Medi Assist Healthcare Services Limited ($MEDIASSIST)

Ladies and gentlemen, good day, and welcome to the Medi Assist Healthcare Services Limited Q4 and FY '26 Earnings Conference Call. hosted by ANI. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Cyril Paul from EMI Investor Relations Services. Thank you, over to you, sir.

Thank you. Good morning, everyone, and welcome to the Q4 earnings call of Medi Assist Healthcare Services Limited. The company published its results on May 9 and have supported the investor presentation to excuses earlier today. I trust all of you have had the opportunity to go through the same. Before we start at a disclaimer, some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs and assumptions made by information currently available to the management. Audiences are cautioned not to place undue reliance on these forward-looking statements while making their investment decisions. On that note, let me introduce you to the management participating in today's conference call. We have with us Mr. Satish Gidugu, CEO and Whole Time Director; Mr. Sandeep Daga, CFO; along with several members of the team. Without further ado, I'd like to hand the call to Satish. Thank you, and over to you, sir.

Good morning to investors, analysts and all participants joining us from India and around the world. Thank you for taking the time to join us today as we review Medios' performance for the year ended FY '26. FY '26 was a milestone year for Mediasssist as we combine strong growth and deep technology-led transformation. Becoming debt-free and net cash positive strengthens our ability to invest in the future, while our AI platforms are now operating at unprecedented scale, processing nearly 1 million claims every month with industry-leading automation and fraud detection. The rapid expansion of Matrix, successful integration of Paramount and our new global partnerships position us very strongly to build the next generation of intelligent Borders health care administration. I'm pleased to be joined by our CFO, Mr. Sandeep Daza; and Sunil from EY, who leads our Investor Relations function. I'd first like to share some of the key operational highlights from FY '26. And before we go in, we continue to improve the quality of disclosures every quarter. We have further added more metrics for each of the segments that we operate in, group, retail, government, international benefits administration technology business and also try to give all of you a color on our technology platform and it. While we will not necessarily do a Page , let me summarize some of the key operational highlights from the year. The total premium under management of administered was INR 5,923 crores as on 31st of March 2026, a growth of 22.8% -- and for someone who's been with the business for this long, personally for me, at INR 25,000 crores is a milestone number. I'm happy to share with all of you today. The group premiums were INR 23,000-plus crores, a growth of 25.6% year-on-year and our group premiums retention stood at 93.2% are excluding acquisition numbers. The retail premiums in the TPA model were INR 2,818 crores, a growth of 4.2% year-on-year. The market share in terms of health insurance premium administered in group and retail of the total health premiums in India was 20.7% end of the year, which demonstrated 115 basis points year-on-year growth. The group segment market share saw 340 bps of Y-o-Y growth, taking us to 33.7% -- the retail segment market share with model was 5% on 31st March 2026 and slightly lower than the market share in the previous year. In line with our hybrid approach to retail, as we discussed in some of the calls earlier, we have reported the premiums managed by private insurers on the back of our core claims processing technology platform matrix. And these currently stand at over INR 18,000 crores, which represents 32% of the industry retail premiums. And while we were improving on the India business, we've also leveraged capabilities for delivering seamless global administration services through expanding partnerships. We've deepened Southeast Asia presence through a strategic partnership with Thailand's leading insurance broker. -- giving us access to over USD 50 million of group premiums in that region. We expanded retail and travel portfolio and we've reported and shared in the slides, the number of retail lives growth and the fact that we now have line of sight to about half of the global travel premiums that are being booked in India. We also built some key global partnerships with Freedom Health, Malayan Insurance and Royal Insurance Corporation in Gujarat, expanding our ability to deliver outcomes for both inbound and outbound health care administration. Coming to Paramount CP. The integration is on track. Over 50% of PG's Paramount Health Services claims volume has already migrated to metrics are on track to becoming the primary engine before the Q2 of FY '27. And we've been able to enable all of the AI capabilities for the Paramount clients that are migrating to this new stack. And as disclosed earlier, we've executed some transfer of Paramount TPA's PPA operations to MediasisTPA effective February 1, 2026, thereby creating a single unified TPA business within the group. And moving on to the technology highlights. Our tech revenues grew 91.9% year-on-year. There are multiple pilots underway with insurers in India and overseas. MavenGuard, our proprietary AI fraud detection platform has found and prevented over INR 540 crores of health insurance frauds in the last financial year. Raksharime, our flagship offering for improving cashless experience, enabled over 32,000 patients to walk out of the hospitals before the bills were even generated across 6,000 hospitals in FY '26. All in all, we continue to be a technology first digitally integrated platform that delivers outcomes to all the key constituents of the industry, the payers, the providers and the members. investments are paying off in creating a unified intconneiggeake experience health care and service delivery. I will now hand over the call to our CFO, Sandeep, who will take you through the financials for the year FY '26.

