Intellect Design Arena Ltd

NSE:INTELLECT

Earnings Call Transcript 2025-Q2

[Praveen Malik, executive]

Intellect Design Arena Limited financial results for the second quarter for the fiscal year 2024-'25 ending 30th September 2024. The investor presentation and the press release has been sent to you and also available on our website. Our leadership team is present on this call to discuss the results. We have with us today Mr. Arun Jain, Chairman and Managing Director; Mr. Manish Maakan, CEO of IGTV; Mr. Rajesh Saxena, CEO of iGCB; Mr. Banesh Prabhu, CEO of IntellectAI; Ms. Vasudha Subramaniam, CFO. Besides, some other senior members of the Intellect management team are present in the call.

Now I hand it over to Vasudha to take you through the financials and later, Mr. Arun Jain will give his comments on the same. This would be followed by a Q&A session, where your questions will be replied by the senior members of our management team. [Operator Instructions]

I would like to remind you that anything which we say which refers to our outlook for the future is a forward-looking statement. This must be read in conjunction with the risks the company faces. With this, I request Vasudha to give her briefing. Over to you, Vasudha.

[Vasudha Subramaniam, executive]

Thank you, Praveen. Good evening, all. Thank you for joining us today. It's my pleasure to welcome you to our investor meeting. We appreciate your continued support and interest in our company. Today, we will provide an overview of our financial performance to discuss key highlights from Q2 and share our strategic outlook for the future. Together, we look forward to achieving our shared goals.

Let me start with the financial overview. Our revenue for full year '24 stood at INR 25,064 million. We are a zero debt company with a cash balance of INR 7,760 million. We are specialists in financial technology and open finance design. Complexity reduction and transformation design are in the core of what we do. We have strong partnerships with Microsoft, Oracle, Accenture to name a few. Intellect is on the path of continuous innovation and spends 2 million hours every year on research, investments spread across 34-plus nationalities.

Design thinking is in our DNA. As you know, we opened the world's first design center for financial institutions in 2013. We have had more than 6,000 visitors across 60 nationalities from more than 150 banks visiting us till date. There have been an OP 600 walkthroughs till date. These design centers are the incubation hub for our innovative and customer-centric products.

eMACH.ai, our first principles thinking based, most comprehensive, composable and intelligent open finance platform, having 386 microservices, 2015 APIs and 650 events. With this state-of-the-art platform, we transform everything, the enterprise, the experience and the operations. Let's get into the performance overview.

Our total revenue for the quarter stands at INR 556 crores, with license contributing to INR 85 crores and AMC contributing to INR 120 crores. Our license-linked revenue is INR 250 crores for the quarter, and our annual recurring revenue stands at INR 662 crores. Our gross margin is INR 298 crores, which is 54 percentage and EBITDA is INR 79 crores at 14%. At this juncture, I would like to mention that we had signed a deal close to INR 3 million in Q2, but could not accrue it in Q2 due to delayed sign-off. This would have taken our EBITDA to more than INR 100 crores. Collections during the quarter amounted to INR 550 crores, and our cash position as at the end of Q2 is INR 755 crores. We had 12 deal wins, and we went live on 9 digital transformation projects during the quarter. Our DSO outside India is 190. And in India, it is 270, which makes the overall DSO at 146.

For the half year ending September ' 24, total revenue is INR 1,161 crores with INR 210 crores coming from license, INR 241 crores from AMC and INR 112 crores from the platform revenue. We have had 23 deal wins during the half year and 21 new deal transformations have gone live. PBT for H1 stands at INR 127 crores and PAT stands at INR 168 crores. In the last 12 months ending September '24, our total revenue was INR 2,344 crores with INR 468 crores of license revenue and INR 470 crores of AMC revenue. EBITDA for the period stood at 20%, and we had a PBT of INR 408 crores. In the LTM, we had 53 deal wins, and we had gone live on 52 digital transformation projects.

Talking about revenue mix, 39 percentage of our revenues are in USD, followed by 18% in GBP, 16% in INR, 7% in euro, 6% in CAD and 14% from other currencies. The numbers that we went through in the previous slides are presented together in a tabular column here with further more details. eMACH.ai is accelerating growth with deal wins and digital transformations in Q2, which are detailed in the forthcoming slides. eMACH.ai has been selected by 12 customers across the globe in Q2, and these financial institutions look forward to embrace enterprise connected intelligence through the first principles thinking based open finance platform. We have 6 deal wins in the Americas, driven by eMACH.ai. Our corporate digital transformation deal in the Americas paved way for our entry into the Mexican market.

Our Magic Submission and eMACH.ai Xponent, a highly capable offering has been inked by 5 large and specialty insurance firms in the U.S. In Europe, we had 2 major deal wins. eMACH.ai Xponent for easier underwriter consumption will be used by the U.K.'s largest business insurance provider and a U.K.-based leader in global finance with a huge asset size of EUR 1,478 billion will be using our payment solution. We continue to offer low-cost and reduced risk products to all our clients.

There are 4 deal wins in IMEA. Our cards platform has been chosen by a large foreign bank in India. Our wealth platform has been chosen by one of the leading banks in Saudi Arabia. A Tier 1 lender in Kenya has chosen our eMACH.ai lending platform and the largest bank in UAE has chosen eMACH.ai CTX to power their customers with higher returns on their cash capital. We have made 9 digital transformations this quarter. The icing of the cake is the significant digital transformation deal going live with our liquidity and CTX in a global Tier 1 bank. This is the largest program in the bank, impacting processing of about $15 billion per day and runs in 50-plus countries on a single instance.

Here are some of the analysts endorsements that came our way. Datos Insights has recognized eMACH.ai Magic Submission as an intelligent document processing ecosystem solutions provider and eMACH.ai digital lending has been identified as a vendor providing AI functionality in business lending. Celent has recognized our Xponent as an underwriting workbench with strong decisioning tools. Chartis has recognized our credit lending operations as leaders in 5 different quadrants. And Gartner has recognized us as a representative vendor in digital marketing, multichannel solutions and commercial loan origination solutions.

We are proud to celebrate our excellence in human capital. We have received the Gold Award for excellence in creating a culture of continuous learning and upskilling at the Economic Times Human Capital Awards. Secondly, we have been honored as the most preferred Workplace for Women Award 2024, '25 by the Republic World and Team Marksmen Network.

We have a funnel of INR 8,889 crores as of Q2 with Destiny deals accounting for 64 percentage of the funnel size in the quarter. The average deal size of the Destiny deals is INR 50 crores and our Destiny deals as a percentage of the total opportunity size was about 60 percentage. Our funnel has grown by 18 percentage over the last 1 year. The number of Destiny deals that are being pursued have also increased from 74 the same time last year to 88 this year.

In summary, we have a healthy funnel, and it is getting stronger and stronger as quarters roll by. The total high-value active pursuits to are continuously increasing and are 88 in number as of Q2. Overall, we have 7 won, 5 lost, 73 carried from previous quarter and added 14. The number of wins is more than number of losses, and we have also added more than what we have won or lost.

