Nucleus Software Exports Limited (531209) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. I'm Harpreet Kapoor, the moderator of this call. Thank you for standing by, and welcome to Nucleus Software Quarterly Earnings Conference Call for the Third Quarter and 9 months ended 31st December 2019. [Operator Instructions] So I would like to now hand over the proceedings to Ms. Swati Ahuja. Thank you, and over to you, ma'am.

Thanks, Harpreet. Good afternoon, everyone. This is Swati from Investor Relations team at Nucleus Software. A very warm welcome to all of you for this Nucleus Software Earnings Conference Call for the Third Quarter and 9 months ended December 31, 2019. For discussions, we have here from the management team, Mr. Vishnu R. Dusad, our Managing Director; Mr. R.P. Singh, CEO; Mr. Ashish Nanda, CFO; Mr. Avnish Datt, Executive Vice President, Global Head Strategy; and Mr. Debyani Sinha, Global Head, Human Resources. So as you all are aware, Nucleus Software does not provide any specific revenue earnings guidance. Anything which is said during this call, which may reflect our outlook for the future, which may be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. An audio and transcript of this call would be shortly available on the Investors section of our website, www.nucleussoftware.com. With this, we are now ready to begin with the opening comments on the performance of the company for the quarter ended December 31, 2019, from the MD. And post that, we would be available for the Q&A session. With this, I now pass it over to Mr. Vishnu.

Thank you, Swati, and good afternoon, ladies and gentlemen. I'm pleased to connect with you in this earnings call for the third quarter and 9 months ended December 31, 2019. Our ongoing investment in the latest technologies, including artificial intelligence, digital and cloud continues to add value to our customers' business. Our market-focused road map-driven approach ensures that our customers can take advantage of those announcements quickly and easily. During the quarter, we showcased our solutions in a range of markets across the world, including Australia, India, Indonesia, Singapore, Nigeria and Philippines. In cloud, we added 7 new customers, and we were delighted to win the Best Lending Implementation Award by IBS Intelligence. Our Q3 performance is in line with our expectations and it reflects the continued strength of our business in India and internationally. Over to you, R.P.

Thank you, Vishnu, and good afternoon, everyone. We had another good quarter with 8 new customers adopting our products. Among the 9 successful implementations we completed this quarter, we also had some significant go-lives, including one with our end-to-end micro finance module of FinnOne Neo at one of the largest banks in the country. This has been a special go-live as with this solution, we hope to touch a lot of lives in the bottom of the pyramid. Our international endeavors are going strong. We are preparing ourselves to take our cloud offering to other markets in the year ahead. I now hand over to Ashish to share the results.

