MPS Limited (MPSLTD) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 financial year 2022-2023 Earnings 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 Managing Director. Thank you, and over to you, sir. .

[Foreign Language], everyone, from Noida and welcome to our Q1 FY '23 earnings call. Today, I have with me Sunit Malhotra, CFO of MPS Limited; Sukhwant Singh, Chief Delivery Officer of India; and Rajesh Jumani, Chief Revenue Officer MPS Interactive who joined us in New Jersey. In our opening segment, Sunit will kick things off by discussing our Q1 FY '23 performance, then Sukhwant will update us on the content business. Next, Rajesh will discuss our robust performance in the eLearning business. And finally, I will discuss how FY '23 is shaping up and will also articulate and quantify Vision 2027. Let's keep going. Over to you, Sunit.

Thanks, Rahul. Q1 FY '23 was somewhat muted for MPS after a record-breaking FY '22 at INR 114.04 crores. FX adjusted revenues were down by 3.3% against previous year, primarily driven by 3 factors: movement of large K-12 projects to the balance part of the year, which largely impacted the Content Solutions business; delay in delivery for a sizable eLearning customer from our [indiscernible] entity, which somewhat picks up in Q2 but starts to perform in the H2 FY '23; a decline in the HighWire business, which is now expected to be soft all of FY '23. I would now like to hand it over to Sukhwant to discuss the Content Solutions performance in Q1 FY '23 and overall prospects for the business in FY '23.

Thanks, Sunit. So our content business serves 2 primary markets, education and scholarly. As Sunit shared, the Content Solutions made a soft start to FY '23 because of the lopsided nature of how education vertical is expected to perform this financial year. However, the scholarly business outperformed and is expected to do well in a sustainable way. For example, revenues in Journals grew by 15% over previous year in Q1 of FY '23, while operating profit increased by 47% over the previous year. Similarly, scholarly books revenue due by 8% over previous year in Q1 of FY '23, while operating profits for scholarly books increased by 77% over the previous year. I would like to now hand it over to Rajesh Jumani to discuss the MPS Interactive Systems performance in Q1 of FY '23 and overall prospects for the business in FY '23.

Thank you, Sukhwant. As Sunit shared earlier, subsidiary made a soft start to the year due to a delay from a sizable strategic customer in Switzerland. That business, however, is a small element and is expected to bounce back in the second half of FY '23. At MPS Interactive Systems, we are all elated with the progress in the business and are looking forward to a full year and seamless expansion in FY '23. In Q1 alone, our revenue grew by 15.2% from a consistent flow of projects from a start accounts. Profitability improved as the business recorded an EBITDA of north of 30% in Q1. Our order book expanded by over 20% as we book significant orders. Our pipeline is robust across different types of work, including learning advisory and consulting, immersive learning, continuous learning, learning technologies and training delivery. And apart from geographic diversity, the pipe is varied across training strategies, including onboarding, product training, sales enablement, soft skills, DEI, sustainability, leadership and compliance. Back to you, Rahul.

Thanks, Jums. While the start to FY '23 has been soft, we continue to be bullish about the year. To summarize, there are certain factors that are giving us confidence. First, our content business is doing exceptionally well with our scholarly customer base. We are the early innings of this growth story for this customer base, and this will continue to unfold through the rest of the financial year. The education practice is having an lopsided year, as Sukhwant described, with a few delayed projects. After a steady pickup in Q2, things will generally roll in the content business in the later part of FY '23. Second, while we reported double-digit growth in Q1 in the eLearning business, our ambitions are higher and will only be unlocked as aspects of eLearning business do well, including the 2 European subsidiaries. We have still not reported a full quarter of EI's earnings. This will show up in its entirety for the first time in Q2. Coming to the platform business. We will have a final decline in FY '23 due to HighWire, and this tends to be an issue with our previous acquisition strategy of acquiring distressed -- asset in distressed prices. While we see a massive ROIC during an impressive payback period of 3 years, growth only unfolds in the 4th and 5th years. We are seeing, though, growth in the scholarly content business due to the acquisition of HighWire. To conclude my comments on FY '23, our theme for the year is to cross INR 100 crores in PAT. [ Markets ] to always tell me that this new scale will open up new doors for MPS, and all of us at MPS are diligently working on crossing this INR 100 crore PAT level in FY '23. Now moving on to Vision 2027. Some of you may have noticed that this was articulated in our Annual Report as to create a compelling learning company at a meaningful scale that helps the world run smarter. We aspire to be the provider of choice in our markets that powers experiential learning experiences with the latest tech innovations. Our EEE values of excellence, efficiency and empathy continue to endure and serve as guiding principles toward Vision 2027. And while we have not shared the quantification of this Vision 2027, we do that today as we set our ambitions at revenues north of INR 1,500 crores and expanded margins by end of FY 2027. We look forward to your continued support in this exciting new growth phase of building scale. I would now like to open the call to your questions.

