MPS Limited (MPSLTD.NS) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 and 9 months FY '26 Earnings Conference Call of MPS Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Arora, Chairman and CEO. Thank you, and over to you, sir.

Thank you. Good evening from Singapore and a warm welcome to our Q3 FY '26 earnings call. Today on the call I have with me, Prarthana Agarwal, CFO of MPS; Sreenivas T. V., COO of MPS; David Goodman, Chief Growth Officer; Rod Beach, President, Corporate Learning business. Prarthana joins us from our corporate office in Noida, Sreeni from Bengaluru; David from Austin, Texas and Rod from Baar in Switzerland. Prarthana will kick things off today in our opening segment by discussing our financial performance. Then Sreeni will update us on our Research Solutions as a segment. Sreeni will then hand over to David to help you understand the drivers of growth in our education business. Rod will discuss the progress in our Corporate Learning business segments. Finally, I will provide an update on key strategic initiatives before opening the call to questions. Let's get going. Over to you, Prartha.

Thanks, Rahul. The first 9 months of FY '26 demonstrates that we are successfully executing our long-term growth strategy despite the challenging holding quarter in Q3. Our year-to-date trajectory remains positive with 9 months revenue growing to INR 563.2 crores, while Q3 saw a minor dip in revenue to INR 182.5 crores at an EBITDA margin of 31.6%. These figures remain within a healthy operational range as we navigate a period of transition. The real story this quarter lies in the engine room of our segments. Education Solutions has emerged as a standout performer, growing at over 38% in the first 9 months of FY '26 and becoming a much larger part of a corporate entity. Research Solutions continue to serve as a stable anchor contributing to 61.1% in 9 months FY '26. Conversely, Corporate Learning saw a significant pullback. We are treating this as a tactical challenge proactively moving away from the low-margin legacy work to realign the segment with the broader growth seen across the group. I would now like to hand over to Sreeni to discuss the developments in our Research Solutions business.

Our Research Solutions segment continues to anchor the overall performance contributing approximately 61.1% of our total revenue in Q3 FY '26, reaffirming its dominant position. We achieved an impressive 16.2% year-over-year organic revenue growth in this segment, excluding AJE, which reflects deep engagement with STAR Accounts and successful new customer acquisition. Across Research Solutions, Q3 FY '26 was a quarter of meaningful progress, top line momentum in several areas and margin expansion as a result of operating leverage. We demonstrated that we can win business at scale and integrate new work at pace. Taken together, Q3 showed a research solutions portfolio that is commercially is resilient with strong pipeline, new logos and credible tech beds. Strategically, we remain focused on consistently improving performance for existing clients, strengthening relationships and pursuing organic growth. We are actively attacking the market to acquire new logos and collaborating across the different business units within research solutions from AJE to HighWire to amplify cross-selling and upselling opportunities, a key strategic imperative is advancing our technology focus areas to ensure non-linear growth and to future-proof our business. This includes completely transitioning to AI-powered workflows, prioritizing AI and agent AI models, removing any dependency on third-party platforms and scaling of DigiCorePro expediting the road map for rubric model from aging and implementing new measurement frameworks. These concerted efforts would ensure that we continue to deliver engaging content at scale while delivering sustained profitability and operational excellence. I would now hand it over to Dave to discuss the developments in our Education Business.

Thank you, Sreeni. The Education Solutions business furthered the momentum in Q3. Revenue grew by 11.3% year-over-year and EBITDA margin grew to 40.8%. In Q3, we settled into a more confident stride, trading highs and lows for steady, compositionally healthier growth. The content and production business built on earlier momentum with major K-12 and higher education customers, converting successful pilots into follow-on ways of product development, legacy overhaul and international projects, while also opening doors with new institutional and professional learning clients. In parallel, the digital and accessibility arm delivered excellent growth and expanded its role in complex high stakes work, large accessibility conversions, multimedia and interactive remediation and sizable EPUB programs demonstrating it can handle volume without sacrificing near flawless quality and schedule performance. Across the portfolio, the education practice leaned into emerging capabilities such as AI-assisted production, and accessibility frameworks, accepting some near-term people and investment costs in order to deepen strategic relationships, diversify its client base and stand up new service lines including LMS and web accessibility and certified accessible formats that are intended to anchor more scalable education-centric growth in FY '27 and beyond. I would like to now hand it over to Rod to discuss the progress made in our Corporate Learning business.

