Aurionpro Solutions Ltd

NSE:AURIONPRO

Earnings Call Transcript 2024-Q1

[Operator]

Good evening, ladies and gentlemen, and welcome to Aurionpro Solutions Limited Q1 FY 2024 Earnings Webinar. Today on this call, we have with us from the management Mr. Ashish Rai, Vice Chairman and Director; Mr. Vipul Parmar, Chief Financial Officer; and Mr. Ninad Kelkar, Company Secretary. Please note that any statements or comments made in today's call that may look like forward-looking statements that are based on information presently available to the management and do not constitute an indication of any future performance as future involve risks and uncertainties, which could cause results or differ materially from the current views being expressed. [Operator Instructions]

I now hand the conference over to Mr. Ashish hai for his opening remarks. Thank you, and over to you, sir.

[Ashish Rai, executive]

Thank you. Good afternoon, everyone, and welcome to this earnings call for Q1 FY '24. I'll go through prepared remarks for about 5 minutes, and then we'll open it up for a formal Q&A. We're pleased to announce the results for Q1, which show our continued growth momentum that we've seen across our core businesses for the last several years. Every quarter that goes by gives us yet another proof point on our chosen strategy to build a global products and platforms player centered around creating Tier 1 IP assets.

Our strong performance this quarter is the result of a good demand environment for many of our core offerings and our expansion into newer markets through both strategic partnerships as well as the expansion in sales channel that we've talked about in the past. This performance is also the result of increasing global competitiveness of our products as they mature and highly disciplined execution that we saw from our teams across the board from sales to open and [ deli. ] This quarter was an especially great quarter for our R&D teams with some truly path-breaking product launches hitting the market after growing multiyear build cycles. While we expect commercial success every time we launch a new product, what really drives us is solving the hard problems that create net new capability and value for our clients, our partners and society in general.

What the numbers will not tell is that the quarter gone by was one of our most successful quarters from the standpoint of bringing new products and offering to market across both banking as well as TIG. I will cover some of this as I go through the presentation. I'm sure by now you've received the deck with details of our performance. So allow me to deep dive into the numbers a little bit, right? When we started the year, I had given a guidance of our plans for FY '24, which said we will grow our revenue between 30% and 35%. We will deliver an EBITDA between 20% and 22%, and we plan to impact margins of 15% to 16%. We believe these numbers put us squarely in the top 5% to 10% of the industry in terms of delivering performance. We will do this while funding the R&D stands that, as you know, we [ fondly ] access in terms of product builds right and not really capitalize investments, right? So revenue for the quarter stood at INR 199 crores, which is a 36% Y-o-Y expansion and 4% quarter-on-quarter.

EBITDA INR 44 crores as compared to INR 33 crores, which is 33% on a Y-o-Y basis and 10% sequential. EBITDA margin was at 22%. PAT went to INR 32 crores, which is a 33% Y-o-Y expansion and 19% on a sequential Q-o-Q basis. PAT margin for the quarter stood at 16%. So while we've worked hard over the last few years to reduce lumpiness in our revenue streams by converting where possible to recurring revenue models such as subscription licenses, for example, there's still some seasonality in our numbers. So I personally think the Y-o-Y comparison is a more meaningful indicator of relative performance than sequential Q-on-Q numbers. Overall, we are very pleased with the execution in Q1, and we feel we are in a great place to deliver on our guidance of 30% to 35% growth for FY '24, while delivering the margin numbers that we planned for.

If we move on to the key highlights. So as I said, our R&D teams had a truly exceptional quarter. On the banking and fintech business getting the in-principle approval from RBI was a great demonstrator offer ability to not only build cutting-edge tech offerings, but also back that up with a strong mature operational prebook. Audio Fintech in the U.S. launched a brand-new next-generation health care SaaS platform called Revique. We also had a significant wins across Southeast Asia and Middle East and Africa, as you can see, on the slide for the banking business. What we also saw was a dramatic uptick in the number of deals that we are competing in and our win rates going up. I think that's a function of both expansion the sales channel as well as demand in the corporate banking segment that's coming through. Similarly, we have significant product launches from TIG nothing more prominent than ECR 1 that we launched at UITP Summit in Barcelona last month -- the month before. This really is a great demonstrator of our ability to do hard R&D and break into large new market segments.

We are the only Indian company to have designed, built and launched an EMV-compliant card readers, and that points to the strength of our ability to do hard R&D. We will continue to enhance our R&D spend this year as we continue to fine-tune our bigger products for global markets as well as keep backward integrating into the value chain, across both hardware as well as software.

Our continued emphasis on building highly differentiated world-class IP as well as our ability to create joint value propositions with other leading industry players, will continue to strengthen our revenue to win on the global stage as well as drive long-term earnings power for the enterprise. As we go further into the year, we will remain sharply focused on executing with energy, with discipline to continue delivering strong revenue and profit growth in this year and beyond.

