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Route Mobile Ltd
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Good evening, ladies and gentlemen. I'm Vikram moderator for this conference today. Welcome to the conference call of Route Mobile Limited arranged by Concept Investor Relations, to discuss its Q4 and FY '23 results. We have with us today Mr. Rajdip Kumar Gupta, Managing Director and Group CEO; and Mr. Gautam Badalia, Group's Chief Strategy Officer and Chief Investor Relations Officer; and Mr. Suresh Jankar, Chief Financial Officer.
[Operator Instructions] Before we begin, I'd like to remind you that some of the statements made in today's earnings call may be forward-looking in nature and may involve certain risks and uncertainties. Kindly refer to Slide #2 of the presentation for the detailed disclaimer. Please note, this conference call is being recorded.
I now hand the conference over to Mr. Rajdip Gupta. Thank you, and over to you, sir.
Thank you. Good evening, everyone. I want to start by wishing all of you good health and prosperity. As we close out FY '23, it is my pleasure to share that Route Mobile has reached a significant milestone, achieving an annual run rate of $0.5 billion in revenue. Our ambition does not stop here as we aspire to become a $1 billion revenue company over next 3 to 4 years through a strategic blend of organic and inorganic growth.
Our impressive performance in Q4 FY '23, has helped us end the year with a high note. With the quarter's revenue being the highest we have ever achieved for 8 consecutive quarters, we have delivered increased revenue and adjusted profit after tax. Despite geopolitical challenges and other headwinds, I'm delighted to share that we have surpassed most of the guidance we set for FY '23, whether it's a revenue growth, margin improvement or payout ratio to our respected shareholders.
Our performance in terms of revenue growth has exceeded expectations with industry-leading growth rate of 78% in FY '23. Even after accounting for acquisition, our organic revenue has seen a year-on-year growth of 41%. As we move on FY '24, our strong growth momentum give us the confidence of to project at least 20% year-on-year growth hence on, with overall reported EBITDA margin expected to be in the range of 12.5% to 13%.
In light of the robust traction, our new product has been gaining, we have established dedicated SBU for each unit, which includes TruSense. TruSense, this strategic division headquartered in U.K. is dedicated to addressing mobile identity and digital fraud. In era where digital threats such as SIM swap and SIM phishing are increasingly disturbing the digital landscape, TruSense stepped up to the challenge. Our intent is to offer enterprise and mobile network operator crucial, actionable, insight through an sophisticated AI/ML framework. This will enable them to proactively mitigate the digital fraud.
Further, we are pioneering efforts in password-less authentication. Another way to key focus of this vertical unnecessary on the new level of security and convenience. Apart from TruSense, we have established dedicated SBU for e-mail and conversational bot framework. For FY '24, we planned to establish a dedicated SBU for voice and a virtual contact center, and we have already onboarded senior resources to spearhead this initiative.
Key highlights from the last quarter includes, we secured 2 -- 3 new firewall contracts since Q3 FY '23 with several other significant deals in pipeline. Additionally, we deployed our first UCaaS solutions for Robi Axiata to cater to the needs of enterprise customers supporting their customer care and marketing operations. I would like to take a moment to acknowledge the contribution of our esteem colleague, John Owen. After a successful tenure of 2 years with Route Mobile, John has decided to move on.
During his time with us, he played a pivotal role in the integration of 2 strategic acquisitions, Masivian and Mr Messaging. This entity become integral to our value proposition in the CPaaS marketplace. In terms of recognition, we are proud to share that Route Mobile was awarded best use of cloud services by telecom companies and the best enterprise cloud offering in IT sector by ET ascent Business Leader of the Year Award '23.
In conclusion, in recognition of our commendable performance of FY '22, '23, the Board of Directors has put forward a recommendation for a final dividend of INR 2 per share. I will now turn it over to Gautam to take us through the financials. Thank you for your continued faith in our vision and strategy and we have to plan even more successful FY '24. Over to you, Gautam.