Thank you so much, and over to you, Arun.

[Arun Jain, executive]

Thank you, Vasudha, for taking through the numbers. So first of all, in my commentary, I think this quarter's financial results are not in line with expectation of analysts. What Praveen Malik mentioned, safe harbor statement that we can't predict the future. We try to make it possible. So it's not just smiling, but I think from an investor perspective, so I'm looking at analyst perspective, different from investor perspective.

From an investor perspective, last quarter, accrued significantly in terms of 2 main shifts we are doing. So if you're observing as an investor in last 6 quarters from March '23, we are shifting eMACH.ai towards to drive the aspiration of having a larger business from U.S. and Europe and Australia, so advanced market share we wanted to increase, and that's how we shifted our pivot from product to the eMACH.ai because we analyze the customer needs more deeply that they need 2 ways. One is legacy modernization space or second is application rationalization space. And these are relevant from eMACH.ai perspective. So that is a shift we first changed the technology. So first 3 quarters, we spent time in changing the technology landscape. And then in the last 3 quarters, we are approaching the problems in a different manner.

And this time, if you see it, we have close to 2/3 of the deals is from advanced markets. So out of 12 deals, 8 deals are from advanced markets. So that's a big shift, which we are looking at it. Second shift we are doing is around distribution network. So a lot of time in last 4 quarters or last -- we are building a trust among the 4 influencer in the market, Deloitte, KPMG, EY, and PwC. So these are the 4 key players from a consulting side who are influencing and buying decisions.

We are working with BCG and McKinsey as a key Board level intervention. And there are 7 SIs we are working on distribution networks. So our distribution partnership team, which is the second lever for our predictable revenue is coming from that area. So first shift is towards getting a higher-margin business and a larger window size. Second is towards building a sustainable revenue. Those are larger canvas which we build around the largest suite of eMACH.ai.

As soon as we move to Americas and Europe, I think we need to -- these large institutions, which we are working, which is Tier 1 institution in the space of what you call JPMC or Citi or HSBC or Wells Fargo, these are the names which are [ tender ]. All these names are desirable name in any product company that they are a customer, whether it's HDFC or ICICI, all of them, ENBD, all of them are those kind of customers which needs to be there.

Now for each of them, the only problem is that each customer requires 5 bridges to be crossed for closing the deal. And with more and more global volatility, the risk department is taking longer and longer cycle time to close each bridge. The bridge #1 is business manager, where we need to sell the concept. Bridge 2 is my technology, CIO, Bridge 3 is my architect. So once I qualify all the 3 bridge against an RFP and I win the RFP, in spite of that, it takes 6 months to close 2 next bridges. Next bridge is procurement and fifth bridge is contracting. It's close to 5 bridges we need to cross to have these deals. So some of the deals which we already are in contracting stage, which I'll ask Manish and Rajesh and Banesh, what we are looking at it, how the business opportunity we are looking at it. And those deals are still -- your question would be whether our guidance of 15%.

So I think now at this point of time, I would say we stopped taking the guidance because the deal values are large, like what Vasudha has mentioned, there's a deal of $3 million, which got signed just 1 week later because the paperwork of 15 signatures, one signature happened only on much later date, then the whole deal should have been signed. Now that has impacted, let's say, the INR 100 crore EBITDA versus non INR 100 crore EBITDA. There are at least many more deals of similar nature, which is there, which is already -- we won the deals. It is still in the contracting process. So it's not for a defensive position that we are postponing, we are postponing, but it's the nature of business what we are in. And that's why I'm addressing the investor that this is a core issue of our business model because we are looking for a big-sized ARR.

So we are looking at single ARR of $1 million, single ARR of $2 million. The annual recurring revenue of $1 million if you were to sign, normally, small, small start-up will sign $20,000 ARR, $30,000 ARR. We are talking about ARR of $2 million. Now those are the ARRs which are creating a huge value for the company, but it's taking an equally longer time for signing it up and multiple [indiscernible] time of evaluation.

So shift 2 is on distribution. Microsoft, we are working very closely with them. And now we are the top 5 player in banking and financial sector. They have chosen us in that category now. So entire lifting up of the Microsoft has gone up. AWS is doing a similar job in other geographies and our financial sector inputs in that area. On consulting firms, we now have full-fledged organization. We opened a new office of partnership in Bangalore to service these partners and doing the boot camp with them. And then global service -- global integrators. So now we are ready with our integration at eMACH.ai with iTurmeric and Purple Fabric, we are ready to let go implementation to our partners. And we have successful implementation in Philippines, one of the large deals where Accenture implemented our solution, and that's why we are building a good capacity with Accenture. So this is on distribution side.

At this point of time, I would like to invite Manish how he's seeing AI in insurance and wealth.

[Manish Maakan, executive]

Thanks, Arun. I think I'm going to stay on the same theme that Arun brought up. I think if you've seen your company over the last couple of quarters consistently has been winning insurance deals in North America. Our insurance business is primarily focused on North America, and it is a complete 100% AWS SaaS subscription platform. I think over the last quarter, and Vasudha just highlighted all the deals we've won, we've got a good amount of 5-odd deals every quarter that we are doing. But there are 2 frames to this, right? One frame is the continuous focus because we've got a very large set of leads. We have over 300 leads actually in the insurance business. And I think the leads are focused on certain set of segments of insurance carriers, brokers and wholesalers in different insurance business lines where we continuously expect that every quarter, we will sign subscription deals.

Now all of you know that subscription, as Arun mentioned, ARR gets accounted every quarter on a monthly run rate basis. And therefore, the revenues that you sometimes see do not justify in the shorter term, the subscription revenue, but they grow significantly over a period of time. We've got over 25 customers in North America right now in the insurance business. But what's interesting is we just completed the recent sort of mega event for insurance in the world, actually, not just in the U.S. It's called the ITC event in Las Vegas, where we actually shared the primary booth, which had almost 300 people come to it. We shared the presentation jointly with Microsoft to the whole panel. I think almost 9,000 people attended it.

So I think our insurance business that you are seeing and your company is seeing is actually a very solid frame of businesses. Now we have a bunch of deals, which are pretty large ARRs to Arun mentioned. And we're also seeing some people based on the sheer size of the business and the growth that they're seeing, would also like to consider doing license deals. So we are actually very flexible in the way we approach how we can help the customers succeed. And just to remind everybody, we are under -- we are sort of the best in underwriting ecosystem in the U.S. As a matter of fact, recently, we've been awarded again for 2024, the Luminaries Award by the leading property and casualty insurance analyst that covers pretty much through an independent panel the insurance capability.