I hope this has given you a useful overview of the overall business context and our strategy and performance. I look forward to answering any questions that you may have.

[Operator]

[Operator Instructions] The first question is from the line of Vivek Gautam from GS Investment.

[Unknown Analyst]

Am I audible? any issues?

[Operator]

Yes.

[Unknown Analyst]

Hello.

[Operator]

You are audible.

[Unknown Analyst]

Congratulations on good set of numbers are continuing. And what is the opportunity size on the TIG segment and..

[Operator]

It seems that we have lost line for the current participant. In the meanwhile, we'll move to our next question, that is from the line of Kranthi Bathini from WealthMills Securities Private Limited.

[Unknown Analyst]

Yes. I just want to know about as there are the big IT companies in India, they have been giving the apprehension and reducing their guidance. And there are some kind of implication about the global slowdown. All these implications are impacting many of the IT companies and especially many vendors have been reducing their banking and financial services budgets. What kind of impact and what kind of visibility as a company you are foreseeing?

[Ashish Rai, executive]

I think if you were a generic IT services company, or a commoditized outsourcer or something right now. I suppose there is some uncertainty, especially in the Western markets as the interest rates have gone up. I think that's particular too a very generic services player. We are highly specialized around a few segments that we've chosen, for example, corporate banking transformations, which we work in through our corporate loan regulations product, collateral, limit management, transaction banking, things like that and transit payments.

We, honestly, for these segments, don't see a demand slowdown at all. And I think there's a reason for it, a high interest rate environment in general is -- you have to understand the kind of clients we sell to on the corporate banking side, right? It's typically you would have to be a large bank, Tier 1 bank for you to need a specialized corporate loan modulation system, for example. High interest rate raw [ materials, ] I don't think necessarily bad for a Tier 1 corporate bank. If you look at the results coming out of U.S., Asia, other markets, most large banks with large corporate loan books are actually doing exceptionally well and a high interest rate environment. Your investment banking side will come down, your M&As will come down. But actually, banks are doubling down on transformation in the corporate banking space, right? So if anything, we've seen a a dramatic uptick in the number of deals sort of coming to the table, right.

Same thing with transit, right? I mean the transformation from close to open loop, we think is a decade low of transformation. We are still in the early stages of it, like we won that deal in California. That's just one U.S. state, which I think is leading the charge, but there is a lot more of the market to come to the table. So honestly, for most of the segments that we chose, we see a fairly decent demand environment.

[Operator]

[Operator Instructions] Next question is from the line of [ Mitul Mehta ] from Lucky Investment Managers.

[Unknown Analyst]

Congratulations on a good set of numbers. Can you hear me?

[Ashish Rai, executive]

Yes, we can hear you fine.

[Unknown Analyst]

Congratulations on a good set of numbers. Just wanted to get some sense on your order book. You sort of highlighted that you have built a INR 800 crore plus order book. Now does this incorporate some of the deals that you have announced in your presentation, like the 1 in Philippines or the Cranber -- I mean, the Canberra deal or the one in Middle East, do these deals are incorporated in these numbers or they are not.

[Ashish Rai, executive]

So look, we announced INR 800 crore plus order book at the end of last financial -- at the end of March, basically, right? That is what it stood -- we -- and typically, most of the order book that we declared, almost 80% of it is the next 4 quarter order book, right? So we would have retired close to INR 200 crores from that order book in Q1.

We added a little bit more than INR 200 crores. So we still -- so we are at INR 800 crores plus those deals that we mentioned, these are new deals which will -- which are essentially new additions to the order book. So that INR 800 crore number was on 31st of March, but the number is still of the same range.

[Unknown Analyst]

So these deals are incorporated?

[Ashish Rai, executive]

I mean, they are now in the order book, but not on that number that you're talking from 31st March.

[Unknown Analyst]

So how much you would have added?

[Ashish Rai, executive]

So we added, I think, something of the order of INR 230 crores in Q1. So we were at 820. You net out 200 that we retired Q1. So the order book went up by about INR 20 crores, INR 25 crores.

[Unknown Analyst]

Okay. Sir, could you speak a bit more on your strategy in the developed country like U.S. or Europe? I mean when do you really go there and bid for larger orders? Because currently, most of our business is concentrated in the Asia Pacific region. So when do we -- I mean when do we actually get there and announce a large deal pipeline?

[Ashish Rai, executive]

Okay. So the pipeline is already building up. Thanks for the question, Mitul. That's a good question, right? So I think the way to look at it is this -- our first focus is on building out product/platform which is really finished and can compete globally, right? It's easy to do project deliveries out in the U.S., if I want to supply bodies, want to do work for someone else, I think that's easy. Selling products in U.S. or in Europe, I mean, honestly, if you think of it, right, I mean how many Indian products do you actually see in the U.S. And I don't even mean software, so or anything, right? Today, you go out to California, you do a tap in, tap out on a fully finished Aurionpro validator unit that's sitting in the past in California, right?