Thanks, R.P., and good afternoon, everybody. I welcome you all to this conference call. Key highlights from financial revenue. Our consolidated revenue for the quarter is at INR 130.3 crores as against INR 128.2 crores Q-o-Q and INR 122.9 crores Y-o-Y. For the 9 months, it is INR 382.6 crores against INR 357 crores for the corresponding 9 months of the previous year. Overall, revenue in foreign currency, including India rupee revenue is USD 18.4 million for the quarter against $18.3 million quarter-on-quarter and USD 17.2 million Y-o-Y. For the 9 months, it is USD 54.4 million against USD 52 million for the corresponding 9 months of the previous year. Product revenues for the quarter is at INR 103.9 crores against INR 101.3 crores Q-o-Q and INR 96.7 crores Y-o-Y. For the 9 months, it is INR 302.4 crores against INR 282.9 crores for the corresponding 9 months of the previous year. Revenue from projects and services for the quarter is at INR 26.4 crores against INR 26.9 crores Q-o-Q and INR 26.2 crores Y-o-Y. For the 9 months, it is INR 80.2 crores against INR 74.1 crores for the corresponding 9 months of the previous year. Expenses. Cost of delivery, including cost of product development for the quarter is 67.8% of revenue against 66.4% of revenue Q-o-Q and 65.3% of revenue Y-o-Y. In absolute term, it is INR 88.3 crores against [ INR 85.11 crores ] Q-o-Q and [ INR 81.2 crores ] Y-o-Y. For the 9 months, it is INR 259.6 crores, that is 67.8% of revenue against INR 236.8 crores at a 66.3% of revenue for the corresponding 9 months of the previous year. Marketing sales expenses for the quarter is 6.1% of revenue against 8.2% of revenue Q-o-Q and 8.7% Y-o-Y. In absolute terms, this is INR 8 crores against INR 10.5 crores Q-o-Q and INR 10.7 crores Y-o-Y. For the 9 months, they are at INR 27.7 crores, 7.2% of revenue against INR 28.2 crores, that is 7.9% of revenue for the corresponding 9 months of the previous year. G&A expenses for the quarter is 8.2% of revenue against 9.3% of revenue Q-o-Q and 8% Y-o-Y. In absolute terms, this is INR 10.7 crores against INR 12 crores Q-o-Q and INR 9.8 crores Y-o-Y. For the 9 months, we are at INR 33.5 crores, that is 8.8% of revenues against INR 28.7 crores, that is 8% of revenues for the corresponding 9 months of the previous year. EBITDA for the quarter is at INR 23.4 crores, that is 17.9% of revenue against INR 20.6 crores, that is 16% of revenues Q-o-Q and INR 22.2 crores, that is 18% of revenues Y-o-Y. For the 9 months, EBITDA is at INR 61.9 crores, that is 16.2% of revenue against INR 63.3 crores, that is 17.7% of revenues in the corresponding 9 months of the previous year. Other income from investments and deposits is at INR 7.4 crores against INR 7.7 crores Q-o-Q and INR 6.1 crores Y-o-Y. Total other income for the quarter is INR 9 crores against INR 11 crores Q-o-Q and INR 5.9 crores Y-o-Y. For the 9 months, other income from investments and deposits is at INR 23 crores against INR 15.9 crores for the corresponding period of the previous year. Total other income for 9 months is INR 26.9 crores against INR 16.7 crores for the corresponding period of the previous year. Total taxes are at INR 5.3 crores against INR 7.7 crores Q-o-Q and INR 3 crores Y-o-Y. For the 9 months, taxes are INR 17.8 crores, that is 22.6% of EBITDA against INR 14.4 crores, that is 20% of EBITDA in the corresponding period of the previous year. Net profit is at INR 23.2 crores for the quarter, 17.8% of revenue against INR 21.1 crores, that is 16.4% of revenue Q-o-Q and INR 20.7 crores, 16.9% Y-o-Y. For the 9 months, it is at INR 60.9 crores, that is 15.9% of total revenue against INR 57.5 crores, that is 16.1% of total revenue in the corresponding period of the previous year. Other comprehensive income is at INR 1.4 crores for the quarter against negative INR 0.5 crores Q-o-Q and INR 2.3 crores Y-o-Y. For the 9 months, it is at negative INR 1.1 crores against negative INR 0.5 crores in the corresponding period of the previous year. Total comprehensive income, which includes net profit and other comprehensive income is at INR 24.6 crores for the quarter against INR 20.6 crores Q-o-Q and INR 23 crores Y-o-Y. For the 9 months, it is at INR 59.8 crores against INR 57 crores in the corresponding period of the previous year. EPS for the quarter is at INR 7.99 as against INR 7.26 in the previous quarter and INR 7.14 in December '18 quarter. For the 9 months, it is at INR 20.96 against INR 19.78 in the corresponding period of the previous year. In terms of foreign currency hedges, on December 31, 2019, we had USD 6.42 million of forward contracts at an average rate of INR 72.27. There is a mark-to-market loss of INR 2.57 lakh which is taken to hedging results in the balance sheet. Revenue contribution from the top 5 clients for the quarter is 34% as against 36% in the previous quarter. The order book position is INR 440.3 crores including INR 405.7 crores of product business and INR 34.6 crores of project services business. In September 30, 2019, product book position -- order book position was at least INR 460.7 crores, including INR 416.6 crores of product business and INR 44.1 crores of projects and services business. Total cash and cash equivalent as on December 31, 2019 are INR 531.9 crores against INR 506.1 crores as of September 30, 2019. This includes balances in current accounts of INR 45.1 crores, various schemes of mutual funds of INR 228.3 crores, INR 67.5 crores in fixed maturity plans, fixed deposit banks of INR 51.7 crores, investment in tax-free bonds of INR 86.8 crores and INR 52.5 crores in preference shares. With regards to receivables, we are at INR 90.5 crores against INR 80.6 crores in the previous quarter. During the quarter, there is a gross addition of fixed assets of INR 1.6 crores, consisting primarily of INR 1 crore of computer equipment and INR 0.2 crores on software. With this, I now hand it back to Harpreet for opening the Q&A session.

