Hinduja Global Solutions Limited (HGS) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. A very warm welcome to the Q2 and H1 FY '26 earnings conference call of Hinduja Global Solutions Limited. From the senior management, we have with us today, Mr. Venkatesh Korla, Global Chief Executive Officer, HGS; Mr. Vynsley Fernandes, Whole-Time Director, HGS and CEO of the NXTDIGITAL Media Business; and Mr. Mahesh Kumar, Global Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Venugopal from Adfactors PR. Thank you, and over to you, sir.

Thank you, Muskan. Good evening, everyone. Welcome to the earnings call of Hinduja Global Solutions Limited for the second quarter and half year ended September 30, 2025. Before we begin, I would like to highlight that some of the statements made during today's call may be forward-looking in nature. These statements involve risks and uncertainties, including those related to the company's future financial and operational performance. Additionally, in the unlikely event of a call drop during the conference, we will ensure the call is reconnected at the earliest. I now invite Venkatesh sir to deliver the opening remarks. Over to you, sir.

Good evening, everyone. Thank you for joining the call. I appreciate you all taking the time. As a quick update to our financial performance for Q2 and H1 of FY '26, our Q2 total income stood at INR 1,222.9 crores, which is USD 141 million, and our operating revenue was around INR 1,091 crores, which is USD 125.8 million. Our total EBITDA was INR 158 crores, which is USD 18.2 million, and EBITDA margins were 12.9% in the second quarter of FY '26. In the first half of FY '26, the total income stood at around at INR 2,410.2 crores, which is USD 277.9 million, and our operating revenue was INR 2,147.3 crores, which is USD 247.6 million. Total EBITDA was INR 317.7 crores, which is USD 36.6 million, with EBITDA margins of 13.2%. Going to the next page. We have -- as you saw it, we have been focused on maintaining and improving our margins, and we are also changing our [Technical Difficulty] focus and orchestrating the future. Our new vision and direction is that we are going to focus on what we call as the Intelligent Experiences. Our vision is to be the most trusted partner for clients, driving global business transformation to create intelligent experiences. When we say intelligent experiences, they include 2 parts, we see it as 2 parts. Every moment that the customer has a connect with the brand, they typically have an interaction, which is what we are calling as intelligent interactions, and then those interactions typically have a commitment to execute or deliver or fulfill something for the consumer. And that is the intelligent operation, which is a fulfillment process that goes on behind the scenes. And we see these 2 coming together as intelligent experiences, because there's an intelligent interaction and then intelligent operation, which is typically augmented with AI and human talent to deliver a more predictable, consistent outcome for the end consumer. That's what we are calling as intelligent experiences. Next. Our key pillars of focus for the road ahead are, we are very future-focused, creating forward-looking service offerings that drive better margins for ourselves and create value for our customers. It will be growth-oriented, where we are going to invest in sales and marketing, where we're going to move towards consultative sales and take a slightly different approach in sales using vertical-focused approaches where there's industry knowledge. And we are going to focus also on driving a team culture that is performance-driven in nature and reward agility and adaptability in the industry. We are also going to create diversity in our portfolio, where we are going to focus on multi-tower deals driven through consultative sales. And we are going to simplify our organizational structure, where we're going to create a leaner organization with reduced bureaucracy and higher rewards for the people that are there managing these organizations as we grow to the future. And we are going to augment AI into our every grain of our operations to be more efficient and to be more effective and to be able to scale much more quickly. Next. With these pillars of focus in mind, the key update that we have related to the acceleration that we have experienced so far is that we are focused on sales and change in the revenue mix that we have. In the first half, we have closed 35 new clients that we have contracted with. And we are seeing the pipeline shifting to more digital services and digital operations, which is 62% of our pipeline today has moved towards digital services and digital operations. We have sharpened our sector focus. We are seeing more and more multi-tower deals in the 3 priority verticals we are focused on, which is BFSI, consumer products and retail as well as healthcare and life sciences. We are able to do this by leading with consultative sales. We have created a new team called Global Partnerships and Solutions team focused on cross-functional collaboration and embedding intelligent experience principles into the client engagements. We have taken our vertical expertise that we have and we are creating solutions that can be deployed across our customers, where we can offer them on a consistent basis that can create repeatable revenue for ourselves with higher margins. And we have created around 12 solutions by co-creating with clients across high-growth