Aurionpro Solutions Ltd
NSE:AURIONPRO

Watchlist Manager
Aurionpro Solutions Ltd Logo
Aurionpro Solutions Ltd
NSE:AURIONPRO
Watchlist
Price: 1 563.35 INR -0.62% Market Closed
Market Cap: 86.3B INR
Have any thoughts about
Aurionpro Solutions Ltd?
Write Note

Earnings Call Transcript

Earnings Call Transcript
2023-Q2

from 0
Operator

Good day, ladies and gentlemen, and welcome to the investor call of Aurionpro Solutions Limited to discuss the Q2 and H1 FY '23 results. Today, we have with us today from the management Mr. Ashish Rai, Vice Chairman and President; Mr. Vipul Parmar, Chief Financial Officer; and Mr. Ninad Kelkar, Company Secretary.

[Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Aashvi Shah from Adfactors PR. Thank you, and over to you, ma'am.

A
Aashvi Shah;Adfactors PR

Thank you, Michel. Before the call, we would like to point out that certain statements made in today's call will be forward-looking in nature, and the disclaimer to this effect has been included in the earnings presentation shared with you earlier. The investor call may contain forward-looking statements based on the currently held beliefs and assumptions of the management of the company, which are expressed in good faith and in their reasonable -- and their opinion, reasonable.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statement. The risks and uncertainties relating to these statements include but are not limited to risks and risks for expansion plans, benefits from fluctuations in our earnings, our ability to manage growth and implement strategies, competition in our business, including those factors which may affect our cost advantage, agent fees in India, our ability to attract and retain highly skilled professionals and our ability to win new contracts, changes in technology, availability of financing, our ability to successfully compete and integrate our expansion plans, liabilities, political instability and general economic conditions affecting our industry.

Unless otherwise indicated, the information contained herein is preliminary indicator and is based on the management information, current plans and estimates.

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

A
Ashish Rai
executive

Thanks, Aashvi. Good afternoon, everyone. Welcome to the earnings call for Q2 FY '23. This is my first interaction with you since my appointment in the last quarter. The company has so far, of course, been communicating actively with the investor community through releases, through announcements, but we've not held an interaction like this for a long time. Going forward, we plan to continue such engagement regularly for every quarter as we go through.

Before we get into the financials, let me spend out a few minutes to update you on the developments within the firm over the last 3 years that we've not posted a call like this before, right? 3 years back, we started our current journey to revisit our strategic direction and focus on building out a global IP-led products and platform provider, sharply focused on a few chosen segments. Now, these segments are banking, smart mobility, payments and smart cities. This strategy leveraged heavily on our established track record and capabilities in working with clients across banking, across transit and government institutions across the globe, right? So as you can see, the strategy has worked very well for us. And you can see this reflected in the sharp improvement in our performance across every parameter that we track, more materially revenue, profitability and the increasingly strong balance sheet that we have, right?

We've now registered 10 consecutive quarters of strong positive quarter-over-quarter growth, as you've seen, and we continue to see a strong growth momentum in the business and very healthy and sustainable profit margins. As a key part of our strategy over the last few years was to defocus from businesses, which either did not fit the target segments or the target economic profile. And you've seen this in terms of some divestments from noncore businesses that we've done such as cybersecurity. This has allowed us to get to this point, where we are building out industry-leading IP and capabilities in our chosen segments. Each of these segments enjoy very long demand runways from what we can see, and we feel very confident that all our businesses are poised for a long phase of high growth.

We also feel great about the growing external validation of our strategy to build out a leading global IP. For example, our banking and fintech segment, our solution for loan origination for collateral management and limits management, we participated for the first time in Chartis' RiskTech Quadrant reports.

Chartis is a highly respected independent global analyst, and we were the only Asian software provider to be squarely in the leader's quadrant worldwide in each of the 3 categories. The loan origination, collateral management and limits management, right? This is a huge validation of our strategy to build out Tier 1 industry-leading IP in that space.

Similarly, if I look at the Technology Innovation Group, the TIG segment, we focused on building out one of the most complete cutting-edge end-to-end, highly integrated offering in the transit payment space. A great proof point of this, how competitive we are with this technology was, for example, the RFP in California for transit [indiscernible] highly global competitive tenders, competing with the best names across the world that we won, right? We've logged similarly an impressive number of wins in this space across U.S., across Latin America, Africa and of course, a number of wins that we announced in India, in the transit space as well, right. So going forward, we will continue to focus on strengthening the economic mode that we have in these businesses through the IP edge and keep executing with discipline so that we capitalize fully on the really large long-term growth opportunities that we see in front of us.