So -- it takes a lot of hard work, a lot of fine tuning to get the products to a level where they can play in the advanced markets, same thing with the software. I think with bulk of our assets, we are now getting there. So corporate loan origination, I think by and large, we are at a Tier 1 level in terms of both depth as well as breadth of the offering, and we are building out the sales channels to take it global. On our payment offerings, I think we are -- especially the license technology that we [indiscernible] we're already in the U.S. market. For example, Q4 -- we are now in Q4 or Q3, I maybe mistaken, we announced $18 million deal around licensing our payment technology. That is a result really getting the offering to that level, right?

Transit, again, we've broken into California. We announced a couple of other deals. We are now going out a lot more heavily. We've built out the sales team to go out a lot more heavily in the market, right? So I think for a number of our products we are getting there. The U.S. is now up to almost 7% to 8% of our overall revenue, right? I fully expect over the next few years for this number to keep climbing up. But I think the way to understand it is because I know a lot of people do benchmark us against IT services.

And it's just a very different game to get a fully finished platform or product out. We also launched a health care SaaS product last month in the month before in the U.S. market called Revique, which is very sharply targeted on practice management sort of offering right. So we are slowly getting there in terms of launching our offerings. We're also -- the other thing we are doing, which not many players do is license our technology to some of the other global players who will take it to the Europe and U.S. and other markets. right? For example, we announced the partnership we have with Finastra, we were licensing our technology. We will do more and more of those arrangements as we go, right? So I think we are, by and large, getting there from a product standpoint. So now it's a question of really finding the right channel either through a partnership or go directly himself.

[Unknown Analyst]

So sir, as far as your guidance [ Technical Difficulty ] you've pretty much enumerated about how do you get to a 30%, 35% growth in the current year? Now looking beyond '24, I mean, could you spell out your sort of, I mean, strategy or some degree of visibility as to where do we go in FY '25?

[Ashish Rai, executive]

Okay. So 2 ways to answer that question, right? One last month, we -- we did an Investor Day where I did present the strategy that we have and articulated what we call the Vision 2030. I mean, if you've time, go down and find the video on YouTube or somewhere, and I think probably that will help. The long-term ambition is very, very simple. We've chosen our segments. We made 4 large strategic bets in terms of what we're going after transformation, the corporate banking space. We see a long demand on way transformation in the transit payment space. We see a long demand on the way. The licensing of technology to other global entries, is we just started, but we see a lot of success ahead, right?

So we've annulated what those bets are. We said in each of our offerings, we want to be a top 3 player globally in the segments that we compete in. Now this is not a 1-year, 2-year journey. This is going to take time, but that is our ambition to get to right? And hence, the desire to build Tier 1 assets rather than something that's good enough to compete in Asia or so. So that's one. So 2030, we've articulated where we want to be.

In terms of immediate guidance, the numbers have been clear about what we hold ourselves to in terms of long-range planning is target 25% to 30% growth, target margins of 20% to 22% on EBITDA and 15% to 16% on PAT. This is essentially how we plan for our business. This is what we believe is the right level to keep growing at. We don't want to grow too fast. And with the delivery reputation because product business is fundamentally hard. You want to really get a lot of fixes together before you grow. So 25% to 30% is the right level at which we plan for the medium to long term.

This year, we had exceptionally good demand environment and a fairly large order book, so we guided 30 to 35, right? But I think over the long range, the expectation should be for us to be in the 25 to 30 range, rather than 30 to 35. I hope that answers the question.

[Unknown Analyst]

Yes. And sir, if you can allow me to pause one more question if you can allow me, sir.

[Ashish Rai, executive]

Okay.

[Unknown Analyst]

Yes, as far as your banking product revenue business is concerned. So let's say, currently, we are quarterly -- our quarterly run rate is somewhere close to about INR 90 crores, and we're going to build it as we move along. Now out of this total, let's say, about INR 400 to 450 -- I mean, about INR 450 crores of product -- I mean, banking product revenue, how much would be the licensing part.

[Ashish Rai, executive]

The reason you ask is essentially what is linked to IP and hence, a different margin profile than the implementation part. Is that the case?

Is it a one-off versus -- is it a margin question on a recurring versus one off question?.

[Unknown Analyst]

No, it's a margin question as well as recurring versus one-off question. So I just want to understand the linearity of your banking product business.

[Ashish Rai, executive]

So look, almost -- the way to look at it is this, like when we sell new deals, typically, 1/3 is licensed and 1/3 is AMC and 1/3 is implementation, right? License and AMC are both linked to IT, hence a different margin profile than the 1/3 which goes into implementation, right? On the overall book, almost 65% to 70% is what you can call recurring or ongoing that's going on. And the other 30% is what we sell and deliver in the year.

