MPS Limited (MPSLTD) Earnings Call Transcript & Summary

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

Good morning, everyone, from New York. Welcome to the MPS Q1 FY '22 Earnings Call. I hope everyone is staying safe and getting closer to being completely vaccinated. At MPS, nearly 70% of our associates have been vaccinated with at least 1 dose of a COVID-19 vaccine, either through private means or through the vaccination camps MPS has organized. In our opening segment today, I will discuss our consolidated performance in Q1, then Robin Blakely, Chief Operating Officer at MPS North America, will discuss how our education publishing business has seen transformative growth over the past 15 months, and she will also focus on key developments. And then Sukhwant Singh, Senior Vice President, who has recently taken additional ownership of our eLearning operations in India, will update us on the MPS Interactive business. They will then circle back to me, and I will provide updates on platform business before we open the call to questions. Before we begin, I would once again like to thank you and extend my gratitude to the MPS Board of Directors, shareholders and the investor community in general for their vote of confidence and support in the successful transition of leadership from first to second generation and my appointment as Chairman and CEO of MPS. Quite and officiously, the business performance in Q1 sets us up for a robust year ahead and confirms that MPS has generally entered a thriving phase of business expansion. Our FX-adjusted revenues in Q1 were just shy of INR 118 crores, which is 43.4% above previous year. While absolute PBT growth was similar to 52% compared to Q1 of last year, reflecting some margin expansion. My top 3 takeaways from this past quarter include: firstly, HighWire contributed the most towards the group's profitability in absolute terms across our business lines; second, MPS North America and North Books, which is MPS North America's back end in India, grew at a phenomenal double-digits clip; and finally, all lines of business were healthy and profitable, including the eLearning business, where not only did the India entity do well, but TOP SIM in Germany also made an unprecedented start to the financial year. I'll now hand it over to Robin to shed some light on the education publishing factors.

Thanks, Rahul. The educational publishing practice came out of the gate in Q1 with a very strong quarter. The successful start of both the U.S. and Indian teams led to a revenue increase of 35% as compared to Q1 of last year. This success is largely due to a collaborative and suitable approach to our global services. Functional and subject matter expertise is provided by our U.S.-based offices with expertise frequently organize -- operationalized from our India-based facilities. The ongoing day-to-day communication and knowledge transfer between onshore and offshore teams has led to successful global integration. During the last 15 months, we've seen an unprecedented growth in educational publishing practice with the increase of business on both the revenue and profitability side. We've been able to strengthen our position as a market leader in the space by both expanding our customer base and building additional volume with existing customers, all while vendor consolidation has been happening across the publishing landscape. With the dependency on the state adoption cycles for the U.S. K-12 education sector, we continue to focus on expanding our client base to include publishers in the global markets as well as those focused on adult-based education, high school equivalency and employability skills. That said, there are large opportunities headed our way this fiscal year due to upcoming math and science adoption smoothly. We're also seeing a lot of growth in the higher education content development space as we increase the scope of our services with existing key clients. Sukhwant, over to you.

Thank you, Robin. And hi, everyone. So MPS Interactive made a strong profitable start to financial year '22, though our expectations on revenues continue to be higher than the run rate in quarter 1. On the revenue side, we grew primarily due to addition of new clients in North America, and 2 of our top 10 accounts did much better than expected, each contributing significantly this quarter. On the expenses side, we are unlocking the learnings associated with operational efficiencies on the content side of our business and are already seeing some early positive results. While North America continues to be largest market for MPS Interactive, we secured some great business in Australia, Singapore and the Middle East this past quarter. The opportunity pipeline is at its highest in 2 years, and the order book is also at a much better place than the same time last year or even last quarter for that matter. Our aspiration for the rest of the financial year is to step up revenues and also expand margins further as revenue increases through enhanced operational efficiency. We would also like to continue to further augment on the marketing momentum. Thanks. And over to you, Rahul.

Thanks, Robin. Thank you, Sukhwant. I will now share an update on our platform business. As for the segment results, the profitability margin for the Platform Solutions segment has significantly improved from 28.44% in Q4 of last year to 34.72% in Q1 of this year. I've used the sequential quarter length because Q1 of last year did not include HighWire. And while revenue was down in Q1 of this year compared to Q4 of last year, this was much better than what we expected in the platform business. The incumbent business saw double-digit growth in Q1 with an increase in business from core customers. The revenues from THINK also grew in double digits, primarily due to platform upgrades and professional services with existing customers. The acquisition of HighWire has definitely helped in growing our existing incumbent platform business in the short term. Let's now open the call to some questions that can help us be better at what we do.

