Intellect Design Arena Limited (INTELLECT) Earnings Call Transcript & Summary

[Audio Gap] to discuss the Intellect Design Arena Limited financial results for the first quarter of the fiscal year 2026-'27 ending 30th June 2026. The investor presentation and the press release has been sent to you and is also available on our website. Our leadership team is present on this call to discuss the results. We have with us today; Mr. Arun Jain, Chairman and Managing Director; Mr. Manish Maakan, Executive President, Group Chief Revenue Officer and CEO of Wholesale Banking. We have Mr. Rajesh Saxena, CEO of Consumer Banking; Mr. Banesh Prabhu, CEO of IntellectAI; Ms. Vasudha Subramaniam, CFO; Mr. Vikas Misra, Chief Strategy Officer; and Mr. Deepak Dastrala, CEO of Purple Fabric. Besides some of the other senior members of the Intellect management team, they are present in the call. Now I hand it over to Manish to give his comments on the results. This will be followed by the comments of Vasudha. Thereafter, we will be in the Q&A session, where your questions would be replied by the senior members of the management team. [Operator Instructions] On safe harbor, I would like to remind you that anything which we say which refers to our outlook for the future is a forward-looking statement, which must be read in conjunction with the risk that company faces. With this, I request Manish to give his briefing. Over to you, Manish.