sectors. We are continuing to pursue partnerships and acquisitions and we are continuing to explore opportunities that can help us grow the business more quickly and be accretive to our margins. We have also undertaken aggressive reskilling and upskilling programs within the organization to drive our own team members to be knowledgeable in AI and how they can augment AI into their day-to-day work. We have several upskilling programs underway. As an example, we have launched a program called DigiRise, a specialized AI-focused training module where we are training our teams across borders. With these acceleration focus that we are driving the business, we expect that over the next 5 years, we expect that the EBITDA percentage or the EBITDA margin will get to in the mid-20s in the next 5 years. We are also with the new -- with the acceleration of new logos and sales that we're able to drive, we expect that we will have a more sustained growth. Because typically, 80% to 90% of growth comes from existing customers. So as we establish these new customers over the next few years, we'll be able to see sustained growth with the revenue that will be generated from these existing customers. Next. Some of the solutions that we have talked about, as an example, one of them is a Cloud Fin Ops Navigator. We are seeing a lot of customers who are concerned about the spend that they're doing in public cloud infrastructure. Especially, as they're deploying AI, the demands on the public cloud infrastructures are going up and their costs are becoming uncontrolled. So some customers are considering what we are calling as cloud repatriation, where they want to go back to physical data centers. We have created a solution called Cloud Fin Ops Navigator, which is an AI-powered platform that helps them forecast, segment and monitor cloud spend and has an interactive AI assistant that can guide them in how to optimize their cloud spend, how to reduce it and free up DevOps resources for them to reallocate towards other areas of spend that they need to allocate those funds for. And the other one that we have created was we have created something called a Anti-Money Laundering Lens, AMLens, which is an AI-driven fraud detection tool that agentically analyzes the transactions, reduces false positives, while ensuring human oversight. This is specific –- a BFSI-specific solution. And in fact, one of the customers that we have helped deploy this with has had significant early success, where they've been able to reduce false positives by around 60% and they have been able to increase the throughput of their team by 3x with the number of transactions they have been able to investigate for anti-money laundering. We have created another solution called Interaction Intelligence, which is more of a horizontal play. This was to transform the QA and compliance and coaching for contact center agents with AI-driven analysis of 100% of the customer interactions, boosting compliance, extracting insights and also helping improve agent performance in real time. We have used this in parts of our business and we are now rolling out to the rest of our business. What we have seen is we have been able to reduce the time to proficiency of agents as we bring them on significantly from almost 10 weeks, 12 weeks down to 2 weeks to 3 weeks, and that is resulting in a improvement in margins of over 30%. From a HealthCare Case Worker standpoint, this is a healthcare specific solution, we are working with some of the public sector healthcare clients, where we have been able to streamline patient intake and documentation process, assisting staff with intelligent automation and human oversight for accuracy. So all these are AI-driven solutions where we have used our historical data and experience that we have and combined with human talent and augmenting AI and human talent together to deliver this highly valuable value-generating AI solutions for our customers. Next slide. In the idea of creating consultative sales, we are repositioning ourselves by focusing more on education for our customers and prospects and creating thought leadership events. We had a large event in Chicago recently in September, where we had over 62 and all -- and odd customers and prospects show up. It was a 2-day event, where we had around -- 50% were existing customers and around 50% were potential prospects. And we are seeing significant success from these educational events that we are running, where we have been able to bring thought leaders in the industry, our own employees and team members and our customers and prospects to the team -- to the meeting. Next. While we are doing all this, we are also keeping our employees engaged and creating a culture that is performance-driven, collaborative and team oriented. We have been recognized as Great Place to Work in 4 geos at this point, and it is in U.S., in Canada, in Colombia and in Philippines. And we continue to drive the engagement with employees to have a very diverse [Technical Difficulty] that is engaged, empowered and focused on agility and growth for the future. Next. So I'm going to hand it off to my colleague, Vyns, to talk about the Digital Media business.

Thank you. Thanks, Venk, and good afternoon, everyone, and thank you so much for joining in the call today. I'm going to start with Slide #13, which is a management commentary. And I hope everyone can hear me loud and clear. Tanuja, I'm assuming you can hear me. Everyone can hear me, right?

Yes, Vyns, we can.