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

Congratulations for a great set of numbers this quarter and good luck for the future as well. Just a very simple question. On the platform business, there was a shift from TOP SIM platform to eLearning. So first, what's the revenue for this company? And like-to-like, what's the impact given this? I believe -- would eLearning be positive if these restated numbers are not given?

So I can take that. Thanks, Piyush. So the -- we're not able -- we cannot disclose what the TOP SIM numbers are for competitive reasons. It's a very competitive marketplace. Having said that, as the movement has happened, the movement has also been reflected in the past quarter. So it's not that we've only changed the existing quarter numbers, but when you look at the comparables for the previous quarter, they are like-to-like. That's the way they've been managed. Overall, the reason for this move is because we believe TOP SIM, it fits closer into the eLearning segment. Also our chief decision maker for TOP SIM is part of our eLearning business. So it made more sense for us to have TOP SIM that we acquired through the Tata Interactive acquisition as part of our eLearning business.

Right. And the second part, so we've done really well on the eLearning side this time. And platform business also was kind of flat. And I believe that is -- across the 3 segments, I think that is where we are -- there's most excitement in terms of the kind of margins of the business offer and the kind of growth that we foresee. So if you look at over the next 4 to 6 quarters, what is it something that management sees on the platform business side?

So while we don't give quantitative forward-looking guidance, I can share some qualitative aspects. I'll also speak for a minute on the eLearning segment. On the eLearning segment, while we've done well on the profitability side, revenue is still below our expectations. And we're expecting revenue to pick up in the rest of the year on the eLearning side. And as revenues pick up on eLearning, margins will also improve. So we're very optimistic about the eLearning business in general. Coming to the platform business, the platform business really -- there's 2 things taking place here. We have a business that we acquired, that's called HighWire, which is the bulk of the platform business. And as we know, we acquired a declining business. So that HighWire business has still not bottomed out. It'll probably bottom out late in the year. But interestingly, what's happening is because of the acquisition of HighWire, our existing platform business has actually started to grow in double digits because we're getting more credibility in the marketplace as a platform company. So I think this year will be -- on the platform side, it definitely will be a wait-and-watch kind of here where we have to see to what extent does the HighWire business finally decline to, and to what extent are we able to replace that revenue with our existing platform business. And then next year, we should see more stable revenue growth in the platform business. That's more on the revenue side. On the margin side, of course, there's still a lot of improvement to be done. We've made a good start in the first quarter, but we'll be looking to step it up through the end of the year.

Okay. That's very helpful. Just a last one, one on the management front, of course, we've hired really good people. So is most of the hiring done? Or is we're looking to add more people on the senior side across the businesses?

Sorry, could you repeat -- didn't come across very clearly. Could you repeat your question?

My question was that we made some really good hiring across the segments. So are we done with most of the top hirings? Or we are still looking to add more people?

So we are complete from a senior management perspective. We're definitely complete. Having said that, we are looking to strengthen our people operations. So we are planning to add a VP and Head of Global People Operations given that we have shortage of -- that they are now. That's one position that continues to be open. And we're also looking to add some people in sales and marketing, but that's not at the senior management level. It's more at the director level.

[Operator Instructions] We have the next question from the line of Anup Kulkarni from PineBridge.

Rahul, congrats for good annual rate of results. So my question is regarding the basic eLearning business, so before this restructuring of TOP SIM moving to eLearning. So how is that business shaping up? Is there any improvement after the pandemic because we were talking about corporate hurting their learning operations? So have we seen any improvement in that?

Yes. We've seen -- as Sukhwant mentioned in his opening remarks, we've seen a lot of improvement on the revenue side. We've -- a lot of our -- so as a stand-alone entity, the India business grew this past -- in Q1. Some modest 8% type of growth on the revenue side, and profitability also was in double digits after a very long time. So it was nice to see that the stand-alone India eLearning business did well, both on revenue and profit. On the revenue side, we had -- some of our old customers are now again picking up in terms of their learning and development needs. Additionally, we've been able to secure a lot of new logos this past year, and a lot of that business is contributing to revenue. Having said that, while we made a very good start to the year, both on revenue and profitability, our expectations are still higher with this business. We're seeing a lot of positive signs. Our overall pipeline is at its highest in the last 2 years. Our order book is also looking much better than what it was last year and also where it was last quarter. So our expectations are very high from the eLearning business. Yes, we made a good start, but we're not done yet. We've got a very long way to go.