So I think what I would like to say is that this business momentum is growing. And it will both for large deals as well as smaller deals on a regular basis, keep growing your subscription revenues. So that's a bit on the insurance side. I'm going to touch on the very exciting area of AI, your platform Purple Fabric. We've had pretty much all the partners that Arun mentioned, leading audit companies, some clients of ours. I think we've done over 35 sessions in the last quarter. And what this platform does differently from -- because there's a lot of noise, there are a lot of AI platforms there in the market today. I think what our platform does different, it helps financial institutions manage their data securely because we know all the security threats that today exist on data, both information security as well as privacy.

We help them govern their AI initiatives because many people are trying small pilots. There's a lot of noise. There are lots of companies going after small use cases using ChatGPT and various type of large language models. I think we believe that our financial institutions, we owe to them a very stable platform to manage AI. And we've got a very good complete platform, which is very well accepted by both the leading audit companies, the consulting companies as well as some of our leading clients. And we have actually 3 very good deals, one of them has gone into pilot. Two are actually -- we have won in the U.K., which are in the process of contracting. And I'm sort of hopeful over the quarter, we will clear out some of these contracting things.

Remember, AI is going through a significant amount of regulatory influence, new regulations coming in. So even the contracting teams do take time to put together all their signatures before they go ahead with us. But I just want to leave with you that we are probably one of the best positioned to manage AI agents and multi-agents working together to transform operations. So you'll be hearing a lot of Purple Fabric as we move forward. And we've already launched the product in a few places. So that is the other point I wanted to touch on.

Third is, of course, your wealth business is beginning to get traction. We've had 4 excellent deals. As you know, last quarter, we had a significant deal with one of the largest asset managers in the world. But similarly, we've recently won a very good deal in Saudi too. And I think our platform is well geared to be able to capture what is a growing wealth business quite significantly in most of the markets we are focused on. I think, Arun, that's a bit of a snapshot. I think longer term, the business where it stands with its leads and capabilities is really well positioned for an investor keeping in mind a longer-term return for the company.

[Arun Jain, executive]

Thank you, Manish. I think today message is on the release is also Purple Fabric announcement. This is a very, very unique platform. Last time we promised to have a session with the investor separate session, Banesh, maybe we can schedule -- it's pending from the last call. We should do a separate invite to what Purple Fabric and what AI -- because a lot of investors don't know what they don't know. And it's a very, very noisy, as you mentioned. So if you can have a -- schedule a session in the next 2, 3 weeks, Praveen for investors to session only. Last time they requested it, I think we were so busy with the client and prospects that we didn't pay attention to the investors. So maybe whosever is interested, they can request and participate for an understanding of what the market is doing, what Palantir is doing and where are we -- where the customer who is using Palantir, they are finding opportunity to talk to us.

Okay. Now it's Rajesh, if you can look at core banking, which is a big area of change and transformation, which is being heard about it, where are we in that journey?

[Rajesh Saxena, executive]

Sure. Thank you, Arun, and good morning, good afternoon and good evening to everyone on this call. Let me give a little bit of a business commentary on where we are from a GCB perspective. And in line with what Arun and Vasudha talked about our focus on advanced markets, let me pick Europe as an example and talk about what's happening in Europe. You've heard me talk a little bit about Europe for the last couple of years about how our strategy is pivoted around Europe. And I think over the last couple of quarters and years, we have been building investment -- we've been making investments and building our Europe sales team, presales team, delivery team, et cetera, so that we can have a critical mass there.

And Europe from a couple of years back, where from GCB Europe was a very small proportion as a percentage of revenue. This year, in fiscal '24, '25, my estimate is that Europe will be more than 25% of my revenue will come from Europe. So that's what we've been able to build. Let me give you a little bit more color around Europe. So I think if you look at it from an existing customers' perspective, you would recall that we have had a couple of wins in the past. We talked about Santander U.K., a subsidiary where we've got a core banking side. Happy to inform the investors and analysts that we've been able to renew this contract, and we have actually renewed it with a further more work.

A couple of years back, we also announced the deal with Auto, one of the second largest e-commerce player where we provide our core and lending platform. There also, we've been able to -- the customer is very happy with us, and they have -- actually, we've been able to increase our footprint in Auto. So the strategy of increasing our -- and trying to do more with our existing clients is working very well in Europe.

From a new client perspective, though we couldn't sign large deals, and I think Arun talked about that, we have 5 deals where we are in the last stages from a Europe perspective. Two of them on core banking is in U.K., 2 are in Continental Europe and one, of course, is in South Africa, which is a multi-country rollout. So I think we are seeing our proposition, our references, our investments that we have done. And hopefully, in the next couple of quarters, we hope to close these deals and bring the license revenue in. So that was a little bit about Europe. I also wanted to take a minute to talk about that learning from iGTB Oxford, where iGTB Oxford has been able to make a Sage brand and doing this transaction banking event.

For the first time from November 4 to November 7, we are having a central banking event on similar lines that we do in GTB, where we are doing this in Oxford at the Rhodes House, where we now have about 50 central bankers and these central bankers range all the way from governors to deputy governors and executive directors attending this event with us, and we have about 30 speakers, confirmed speakers globally coming into this event.

So this is the kind of effort and thought leadership that we've been able to create into -- in Europe. And this is something similar that we are doing in other parts of the world. So I just thought I'll pick up Europe since Arun and Vasudha talked about it. And sitting where I am, I'm feeling very bullish about some of these deals. So hopefully, in the next couple of quarters, we should be able to see good results. Thank you, Arun.

[Arun Jain, executive]

Thank you, Rajesh. I think the important is the eMACH.ai and core banking, we are able to implement in Santander U.K. or Auto, they are happy customers because a lot of times, this transformation never completes. A lot of people promises -- now just PNG, one of the largest -- one of the bank has gone live on core banking transformation in 7 months' time. It's the fastest transformation. And it's on the website. Their Chairman is publishing that how they help the customers to go live in 7 months' time. So that's, I think, the differentiation which we are creating over our competition.

Manish, it's your turn for your GTB brand and large account access you have, the dream account access.

[Manish Maakan, executive]

Thanks, Arun. I think -- I feel quite proud that we've implemented a successful market strategy by aligning all our eMACH assets, both IP and talent across Tier 1 and Tier 2 banks worldwide. Our core strategy has always been to grow with customers globally and extend to other regional or local banks in the market where we enter through global Tier 1 banks. So that helps us to be -- remain with the market leaders and establish the market leadership brand. This alignment has fostered deep trust and strong relationship with the top 60% of the banks across all continents, and this leads to high-quality revenue growth consistently for us.

Our steady stream of wins has demonstrated the continued success and impact of this strategy. We, in this last quarter, moved 2 very, very large banks, close to $1 trillion of their assets deposit base from one platform to the other. And it's been very big success for them. So our capability to execute large execution is also a proof point consistently in our winning strategy. This has now further been strengthened with the enterprise-grade eMACH cloud availability, which in the last 120, 150 days, which Arun has been talking about, we've been rolling across markets. The big differentiation this offers now is that our core capabilities are available in a unified solution, and they have embedded AI into the core platform.