Thank you. Thank you, Rajdip. Good evening, everyone. Hope you and family are safe and fine. We have already uploaded our quarterly earnings presentation on our website as well as on the stock exchange website. I hope you had a chance to go through the presentation. I'll quickly summarize our financial and operating performance during Q4 FY '23 and for the full year FY '23 before opening the floor for Q&A.
The key takeaways from our financial performance in Q4 FY '23 has been the stellar revenue growth. We recorded Y-o-Y revenue growth of 61% and Q-o-Q revenue growth of 2.3%. Q4 is historically slightly muted to Q3, owing to seasonality and 2 lesser days in the JFM quarter, yet we have surpassed our Q3 FY '23 revenue in Q4 FY '23. We believe that we have demonstrated industry-leading growth, coupled with expansion of operating margins during the quarter gone by.
With such a superlative performance, we believe we are today one of the largest and the most diversified global CPaaS player focused on emerging markets, if not the largest emerging market-focused CPaaS player today. In volume terms, we registered over 107 billion transactions in FY '23, a growth of over 106% on a Y-o-Y basis. In FY '23, our revenue from termination in India, which is a key focus market for us, including both domestic and international termination into India stood at USD 207 million, which translates to INR 1,638 crore value.
Besides India, we believe some of the other key growth focus markets for us in FY '24 will be GCC countries, LatAm and Indian Subcontinent. For the full year FY '23, our operating revenue increased by 78%, out of which organic revenue grew by around 41%. During the year, we returned more than 50% of our reported PAT through dividends and buyback to our shareholders. One area, where we as a management team, continue to focus on is improvement in the operating cash flow of the company.
In FY '23, our normalized CFO to EBITDA conversion was 45%, slightly below our 50% baseline guidance, which we had given at the beginning of FY '23. You may refer to Slide 21 of the earnings presentation.
We have demonstrated significant improvement in the normalized operating cash flow generation during H2 FY '23. As our enterprise business continues to grow, it will definitely have some impact in terms of working capital. However, most of these enterprises are large enterprises with very strong rating credentials. And if need be, we can always get these quality revenues or quality receivables factored without recourse to demonstrate better operating cash flow generation of the business.
Further, the receivable and the payable cycles have steadied to a large extent. And hence, we believe the normalized operating cash flow of the company should improve considerably going forward. Notwithstanding the awards, we continue to remain committed to deliver normalized CFO to EBITDA conversion in the range of 50% to 75% in FY '24. The normalization will largely pertain to the security deposits given by us for any large strategic firewall deal, which according to us, should be consumed as capital employed.
Typically, such strategic deals -- yields, ROC in the range of 25% to 50% basis some of our past such firewall deal experience. With this backdrop, let me walk you through our financial performance. In terms of Q4 FY '23 performance, Q4 from -- Q4 revenue from operations grew by 61.1% on a Y-o-Y basis and 2.3% sequentially to INR 1,087 million. Billable transactions stood at over INR 27.4 billion in Q4 FY '23 as compared to INR 27.7 billion in Q3 FY '23 and INR 18 billion in Q4 FY '22.
Average realization per billable transaction improved to INR 0.37 as compared to INR 0.36 in Q3 FY '23. Gross profit margin stood at 21.3% as compared to 22.4% in Q3 FY '23 and 21.1% in Q4 FY '22. The slight contraction in gross margin is attributable to the seasonality in the business of Masivian and certain markets for Mr Messaging for Mr Messaging being affected due to geopolitical issues.
Adjusted for their gross margins, Route Mobile gross margins expanded during the quarter gone by. JFM, that's January, February, March, it's seasonally the weakest quarter for Masivian. And as we head into the subsequent quarters, this will improve significantly. EBITDA for Q4 increased by 91% Y-o-Y and 4% Q-on-Q. EBITDA margin improved from 13% in Q3 FY '23, to 13.2% in the quarter gone by. Effective tax rate for the quarter was 14%.
Adjusted profit for tax grew by 90% Y-o-Y and 19% sequentially and PAT margins improved from 10.2% in Q3 FY '23 to 11.9% in Q4 FY '24. For the full year, revenue from operations grew by 78% from INR 20,020 million to INR 35,692 million in FY '23. In terms of certain KPIs, billable transactions increased to 107 billion transactions as compared to 52 billion in FY '22. Average realization per billable transaction was INR 0.33 as against INR 0.39 in FY '22. We had a net revenue retention of 124%.