Thank you so much, sir. With this, we will open the floor for Q&A interactive session. [Operator Instructions] First question of the day we have from Samarth Singh from TPF Capital.

My question was first, on the India business. We continued to see good growth there. Could you please just give some quantitative -- some qualitative detail on where is this growth coming from. Is it from the NBFC side, from the private bank side? And with FinnOne Neo and FinnOne cloud, any qualitative details would be appreciated.

Thanks for your question. Seeing the growth currently in terms of the revenue, what it represents, and we, as you understand, our businesses generally, there will be some time lag between the order book and the revenue. Currently, the revenue are coming not that much from NBFC side, which is a cloud business, which is there primarily. However, in terms of the order booking, the significant growth is coming from the cloud businesses there.

Okay. Great. And just to get some historical perspective on this, so I think until like 2016, our top line in India was anywhere between INR 60 crores, INR 70 crores, and then we launched FinnOne Neo and it's almost double -- more than double since then. So this revenue growth in India that has come in, is that largely on 1 or 2 large implementations? Or is it multiple implementations that they're doing that affects the INR 70 crores, INR 80 crores of additional revenue that you're getting?

So if you see, we have been backing our orders in the Indian segment quite well in the past also. And it's a mixed bag of both when it comes to revenue because the projects, when the Neo got launched, we got big clients after that, as we have updated in our past call. And also cloud has also contributed to the revenue. However, cloud being the subscription model, the growth will not be that significant in terms of the quarter-on-quarter growth, which is there, though there is steady growth from that perspective also. So to answer your question, it's a mixed bag of both India order book to NBFC and others. However, a large portion of contribution of revenue, which we are reflecting from 2016 onwards will be significantly from non-cloud business, which is there, though cloud is growing at a satisfactory rate from our perspective.

But in terms of granularity, is that 1 or 2 very, very large orders? Or is it multiple orders that reflect that growth that has come?

Multiple orders. Multiple orders, I would say.

Okay. Great. And then on the Australia business, can you please just give us sort of a landscape? I think there are 50-odd banks in Australia, how many of them are using lending-specific products? And how many of them are using sort of core banking? And who are our competitors in this space in Australia?

So I'll just throw some light and then I'll request Avnish to help me answer it more granularly to you. My understanding is that there are 3 segments, as I look at it from a finance perspective, in Australia. One is the large bank, which are 4 banks as the Big 4 as we call it in Australia. Then there are smaller banks, which are regional presence, which are there and then, there are trade unions. And then there are ancillary credit unions, shape and form whichever. These are the 4 segments which are there. Lending is prevalent in most of the segments, as we talked about, starting from big banks to even -- as the smallest being credit union and even smaller than credit union which are there. And then when we talk about our focus, which is there, it's primarily regional banks right now as well as credit unions, more on credit unions as we are seeing some success from that perspective which is there. Anything, Avnish, you would like to add to the question? I guess, more?

Yes, I mean, so to pick on your thread about the kind of systems that they're using, what we've seen is that on origination side, they use very specialized lending platforms. On the servicing side, there is still predominantly they carry it out on their core banking platform. And I think what -- it was a little bit surprising for us. So what is interesting to note is that in the segment of interest for us, which is like Ashish said, Tier 2 banks and credit mutuals, there is a lot of interest when they look at the servicing system, and some of our conversations are already at a substantial stage even on that side.