This also excites all our system integrator and consulting partners now that they have capability to effectively rollout and implement these things. Additionally, what we have been doing is work along with McKinsey and BCG to better articulate the unique value we create for wholesale banks. I think we are one of those unique partners who understand the depth of the corporate, understand what a retail industry, what an oil and gas industry, what different industry core needs are, and we are able to compose composite solutions for each of the corporates using that.

Based on this, in the last quarter, we managed to close 4 significant deals across Americas, Europe and Middle East. And notably, 3 of those 4 were the existing customers where they bought more capability, more IP from us. And the fourth customer we opened up in a new Mexican market. The beauty of that is that a number of senior execs from this bank had experienced our wholesale banking CBX in their previous roles, in their previous lives. So consistent endorsement and high NPS has helped us continuously to win with these markets.

I think looking ahead, I see a robust pipeline of about 10 deals we expect to close. These are deals between INR 20 crores to INR 30 crores across the next 4 quarters. And I look at the 4 quarters as 2 different horizons. H2 FY '25 as the first horizon and then HY FY '26 as the second horizon. For this period, I'm quite bullish. And we just concluded last week a very successful [ Sibos ]. There were apprehensions of it being in Beijing. But despite that, we managed to pull good amount of customers and prospects, and we had over 130 meetings over there. I'm looking forward to monetizing these connections and strengthening our sales funnel further with this successful event conclusion.

Thanks, Arun. Back to you.

[Arun Jain, executive]

Thank you, Manish. I think the overall commentary to me is we are more busier than any point of time. I personally visited 20 different cities and met the customers and met the prospect. I think that the kind of appreciation we are getting from the market is that we are better than any other architecture framework, which is there. I would say this is a journey of Intellect 3.0, where we are looking for now expanding some sales investments in next 4 quarters. So there will be some additional cost on the sales investment because there's the right time and we can leverage it, whether it's in the sales for Purple Fabric. And we were discussing multiple times that should we take AI business out of Intellect, but we believe that AI business is a core part of our strategy and it works integrated way, but we need to make an investment.

We are sitting on a large cash pool of INR 700-plus crores in our kitty. And this is the time when we'll be putting some investment into expanding the sales network in U.S. and Europe. Our proof point has been established in the last 6 quarters. So that's the most important piece is that we wanted to prove whether it's working or not. And first 3 quarters was just a concept selling. But after that, it became a real good value creation where we can have a deep conversation with CIO that how can he reduce his cost by $50 million over the next 5 years, what kind of a conversation we can do at a strategic level. We lifted our conversation from product level conversation to a strategic level conversation with the customer, and that's where the significant deeper relationship we can have.

So we have close to around 35 accounts where there is a potential of each account to become a $10 million to $20 million size in next 3 to 5 years. And that is a potential which itself can become $500 million to $700 million business. So I think that's why our excitement is very, very high, and all of us are traveling. Rajesh is in U.S., Banesh is in London. So all of us are in different part of the geographies in this period.

So I know your numbers of this quarter are not met, but look at it overall perspective from an investor perspective that the company has got better assets. We had such event happen in the last 6 years of journey that every 3 years, there is something drops down and then come back again. So this is, again, an opportunity for somebody to find investment opportunity in the company.

Thank you and willing to have some questions.

[Operator]

Thank you, Arun. Now the forum is open for Q&A. [Operator Instructions] First, we have Mr. Vivek Kumar from [indiscernible].

[Unknown Analyst]

My question is, when will we get back to this EBITDA being above 20% and that is definitely is a function of the deals. And every quarter, we are missing a few deals at the -- not missing, sorry, a few deals are getting postponed to the next quarter signing up and because of that, margins are getting affected. So -- and last 2.5 years, you have been investing in eMACH.ai and all these new platforms. And from the Investor Day, you were saying and you are so positive because you're looking at the current demand and future prospects.

So when do you think all these products will fire up and we will definitely stay above 20% margin and good growth. When I say good growth, about 10%, 15%, irrespective of all these kind of small, small events because these are not big things like huge recessions or COVID kind of thing. These are like one deal getting signed or delays. Even accounting for delays and minor disruptions, when will we, as a company, go about 20% and stay there? 2 years, 3 years...

[Arun Jain, executive]

It will be. I think 20% EBITDA margin is not a big issue. Even LTM is still we are 20% plus on an LTM basis. It's only maybe next 2 quarters, we'll see the significant shift if you look at it on an annualized basis. So we are quite bullish about it. 10 deals in Manish, 5 deals in Rajesh, 3 deals in Banesh are all more than $3 million deal, each of them. So even if we are able to convert out of those 18 deals, 6, 7 of them will be above 20%.

[Unknown Analyst]

So growth, sir, growth can -- when will we get back above this? Because we have designed our company as architecture 20% growth. Because of this GeM and your investments taking time to pay off, I think this is getting delayed. So when will we get back to this predictable 15% growth?

[Arun Jain, executive]

Last quarter, I mentioned about INR 700 crores annual run rate. So I think our target in the next 3 quarters, we should have at least 1 quarter above INR 700 crores.

[Unknown Analyst]

So sir.

[Arun Jain, executive]

Which is a lucky quarter could be, that's another point of view because deal sizes are big.

[Unknown Analyst]

Sir, on the digital core banking, can you throw more light of -- because you said we have come to the top 3, and we are fighting deals, how many deals are we fighting in the digital core banking? And how are we faring with respect to competition terminals and thought mission. So if you can -- Rajesh, if you can throw more light, deeper light on that?

[Arun Jain, executive]

Rajesh?

[Rajesh Saxena, executive]

Yes. So I think we are seeing good traction in the core banking space. From a market perspective, I think we are seeing good traction, and we are seeing a lot of banks who were earlier apprehensive of doing a core banking transformation coming into core banking transformation space. So I think from a market perspective, it's a good sizable market. Of course, some banks may have different strategies. Some may have hollowing the core, some may have other strategies. But the market size is good.

And I think from the deals that we are invited for right? We are seeing competition space either from Temenos or sometimes from new thought -- from new age players like Thought Machine or Mambu, et cetera. And I've said this multiple times, but let me repeat it again. We are in a very sweet spot because we have the latest technology stack, right, which a new age platform brings, but we also have the domain, the domain and the width of the product. So we are really in a sweet spot for able to do. And whenever we are competing, I would say that we are winning as much as a Temenos will win or a Thought Machine will win. So top 3 players, and we are seeing good traction in that.

The other point I wanted to make was that last year, we had announced the win of OTP Bank in Hungary, OTP Bank, just as a reference point, is like the HDFC or Central Eastern Europe market. It's a very prevalent bank there. And we are right now in the process of implementing for OTP and the kind of maturity our platform is getting because of what we are doing for OTP, I can confidently say that from a platform perspective, we are going to be the world's best platform from a core banking perspective. So that's why there is so much of bullishness from that perspective.