You may refer to Slide 12 for these KPIs. Gross profit margin expanded to 22% vis-a-vis 21% the previous year. EBITDA non-GAAP grew by 77% to INR 4,566 million in FY '23. EBITDA margin stood at 12.8% in the year gone by. In terms of operating leverage, EBITDA as a percentage of gross profit was at 58% in FY '23. Effective tax rate for the full year was around 13%. Adjusted profit per tax grew by 92% on a Y-o-Y basis, to INR 4,007 million in FY '23. PAT margin improved to 11.2%.
Net cash was INR 7,737 million as on March 31, 2023. Average receivable and payable days were around 62 days in the year gone by.
With this, we open the floor for Q&A.
[Operator Instructions] We take our first question from the line of Anil Nahata, an investor.
So that's a big set of numbers this quarter, and congratulations for that. I wanted to ask the question regarding the area that has opened up in terms of the AI filtering and other security-related platforms that you are discussing. So just wanted some color. Actually, what is the kind of market size that you see in India, this kind of product a year or 2 and also across? That is the first question that I have.
Rajdip is here. Anil, right?
Yes, Anil, right.
So the market size, I think there is still, the entire product itself is very early stage. Honestly, if you talk about market size, what is the current market size in India or abroad, I think it's a very early stage of UC with multiple operators what we are doing. I think we cannot -- we may not be able to give any kind of market sizing at this point of time, but probably by next quarter, next call, we can give you some kind of number for sure.
What will be the kind of business model that you will follow in this? Is it something like you will deploy at Telco and [indiscernible] you will be going to directly to the enterprises or a mix of both?
So if you see our data security products like Route Mobile already has a company called 365Squared. They have specialized themselves for firewall solution. And with this current deployment solution which we built for antiphishing is something for operator as well as for enterprise. So our focus is definitely going to be both the sides of the business. So just to answer your question, it's operator as well as enterprise.
Okay. Rajdip, I will look forward to some more details in the next quarter or the quarter after when you have better opportunities to explore the market. The other question that I have is in terms of a request that if you, can going forward, start putting your market share numbers for the Indian market, particularly in terms of what is your market share for the domestic as well as the international kind of business. That will be a very good parameter to judge like how Route is going vis-à-vis with the competition. And if you can give some numbers around that, it will be great right now.
So India itself is a very fragmented market, right? Tier 1, Tier 2 and then there are lots of other [indiscernible] and there is also lots of double counting that happens within, because some reseller using another reseller. So, I think, honestly -- to be honest with you, it is impossible to give some kind of a market share. But yes, we believe ourselves with our total market share for India domestic traffic is over 20% as of now.
We take our next question from the line of Nikhil Choudhary from Nuvama.
Congratulations on such a good result. First question for me is, I want a bit of understanding on what led to such a strong revenue growth in this quarter despite of seasonality. So I just want to understand what were the triggers. And with such a strong exit rate coming in FY '23, what kind of revenue growth do you expect in FY '24?
Gautam, let me just start with this question.
Sure.
We have already given guidance of 20% growth for the next year. And I think in last quarter, as we were already talking about onboarding few large banks, and I think all those banks are already onboarded, not only in India, but in Ghana and Nigeria also, we onboarded 2 large banks as a customer. Apart from that, there is a lot of traction we've seen in this market and the LatAm market as well. So I think it's the overall combined growth in all the markets where we operate. And some of the large banks has contributed a lot in last quarter, especially for banks.
Just one more. Can you give us some color on the geopolitical impact on Masivian? What's basically happening there? And when do you believe that could get resolved?
It was not Masivian, it was not, Gautam I think...
Mr Messaging. Yes, yes, yes.
Yes, Gautam, if you can just...
Yes, yes, yes. So for Mr Messaging, I mean, they traditionally have been terminating quite a bit of their communication messages into Russia. So that has got impacted quite a bit in the last quarter. And again, I mean, things to go normal, I mean, we'll have to just wait it out. But for the current month, I think for the month of April, I mean, we have insights into Mr Messaging's number. And I think things are coming back to normalcy.