Thanks, David. Across the Corporate Learning business, Q3 FY '26 was less about headline growth and more about resetting the foundations for a different type of future. MPSi Liberate and MPS Europa all operated below prior year in budget revenue levels, but each spent the quarter tightening cost structures, sharpening commercial focus and lend into higher-value capabilities. MPS drove a dramatic EBITDA recovery by the end of the quarter through disciplined cost controls, high utilization and early wins with AI-enabled solutions whilst continuing to add new logos and maintain strong client satisfaction. Liberate delivered its most improved quarter for the year, rebuilding the pipeline health, deepening anchored relationships and integrating more tightly into the global organization. Even as enterprise demand remained patchy, the team doubled down on margin protection and RFP discipline. MPS Europa navigated a tough revenue and profitability picture but secured strategically important VR, AR and immersive training projects that began -- and we began the rightsizing of the organization and the leadership structure to match a more focused high-impact portfolio. So taken together, Q3 for corporate was a turn the corner moment. Financials are not there where they need to be just yet, but our operational discipline, targeted rightsizing and pivot towards AI, experimental learning and thought leadership-driven sales is laying the groundwork for more resilient and scalable growth. I'd like to hand over to Rahul to conclude this opening session.

Thanks, Rod, and thank you for the rich update team. Q3 was an excellent jolt to rationalize our costs. We started a new efficiency drive for radical cost optimization. With surgical efficiency, we crush noncore nice to have expenses. We've executed these changes quickly to further expand our margins and prepare our balance sheet. While Q3 requires a disciplined reset our forward-looking data is compelling, MPS is comfortably placed to surpass an EPS of INR 100 in FY '26. We expect to outperform our Q3 benchmarks as a change measures take hold and the synergies from Unbound begin to materialize. We are playing both the short and long game utilizing this period as a catalyst to build a leaner platform-led organization. By Q1 FY '27, we have conviction that we'll be operating from position of significantly enhanced trends. Now coming to the acquisition of Unbound. On Friday, we informed that MPS North America, LLC, a wholly owned subsidiary of MPS Limited, entered into definitive agreements dated 30 January for the acquisition of 100% stake in Unbound Medicine for a total consideration of USD 16.5 million, subject to customary adjustments payable in accordance with the terms and conditions set out in the SPA and other definitive transaction documents. The acquisition of Unbound is a transformative milestone in our evolution. By moving directly to the heart of the medical and nursing ecosystems with established institutional relationships, we've taken full control of the value that we deliver. This is a bold market expansion into a sector anchored by resilient, recurring revenue and unrivaled customer stickiness. We see immense potential for revenue synergies by introducing Unbound platforms to our global client network while driving capability expansion through our shared expertise. By making the advanced technical resources of MPS Labs available to support Unbound's proven offerings, we will accelerate our collective innovation and position ourselves as a primary technology-first partner for the global health care community. Let's now open the call to questions.

[Operator Instructions] We have the first question from the line of Rahul Jain from Dolat Capital.

Regarding this particular quarter, we saw some bit of moderation on the traction in the education business side? Is it like a part of the trend that there will be some quarters where there could be this kind of volatility, this is the kind of contract that we have. And in general, if you could share your thought process on a sustainable basis because this has been one of our key growth drivers. So any color on the prospect out here would be happy to understand on that.

Thank you for your question. Yes, I'll let Dave give the more detailed response, but at a high level, I wouldn't say quarters, I would use singular. This is a one-off quarter. So that's what I'll like to pitch in and then Dave, go ahead and answer the question.

Yes. I think you answered the question in part with your question. Definitely, the timing of certain projects can impact revenue in a specific quarter in the education business. Year-over-year, we're still headed for double-digit growth. One really good example of the work we're doing to have sustained growth. We landed another major higher education clients in Q3 on a long-term contract and the expectation of that client is a 7-figure year-over-year spend, which will begin to ramp in Q4. So we're continuing to look for those large sustainable clients that can help us avoid any of those challenges from a project-to-project basis.