So taking a slightly longer-term view, this business used to be about, I think, INR 100 crores per year before we acquired or before the company actually started facing problems. So how long do you think we would take to reach that level? So not on this reported basis, but on that original business going to INR 100 crores level?

2 years.

[Operator Instructions] We have the next question from the line of [ Prabhat ], an individual investor.

Rahul, great numbers there. I think quarter-on-quarter is going from one high to another. Just wanted to take one page. I remember last time, during COVID time, execution was hit. So really to understand this time, are these numbers despite execution getting hit? Or -- so is there an upside beyond that you think coming up in the next quarter? Or you were able to manage without any hit on the execution front?

No, we haven't had fortunately -- touchwood, fingers crossed, we haven't had any delivery challenges. Yes, again, on the eLearning side of our business, there's still some improvement that could happen both in operational efficiency and productivity, but that's got nothing to do with the pandemic. It's just a general -- we need to improve our operational efficiency in the eLearning business. But the core business, we did not have any challenges this past quarter.

[Operator Instructions] The next question is from the line of George John from Equity Intelligence.

I hope I'm audible. Could you please share the revenue from the HighWire business for the quarter?

We don't provide business unit-wise revenue details simply because this is a very competitive marketplace. We do provide business segments and those results are available with you. So most of the platform business will be HighWire.

Okay. So is there a sustainable margin that you'd provide for the eLearning business?

Sorry -- for the eLearning business?

Yes. Sustainable margin...

Yes. So most companies that do well in this space operate between 20% and 25% margins. And our first milestone, of course, is going to be to get to that range, 20% to 25%. But MPS is not an average company, so our goal would, of course, be to perform above average. The first goal is -- first milestone is to get to that 20% to 25%. And then, of course, once we get there, then we want to beat the average because those seems to be the average industry numbers. There are some changes we have to make to our operating model and those initiatives already underway.

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

Rahul, am I audible?

Yes, you're audible.

So congratulations on an excellent set of numbers. Very heartening to see the efforts that have been put in by the team. So congratulations. Let me understand the supply side situation, right? I know we do not really operate on the IT side of the business. So I just wanted to know if there is any impact from this update trends? Or is there attrition numbers shaping up?

Sorry, I didn't understand this question. Again, could you repeat that, please?

I just understand the attrition numbers, how are they shaping up attrition to these risks?

Yes. So for us, I think last year -- last financial year, our attrition numbers were very low because it was -- I guess, our -- it is a pandemic year and people are not looking at moving jobs on average. So last year, we did not see -- we saw very little attrition compared to our usual trend. This year, I think the attrition levels have gone back to the pre-COVID year. So we haven't seen attrition go higher than previous, basically going back to the average and going back to normal. So for us, it's business as usual. We did see very little attrition last year, which is out of the ordinary, but this year, it's per expectations.

Okay. Okay. So is the compensation cycle complete or is it planned the next 1 or 2 quarter?

Complete. We complete that in Q1 every year. For us, it was completed in late April, early May, effective April 1.

The next question is from the line of [ Arun Shah ], an individual investor.

So I'm joining in the call for the first time. So can you just briefly explain me about your 2 businesses about eLearning and Platform Solutions?

Sure. So our core business, of course, is -- was Content Solutions we had set up as an Indian subsidiary of Macmillan. And then since over last 7, 8 years our business -- we formed these 2 new revenue streams. On the platform side, essentially, we have -- we own a lot of proprietary IP that has got some Macmillan days. We invested in newer IP further. After that, we acquired 3 platform companies: mag+, THINK and HighWire Press. And essentially, we provide Platform as a Service, which we should provide to publishers across the globe, and the platforms basically move -- have use cases from content creation to content management to content delivery. So we have a full platform...

For the publishers or anyone else also?

So we look -- our platform business is largely focused on publishers, but we also have customers as Fortune 500 companies and large corporates as well as some educational institutions as well. But a large part component of it would be publishers. And then our revenue model is licensing setup and configuration and implementation. And like -- the recurring charge tends to be about 70% of the annual revenue and the rest of it is services that we provide on top of the platform.

And the acquisition of HighWire which you did, that was a central business or that is different to your core which you used to do earlier?