Okay. Thank you. Thanks, Venk. So yes. So if you go look at Slide 13, there's no doubt that the Media business continues to face challenges in India, whether it is from OTT or whether it is from free dish or free television services. But there's been -- against all those headwinds, to be fair, the entire Digital Media business has seen a very strong performance in Q2. And this is on account of various aspects that we've carried out in the business, some of them being optimization, but others being growth drivers in terms of the broadband vertical. So if you look at the 4 points that have kind of really driven us in this quarter, the first is there's been a very accelerated sales-oriented approach for wired broadband. We've looked to expand in Tier III and Tier IV markets. And I have a slide which will talk about the strategy that we've adopted. So I won't spend too much time on that. Similarly, we've launched our IPTV or Internet Protocol Television Solution. I mentioned this in the Q1 call, if you all will recall, when asked about how we're going to build a flanking strategy for DTV customers that are looking for a digital solution. CelerityX, our enterprise business, has continued to add some prestigious logos in Q2. And as I started this call, I mentioned there are cost optimization initiatives. We're very happy to see that those cost optimization initiatives that we initiated at the start of this fiscal to address the challenging environment, they've already helped improve margins. And as I say, the numbers are there for everyone to see. I'm going to go on to Slide 14 now. This is the big one for us. We have launched our Internet Protocol Television Solution called ONEiPTV. We launched it recently in September. And we're quite proud of it, because what it does, it provides 650 television channels to customers over the internet. So suddenly, here's a single wire-to-the-home digital experience for our customers. So using a single wired broadband connection to the home, we provide television services, 650 television channels. These are live television channels. So it's your same television channels that you will see using a cable TV connection, but they are now being delivered to you over the internet and they're streaming effectively. And then there are also value-added services that we've built in it. And I think the biggest advantage for a customer of NXTDIGITAL, our DTV product, or ONE Broadband is that we are offering combo plans. And those combo plans are highly affordable, where we've integrated our broadband and IPTV service. We're already available in 100 cities. Even as we speak today, we are rolling out in another 12 cities by tonight. And if you go to Slide #15, we actually had a pretty much of a houseful launch. We launched it at an event called Satellite Cable and Television 2025. It's the big trade show that happens every year in Mumbai, and we launched our product there. My senior colleagues, Amit Luthra, whom you know joined us in May as our Chief Business Development Officer, and even our CTO, Jaydeep, delivered a session, and essentially highlighting how -- keeping in mind the HGS principle of innovation, technology and a customer-first approach, those same principles are driving the next phase of our digital growth journey. So with the launch of IPTV, there's one more product in our portfolio after wired broadband, after cable television, satellite television via HITS, OTT, we now have IPTV also as a strong product in that market. Moving on to Slide 16. This is our incredible sunrise performer, CelerityX. As you know -- just to kind of give everyone a quick heads up, CelerityX was set up as the enterprise business division of our broadband vertical, and the entire objective was to leverage the infrastructure that we've invested in, that we've built, the teams that we've built, the capabilities that we've built to be able to leverage all of that and monetize all of that for the corporate sector. And just in Q2, CelerityX has been able to add significantly strong new logos in Q2. But I think the biggest, exciting part for us is we've delivered over 3,000 hi-speed broadband links in the last 6 months. This is clearly setting the stage for aggressive growth, because that is something that is very unique to us as a company, as a division. So CelerityX has a very clear unique offering that it pitches, that we use as a pitch to our customers that no one connects India the way CelerityX can. And we kind of hold good on the promise. So some of our customers have asked for connectivity in the upper reaches of Sikkim, Uttarakhand and even Andaman and Nicobar Islands, where we provided connectivity to customers. To banks, especially, that have asked for this service, we've been able to provide them. And even while CelerityX is delivering connectivity all across India, they also extended its profile and its portfolio to cover managed Wi-Fi, cybersecurity and even disaster recovery solutions. So all of these solutions are focused pretty much to address the evolving needs of the modern companies. Modern enterprises need connectivity, modern enterprises need reliability, modern enterprises need security. And the entire Hinduja Global Solutions portfolio, our global portfolio, covers all of these solutions to be able to provide corporates in India with the highest quality of service and products that compete with the very best in the market. So that's on CelerityX. Moving