Thank you, Praveen. Good evening, everyone. Thank you for joining this Q1 FY '27 cascade. The theme for this phase is growth by design. I think that's what we introduced beginning of this year and how we're doing. I'm going to focus on giving you some evidence on what growth is and then going to talk about the algorithm, which makes that growth happened. Our total income has reached INR 872 crores, growing 19% Y-on-Y. Our license revenue has grown by 17% to INR 457 crores, and we've secured 19 strategic wins and expanded our pipeline to INR 13,000 crores. The number of Destiny deals have crossed 100 for the first time, and we've converted 7 during this quarter. None of these are isolated outcomes. They reflect a deliberate growth system connecting our research, platforms, priority markets, customers and execution. Today, I will explain the algorithm behind this growth and how we are working to make it increasingly repeatable and predictable. So our unfair advantage on the platform -- so the 2 platforms which are creating the unfair advantage for our growth journey, eMACH and Purple Fabric, around which we have been making most of our investments and going live. The data points on what each one of them are has been listed over here. Our moat is not one technology. These are 2 different distinct technologies. It's the combination of composable banking and AI, which is making the difference in the world. It is our ability to reuse proven capabilities, reduce implementation complexity, lower total cost of ownership and bring differentiated propositions to customers with greater speed and certainty. This is -- the question is whether this differentiation is producing commercial evidence. Our Q1 performance demonstrates that it is making a difference. If we go to what's our core strategy which connects all of this value? I think the first pivot of our strategy where we are making significant investments is AI first. And how this AI first is making an impact to our lives is, we look at it -- I look at it from 2 perspectives. First is external monetization. Our Purple Fabric is creating stand-alone enterprise AI opportunities while increasing the differentiation of eMACH in broader transformation decisions. We are focused in selling PF as a platform and as AI first in all our eMACH stories. So each of the wins you see would have not been possible without either one of them. Financial institutions need more than access to a language model, which we hear a lot out there. They need an AI that can work with enterprise knowledge, established workflows, governance, framework, security controls and regulatory requirements. The second value we're seeing from AI is internal transformation. We are expanding AI adoption across engineering, testing, implementation, customer support and business operations. Our objective is to increase execution capacity, shorten delivery cycles and support operating leverage over time. Our second growth engine is focused execution in strategic markets. North America has become one of our most important growth markets, and we are parallelly pursuing our continued growth around Europe, Middle East, India and APAC. Our third growth engine is productizing our domain expertise. Our portfolio addresses across wholesale banking, core banking, digital banking, lending, wealth, insurance and commerce. Purpose-built propositions in each of these areas such as Islamic banking, custody and credit unions allow us to address specialized opportunities with greater repeatability. This is power of true eMACH. Our fourth growth engine is strategic customer expansion. During quarter 1, we secured 19 strategic wins and completed 16 transformations. And over past 12 months, we have achieved 61 wins. You would see the average of 61 over 12 and 19 in the last quarter, showing that the number of wins are growing. A strategic win is only a beginning. Successful implementation creates customer value, customer value builds trust and trust gives us the right to expand across additional products, business units and geography. These are our 4 pillars of our growth algorithm. In Q1, like I said, North America is helping us make an impact. One of Mexico's largest banks selected eMACH CBS, and this is a franchise of one of the largest global banks where the digital engagement platform on the corporate banking, wholesale banking side across all lines of business was chosen. We have 6 credit unions in Canada adopting a digital engagement platform. This further reinforces the investment we made about a year ago in Canada, and our wins are continuing across that. It ratifies our investments and strategies consistently. Europe is where we have been winning enough before also. Another large top 5 bank in Europe for their investment services and asset management side, they looked at our eMACH CBS to make transformation over there. In Middle East, last quarter, we had -- war had impacted us, but this quarter has been very large for us from -- post war for us over here. The war has also forced banks to really think through the infrastructure and actually are putting more investments to solidify and upgrade their infrastructure. So we saw a number of wins in Middle East from that perspective. India, homegrown market, one of the largest financial services company picked up Purple Fabric as a complete enterprise open business impact AI platform. So we're winning AI in eMACH as well as individual platform deals. That was a big -- we had another 3 custody deals, which shows as wealth is coming into India, all supporting the market strategy, we won 3 large deals on custody side, further expanding our market leadership in India. From an APAC perspective, we had 2 deals across Southeast Asia and 1 deal in East Africa, further expanding our individual franchises over there. So if you look at, it's been a very balanced portfolio across markets, winning across all 5 geographies where we operate out of that. Our pipeline, like I said, grew INR 13,000 crores, 15% year-on-year, and we've crossed 100-plus Destiny deals. This is giving us confidence that our investments are in the right direction. Our results are proving that execution is backing where our investments are going. And we had 7 large strategic deal wins which we had during the last year. This is statistics on our deal size band. Above INR 50 crores, 29 deals. So we have a varied portfolio. We're not singularly dependent upon either large, medium or small deals. So balanced portfolio across markets, size of deals and platforms. I think that balanced approach of what Arun has been consistently saying is, that's the arena, arena across products, arena across markets, arena across types of deals. So that's consistently making us remain consistent on that performance. The 20% promise, LTM basis, we're continuing to live up to that in that plus/minus 2%, 3%. That's where our journey is currently. So how -- what are the other additional markers of the success? Analysts consistently rank us #1 not across one platform. IBS is one of the most popular sales league table, which collects data from everyone. And this is where they showed us our leadership of in the last 12 months' period, who has been #1 in winning deals across that. So this is a sales metrics. Going on to the next slide. This is a qualitative metric where the analysts on our capabilities are commenting upon how we are -- where we are in the leadership Magic Quadrant. The industry awards confirm that our assets have been used and they made an impact -- business impact and the industry rankings and customer expectations, all these are proof points of why eMACH.ai is being adapted and why consistently recognition and around the globe, we're getting these successes. This is the other proof point of -- if we look at over the last 6, 7 quarters, what our performance has been. On an LTM basis, we have been -- from Q3 FY '25, we've been consistently growing and this consistent growth is what we are looking at. I think we have always said, let's look at LTM basis. This is a proof point of that data being plotted to show on an LTM basis how our growth has been. Our investments are being done on the LTM basis. Our growth is around that. All proof points are around that. I think this would make each one of the investors feeling comfortable and confident that the support you extend to us is going into the right direction. Additionally, to continue building the market momentum, there's enough market events we participate in along with our sales and marketing teams to ensure our brand is visible and is consistently celebrated. These events are now also markers for me actually to close deals as well as to make those last mile customer-to-customer references. So been very successful from them across. And again, you see it's well spread out across all markets. So the balance of portfolio in all execution, you will evidence from this. To continue supporting this, we are continuing to make, again, balanced investment in senior talent leadership around AI and our go-to-market capabilities and our technology capabilities of how we support and continue to extend our moat for Intellect being AI-first growth agenda. I would now request Vasudha to share the financial details.

