenues in your business, somewhere around INR 3 crores, if I'm not wrong. What kind of those services are you providing when it comes to AI? And also, why -- like what is the trend of this employee addition that you are seeing at your organization because of this whole AI?

Correct. No -- so there are 2, 3 aspects here again. So there is -- in -- especially during this quarter, we don't see any much correlation between the people added in this year or -- and so on because there's a lot of experimentation or things that we are doing at our end, like 2 development is that. So [Foreign Language],there is some here and there. But mainly what we see is currently what projects or clients are asking is, we have this certain process. Currently, we are doing with like so many people are -- like in Japan, what is happening is they don't have people at all meaning -- so there is -- many of them have projects, but they don't -- they are not able to deploy it or implement it because of lack of people. So there, they are saying is, can we automate a certain project on this thing. So earlier, like a few years back, they would do it RPA and this now they are saying, can we deploy your AI? Can but then they don't want to deploy directly on production or anything. Can we take a certain process. So where we are doing, let's say, for a U.S. client, they have 16 applications, a lot of code base, and now they want to take it global. But they want to look into the code base now and see whether the code is localized or international or where are the bugs. So now leveraging AI, we have created certain tools or solutions for them, whereby we have automated a certain way. And now this entire year, we'll be looking at each core base looking at and fine-tune or go further for this. So -- we are -- there is a case where the customer had a limited budget, and we had to deploy an application. So earlier, we would have, let's say, quoted, say, 10 months and we would need, let's say, literally 3, 4 months to deploy it. Now even if we have quoted 10 managements but we were able to deploy it in, let's say, like, for example, a more faster way. So we are seeing some such experimentation from our clients, not a complete full-fledged [Foreign Language]. And then we are developing certain tools, certain new things for which we are hiring. So some of them might not be directly billable on a project or something. But we continue to hire. Lastly, we also see some pressure from French and families where last 2 years, especially last 2, 3 quarters, new grads and 1 or 2 year experience, they're not getting jobs. So we get referred to some candidates where we are trying to hire them and see if we can deploy them on some pilot projects and so on yes.

Divya mana, you can go ahead with your question.

I have a couple of questions with me. First is on related to borrowings. So as we already have INR 21 crores of current investments with us and except noted funds. So can I move why we have INR 43 crores of borrowing and many will be able to repay it?

Okay. So you will see that during this year, we have certain borrowings on the balance sheet. I think the orderings I've been basically in Japanese yen to take care of the consideration payment for 2 of the M&A deals. One is in U.S., Ten and another is in Japan, which is our Fred based out of Japan. These payouts have been around -- the borrowing has been plus around INR 16 crores, whereas the payouts have been around INR 22 crores for both the deals. And the third acquisition, which we have done in cooperation. As you know, the consideration payment was very low in that case, and they have certain long-term loan in the balance sheet, which we have taken over through this acquisition. So that is the third component of the borrowing. The entire repayment schedule is over the next 5 to 6 years and the interest rates since these are JPY loans between 2% to 3.5%.

Okay. Okay, sir. Can you also mention from do we have borrowed this amount?

In our bankers Gotebank, but there is a Japanese bank for an Corporation and the Indian Bank is tat.

Okay. Our next question is, as we have trade receivables very high in this financial year. Can I know the reason behind it? What did you say Trade receivables.

Yes. So trade receivables are around. I think have moved.

From INR 16 crores last year to say INR 26 crores this year, correct, that is the. Do. Correct?

Yes. the reason we base. If you see the last quarters, the revenues itself have been INR 37.27 crores. So naturally, the receivables also have gone up during the quarter. SP-9 Okay. So it's natural SP-10 Obvious. Yes.

My next question is, as we have noncurrent investment of INR 16 crores. So can you classify it.

Your voice is a little low -- you've been a little louder.

Or less INR 16 crores. As we already have, noncurrent investments of INR 16 crores. Can you classify -- so this is again coming out of the same deal, which is done in Japan.