Sure. And one question, which is more towards the M&A that we have announced a few days back. So it would be great if you could share some thoughts in terms of how this would work -- how this business actually work in terms of customer targeting? Is it a digital acquisition that we chase? Is it more like a B2B format where we try to get clients through a sales team? And the subscription charges that I have seen in some of those courses or access, are these perpetual for those specific content? Some of these things, if you could share your thoughts on.

Yes. So I'll share some high-level information now. And then we're hoping for the deal to close by February 10. So currently, we've just simply signed definitive agreements. There are some customary closing requirements. Once that happens, we'll be issuing a very detailed press release that details amount. So Unbound overall is a high-margin subscription-led business model. Recurring revenue, very similar to our platform business. The business is primarily a B2B business focused on medical schools and nursing schools in the U.S. and Canada. And of course, there's a large opportunity to expand that into the customer base of MPS, but also just kind of expand Unbound globally. There is an element of B2C, but that is where the same solution or a configured solution is being sold to individual practitioners through the app universe. So -- but that's not the primary business. The primary business is a B2B business. And like the MPS platform business, very high recurring revenue, and institutional stickiness as well, given that a large part of the customer base is medical schools and nursing schools. So like I said, happy to share more information in the coming days, but that's more what -- I'm not at a super high level.

We have the next question from the line of Navid Virani from Bastion Research.

I have 2, 3 questions. First one is on the guidance that we provided in the presentation saying that we will be closing FY '26 with INR 100 plus. So I was just trying to back calculate a few numbers. And when I back calculated, I found that the revenue number that I am arriving at using the existing margins, et cetera, it comes out to be upwards of 20% for Q4 revenue growth number. So am I thinking on the right line? And an attached question to that is regarding the overall growth. So if I look at the last 2, 3 quarters, the revenue growth trajectory has been really encouraging, excluding AG. But this quarter seems to be slightly off. So how should, as investors one think about the long-term growth trajectory of MPS is what I wanted to understand.

Yes. I think on the first question, like I shared before, we don't really like giving guidance. But given that Q3 was a bit of surprise for everyone on this call, we are providing some high-level EPS guidance, which is that we're expecting to cross INR 100 this year in EPS, which, as you can imagine, having known us for a while now that it's a conservative number. So we feel that we comfortably will go north of the INR 100 EPS. In terms of growth, I think if you look at the first 6 months, really what was driving the growth was the research business without AJE was growing at north of 15%, which, again, it has done this particular quarter as well. And for Q1 and Q2, the education business was growing at a super normal 50% type of rate, which kind of normalized this quarter to closer to 11%. And corporate learning this year has been off. So in terms of what we expect is Q4, we obviously -- given the guidance that I've shared, we obviously expect a better quarter in Q4 itself. And then next financial year, what we're expecting in terms of broad themes is we're expecting the rapid decline in AJE to kind of stall and FY '27 to be kind of be a stable revenue for AJE -- stable revenue year for AJE, which basically means that the Research Solutions business, which is growing without AJE, then as a total also starts to do better. Education business, like Dave explained earlier, we're expecting to grow in double digits in a very stable way. So no concerns there. And finally, in the Corporate Learning business, we returned back to growth as well as in FY '27. So in addition to that, of course, we have the acquisition of Unbound, which we believe is a strong, robust growing business, which also has revenue synergies with MPS. So yes, we are thinking of Q3 more as a speed bump and Q4, Q1 looking very solid and FY '27 in general, looking like an exceptional year.

We have the next question from the line of [ Mahesh BP ] from Individual Investor.

Rahul, my question is related to the AI changes, which market segments is seeing a bigger threat to revenues and margins from all the changes happening in the AI part?

Sorry, could you repeat that, please? Your voice is not coming clearly.

So my question is, which market segment that MPS operates it, is seeing a bigger threat from -- a bigger threat to revenue and margins from the AI-related development?