Thank you, Manish. Good evening, everyone, for joining us. Let me take you through our financial performance for the first quarter of '26-'27 and then provide a broader perspective on our last 12 months of performance, which in our view is the best indicator of the structural progress we are making as a business. So Q1 was another quarter of healthy growth, disciplined execution and strong cash generation. We reported a total income of INR 872 crores, representing a 19% year-on-year growth over Q1 of '25-'26. Our license-linked revenue comprising platform license and annual maintenance revenue increased to INR 457 crores, up from INR 389 crores in the corresponding quarter last year, representing a 17% year-on-year growth. Moving to profitability. EBITDA increased to INR 194 crores compared with INR 176 crores in Q1, while PBT increased to INR 135 crores compared with INR 126 crores in the corresponding quarter last year. Our platform-led operating model continues to provide operating leverage even as we invest for future growth. Next slide. Let me now turn to what we believe is a more meaningful perspective of the last 12 months. On an LTM basis, our total income reached INR 3,299 crores compared with INR 2,690 crores in the previous corresponding period. License-linked revenue increased significantly to INR 1,734 crores compared with INR 1,324 crores a year ago. Platform revenue nearly doubled to INR 595 crores, while license revenue increased to INR 554 crores and AMC to INR 585 crores. Our LTM EBITDA increased to INR 721 crores compared with INR 646 crores in the corresponding previous period, reinforcing our ability to scale profitably while continuing to invest for long-term growth. Our LTM PBT has crossed INR 500 crores as of Q1. Another important highlight this quarter is our collection performance. Collections for Q1 increased to INR 763 crores compared with INR 586 crores in Q1 of last year, representing a growth of approximately 30%. This reflects disciplined execution, healthy customer collections and continued focus on our working capital management. Looking at the broader picture, LTM collections increased to INR 3,221 crores compared with INR 2,401 crores in the previous corresponding period, representing a growth of approximately 34%. As of the end of the quarter, cash and cash equivalents stood at INR 1,269 crores compared with INR 976 crores in the corresponding period last year. representing an increase of 13%. So this healthy cash position provides us with the flexibility of continuing to invest in AI, product innovation, strategic market expansion and long-term growth opportunities while maintaining a strong and resilient balance sheet. In closing, we believe the financial performance this quarter reinforces the structural strength of our business model. Thank you.

Thank you Vasudha. Now we open it for the Q&A session.

[Operator Instructions] First we have Mr. Meet Mehta from Prasun Exponentials.

Yes, the platform business saw quarter-on-quarter [Technical Difficulty] and how should we look at the...

Meet, your voice is breaking. Can you repeat the question, please? Meet, can you come again?

Hello? Am I audible now?

Yes, you are audible now. You can ask your questions.

Meet is not audible. Maybe we can...

Praveen, Meet's audio is not audible, you can move to the next person.

Okay, I'm moving to next person. Then second, we have Rucheeta Kadge from [ CJW ].

So basically, I wanted to ask on the platform revenue side. So we've usually seen a Q-on-Q growth because it's a recurring kind of business. But this quarter, there has been a degrowth in that Q-on-Q. So what led to that? And how do we see that number going ahead?

See, first of all 0 -- I mean, the same thing that we've been saying in every investor call, not to measure it on a quarterly basis because last quarter was the last quarter of the financial year, previous quarter. And so there has been some true-up in some of our deals. That's why you'll see some spikes. And there is nothing like a degrowth, it's still...

So I understand on the license part of it, right, because it's kind of a bulk revenue. But I'm talking more on the platform revenue side, right, which is recurring in nature. Like if you get that, it has to come, right? Incrementally, it has to get added, which has gone down.

See, if you look at the quarter-on-quarter numbers, say, for example, if you look at the first quarter of last year, it was about INR 135 crores, and then it was INR 137 crores. So, we are still in the same line. We are about INR 140 crores this quarter. not significantly changed. Just that in the last quarter, we were able to get some additional revenue because of the true-up of some of the subscription deals that we had contracted, and that is the reason.

So is there -- is it like some of those subscriptions have now ended and further, we'll now have to add more customers?