Thank you, Satish, and a very warm welcome to all the participants. The financial highlights for FY '26 Total income was INR 232 crores, a growth of 23.6% Y-o-Y. The revenue from contract with customers excluding other income, which we call as operating income was INR 4.8 crores, a growth of 2.1 INR crores to the EBITDA was INR EBITDA profile was 191.617.12ATNR 89.3owe,ceems net of the tax impact, the adjusted PAT stands at INR 68 crores. However, we have also shared in the investor present the PAT bridge to steady PAT and on the same, which can be referred on Slide 13 and 14. Moving to a few of the key highlights on the balance sheet and other operating metrics as on 31st March 22 free cash flow position as on date was INR 265 crores. The net worth of the group stood at INR 52.4 crores liability INR 28.2 crores to inform that the group has become debt-free during Jan 2. The revenue per average headcount on the nongovernment business was INR 3.1 lakh. With this, I hand over the call back to the chorus call operator.

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So first one is on the overall business. So if we look at the dominance and the market share that we have in the group business, that is kind of missing in the retail part. Now given the capabilities that possesses as of date, how do you think this kind of dominance can be achieved in the retail business? That's the first question I have...

Savi, this is Sat to answer that question. Rail has -- so group, I mean we don't have to discuss, but in group, the policyholder typically is far more aware of the service they need, the complexity of the requirements that they want and the technology, the deployment, the networks the importance to provide some kind of stability and continuity for their employees as they continue to expand benefits and potentially work with more than one insurer even. So that means what allowed us to establish our in the group business and significantly expand our market share. Retail for a very long time was play to put it plain vanilla catastrophic care inpatient only with a very low incidence, very low frequency and high-value claims. And depending on the insurers and when they started their journey of building some of these capabilities, there was a time where the TPA industry was not ready and some of the other insurers that came in later followed a hybrid approach of building some capabilities inside and using TPAs and some of the newer generations are relying on TPAs for large-scale dependencies such as network, physical presence, electronic distribution. So I think depending on the insurers, they are at different stages of where they are in their evolution. But what we have seen, especially post COVID is there are 2 or 3 areas where we've seen opportunities. One, where products are moving to, say, a high frequency, low-value claims, especially around outpatient and various benefit products. or insurers who need it to supplement their desire to be the front end to their customers, but with significant back-end capabilities such as a countrywide network and superior fraud detection and sometimes even an entirely new claims processing system. So retail has, in our minds, has evolved to be, for lack of better words, a hybrid approach across the country. And today, we are able to deploy our TPA capabilities in the portfolios where we are hired as a TPA, which basically means that the insurer introduces us to the member, saying MediAssist will take care of you. And we have solutions today right, using all the technology capabilities in a plug-and-play model. where the insurers are able to plug in the various capabilities that will make them more effective in delivering retail services to their membership. And that's what we are beginning to sort of report as our technology revenues. And I think -- sorry, it was long-winded, but I think the market is evolving, and we have solutions for whatever be the scenario in which a retail insurer prefers to sort of evolve their approach. But we still probably deliver the best if we were to run end-end.

Just a follow up on that one. So we have -- it's really helpful to see additional data points that you have introduced, which I am assuming is pertaining to the technology business 10m.'sU.roduced is there suggest kind of real...