I mean, the growth is coming from some other markets, while Russia is still impacted, but some of the other markets have started to pick up for them.
We'll take the next question from the line of Dipesh Mehta from Emkay Global.
A couple of questions. First of all, just want to get sense about new product revenue growth. We have said total number, but can you say what would be the organic revenue growth for the year in new product. If I do some working about sequential revenue growth, it seems to be muted on quarter-on-quarter or rather it is -- quarter-on-quarter decline seems to be the case. So just wanted to get a sense on -- from you about new product perspective because earlier, we indicated new products likely to be a higher share of revenue.
So far, it remain in single-digit kind of number, low single-digit kind of percentage mix. So if you can give some sense how it is likely to play out for us? And if you can break up it further across products, how the growth is playing out.
Second question is about the price. Can you provide some sense about NLD, ILD as well as international market? How the pricing is behaving? If you can give some sense or any changes in pricing playing out for us? And last question is about gross margin. Earlier, we indicated about over the next couple of years, our gross margins would expand and we give aspirational target of $1 billion revenue. So if you can provide some sense once we hit, let's say, $1 billion mark, what kind of gross margin one should expect?
Dipesh, let me just start with second question first and then Gautam, I think, can add. So Dipesh, I think, honestly, as we see the digital adoption and penetration is increasing day by day, but any new product has its own life cycle, and it takes really 2 to 3 months, maybe 4 months also for one deployment. And I think we have seen a very good traction in last financial year where we -- I think on the overall volume on WhatsApp, our e-mail has grown multifold.
But if -- at the same time, our revenue for SMS also grew multifold as well, right? So if you talk about if we hit $1 billion, what would be my gross margin? But honestly, we have aspiration to hit about 25% plus, maybe more than 25%. That's what I can tell you right now. But I think it's a 3-year horizon, which may change the product mix a lot, it can be over 30% also. And what was your first question?
About NLD price, right?
Yes. ILD and NLD price.
So ILD price, yes, I think there is a price increase in India, which has happened, I think, for the month of 22nd April onwards. And so -- but again, how much is going to impact the revenue of overall in coming quarters, we have no idea because mainly we have seen if there is a price increase in market, there is definitely dip in the volume. So we want to just wait and see how this quarter goes. But as for the last 1 month, we have seen -- I think we have not lost single customer because of price hike, but we are able to maintain our revenue run rate.
And any changes in international market because we operate in multiple market. India is roughly 40...
Yes. Yes. Yes. Yes, there is definitely. Our firewall is going live in Sri Lanka from 21st of May and there is a step of price increase going to happen. We are increasing price to almost $0.15. So that is one thing. Apart from that, I think various other markets where there is a firewall is getting deployed, prices are getting increased, but we have seen most of the already players adopting these prices, and they are happy to pay, and we are still serving them as a customer. So we don't see any impact.
But there are a few countries where we have an exclusive firewall deal. One of them is like Mobitel Sri Lanka, which is going live on 21st of May. I hope I'm able to answer your questions.
We take the next question from the line of Mohit Motwani from Nuvama.
Congratulations on a great set of numbers. I just have 2 questions. One on what was the Masivian and Mr Messaging revenue for the quarter? And how much of performance-linked payout is spending? And what is the quantum in FY '21, '25 that you're expecting?
Gautam?
Yes. So the revenue of Mr Messaging for the quarter, right?
Yes, for the quarter.
So I have it in -- INR 147 crores was the revenue of Mr Messaging.
Okay. And Masivian?
Masivian was, one second, INR 50 crores.
INR 50 crores, right?
Yes, yes, yes.
And how much of the payout for the acquisition that you have made and there were some performance-linked payouts, right? So how much of that will be coming in -- kicking in FY '24, and '25?
Yes. So for this current year, I think we have a payout of about 6 million to Masivian in this month. And from the earnout, it's about $2.36 million that we have to pay to Masivian at the end of this month. And the subsequent month, we have a payout of -- payout to Mr Messaging of around EUR 6 million.