Rucheeta, it's not like that. See, many of our contracts are based upon the transactions, especially in the subscription space where we [ depended ]. In the case of Magic Submission, where totally depends upon how many transactions or how many policies are being processed by the platform. Like Vasudha said, last quarter was the final quarter of the financial year. So we did see a good spike in the transaction volumes in the last quarter. Nothing to worry about. Yes, this is a consistently growing platform revenue. Yes, last quarter was a spike, so that's the reason perhaps you're seeing see an aberration.

Let's look at the LTM basis, it's close to INR 600 crores. That's -- and it's a double of what it was 12 months ago. So, [Technical Difficulty] average rate is closer to that.

So we should not look at it quarter-on-quarter. We should look at it more annually you're saying, again?

Absolutely.

Yes. This is not customers runoff. There are spikes, some contracts have, if usage goes up, we get that spike in. But over a 12-month period, if you average that out, that will give you what the average is. And if you look at it on a 12-month basis, it's close to INR 595 crores.

Okay. And that should grow at whatever the company is growing at, right? Annually 15%, 20% of growth. That's how we should look at it.

That's where we are investing and moving towards.

Got it. Got it. And on the expenses side, do we see a gradual reduction in it because we still see like around INR 120 crores, INR 130 crores above what we were doing earlier, right? Earlier, it was INR 550 crores, which we used to do quarterly. So when do you see that scaling down the expense part?

Expense has increased by only about INR 14 crores from last quarter to this quarter.

Quarter yes. But earlier, right, we were at a run rate of INR 550 crores, then we increased it for AI and employee cost had gone up because of the calibration of the new company, right? A new segment which we took from a particular company, right, the Canada based. So that's what I was asking like do we see that it should reduce or you see that incrementally now the addition should be lower?

See, last quarter, we specifically made some investments in Purple Fabric that we called out at the beginning of the last financial year itself. And we made an investment of close to about INR 72 crores. But this quarter, we have not made any incremental investment. So in fact, out of the increase of INR 40 crores last quarter to this quarter, INR 7 crores is on account of ESOP cost. And the remaining is anyway the BAU cost. We don't see any major increase in the cost. But of course, we do have some plans to make some investments.

Next, we have Mr. Rahul Jain from Dolat Capital.

First of all, congratulations on a strong license win during this quarter. Can you just talk about how we are seeing the momentum right now? Are we seeing there is an increased demand toward license-based deal wins? Or we are seeing incremental trend towards subscription-based demand coming within our customer base? That is part one of the question. And secondly, just on the cost side of it, we are seeing cost increase quarter-on-quarter. I understand we are investing into the business. But is there a point beyond which we think the operating leverage should start playing out with this kind of a growth?

Rahul, if you look at license as well as platform, the revenue for that in this quarter as well as on an LTM basis, it's consistently close to each other, those numbers are. Different quarters, different models are pursued, different segments of customer, either platform or license. So that balanced approach is keeping us. The intent is to grow the platform revenue. That's why if you see, on an LTM basis, it's doubled up from that perspective. The license used to be a stable revenue for us. Platform revenue is growing. And that's where we are making investments on AI to support all of this.

To respond to second question, I think Rucheeta asked the same question to Vasudha the on the cost side, INR 550 crores (sic) [ INR 558 crores ] to INR 677 crores. Total cost this quarter is INR 677 crores versus INR 663 crores last quarter. So those costs are now inherent in the cost. If Purple Fabric investments are done, those mainly in technology business, the people cost. So people cost remains constant. It doesn't come down on quarter-on-quarter. So we'll not come back to INR 550 crore cost base. So if that is the expectation, it is there. The operating leverage, which Rahul is asking is -- will come in that -- this quarter, we didn't have a salary increase [Foreign Language] the cost of headcount increase, it remained constant. INR 7 crores went into ESOP and RSU and remaining INR 7 crores went into additional event, marketing and travel, those are the costs which it went into. So there is a good -- the news is that headcount cost and whatever the salary increase cost is there, it got accommodated into the same cost structure. That's a very positive news from that perspective. That operating leverage can start coming down.

So sir, just to conclude from your remark, which you just mentioned, so is it safer to assume, given that we have decent growth momentum thought process on an annual basis, we should be improving the EBITDA margin on a FY '27 to FY '26 basis?