I think we've typically not disclosed some of these revenue metrics as in the past as it's an evolving space. But if you look at the PPA business today and look at the way some of the contractual obligations are around the headcounts that we deploy in terms of -- for fulfilling contractual obligations, I think it would be fair to say that a reasonable target state is the technology business allowing us to capture the non-headcount portions of our yields and hopefully be able to track in some cases on outcomes and with a higher margin profile of maybe at least 1.5 to 2x traditional EPA business I think directionally would be a fair way to look at it. However, this is not a guidance, and this is just to give you a perspective of the parameters that typically go into this evolution of a platform growth. But if I were to just take this a little further and look at what we are able to do in the international markets, we are able to deploy the same technology stack globally. And that's the pipeline that we've spent a lot of time building in FY '26. For example, the contract that we recently signed in Thailand allows us to provide our front-end technologies that are critical for memberships digital experiences to a cohort that's actually being serviced in that country. So a lot of our international contracts are also on the back of how we are able to deploy our tech as in those geographies. So given the wide variety of contracts and the deployment models, it will be hard for us to provide guidance. But I think what I said earlier, I think would be a reasonable aspiration -- last question I have, if I look at the industry, can you help us understand, let's say, if the industry premium is INR 100, what portion of that is being administered TPA what portion of the industry premiums are not under the TPA of now? -- can some understanding on that, that would be helpful. There are no clearly reported numbers and one has to compile based on multiple disclosures across insurance and CPs. But I think just from an order of magnitude perspective, best to think about it as a 50-50 between what the traditional PPA models are deployed and predominantly in the group side of the business for the reasons I mentioned earlier. regulatory reasons like, for example, the personal accident and others not in the scope of the PPA. But I think I would go with 50-50 for now just for you to get a sense of the size of the market.

We take the next question from the line of Pritesh from Nov.

So my first one is a follow-up on the earlier participant's question in terms of getting a sense on the international segment, specifically around what is our take rate or the pricing. So this INR 22-odd crores that we got in FY '26 from the technology side, is it sort of fair to assume that of the premium managed on the platform model that would be entiallyomor from which we can sort of get a sense on the take rate. And then depending on the mix of Raksha the mix of probably matrix that pricing will probably evolve over time. So that was just from a first question from an understanding perspective. So my second question was that if I look at your retention compared to last year, a paramount is about 3.2% wanted to understand why that is slightly lower. And if you can also give some color on the PSUocailroup given the cons, how those are sort of evolving. And my third question would be that if I look -- if I was to assume Paramount Paramount contribution about INR 34 crores, INR 35-odd crores similar to last quarter, excluding that, the growth is around 10%, 11%, which is of Paramount. So what are the levers here for us over the next kind of 2 years to probably accelerate this? And what kind of mix and what is the kind of revenue growth aspiration that you have going forward? So these would be broadly my questions.

A lot, but I will attempt to answer each one of them as the best of my abilities. So I think the first question, the reason we put the premiums out is think of this as an opportunity that exists, not necessarily the limiting factor on the current set of revenues. And obviously, the revenues in FY '26 are also because of the timing and how much of the transition sort of has taken place of some of the core deliverables. But I think you are right. The way to look at it is that there is an opportunity basket that exists. I think the more we are able to deliver in terms of incremental components and incremental capabilities, the incremental revenues from those premiums will continue to grow. At this point, the revenues are only from the pure SaaS platform, which is the core engine matrix. -- currently does not have any of the AI-led features or outcome-based pricing built in yet. In the past, our AI engines were very tightly coupled to Matrix because one had to first migrate to matrix in order to be able to use some of these services. But as mentioned in the text and in RPR, we've been able to now sort of tease these capabilities out. And today, Mavenguard, our fraud detection engine, our discharge experience and a few other interesting capabilities that are in the labs can now work on top of legacy or proprietary claims platform that the insurance companies might already be and deliver some of these incremental. So in summary, this is the opportunity of the pie that exists and the revenues that we book will be based on the value that we are able to create to the insurers that are on the platform. On the retention side, on group side, yes, it is marginally lower than our historical 94-plus percent. I think part of that is attributable to some of the deliberate decisions that we took at the beginning of the year from a quality of revenue perspective. And of course, part of that was a little bit of a transition in some of the operational changes that we made to improve the overall experience. not discuss the Q1 and we see the 3% largely driven by what transpired in Q1 of last year. And since then, I think we've gotten back on track. And hopefully, as we move forward, we should get back to a slightly higher retention rates. On the allocations of retail and so on, these are not in our control. Different insurers have different cycles. And as and when there is an allocation that happens, I think we will continue to sort of participate and win based on merits. And especially if you look at the work that we are doing on retail, I'm just trying to find the page. There is Page #8 where we talked about the retail business. while our revenue -- the premiums that we manage grew just by about 4% in the TPA model, we have delivered over 38% improvement in the direction in a small portfolio of that size. And we've delivered experience to the membership in retail, which is typically not being seen in the market today. And as we continue to deliver and redefine how retail customers are serviced at par with the group customers, and we believe that will continue to improve our right to win even in the standard TPA model. Lastly, I think from our growth perspective, you're right, the consolidated growth are in the range that you spoke about. But at the end of the day, for us, Paramount is an organic one at the moment we sign the deal because the retention is responsibility and growth of the book is 100% our responsibility. So in some ways, adding Paramount is inorganic growth once we sign. But having said that, if you look at the business segment reporting that we've done, this is the first time we've sort of called out the revenue contributions from each group. And you've also seen the outcomes that we are able to deliver to the insurers significantly supplementing from a growth perspective. And we expect the technology and international growth trends to sort of continue if not improve. And on the core business, we will, as we always said, from an overall industry growth perspective, we will better the translation to revenue is slightly slower because we don't report on premiums, we report on a 12-month basis service. That's why most -- a lot of our revenue today sits in what we call as contract liability, which is revenue that is committed, but we haven't yet booked into the P&L. And that's an incremental INR 280 crores of unearned revenue that's actually sitting in the balance sheet today.