on to Slide 17. I thought I'd summarize for you some of the exciting things that we've done in Q2. As I mentioned to you at the end of the Q1 call last time, we have been focusing on building an organization. We've been focusing on building integrated solutions as well. And this is now beginning to see traction in Q2. And of course, we'll see acceleration in Q3 and Q4. So there are 5 key pillars that we've looked at. The very first pillar is we have worked on developing and expanding our services to 100 new towns across India. As you know, our digital television business, our HITS platform, Headend-in-the-Sky platform, covers about 1,800 cities and towns in over 4,500 pin codes. And the entire broadband business is leveraging that connectivity, leveraging that connect with the platforms and the partners and customers there to expand to about 100 cities. And again, in the true spirit of the Hinduja Group of partnerships for growth, we are engaging with microentrepreneurs for lead generation. So we've created this -- we're creating this new organization, a national organization of entrepreneurs who will work with us to develop these new markets. That's on the retail and organic base. In terms of CelerityX, we are continuously, as I mentioned earlier and I won't spend too much time on it -- we are building a single vendor solution stack. So that is something that our HGS team and the CelerityX team are working together to ensure that there's a very robust portfolio expansion, not just to increase stickiness of enterprise customers, but to be able to give them a single window approach for products. In terms of the strategic alliance partnership segment, which, as you all know, was the mainstay of the broadband business, our SAP partners have continued to deliver on their promises. Revenues have been growing there with assured margins. And markets where OIL doesn't have reach, we are working on developing new strategic alliance partners. In fact, just in October -- and in fact, we'll announce it formally obviously in the next quarter -- we've been able to sign on to significantly large SAP partners, and those partners, the process is on for onboarding them into the ecosystem. The fourth column that you see on Slide #17 is called the BAGO initiative. This is Broadband Accelerated Growth Opportunities. What we realized, there is an incredibly large opportunity of over 1,000 or close to 2,000 smaller independent or satellite -- independent service providers or internet service providers, and the idea is a lot of those are facing challenges in terms of growth and looking for strong partnerships and relationships. So we've created this cell called Broadband Accelerated Growth Opportunities at the head office through a central team and we are evaluating products and we are evaluating deals, potential deals that could help us accelerate in certain markets. And as a result of managing it through a central HO team, we're able to obviously accelerate the growth in those markets. So that is the BAGO initiative that we've launched recently in Q2, and we've already been able to close certain deals. So a lot of the retail and organic growth that's happening will continue to be driven also by the BAGO initiative. On the organizational slide, which is our fifth critical pillar, we have continued to build a scalable empowered tech and operational system. The idea is that as our business -- as our broadband business expands across the country from beyond 350 cities, adding another 100 towns, it's very important to create a very quick reciprocal or a troubleshooting mechanism to be able to ensure faster resolution. And we've been decentralizing a lot of processes, one is operationally and second is technologically. As you know and as Venk, my colleague, pointed out, HGS is a leader clearly in the tech space, and we have that incredible opportunity to leverage the tech capabilities to build solutions that help our business and help our broadband business grow significantly, and therefore, eventually ensure that we start to set up industry benchmarking. So we believe that, that is happening, it's on the right track. And with that, I'm going to go to Slide 18. This is -- it's always satisfying and -- to see that you're recognized and as a company we're recognized for the efforts we put in. And our broadband business, ONEOTT Intertainment Limited, the very prestigious BCS Ratna awards that happened in August, our ISP has won the award for best ISP delivering in rural India. We always keep talking about the fact that the Hinduja Group is very, very robust and is very focused on digital inclusion and connecting the unconnected and the underserved, and I think this award of being the best ISP delivering in rural India bears testimony to that. So we're quite delighted with that. And on the television side, the Innovative Technology Provider winner. We've been the winner in that category, where we've been able to provide solutions. And you've seen recently the IPTV solutions. We've had OTT with the only HITS platform in the country. So all of that put together always gives us the technological advantage. So it's been a good quarter. It's been a good first 6 months of this fiscal, and we plan to continue where we've left off. So thank you everyone for that and the support. With that, I'm going to pass on the baton to my colleague, Mahesh Kumar Nutalapati, who is our Global CFO. Mahesh, over to you.