[Operator Instructions] We have a first question from the line of [ Rishikesh Kare, ] Individual Investor. .

I was just checking the cash balance. It has gone down from INR 182 crores to INR 125 crores. Now after factoring the dividend payment of INR 52 crores and acquisition cost of INR 40 crores, generally, you have -- basically, you have excess generated cash of [ INR 30-crores plus ], which actually... [Technical Difficulty]

Sorry, you broke up.

Yes, am I audible now?

Yes.

Yes. I was just checking your cash balance which has gone down from INR 182 crores to INR 125 crores in this quarter. But I assume that is after factoring the acquisition of INR 40 crores and dividend payment of INR 52 crores. So you seem to have generated cash of INR 30-plus crores or INR 18-plus crores cash earnings per share this quarter. So why is there such a divergence between your cash earnings per share and your reported earnings per share?

Sunit?

So there are 2 things which have happened here. One is the, you correctly stated, the acquisition cost of -- that INR 42 crores for the EI design and the dividend part. And this includes, in fact, when you're looking at the consolidated cash balance, in fact, there is an intercorporate loan which has moved from one entity to another of INR 15 crores. And so if you look at the entire thing, the dividend has also been paid out. But the dividend -- the other certain part has also been paid out in the month of July. So the entire payment has not been made in the month of June. Certain payment has been pulled over to July also.

Okay. So what would be the cash earnings this quarter, like after factoring the spillover?

See, we have not exactly bumped it out. But over a period of 1 year, if you look at our last year financials, it would be close to INR 80 crores every year that is generated out of the business.

And this year, do you expect it to be higher?

Just to interject there, sorry. The INR 80 crores wasn't a PAT of INR 87 crores. So we should follow the same ratios going forward as well. There is no change in the nature of the business in terms of working capital.

Okay. Fine. Okay. So we would expect around INR 100 crores cash generation this year?

Again, we're gunning for more than INR 100 crores of PAT, so depending on -- and obviously, the cash flow impact don't seem to be equal in our case. So yes, again, I'm not really -- we're not really monitoring cash flow. We tend to have a very strong balance sheet. But yes, we are running for north of INR 100 crores on par.

[Operator Instructions] We have our next question from the line of Umang Shah from Surat Capital BIS.

Sir, the first question was, if I understand FY '22 numbers and if I remove TOP SIM out of it, our platform division revenues have pulled down from INR 120 crores to INR 108 crores approximately. So sir, in this entire decline attributable to be HighWire? Or is THINK360 and other platform also reason for the same?

So I didn't understand your TOP SIM comment because TOP SIM is part of the e-learning business. But yes, your observation is correct that all of the decline in the platform business is from HighWire.

Okay, sir. And sir, [indiscernible] for FY '22, right? So what was the reason for this decline?

So we don't know -- that requires sort of a big, deeper understanding of the acquisition strategy, and I'll maybe step back and explain that to you. So historically before the acquisition of -- the [ 97 ] acquisitions that we did, we were basically looking at acquiring distressed assets at distressed prices, which meant that, on average, our payback period would be 3 years. And during that payback year, we will have a very high ROIC and growth would really start to unfold in the fourth or fifth year. That was our old acquisition strategy. We acquired HighWire really in July of 2020 during the middle of the pandemic. Just in 2022, we're still -- we're just on the 2-year mark. So with HighWire, we see that same acquisition playbook playing out. Of course, going forward, we've modified that acquisition strategy towards acquiring growing assets like EI design at compelling valuations. But yes, with HighWire, we will see that 5-year cycle play out and growth to be only coming in the fourth and fifth year.