Any color on what you landed in FY '24 for the full year? Any color on that?
So for the full year, the Masivian's balance payout of $6 million, I think, will be done in November. There is no other payout that is due in the financial year FY '24.
We take the next question from the line of Moez Chandani from Centrum Broking.
My first question was that I noticed that you've done some borrowings of about INR 100 crores this FY. So can I understand what this is for and what -- how you plan to utilize that debt?
Yes. So I mean these borrowings are more from a treasury management standpoint. So it's backed by cash collateral, so to say. And the borrowing has been done in the U.K. entity. And against the cash collateral that we have as deposits. So this would be positive carry transactions from our perspective.
All right. Understood. And also, I noticed that you've called out a few -- about 6 industries in your revenue contribution from select industries. So those 6 come to about 63%. Can I understand what constitutes the other 37% and how you see those industry mix moving in FY '24, any particular industry that you want to call out?
Yes. So from our perspective, I mean, we have a very long tail and when we do this analysis only for the top 150 clients. And within that, I mean, we call out, I mean, the key sectors, so to say. And at this point in time, considering the new products and the strategic business units that we have created for some of these new products like TruSense, we believe we -- that BFSI and fintech will be a very key industry vertical that we'll be focusing on in a big way, along with e-commerce.
[Operator Instructions] We'll take next question from the line of Yash Tiwari from [indiscernible].
[Foreign Language] The journey from $2,000 to $0.5 billion is really phenomenal. I have 2 questions. As much as we have got to see Mr. Gupta on different interviews, [Foreign Language]
So how much do you expect the potential is -- unrealized potential. And secondly, in terms of the South American market, there have been quite a number of acquisitions and you have set up STS subsidiaries as well. So do you see upside -- significant upside from there on the activity happening in South American market?
Yes. Definitely, yes. [Foreign Language] Our firewall solution is one of the very unique solution, which we have built from last so many years and is deployed in multiple operators globally. And somehow, I think -- I don't know what to talk about our product, but indirectly, I think it is definitely adding lots of value to our overall growth as a company. And this particular year, I think we, as a team, have taken a target to close at least 8 operators. That's the only thing I can tell you, but there are already deal which is getting closed in the next 1 or 2 weeks. That we're already in the process of that.
And maybe I can just give a guidance about 6 to 8 operators to be closed this year globally on our firewall side? Indirectly, all these firewall deals are linked with Route Mobile revenue also because if 365Squared put their firewall and they become the exclusive gateway, which means that every single SMS has to flow through Route Mobile platform. In that case, we have an advantage of setting the price for the market since we work very closely with all the OTT players, I really don't need to go in market to search for a customer because the customers are already there as a part of Route Mobile customer. What we need is just open a gateway for them the moment we have exclusive partnership with this kind of operators.
And I think this year definitely is a year for us, which is where I'm going to close at least 8 operators for sure. And with that -- and I think that's what the like when I talk about my roadmap for $1 billion revenue, I think the firewall deal will definitely contribute a lot in the next 3 years down the line in our debt journey. That's the thing I can share right now with you.
And in terms of our strategy in Latin America, I think we have recently acquired a license in, I think Chile. With that, we have access of all the operators as a direct connectivity. Now we can start selling those connectivity to OTT players all across the globe along with the domestic customer base out of Chile. We already set up our sales team in Peru and in Mexico now. We believe in the next 3 years down the line, contribution coming from Latin America is also going to be like substantial in terms of what it is today. I hope I'm able to answer your question.
Very well sir. As a retail investor, it brings a lot of confidence, and I wish you all the best, we continue staying this journey with you. [Foreign Language]
[Operator Instructions] We'll take our next question from the line of Vivek Ann, an Investor.
[indiscernible]
Sorry to interrupt, [Operator Instructions]
Is It better now?
Yes, please go ahead.
What are the comparable companies in the Indian and international landscape against which Route competes?