Yes. We are seeing AI more as an opportunity. On the research side of the business the theme is to drive improved cycle time as customers look to monetize their content faster. So the theme is around speed and efficiency and cycle times. Within research, I guess the part -- the portion of the business that has possibly been impacted by AI on the revenue side, the AJE business that is more B2C relevant. So that's one potential aspect. But there also, we have our own platform called rubric that we are selling. Additionally, a lot of the growth that we expect in AJE is expected to come from B2B, which is similar to the rest of the Research Solutions business. So that's research. Within education, we actually have not seen the same kind of adoption that we've seen within research, customers are seem to be more risk averse in the education space. We have seen, again, some discussion around speed and efficiency as well as leveraging AI to drive speed and efficient workflows and reduce costs and specifically speaking to the education space. And there, we've seen whenever customers have done that, they've consolidated the supply chain and given more work to scale players like MPS. So while it may have been a disadvantage for some of the smaller fringe players because they get knocked out for players like MPS that has actually been a boost. So to give you a couple of examples on the translation side, traditionally, customers would go to the specialized language companies based out of the region that spoke the language. And now it is -- that whole translation work has been outsourced to us. On the corporate learning side of the business, yes, the straightforward eLearning, the flat eLearning, Level 1 type of eLearning, we are seeing less demand for that and there's more demand for more complex type of development. The most straightforward development has pretty much been -- is not being done actively outside the organization. Most enterprises are handling that internally. But overall, I think we are seeing it as an opportunity because what it is doing is it is consolidating a highly fragmented market and in the benefit of scale players like MPS.

We have the next question from the line of Ravi Naredi from Naredi Investments.

Giving the reasonable result of this quarter, sir, due to U.S. dollar, euro and pound rises drastically versus Indian currency. So will it improve margin in future?

Yes, absolutely. It's very accretive for us.

Okay. And second, we always have in mind to raise equity through QIB. I advise you have a good amount of money in this year. So keep in kitty instead of paying higher dividend. So question of QIB doesn't arise.

Absolutely agree. We are not planning to use any equity financing. We will be using debt as an option. And later this week, we'll be sharing more information on what does that debt look like. So that disclosure will be filed and you'll have the information on the disclosure is filed. But we're not looking to do any equity financing. That is not on the card.

And how much we remain in surplus Unbound Medicines buying -- after buying this company?

So sir, once we file the disclosure, you have all that information. We just have to file the disclosure before we share.

[Operator Instructions] We have the next question from the Sucrit Patil from Eyesight Fintrade Pvt Ltd.

I have 2 questions. My first question to Mr. Rahul is as MPS works with global leading clients across services and platforms, how does management think about balancing deeper engagement with existing clients versus adding new clients? What changes in client spending behavior or deal structures would prompt you to adjust this focus? Any color on how you internally decide when to shift that balance? I just want to understand your view on that. That's my first question. I'll ask my second question after this.

Okay. I think MPS, depending on the business segment, the emphasis shifts a little bit, but overall, the philosophy is that there are certain partnerships that are what we call STAR partners, our STAR Accounts. These partnerships are determined if a customer hits 2 out of 3 criteria. The first criteria is current size. The second criteria is future potential. And the third criteria is some strategic intent. So for example, if the customer was an apple, for example. So as long as the customer needs 2 out of these 3 requirements, they immediately become a STAR customer. A star customer gets an executive sponsor from the senior management team of MPS. They get a dedicated account director. They get a dedicated communications contact and they get a dedicated operation [ spot ]. In addition to the full teams that sit behind the delivery teams that sit behind these teams, a STAR Account is informed that they are a STAR Account because this requires collaborative effort. A lot of governance, we do monthly governance, we do quarterly business reviews. We make sure that we are man-marking the entire customer organization as well as interacting not just [ tackly ], but also more strategically through innovation labs and workshops. And we also bring these customers together. So different STAR Accounts also come together in different forums. So there's a whole framework at MPS around STAR Accounts. When we started this journey, we had 10 STAR Accounts that we scaled to 30. And now we are almost at -- in triple digits. So across the 3 segments that is research, education and corporate. Typically, what we have seen is STAR Account over a 2- to 3-year period, if we started the journey with identifying them as a STAR Account, the lines of business or the kind of the spread of business that we do with them doubles. So for example, when we started the first phase of STAR Accounts, our average cross-sell index, which is the number of business units or MPS engaging with a STAR Account was 2.5x. So on average, STAR Accounts -- 2.5 business units were working with STAR Account. After 2 years, that number jumped to 5.5, which means that 5.5 business units on average out of 15 business units were engaging with the STAR Account. So we saw a phenomenal jump through this initiative. And that's really what we are driving forward is entering into a strategic partnership where the respective customer and MPS are aligned on vision, strategy and goals making sure that they are consuming all that we can supply of MPS, working from their backwards from the problem statement. And then finally, also exposing them to other MPS STAR Accounts so that it's not just learning from the partnership, but our overall STAR Account framework. In terms of net new customers, again, depending on the market, we approach it differently. We are probably the most aggressive in acquiring net new customers within the corporate learning market given the deal sizes and the nature of the business. But overall, I think if you look at the overall MPS customer base, given our size of company, we have over 400 B2B customers. So for us, cross-selling and going deeper within the existing customer base is the dominant strategy.