Yes, so this is, again, with the IM corporation that we have taken over their business, and so this noncurrent investment is also part of that which we have taken over. And over the period of next 2 to 3 years now, we'll see how we can manage that our investments we deal with. These are all part. Basically on Jan 6, we took over this company. And now we are in the process of integrating their finance team, our teams, delivery teams and so on yes. Okay.

My last question is, as we have doing plan of INR 300 crores of revenue in next 3 to 3.5. Can you give me the guidelines which you are looking forward for it? And how we are to give you a guideline here wise.

As Sunil san said right in the beginning comments that we are not in the process of giving guidance as such. But we have been talking about our vision and how do we want to sort of travel on that path. Since we started with our journey INR 25 crores annual revenues, we reach INR 100 crore mark with a span of 4 years, something similar we want to do over the next 5 years. And therefore, we have decided 2 milestones. One is within, say, 3, 3.5 years, we would like to 3x revenues. And then 5 years revenue is over 5 years. So naturally, we also indicated to you that our last quarter revenue is INR 37.27 crore. So if we assume that it is INR 40 crores run rate, then we should be anywhere between INR 140 to INR 150 crores. That is the -- if we hold on to current revenues and then drive certain growth, these are the numbers we can look at as an outlook but there is no guidance.

I said I also want to add to it. So when we started, again, we said that he will chase 5x, which means around, say, 35% to 40% growth year-on-year. But then what we realized with our current team that time, not everybody was geared. So if you look at our first 2 years, we grew a bit slowly, 25%, 25% 7%. By the time team started picking up. Then we gave a target to internal teams that when we say 35%, 40%, certainly, it looks like a big number. But we said like, can we do at least 7% to 8% or 10% growth quarter-on-quarter -- so we try to break that thing. So now we see that at least the team has understood this well. We also want to tell ourselves that many times, it's bigness like [Foreign Language] elevator next be some, can we do it and so on. But so we want to go in that direction. We believe that so far, we can -- we have done and if we can reproduce that. So of course, there are so many uncertainties happening around. And -- but we see AI as an enabler. We have the Japan market actually really not explore that much. And then Japanese companies taking interest in India trying to set up small GCCs for them. So there's a lot of things happening. But as you know, Japan is like a slow sales market. So many of these OTT opportunities or what we said today, we have been working for 1.5 years with them on different POC tools creation. And during those quarters, we were not able to show immediate margins or profit but now that has translated over the year. So yes, just to answer, we might not have immediate exact answer but we know we are going in a certain direction yes.

[Operator Instructions]

We have also uploaded the deck on the platform so that it has more whatever the insights that I had mentioned on our website also, there is an FAQ forum where we tie to update.

[Operator Instructions] Akash, as you can go ahead with your question.

I'm audible.

Yes.

Sir, any plans to go on the main board?

Yes, we -- of course, we want to. We meaning theoretically, around a year back also, we were eligible. I mean because we had just completed 3 years, but then last year, they changed the rules, et cetera. So there are a few conditions. I think one was INR 100 crores, and then there was a net worth, INR 75 crores and so on. So we are trying to see that we first fit all this. And then, of course, we want to go on the main board.

But any time line, anything you're planning which you can share with us?

Correct. So ideally, we want to go on main board on year itself, if possible. And -- but then again, as I said, there are 1 or 2 conditions that we still have to manage. But next 2 quarters, we'll see we can try to manage those conditions and then go on the main board. So we see, of course, that also 1 as a milestone for us, for our shareholders as well because then we go on the bigger canva.

And the other question is tax rate going forward?

Tax rate, tax, what is the tax rate that we expect going forward?

No, I think effective tax rate will continue to be the same because I don't think there is any opportunity for doing any tax savings.

What big opportunities that the company sees by leveraging the AI solutions?

Were solution, what is the opportunity available to the company.