Thanks, Vyns. Good evening, everyone, and thank you for joining us today. We appreciate your continued trust and support as we share our performance for the quarter and provide insights into our strategic direction. Having said that, let me walk you through the financial highlights for the quarter. I'm on Slide 20. Revenue for the quarter stood at INR 1,091 crores, which reflects 3.3% growth as compared to previous quarter. And from an year-on-year, it's a marginal growth of 0.4%. In the current quarter, depreciation expenses are at INR 118.2 crores as compared to INR 128.3 crores in the previous quarter. And on a year-on-year basis, depreciation has dropped from INR 133.2 crores to INR 118.2 crores. Profit before taxes for the quarter is at negative INR 14.1 crores as compared to INR 26.5 crores negative in the previous quarter and a negative of INR 40.7 crores on a year-on-year basis, which definitely reiterates the messaging that both Vyns and Venk has been providing about our transformation initiatives, and driven by operational efficiencies and disciplined cost management. Taxes for the quarter are at INR 12.9 crores as against INR 19.9 crores in the previous quarter. And on a year-on-year basis, which is fairly consistent, at around INR 9.9 crores, were in the similar period in the last year. PAT, profit after taxes, from continuous operations are -- for the current quarter is at negative INR 27 crores as compared to a negative of INR 46.3 crores in the previous quarter, and a negative of INR 50.5 crores on year-on-year basis. As mentioned earlier about PBT, we can see the impact of initiatives, which are showing up in a narrowing of the losses, both quarter-on-quarter and year-on-year. And coming down, the total EBITDA is at INR 158 crores, which is marginally down by 1.1% sequentially, but better by 2% on year-on-year basis. Moving on to Slide 21, which is balance sheet overview. We are maintaining a strong balance sheet worth a total net worth of around INR 8,098.5 crores with a debt of INR 1,254 crores, reflecting healthy gearing ratios. The net cash and treasury surplus is around INR 5,321.3 crores. On cash flows and cash, I can reassure that we are maintaining a strong liquidity position, ensuring the adequate working capital to support ongoing initiatives, which has been discussed in detail between both Vyns and Venk. And this resilience underpins our ability to invest in the growth while safeguarding the financial stability. Moving on to Slide 22, which is revenue composition. The left side of the chart shows revenue by source, wherein the CX operations constitutes around 55% of our total revenue and digital and media services accounts for 45%. The right side of the graph, the chart shows split by vertical. Tech, media and telecom continues to be our largest vertical, accounting for around 52% of the total revenue. CG and retail is at 20%, followed by BFSI at 19%. Health and life sciences and other accounts for around 5%. And the public sector revenue remains stable, primarily from U.K. and Canada, which are mainly consistent with prior quarters. Moving on to Slide 23, which is revenue composition by origination and the delivery locations. From an origination perspective, the chart on the left side shows for the quarter India geography accounted for around 39% of the revenue, total revenue originations; and U.S. is 29%; U.K., 11%; Canada, Australia and others adding up to 21%. From a delivery standpoint, again, 43% of the total delivery was accounted from India. Between U.S. and Canada, it is around 28%, where Philippines accounts for around 13% and the U.K. and others accounts for 16%. Moving on to Slide 24. This slide shows -- the left-side bar chart shows the client concentrations. This chart shows how well diversified is our customer base to avoid or to minimize any single customer risk. So our top customer accounts only for 7.6% of our total revenue, whereas top 5 customers account for around 21% and top 10 customers represents 29.8%. And the right side of the chart shows the DSO. DSO for the current quarter stood at 61 days as compared to 65 days for the same period last year on a year-on-year basis. Better collections have assisted in better DSO for the quarter. Moving on to Slide #25, which shows the details of H1 of FY '26 as compared to H1 of FY '25. Revenue from operations is at INR 2,147.3 crores versus INR 2,179.1 crores, a marginal drop of 1.5% on a year-on-year basis. Reported EBITDA, we have an expansion of 30 basis points from H1 of FY '25 to H1 of FY '26 from INR 51.2 crores to INR 54.8 crores. Profit before taxes stood at negative INR 40.6 crores for H1 FY '26 as compared to negative of INR 84.9 crores for H1 '25. PAT from continuing operations stood at negative INR 73.3 crores as compared to negative of INR 107.5 crores on a yearly basis. And again, as mentioned earlier, losses are definitely now rangebound, showing the impact of the initiatives that have been put in place during the years. On total EBITDA, we have an expansion of 6.5% from H1 FY '25 to H1 FY '26 from INR 298.3 crores to INR 317.7 crores. So this ends the financial section. So before closing, I just want to reiterate what both Venk and Vyns have mentioned earlier, that we continue to advance our digital transformation agenda. We are also looking at strengthening partnerships and exploring selective acquisitions to accelerate growth in high potential segments. And our commitment to innovation remains unwavering as we invest in technology and talent to stay ahead in the rapidly evolving market. Having said that, I want to reiterate our commitment as an organization is in creating long-term shareholder value through sustainable growth and prudent financial management. Thank you once again to all of you for your continued trust and partnership.