Out of the sell and deliver roughly half would come from existing and half would come from new. So the actual new dependence is very, very small, right? So recurring, roughly, let's say, 2/3, 1/3, recurring and ongoing versus one-off, and in a deal, license is a third, AMC a third, implementation in the third.

[Unknown Analyst]

Anyway, congratulations and wish you all the best, sir.

[Operator]

[Operator Instructions]

The first question is from Varun Mohanraj from Kalinga Capital. What is the business model in TIG transit segment? Do we get business from new metro projects alone or we get business for existing metro projects also? If so, what is tenure of such projects. My second question is on data centers, which part of the data center value chain are we targeting?

[Ashish Rai, executive]

Thanks, Varun. So 2 questions, right? So first, coming tackling the transit side, typically -- so we do compete on new projects. I think the way to look at demand for the transit side is there is 2 sort of parallel movements happening. One is -- you've got the whole Western world, which is largely an existing legacy technology, which is usually closed loop and there is a movement from closed loop to open loop, California being 1 example, right? So a lot of the western world is closed loop to open loop, so old tech to new tech.

A lot of the emerging world is where new projects are coming out. So a lot of times, it's no bet to open look, right? So both of them are kind of very strong demand drivers for us. We will play in both of those spaces. So California is an example of old tech to new tech, something like Haryana Transport orr Noida Metro, Nagpur Metro is an example of almost no tech to new tech, right? So we'll play in both of those places.

And the revenue model typically will depend on the nature of the transaction. Largely, by and large, we don't do too many CapEx deals. We've done those in the past. We've also done some recently, but then we will normally find a partner who will provide the capital and we will provide the tech. And usually, outside of India, it's a pure tech deal. California has proven, Canberra has proven, Central America, Latin America are wins, even in Africa [ has one ] that we can go head-to-head on a tech competition and win pretty much anywhere in the world, right? So globally, we will obviously collaborate with our larger partners like Mastercard, for example. So Maldives, for example, if you look at it is together in partnership with a Mastercard right? So we will find partners where capital is needed, but by and large, we will go and provide the tech.

In India, we will do larger CapEx transactions as well, but then find a capital partner to work together with us on it, right? So which is like Nagpur Metro, Noida Metro, Kanpur Metro, Haryana Transport, et cetera, right? So that's essentially transit. The segment has been growing very, very strongly for us, and we see a long demand as the world moves from close loop to open loop. Open loop is basically is you used to preload a instrument and go to the metro gate, now you want to use your card, you want to use QR Code,, you want to have account-based ticketing and all that stuff. So essentially moving from here to here. And that I don't think is a movement that can be soft, and that will go on for some time.

On data center, this is a specific bet we have on the digitization of India. We see a significant long-term demand as well as we saw a gap in the market, right? So we built out what we believe is one of the strongest data center design teams in the country, one of the strongest teams in terms of project managing a bill right? And there is a significant demand. We've announced a lot of wins in that case, including some highly complex competitive projects that we were in the space, and we've got some fantastic strategic partnerships with a few clients who've been investing heavily in the space, right? So data centers, we will play across the spectrum we will normally maintain a mix between design and project managing a bit, essentially to deliver a net result, which delivers to the enterprise expectation on margins. right? Because design would tend to be higher margin and the rest of the stuff would tend to be lower margin. So you work on a blend, which it still delivers to the enterprise margin for sure, right? And this is a business, again, which has been -- so TIG on the phone has been growing exceptionally strongly.

This is a business which is probably growing even more strongly than the TIG growth level.

[Operator]

The next question is from Krupa Desai from Electrum Capital. So on the banking side, sir, in U.S., Europe, would you be replacing the existing competitor or find new customers because I believe large banks there would have already been having such solutions placed.

[Ashish Rai, executive]

To formally get involved is where the bank is -- so if I take corporate banking as an example, where the bank is looking at a transformation on the corporate banking side, right? So whether you go into U.S. or you go in Asia, you will hardly find a bank which does not have existing technology. I don't think such a bank exists. So you will always have some tech to replace. Typically, what would happen in a corporate loan origination space is -- this is a space where a large bank believes its competitive source lives in the workflow process in the origination process. They have built up system largely in-house or use them and outsourcer to build it, which is a reflection of how they ran their process.

Now there is a need to move to a best practice process. Hence, do a transformation of the system, move from a custom-built application to actual first-rate product, right? So if you see corporate loan initial space, we participate in [indiscernible] quadrant, we are squarely in the leaders quadrant on corporate loan origination on collateral management and limit management, and this is leaders quadrant globally. So we have other top choices the bank has in terms of -- if I wanted to incorporate best practice in my origination process and move to a packaged product, we are on the size.