If I get briefly into the key financial metrics for the quarter, Q2 FY '23, we saw a very strong growth in the key metrics on a year-on-year basis. Revenue for the quarter stood at INR 155 crores, is up 26% year-on-year growth and up 6% on a Q-o-Q basis. This is solidly in line with the company's estimates for FY '23. EBITDA for Q2 FY '23 stood at INR 35 crores as compared to INR 27 crores in Q2 of FY '22, which is a growth of more than 30% on a year-on-year basis. And again, a 6% sequential Q-o-Q basis. Our EBITDA margins for Q2 stood at a healthy 22%, which is comparable to the level we've been at in Q2 FY '22 as well, right?

Profit after tax Q2 FY'23 stood at INR 25 crores, which is a growth of 32% on a year-on-year basis and a Q-o-Q basis, that's a growth of more than 4%. The margins for profit after tax grew at 16%, which is higher by 100 basis points, if you compare year-on-year. On a half yearly basis, the company has exhibited significant growth as well. The revenue for H1 FY '23 was higher by 25% on a year-on-year basis. The EBITDA and the PAT, respectively higher by 31% and 44% for H1 FY '23 on a year-on-year basis. You can find all the details in the investor [indiscernible].

So while we've seen strong growth in the business on all fronts, there have been some execution delays in the quarter that have affected the cash flow and working capital. As you can see, the receivables and working capital loans have increased during the quarter. Some of this expansion is totally because of the organic growth as a side of the business growth and some of it is caused by a working capital mismatch that we've seen due to execution delays in the quarter. We've seen some inordinate delays in arrival of materials, due to global supply chain disruptions in some large projects under execution, which ultimately delayed the project milestones amply. The teams that have since been working on this, they have executed very, very well to resolve these issues. And most of these projects are expected to go live very, very soon. So we will have the better position for the business back to the normal leverages soon as these projects go live.

During the first half of FY '23, we also successfully completed our investments, the strategic investments that we announced in Aurionpro Toshi Automatic Systems, ATAS and in Hello Patients in the U.S. And we're fully on track to complete acquiring 100% ownership of SC Soft Singapore in the next few months.

We expect to finish the year with a significantly stronger balance sheet, to the combined effect of: one, a strong second half that we can see, a full resumption of the normal business cycle across all of our segments and completion of these strategic investments that we talked about, right? So overall, as we enter the second half of the year, we feel we're well positioned to meet our performance target of growing the top line by 30% for FY '23, while sustaining the margin profile for the business that we sustained so far in the year. We continue to see very strong demand across the key segments. And as a business, we remain focused on continuing the growth trajectory through the year and into the next year, right?

That's all for me for now. I hope this has given you a useful overview of the overall business context and our strategy and performance. I look forward to addressing any questions that you may have.

Operator

[Operator Instructions] The first question is from the line of Umesh Matkar from Sushil Finance.

U
Umesh Matkar
analyst

Congratulations on a great set of results. I have just 2 questions. So first, if you could provide the breakup of order book segment-wise as on date. And also in data center, we're seeing huge investments like the UP government inaugurating its first hyperscale data center. So what sort of opportunity do you see in data center as well as in other segments like kiosk, Murex, smart city and smart mobility.

A
Ashish Rai
executive

Thanks, Umesh. Yes. Great question. Thanks for joining the call. So let me start with the data center question first, right. So we -- as those who've been tracking the business would have known, we got into this business over the last couple of years. And over time, we've brought together a very strong set of capabilities, one of the most respected teams in the country, as well as some serious IP that we are building out in this year.

So we've been going out and logging a number of very notable wins in this space. You are totally right. This is a space which is seeing explosive of demand. There's a lot of investment that's happening in the country, and we see that happening through the year as we go on, right? So we will continue to capitalize on it. It's a business that is certainly growing very -- but it's a very strongly growing business for us.

We do not declare growth rate at a sub-segment level. So I will leave it at the remarks that it is growing at a faster pace than the combined business for us, right? And we continue to see very strong demand. We've been growing capacity in the business, and I'm sure we will -- it will be a strong driver of growth for us, going forward.