Another extension to the same question. But my second question is to Ms. Agarwal. I believe she is on the call today.

Yes, she was on the call. What's the question?

Beyond the reported margins and cash flow, what are the key early signals you track internally, maybe project mix, platform usage or billing pattern or anything particularly that you have to assess margin visibility and cash flow quality before they show up on the balance sheet. Just want to understand your view on how you track all these things internally.

Rahul, would you take it and then I can add on?

No, no go ahead. You wanna go ahead?

So in terms of tracking, I think we have our internal matrices wherein we track the cost and margins internally for each of the businesses. And whenever we see signals wherein we see a reduction like we have seen AJE where we have proactively taken measures in terms of restructuring, et cetera. So I think internal tracking, we have our monthly systems wherein we track the margins and the revenue by BU, sub-BUs internally, and we take corrective actions on a timely basis and on a real-time basis.

We have the next question from the line of [ Vikash Mistry ] from [ Musan ] Ventures.

I have a slightly long-term question. So as you alluded that due to artificial intelligence, a lot of small companies are going away and you are trying to get that pie of it. But at the same time, some of the larger companies also increasing their capabilities because of that, and they can also enter into areas. So does the evolution of AI reducing their long-term cash flows and breaking your longevity of the cash flows. So how do you see on one side, you're getting slightly benefited as yourself alluded. And on the other side, there may be a chance that other players can come into the market and they can reduce the longevity of your cash flows?

Yes. I'll answer that question in a brief way, I think, Sreeni, I'm going to bring you in. And the reason I want to bring Sreeni in is because he is a new entrant into our industry. He's come in a very senior position. He's the Chief Operating Officer of the company. So he has the perspective of what -- when outsiders come in, what does it feel like? And also the perspective of what his view of the MPS value proposition is. But the short answer to your question is outsiders have tried before. I think what is different about MPS and unique about MPS is we bring the domain expertise that's been around -- we've been around for 55 years, a little bit more now. And we have been able to very uniquely combine this domain expertise with technology. So the combination of subject matter expertise, domain knowledge with technology is really our moat. If you're living and breathing this business, you understand this moat intuitively. So that's fine so hard for me to describe, but maybe, Sreeni, you can come in and share your thoughts. Yes. I'll answer that question in a brief way.

Sure, Rahul. As much as I would like to get on the threat bandwagon, it's not an overstatement when we say that we view the AI transformation as a glass half full opportunity rather than a glass half empty threat. And main reason for that is we are probably the only publicly listed independently owned company of our size that has the capabilities and the demonstrated -- have demonstrated ability to service the entire value chain for our clients end-to-end. And when people talk the impact of AI and its ability to transform client businesses, they don't fully understand that this transformation cannot be executed in parts of the value chain. It has to be executed across the entire value chain, which is where our particular advantage lies because we can actually help clients optimize the whole rather than address parts of the whole, which will need for the bottlenecks to move into areas that they don't control. So long story short, I feel that we have a significant moat, especially because our clients mainly maintain the truth infrastructure around research integrity and the validity of what is getting published. So in that sense, they need partners who have the domain expertise, and it has been demonstrated again and again that the -- with the advent of AI, specific technical capabilities are becoming more and more commoditized and the domain expertise is what's getting valued more and more, and we are in prime position to take advantage of it.

Yes, we do the similar -- sorry.