So highly complementary. So like MPS was the first Content Solutions outsourcing company in the world established in 1970. HighWire was the first Platform Solutions company in the world, established 25 years ago. So highly complementary business, same domain, same marketplace, but it's basically -- MPS in the publishing domain was understood to be a Content Solutions leader, and HighWire was known as the Platform Solutions leader. So it's been a good combination for us. What we've done after the combination is we've taken some of our platform solutions, and we're now marketing those solutions under the HighWire umbrella brand, which has been very successful for us in the short term. And HighWire, of course, has a lot of credibility in the marketplace. Stanford founded organization or known as a thought leader and known for innovation in the public opinion.

So Stanford is your -- I mean like, Stanford is your like client, right? Stanford publishing and all?

I'm sorry?

So Stanford is one of your clients?

No, Stanford University was where HighWire was incubated and founded. They're not a client.

So who is your clients? So can you name one of the companies or something in your client?

So our top customers would include -- so the large publishers like Elsevier, Wiley, Taylor & Francis, but also medium-sized publishers like Royal Society of Chemistry, British Medical Journal, American Chemical Society, so it would basically mostly be publishers.

Do you manage the websites also like on the content side?

I'm sorry?

Do you manage the website also on the content side?

So we provide platform as a white label, which is -- the website and the front end is one component of the platform, but we provide the entire platform ecosystem through which content is sold. So if I am a publisher and my website is called publisher.com, their entire ecosystem that powers publisher.com is provided by us to the publisher.

Correct. Correct. Okay. Can you just -- this is on the eLearning side, what are you doing?

Yes. On the eLearning side, essentially, what we provide is any organization has -- any large corporate has learning and development function. The learning and development function is focused on making sure that the employees are going through the typical employee life cycle of selection, recruiting, onboarding, retention and growth. And what we provide is we provide content and technology solutions that enable that. So for example, if an organization is looking at an onboarding growth, build the content and provide the technology assets to deliver that onboarding program in a digital format. So we power the entire content and technology side of learning and development for corporates on the eLearning side.

The next question is from the line of [ Dharmesh Ram ] from [ R Center ].

Congratulations for a good set of numbers. So I think I missed it. What is the size of the order book you are sitting on right now?

Yes. We don't share business unit-wise information. This is a very competitive marketplace. What I can confirm is that as of last year and the previous years, most of our order book on the eLearning side was corporate. But now we are seeing 70-30 split where 30% of our revenue on our order book is from education institutions, which for us is a wonderful development because this is an area that we have deep expertise in.

Okay. So one more follow-up there. So what's the effective tax rate you are expecting for the company going forward? I think -- I have seen a bit of fluctuations out there. And I think this quarter, the tax rate was lower. Because of that, really focus of additional profitability was added to the PAT. So going forward, what digits we can take as tax percentage on your PBT?

Yes. I think last year, our tax rates were higher because we had gone for -- there were 2 big events that took place. One, we had gone for a government's scheme called was Vivad se Vishwas to settle an old tax matter that we had inherited from the Macmillan days. And second, because of the new -- because of what's been introduced in the Finance Act on treatment of goodwill, we had to also had made some changes in tax working. So last year was an abnormally high tax rate year for us. I think what you're seeing in Q1 is fairly reflective of the path forward. This is going to be our standard tax rate going forward, what you've seen in Q1.

The next question is from the line of Ajay Kapadia from Motilal Oswal.

Rahul, as you rightly said that if we compare these results with the fourth quarter rather than the first quarter Y-o-Y, I would just like to know for the whole year, under which segment this EBITDA the growth would come other than the eLearning? Platform side, you said that this year will be wait and watch. So when we look at the platform side, we might not grow. And for the content, you have always said that it's like 34% growth area. So how do you look at the -- where the growth will come from, for this year?

Sure. So I'm not sure if you joined the last call, but I made a correction to that statement on the content side. So like you rightly said, platform business, this is more a wait and watch here because this year, we will basically understand what is the true scale of the business because we have a declining business that where we're trying to arrest the decline, and we have a growing business, but we don't know how much growth we'll get in the business. So it should average out and we should significantly know more in Q3 and Q4. That's on the platform side. ELearning side, I think, like I was describing at the beginning that we -- the growth we've seen on the revenue side, they're satisfied, but they're not elated. So we're hoping that through the rest of the year, growth will pick up further than what we saw in Q1. So that's on eLearning. And on the content side, last year, we grew at 11%, 12% and expect that trend to continue this year. So while -- if you are asking -- if you asking a question, what is your vision for the Content Solutions business 2 or 3 years ago, I would have said that modest growth. But what the pandemic has done for us in our content business is that it has really differentiated our ability to deliver on schedule, on quality, on budget to our customers. And yes, because of the differentiation point that we've created between us and the other competitors, we are now again bullish about the content business. We expect this trend to continue as our existing customers continue to pass more volume with us. And we're also getting into agreements where customers are not just sharing numbers or volumes for 1 year, but they're also talking about how volumes could grow over a 2- to 3-year period, particularly on the Journal side of our business. So I think this financial year, revenue growth will definitely come more from the content and eLearning business. Having said that, we are expecting significant margin improvement in the platform business as we proceed to the year.