Got it. So sir, anything on the mix because as of now, technology is contributing around 2.5%. So maybe say a couple of years for how do you see the contribution from this coming through? Because as you have mentioned, this 2.5% is probably just from -- as of now, the one product that we are monetizing, but we are developing capabilities across multiple sort of lines. So how much do you think -- how big can this piece become over the next maybe, say, 2, 3 years?

Obviously, we think that it's a great opportunity, especially if you look at the international opportunities in the mix. Right now, we are only reporting limited requirements in the Indian market with limited insurers. I think we're comfortable to say that compared to FY -- there were some very interesting growth rates you saw on the tech business. You've not seen a lot of the growth on the international business, but a substantial amount of the work was to build a very strong pipeline that will contribute to the international business. I think we're comfortable seeing similar growth rates we should continue to see in these businesses. And of course, we also hope that as India needs to buy more and more insurance that between the policy interventions and other opportunities that the health insurance market itself will start picking up the growth trends that were visible not too long ago. And then as the leading player in the market, we will continue to make the most of the health insurance growth trajectory in India...

We will take the next question from the line of Jayesh Gandhi from Harsh Gandhi Securities Private Limited.

I have one question, which is on the government what impact can it have on our...

I think let's just take a step back and look at the whole objective. and the vision of the government, which is 2047, insurance for all by 2047, of course, which means health insurance for all. Everybody needs to be covered by some kind of health financing plan, right, whether it is private or public sponsor in whichever be the template. Of course, for a country of this size, one is to aspire for everybody has insurance. Two is how do you make that a reality, both from people discovering products, participating in purchasing products and getting exceptional service in every open corner of this subcontinent, -- and some of those are the core capabilities that we need to build as a country. So the government's vision in some ways includes a multipronged approach. One is how do you create a simplified marketplace where the citizens of this country can discover insurance and buy. And that's more on the distribution side. And of course, the second and equally important aspect is the whole Aman Bharat digital mission, which is the mothership for many other digital interventions, be it the standardization of the hospital records to electronic health records to creating the equivalent of an account aggregator but in the health care space to building the equivalent of a UPI for health payments. I think these are various initiatives that the government has kicked off between NHA and the IRA. And we are a very proud partner to many of these events, especially on the National Health Pim Exchange. We are deeply integrated. Multiple insurers use our integration today to integrate with NX. I think the only positive takeaway that I will take out of this is if all of these initiatives get us back to the CAGR that are actually needed between now in 2047 for health insurance to reach 100% of the population, and we will be there in whatever form and fashion that we can, one, support that initiative and two, monetize the capabilities that we have built it as a PPA or as a technology partner or even in the public health, you've seen the work that we do across 13 states and union territories today, contributing over INR 113 crores of our revenue. I know it's a long-winded answer, but it will be unfair for me to limit this only to do much of them. Sir, I was specifically asking for business in a sense...