On the Murex business, again, it's a very specialized business for us. It's a symbiotic relationship for us. In which case, we're looking at bundling some of our solutions, especially on the FX distribution side together with Murex as well as working with Murex on implementing projects. We've seen -- again, it's one of the businesses that outpaced the overall business growth. And we see us being -- it being a very strong strategic relationship for both of us, which will drive growth for us in the future, right?

Coming into the breakup of the order book is -- again, we will probably not declare the order book exactly at the segment level. But one, we've declared the overall size of the order book, it stands at INR 700 crores plus right now, north of INR 700 crores, and we continue to add to it every quarter. The second thing to look at would be TIG is about 2/3 of the book and banking and fintech is about 1/3 of the book, right? And both these segments continue to add to it as we go on, so every quarter as we go forward, we are accumulating onto the order book, right, as we go. That's -- hopefully, that gives you a good flavor of where we are.

U
Umesh Matkar
analyst

And I had just one question on the presentation that you have given. So TIG. This includes what -- which segment? So TIG is sale of software and sale of equipment -- sale of equipment would be Toshi, I guess, right?

A
Ashish Rai
executive

Yes, partly. So TIG, so that Technology Innovation Group for us. That segment includes transit, which includes Toshi in it as well as well as the validator side of the hardware that goes into transit payments, right? So one part of it is the Toshi side, the manufacturing side as well as the validators, which get done from our Singapore subsidiary, which is at SC Soft, right. So that goes in, plus it also includes our smart city business and the data center business as well.

U
Umesh Matkar
analyst

And what would be the sale of software and sale of equipment?

A
Ashish Rai
executive

So yes. So what does it mean? So the sale of software and equipment shows up on the license -- the sale of equipment and product licenses number that we're showing on the slide, right? So that is one, the software licenses from both sides of the business, which is banking as well as TIG and plus the equipment that's going through on those [indiscernible].

U
Umesh Matkar
analyst

And also, if you could quantify on the opportunity that you see on the segments that you have mentioned, and that would be great as to what is the pipeline going forward for the segment?

A
Ashish Rai
executive

So okay, 2 ways to look at it, right? So one is, as I said, the order book, most of it, which is executable over the next 4 quarters, it already stands at INR 700 crores plus and keeps on increasing every quarter as we go, right? So that points to a good level of demand as well as a good ability for us to convert that demand, right? So that is one, and that keeps on climbing. We will not declare the pipeline numbers explicitly because pipeline is a function of conversion.

But I would put it at several times, the order book that is staying there, right? So we are converting at a good clip, and the pipeline stands at several times the order book. A good indicator of -- I think the reason we don't want to get into quantifying the actual overall demand for these segments is the following. As you see in -- in banking, for example, right? The intent is to build a globally competitive IP business, right? And that's a good proof point for me. I say lending, it's a large global segment.

We are absolutely Tier 1, the -- on the Asian vendor, sitting squarely in the leaders quadrant in loan origination, on the banking book side of collateral management and limits management. This is a huge space. As you would know, corporate loans is at the heart of any wholesale bank, right? It's a very large segment. I have a globally competitive IP, which gives us a ride to win. So now how much -- the problem is not the demand. The idea is, how much of that demand can we tap into because when we compete, given how competitive we are, we will win our fair share.

So what we are focusing on is now expanding the distribution of this product out to U.S., out to Europe, out to Middle East, out to markets we've traditionally not been in. If I quantify the target addressable market, it would be a very large number. I don't think that is a constraint for us. The idea is lets capitalized on the demand by expanding distribution, right. So that's why we don't get into declaring the overall size of the market.

Same thing with transit. It's a very large global segment running into billions. We are building out one of the most competitive fully integrated stacks in the space. And we will go out and compete. As you can see, we're already winning in U.S. We're already winning in Latin America. We're winning in Africa. And we strongly believe we are just about scratching the surface. It's again a question of strengthening the distribution and capitalizing on that demand. So I would probably summarize it by saying demand is many orders of magnitude more than the order book of what we are selling right now, right? So the question is, how much of that demand can we tap into.

U
Umesh Matkar
analyst

I saw in the press release, where you mentioned, good growth expected from the kiosk segment. But however, on the latest quarter, there hasn't been any traction. So going forward, do you expect that segment to pick up?