So typically, the move is not from some other product to us, typically the move is from a customer [indiscernible] the bank base and which is 90% of it or especially weak product they bought long time back and move to an [indiscernible] solution.

[Operator]

The next question is from a participant from Columbus Investments. Please share details of the new product that you have launched in this quarter, especially since you mentioned that it was a great quarter for the R&D team.

[Ashish Rai, executive]

Yes. So thanks for bringing it up. So it really was an exceptional quarter, right? And I think these are -- there are -- so numbers are numbers, but there are some quarters that make you truly feel -- I suppose why you jump out of the bed every morning and come to work, right? I mean, so it's -- so ECR 1 for example, that we launched in Barcelona last month, Sanjay and his team launched, that's almost 2 years of grueling hard R&D to go out and build the card reader, which is EMV compliant. And it does a lot of things. One is it obviously completely changes the margin profile of our own validator units that we were manufacturing because that's a key component of the validation. So it immediately improves our margins wallet. But the second thing is you really need high-quality card leaders everywhere, right? So it just opens up a brand-new new market, strategic partnerships of a very different scale for us. Once we roll these out and can manufacture them at scale, right, not just for our own validator units, but even for as a standalone product by itself, right.

Similarly, we launched -- so that is like -- I mean it is really exceptional. I don't think there are many firms forget in India, one on a wider scale who can do it. right? And that was a great achievement. We launched a health care SaaS platform in the U.S. in the week, which again has gone through a few outpatients and finally launched for a very, very specific segment of the market. We are already taking in a few clients and fine-tuning the product further. So that is a big one.

We came up with core sort of new releases for a number of our products. So what is happening to Oriental right now is as we go into new markets -- so we did not really have till 9 months, 12 months back when we started investing in the sales channels, we had a much smaller pipeline, which was a lot more -- not only focused in terms of geography. Now as we go wider, we enter new markets, even when you have the core product deal bills done, you need to fine-tune the product for the market that we are going to. Banking tends to be a highly regulated industry, transit as well on the application side, we'll need to do a bunch of work. So we actually had new versions come out of a number of our offerings. We also are working with a few strategic parts. So that is on the banking side.

We're also working with a few strategic partners in terms of -- so like the Finastra partnership that we announced. And now we have -- by and large, we will not announce new partnerships in the space for confidentiality reasons, but we're working on a number of other product leases, which are specific to working -- licensing our technology to other large global ISPs. So if I go back to the Finastra example for a second, what is it that we are doing. We have a cutting edge with management solution. So we know how we do that. Finastra has the #1 trade finance solution in the world. We are co-creating a real-time limit management functionality, call it a module inside, which will work together with the Finastra trade finance solution, right? Now -- once we are already working on the first client on that one and once the integration is done, the product is generally available, it becomes accessible to the entire sort of client base for Finastra if they want to get into real time limits.

So arrangements like those deed products to be fine-tuned and then released. So we actually got 3 of our core offerings divergence out as well in the quarter, right? So I think there is a lot of work that was in the plan for 12, 24 months that came out, in the quarter. And that is something that we are especially proud of. I mean numbers are numbers. And obviously, that's what we work for, but we also work for the impact that we make, right? And then that's the sort of R&D success that I was stocking world. Thanks for the question.

[Operator]

The next question is from Vivek Gautam from GS Investment. What are we doing to improve our perception due to past CG issues? Please highlight our USP and [ moot ] and how is the [indiscernible] size in all our segments.

[Ashish Rai, executive]

Okay. So unless there is something specific to answer, I don't know what I can say about past issues -- or -- look, the way we are running the business is -- our goal is to be highly transparent. Our goal is to create net new value in the world. Our goal is to build out a global IP-led products and platforms player, routed in India, routed in Asia. We don't believe there are too many of those, and we believe there's a giant market opportunity, if we get our deal right. We chose a few bets. We are building against those bets.

We are running a highly transparent business. we have a very clean balance sheet. We had about INR 170 crore, 180 crores of debt. We retired it now to a fairly low number. We are -- we don't capitalize any -- with the exception of the payment side where for regulatory reasons, we capitalize a very, very small, not material amount. We expense all of our R&D. So there is no significant intangible assets sitting on the balance sheet. So unless there is something specific, I can't answer around corporate governance. I think we run on the cleanest businesses, one of the most competitive businesses in the place. We've been -- our products, chartered [indiscernible] quadrants. There is no vendor in India. There is no vendor in Asia, which can claim to be there. I mean, if you talk of a few competitors, they are far to the left, not even threatening to get anywhere close to the leaders quadrant in the next 10 years, right? So we create real value -- we run a competitive business.

We have been very clear about where we want to be in 2030. I mean I hope that is good enough. But very happy to take on any specific questions.