Sure, sure. You can assume that. Rahul, you're seen last 2 quarters are above -- close to an INR 850 crore mark -- from a INR 700 crore mark to INR 850 crore mark, the needle has changed. I think where we need wishes is how soon we can get to the INR 900 crore mark, and that's what we are driving.

Yes, I'm sure you would achieve it soon. Best wishes.

Next, we have Mr. Neel Chhabra from Recite Ventures.

Sir, largely, if we think about on a run rate basis, we are at INR 3,000 crores of revenue right now with over like 6,000 employees. So if you look at revenue per employee, we are roughly at INR 50 lakhs. And if you look at our peers like Oracle, they are doing roughly INR 1 crore per employee or Temenos, they are at INR 1.5 crores or even nCino, they are at INR 2.5 crores per employee. I understand, partially this is because we have a service mix in our business as well. But directionally, where do you see this moving over, say, next 3, 4 years as our platform and license-linked revenue increases? Where this number could go like? Like how internally as a management you are looking at this number?

Yes. So, I think it depends on the investment the company is making. We have a 1,200 people research team in the company to sustain this growth. If you cut down those 1,200 people, we can increase the margin by INR 400 crores per year. So the question is a lot of time, company doesn't invest sufficiently for keeping the momentum. We grew from INR 600 crores to INR 3,300 crores in last 10 years. FLEXCUBE revenue growth number from last 10 years is not the same, percentage-wise. So it's -- obviously, operating leverage will come in. So your question and Rahul's questions are the same, that operating leverage on the per head count, good metrics is the INR 50 lakh per employee. We'll move towards INR 60 lakh or INR 70 lakh or INR 80 lakhs, but I think we don't measure that. We measure what is required for a strategic business, we invest that way. So we are not running on this metrics of a headcount metrics or a revenue metrics. So those metrics are not part of the business agenda. But yes, to respond, this will improve definitely.

So, if you look at division-wise, obviously, iGTB has a different kind of maturity, iGCB has a different kind of maturity and the economics would look completely different given the life cycle or the stage that business is in. So if it is possible for you to just showcase like at scale, like I think I'm sure iGTB must doing like over 40% operating margins given their scale. But if you can just give a breakup, if possible, of division-wise, if management is comfortable doing that in coming quarters?

Yes, Neel, that's the number we usually talk about during the annual thing because it won't be right to talk on a quarterly basis. But your point is very valid. Definitely, each of the businesses are at different stage of maturity. So usually, we do not go ahead and disclose this at a quarterly level. But definitely, when we have the annual call, we will talk about it.

So last quarter we did that, gave the share of headcount.

We don't disclose it, and then...

Headcount is not what we looked at.

Not on a headcount basis. I'm just saying maturity basis, like iGTB is mature, at mature stage, what margin it is making. iGCB is a young growth company at what margin they are making. Purple Fabrics could be completely new. They might be loss-making as well, which is completely fine given the life cycle of the business. But I was just asking, how do we look at, as the business matures, what does the steady-state economics look like? So if you can give breakup of that in coming -- like on annual basis only, if you can do that in coming years. That would be helpful to gauge.

Yes. The only thing you can look at it -- you're perfectly right, iGTB will be operating at a much higher margin. Our headcount revenue from iGTB will be much higher than the INR 50 lakh average. That will be at least 30%, 40% higher than our current number. iGCB will be in the same range or AI will be in the slightly middle range. So that indication we can give that all the 3-maturity index that you are plotting is perfectly in line. As of now, we don't declare that number to unnecessarily make one business look smaller than other business. It gives a feeling to the employee that whether I am performing better than others. So it's not a practice we want to create that observation in our employee community because results are seen by employee community also. So that is not the appropriate metrics. But from your perspective, as an investor -- but I'm giving you an indicator that every mature business can go to same number as FLEXCUBE number. So, if that is the number you are looking for, [indiscernible] we'll be closer to -- in the next 2, 3 years, closer to the FLEXCUBE profit margin number.

Next, we have Mr. Arvind Arora from [ A Square Capital ].

Sir, what's our R&D budget for the current year and the next year, if you can throw some light on that? And what -- and when can we expect magics in the numbers of this hard work that we are putting?