The next question is from the line of Manjeet from Solidarity Investment.

Great to see the results coming through. I had one question on the eLearning piece. When you reach the scale of INR 100 crores odd, which you mentioned, what's the kind of margins we will meet in this business? As most stated, I'm not worried about next quarter or year.

Yes. So like I was saying earlier, 20% to 25% is the minimum. An average company in the space makes that kind of margin, an average company. So while our first milestone will be to hit that range sometime by the end of this year, ultimately, when we get to INR 100 crore level, we will obviously want the numbers to be closer to 30%, not 25%.

Got it. My other question was on the eLearning space again. What are the challenges for us to get to that INR 100 crore mark? Whether it's 2 years or 3 years now, but from a more -- from a business perspective, what kind of challenges the team is facing to get to that mark?

It's a pure sales and marketing challenge. And the reason for that is a lot of these business -- lot of these -- and the business is -- large part of the business is project based. So every year, you have to build up an order book from scratch. Yes, you do get some carry-through from the previous year, but it's almost like every year you have to build up an order book from scratch. I think it's a pure sales and marketing challenge that we are addressing. On the marketing side, we are definitely seeing much more momentum. As Sukhwant described in his opening remarks, we want to make sure we carry forward on our momentum. On the sales side, we've now appointed a Chief Revenue Officer for the MPS Interactive business. This is a person who is already in the business, who's been with the company for -- since the late 1990s, since 1997. So he's been appointed Chief Revenue Officer so that we have one person accountable for revenue growth. And he's been one of the most successful business development folks in our group since change of ownership from Tata to MPS. And we're also under him, adding 2 sales professionals under him, one in the U.S. and one in -- potentially in India or the Middle East. So it's a pure sales and marketing challenge. I don't think we have a delivery challenge. It's more on the sales and marketing challenge, and we're addressing that.

And how do you stack up your earnings against our key competitors in terms of gaps on the sales and marketing side? Are we very close to filling these earnings well? There is still a lot more to do over there. If you could just give some industry perspective as well as a competitor view?

You're talking about the eLearning space, right?

Yes. Yes, eLearning, that is your business, on the sales and marketing.

Yes, I think what's different between us and our competition is that we have a compact team. But it is a very high performing team, unlike some of our competitors that may have a few high performers, some average, some below average. We have a compact, high-performing team and I think the big challenge ahead of us is how do we scale this team to a bigger size. And as we scale the team, we don't lose the high-performance culture that we've created in this team. So in terms of marketing, we would -- I would say, we are now inching ahead of our competition a little bit. Last year, for example, there is awards in learning called Brandon Hall awards, which are considered to be the Oscars for learning. We were one of the top 3 companies in terms of number of awards that we received. It's about 34 awards last year in the learning space. So I would believe that on the marketing side, we are now inching competition. Besides, it's a matter of time as we add a couple of people, and we're highly selective on who we add, that we should start seeing results on that front as well.

Great. Rahul, just 2 more questions and I'll come back in the queue. The first one was in terms of incentivization of our core team, I'm not sure how you do it, but is it via shops or institution? How do you kind of ensure that the long-term goals are aligned with the incentivization structures and thoughts on that? And my second question was on our traditional business Content Solution. Do we still see a low single-digit kind of growth over the next 3 years in this segment? Or there could be potentially higher growth there?

Sure. On the compensation side, we -- for anyone that can actively contribute to revenue or EPS, they are incentivized to both fixed compensation and variable compensation. We currently do not have an ESOP scheme, but it's something that is being actively discussed internally. On the content business, like I was describing earlier, if the same question would have been asked of me pre-pandemic, I would have said this business will probably see low to mid-single-digit growth at the best. Having said that, this past 12 to 18 months have been phenomenal for us on the content side in the sense that the strong players in this market have become stronger and the weak players in the market have become weaker because -- on the delivery side, we've been able to deliver a higher volume of work even through the pandemic. And because of that, our customers are viewing us differently and also to us with more emphasis, both in terms of visibility, but also in terms of their commitment to us as a supplier. So we are now again 3 years -- we're again, bullish about Content Solutions and expect double-digit growth. So we believe while earlier we had provided a guidance a couple of years ago that we will see most of our growth come from the eLearning business, we now believe that we can grow in the content business in the same volumes as the eLearning business.