It's a good question. Honestly, like for us we compete with ourselves every single day. There is a huge market of over $60 billion. And I think everyone has their pie in this market. As a company, we don't want to get compared with anyone. I think we want to focus more on our roadmap, which we have defined. And if you talk about comparison, there are definitely companies available in India for a domestic market. But again, as I said, Route Mobile is a global company. We build the entire platform to serve the global customers and we all connect with over 1,000 operators, which means that there are only a few setups of Tier 1 of aggregator in the world who have this kind of connectivity and we are one of them. Okay.
And every single market, if I go, there will be some kind of a competition. So we operate from 22 countries. In each country, we may have 3, 4 domestic competitor, where at the same time, we have in India as well and you must be knowing all the names.
[Operator Instructions] Take our next question from the line of Abhishek Sharda from Hem Securities.
And congratulations for good set of numbers. Sir, my first question is regarding your guidance that you mentioned that FY '24, will be able to achieve at least 20% growth. So is it fair to understand that this 20% is organic growth? Or it isn't a mix of both organic and inorganic.
It is completely organic growth.
Okay. And we have planned for acquisitions also, right?
Yes, Rajdip.
Gautam, let me just answer this question. Route Mobile always believe that like if you want to grow multi-country and set up teams all across the globe. Acquisition could be -- is always a good option, right? But right now, I think we are in process of integrating all the acquisition which we have done in the past. And I think integration is also very key for Route Mobile to make sure all the companies which we acquired are well integrated. And I think we are fairly successful in those integration as of now.
But yes, you are right. We are definitely looking out for certain acquisitions. And maybe we cannot give any kind of a time line. It may happen in 6 months also or it may happen in 1 year also or maybe 3 months also? But as a company, we always believe that we are -- we can grow multifold if we really want to be global by acquiring certain local companies. And we may -- we don't want to shy away with that. But right now, I think we don't have anything in our plate to look for. But yes, the incoming quarters or years, we'll definitely look into that for sure.
Sure. Understood. And sir, secondly, I just want to understand about the hiring plans, what are your hiring plans? And what is the current attrition rate?
Attrition rate is already mentioned in the presentation, like a tech company, we are definitely looking out to build some product in house. And as a normal company, requirement against attrition we keep on hiring. And we are looking out to add more people. But how many people, probably I cannot answer that right now. But we do have a plan to hire -- in fact, we are already hiring people as of now also. But how many we need, I cannot quantify as of this moment.
We take the next question from the line of Keval Shah from Banyan Tree Advisors.
So I have 2, 3 questions. could you share what was the organic and inorganic revenue for the Q4 FY '23?
So organic revenue growth was 53%. And the rest was inorganic.
Okay. And you just mentioned there was a hike in ILD prices. Could you quantify the amount, like percentage-wise, what was the hike in April?
I can tell you about India. I think it has increased by 25%.
Okay. In India, 25%.
We'll take the next question from the line of Vivek Sethia from HDFC Securities.
Congratulations on a good set of numbers. So I had a couple of questions. So before those couple of questions. I just wanted to continue on the previous question about the NLD, ILD pricing. So if you could just highlight like what has been the -- when was the last hike taken in NLD, ILD. And going forward, like how do you expect the rates to move.
Yes, if you could answer that and then maybe I'll move forward to my next 2 questions.
So, I think, honestly, it -- this all depend on operator, right? We have nothing to increase or decrease price because for us, if a pass on -- so pass-through price, like the last price increase happened, I think, 1 year back. And exactly after 1 year, the operator in India, they have increased by 25% that's the only thing. And we are, no way we go and influence our operator to increase or decrease, but it is completely dependent on the operator's strategy.
This last price increase which you're talking about is just NLD or is it for ILD also?
ILD. ILD. Whatever price I'm talking about right now is only ILD. NLD, I have no idea because there was some kind of discussion but nothing happened. So I'm looking forward for it because as of today, we have no intimation from operators to increase the NLD price as we speak. But on ILD, it is definitely increased in the month of April.
Okay. So the 25% increase you spoke about was for ILD. Okay.
Yes, yes. It was for ILD only. Just, sorry, if I'm not able to mention correctly, but it is just only for ILD for India. Okay.