Okay. Great. And I think before the servicing, when the last win was in Australia was in 2016, if I'm not mistaken. And last year, we showed Australia revenue of about INR 9-odd crores. So is it fair to assume that, that was the sort of AMC revenue levels that are coming in from the one Australian client?

I believe you missed one of our calls, which was in -- after the first quarter which is there. We bagged this significant order in quarter 1 of this year itself which is there. And you are right, that our first win was in 2016. So the Australian revenue is a mix of both the old customer, which is there and the new customer, which we added on. It's a mix of both revenues in terms of AMCs from the old customer as well as a new implementation which has started.

And I'm sorry, just to clarify. So our revenues in 2019 from Australia, would that just be reflective of the AMC revenue from the one client we have?

No, so that is why clarified. I mentioned that in quarter 1, this year itself, we have made a sizable deal from Australia as we had updated on the investor call also. And this revenue, which is reflected in the current quarter, which is there or post the first quarter is also reflective of both the revenues from the customer -- existing customers were there and the new customer which has got added, too.

Right, right. Okay, okay. And so just going back, historically, in Europe and Japan, I think this was way back when we had won, I think, the e-comm deal in Japan and the GMAC deal in Europe. The expectation was that we'll get a large number of orders from both these regions simply because clients that were -- potential clients that were on old legacy mainframe systems and they would end up moving to products such as ours. So could you explain to me why did this opportunity not fortify for us?

So I'll take one, one shot and then probably I'll request Avnish to update on that end. And I really want to thank you. You have mentioned some of the contracts, [ even though I ] was not there. So it brings [ good memory back ], remember that, I'm really thankful for that. Yes, you are right that [ AECOM ] is an old -- very old order, which you are talking about. And GMF also, which is there. Though, in GMF, steadily, we have maintained our growth and the revenues which are there. And customers, still any new implementations, which are coming -- they are coming our way, which is a very interesting one, though, may have not be specifically Europe, but anywhere the GMF goes, we are very fortunate to have GMF as our customer in our list, and we are trusted partners to them. However, in Japan, our business has not grown. You're right about the fact that from a perspective, we are still predominantly with the existing customers, which are there. Japan, as I look at it, yes, there's a potential, but they are still on the old mainframes, which were there and customer is not willing to change to the new technology as of now as far as my understanding there. Avnish, any light on Japan specifically? Would you like to add?

Just a couple of things. One, I think we were also settling down on which market should we focus on. Because on one hand, we were -- we had completely changed the way we were engaging in the market. So that was a lot of work to be done on our side in terms of internally restructuring, internally putting the new process in place, training the teams on how to value position ourselves, how to sell business value. So we also were kind of taking a look at which are the markets that we want to focus on, and we wanted to go deeper rather than spreading ourselves to attend across too many markets. So when we chose Australia, for example, as the market, we were -- we knew that the whole cycle of opening up the market, establishing the brand and then ramping up is going to consume a lot of bandwidth, both at the leadership level as well as down below. In Japan, while work has started, but one, the culture is different in terms of the way they take decisions. And two, we also are now looking at ramping up now that we think that in Australia, at least the machinery is moving, and we are seeing results already.

So in Japan...

Sorry. Particularly by the time we were still breaking into Japan and of course, Avnish has clarified the date. The market is a pretty tough one, especially to taking our product into Japan. However, we also kind of started focusing on the new product because they started coming up in 2012, and we kind of launched it in about 2014. And that's when we regrouped and kind of decided that we would like to focus first on -- in India and then Australia in our -- the so-called easier markets. On the other side, when you talk about GMF, I think that got -- that has helped because we do have a lot of captive auto financing customers. And subsequent to that, so that did help us considerably. Of course, General Motors itself has been going through a lot of mergers and acquisitions and splits. So that has also, of course, in a way, helped us to divide our focus. But -- so I think there, we've kind of got some benefit out of it. About the Japan, I think it kind of also coincided with the re-architecting that we wanted to do and go back.

Okay. Got you. So is it fair to say that in Japan, it isn't -- that we weren't able to capture the opportunities, just that the opportunity has not sort of happened yet in terms of people moving away from the legacy system?