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

So I have a couple of questions. So last year, you mentioned Agent X as central to the AI-led transformation to be rolled out across 20 BPM clients with a 12% Q-o-Q user growth. Has the adoption sustained as you scale? And is it tracking your expected trajectory?

And the answer is yes. We have been able to get across 20 clients, primarily in the North America region. Now we are moving on to deploy in the U.K. and the Asia Pac regions as well. That's the project for this year. With Agent X deployed, we have been able to see sustained improvement in gross margins. In fact, it does an uplift of around 30% improvement in gross margin. And what we have done is we have taken that uplift and we have been able to apply it against -- or invest into additional sales teams and solution development. So we are funding our internal development without impacting the overall margin capability on the EBITDA level.

Got it, sir. And secondly, has the revenue mix evolved as planned? And is the digital share of total revenue aligned with your 12 -- 5 years transformation road map?

Yes, it is. In fact, the pipeline is showing a very healthy digital pipeline. From a revenue mix standpoint, this year, we were supposed to get to close to 50% of revenue mix from digital versus BPM revenue. And we are starting to see that. They're pretty close. It's like a plus or minus 1% for this year that we are projecting the trajectory to end. So we are seeing the things roll out as planned. More importantly, a lot of the new customers that we have acquired, they are related to digital projects. And typically, what happens with digital customers where we acquire -- related to digital projects, is they start off with a smaller project. As they feel comfortable and build the trust with us as a company, as a delivery partner for them, the scale grows. So we anticipate that to accelerate the growth and the digital revenues to accelerate in the next few years.

Got it, sir. Got it. And lastly, as a part of your 5-year AI transformation, covering all your margin optimization, GTM refresh, vertical solution and acquisition, how do you use -- how do you envision HGS architectural design as a way it shall build, deliver and monetize the value?

So we see that as we progress to the future, we will be more and more using an augmented AI model, where we will be using AI to be augmented with human talent to deliver services. So today, if you look at our BPM side of the business, not the media, but the BPM side of the business, we have -- broadly we can divide it into 3 segments. One is where we do technology services and the second where we do majority of the contact center and business process management services. There's a new service segment that is evolving, what we are calling as digital operations, where we are combining the technology capability, the process management knowledge and the customer service and interaction knowledge together into one single segment. And we are calling it the digital operations, where we are going to -- we'll be able to take an end-to-end business process and reengineer the process to be able to combine both human talent and AI models that are unique to that specific problem statement and create a end-to-end business process execution capability for that critical business problem. And as we go through this exercise of doing it, we are going to be pricing -- our pricing models will evolve to be outcome-based pricing models, where we're going to charge per transaction or per outcome with the customers and create a sustained set of revenue base. Our margin profile for these projects will be much higher than the typical labor arbitrage delivered margin models, where here, the scalability is much larger and a higher margin capability that comes along with it.

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

I have one question on digital and media services. So now it accounts for nearly half of the revenue. And with strong momentum in enterprise, broadband and ONEiPTV, how do you see [ cost ] business conversions shaping your future operating model, for example, using broadband backbone to enhance BPM delivery or leveraging BPM relationship to facilitate media penetration?

And you're absolutely right. Way back when we became a part of HGS, the objective was pretty much how to leverage the digital capabilities and the inherent, what I would term as field capabilities of NXTDIGITAL to work together. So one great example is the product called OneX. This solution which we rolled out about 2 years ago is a digital solution that was designed together with the HGS and NXTDIGITAL teams to be able to provide our enterprise customers with not just connectivity, because connectivity is a very pedestrian aspect, but to be able to provide them online dashboard management capabilities. So the solution has been designed. Assume you're a bank and you have connectivity in -- let's take the most remote place, Andaman and Nicobar Islands, and you're using 100 Mbps of connectivity. And suddenly you see you need a new solution. You need to be able to put up the -- to increase the bandwidth, et cetera. You can use this OneX solution and manage your link on your own. And that has been a significant fill in our side, where we've been able to look at CelerityX grow. So that has become a very critical component. So the entire CelerityX business is riding on technology integration across both platforms. Are there any more products similar being rolled out? Absolutely. As I mentioned, there is also cybersecurity. HGS has developed some incredible strong cybersecurity products. So the banks that we are actually dealing with or the corporates we're dealing with, we're able to provide them with a single window approach in terms of how it will work. So I think from a perspective -- as you rightly said, what is it that we're doing from a media perspective here in India? Those are the components that we're doing. And there's SOC services, et cetera. So I'm going to get Venk, because Venk and I have been working really closely on how to be able to build value for our customer base in India. So Venk, can I get you to just talk about the cybersecurity and the SOC services so that will add value to the entire pitch, please?