And this growth on content business, the pricing pressure has eased opposite? Or it will be your mix of volumes coming from pricing pressure still continuing, which you showed over the last couple of years?

I wouldn't call it pricing pressure, I would call it a pricing gift in the sense that pricing for us has always been something that we've used to our advantage. We -- as you know, we have a significant operating model in Dehradun. We have close to 1,000 employees there, and there's a lot more capacity in Dehradun. Secondly, we take a lot of pride in automating things on the content side, whether it's things to do with workflow or to do things with -- that are mechanical, we tend to automate them. So between automation and our Dehradun model, we use pricing -- downward pricing as now as an advantage. And yes, prices will continue to go down, but it will also mean increase in volumes. And overall, we are confident that in the revenue equation of P into Q, as speed reduces, Q will increase at a faster click. So we've done all the math on that and the forecasting around that. And we are managing these agreements with our customers. And yes, it could mean pressure for the industry in general. But for MPS -- from an MPS perspective, we're using it as an advantage.

Our next question is from the line of Jyoti Singh from Arihant Capital.

Congrats on a good set of number. I just wanted to understand the education platform opportunity and what is the size of the opportunity? If you can...

Thank you for the question. Yes, I think -- so from a platform side of our business, we find it very -- there's not much research out there on the publishing platform landscape. What we do know is that we have -- our platform ecosystem is broken into various parts. So there's a content distribution and delivery ecosystem. There's an analytics ecosystem. There is content authoring and content creation ecosystem and there's a content workflow and content management ecosystem. And while we don't know what each of these modules or either the -- some markets could be valued at. What we do know is that in each of these modules, as described, there's 4 or 5 different modules, our largest competitor is -- has revenues upward north of $50 million in each of the modules. So for every module, we have a unique larger competitor, and each of those competitors have revenues north of $50 million. So if I just -- if I were to just add that the #1 player across all the platform ecosystems that we have, there the combined revenues would be north of $300 million. But that's just one competitor. There's not much research out there that we have access to. Having said that, we are seeing our incumbent platform business, now platform business minus HighWire now growing in double digits now. So once sales do stabilize at HighWire, we expect the comprehensive platform business also to grow at double digits.

The next question is from the line of [ Tanmay Bheda ] from Right Time Consultancy.

Yes. Am I audible?

Yes, you are.

Congratulations to the management for a great set of numbers. I had a question regarding the business side. So you mentioned having Wiley as a client. So I wanted to understand what kind of service are we providing to aglies like Wiley? And the next question is from this pandemic year onwards, since the universities and classes are going to in-person and switching from online, so would we seeing -- would we be seeing any negative impact due to the switch from online to in-person?

Yes. So Wiley, of course, is a very strategic customer for MPS. Our relationship goes back over 2 decades. And so it started off with us providing content management services for their journals business and their books business as well. So we engage with them on the Content Solutions side. Prior to the acquisition of HighWire, we were providing Wiley some platforms on the content management side as well. And then after the acquisition of HighWire, our relationship has grown even further because we've -- 2 of the Wiley products that are significant in revenue are managed and hosted by us. So it's a fairly comprehensive relationship. The only area of business that we do not engage with Wiley today is on the eLearning side, and that's something that we're trying to nurture and develop. Currently, we are mostly on the content and platform side of the business. And again, the vision, of course, for us, some of our strategic customers is to really be truly end-to-end and engage with them across our various lines of business. So that's one of our big goals over the next couple of years to be able to navigate that. And could you repeat your second question and I can answer that?

Yes, sure. So from this academic year onwards, most of the universities and schools in the U.S. are switching to in-person from online. So would we be seeing any negative impact due to that shift?

No, we don't see any negative impact. If anything, there may be some positive impact because on the education publishing side, any revenue that might have been -- as a customer selling to universities, any revenue that may have been impacted because of people at home, that will -- those products will come back into action. Additionally, most publishers and institutions have moved to digital-first workflows, so they produce the digital versions first and then the print version. Everything have the digital version today. So yes, we don't see any impact on people going back into the physical infrastructure impacting our business in any way.