I mean it's tough. I mean it's tough. There is no doubt. I mean the language itself, the acceptance of technology or any technology from outside. So it's a good challenge for us.

And in Europe, what has happened there?

So I think our focus hasn't -- I mean, we're still trying to figure out whether how ready Europe is for a technology revamp that will be necessary. So we -- I think we took off pretty well with the new product. Our first couple of implementations was in Europe, but then I think the slowdown and the confusion there seems to have overtaken for a moment, and then we'll let it recover, I think.

Got you. Okay. And last question for my side. Is Africa an important marketing area? And in terms of that, which countries? And if you could just sort of give a landscape of that as well, please.

So, I mean, Africa is, I think, interesting is the right word. We have been in Africa, in at least some chosen markets. For example, Nigeria, Kenya, a little bit in Uganda, South Africa. And I mean, Africa is not a monologic market. It's a very heterogeneous market. I would say that we have -- we are leveraging a little bit of legacy presence in Australia, but we remain a mixture of a little bit of planned but also opportunistic in the way we're looking at that market.

[Operator Instructions] Next question we have from [ Marsh ], individual investor.

I just wanted to know what is the order book currently that we have?

The order book position is INR 440.3 crores, including INR 405 crores from product businesses and INR 34.6 crores from the project and services business as of 31st December 2019.

Sure. And another question is that if you look at any cloud business, typically, it will have 2 components. First is you migrate if you have existing solution or a loan book or you are initiating fresh -- if it is a fresh customer, new customer, yes. And then there is an ongoing pay-as-you-go model for most of the customers. So for your current revenue, what part of the revenue comes from a pay-as-you-go model? What percentage of revenue currently that you own represents pay-as-you-go model?

As compared to the implementation initially, that's what your question is?

No. I'm saying, in general, right. So, suppose, let's say, you made INR 130 crores this quarter. Out of that, approximately what percentage of revenue is coming from pay-as-you-go model? Because to me, right, that is where your operating leverage lies, right, and your margin expansion lies. So the way I'm looking at it is, right, from 2009 to 2019, stock price hasn't given any [ vehicles ], if you look at it, right? And one of the things where I believe that operating leverage for your business can kick in is that if you have that pay-as-you-go model where you can earn as the loan book expands for your customers and it's how these customers -- if they are big enough or they become big, then your margins expand and you make that extra buck. So I just wanted to get a sense of like where we are in terms of percentage and how company looks like this pay-as-you-go model. And will you -- do you think that operating leverage will kick in, in future as we go along?

So I'll answer -- try attempting your answer in 3 or 4 ways, which is one is the fact that currently, as you rightly said, and there is no doubt, it resonates with us also that the business model in the cloud, as we -- if we get into a cloud model and pay-as-you-grow kind of situation and pay-as-you-use model, it will be very, very effective, right? Now it is very insignificant in the overall number, I would say, therefore, right now, it may not be appropriate to look at it. Also, it has a mix of -- even cloud when we move on to the cloud, there are many models which we may adopt to, which is one model which you have suggested. We can also look at people who want to go on cloud can still -- there are many pricing models. So our revenue right now is a mix of multiple kind of options because we are also trying in the market, and we are trying to explore market and trying to get more options. And our whole focus right now is providing value and experience to the customer rather than the pricing and the norms which were there. Right now, it is insignificant. Therefore, it may not be relevant even to share at this point in time. But you are right, from a strategic perspective, we are very sure that what you are saying is the right way to move forward, and we are also attempting with every customer that we engage on cloud on a similar model, but at the same time, the current focus of the company is primarily to give experience and value to the customer. So it may not be relevant at this juncture to share the numbers around the fact that how much of that is there because it's a very small number right now.

Okay. And the other one was that I understand that you have a few big banks as customers in India. So can you just comment on what is your experience of their willingness to move to cloud? And if at all, they move to cloud, will that be a big business for you in terms of migration as well as an ongoing business if and when they move?