A
Ashish Rai
executive

So we are seeing a very strong demand in terms of pipeline growth in the segment. Again, at a sub-segment level, we'll probably not explicitly call out numbers. But as you would have seen the recent guidelines from the Reserve Bank of India around digital banking units, and we see a lot of momentum within the banking space. We see a lot of momentum within some of the other segments as well, in terms of the demand coming through. Again, we are working on expanding out the scalability of the business, but we feel very good about the growth in that business if you start looking out 2 to 4 quarters.

Operator

[Operator Instructions] The next question is from the line of [ Umang Shah from India Bridge Capital. ]

U
Unknown Analyst

My first question was, I think you were one of the 3 vendors selected in California mobility marketplace. So 2 part questions. One was how is the response that you're getting from the local transport authority there? And the second part was, we had applied for both processing and validated suppliers, but we were selected only in validated segment and not in transaction processing segment. So what was the reason for the same?

A
Ashish Rai
executive

Okay. So that's a very good question. So one, we chose -- so for -- when we were getting into the RFPs, we chose to participate on the validated side of the business because of the relationships that we had and the POCs that we turn to support it, right? I think we did not participate on the other side of the business due to strategic reasons on the bid. We -- so we see very good progress in terms of rollout on that contract. So it was obviously a very competitive win for us. Now that we are in California has -- and I may be off by this in a little bit, but give or take, 300 transit operators, and we are already in -- on the rollout of the first 5 or 6 that we started working on. This would be a pretty long-term project for us, and we are investing quite significantly in building out the business in California and in U.S. overall for that space.

U
Unknown Analyst

So what was the revenue from this marketplace in sitting in the books today, for the quarter or for the half year?

A
Ashish Rai
executive

The revenue projection…

U
Unknown Analyst

No, no. What is the current revenue? You said we're started off with 5, 6 operators, right? So what is the revenues that has currently accrued to [indiscernible] accounting spend for?

A
Ashish Rai
executive

So for us, I think it's north of $1 million so far. Yes.

U
Unknown Analyst

And sir, one more question was, after 2017 Nagpur Metro, we have not really won any new deals in the Indian metro system at least I think 2018, Noida was the last one that we won. While there are different players taking the different metro projects and the entire slab is based on [ NTNC ], is what I understand. So do you envisage that the entire system will go to one player eventually or all of you can coexist and your -- what stops us from winning new contracts?

A
Ashish Rai
executive

So it's a question of where we participate and where we don't, Umang, but I think we have one of the most compelling competitive offerings in the transit space in India today, and we've logged a fair number of wins after Nagpur and Noida, which are -- obviously, they continue to expand as well, but they are fully live. We were in a Kanpur as well, which, together with our partners in a consortium bid, which we've again rolled out.

We've also announced wins in the space for UP Transport. We announced for Haryana Transport as well, and we continue to pass quite a number of other bids, right? So India transit is a very strongly growing business for us. We see a very strong momentum on the demand side. We see -- we actually see very strong conversion rates from our side on the bids that we want to participate in. I think we need to expand capacity, which we are working on to again continue to capitalize on demand and the growth. But again, that's a business that's been growing very strongly for us.

Operator

We have the next question from the line of [ Darshan Zaveri from Crown Capital. ]

U
Unknown Analyst

Congratulations on a great set of numbers. So my question is about -- a bit about our long term, which is maybe in the next 3 years, where do we envision ourselves as because we've been growing at a good rate, and we have made some recent acquisitions also. So what kind of a growth lever do we look forward in the next upcoming 3 years or a long-term plan.

A
Ashish Rai
executive

Thanks for the question. So look, what we've done so far, right? And I covered some of it in my opening remarks, we are building out a global IP-led products and platforms provider, right? We chose a few segments to operate in each of these, we believe, are segments with one very large demand runway. Second, we believe fragmented or uncontested leadership in some of those spaces, right?

So what -- I don't see it as a demand which will go away in, let's say, 3 years or 5 years or 10 years, this is very long term, very, very long demand on this, right? So we chose those segments. This is banking. This is transit. This is smart cities and the government work that we do within the TIG group, there are a few segments like data center, the partnership with Murex, et cetera, where we again look to capitalize on demand, right?

So these are very, very long demand. We will continue to reinvest back in these businesses to keep on growing at a level. As we said, 10 strong quarters -- consecutive quarters of strong Q-o-Q growth and we'll continue to press the peddle on growing these businesses, right?

When we talk about what strategic M&A, for example, as a lever that we use. We are sharply focused on completing out the offering. So how do I increase my wallet share with the same customer? So if you actually look at most of the announcements that have happened from us, we are looking at fleshing out the offering so we increase our wallet share, right? So 2 things. One is what is an adjacent space to where we already have an IP that we can expand to. So that's the adjacency part of it.