Right, sir. Sir, the second question, Mr. Jumani has been training [indiscernible] data for a very long time. And now when you see [indiscernible] Global Revenue Officer. Is it for the entire group? Or is that only for the learning division?

It's for the MPS Interactive business, the eLearning business.

Not for the entire MPS? How will this evolve? Like it's not a CEO role, right? So what does it entail?

It is responsible for developing the revenue of the cost of the eLearning business.

Right, sir. So in the overall chain of command, one would be taken care of the eLearning business?

So we have split responsibilities. The revenue responsibility sits with Rajesh Jumani, and the delivery responsibility for India sits with Sukhwant, who shared the opening remarks. And the European responsibility for delivery sits with [ Adilah Barga ], who is the Managing Director of the entity in Europe.

Right, sir, right. And the last question is, sir, we are designing an acquisition. Is it existing on the time line? [indiscernible] with respect to indications?

Yes. So that's the beauty of acquiring a growth -- growing asset. There's not much of integration to be done. But yes, we are about 8 weeks into the process. Everything seems to be on track. We're, in fact, running ahead of schedule. So we're very satisfied with the progress of the acquisition. And like I said, there is no turnaround required here. It's more around driving growth, and we are on track for that.

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

I have a couple of questions. Firstly, on the EI design, now that the acquisition is complete, can you share the financials for financial year '22, that is the revenue, EBITDA, tax for the company? I think in the presentation, it will be up to 9 months.

Okay. So -- and what's the second question?

The second question was regarding the vision for 2027, which you highlighted. You said that the -- I think you said that the revenue is INR 1,500 crores, right?

Yes.

So that's 3x in 5 years which is a CAGR of about 25%. So I wondered if you can throw some more color on how you're going to achieve that, that would be very helpful. Because from what I understand is that the content business is a mid-single-digit margin, mid-single-digit CAGR kind of business. So if you can throw some more color on that. And finally, I have a question on the possible dividend, which I'll get back, if you can just answer these 2 first.

So I'll answer the question on the vision for 2027, why do we feel confident about revenues north of INR 1,500 crores at margins -- at expanded margins. And then I'll also touch upon the dividend question. Meanwhile, Sunit will give you -- will come back then and talk about the EI design numbers for FY '22. So like you rightly pointed out, we have 3 business segments, content, platforms and eLearning. Your observation that the content business is a single-digit growth type of business was our kind of conclusion as well pre-pandemic. But as we've seen in the last couple of years that started to change, and we expect this business to start growing in double digits now, including FY '23. I understand we've had a bit of a lopsided situation this growth coming more in the second half of the year, but we're feeling very confident about the content business growing at double digits. And we believe it's sustainable. What has essentially happened in this particular business segment is that customers have reviewed the supply chain and now looking to consolidate with scale partners that have see this tech IT. So that's the big change that's taken place. So we're getting more volume from existing customers but also acquiring new customers. So we are more bullish about the content business in general. The eLearning business as a market, depending on what report you look at, is growing between 15% and 20%. We feel that, organically, our business can also grow at that same clip. And keeping the 2 European subsidiaries aside, we actually did grow, as Sukhwant described -- or rather Jums described north of 15% in Q1 alone. So we expect our eLearning business to grow at a 20% CAGR without new acquisitions. And on the platform side, once we hit the 4-year, 5-year mark with HighWire, we expect that business also to grow at 20% clip. We are -- we also have a fairly active acquisitive strategy. We are hoping to do a couple of acquisitions a year over the course of the next 5 years because -- we believe we can get that done because of our modified acquisition strategy, which includes acquiring growth assets rather than acquiring distressed assets. So with the blend of organic and inorganic growth, we'd be very comfortable with this projection of revenue north of INR 1,500 crores at expanded margins. Just to reflect back also, when we started this journey back in 2011, '12, this was INR 120 crores, INR 125 crores business. Today, if you look at last year, it was INR 450 crores. So we've done this before. Yes, it took us 8, 9 years to do. But now we have a certain scale, which gives us confidence that we can do it again but at a faster clip. Of course, there's lots of moving parts in our business. Having said that, the number that we're pointing out here, the management team feels very comfortable. In terms of -- I know this question will come up after this, so I'll preempted and proactively answer it. In terms of financing some of the growth, especially on the inorganic side, we are open to looking at -- our focus is, of course, internal accruals. But if a sizable opportunity, for example, pretends itself, we are also looking at options of debt and equity both. So there is another nuance to financing where, historically, we only look at internal accruals. On dividend, I think dividend buyback is something that the Board talks about periodically. I think we've been fairly -- our track record is fairly strong in this front. We tend to -- if we do not see any deployment of capital possible, we tend to redistribute [indiscernible] funds very quickly. So I think we will carry forward -- I believe we'll carry forward that track record. And again, the focus here, of course, is to get to -- is to beat INR 150 crores at expanded margins in the next 5 years. And of course, if during the journey, we find [indiscernible] surplus, we will distribute those funds. I'll just give it to -- transition to Sunit to talk about the EI design numbers for FY '22?