What is it? Sorry, first is simple that we spent $20 million in R&D. And each year-on-year, dollar gives you more budget for us. So we have INR 160 crores last year, INR 180 crores to INR 200 crores will be the R&D budget for this year up to INR 200 crores -- it can go up to INR 200 crores for this year, INR 180 crores to INR 200 crores. What is the second question you asked?

So what's the area of the focus on this R&D that we are -- where we are spending?

We are spending in AI eMACH -- the 2 platforms, which is Manish has highlighted, eMACH and Purple Fabric. Purple Fabric is a core area. It's a huge potential which is there. We have filed 28 patents in Purple Fabric. So this is the area where, as an investor, after multiple conversations, is still your focus is a lag indicator and investor -- as an investor, you're not looking lead indicators. So your questions are not on the lead indicator, your question is on the lag indicators. If somebody -- Silicon Valley investor would be there, then he will be looking at a lead indicator investment rather than a lag indicator investment.

And I shared 2 levers of AI. One is externally, second is Internally.

So that's where I think we are very bullish about what the potential Purple Fabric is going to offer for the R&D expense, which is peanut compared to the AI space where people are investing $200 million a year. We're investing $20 million a year, which is across multiple lines of business. So, that's our current state, but AI is a core area of investment.

Understood. And sir, like earlier, you used to mention our focus is on incremental INR 100 crores. So now if you look at our base, it's increased drastically. So now -- like how we are looking internally, like still we are looking incremental INR 100 crores? Or is there any shift on the target part?

No shift. Every 3 quarters, INR 100 crores increase.

So then, sir, our growth would not be like at a 20% at least if we are focusing only on INR 100 crores?

Don't ask the last point question. You're right now seeing 19% LTM basis. You're seeing last 6, 7 quarters consistently.

23% LTM.

23% LTM. So, the last 2 quarters, close to INR 850 crores operating income, let's just state less and focus on performance.

Next, we have Mr. Kushal Goenka from Mangal Keshav Financial Services.

Sir, my question was more on the gross margin side. As per my limited understanding is that once -- if you are moving up the value chain, like I'm extrapolating from the likes of, say, manufacturing companies, when those companies move up the value chain, the gross margin should inherently increase. So if we are moving up the value chain to Purple Fabric and eMACH.ai, shouldn't our gross margins, which is around 58%, 59% should increase, and that should lead to an increase in EBITDA margin also. So I just wanted to know your thought on this. And also like coming [Technical Difficulty] numbers like if we see INR 350 crores of PAT. And I think so still we are -- on a like-to-like basis, I think so we would cross that number this year after, say, like 4 years. So, just wanted to understand if we are moving up the value chain, shouldn't the gross margins and then the EBITDA margins and hence, the PAT should have increased. So are the ROIC of the investments that we are doing, the R&D investment?

First of all, I think you compare technology...

That [indiscernible] generating a higher returns.

This is one of the first issue of Indian investor. Are you comparing tech company with a manufacturing company. Now definitely, this margins will go up. One day, it will go up so much that you'll find excitement over there. So the question is not about which metrics we are tracking. As an analyst, you track all our metrics. As a business leadership here, we don't track these metrics. We look at it market trends, forward-looking guidance, which is coming in our market, what is the right investment to be made? If we have to make the company for next 20 years survival, 20 years as an institution which should grow year-on-year for next 20 years, our focus is that. Our focus is whether the headcount is so much per headcount revenue, per gross margin, 56% become 58% or not. Those are very macro-focused numbers. Those numbers will automatically come if we cut down the investment. We are making -- the last year was a major investment. Rahul has asked a question, if my headcount costs remain at INR 680 crores, INR 600 crores to INR 700 crores is cost remain there, then whatever revenue growth will come, it will come to the bottom line. So you just extrapolate from that perspective as a leading indicator perspective, if INR 900 crores is a number, INR 950 crores is a number and my cost remain INR 700 crores, it will be INR 250 crores EBITDA. It's not a rocket science to look at that number, which will coming through at next 2, 3 quarters. But we don't want to drive our business towards that. Our driving is towards what is right for the customer, right for the market and right for the sustainability and growth. Growth by design is the point Manish has mentioned. Our focus is how many companies in India grown and crossed INR 3,000 crores revenue. Most of the companies stuck at INR 800 crores, INR 900 crores just because the investments are not complete. So this is the core strategy as an investor, you need to understand Intellect, theory of Intellect is INR 4,000 crores, INR 1,000 crores. We mentioned about 2 years back or 1 year back, 1.5 years back that we will be INR 4,000 crores by '28, INR 4,000 crores and INR 1,000 crores. I think we are running on those milestones and INR 4,000 crores and INR 1,000 crores is a good number for us to look at the investment -- thesis of investment cases.