Sorry to interrupt. I'd just like to add one more point. So I think this question, let's -- if we get really specific, we've just come fresh of a transaction, right? And we've just recently entered into definitive agreements to acquire Unbound. So if we get really specific and say, can OpenAI and Anthropic with the language capabilities, for example, disrupt Unbound, right? That's something we extensively covered in the diligence of the acquisition of Unbound, right? So just to pick up that specific set, can AI impact Unbound, for example? The answer is no. This requires some understanding of the domain. So think of it from a clinical perspective, right? In a clinical perspective, there's a huge trust gap that Unbound is solving for. The general LLMs that like an OpenAI and anthropic, they are problemistic, meaning they're prone to hallucinations. They lack the verified peer-review basis on which high-stakes medical decisions are taken. And no medical school or nursing school for that matter, will accept that kind of liability. So first, Unbound has exclusively the content. They own or license gold standard clinical guides. Second, they've integrated everything into their workflow beautifully. So it's embedded already in the workflow of 480 institutions and with a retention rate of 97%. So it's so embedded in the workflow, the switching cost of moving away from a stand-alone chatbot is also not possible. Forget a full-blown LLM switch. And finally, to supercharge the data, Unbound has, for example, integrated AI that not only thinks within the guardrails of the library, but also is legally indemnified evidence-based intelligence layer that simply -- that AI simply cannot safely replicate. So again, the domain piece is super important here. And you have to understand that the value creation is not around language, the value creation here is around science. And we are so embedded in the workflows that the switching cost is simply like it's impossible.

Yes. We do echo the similar observations. But having said that, if in today's environment, we are virtually just making the things faster and the growth should be much faster in coming times. If we do not grow greater than materially higher rate, 15% to 20%, so what could be the handicap that will pull us on downward direction, which we are seeing as of now, but we feel that going forward, it should be growing materially higher.

Sorry, I didn't understand the question. What could pull us down?

This is a once-in-a-generation opportunity wherein we are getting the fruits of the AI, and we are deeply embedded into the workflows, and we are suitably placed to get the whole market share with us. If we could not able to grow, what can be the conditions that can be...

No, I don't see this as a zero-sum game. I think that -- if you're seeing this as a zero-sum game, yes, there's a problem there. This whole opportunity will only be unlocked through deep collaboration, through deep perseverance and iteration. This is not some windfall that's going to happen in winner takes all type of setup. This is not a zero-sum game. So we don't see it that way, at least for our domain. I'm not speaking for all markets. But for our specific domain for our specific market, we see this as a highly collaborative, iterative and partnership concept that has to be done between us and the customer. And in some cases, with some of our competitors and other stakeholders in the value chain. We are constantly integrating with competitors in our products as well. So yes, this is not a black and white kind of situation.

We have the next question from the line of Krushi Parekh from Bugle Rock PMS.

So again, I'm not particularly sure about how much relevant this is, but we have seen that the university funding in the U.S. was curtailed materially over last 1 year.and also is expected to continue. So specifically on that particular front, how do we see this kind of budget curtailment impacting our volumes on, say, the research side, not immediately, but say, over the next 1, 2 or 3 years. And what are we specifically doing to tackle that, if at all?

Yes. If you look at our overall geographic concentration, the U.S. is now less than 50% after Unbound will pick up a little bit more. But I think what we are seeing is that we are monitoring global spends as well. So global spends are on the rise. We haven't had any major issues with our customers in terms of spends coming down. Potentially, it has affected the marketplace, but specific to MPS, it has not affected us. Like I was saying, we have over 400 customers that we serve. So for us, it's less about acquiring net new customers. It's more about going deeper within the existing customer base. So for us, one is being more diverse than anyone else. I think we are one of the few companies in the industry that has such a small percentage of North American revenue. You've seen this quarter itself, the U.K., Europe revenues has picked up quite a bit. Second is with our existing customer base, we are not seamless exposure. And third is because we have over 400 customers. For us, it's really not about -- at least on the research and education side of the business, it's really not about acquiring net new customers. It's more about going deeper with it.

Okay. Okay. And it's been some time since we have spoken about combining our sales efforts, I mean, providing all the opportunities and providing all our offerings to the customers. So where are we on that journey? And what are the other initiatives that we have currently taken up to overcome any challenges that we have to integrate all the sales efforts?