[Operator]

The next question is an audience question from the line of Sahil Sharma as [ initial investor. ]

[Unknown Analyst]

Can you hear me?

[Ashish Rai, executive]

Yes, please go ahead.

[Unknown Analyst]

Yes, sir. The question is, since we have Tier 1 IP and when I look at the distribution or geographical distribution of our revenue, most of it comes from India and then from APAC. We get a very small percentage from U.S.A. and I think almost done from Europe. So what I wanted to understand is what is our strategic direction for growing that by selling our Tier 1 IP to Europe and U.S.A. and increasing that? And what could this look like in 2 to 3 years or whatever time frame you can talk about.

[Ashish Rai, executive]

Yes So look, first our product businesses in Southeast Asia, Middle East and India, I think that's where we madly been centered are highly profitable. right? I think we can drive margins in these markets, which are better than what most players can drive in U.S. or Europe, right? And pretty much, I would say, pretty much 98% of the industry would do lesser margins than us than what we can do in Asia. Typically, the reason people don't like being in Asia and India is because they are selling essentially services, which is selling work as for someone, and you don't get the right realization on those [indiscernible] in these markets, right? But when you're doing product -- that is not a big problem, right? So that's number one.

So we can run a highly profitable business in these markets. But of course, you are right. We don't aim to be just in Asia. Our ambition is to get to -- like I said, top 3 in our chosen segments globally by 2030, right? Now it is a long, hard journey to get there. And to be complete in U.S. and Europe, there are 2 things that are needed. One is the products really need to be very competitive and suited to the banks or suited to the providers there, right? On the transit side, I think we are there. We can go out and compete with the best in the world and win. So I keep coming back to California, but if you look at it, it's a competitive global RFP. There's no choosing favorites on that one. There is no fixing the game. It's a competitive head-to-head and we go and win, which means if I can win in California, going head-to-head with pretty much everyone in the world, we can win anywhere, right? So we believe from a product standpoint, we are very well placed on the transit side.

On the banking side, we are very, very well placed in Asia. So corporate loan origination is as deep a product as you get anywhere in the world, but we want to be really go market by market, make sure we are suitable and then go right? So one is that making the product fit for purpose for the bank. It's not a question of debt, it's question of adapting to the market and we will go slowly as we do that.

The second is building a sales channel. Now building a sales channel, I'm not a huge fan of hiring 10 guys, [ showing ] them in the U.S. and then hoping that works, right? I mean selling in large banks is you need to play the long game here. So what we are trying to do is we are saying, yes, we will organically build out our sales team. We beefed it up in the U.S. We don't have any in Europe right now. and we will support those teams to succeed as that unit succeeds will scale up. So we are not in a rush to scale up with a large sales team day 1, we will scale it up organically as we build a box, that box succeeds, then we scale it up, double the size that box succeeds, will double it again. So we will organically grow. But to speed our time to market, what we will do is we'll go and focus on strategic partnerships that can take our products global, right, which is where in every large segment that we exist in, where our products can play together with a large global ISP, we will go and get into an arrangement where we develop IP because we are very good at building products. We are very agile we are very cost efficient.

In terms of building it, we know how to play the product game. We know what it takes to build the product. We know what it takes to manage it. We know what it takes to stand up an implementation team. We know what it takes to surround it with API framework. We know what it takes to make it cloud native, right? There -- it's not a game that we commoditized outsourcers can play, right? So we use our strength, like win-win partnerships, and that will allow our products to go to see a lot more. So Finastra we announced, we will probably announce a few more, but most likely without mentioning the names of those vendors, right? And we'll do more and more of those. And those will also take our products to Europe and to U.S., right? And I think those will be -- once you see the results of it, and those results should come out much more sooner than 2030. Those would be exceptional win-win situations, which is a win for the client, win for both the partners working together in terms of creating those solutions, right? So I think that is how we'll go strategic partnerships, deep partnerships, expand sales channel in the U.S. grow organically and continue to drive the channel in Asia.

Asia is also -- if you see most of our sales expansion is 9 to 12 months. It's very, very new for us, right? So we've got a lot of headroom in Asia as well, which we will keep tapping onto. So that's essentially we began.

[Unknown Analyst]

Sir, can I ask one more question? Sir, when we look at the license we got for payment aggregation, can you just share like how we would leverage that and what is the business model there, but I think auto pay, right?

[Ashish Rai, executive]

Yes. So auto pay payment, as you know, digital payments is a vast market. We've applied for licenses in India, which we got an in-principle approval from RBI from and we applied for license in Singapore, which is still in the process. The goal is not to become the 51st payment gateway in India and join the race to the bottom on margins. The goal is to strategically play in areas we are strong in, right? So -- this is something that I've explained before. What is the key strategy when we go into a segment, right? So first is we choose the segment, right? We choose a segment where we believe the demand runway is long. We believe the leadership is fragmented or at least contested on a global basis.