So I think -- so the future, I think, is going to be cloud. As far as the big guys are concerned, I think their investments into data centers and infrastructure for the moment is very high. So they are very clearly embracing the cloud. However, I think strategically, there's, for the moment, moving their nonoperational systems onto the cloud to test out the waters and then, of course, to ensure that the investments they made earlier are not brought down to totally wasted. So I think -- so in a nutshell, I think the movement towards cloud will happen. However, the larger banks and institutions have a lot of investment they've already done. So they will take their time. Obviously, startups and smaller are far more agile on this and that is where their biggest traction is today, but it will move up the chain for sure.

Sure. I have one last question, yes. And this is, I think, a couple of quarters back. Vishnu was there on the call, and there was some question on how can you utilize your cash to reward shareholders better. And I think the perspective that was given was that we need to look at this company from a 10- to 15-year perspective. And I respect that, yes, but I've been watching you guys in and out as a shareholder from 2006. If you -- there are 2 aspects of it, right? If you look at honesty, sincerity and integrity in terms of running a business, you guys have not diversified into wrong things. You're not gone into developing something that is not your core, right? Which all is good, right? Your accounting standards are pretty -- as good as anyone else, right? You don't capitalize. You expense everything, which is all good. But when it comes to valuation, just look at it, right? I'm just comparing most of the IT companies in terms of cash on book divided by market cap, and I believe that you have highest amount of cash as opposed to market cap for any IT company. And if I just remove that cash from your balance sheet, you're almost trading at 2 or 3 [ PE ] yes. My point is that I think there is a lot of potential, but if you can give some perspective on how management thinks in terms of next 3, 4 years and give that comfort to stakeholders that there, you want to create wealth and you have a perspective, which a lot of us, I don't think, on a quarterly basis, we are interested. But at least 3-year commentary if management can give that every quarter, that would help because otherwise, like -- I don't know, like, if it is an endless rate or like how do we treat it, right? Because if you look at it, right, interest rate on your cash, right, is equal to more or less equal to the dividend that you are paying, right? So you're not even paying dividend on what you own on a yearly basis, right? So I think a little bit of commentary on that would help for [ assuaging ] people and believing in you and hoping that over a period of time, we will get some wealth created.

So I think firstly, thank you for the compliment, and we value that as much as anything else. On the business front, I think -- so one of the key steps that needed to be taken was to really re-architect the product for the next 15 to 20 years. I think that is where I believe the second era started because we felt that the older technology and the product would not have given us the growth in the coming 10 to 15 years, and that was the first step taken. Along with that step, the key thing that we took was that the -- that our product would be -- so the best -- better than any of our implementation. So in our older model, we used to have too many implementations and each one of them were really good, but the next product release would never be better. So I think that was one of the biggest things and that we have managed to also prove to ourselves that, that is the right way to go. Today, we have the 6 monthly releases which come out, which is what is running at all our implementations of Neo and FinnAxia, which is one of the -- another, I would say, process re-architecting or mindset re-architecting that we needed to do. I think after the initial couple of years of, again, reestablishing, getting our product to be accepted by the leaders within India, we did start a few years back in breaking into -- pretty clearly, I think if we look ahead, 2 clear strategies would be most critical. One is, of course, cloud, and very correctly interpreted, cloud is what is -- cloud and the annuity model with cloud is what would give our future a base, which would grow and we keep joking as will be probably like the banks where you have some kind of delinquencies running, but a lot of people will grow out of the larger numbers. So it's a question of onboarding as many of our customers onto our cloud -- bring -- so cloud becoming one of the key strategies. And the second is really to get on to the high-yielding international markets and referring even in the earlier -- earlier in this call about our focus on -- in Australia. We're also investing very differently in these countries. We, in fact, signed off, prepared the market all over again, over a couple of years before the traction picked up. Today, we are very satisfied with the traction. And we do have a couple of others. As I mentioned earlier in the call, Europe is in a confusing state, so we still need to get into it. We've got the U.S. that we need to get into and in the same model. And probably, our feeling is that for all these kind of entry into markets, we would probably require a lot of financial backing to not only invest in making our presence significant and acceptable, but also to cultivating the product as well as the offering and the way we sell. So I think both the new product coming out, we do see things going in the right direction. Or could they be quicker? Well, we wish it would be. And so these are really the steps we are taking. And I see no very obvious reason for us to not be able to grow the way we want to.