Yes. I think the biggest challenge is in terms of scaling the effort. I think we have it proven on a 10 customer basis. We have it proven on a 30 customer basis, and we have it proven on a 50 customer basis. Now as we're going from 50 to 100, it's really about execution. So in terms of execution, it's about building the operational efficiency like we have in our service delivery, building the same operational efficiency and rigor in account management, business development and how orders flow from sales to operations. So it's mostly an execution challenge. Our strength as a company is execution. That's been -- our value proposition is operational excellence. So we are bringing some of the same themes to this scaling up. So no challenges as such. But yes, of course, any company that's trying to grow at the pace we're trying to grow, we do have growing pains.

We have the next question from the line of Parimal Mithani from Credential Investments.

Yes. I just wanted a clarification. You mentioned to an earlier participant about raising one of the colleagues about raising debt. Can you -- what is it regarding for that?

Yes. So like I shared, we've entered into definitive agreements to acquire Unbound for USD 16.5 million. So there is going to be some debt involved in the transaction. We will be -- once we file the disclosure, you'll have all the details will be in the public domain. We haven't filed the disclosure yet. Because we have not received the debt. So we have not filed yet.

We have the next question from the line of Madhur Rathi from Counter Cyclical Investments.

Rahul, I'm confounded that you are giving a guidance of surpassing INR 100 EPS for FY '26, whereas if you see our quarter ending September '25, we already were doing a trailing 12-month EPS of INR 104. So now when you say that we will cross INR 100 EPS for the full financial year, I hope we are not expecting a degrowth in the fourth quarter. And in the last call, you also mentioned that you expected a further increase in margins in the second half, but it doesn't seem that they have come. And also, Rahul, I think there is some issue with the eLearning that for -- this division has gone back over 3 years back. I mean if you see the performance, even 3 years back, we were doing like significantly more top line as well as margins than what we are doing today. And in between, there was this Liberate acquisition also. So I mean, if you could just shed some light on all these points.

Sorry, could you ask your question?

Yes. So Rahul, the question is that -- firstly, we were already doing INR 104 EPS in trailing 12 months till second quarter of this financial year.

Let's go to now. It's difficult -- sorry to interrupt. It's difficult to answer multiple questions together -- let's go one by one. So I think like I shared, we are comfortably placed to cross an EPS of INR 100. That's all I shared. And the reason I shared that was because there was some concern from people that attend these calls is that is there going to be a miss. We normally don't like to give guidance, and that's why we've given a very tight conservative guidance. There are a bunch of numbers that are bigger than INR 100, but that's all we can share at this point in time. What was the second question?

Okay. Fair enough. Yes. So now the e-learning, Rahul, if you see, then we have gone back over 3 years back, if you compare our quarterly numbers, then it is less than what we were doing 3 years back. And in between, we did this Liberate acquisition also in the same space. And so I mean, why is there -- why is it taking so much time for the numbers to pick up?

Okay. So I'll again answer the question at a high level in terms of the corporate learning business, and I'll bring in Rod to talk about what the prospects look like right now. Earlier this year, we took an introspective look at how the corporate learning business is performing, and we realized that we are operating in 3 silos. We have an entity in Switzerland that's doing its own thing. We've got an entity in India that's doing its owning and an entity in Australia is doing its own thing. And we saw that from an operational efficiency standpoint, the Australian entity was performing far better than its peers, both in terms of productivity as well as in terms of margins. And also in the small region of Australia also had a very high market share. So with that kind of context, Rod and I spoke, his -- our final buyout of the stub left in Liberate was coming up. And Rod was interested in playing a larger role within the overall Corporate Learning business. And we decided together that it was best for him to run the Corporate Learning business as the President and bring all these 3 entities together and really go after the market in the managed services play that we were looking to pursue. So that's kind of the background. I think we're starting to see some very early signs of success in the Corporate Learning business. But Rod, please come in and describe what you're seeing already.