And we believe we have the ability to build out in Tier 1 assets, right? So once those 3 conditions are met, we are in that segment like corporate banking, transit, whatever, right? So we choose the segment.

When we go into that segment, then what are we trying to do, right? It's not just building a product. What we are saying is we're not that keen on sitting in a box that says software or hardware or services or whatever, right? So we are a tech player. We will look at the whole value chain. We will look at how does the client buy. In the case of a transit operator, it goes from a validator to the software around ASC to the payment stack to gate, the whole thing. In the case of a bank, it goes from the software to the implementation to the cloud, right? So we look at the value chain. We will try as far as possible to occupy every point on that value chain, right, and become the most cost-efficient producer on every point of the chain. That is what allow us to really build up a competitive advantage over everyone else who's playing that game who think they're a software vendor or hardware vendor or service spend, right? And that allows you to drive margins, right? So that is the game.

Now coming back to your auto pay point, transit, for example, we are end-to-end and the payment offering can play very well with transit, where we already hold the content, right? So it allows us to expand the margin on the same business that we are doing any way better, right? Second thing is, for example, the B2B SaaS platforms we have enabling B2B payments, which we believe is an underserved lease, right? So we've chosen spaces where, A, we have a competitive advantage, we think. Second, we have a margin expansion gain Third, we have been able to really differentiate ourselves and go after the underserved market, right? So that is essentially the game for digital payments. We believe this is a huge market.

Even when you get so specialized, you're obviously competing with everyone else, but we are in spaces where we believe we are. Once we have the offering fully ready. So we've got the in principle approval, but we still need to get the final one, right? So then we essentially play in spaces where we have that unique competitive advantage.

[Operator]

I may request you to join the queue for any follow-ups as we have several participants waiting for their turn. The next question is from the line of Suryansh from BIZX Enterprise LLP.

[Unknown Analyst]

Congratulations. So I need to ask that after recent capital raise, do we need further capital raise in near time sir?

[Ashish Rai, executive]

Okay. I mean the short answer is no. The capital raise that we did is actually a very, very minor capital raise. It's not a significant capital raise. As a business, so like I've said on previous calls, we are kicking up enough capital to reinvest back in the business and can support the organic growth of 25% to 30% level. And the additional capital that we raise is it sort of improves the strategic flexibility for us a little bit as we go into an environment where we see some very large opportunity. Our revenue to react to it improves slightly, right? But it's not a huge amount of capital raise, it's a very minor capital raise, right? So that is the only ambition behind that. It sort of improved the strategic flexibility over the next 12 months to react to significant opportunities, which we think may appear, right? So if they don't appear, it's essentially used internal corporate purposes.

Do we need more capital long term. So this is what is happening to the business, right? What we said is, first, choose the segments we did that. Second, build out assets in each of the segments that will compete, we've done most of it, right? Third, go out and expand organically in each of those, be ready for scale, right? So if you go back and see that vision 2030, the period in the middle is that scale readyness period where we say -- because product business is not the same. If I want to grow 30%, doesn't mean we have to go and have 30% more people. I need to actually have far lesser people, but then I need to tie the whole thing end-to-end, right from how we design, how we fine-tune how we manufacture even we've got a bunch of manufacturing facilities for electronics out in Southeast Asia as well as India, how we get the software side right, how we get the operations side, right? So you need to get the whole thing, fine-tuned as we really scale.

So I can -- we can see a situation where we have built out a lot of products and we are ready for scale from design to manufacturing tool software and we can deploy more than the amount of capital that the enterprise is kicking up. But I would say if we ever reach that situation, that would be to support growth rates more than the organic 25% to 30% that we've been committing. So the short story, 25% to 30% to support that growth, I don't think we need any excess capital.

[Unknown Analyst]

And one last question was that, sir, are we also playing something in the insurance side or not like we are in banking? Are we playing in something insurance also?

[Ashish Rai, executive]

Not in any significant way at the moment. We've been talking to a few insurance clients in terms of supporting their digital efforts and especially on the payment side. But we are in the U.S., it's by happenstance, but essentially, we have become some sort of a key link in the payment chain in the insurance business because of our license technology being used by some of the very large payment facilitators to the insurance business in the U.S., right? So we've been exploring some conversations in the insurance space around leveraging the payment technology further. But that's not an insurance domain offering. That's essentially a payment offering. It's just that an insurer happens to use it.

[Operator]

We'll take the text question from the line of Paresh Toshi. One next-generation treasury application, in GTA, issuance of RFP, a [ previous ] meeting for the caption E tender was conducted at 3:00 p.m. on June 23, 2023. This was attended by the company; two, when can we expect RBI license to operate as payment aggregator. Please throw light on the about 2 matter.