Second is where can I backward integrate my offering, for example, Aurionpro Toshi to again increase the wallet share on the same segment, right? So that's essentially the focus for the firm. We believe each of these segments is so large that if we keep on expanding the IP both organically by IP, I mean, the IP and the offering and the capabilities around it. Both organically as well as through strategic M&A where we can find an adjacency or an opportunity to backward integrate, we will flesh out the offering and grow in those spaces, right? So that is essentially how we see ourselves as growing.

The third aspect to it is being able to bring our IP from the various businesses together to create wider industry platforms. In the form of each of these is almost like a fintech by itself. For example, the announcement we made around ROBs, where we bring in our capabilities across payments, across digitization, across supply chain into one integrated offering for the SMEs.

From an R&D standpoint, that's not a significant or a material spend because all we are doing is bringing IP together. But from an industry impact standpoint, that is very, very significant, right? Similarly, the allocations [ play ] by U.S. So if I bring it back, we've chosen the segments. We have chosen to build IP in those segments. The focus will be continue to add to it and keep expanding to the adjacent spaces and continue to integrate the offering to get more and more of the wallet share.

We really strongly believe in all of it coming together in the service of the strategic clients that we go after. So we -- most of the offerings that if you look at it, the end economic buyers for us is the same. So we are looking at focusing on the set of buyers that you already work with and how can I keep on adding to the offering set in the service of those clients, right? Hope that makes sense.

U
Unknown Analyst

So in terms of numbers, could we expect $100 million revenue in the upcoming 3 years? And what about the margins that we -- because we've been adding new offerings, maybe our wallet share is increasing. So margins might increase also. So could you give some color on that, that would be very helpful.

A
Ashish Rai
executive

Okay. Good. So I don't think we want to -- or we are in a position to give very long-term guidance on multiyear numbers. What I would say there is, you've seen the last 2.5 years of this journey, we feel we are able to sustain momentum going out into the future, right? So I think that's where we are, we as a team are focused on capitalizing on the opportunity and continue to sustain the growth levels that we are at over the past couple of years and well into this year and the next year, right? So I think in terms of numbers, that's essentially what we would say -- in -- sorry, what was the other part of the question? I…

U
Unknown Analyst

In terms of margins, because you've made some acquisitions, you are waiting for that to be margin accretive or going forward on new products because you are developing them. So would that hamper the margins or you'll be able to sustain the margin or maybe even better them?

A
Ashish Rai
executive

Yes, good question, Darshan. So in terms of growth rates, we sustain the growth rates, right? And then when you see the margin profile of the business, so what really happened is we bet on segments, where we said the economic profile of the business matches our ambitions around margin, right? So you would have seen the last several quarters, margin has come up to a fairly healthy level. It's improved, and it's sustained at that level. We intend to operate within the margin thresholds for the existing businesses, right? So we will be able to sustain where we are. We are not -- the economic profile may improve over time, but we are not really looking at especially doing any acquisitions to help with expanding those margins because we are very comfortable with where they are, right? And the growth rate will result in the growth in earnings that will come it while you sustain the margins.

The other aspect to the business, so we are at about 22-odd percent EBITDA margin, and that's where we are more or less there, right? The other aspect to the business is the investment in R&D that goes in, we are able to, at the current margins keep up a healthy level of investment back into the product that we need to sustain the growth, right? So we will continue to keep that up at the current margin level without necessarily affecting it. As you would have seen, we are -- depending on who's looking at it, we are completely expensing out our investment side now, right? So -- or majority of the investments, right? So that's, again, a point [indiscernible] as to pack. The excess as the economic profile improves goes back into R&D and we expense it out and we sustain the current EBITDA goals.

U
Unknown Analyst

If I may, can I just squeeze in one more question?

A
Ashish Rai
executive

Sure.

U
Unknown Analyst

So I just wanted to ask about our geographical mix. So do we see increasing in maybe U.S. and that might -- so how much -- which is that geographical level, are we seeing slowdown somewhere or something? So just that's my final question.