Sure. So for EI design, we are on track. The first month, in fact, [indiscernible]. FY '22 last year was INR 32 crores of the revenue, which was there, and the reported profit before tax of INR 9 crores. And profit after tax was -- the tax rate was 26%, 27% there.

Okay. Okay. Sir, I just have a couple of follow-up questions. Firstly, regarding the vision part of it, my follow-up is basically the -- ex any acquisitions, assume that you don't do any actual acquisition in the future, then do you think that 15% to 20% growth on the current assets that we have? Is that sustainable for the next 5 years? Would you -- would that be fairly accurate?

Sorry, could you repeat that question, please?

So let's assume that you don't do any acquisitions in the future, right, and you're guiding for a 25% CAGR for the next 5 years. So ex of any acquisition, do you think or 15% to 20-odd percent growth is sustainable on the current business that we have.

So the numbers I gave were a blend of organic and inorganic. And what we've assumed is, again, a ballparking here, but like a 50-50 split, 50% coming from organic and 50% coming from inorganic.

Okay. Fine. Fair enough. Fair enough. And actually...

I just want to correct myself on the figure which I gave you was for FY '21. For FY '22, the revenue was INR 38.88 crores.

INR 38.88?

Yes.

Okay. And on profitability?

Profitability was INR 8.20 crores.

That's before taxes?

This is profit before tax.

INR 8.2?

INR 8.20 crores.

Okay. And sir, just a follow-up lastly on the dividend policy. I mean, on the couple of calls back, I think you mentioned that you want to maintain an approximately INR 150-odd crore cash balance just for acquisitions. So assuming you make about INR 100 crores of cash profits this year, can we expect the same sort of policy that anything north of INR 150-odd will be paid out? Would that be fair? That's it.

Yes, I would confirm that right now, but if suddenly I'm presented a $25 million business at a 25% EBITDA margin, I want to take a stab at it, I will. So I confirm what I said last quarter with the caveat that if an opportunistic play presents itself which allows us to go faster towards our Vision 2027, we will execute on the call.

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

Congratulation on the strong numbers. I just wanted to clarify. I think just a moment back, you said half of the incremental revenues that are you envisioning would comes from organic and from inorganic. So is it safe to assume organic will go from INR 500 to INR 1,000? Is that what you're trying to interpret?

Yes. Again, ballparking around, but roughly, yes.

Okay. And secondly, from the segmental outlook, that you gave that content can sustainably grow in double digit. I understand that we had done decent in the last 1 or 2 years in this business. But what is adding to the confidence that it is a more sustainable thought? Because you are saying that this is coming because volume share expansion with the customers. So are there a significant opportunity left for us where we are smaller in an account where we could expand today's volume growth? What is driving that?