[Operator Instructions] The next question is from the line of Sachit Motwani from Param Capital.

Rahul, congrats on a great set of numbers. My question was on -- now sitting on INR 227 crores of cash, so obviously, in the past, you've made acquisitions where either the revenues are not growing or declining and you get them at a reasonable valuation. But any thoughts on incremental acquisition? Any change in strategy in terms of trying to acquire a company which is growing, and like might as well pay a better valuation? Any thoughts on that?

Yes. So a great question. Thanks, Sachit. So from -- there's 2 aspects to this question. I think on the acquisition side, the only change -- the only big change in strategy that's taken place is we've recognized that whether it's a company that has $3 million in revenues or $20 million in revenues. For us, as a management team, it takes the same amount of effort. So what we have kind of taken a call is that we want to definitely look at acquisitions that are upwards of $10 million in revenues because they end up being more meaningful. Having said that, is there something below $10 million that is opportunistic and helps us complete some capability areas, let's say. We would make that play, but that's not something that we're actively pursuing. But even in that play, we would at least look at revenues of at least $5 million, I believe. So that's one change in strategy in terms of do you want to make -- do you want to take a meaningful right versus just doing very, very tiny acquisitions like you did between -- in the early days. In terms of an acquisition, that's -- of a business that's growing versus declining, yes, we are having those type of conversations, but we are looking to structure them slightly differently, where we may not just do the acquisition outright as a 100% cash type of acquisition upfront. So those are conversations that we are pursuing, particularly on the eLearning side of our business because most of the companies in this space are growing, and this is an area that we want to grow as well. So yes, absolutely, we're looking at those type of companies, but we're not looking at a big-bang approach there, we get more like possibly a phased approach or other approaches that we are contemplating. So -- and then the second part of the question, of course, on the -- which you didn't ask, but I'll still share the information that we are also -- our Board will in next quarter be sharing a dividend distribution policy. So we will be making -- creating a public document that gives access to what our policy is in a more transparent manner. Of course, we'll also be evaluating if there's any excess cash at the end of the year. That is the most efficient form of the distribution, whether it is dividend or buyback.

The next question is from the line of [ Mohit Rathi ], an individual investor.

I have 2 questions. First of all, congratulations on a good set of results. Yes. So on the last call, there was a -- you know that we are going to put a lot of impacts on revising the HighWire business, but still, I think the platform business is on a decline. So what is our initiative on bringing it back and stabilizing it somewhere? And second is on the -- you just mentioned on the dividend or buyback. So last year, we did a buyback at around INR 600. And company has done well. So why don't we look into another buyback?

Sure. So I'll take the first question. On the platform side, you must appreciate that we acquired a business that was declining and a loss-making business. So our first goal really has been to arrest the decline and to stop the bleeding and make the business profitable. We've been able to successfully turn around things on profitability very quickly. In fact, under MPS ownership, HighWire has not had a single loss-making month. From the first month itself, we were profitable. So for us, it was a proud moment that in our last -- most recent acquisition, we've actually gotten things right from the first month itself. On the revenue side, in terms of arresting the decline, we've understood that many of the issues that the HighWire customers are facing were on the support side, and that was that had to do more with the capacity problem. We've managed for that by increasing capacity and support in India. We now have key employees that are attached to the HighWire business in India. So we've seen -- and we have bought -- when we bought HighWire, their total headcount was between 75 and 80. So just the India team today is 90 people. So it's significantly scaled the support function as well as the operations function in general. Many customers are starting to see signs of that. Just to give you one data point. When we bought the company, our total number of support tickets were hovering between 400 and 500 for the HighWire group. Today, as I speak, they're less than 200. So we've been able to significantly reduce the tickets and customers are seeing that kind of lift. One of the things we obviously cannot control is any customer that decided to terminate the agreement with HighWire prior to acquisition, we've not been able to turn that around because normally with a platform supplier, customers only terminate an agreement when things have become really bad. So it's very difficult to recover. Having said that, we did have at least half a dozen customers that were kind of on the fence. They did not terminate, but they were not happy. And each of whom we've either been able to renew or upgrade through additional offerings. So we've started to correct for that. How that plays out in terms of if HighWire hit bottom? Or has MPS -- the core MPS platform business, has it hit at speed? All of that will now play out through the year. It's very difficult to predict how it will play out. But overall, what we expect is that at a consolidated level, we'll achieve a base. And from that base, we should be able to grow 10%, 15% fairly comfortably. On the dividend buyback question, really, my understanding is that 2 sequential buyback based on the regulations, we need to have a 12-month gap. We have not locked out of the previous 12 months yet. We are still in the 12-month window. So of course, in the next Board meeting, we will be, as I've described on the previous question, we will be announcing a dividend distribution policy. And depending on when the buyback opportunity becomes available based on the rules and regulations, of course, we will be pursuing that based on where we are with the funds -- surplus funds at that time.