A
Ashish Rai
executive

Yes. So 2 parts. One is across the geographies we are in, we see reasonably robust growth potential, pretty much everywhere we are. But we have a heavy concentration in Asia at the moment. In many of our segments, we are recognized as or have built up a very strong reputation as one of the top vendors in the space. And our ambition is to increasingly expand out the channel in U.S. and in Europe for at least the banking and the transit segments to go and sell more in those regions. At the moment, we are very heavy but that is the plan for the future.

Operator

We have the next question from the line of Hiten Boricha from Joindre Capital.

H
Hiten Boricha;Joindre Capital
analyst

I have one bookkeeping question. In your opening remarks, you mentioned our receivable has gone up due to increase in revenue or some delayed in the business. So can you throw some more light on this? What is -- what will be your normalized revenue by this year or which segment has led to increase in the receivables?

A
Ashish Rai
executive

Yes. So it doesn't really impact the revenue per se because project execution by and large it affects us slightly, but not usually the project execution by and large, goes on. What I meant there was, we are in the middle of executing some very large projects. And in the quarter, we faced -- so these projects include material that we need to secure from some OEMs. These are very large reputed global OEMs, and we faced or they faced temporary supply chain disruptions in the quarter, which delayed the arrival of that material and hence, delayed some of those projects.

We are working through those. And we actually resolved most of those already and the projects are set to go live in the quarter, right? So I don't believe it has a huge material impact on revenue, but it does impact these debtor days that we have, which have gone up a little bit by 10 or 12 days, right? So I think that's the impact. We do expect the revenue momentum to get stronger as we get into the second half, as these projects also go live as well as we continue executing on the new projects that we are working on, right? So that's about it on the revenue impact. It is not material, in my view.

H
Hiten Boricha;Joindre Capital
analyst

So actually, my question was on the receivable number itself. So it will be normalized -- 10, 12 days will be normalized by end of this year, itself, right?

A
Ashish Rai
executive

Yes, totally.

H
Hiten Boricha;Joindre Capital
analyst

And sir, I have one more question. You gave the order book breakup of TIG is 2/3 of our books and bankers is 1/3. So can you also give the margin difference between this? So what kind of margins do you make in TIG and in banking?

A
Ashish Rai
executive

So I'm not -- at the moment, I think, prepared to make a sub-segment margin description. I don't think we've declared that before. What I will do -- it's a good question. I think what I'll do is, we'll take it back to the board to see whether in the future we want to start breaking up the margins. I think, more or less, the comment I would make is both the businesses have a fairly consistent margin profile they've held to it for the last 10 quarters that I can see, and it's not really changing well and our averages hold within the threshold, right? So you can look at the enterprise margin number and say that we are within the range of that enterprise number in both those segments, right? We will take it back to the board and probably for the next call, we'll see if we want to declare margin levels at a segment level.

H
Hiten Boricha;Joindre Capital
analyst

Sir, I have a follow-up question on the earlier questions. I just want to understand, which -- it's from which segment, sir, banking or data center or maybe TIG, I just wanted to understand just -- from which segment.

A
Ashish Rai
executive

It's TIG. It's some specific projects in India, where we have a dependence on some large OEMs. So this is very narrowed down to some specific large projects for TIG in India. And the project is with very -- so it's typically with very large organizations as well, right? So it's very high quality debtors, we have no concerns at all on the end client or the OEMs in the space.

Operator

[Operator Instructions] We have the next question from the line of Swechha from ANS Wealth.

S
Swechha Jain;ANS Wealth
analyst

So sir, wanted to find what comprises in the revenue for sale of software services and sale of equipment and product license? If you could just help me understand the same.

A
Ashish Rai
executive

So look, those 2 categories, the sale of product, the sale of software services is essentially any services that go into enabling our products to the end client, right? So this will include implementation services. This will include ongoing enhancement and customization services, and this will include the AMCs that go with the software that we sell, right? So any services required in enablement of the software and the overall offering that we sell. So that is it. So any services.

The product and licenses is essentially the one-off sort of payments that the client makes to acquire the rights to use this, which is where we sell a lot of software, for example, on the banking side, we will sell a loan origination software or a transaction banking software. We normally charge a license for it, and then we charge an implementation fees. So the license will show up on the license breakup and the implementation services and the ongoing support will show up on the services side. Is that satisfying?

S
Swechha Jain;ANS Wealth
analyst

Yes. So in your presentation, we've given separately banking and fintech sale of software service, tech innovation and sale of equipment and product license. So the banking and fintech revenue, so it is some [Technical Difficulty] it would offer and sale of equipment, right? Am I correct?