Yes, I'll answer that in 2 ways. So one, the content business has 2 markets, the education market and the research market. The research market postpandemic organically is growing at 10%. So there's far more research being published today on average. Because there's an organic sort of lift happening in the market itself, it's giving us some confidence. Now within that market, we have 2 types of customers, customers that are large in scale and want to work with providers like NPLs that are also large in scale from a relative standpoint. Then there's another customer base, which is a midsized publisher or university press or society. They want to work with vendor partners that are more complete, and the acquisition of HighWire Press has made us more complete. We are seeing, for example, a lot of growth on the content side of our business coming from the HighWire customer base. So between the market, by expanding large customers within that market wanting to work with scale players like MPS and small customers wanting to work with players like MPS that are more comprehensive, we're very bullish about the research part of our business, which also tends to be a higher-margin business compared to other parts of our business. On the education side of our business, again, we are seeing a drive of publishing companies turning into subscription-based companies. And as they become subscription-based companies, the volume of content they need to produce is going up. So think of -- from the volume of content that used to get -- produced, for example, on the cable network side, there's a farm -- in the Netflix model, you're seeing companies in metrics produce far more content than what was produced during cables. Similarly, as publishers move to a subscription model, they would have to produce more content on the education side. And as they produce more content, there's more work for us. So that's one part of the education story. The second part of the education story is that we are now starting to work with educational institutions directly. So for example, we're working with many U.S.-based and European-based educational institutes where we are developing a lot of the courseware. This is an entirely new market for us that we entered about 18 months ago, and we already now developed customers that are north of $1 million in revenue in this particular market. So again, a combination of traditional publishers becoming subscription-based platforms producing more content, therefore more opportunity for us; plus, us servicing a new customer type, which is education institutes, are giving us more -- giving us more optimism about this market. So that's really on the content side of our business. Having said that, there's also this element of small base effect. Our content business is much smaller than some of our larger competitors. And some of them are 2x or 3x of a [indiscernible]. So as we play catch up, we will definitely be growing faster than them. So there's also a small base effect element to this as well. So very bullish about content, including FY '23.

Yes. Just a small clarification. You said the U.S. European-based education institute that you started working with them that, and then you mentioned something like $1 million. What was that? I missed that part.

Yes. So we are working with a U.S.-based university to develop over 50 of their courses. These courses are targeted at professionals that are consuming these courses -- as they are working professionals, consuming these courses on the side. So these are more professional development courses. So we're developing 50 of these courses for a university. Traditionally, we will develop these courses for publishers, but now we're also working with university directly.

And the size of such could be $1 million? This is what you're trying to say?

Yes. And what I'm trying to say is this one customer is -- we've developed a few customers, and these customers are over $1 million in average. So as we scale this type of revenue, there's only a handful of customers today. There's a huge potential to scale this business. That's the point what I'm saying.

Sure, sure. And on the platform side, what excites you? Does the HighWire [indiscernible] at a [ post monetization ] will do better? Or is there more relax to that?

So more relax to that. Of course, on the HighWire piece, of course, will only settled down, like I described. We are hoping that we would go faster than our previous acquisition playbook, but it's kind of running at normal course. What's giving us confidence is that while we have lost customers that historically were associated with HighWire, we are gaining new customers. On the HighWire side and on the platform side of the business, we have a 3-pronged approach. We are playing price/volume approach given that on the platform side of our business, most of our competitors are based outside of India. Because of wage arbitrage, we're able to play a price/volume approach to create market share. The second thing that we're doing is we're following a product bundling approach. So we're combining a lot of our SaaS products and opening up opportunities as a result of that. And the third thing that we're doing is wherever possible, we are combining the platform offering with the content services offering, which, again is giving us a lot of conviction that and is tracked several deals in the last 6 to 12 months across these 3 strategies. So as decline stops, the growth will start to show up because while we have churn, we also have addition. Currently, the net is negative, and we're hoping that by the fourth year, it will be positive.

[Operator Instructions] Our next question is from the line of [ Rishikesh Kare ], an individual investor.

Am I audible?

Yes, please go ahead.

Yes. In the Q3 con call, you were asked a question and you have said that you'll be beginning the journey for reaching 25% operating margins. But this quarter, there has been a slight drop. In fact, it has gone down to 25.8%. Is there any specific reason for this? Or is there any one-offs?

Yes, the revenue. So like I said, in the beginning of the call, the education business seems to be performing better in the second half of the year even though the research business has already picked up. So it's more seasonality of revenue -- not really seasonality even, it's more delaying of certain projects but on average, which would be okay by the end of the year.

We have a next question from the line of Keshav Garg from CCIPL. .

Just wanted to understand that how is the demand looking in our various segments in the context of the recession and economic slowdown in Western markets.

Yes. So, so far, again, something that we are actively monitoring both on the sales side but also on the operations side. Currently, we still are not seeing any manifestations of that. There is -- yes, on the education side, certain projects have been delayed, but they have not been canceled or abandoned. So as of as of today, not seeing any impact. But it's something that we are actively monitoring. We've -- I'd be [indiscernible] to say that people tend to spend more in education and learning during a recession. Now whether that academic concept plays out in a real world or not, time will tell. But so far, not seeing anything different for us at least yet. But of course, time will tell.