So we see meaning the various in the language field, we still see clients asking us to develop tools for checking output or development lingual LLM and so on, like as I mentioned. And on the IT side, right from AIS is still development for testing or for data-related like analytics or modeling, a lot of areas where we are seeing some queries coming up. So -- and with base now in Japan, Netherlands, U.S. U.S., that way is a more mature market. But in Japan, everything is completely new, and there's an open field out there. So we see a lot of opportunities. Only thing is how we can convert that or converting the size that we want, meaning Currently, the deals are very small. But if they turn out to be big, it will really add to the top line, yes.

Manish, sir, you can go ahead with your question.

First of all, congratulations on the good set of numbers. Sir, partly for my each I just wanted to understand as to how does this language localization work? So if you can give a couple of examples as to this model exactly work especially for the Japanese clients that you handle?

Yes. So [Foreign Language], when we say we are localizing a software and application or a website, what we are saying is we are adapting or for a certain locale or a certain environment. And so when we say we want to take this software and take it to China or Japan, then we have to show the -- not just the screen better the calculation, the yen at JPY tax rate. I mean everything goes -- changes in the software, for example. So people see that just as a translation but there is a lot of intricacies there. Then there are areas where, let's say, when Amazon, Alexa speaks in English, but I want Alexa to speak in say Telaria in then we have to create data sets to train the AI engine of Alexa to -- then -- so companies would ask us to create data sets in Hindi. Then Hindi will be Bombay Hindi, Hydra Badiindi, Lanone it has to understand all types of India and so on. So -- and then they will ask output in a certain format. So this is one. The automotive industry will have, again, like cars would want to go without any assistance or drivers. But then it has to think like a human being when you see it as a rock or a speed rate it has to think. So then image annotation, in OTT, we see a lot of automation in subtitling and labeling because South Indian movies are coming to North India, for example. Or likewise, in Japan, animes, they want to take it to global. So in all this in the anime, there is, let's say, a balloon where the text is there, then we have to write programs to extract it. And so earlier, a lot of programming was needed. But now leveraging AI, a lot of these things are possible. Like earlier, we would have to have voice over. We actually had to rent studios but now synthetic voice using AI, we can generate. But then some clients specifically ask because of certain reasons, regulatory or brands. We want human interface only. So here, a lot of play comes from linguistic side, meaning language side and technology side. But so that's why we had coined ourselves as a lane firm but it started getting confusing because look some there to actually get on the end. So at heart, we are -- by nature, we are a tech firm, like IT services for technology firm. But when we say we have an ability to deliver in local languages. So if you want to develop a trading platform or a salary application aisle application, you can go to Infosys or any big IT company or anyone, for example. But the moment you say, we want salary slips in Marathi or Telba and our bilingual, meaning date/dnang, for example, and so on. Then such work, people tend to give us because we bring in the linguist capability as well as the the technical aspect. Now when it comes to Japan, every delivery has to be in Japanese language. They will not accept anything much or much in English, meets SAP implementation be ore be it managed services. So when I say managed services, the L1, L2 level 1, level 2 port they want in Japanese. L3 can happen from from U.S. or anywhere. But the first layer has to come from Japan where we bring in our expertise. We will support everything in Japanese. We also have some Japanese speaking in India as well. But then they prefer in that time zone, not locally there and so. So language. And when we say Japan, in ASEAN, there is Bahasa, Tagalog, Thai, in India and around the Simanilanka, Bangla and Bangladesh. So there's a lot of language play comes in play. And then in India, also, we work with big portals, like e-commerce portals, where they need language support and so on. So meaning there is a perception that there is a translation to [Foreign Language] a lot of technology that goes behind and could be speech wise LLP and later language processing or it could be related to AI or anything. But again, we also do generic [Foreign Language] just want to develop an English-based trading platform. We'll support you then -- but then you might say then why come to Fidel, you'll go to bigger farms or better from and so on. But our niche comes from that perspective.

Next question is from Advik Joshi. Sir, any acquisitions in the pipeline this year?