A filing and claim settlement is also part of this. And we have government as our -- one of the biggest customers. So maybe not in, say, longer term, 5, 10 years, but do you see this as a -- I mean, not a problem, but do you see it as a risk immediately for a couple of years, maybe once it is launched and once it becomes acceptable? -- industry is growing. So maybe in a pretty long period of time, it will be advantageous to us as well. But in a short span, say, 2, 3 years?

I do not expect any disruption on account of on what we do. At the end of the day, every member who buys a policy, policy is a promise and the claims have to be adjudicated and processed and network has to be delivered, service has to be delivered. And unfortunately, sometimes health insurance and this down only to just processing a claim post factor. It's about building networks. It's about eliminating fraud-based and abuse. It's about guiding membership to find the right hospital within their financial outcomes. Today, over 60% of the membership today that uses our Navigator, which is a predictive tool, actually adjust their room types in the hospital choices to optimize their out-of-pocket expenses today. And somebody needs to sort of demystify the insurance policies and so on and so forth. I think one, the service gamut of health insurance is beyond just a post factor reaction to a claim that is actually priced. In fact, I would argue that the true measure of this country's success would be 100% cashless and resulting in 100% payable health insurance products rather than those products that actually focus on reductions. I think each of those will need distribution scale, network, technology, manpower and integrations, which we believe we have a combination of all of those that are required for us to be a very effective partner in the national health exchange or to be a backbone for any of the other initiatives.

We have the next question from the line of from...

OnIousI9Isur Thanks. I think there are multiple nuances to your question, I'll try to peel the layers First, in countries like U.S. and I think, in fact, in my past life in early 2000s, I built r engines that automated partly the health claims processing in markets like the U.S. So first of all, it's not unusual in any market for claims to be automatically processed. You are already seeing that in certain areas in India, especially like small value motor claims, right? You can upload a picture, you can take a picture and send it because often it costs more to send a survey plus the loss than you just pay the claim today, right? Of course, you want assurance that event has actually taken place. There's no fraud-based abuse and that the reimbursements that you are paying to somebody are exactly as per the policy. So a substantial part of claims processing is actually rule driven, right? It would be unfair for us, even for me as a technologist to say that you need complex AI to automate a claim. What we lack today as a country are good quality data inputs, structured data to actually deliver an application of the rules, right? It is no different from how you compute an income tax liability today from various income sources, you have well-defined rules and the sequence of rules application and eventually you arrive at a tax number. Now of course, one wouldn't be happy if you came up with just a number and you couldn't explain how you came up with the number or even if somebody told you, you are plus or minus 5% within that. So right now it's a parallel to health insurance claims. I think what where we have extended so far is to build possibly the country's largest codification of master data inputs and rules that are required for us to adjudicate each claim as per the performance of each policy of each member and overlay that on each bill and each specific treatment and be able to completely independently explain how the system actually arrived at the final outcomes of a claim. And that's what we actually do today. much as we would like to say AI will automate a claim. What we need AI for right now gently in the country is to make sure inputs are good enough for the rule engines. And two, that nobody is playing the system. rest is largely rule driven. And I think that's the combination today we deploy. And that's how we are able to deliver value that is absolutely measurable to the insurers like fraud savings are over INR 540 crores. We deliver network discounts over INR 1,300 crores last year. I think that's where we are on. And this space will evolve. And I hope that we actually are able to automate 70% to 80% of all insurance claims in a manner that citizens of this country rebuild their trust or build their trust in health insurance, which actually allows us to really run towards this 100% coverage by 2047. And then that day comes yield is a smaller problem and opportunity is a larger...

Okay. And your answer to the part that whether there is a chance because IRBinuously insurance companies to lower the insurance premium. So is there a chance that our take rate can also decrease from 5 years from now to 3.5% to 2.5% or so it decreased from 5% in the last 5 years.

I think it's very hard for me to forecast what will happen 5 years later. But much of the group yield changes, to be honest, is also because of the introduction of a variety of low ticket size benefits that some of the employees and their families actually opt in for, which are not fully priced, right? It doesn't mean that we're getting necessarily paid lesser for the same work compared to before. But it is also the nature of benefits that are changing, right? Somebody could actually pay incremental 1% premium and potentially get a room rent deduction waiver or a co-pay waiver. And then not everybody participates in the small ticket size opportunities. On the whole, it might look like the yields are compressing, but our internal metrics we track more on the effort versus the life level remuneration and those have been fairly healthy or improving from our side. So I think it will be very hard for me to answer that question specifically. But we'll continue to improve our disclosures so that you have a fair sense of it.