Sir, and in December 2020 quarter, we made the highest EBITDA per quarter of INR 33 crores, and since then it has been stagnating at around INR 31 or INR 32 crores. And last quarter, June quarter, we did INR 30 crore. So going forward on a quarterly run rate basis, what kind of EBITDA should one expect?

Yes, it's very difficult to give quarterly guidance. Again, I'll go back to my opening remarks that we are gunning for north of INR 100 crores of PAT this financial year.

Great. And lastly, in the AGM, it was mentioned that in our platform business, we are expecting from fourth quarter of this financial year or then first quarter of next financial year, we'll start growing at 15%, 20%. So you think that still holds?

No, that doesn't hold. Like I was saying, we were more optimistic. This seems to -- that -- we were optimistic that this will play out better than what we have seen in the past. But this seems to be playing out at par. So basically, we'll start to see growth in the fourth year, 2024. Yes.

We have our next question from the line of [ Arjun Goel ], an individual investor. .

Sir, in the recent past that rupee has depreciated so much against the dollar, what impact will it have on our revenues, assuming -- revenue and profitability assuming it stays at this level for the rest of the year? If you can talk a little bit about the ForEx element of the financials.

So we tend to -- our hedging strategy is very straightforward. We tend to -- our goal is to cover receivables. But it really as -- if the rupee stays at this level of [indiscernible] to depreciate, of course, it will go straight to the bottom line. And we're seeing that it's going to happen, as other export businesses and other IT businesses are seeing. So it should go straight to the bottom line.

But I mean, I think other IT companies are also facing an attrition problem and they have inflation counter it, right? So are you also facing similar issues? And like what is the attrition? What -- how much is the wage inflation, things like that?

I think -- yes. So we have a slightly unique setup, where we have about 2,600 employees. 97% of them are based in India. Having said that, in India, unlike -- we have 7 centers. So most of our competitors, all the IT space in general, if you had 2,000, 3,000 employees, you would be at the most in 3 locations, if not 2. And we've done this fairly -- while this happened through acquisitions, we've maintained it with fair deliberation. And the reason for that is that if a talent shock does take place in a local environment, we are hedging ourselves by being present in 7 different centers. And same goes for us internationally. We have 3 centers in Europe and 5 in the U.S. as well. So while I wouldn't say our attrition levels have reduced, what I will say is that many of our competitors, the attrition levels in our industries has been at 2%, 2.5% for many, many years now a month. For some of our competitors, it has gone up over 3%. In our case, it's just at the same. It has not improved. It has not declined. It's just at the same. So for us, this is a competitive advantage for us, being so distributed. So we haven't seen the same impact -- at least yet, we haven't seen the same impact that some of our competitors have because of the distributed workforce.

Right. So I mean, sir, the delta and the margins for the next quarter, assuming dollar -- the rupee dollar rate remains at about INR 80, it should lead to a massive delta, right, in EBITDA margins. Am I reading it correctly? Or is the hedge rate also at about INR 80? I'm not entirely sure how it works, but is that fair? Or...

Yes, it's fair. So basically, as the rupee depreciates, it goes straight to the bottom line. Our internal budgets are [ prepared ] at INR 74. And we plan our expenses, we [indiscernible].

We have our next question from the line of Sachit from Param Capital. .

Congrats on a good performance. First thing I wanted to check with you was in this particular quarter, there would be some contribution from EI design it? Is it possible for you to quantify? I believe it would be a 1 month revenue, right?

Yes. $400,000, again giving you ballpark estimate, Sachit.

Okay, okay, okay. Second is there's a more structural kind of a thing that I wanted to understand that now you're talking about a potential [ 5-year ] vision of INR 1,500 crores revenue. So what are...

You didn't hear me for quantifying the vision. You've been for 9 months now.

Yes. No, no, thank you so much for doing that. Sir, I just wanted to understand what organization level changes you would want to change to get to that vision? Because we talk about competing with larger players in the content space. So just wanted to get your sense on the second level management and all its ready and that bandwidth can be handled by us. That's what I wanted to understand for me.