[Operator Instructions] The next question is from the line of Dhruv Shah from Ambika Fincap.

Rahul, congratulations on a good set of numbers. I just had one question. You said that you don't give guidance. But considering the growth you have shown in eLearning and you're saying that Content Solutions growth is also coming back, can we expect high -- see mid-double-digit growth in this year? And then next year maybe Platform Solutions coming back with HighWire contributing. So can we expect more than 20% growth? Just a rough guidance would be helpful.

I can give you some small -- I can give you some data that might help you arrive at the numbers. But of course, we won't give you -- won't spoon feed you guidance. So that's -- we don't see value in that because in the past when we've done that, in fact, we see that when we share guidance, we limit ourselves and we set a feeling on aspirations because once you have a guidance, you try to hit the number, not beat the number. So we don't want any feeling to our aspiration. Now in terms of some data points, as I described to Anup from PineBridge earlier on the call, that our eLearning business, we want to get to INR 100 crores in a couple of years, which means this financial year -- by the end of this financial year and next financial year, our goal will be to get to that scale. So you can do some math on the eLearning side. On our Content Solutions business, we should grow at the same clip of 10%, 11%, 12%, 13% for the next 2 to 3 years, and we expect that. And then once the platform business stabilizes through the end of the year, we can expect 10% to 15% growth in the platform business. I hope that helps you.

Yes. But Rahul, my question was eLearning -- anyway, we are at a run rate of INR 88 crores. So isn't INR 100 crores a bit less of the...

Yes, I think you're looking at the -- so let me clarify that. You're looking at the combined eLearning business, which includes TOP SIM, Switzerland and India eLearning. So to correct -- to just to give you some sense. This -- we are talking only about the India entity to go to INR 100 crores. And the combined values and the corresponding combined value that you're talking about is more like INR 130 crores. So if you take the TOP SIM and the Switzerland revenue and add them to the INR 100 crores, it'll probably come to INR 130 crores.

Right. Right. Right. Okay. And also on the EBITDA margin side, you have shown a tremendous improvement in your eLearning side. So can we cross 30% and can -- is 30%-plus kind of sustainable?

Yes, I think the first goal for us in eLearning is to -- and I'm talking PBT by the way, I'm not talking EBITDA because one of the things that this new IndAS has done, which I still as a business person, I'm not at an accountant. I do understand is there's 2 parts of rent into depreciation, so the life of me I can understand. So we've, in fact, stopped looking at EBITDA, we now look at PBT as a management team because that whole rent equation moving to depreciation confuses the hell out of us. So the numbers I am talking about are PBT, not EBITDA. So we're talking about -- the first goal is to get to 20% to 25% that average range. And then once we get there, then we assemble, reassess, regroup, and then try and see what we need to do to get to 30%. We're not close to the 20%, 25% range here. So we want to hit that number first.

Right. No, I was talking on the console part.

Yes. On the console part, I think -- see, the other part of it is our Content Solutions business also is not where it needs to be on the margins front because we are expecting some growth at the end of this year on our Journals business. So you see some of our increased headcount there. That headcount is currently not being built. So once it starts getting built, those margins will improve. In the Journals business, you have to prepare headcount 3, 4 months ahead of the work coming. That's just how the Journal business works. And when once the revenue comes, then you get into the margins. So yes, console level, 30% should be a fairly achievable milestone assuming we exceed 40% on the platform business soon enough and we get back to the mid-30s in content business and the eLearning between 20% to 25%. So yes, 30% should be fairly achievable.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to Rahul Arora for his closing comments. Over to you, sir.

Thank you. Again, a big thank you and lots of gratitude for everyone for all their support through our journey. As I shared on the call, MPS has generally entered now what we can a thriving phase. Q1 has been an exceptional quarter, both on revenue and profit terms. And we hope to carry forward the momentum through the year and look forward to all your support and continued guidance. Thank you so much.

Thank you very much, members of the management. Ladies and gentlemen, on behalf of MPS Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.