Thanks for your question. Next, we have N. Puranik from Enam Securities.

A couple of questions. One is, I think, the subject you have been discussing in the last few minutes, it's about your product portfolio. The new in terms of its currency and relevancy as a product. How mature is your product? Is it really a full-fledged product? In some part in earlier versions, it was half product, half project. And how fully is the product in terms of maturity, sophistication and relevance to customers today? So I want to get an understanding. But also, as you talked about, I want to get it to the next level of market acceptance. If you can elaborate in detail, what are those steps, both in terms of technology, process, business process and as well as the regulation and compliance?

So as far as the product is concerned, I mean, I keep saying that it's -- there is a product manager view to it, which means -- which actually says that it is -- the product is never ready. And then really, the product managers need to keep applying their mind to what is next. And on the other hand, of course, is it delivery -- ready to deliver value? I think the best test of this, which I feel we've passed is even the orders from Australia and the big customers in India. I think that is proof that firstly, that it is adding value, but most importantly, also adding more value than what our earlier release -- our earlier product has already delivered to them. So I think, to me, that is one good measure of figuring out whether it is ready and mature and to win. I think I have no doubt that it is mature enough to win anywhere in the world. Of course, each of those countries would have nuances of their own in the product as well as in the business processes, which is what is the second part, I will talk to of your question. I think when we said market and market readiness, there are 2, 3 fronts. And I now share that I think we've had some outstanding success in Australia because I think we didn't really start selling very heavily in Australia. We actually went and understood. We spent a lot of marketing money to establish our thought leadership in the area of the lending business there, not only did we pick up, but we also got to be known in the market for people who understood the business and obviously, who then can be looked up to for any technology solutions. And that required not just marketing bucks to be spent on, so we had a lot of industry get-togethers. We had -- we had a lot of panel discussions with CEOs on local regulations and things like that. We've also spent a lot of -- I mean, it wasn't really complex there, but we also spent a lot of time and effort to understand the Australian market. And then in parallel, started selling. So I think we need to repeat the same, especially for the high-yielding geographies and that is what I meant with the marketing strategies. Avnish, anything to add?

I just want to get a better understanding, for example, today, how much of customization you do for a product from your earlier -- the process of selling a product. So how much of customization happens today?

So for instance, I mean, it -- I'll give a little technical answer in the end. But first, just the business answer. So all my cloud customers are running with 0 custom core.

That's understandable, yes.

Correct. And this does include start-ups, but also includes some sizable portfolios being run by them. On the larger customers that we have, we do have customizations. I wish I had a number, but I can say it is a significantly lower percentage than what we used to do earlier. And the better part is the technical answer that the change request for the customizations that we're doing today for them is actually done on a different layer altogether technically. The good part about that is that we are actually able to give them upgrades after core piece, while their customers continue to work on the new release. So this was something that was technically not there. So this is what we've been really working on.

So that's more componentized architecture that makes it work faster?

That is right. That is right. And then a lot of flexibilities and the parameterization would help. A lot of the variations to be handled only through configurations rather than building those capabilities. What I did mention was, again, extending on the majority of the product. I must share with you that today, a large part of the investment which is going in is not just now going into getting basic functionalities in place. We have -- actually, my last 2, 3 releases have come out with 250 APIs, which opens up our solution which can integrate in the new digital ecosystem which is, again, extremely tech-attractive at least to CIOs because it...

[ We see a great ] methodology at work today.

And it fits into the digital architecture that they wish to create in their businesses. So that helps a lot, of course.

So there's a significant reduction in terms of customization, what used to happen earlier. Today, for us it's the customizing.

That is right. And that -- the best part is that -- and just to share with you, the first 2 releases that were implemented on the product have already got sunset, which means that my 2 -- first 2 customers who took on the first few releases of FinnOne Neo have migrated to the new releases and there is no-one on my first 2 releases now.