Very good question. Very excellent question. So we've been working on this now for since 2018. So we formed a senior management team, firstly, around 2018, right, after the acquisition of Tata Interactive. So we have 8 people in the senior management team, also have 9 people in the senior management team. 3 of them I've been with MPS since we started our story, Sunit, myself and [ Narain ], our CFO and Chairman and CEO. 3 of them came from acquisitions, 2 of them from Tata Interactive, 1 of them to HighWire Press. And 3 of them were external hires, 2 of them from larger competitors, which says a lot about MPS, that people in senior management positions are willing to move to a smaller company. And the third -- and the last ninth one is Sukhwant who opened was -- shared in the opening remarks, who is a graduate from our management program that we have in collaboration with [ ISB ]. So every year, with [ ISB ], we onboard 4 to 6 management professionals to basically be the future addition of the company. We started this program again, back in 2018. Again, Sukhwant was a graduate of that particular program. So there's one initiative which was forming the senior management team. There is other initiatives that we're doing in collaboration with ISB. The third piece that we've done is we're very definitively looked at the next 3 levels of -- 3 layers of the organization, so from the senior management team then the next 3 levels, and we've made sure that across each of those levels, we are well represented, people have bandwidth and we have good management depth. So that's been an exercise that we've been carrying out very intentionally now for many years. On top of that, we are also exploring now an [ ESOP ] program to make sure that this massive talent pool that we've created over the last 3, 4 years performs as co-owners rather than as employees. So that program is currently under discussion at the NRC of MPS and hopefully will be launched sometime this financial year. So there's been a lot of thoughtfulness, effort gone into building the team. And now it's about making sure that business team continues to grow and prosper.

[Operator Instructions] We have a next question from the line of [ Umang Shah ] from Surat Capital AIF.

Can you hear me?

Yes.

Sir, we have 2 divisions which is content and eLearning. In content, we have a limited number of customers and limited number of competitors because it's a fairly consolidated space, eLearning, we had a very fragmented industry and a large number of customers. So when we are looking for new deals or when you're pitching for new deals, what are the key determinants in both set of segments? And can the sales force be fungible in both these segments?

Yes. So again, content gets broken into 2 ways, right, research and education. So yes, the research side of the business, on the -- it's pretty spread out. So you have rightly -- you rightly pointed out with the large and midsized publishers, it's a finite set of customers. But then there's this whole universe of university presses, societies, which is much larger. So on the research side, there's definitely an opportunity to grow within this customer base. And from a representation standpoint, the HighWire relationship base has given us kind of a springboard to unlock this particular marketplace. And then on the education side, again, there's different dynamics. You have the traditional education publisher that is trying to pivot to a subscription-based business, you have an educational institution type of business which is slightly different, and then you have an EdTech business, which is some of the new Edtech [indiscernible] emerging. So what we've done essentially is we've created a different sales organization for each of these markets. So we have our sales teams focused on research. We have -- and marketing teams focused on research. Similarly, we have sales and marketing teams focused on education. So that's on the content side. Having said that, like you rightly pointed out, on the content side of our business, whether it is research or education, a lot of it is referral and word of mouth. So it's more old school that way. On the corporate side of our business, it's more marketing-led rather than sales-led. So we've -- for example, with the acquisition of EI Design, while we acquired a great asset in terms of an operational delivery model, what we also acquired is an asset that has a great digital marketing engine. So for example, every year, they generate about 1,000 leads on average. So a very, very mature marketing model. Because the market is so fragmented both in terms of vendors and customers, marketing is a strong sort of driver towards creating growth because it's impossible to attack this with [indiscernible] model because there's so much opportunity. So our focus is more around having a great compelling marketing message, which then builds inbound interest, which then is unlocked by our sales team versus the content side of our business, which is more outbound. So there's an outbound inward element to this as well.

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

Thank you so much to everyone for all the support and insightful questions. Your questions always allow us to introspect and do better. We've -- like I said, like Sunit pointed out, we've had muted start to FY '23. Although our eyes are set on FY '23 to cross INR 100 crores in PAT, we have now also quantified our vision for 2027, which is to be in excess of INR [ 159 crores ] in revenue at expanded margins. We look forward to your support. This next phase of MPS is about building serious scale. And again, thank you again for the past several years where you've been really patient with us, and look forward to your support going forward as well. Thank you so much.

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