[Unknown Analyst]

Arun ji, someone mentioned that clients are more preferring license deals because of the -- is there any shift towards clients preferring license or it's just a random remark?

[Arun Jain, executive]

Listen, both are there. I think the people last year on bank preferred license revenue. Sometimes they look at it, we want to sell recurring revenue because that's for 10-year deal value, recurring revenue of $1 million is a $10 million revenue, while license of $2 million doesn't give you that. And our values are like FLEXCUBE, if you look at it, the Oracle OFSS. The value is more is like [Foreign Language]

We have more value getting created in this kind of product. So this annual ARR, we prefer. But if customers have a very large deal value running into $4 million, $5 million license revenue number, where the AMC itself is $1 million, we are okay to go for a license revenue.

[Unknown Analyst]

Sir, last question. On the BaaS, 2 years back, Manish ji said we are trying to do it in Americas, North America and advanced economies. How is the traction in the BaaS strategy that we have taken?

[Manish Maakan, executive]

We did announce a deal in quarter 1 on that in the U.S. market, and we're working with 3 or 4 more of those in, like I said, out of the 10 deals in the marketplace. See, it's -- I would want to add to what I said, BaaS is one thing. The second significant shift is embedded AI in our platforms. And that's what everyone is looking at of how I can transform my operations with AI. Doing it outside the platform versus -- because of our Purple Fabric assets, our capability to orchestrate within our platforms. I think that's the magic bullet right now, which is creating my excitement as a big differentiator in the market.

[Operator]

Next, we have Mr. Umang Shah from Banyan Tree Advisors.

[Umang Shah, analyst]

Two questions. How much investments are we planning to make in eMACH.ai in terms of setting up sales offices in North America and Europe? That was the first question. Second is that North American banks have been very reluctant to move to newer technology, be it core banking or be it cloud-native platforms. So what gives us this confidence that the eMACH.ai platform that we currently have will help these North American banks leapfrog from their 30-, 40-year-old legacy systems to the current micro services architecture. What are the conversations that have changed over the last 2 years, which were not changing for the last 10, 15 years? Those would be the 2 questions.

[Arun Jain, executive]

Responding to the first question, I think in next 6 quarters, we should be spending around -- we have to still work out the details on the investment with close to $20 million. We are -- in the Board meeting, we were discussing about it that it's an opportunity. It's a lowest cost investment because products are ready. People take time to build the product over here. We have invested last 10 years in building the product. Now it's the time of GTM. So it takes 9 to 12 months for sales team to start realizing the value what is invested.

To respond second question to you on why American customers are more open right now. I think the cloud technology and AI technology, I think what Manish has mentioned, embedded AI is a sweet spot we are getting because we are talking about enterprise-grade AI platform, not ChatGPT as a transactional grade solution. So we are embedding AI into trade system. We are embedding AI into lending system. We are AI into underwriting system. So that's why our U.S. customer is the entry point for us is AI now.

So AI is a starting entry point, and then we build up a story around microservices. So they are not looking to change entire core banking system, but with my iTurmeric and Purple Fabric, we are able to offer application rationalization, which is a space which is emerging because they are running, let's say, 30 applications, which are fragmented with a fragmented database. With AI, we are able to consolidate those 30 applications into 2 applications. That's a big win for their perspective. So that's how we are addressing to build a trust in U.S. So I must appreciate your deep study in the market that they will not be changing core system. We are also not asking them to change core banking system.

[Unknown Executive]

Arun, just wanted to add, if it's fine, right? So thanks for the question. One of the things we are seeing, at least on the insurance side, everybody is using a cloud-hosted multi-tenanted platform. But on the banking side, the interesting thing is eMACH, because of the nature of its architecture, can coexist along with legacy. So I think your ability to be able to take certain pieces and not transform all of core banking at one shot, I think is a very, very interesting way of actually implementing and coexisting along with legacy regardless of whether you go to a cloud solution because we are agnostic on cloud and eMACH, you could take parts of this, compose it and actually execute it to actually improve the priorities for a client and get good business outcomes rather than expect to do a full transformation, which was something that many people had to do in the past and had its own challenges.

[Umang Shah, analyst]

Great, sir. This is very helpful. Thank you for explaining this. So because we are reluctant. I mean, the banks are reluctant to do full transformations and our entire pitch around our core banking system, IDA core banking system was that we would ease this transformation for these banks and help them move to a much more componentized nature, then wouldn't eMACH.ai actually compete with your core banking product, which you have for the banks?

[Arun Jain, executive]

Core banking product is embedded into eMACH.ai. So all the micro services are available like in Auto payments, which is the largest company, we embed the core banking micro services into their application. So I think we need to just explain you more clearly that micro services, what we said 386 micro services, we may choose 15 micro services to make an application rationalization, which can coexist with the existing core in a Phase 1 and Phase I and Phase II. So that's what we are proposing that we can help the bank to reimagine banking rather than a modernization.

[Unknown Executive]

Arun, just adding to what you said, look at some of the modern new core banking players, the difference between what they have and what we have is they just have an SDK. The domain depth of those capabilities is really lacking. Our experience and expertise of rolling these things out across these large Tier 1 banks across so many markets. So we have a modern technology, which has been recomposed on the eMACH architecture as well as our 30 years of depth of expertise. You don't overnight become that expertise. You can read a ChatGPT, but ChatGPT doesn't give you depth of knowledge. Depth of knowledge comes by the experiences. I jokingly say cars we have on our backs, building and learning through this 30 years of journey, you can't underestimate that for any new competitor. Enterprise-grade technologies are not built overnight.

[Operator]

Next, we have Mr. Ravi Mehta. Mr. Ravi Mehta from Deep Financial. Ravi?

[Ravi Mehta, analyst]

So my question was more on the environment. So we hear a lot of IT service company giving good commentaries around BFSI demand uptick. How is it for you, at least when we compare it, say, 3, 4 quarters back and now, when we see this deal signings delayed, at which leg it is getting delayed, whether it is the concept selling stage or the compliance or risk, or just want to understand how the environment is changing and where exactly the delay is happening, if it's at the closer end of compliance and all it is still okay, whether the initial pitch is getting sailed through. Just want to understand that.

[Arun Jain, executive]

Okay. So I think if you look at the lead generation process to the closure process, we call it, P0 to P5 6 stages of the -- our lead generation process, as Banesh puts it, we have -- now we need to really take a conscious call that which are prospect to further work on it, which is how do we move from P0 to P1 to P2. So we have a good amount of traction in last 1 quarter, we added close to 150-plus or 180 leads in this same quarter in the funnel. There significant acceleration happened in the lead to opportunity, which is close to 100 leads have moved to opportunity. So there's a movement happening. And what the results issues are there, which is related to 50% of issues are related to contracting phase after fourth bridge within the deal win.