Predictability and quality is what we are focused on, and we continue to drive that.

But quarter -- if you compare quarter-to-quarter platform to this, I think all are so -- market is so variable and we don't want to get stuck in those areas of the platform. Some of the companies when 3 years back, you asked the question, platform revenue should be more what happens to license revenue? We mentioned that it will be a hybrid model. It will never be a total platform and many questions were asked, this company has stopped giving a license revenue. This company has stopped giving it. If you understand the customer behavior, we react as per design, thinking to the customer behavior and act accordingly. We don't get by the patterns of trend. And that's a very myopic view of driving the business, sustained business growth.

Next, we have Mr. Vivek Turaga from Bestpals Advisory.

Arun ji, like you were not there in that con call. Like 2, 3 con calls back, there was a mention about tailwinds in mainframe to modernization. Can we like -- and then, you are building up the capacity for it. So can you just comment on that?

I just announced also a senior leader with mainframe background, we have added in the team. That's why investments are happening. So we are working with cloud partners also hyperscalers to bring our mainframe to cloud.

So are we winning? Or are we confident? Or I don't -- like if you can...

We have multiple wins we have announced where we're moving from mainframe to cloud. How do you move it at scale is what we are looking at.

Sir, second question is like you mentioned in the first slide, Manish ji, that you have an unfair advantage like in the last 5, 6 years of like eMACH.ai plus Purple Fabric. If you can go deeper, like because of these 2, how has our deal win rate or vis-a-vis the competition? If you can explain us like why should we think it is unfair advantage? I understand the technology part, but when you compare in the market, what are the kind of deals? Or is it like what is that unfair advantage helping us? Is it like sales cycle is becoming lesser or so if you can explain that.

Good question. I'll give you an example of 2 of our young platforms, Trade Finance and Lending. They are far more mature platforms out there who have been ahead like in some platforms, I am ahead of everyone else. Our win rate suddenly over there is growing because we're starting with AI first. Rather than conventional battle, we are able to demonstrate modern new technology with AI first. That's driving wins for us. And that's what you're going to continue to see. Embedding all number of CBX you are seeing AI first in there is making that difference. So eMACH just as an architecture, which is composable, hyperscalable plus AI first and then Purple Fabric as a platform, which is significant in North America for my insurance as well as individual platform deals. So they are dual engine right now.

So you think the -- in what way is it like vis-a-vis is it like convert -- I don't know if I'm able to -- is my -- like is it like only in 2, 3 products or across the products we are finding unfair advantage?

Across the products we are implanting, I was giving you examples of some of my young platforms where I would have taken much longer to win at the rates I'm looking to win. The mature platforms are continuing to create an expansion because AI first is there. You saw a number of Middle East deals I have announced. My dominance over there, why is it continuing, not just because of what I had before. It's the AI capabilities which is making that industry-specific innovations.

Okay. Sir my third question is, this may be like repetitive, but please, for the greater clarity because Arun ji mentioned he will conduct some con call for investors on AI, and we couldn't do it. So whenever we speak to many institutions like Bajaj Finance or HDFC or even Equitas when we went for Analyst Day, many were mentioning that there's a lot of software that they are trying to build in-house more than before because of people call it white coding, whatever. So what is your view? What part of the software are they doing more in-house? Okay, I understand a few people can do, not everybody can do. But how are you seeing this trend that build versus buy -- is it -- like are you seeing any pricing pressures because of it? So because it's a little bit confusing. This part is confusing because there are institutions which are still buying, but there are institutions which are saying, no, we know -- we understand our business better than the vendors. So we have allocated to the technology guy, and he will make sure we build a -- so what are they actually trying to build? Is it like the system of record that you apply or on the top of it? So if you can be more -- like if you can give any clarity on it.