Excellent. So that means you are a lot more confident of seeking maintenance revenue from customer today?

Absolutely. Absolutely. Of course, it's still not easy from those who...

It will be marketed and difficult to get license revenue.

Correct. So exactly because unfortunately, to some of the, I would say, short-term viewers, they can't see how the CR, the change request of the custom business will -- expenses will hit them over the next 5 years. They are more worried about how is the license higher today. But I think a lot of people, thankfully, have already regulated their earlier models and have been hurt with the changes, which actually goes and disturbs the entire architecture and technology deployment, making the whole system very unstable.

But they still -- do they still understand value today? Or they're still trying to understand value? Or they don't want to understand value, but they don't want to pay a price for it?

I think that you have all kinds. So we're looking -- we'll be really looking for those who are -- who can understand value so. [indiscernible] everybody is looking.

But in other markets, [indiscernible]. In international market, you don't have much of an issue on this?

International market is easier for sure.

Easier for you.

Yes.

The other question is about you've -- I saw a press release saying that you have hired as -- appointed a Chief Evangelist. Chief Evangelist. So can you tell me what does an evangelist do beyond what the product manager is doing in terms of taking product to the market and building a passionate positioning of it?

So firstly, what -- firstly, it helps a lot because the Chief Evangelist is Prakash Pai, who fortunately accorded the first product and his experience in banking and finance is probably far more than mine as well.

So you understand the product then?

Exactly. So I think that the product managers do that. And you're absolutely right. And I think I'll go back to your earlier comment, Puranik, where you mentioned, do they understand the value. I think the Chief Evangelist role is really to see how we can answer that question much better.

Earlier. You're earlier than that now. So the question mark to the company, was it more to specific customers?

Ecosystem. Ecosystem. And some by generally talking, but some even engaging one-on-one. So I think, the Chief Evangelist's key role is to be able to ensure they see value in what we can offer to them. And so it's not fair, I would still not say it. It's not product management because the Chief Evangelist will not also think of what should be next in the product, but it is just that how can you deliver value and whether people see value in what we have to offer. Because we do believe that we have much, much more value to deliver than what is generally seen. Because what is generally seen, unfortunately, is only an RFP point [Foreign Language] which is not what we believe is a good way to buy, I mean.

But can you give some sample of how a Chief Evangelist is going to position your product from -- for that means he needs deeper understanding of products, deeper understanding of customers' requirement and more importantly, the challenges the customer has in terms of implementing, using it, creating millions of transactions and the road map for his own growth in use. So if you can give some sample of the way you pitch and position your product.

Sir, I believe you answered the question yourself. So that is exactly it. And it will be done either through forums or actually one-on-one engagement that Prakash will be doing with senior executives to engage at a business discussion level, understanding the business problems and how that can be applied. So it's exactly what you just said.

In terms of regulation, compliance, maturity, where are your -- where is your product? Because that's some -- the highest end of the value chain in a product.

So I think what we've realized over a period -- so while I can very easily answer that by saying in India, we're completely compliant. I think -- however, our strategy always -- and that is probably one area where the custom layer comes into play. Because when we talk of regulatory requirements, about 80%, 90% of it is really reporting. Then you do have things which are part of the business. The advantage we do have is that in most of the countries that we are now active in, we were already aware of the regulatory. So we are kind of there. But the last mile is always something that we do cover in part of the implementation. So it's something which has been manageable. And then we are pretty far on that. I mean it's -- so if you ask me, are we ready regulatory-wise for the U.S., I think lots of effort has been going on, on first identifying it. So we are, obviously, out of all the countries, least ready for the U.S. However, I think the good part is, today, we are far more aware of what needs to be done. Some of it can be fulfilled by partners actually, and some of it, we may have to build up some [ logical thing ].

And most important when it comes to the downstream revenue coming from a product, that's the analytics. So how well you are positioned in terms of data and analytics and the big data tools that you have to provide the key analytics to the client in terms of your revenue opportunity and client connect?

I think -- so there, I think the products are pretty good product. Only thing, it competes with speciality analytics products like [ SAS ] and...