So after winning the deal from business manager, technology manager, CIO, architect, after qualification of this gate, a lot of -- we are stuck at gate 4, between gate 3 and Gate 4, we are stuck at. The procurement wants to negotiate $100,000. Somebody wants to put some contract. The meeting will be -- one meeting will happen. Second meeting will happen after 4 weeks, 5 weeks. So those are the things which are -- our 50% deal gets stuck. 50% deal, which is there in the pipeline, which mentioned in a large deal, Vasudha mentioned, are in the space of where we are in last 2, and we have a superior architecture.

And some of the deals we are new to the country. So we need to reestablish our referenceability in that country. So some of the Nordic countries or some of the European countries where we don't have a footprint, our own footprint, it takes referenceability as a lever where it extends the time so they go for the reference check for the existing client.

And so a lot of deals we are in the last 2 -- so last 2, I think we are reaching in last 2 with eMACH.ai. Most of the deal, almost 80% once we are able to apply for RFP, we are in last 2. Last 2 to last one is one of the other gate, 50% deal. So 50% deal is after we have won the deal, there's a time to close with all the tick marks of auditors. So it's a big shift, which is there and all the risk committee members. So Ravi, if I answered your question.

[Ravi Mehta, analyst]

What would be the time line of closure compared to, say, maybe 3, 4 quarters back and today, like has it shrunk? Or is it getting -- if the deal size is same, I understand that you're getting into larger deals will take time, but say, a similar size deal, is it shrinking or?

[Arun Jain, executive]

For us, it's expanding. So there's no shrinkage for us. Even 12 months back, we were not shrinkage. IT services company may be shrinking, but we were not shrinking in 4 quarters back also. So our value proposition is not shrinking. All right.

[Ravi Mehta, analyst]

Okay. And just one bookkeeping question. The subscription revenues had actually fallen Q-on-Q. I thought it's sticky business when a client is getting into a subscription contract. So anything to read into it and why so?

[Arun Jain, executive]

Subscription revenue also flip on recognition system of subscription revenue because there is -- as per accounting policy, subscription revenue of license is independent of the infrastructure, one can accrue full year revenue in a quarter, while -- so those are blips in the subscription revenue.

[Operator]

Next, we have Mr. Rahul Jain from Dolat Capital.

[Rahul Jain, analyst]

Yes. So just a couple of questions. I think, firstly, to extend the thought which we were discussing earlier on the SaaS reduction. So is there an element of annualized booking in one of the previous quarter for us to have this number at this point? And secondly, is there still a GeM kind of a revenue element which could have caused this thing in the SaaS revenue?

[Arun Jain, executive]

No, there is no GeM revenue.

[Vasudha Subramaniam, executive]

There is no GeM revenue there. So -- but 1 or 2 projects, we had a high subscription revenue in the previous quarter because it's all depending upon volumes, right? So if we have a higher volume, so naturally, the subscription revenue will be higher. So that way, we had some in last quarter. Comparatively, it was lesser in this quarter. That's it.

[Rahul Jain, analyst]

Sure. And this we have observed in multiple accounts and not 1 or 2 specific clients?

[Vasudha Subramaniam, executive]

Yes. Volumes will not be consistent, right? So it will not be the same from one quarter to other quarters. So it will be ups and downs.

[Rahul Jain, analyst]

Yes, that we understand, but this is a significant decline. It's like 30% decline. So that way, of course, it sounds pretty different from that context. And we -- on the demand side, Arun ji, of course, we have explained in detail that how some of the landscape is shaping up. But from our specific pipeline perspective, what is the way to go back to our 15% to 20% kind of a growth journey? What are the challenges you see in the immediate future in case that becomes a risk from a next 4 quarter perspective to go back to 15% to 20%...

[Arun Jain, executive]

Deals are there in the pipeline. I think it's a question of when it gets accrued. So just we need some more patients in this area, which should have taken care of in 1 or 2 quarters, but we are looking for a positive numbers in the coming quarters because deal pipeline has been mature now.

[Unknown Executive]

I think, Arun, just to add to what you said, if you look back in the past also, Q3, Q4 typically are better quarters for us, and that's why the annual we say. So we just got to watch that out.

[Arun Jain, executive]

Because Q3 is -- like America and Europe, the most budget cycle is Q3, Q4. So budget cycle of America and Europe is linked to the budgeting cycle. When we have more deals in this part of the world, Asia Pacific, it's Q1, Q2 also is good. But Q3, Q4, when we are moving our focus to Americas, then Q3, Q4 will be better because the decisions are budget cycle decision, they are planned decision, while in Asia, decision can happen any time.

[Rahul Jain, analyst]

Understood. And one of your competitor, Oracle, they've been witnessing significantly higher value of cloud deal in the total license fee that they are signing. And our conversations suggest that they see significant traction from the cloud deal perspective. So is it something like that, that our positioning in those kind of deals is slightly different, and that's why we see a slight difference from the momentum difference in the last couple of quarters versus what probably in OFSS is delivering right now?

[Arun Jain, executive]

Yes. Rahul, Oracle has advantage of old deals of 20-year-old deal, which they are migrating to cloud. So there -- when I look at the study, the new wins versus migrating wins are the upgrade wins. So when they are upgrading, they are upgrading on a cloud. So that's one tailwind they are available with them. In a few of the clients, we can also have a -- like what Rajesh was mentioning, Santander, we upgraded; Auto, we upgraded. So whenever we are upgrading a client, you get a higher value and higher pricing to the deal because of the tail. We have -- we're still not as big as Oracle Financials on the existing clients, which are more than 10-year-old clients.

[Unknown Executive]

And they are trying to leverage the lost ground on cloud by subsidizing some of these deals on the cloud basis.

[Arun Jain, executive]

Even Oracle is subsidizing, yes.

[Unknown Executive]

Yes. The Oracle Cloud, they say comes at the same price. We are in competitive bids. They say whatever is the other person's bid, our bid is along with cloud. So they need to show cloud growth because that's where they're losing out with Amazon or Microsoft.

[Rahul Jain, analyst]

Understood. And Manish, to your point, and sorry, Arun ji, if I missed the comment because you were mentioning something around the guidance part. So since Manish is saying that the H2 could be good for some of your bigger markets. So are we still commenting on our annual guidance for this year? Or we are saying for now, we should be skipping that for now?

[Arun Jain, executive]

You want to pinpoint -- we don't want to give any more guidance with the kind of a volatility which has happened in the deal. So we want to avoid any guidance. What we want to do the commentary on the quality of the business and conversation quality of business. So this quarter-on-quarter pressure is unnecessary deplete our energy at the company employee level, they feel that suddenly share price move up, move down. Our momentum, which is there in the market feels positive right now. So we don't want to look at it to just have a mirror for lens for the guidance. So we don't want to give guidance out, but we are very positive, healthy about it. Still growth can be there for this year. So don't worry about that.

So how much growth can be there depends upon out of the 18 large deals, which is there, how many we can close, which has almost crossed the gate of a third gate or fourth gate they crossed.