Again, there is the -- we always continue to tap opportunities. We know exactly what we are -- so for example, we are looking at certain competencies to build. Our location wise today, we are in Far East let's say, in Japan and far South India. But today, if we get pure to acquire in, say, Singapore or Hong Kong, then we were seen as an Asia Pac company from U.S. or European company clients perspective. So we are continuously looking, as I mentioned, we are not in a rush. We want to see that they are either bringing us a new competency, new geography opportunity, new clients. For example, today, 70% of our business is through system integrators or something. 20%, 25% is direct customers. Can we get to have somebody has direct end customers as their clients like banks or or say Disney or something like that. So then we would like to acquire such company and so on. So we continue to explore, but immediate article, action we'll see how it goes yes.

Okay. Where do you see PAT margins 3 years from now?

This is a difficult question not to say anything. As I said, we have -- we always say that we want to maintain double-digit margins, meaning can we get more? Of course, we want to. But I think the -- on one side, we are seeing that compared to a few years back, there is a more requirement to invest in R&D or partner. It could be joined like let's say, we do it in-house. When we set up a small unit where we do jointly by partnering to another company where we invest together or then we invest in a start-up or something like that. So -- and all this will take direct or indirect it on the margins. But to even sustain every year now going forward, there's a lot of changes happening. So we want to maintain healthy margins but at the same time, we want to see focus more on the growth, more on the quality of clients that we are more at these long term and and so on. And lastly, [Foreign Language], we also have the -- we want to create some jobs as is, meaning jobs as well. Unless support the communities and create like there, we have some impact of the Japan culture. In Japan, you don't restructure immediately. It's rather very difficult to let go some one. And they are also kind of working for you with an idea that I'll work with this company for my life. So we also have that bit mindset yes.

Okay, sir. Tanmay Mehta, sir, you can go ahead with your question.

You have a category listed on your website, high-tech solution. So how does it depend from IT services and enterprise on Correct. Again, at a base, everything is technology only. So -- but what we are seeing is -- so when we are now -- so recently, what last 2 quarters, what we are doing is we are kind of visiting manufacturing firms. Some are using Siemens machines, some are using some Taiwanese machines and then so on. And where what they -- they have unique problems, [Foreign Language] so that doesn't give us an idea. But we have this explicit case where we want this data. If this gets at on a display, but then there is an interface of these machines. There's some electronics, some IoT, bringing that data reeling it to cloud, showing it on their mobile. So there's an interplay of different technologies and so on. It's not a simple [Foreign Language]. And that's where we thought -- this brings a lot of different play. So we could have named it multitech something. We said we'll let's have with high tech and so on. So plus, we also see a lot of play happening around different technologies when like these days, somebody is doing drone. So drone to log them drones, but 1 is capturing a lot of images. And now this image is when they are coming in, can we build applications on top of them, deciphering what the image is and so on. So we are like can we partner with this. This will involve high imaging resolution, again, cloud, AI and different. And that's where these kind of solutions we have clipped together and said that can we put it under the unit of high-tech solutions.

That's right. Yes, the deposits from the side -- do we have any other questions? Another from Pareto. No. Sir, as you said that high-tech solutions, do you have any revenue as of now from that vertical -- as of today, it's a direct revenue in a year, but we are working on these POCs. And this is just like last 1 or 2 quarters, we actually started talking survey, earlier in 2016, Hamlet, we had done some IoT product development and we had built revenues close to, say, INR 5 crores to INR 1 crores kind of in -- but then we were -- at that time, we thought of going into product development and then we also were incurring losses.

Then we realized unless you are first 2, 3 customers take product development, and it's a big deal, meaning unless you have pockets and and so on. So from there onwards, we are seeing that, let's first talk a few thing. Will they pay at least INR 5 lakh, INR 10 lakh, INR 2 lakh, INR 5 lakh, whatever for new something? And can we then deliver in that price point and so on. So as of today, be immediately, but like Japan consulting when we started Ushuaia but slowly treated other companies coming up. And sometimes it helps us. We go with -- when we went to these 2 manufacturing firms, they actually gave us cat designs, which had come from them from Germany, and they want the saying, read makers then. Can you develop a program to extract this text from German and change it and deploy again get these drawings translated basically. So it is leading to some other language location at business for us, but this high tech is still yet to give us recognizable revenues here. Any other questions?