[Ashish Rai, executive]

I don't think they're too are linked. I think the information that you picked up on the participation in the RFP, if that is an open thing than just go by what it says, I'm pretty sure it doesn't say anything about the payment licenses, right? So the 2 things are not meet.

[Operator]

Next question is from Umesh Matkar from Sushil Financial Services Limited. Congratulations on a great set of results. Can you explain on Revique Healthcare SaaS platform and how it fits to your current business model?

[Ashish Rai, executive]

Just on the previous one, right, I missed answering the second part of the question, which was how long does it take for us to get the license, right? So while I'm pretty sure that actually RFP point made and the payment thing is not linked. We are going through the process in terms of fulfilling the operational parameters that RBI needs for them to come in and do the inspection and do that, right? So I think that will take a few months before we get into that inspection. As we get to that milestone, we will inform in the right forum as we as we get there, right? So coming to Revique. It's -- it's a SaaS platform, which focuses specifically on specialized kind of practices. We've built up a platform that if you are a specialized health practice, on Medpass, you can actually use this as the main software to onboard new patients to manage your practice and to enable all the payments around it.

Now this platform has come out of an acquisition we did 12 months. Okay, I may be wrong in the time, but last year, which was for Hello patients. And what we've done is we've combined our payment technology with some of the software that was getting built around Hello patients. We completed the software or we completed large parts of it to be delivered to one part of the market. and combine that with the payments technologies, and that's what we've launched, right? So this is still a soft launch where we're going out and fine-tuning it for the initial set of prospects and clients, and then we intend to push it a lot harder, right? I think the even if you walk just the MedPass space in the U.S., that's a huge space, and there is a clear edge we have on the payment side of things in terms of really enabling seamless transaction for the client, right? So I believe we have some real value to add in terms of the experience that a client gets from the practice. Both in terms of onboarding regular use in practice as well as the payment side, right? So that's essentially the plan.

[Operator]

The next question is from Mayur Damani as an individual investor. Congratulations on a great set of numbers to team Aurionpro, in spite of the biggies not able to deliver on a high base and business model. What is our strategic planning for future orders that is beyond INR 800 crores and 4 quarters from now, expanding in U.S.A., MEA region and others.

[Ashish Rai, executive]

Okay. I would not speculate on where the order book will be in 12 months or 24 months. I think that's I don't think that's really very relevant to our planning. For the next 12 months, honestly, we need very little sell and deliver to the next 12 months revenue. As I've said a few times in the past, when we look in the near term, which is 4 to 6 quarters, demand is less of a problem than capacity. What we need to get is our capacity in order, what we need to get is end-to-end, make sure the chain is so tight that we are growing while enhancing our delivery operation, not putting it at least as we grow too fast, right? So the challenge for us is not that.

In terms of new business that we really need to close to deliver the next 12 months, that is a very, very small amount and 75% of that would come from the existing clients, right? So it's really not a big thing in terms of order book expansion, right? Over the longer term, we plan to grow at 25% to 30%, the revenue, roughly 1/3 of our revenue every year is new revenue, so which is basically needs to come from the sell and deliver, right? To deliver that 1/3, you typically need to sell about kind of 17% more than that, right? So I think that is essentially what the sales number should be at, but the way we go is we really go bottom up, we go product by product. We set a number of what we can take, honestly, at the moment and then derive the revenue from that, right? And we will sell correspondingly what is to deliver that number, right? I don't think we are in a situation to really go all out and capture as much of sales as we realistically can, right? Because I think the way to look at it is this. In most of the segments, we are extremely competitive, whether it's transit, whether it's banking, extremely competitive, right? So if your limit is your revenue to take business, not your avenue to sell, you would want to calibrate sales to make sure you're not sort of engaging the capacity right? So I think that is essentially what we are doing. It's not blindly sell as much as you can. It is decide how much you need to sell to deliver the 25% to 30% and then calibrate the sales there in terms of how much capacity you put on the field, right.

Now that does not take into account some of these new strategic partnerships that we formed because honestly, we don't know what that would drive in terms of future sales. right? So there, that is one sort of variable, which we're not planning for at the moment, which may increase the amount of sales we may have to take, but we will sort of cross that bridge when we come to it.

[Operator]

Ladies and gentlemen, that would be our last question for today. I now hand the conference back to Mr. Ashish Rai for closing comments. Thank you, and over to you, sir.

[Ashish Rai, executive]

So thanks, everyone, for joining the call. Q1 I think, was a good demonstrator of, I suppose, the continued success of our strategy. The journey we are on is a long journey. So 1 or 2 quarters do not really -- they are not so material in the larger scheme of things other than as proof points to say whether we are going in the right direction. In that sense, Q1 was an encouraging quarter for us. We will remain focused on delivering to our plan of growing 30% to 35% this year and maintain the margins that we are at. I look forward to seeing you in the next earnings call. Thank you very much.