[Unknown Executive]

Rahul, we genuinely feel responsible for the growth we have to deliver. It's also balancing medium to long term. There are challenges. I could close deals by dropping price. We are driving the right value and right margins for the organization. We're expanding the footprint. The most beautiful thing is now cross-sell of all product lines into large Tier 1 banks with GTB really won them early. There's a lot of effort on there. AI is behind us. It's just 2 quarters we've come off GeM. And H2 is always better than H1. These are factual statements. I'm saying none of this is an emotional comment. I think we need that confidence and support from each one of you in this journey. We have enjoyed it. We look forward to that.

[Rahul Jain, analyst]

Yes, it's definitely heartening to hear that. And we are sure in the last 7, 8 years, Intellect has been the fastest growing in this category. So we don't have any question around it. We're just trying to understand the current state of things. Best wishes for the time being. Thank you.

[Arun Jain, executive]

Thanks for appreciating that.

[Unknown Executive]

Thank you, Rahul.

[Operator]

Next, we have Mr. Rohit Balakrishnan from ithought PMS.

[Rohit Balakrishnan, analyst]

So sir, just a couple of questions. So you, in your opening remarks, talked about distribution actually, we are focusing a lot. And even in the last couple of calls, you've been -- or last 3, 4 calls, you've been talking about. So at this point of time, is it possible to share some quantitative numbers in terms of how much -- how many deal wins are coming from -- maybe in this quarter or in this H1 from the distribution partners or in terms of value, anything that you can share? And out of the ones that you've been talking about where you are very confident or we have sort of moving quite forward in terms of getting the deals. Have they been like facilitated by the distribution strategy that we have won, if you can share?

[Arun Jain, executive]

Yes. I think we will not be sharing the numbers because there are multiple partners get involved into one closing the deal. So giving a reference to some deal where there will be a GSI will be involved, there's a consulting partner will be involved and there's a Microsoft, AWS will be involved. So all the 3 partners will be involved to create a trust circle with the customer. So sometimes it's a direct GSI who is becoming a front end for me. Second time, he is becoming providing a comfort, which I mentioned that when we are in a new country and you have referenceability issue.

The anchoring of the trust comes when the customer talks to one of the consulting partner, one of the GSI, one of the scalers -- cloud scalers. If they heard the name, it helps us out in winning the deal and providing the comfort because he loves the technology, but we are new in the market compared to the many other players like Temenos is 30 years old or Infosys is 30-year old. We are new in the market. And that's where this ecosystem is working. So we're not able to specify a separate line item of distribution deals, but now they are playing on -- the network effect is happening now.

[Rohit Balakrishnan, analyst]

Sure. So sir, I mean -- so if I look at our -- and I've been tracking our company for some time now, almost 6, 7 years or even more. So sir, if I look at, let's say, over 2016 or '17 till, let's say, '23, we grew about 15%, 16% in terms of our revenue, even if I exclude GeM from that, right? And over this time, I mean, our more products have become mature. In the first journey, it was GTB, then GCB and now even insurance and even wealth is getting -- again, geography-wise also, we are getting more and more traction in advanced markets.

So forget the immediate issues because of either GeM from the revenue base going away with distribution tailwind also coming and us getting more and more -- I mean, last 4, 5 years or as I said, 6, 7 years, has been around 15%. If I take a longer-term view, 3, 4 years, is it right to say that probably we will better that growth rate, given -- I mean, on the headwind side, there are issues in terms of geopolitics or slowdown, et cetera. So I mean, how do you see that?

[Arun Jain, executive]

Rohit, I think very good -- the way you put the question across is also very nicely of 6-, 7-year traction, how we get it. And in spite of all those headwinds of Brexit and all those issues happened during the past, we can't predict that. But around 15% to 20% growth rate, I think we are all comfortable for the next 3 to 5 years because this technology is available, which is meant for 20% growth rate. Specific year, specific quarter, we're not able to look at it. But if you say 15% growth rate year-on-year for next 4, 5 years, our margin growth will be 30%, 40% year-on-year.

[Rohit Balakrishnan, analyst]

Right.

[Arun Jain, executive]

So EPS growth will be 30%, 40%.

[Rohit Balakrishnan, analyst]

Right. Sir, actually, that was my second question. I think I had asked this question in the last con call also. I think in the first question that Vivek asked, I think 20% as you also said, 20% we are anyway doing. And in the last call, I had asked that the journey towards closer to 30%, and you said 6 to 8 quarters. And in this call, you're saying that maybe we'll have to invest given the opportunity. So are you still confident that over 6 to 8 quarters, we'll get to that 30% or given the investment of $20 million, maybe there is some delay or...

[Arun Jain, executive]

I think I'd not like to comment on it. I think let the time tell us that how the market will behave and what we'll work it out. But you have seen some 5, 6 years improvement can happen because it's all dependent on license number. Our costs are now stabilized. INR 480 crores last year -- last quarter, it was INR 483 crores. This time, it's INR 477 crores. So it's a total cost is INR 6 crores lesser than the last quarter. It may go to maybe INR 490 crores, INR 500 crores, if our revenue number goes to INR 650 crores, INR 675 crores, suddenly EBITDA number will be much higher. So all these are calculable numbers for you, Rohit.

[Rohit Balakrishnan, analyst]

No, sir. Actually -- so of course, license -- I mean, obviously, if we win the deals, definitely that operating leverage will come. No. I was actually asking -- I mean, from a cost point of view and from an investment point of view that you said...

[Arun Jain, executive]

Only sales investment are more rare.

[Rohit Balakrishnan, analyst]

Okay. [indiscernible], I mean, assuming the deals, there is no delay, et cetera, I mean that's a big assumption I'm taking. But in that journey, 6 to 8 quarters or probably 10 quarters, the margins you think -- I don't want specific numbers. I'm just trying to see directionally, we are getting towards that number of closer to 30% margins? Or is that still -- I mean, given you are seeing more...

[Arun Jain, executive]

Yes, yes, definitely. 30% margin directionally 3 years from now, we are definitely there. Definitely, directionally, we are 30% margin business here. Otherwise, we should not be wasting time on us. So many of senior leadership is sitting here.

[Rohit Balakrishnan, analyst]

Sure. No, no, absolutely, sir. And sir, just one last question, actually 2 just numerical questions. Sorry, sorry, just -- sir, one was that balance sheet-wise, I mean, post GeM, we thought our balance sheet will probably become slightly more better in terms of receivables and unbilled revenues, et cetera, that cleanup has happened or yet to happen? I mean, in the sense, has that gone away from the balance sheet? And if you can just give that? And second, I'll just quickly ask, is it possible to share revenue from Advanced Markets broad number that we have, let's say, for the last 12 months? These are the 2 questions, sir.

[Arun Jain, executive]

Yes, -- you'll note it down, but GeM hangover is still the area that a lot of money is sitting to the GeM kitty. So we'll park it that way. Government of India, how the payments are. Now since we are not even in the system, we are struggling on the money collection from there. So we have to go something different to collect that money. So that bucket, we need to keep separate, and I'm suggesting CFO to publish non-GeM DSOs and collection, which is there. So that will make the balance sheet stronger.