We will take the next question from the line of Maria from Advisors LLP.

I have 2 questions. The first one is slightly longer, so bear with me. On the technology side of our business, if we start pricing on fixed price contracts versus outcome-based pricing, it become very difficult to move them to outcome-based pricing later because typically, I don't see B2B contracts sort of being revised once established 500 cA,y't10vither we should be happy to pay for it. So that was question one. And the second question was what is the growth in red1012%extpT, banks, et cetera, literally emees.'ic

Thank you. I think I clarify right now that current revenues that we are reporting are only for the core SaaS platform, which is the foundational end-to-end claims processing engine. Currently, none of the AI capabilities are contributing to that revenue number. And of course, we like to believe that the world, especially the AI-led world should eventually move to outcomes-based pricing because the cost of running that is nontrivial. So I think that's sort of directionally our view as well. And I think that is a fair way to go back to the insurers and saying here are the outcomes that I can deliver. And if I deliver the outcomes, you pay for the outcome from a technology and AI and the model perspective. And in fact, I believe that a lot of AI will eventually move to that model. So currently, we don't have a contract where it's a fixed price contract for where we can potentially deliver outcomes. Secondly, on the organic growth side, historically, when the health insurance industry was growing at 18%, 19% CAGR until about 3 years ago, our group sort of led a little bit. Group was growing at about 18%, 19% COVID, there was exuberance both in terms of the number of positions that were created employees hired and also the expansion of benefits to cater to hybrid remote different kinds of networks, different kinds of benefits. So we saw over the last 5 years, the highest same-store growth on an annual renewal of even 20%, 25% compared to the pre-COVID standard growth rates that we used to see in same-store growth of 13% to 14%, right? So if you retain -- if you return is 5%, which means 100 became 95% on renewals, on 95 we had a tailwinds, which sort of provided that natural same-store before we organically added like new business. We continue to add a lot of new business organically. In fact, we -- last year, we added over INR 2,000 crores of new group premiums organically. reflect depending on the time of the year at which the account is added. So coming back to your question on the growth. So from the highs of 25-odd percent post COVID we saw it decline to 18%, 15%, closer to 12%, 13%, now tracking to maybe 8% to 10% on the same-store growth blended. I think that's what we are currently seeing. And it's fair to ask that with the IS slowdown and some of the large enterprise slowdown, what's actually happening -- it is not that the other industries are not picking up from a light perspective, right? The other industries are definitely picking up. In fact, we have over 25 industries in our book today. The reason why ITITS stands out is one is the sheer number and two is the wallet -- the size of the benefit, right? And the per unit or per employee benefit or the ticket size is fairly high in the IT and ITS business. So you need many more of, say, manufacturing jobs to match the ticket size. But we're seeing some very interesting growth trends, for example, in oil and gas, chemical and some of the other industries and some amount of the manufacturing that we've been able to take our services to are reasonably augmenting from a light growth perspective. The reason you don't see that translating into premiums right now is the differences in the ticket sizes. -- we think that growth is reasonably sec across you combine all of the groups.

Got it. And just one more question was you mentioned something called headcount contracts in one of the responses. I just wanted to understand how does this headcount contract really play out to your other contention that AI does not really impact this piece on automation, et cetera, the answer is very helpful. But typically, when there is headcount sort of contracts, on that because of typically asked by customers. So I'm just confused about those 2 data clarify.