Sure. That's great, Vyn. So one of the things that we have done is -- see, the BPM capability is to be able to staff and manage and monitor different types of services. So we have created a centralized SOC that now services over 20,000 endpoints today for some of our customers, and we plan to expand that and offer it as an offering along with the business broadband capability that's being offered through the media division, where we can provide endpoint security and alert our business customers with any threats that they are going to face. We foresee that with AI coming up, more and more of these threats will continue to come out. Cybersecurity management and information security management, especially endpoint security will become even more critical. And our SOC facilities are gearing up for making sure that we can provide these services to our customers.

It was really helpful. You also spoke about leaner structures and reduced bureaucracy. Can you elaborate on where you see the next wave of operational efficiency and how will those translate into margin accrual?

Sure. So one of the things that we have been looking at is, historically, we have had a business leadership that was there for each country. So what we have done is we have now divided the –- our -- we are in 9 different countries on the BPM side of the story. So what we have done is we have divided that up into 3 regions. One is Americas, which combines our U.S., Canada, Jamaica, Colombia region as one or countries as one region. We have our U.K. and Europe and Africa as one region. And then we call it Asia Pac, which is the –- our Asia Pac is Philippines, Australia and India as one region. And we have been able to bring -- we have created leadership that are at the regional level. So therefore, reducing the number of leadership positions that are there. In addition to that what we have done is we have created AI-based tooling that is going to support a lot of our management team. So as we -- so that we are more efficient, so that as we scale, we have additional capacity to grow without having to add additional G&A to the organization.

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

Sir, I was just trying to understand the cash flow that the -- EBITDA includes the interest income on the treasury as well. So where are we deploying the cash flow from operations and the interest income? So there was an item, repayment of lease liability around INR 600 crores in the last year. So can you just elaborate exactly as to where the cash flow has been deployed?

See, there are 2 aspects. One is the cash from operations that we are generating. So those cash from operations are used for further operational requirements, whatever is coming up, like facility consolidation, certain initiatives that we are taking. So in those places, those cash are getting utilized. And second, the interest income that we are generating about -- on the investments that we have, if we don't see any kind of an immediate need for those amounts, we are redeploying those interest income into further investments. So depending upon the operational flexibilities and the interest income that we are generating, we take a call either to pre-close the lease, which is purely upon the interest arbitrage, or to continue the lease and deploy the funds for further generation of income.

Okay. So what is exactly the lease actually? It's not the borrowings, right? It is...

No, these are not borrowings. These are the assets that we take on a leased basis. And then there are certain kind of rental premises that gets accounted as per the new Indian Accounting Standards. So these get classified as [indiscernible].

What are the lease assets actually? Like what exactly is a lease asset?

One of the rental premises, which gets classified as lease rentals. That is one lease asset. The second is that for our media businesses, we take certain assets on lease basis, like the desktops and set-top boxes and all. So those things are classified under lease assets, and that is like repaid debt as per the terms of the leases.

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

I have a few observations and then a few questions on which I would like some clarifications. You talked about a drop in the losses, PAT losses. I find that to a great extent, this is because of ForEx gains? Correct me if I'm wrong. Two, I find that the top line has been stagnant. And Vyns has talked about improving the EBITDA margin from 13% to almost doubling it to mid-20s. Would this be on stagnant top line or also on increasing top line, because that will make a huge difference? The third is, while I'm enthused about the initiatives taken in the media division, I'm somewhat concerned about the continuing losses. For example, a few quarters back, it showed that they made a profit of INR 10 crores and suddenly I find that this quarter the losses are at INR 38 crores. Now I'm wondering what has led to the sharp increase in losses? Perhaps Vyns could expound on that.