[Rohit Balakrishnan, analyst]

And sir, advanced market revenue, if you can share broadly?

[Arun Jain, executive]

Yes. We will look at it.

[Operator]

Next, we have Mr. Harsh Jhanwar from Avendus PMS. Harsh, quickly, can you ask the question.

[Harsh Jhanwar, analyst]

My question is -- I just have one question to Manish. Manish, in our strategy analyst meet 1.5 years back, you mentioned the strategy where we'll be able to cross-sell more. So in FY '23, we -- product per customer was 2.9, which we were supposed to take to 4 per customers by FY '26 and increase number of clients by 101 to 150, hence in the process, increasing market share by 2.9% to 6%. So where are we in that journey...

[Manish Maakan, executive]

Thank you for remembering like I gave, I think the strategy remains same. The results remain same. I briefly mentioned that 3 out of 4 deals in the last quarter came from existing customers in cross-sell. And fourth was also somebody who had bought from me before in their previous roles and lives. So that continues to win. I will share that specific statistics more. What I'm feeling far better and more good, I would want to say is those were limited to the GTB portfolio. Now there's a lot more focus of all other products for Intellect with eMACH.ai, our ability to execute and sell and for the customers to consume because we are in-built in their environment, that is improving, and that's what you will see a lot more success on. Over the next 3, 4 quarters, you will hear a lot more cross-sell of other products into this portfolio.

That's maybe one of the reasons we are saying we are bullish about Americas and Europe. AI is one enabler. This is second. We've established our proof point of our strength of co-banking. The first one is difficult, but the number of wins on co-banking independently, we have also executed in Europe in the last few quarters is further adding to that strength. So...

[Arun Jain, executive]

Actually the strategy there Manish is, we look at the strategy for GTB, then GCB, then AI. Then we look at the strategy, first, Asia, then Europe, then Americas. So U.S., we are only spending time just 2 years back. So it's going step by step, and that's a very calibrated strategy for the investors with the way we are approaching the market. And that's how we prepared eMACH.ai to cater to the U.S. market because U.S. is a [indiscernible]. If you have a $1 billion company, U.S. has to give us $300 million from there.

[Manish Maakan, executive]

And if you look at last 2 quarter results, we are saying number of deals from U.S., you could go back and see, is that a significant number or not?

[Operator]

Next we have Mr. Rohit [indiscernible], individual investor.

[Unknown Attendee]

Like some of the other callers have been following the business for 6 or more years. And I mean, I had the luck to see the design center also Mr. Malik had very kindly showed it to me. Sir, my question is on the trajectory we are on in terms of distribution. I mean, in the earlier remark, you -- initial remark, you mentioned that we are in the phase where we can finally let go of implementation. And I mean, at least my study of various global leaders in the product space indicate that when they let go of implementation and focus on product development and selling primarily, that's when the growth really takes off because, I mean, implementation is a large chunk of the work because you want to control the quality in the beginning. But once that is done and you trust others to do the implementation, the growth really takes off.

So could you give more details here in terms of what proportion of our business is self-implemented versus outsourced and going forward over the next 3 to 5 years, where do you see this number going?

[Arun Jain, executive]

So as of now, I think we are doing jointly with the partners. So when we are looking at IBM or Accenture, we are working with them alongside with them. So they also have a revenue, we also have a revenue from that. So there is one portion of that business. Our focus would be that -- if it's 5 years from now, we want to keep deep customer relationship ourselves. So that is a deep relationship that we are talking about 35 accounts with $20 million potential each. Those accounts, we would like to see that there are deep relationship, deep margins are there. That strategy will be different from a normal product player because we would like to add a strategic value to the client of those 35 accounts.

While the rest of the bank, which is out of 1,000 banks, we are looking at it and out of 500 insurance company, we are looking at it. There, we are looking for the partnership expansion significantly. So that's a dual strategy over here, I would like to suggest to you. Percentages are too difficult right now to predict. Our target is 20% from partners. Revenue in next 3 years would be a good benchmark for us.

[Unknown Attendee]

So when you say 20%, is it on the overall Intellect level?

[Arun Jain, executive]

Yes, Intellect level, yes.

[Unknown Attendee]

Okay. That was helpful, sir. And the second question, see, I mean, again, as you indicated in this call, because we are not -- we cannot easily talk to the customers in terms of the product that you're implementing and because we are not part of the company itself, it becomes difficult to figure out the trajectory, and we always have to sort of wait for con calls and understand what is happening. So is there more metrics which gives us a better understanding?

Because -- I mean, I don't look at quarterly, but LTM angle say we have not done well this quarter, which is for temporary reasons, of course. But I mean, it is offset for the fact, as you said, that in many deals because of the delay in closure, we are in the last 2, last 3 level. So is there more details around that, that can be shared, which along with the numbers, gives us a more holistic picture of where we are at this point in time in terms of number of deals where we last 2 or last 3. So is that something that is possible? Because others, it gives us an incomplete picture and we are not able to reach the right conclusions.

[Arun Jain, executive]

Rohit, a lot of numbers we can't share just because competition is there. So the problem is all the investor numbers are competition tracked. We have seen whatever you are sharing in investor conference are going to competition and next time the strategies change. So we are very guarded right now what should share, what not to share. We don't mind sharing with you, but the question is it's a public domain.

[Unknown Attendee]

Understood. Fair enough.

[Manish Maakan, executive]

This is absolute resource of how technical analysts are assessing us. They look at both as qualitative feedback and assessment of products as well as who is the best-selling product. So there's enough data points, third party, which you can also access.

[Unknown Attendee]

Yes. I mean, fair enough. The analyst coverage reports are helpful for sure. And sir, my last question basically is if I see over -- I mean, if you can help me with understanding over the last 2, 3 years, we've talked about how we are reaching the deal ends, but we still have, let's say, 7 wins this year -- this quarter, 5 losses. So in general, how has been our win-loss ratio? And how has been our trajectory to reaching the last stage of different contracts over the last 2, 3 years? Is that something that you could discuss in the call?

[Arun Jain, executive]

Not on the call, let's see. That will be difficult to discuss. It's too many things are there in this last windage. Sorry, we are just running out of time. So if next only one more investor is there.

[Operator]

Arun, we are done with this, but there are only 2 repeat questions. Can we take it or we can close it?

[Arun Jain, executive]

No, -- thank you. Why can't you send it to me. Happy Diwali to all the investors.

[Operator]

Thank you, everybody. Vivek and Rahul, you can send your questions to me, and then we'll take it forward from here. And thank you, everybody, for attending the call today. Now we are closing it.

[Vasudha Subramaniam, executive]

Thank you.

[Operator]

Thank you. Now you can log out.

[Manish Maakan, executive]

Happy Diwali to everyone.

[Rajesh Saxena, executive]

Happy Diwali to all.