Yes. Well, it's a phrase strengthening numbers. The opportunities that we have to be able to do the upsell and cross-sell between the different entities is far greater than us all trying to do our own separate things. So systems, platforms, technologies, innovations, geographies, people, skills, everyone was in silo. So now the focus has been to align those. We're making good progress on those. And going back to that strength in numbers is AI is disrupting that Level 1 low-end market space. The organizations are sitting there wondering how it's going to impact them and what they can do in their own space with generative AI with automation and efficiencies and content generation. But now that's created an opportunity for us bigger in size for us now to go for the managed learning services. So as organizations are planning for AI automation, they're wanting to play it safe and managed learning services is going to be the next big thing that's going to take off, and we've been positioned ourselves very strategically to take that. We've got some big opportunities at the moment we're hoping to close soon, and then we're going to be well positioned to be taking on some very large projects in the managed learning services space off the back of uncertainty of the market that is sat watching to see what's going to happen. This is a strategic play we're going to have in that space. But also the other opportunity that we see is the higher-end elements. So again, dropping off that Level 1, but focusing on the Level 3 and some of the AR, VR and AI agentic bots and personalized learning pathways. So it is a very huge and exciting pivot in the market, and we believe we're at the very forefront of that. And uniting the team just means it's going to make it easier for us to get those bigger targets rather than chasing small value one-off eLearning projects.

We have the next question from the line of Rahul Jain from Dolat Capital.

Just 2 things. Firstly, of this new M&A, are we expected to -- expect this business to be part of our -- are this revenue going to be subset of education revenue or it will spread across the 3 businesses? And secondly, any color on AG part of the business, how we expect growth and margin in this business from a directional point of view?

Yes. So Rahul, I'm just going to take a minute to also answer the previous gentleman's question, Prarthana just gave you a data point that I did not share. I quickly answer that, I'll come to your question. And [ Christine ], I'm going to bring you in on the AJE question. So we also have to look at the -- when we're looking at EPS, we also have to look at the impact of the labor code. So that's about INR 3.5 per share. So that we are also dealing with that negative. So when you're computing the possible EPS for Q3 -- sorry, for Q4 and for FY '27, do remember there's a subtraction of negative INR 3.5 coming from the labor code exceptional item. So that's one point. Second point is -- let me bring Christine to talk about AJE and then Rahul I'll answer your second question. So that's one of the question. So Christine, you want to talk a bit about AJE, just give a color on what's going on, what's looking good? What have been the achievements this year? What do the next year look like?

Sure. Thanks, Rahul. So we're expecting FY '27 to be the first year for AJE to show some stable revenue. This is along 2 lines on the B2C -- on the B2B partnerships, we have newly been awarded as a vendor for one of the top publishers -- top international publishers. So we're very happy about that. We're seeing more interest in the editorial services that we are providing to publishers like Journal editorial Office, peer review services. So that's going to be another line of growth that we're expecting to see. And we are in conversation with other top publishers as well as university presses. So that's on the B2B side. On the B2C side, where we've already started expanding our suite of services that are intended to cater to more evolving researcher needs. This includes a more competitively priced scientific editing like service, plagiarism check, bigger formatting, services that are more sought after in the current researcher space. We're also experimenting with more competitive pricing now that we've seen some improvements in costs. So we're seeing some increase in the order numbers and value for services that we are able to price more competitively. And the third aspect of the B2C growth is going to come from value addition to existing services. So we're expecting to see an overall stable revenue year for AJE in FY 2027.

Yes. And Rahul, to answer your question on classification of revenue and segments for Unbound, Unbound is mostly like in the education segment. So we will -- we will basically report these numbers within education. There is a very tiny piece of revenue, a smallish piece of revenue that will potentially go to the research segment, but mostly education, some research and no corporate.

Ladies and gentlemen, we will take that as a last question. And that concludes the question-and-answer session. I now hand the conference over to Mr. Rahul Arora for the closing comments. Thank you, and over to you, sir.

Thank you, everyone, for your active participation in our earnings call for Q3. We appreciate all your thoughtful questions. Your unique outside-in perspective is helping us learn and improve with every call. I also want to thank all our stakeholders for their continued respect and support. Like I've shared previously, this has been a remarkable journey and wouldn't have been possible without you, and we're looking forward to supercharging scale for MPS. Thank you for your continued support, feedback and partnership mindset.

Thank you very much. On behalf of MPS Limited, that concludes this conference. Thank you for joining with us today, and you may now disconnect your lines.