A
Ashish Rai
executive

Sorry, I did not get that Swechha, sorry. Your line cut off.

S
Swechha Jain;ANS Wealth
analyst

So in our presentation, on Slide #7, you've given the breakup, where these differentiated banking and fintech and tech innovation group revenue and sale of software services and sale of equipment. So the banking and fintech revenue will comprise a portion of software and a portion of sale of equipment, right?

A
Ashish Rai
executive

Correct.

S
Swechha Jain;ANS Wealth
analyst

The other thing I wanted to understand is, we recently won an order the BEAM order. So I wanted to understand the INR 700 crores order book that you've mentioned, does that include this order? And does that order book also include, we have a big order from a PSU bank. And also we are doing something for the diamond industry in Surat. So does the INR 700 crores include these 3 orders?

A
Ashish Rai
executive

It includes the last 2. I think the BEAM is a very specific partnership that we announced only today. So that is something that we have to build out. It's more a partnership to really build out an ecosystem. And I think over time, it will add to the revenue. But the last 2 are orders we announced and that's included in the order book.

S
Swechha Jain;ANS Wealth
analyst

So the BEAM partnership, so can you guide us on the revenue potential for this partnership?

A
Ashish Rai
executive

Okay. So it's -- I probably cannot be very specific on the answers, right, but let me give you the context. So a couple of months back, we launched a platform called ROBs. Now ROBs is a very specialized platform where we pooled our IP from across various businesses in Aurionpro as well as with a partner to create something which we believe the industry needed. Now what does the industry need? If you look at the digital economy in India, we've heard Mr. Modi talk of $1 trillion digital economy.

We've heard -- for example, I'm just taking an example of India, it's not an India-specific platform, but if we -- India, how does the digital economy increase. Now SMEs are the heart of any economy. And we found the SME participation in the digital space as very, very low. So we don't believe we will achieve the ambition of $1 trillion digital economy easily without the SMEs participating in the economy.

So what we did was, we went back and we created a platform which we believe is very unique. It includes digitization, which is a digital store front. So if you are a SME, you want your own e-commerce storefront or you want to go into a marketplace like Amazon or a [ place cart ] or on ONDC. So we enable you to have that digital store front.

The second part of it is financing, where we go in and tie up with a number of banks and financing partners to help you manage your working capital, which we believe is a great upgrade need to the SME side. And the third part enterprise-grade supply chain functionality, which we had to a partner anyway. So this is Tier 1 supply chain functionality no matter where you are in the sale, you are a manufacturer, you are a trucking operator, you are a freight forwarder, you are a warehouse operator.

We've got the functionality for you to run your business. And this is Tier 1 enterprise functionality. But thanks to the benefit of the cloud, we bring it at a very, very cost-effective for users, SaaS price points, right? So now in digitization with financing with supply chain into one powerful offering that allows the SMEs to embrace the digital economy.

So we took this and we've now tied up with BEAM to kind of enable this same functionality for the wider agricultural ecosystem, right, which is where we can have organizations, we can have SMEs who operate on the agricultural economy to use the same platform, right? So that is essentially what we've built out. It is, we believe, a platform with a huge impact, but we are now building out the critical mass in that space and hence, the partnership and a few other partnerships we've done to start building out the critical mass.

And if -- for us, we get revenue, depending on the number of users that come on in, the potential is very large. But right now, we will not give specific numbers on the space. You have to think of it as a very fully fleshed out fintech in its own right, that we build out and we are incubating within the business.

S
Swechha Jain;ANS Wealth
analyst

so I have one more question, if I can ask you. So what kind of order pipeline are we trying to build like across which sectors or which geographies? And how many customers did we acquire, did we acquire customers in current quarter?

A
Ashish Rai
executive

So we've not been -- okay, so pipeline is very strong, right? So we will again -- it's one of the open questions with us to take back and say whether we want to declare the pipeline numbers, but it's a few thousand crores as it stands right now. So it's a very big pipeline. We obviously need to convert it to add to the order book, and we've seen a strong conversion momentum every quarter. So we feel very good about where the pipeline stands. I will take the question back on declaring the size of the pipeline.

Sorry, the second part of the question was?

S
Swechha Jain;ANS Wealth
analyst

Any customers...

A
Ashish Rai
executive

Number of customers.