Yes. Yes, many of you might have not invested or whatever, I'm not sure this thing but please do follow our company to do look at us give us pointers any ideas, any competitors that you see in the market or it would be great to connect and learn from you as well, yes. And if you cannot -- mean if there are no questions today as well, feel free to reach out S She'll be happy to answer any questions or take it later as.

Okay. Then, sir, sir, I think we have taken all the questions. I think there's 1 more question in the books. There's 1 more question. Sir, which region do you see the high potential going forward?

Meaning for if you ask me -- if you say tomorrow, there is business in Africa, I'll take next right to African go there [Foreign Language] to come in. But what we are seeing is we have now based in Japan, U.S. and India. India is also growing. So we are not leaving it untapped. So we regularly participate in like exhibitions or events here. We do some mailers -- last week, there was an event in Hyderabad. There was a pharma exhibition where we showcased our data modeling or data analytics solutions, language solutions because that's also a very regular and it needs some leverage support and so on. So we -- I mean, we are not suddenly trying to go in unknown regions. But some of these recent experiences that we have. So for example, we get regular training requirements from, say, Nigeria or other band Baku exchange, actually, meaning it's not like a brokerage firm or it's an exchange asking us to -- can we support. Last year, we had Bangladesh, 2 years back, rather, we had Bangladesh Exchange asking us to train their team in fixed connectivity. So we believe that these emerging markets have some requirements that we can deliver from here. Japan market, because of our presence and Japanese language expertise, we can try to leverage that. We don't want to leave it like open. U.S. market, now we have presence out there. And it's 1 of the biggest tech markets where we still have hardly started there. So we -- at least these few areas we would -- or geographies, we don't want to leave on tap. That said, we are continuously open for looking at different geographies or markets here.

Manish sir, you can go ahead with your question.

Yes. my question. So sir, this revenue of INR 37 crores that we've achieved this quarter -- can that be minimum revenue that we can achieve across the 4 quarters in the new financial year? Is that the minimum revenue that we can expect -- we want to -- I mean, if you ask me, we want to maintain that and overachieve that.

But that said, [indiscernible] it's a bit early. We just rather we are so aesthetic about the fact that, as I mentioned, just a Sapele, we were doing INR 6 crores a quarter. And now we have a 6x of that. So we want to maintain that at least minimum this -- so far, we have maintained typically, Q1 of the next fiscal year is a bit tough because, again, you have raised the expectations and you want to overgrow that Q4. And Q4 typically are good and so on. But that said, we want to at least maintain this and grow from there, yes.

Just to add to what Sunil san said just now. So this INR 37.27 crore is a combination of organic and inorganic during the quarter. Naturally, we are taking a handle on the latest acquisition of IM Corporation. It will take a little time for us. Then we do have another acquisition done in U.S. So we have got a reasonable handle there. But then how do we drive the growth within these accounts while sustaining the current level of revenues, that is going to be the key, and we are exactly working on that. So that's why there is no state mathematical answer but our intention is to sustain this level of revenue and growth. Does that answer your question, Manish? We would decide we can. I ask Manish, whether it answers your question. Yes. Sorry, I have connectivity in select.

Then sir, I think we have taken all the questions. I would like to hand over to you for your closing remarks, and then I'll close the call.

So thanks a lot for your time today. And as I mentioned, we see these as milestones. We -- the journey is long, we expect to -- or request you to continue following us. to refer us to friends and families, you know when you see -- I feel confident about us, give us pointers and we'll be open to look after any suggestions as well. And from our side, we continue -- we'll continue to keep as much as communication as possible. Once again, thanks a lot to Fidel portal as well to your team for arranging this. Thanks to all.

Okay. Thank you. On behalf of Fidel Portal, I would like to express our gratitude to the management team of Filelatefor taking time to join us and provide such detailed responses to the question. We also appreciate all the participants for their engagement. If any question remains unanswered, please feel free to reach out to email IDs given in the chat box. You may disconnect your lines now. Thank you.