No, no, very fair point, Suresh. I think if you look at our business today, I would first put this into where the contractually we are supposed to deploy headcount, which is like the public health that the government discussed today. 13 of our headcount today is contractually obligated and deployed at the remote corners of the country, serving INR 27 crores of members through public health schemes today, right? And there is no technology, there is no. It's our duty as a leader to participate and deliver services. And of course, we continue to be careful about the quality of revenue and various other aspects, and that's why we continue to be a material player, but not actually have that business create any kind of a drag for us in the overall margin profile. I think I was saying that some of it is headcount today in the core KPI business. It's also because the existing expectations of the workflows of the industry, right? So the workflows of the industry today expect that a doctor and their registration number and there's a seal and signature when you send the claim file to an insurance company. or you have corporates today because they don't yet have a fully integrated digital experience, expect that an account manager sits out of their office and deliver service today. So there are some aspects of the core business that are still driven by headcount. But if you look at our employee benefits cost that we report as a percentage of revenue, I think last year was among the highest as the integration process started. But otherwise, typically, we've been around 45%. And even if I unwound some of the other services that potentially could be to us will not be more than 50%. And most BPs that we acquired had headcount costs in the range of, say, 65% to 75% of revenues, right? So that's what our technology is already enabling us to differentiate. I think the limited point that I made that AI for AI to make impact -- it is the quality of inputs and your ability to sort of standardize homogenized inputs and flag of outliers is way more important than just deploying just guessing through AI on the outcome of a claim because claim is significantly a rule driven that we already sorted out within the platform.

We will take the next question from the line of Tarang Agarwal from Old Judge

Congrats for a strong set of numbers. A couple of questions. Actually, one, when do we expect the Paramount acquisition to integrate and for you to get your desired synergies? I mean, do you have a sort of a visibility on which quarter should that sort of start panning out?

Same time, we've always said for every integration at the risk of sounding repetitive that 4 to 5 quarters is what it takes given the nature of the 12-month long contracts and mandatory annual renewals. We're 3 quarters down. And I think our quarterly margins in Q4 also went up by another 130 bps compared to Q3 I think we still track to being 1 or 2 quarters at the most from a Paramount perspective. Yes, that's a simple answer.

We will take the next question from the line of Garik...

First question is regarding the -- in the quarter, we had an exceptional item. What's the update on the recovery? And the second question I have is on the nature of internal business where we have an impact because of the Middle East conflict. So have we seen any impact because of it? And what kind of lag are we likely to see the revenues...

Sure I'll take the international question. Let me just take a shot at it if we need more details, Sandeep can chime in. I think those exceptional items that we have provided, they still continue to be open items, including insurance claims to the claims to sell up item continue to be open. And we will, of course, carry that each quarter until it comes to a logical conclusion. And we are part of the disclosures in the financial accounts and the notes. On the Middle East conflict, we have no real exposure to Middle East today our revenues. We significantly operate in Continental Europe, Australia, New Zealand, Southeast Asia and inbound and outbound from India with some amount of work in the U.S. So we have little or no exposure today to what's happened from a conflict perspective. I think the only slowdown that we saw in the international business was on the group segment where like the ITS companies reducing headcounts in India, there have been also some amount of patterns that have changed in terms of medium and long-term deployments of their employees abroad. And the portion that is in fact, in some ways, I wouldn't say negatively impacted, but because the premiums are going up. We serve some of the sea farers across the globe today. So there is some operational challenges there, but we currently don't see from a revenue and any kind of a negative impact perspective.

In terms of international business, is there any specific region that we are focusing on targeting just open up in Thailand that way. Is there any specific area that we are looking to target in the coming not a broad target in that sense...

On international, we are fairly clear that we are not trying to replicate what we do in India. We are predominantly taking our technology and other capabilities to those markets. And at this point, I think we see markets like regions like Southeast Asia having the most similar workflows and processes and sort of quicker deployment cycles for the technology stack that we have available.

Ladies and gentlemen, we will take that as the last question. I now hand the conference back to Mr. Satish for closing comments.

We thank you. Thank you all for joining us early this morning and thank you for all the insightful questions. We fully appreciate your partnership and feedback as a company that has no peer or comparable in the markets. we will strive to improve our disclosures and strive to improve the explanation of how we run our business, what the opportunities are. And thanks again for shaping some of the narratives with your insightful questions. And I think as we close, we are truly excited, as Madhya said, that we are able to deliver a technology platform that's typically not seen in most markets because most solutions today target one of the stakeholders, right? We built solutions for insurer build solutions for hospitals to build solutions and digital journeys for members. We are in a unique place where tens of millions of members and millions of claims transactions, allowing us to create truly interconnected intelligence platforms. connecting all of the stakeholders in any market and very seamlessly enabling experiences that can be enabled only when all 3 stakeholders are connected extremely well. So we're excited about the opportunity. We are excited about the space we are in, and we are excited about our growth prospects, both in India and outside. Thank you again for your continued partnership. Thank you.

Thank you, members of the management. On behalf of E&Y, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.