S
Swechha Jain;ANS Wealth
analyst

Any new orders -- yes customers…

A
Ashish Rai
executive

New customers we added in the last quarter is close to double digits. Again, that's a number that we don't declare out fully, but overall, the number of important sort of key clients for us is now north of 100. And I think that's a very strong base for us to drive the recurring revenues.

Operator

We have the next question from the line of [ Ganesh Shetty ] an individual investor.

U
Unknown Attendee

Congratulations for great top numbers.

A
Ashish Rai
executive

Thank you, Ganesh.

U
Unknown Attendee

Sir, my first question is regarding the building of the talent pool because now as we are moving to [indiscernible] we have a lot of challenges on talent pool as a strong technology for background. So how we are going to sustain that capability add build a strong pool for [indiscernible]. Is there any strategy at high top management level within the target team so that we can be assured of meeting the growth in our future. Can you please explain.

A
Ashish Rai
executive

Great question. Thanks, Ganesh. So on talent, a few points. One, I think we face less challenge around talent compared to some of the -- or a large part of the IT industry, which are the more services focused players. I think we, on a productivity basis, because we drive a much higher productivity given the IP that we've built out for us. The talent challenge is actually not as serious overall. But of course, we are growing at 30% plus for some time. So we do need to keep growing the talent base.

We feel we have become one of the more attractive places for the right kind of talent to come in and join. Why is this? This is because one, as a employer focused on building out products, building out platforms, building out IP, we believe we are a very unique place for the right kind of talent to come in and do their best work.

So I think we see a lot of traction increasingly for talent coming in from global firms, for talent coming in for us across the globe in most of our resource centers. So we, of course, have a huge concentration in India in terms of the resource base, but we also have a fairly significant resource bases in Vietnam, in Singapore, in Malaysia, in some of the other Southeast Asian countries, as well as some places in the Middle East.

So it's -- we see, one, because of the geographical distribution of talent, we find it's relatively easy for us to get the right kind of talent. And second, our positioning as a sharply IP product-focused setup gives us a little bit of an edge in terms of getting the right talent from Tier 1 firms. So we continue to focus on one, building a good pipeline to support the growth that the enterprise sees right now, which is, we expect to be clocking 30%.

So we have to keep the talent base stretched for it. And the second piece, we also had a great help from our geographical distribution, as well as some of the strategic M&A that we did, right? So we feel very good about the position where we are, and we'll continue to work on becoming a more and more attractive place for the right kind of talent to come and join us.

U
Unknown Attendee

My second question is regarding our Toshi Aurionpro, either it is a part of the [indiscernible] growth, I feel there is a very great potential in developing Toshi Aurionpro as a separate business unit, which can is very profitable for us because it can find application in many of the industries. And do we have a plan to expand the manufactured base of Toshi Aurionpro [indiscernible].

A
Ashish Rai
executive

Yes. Okay. So we -- okay, so why did we acquire Toshi Aurionpro, first of all. It was essentially for us to backward integrate into an end-to-end offering in the transit space. We believe, together with our ATAS, which is Aurionpro Solutions Toshi System, we have one of the most integrated end-to-end offering in the transit space, and that itself has significant potential. So I mean, compared to what we are doing right now, it really enhances the ability for us to take a much larger share of the spend.

The second part is actually very interesting in the businesses that we are in, we are actively looking at expanding the manufacturing capacity to support some of the businesses within the enterprise. Now we don't really have a plan to go outside into unrelated areas. But even within the enterprise, to grow capacity to support the data center work, to grow capacity to support the kiosk work; to, again, grow capacity to support the transit business. I think that presents a very large potential for Aurionpro Toshi. It presents a very large potential for us to go in and take a much, much bigger share of the pie. And that's what we are working on. We are -- your question is very relevant. We are actually working on expanding the capacity in that business to meet the demands of the business that we see.

Operator

Ladies and gentlemen, that was the last question that the management could answer today. I would now like to hand the conference over to Mr. Ashish Rai for closing comments.

A
Ashish Rai
executive

Okay. Thanks. So thank you, everyone, for joining the earnings call. We recognize we hosted this after some time. Going forward, the intent is for us to build out on this and host a call every quarter. The goal that we have as a management team is to build out as transparent a mode of communication with our shareholders as we can. And as we go out into the future, which we feel very, very optimistic about, we will continue to share a lot more information with the participants and the investor community, both through the formal releases and announcements that we make as well as more of these calls going forward. Thank you, everyone, for taking time out to join this call today, and good afternoon.

Operator

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

All Transcripts

Back to Top