Okay. So coming to my next question, I just wanted to understand like any particular reason for the decline in new product sales. And going forward, how do you see that pan out? And also, if you could provide maybe the number for the new customers onboarded? I think I couldn't find it in the PPT.
Decline in -- Gautam?
So 135 new customers were onboarded in the quarter gone by, yes.
Okay. And any particular reason for the decline in new product sales during the quarter.
So it's more to do with seasonality. I think Q3 happens to be our best quarter. And Q4, there is a seasonality impact that is there. On a Y-o-Y basis, there was a 24% growth in new products. Yes, in the quarter gone by.
Okay. And you spoke about Masivian and MRM having some issues with regard -- due to which we see gross margin under pressure like -- and like how do you see that panning out going forward? Is it something long term or like it was just a one-off for this quarter?
No, no, no. It's a seasonality. I mean for Masivian, it's a seasonally weak quarter, even last year, so calendar year for JFM, January, February, March, typically is the weakest quarter for Masivian and as the year kind of progresses into the subsequent quarters, their revenues and margins profiling improves dramatically, right? And we've seen that trend for the last 2 years as well from a calendar year standpoint. So it is not a surprise, I mean, from a Masivian standpoint, I mean, the numbers. For Mr Messaging, the impact was largely more to do with their traffic is getting impacted into the Russian -- for the termination into Russia. Other than that, I mean, the business continues to be as robust and the April kind of a run rate, things are again back to normal. So that seasonality aspect has to be kind of accounted for every year for Masivian at least.
So for MRM, you're saying that the political issue is resolved. Now there's no such issue existing as of now?
It is not resolved. Russia continues to be very low in terms of revenue contribution. It is the other markets that have picked up well for them.
[Operator Instructions] We'll take the next question from the line of Dipesh Mehta from Emkay Global.
Just on data point-related question, can you say revenue from firewall business and call to connect for the year or quarter whichever you can say?
I think Dipesh, Gautam can send you offline? Is that okay?
No issues.
We have next question from the line of [indiscernible], an investor.
Sir, could you explain me about the cash flow [indiscernible] IT company, product-based company, our cash flows are 50% or [indiscernible] could you explain...
Your voice is not clear, I don't know.
I'm sorry to interrupt, sir, there is a wind blowing right from behind. So that we're not able to understand the question. Do -- you may want to come a little aside and then ask the question again.
Yes, is it better now?
Yes.
I was asking that being a product-based company and the IT in the industry, why are the cash flows at 40 or 50 or like 70-odd percent here? Could you explain about that? And how can we improve going forward? That's my doubt.
Yes. So I think I did talk about it during my commentary about the initiatives that management will be taking -- I mean, there is definitely an increased focus to improve the operating cash of the company. There were certain prior period payments that we've done in the year gone by that had -- in some years, historically, we have also delivered over 100% EBITDA-to-cash conversion.
So there are some strategic investments that we are making in terms of some of the firewall deals, which warrants security deposits to be given. Now from our perspective, as I said, we consider that as capital employed with a return on such capital employed potential being as high as 25% to 50%. And as the business -- I mean, the business is also kind of growing at a superlative growth rate and some of the enterprise business in India, Middle East has working capital requirements. But again, as I said, most of these clients are -- and some of these large clients are -- even have sovereign grade rating, right?
So we can always get this factored and realize better operating cash flows. So it is just that. I mean, the business is self-sustaining and we've been able to kind of meet our working capital requirements through the regular monthly cash flows that we are able to generate. And hence, there was no reason for us to kind of get into such factoring arrangements. In our case, unlike most of the other IT companies, one significant part of our cost of goods sold is paid to the operators, whereas in most of the IT companies, if you were to look at it, it is only the human capital cost that is kind of there.
So that is a degree of difference between, I mean, an IT company versus how a CPaaS company should be looked at. Happy to kind of also maybe circle back off-line to kind of give you more color to the analyst.
Yes, Yes. I recollect. And other question I have, sir, regarding the product revenue, okay? We have been maintaining growth rate like INR 30-odd crores for quarter and INR 40-odd crores. Where -- when at which point of time can we see a jump here that is kind of like any product-based company has a huge revenue growth here. I'm asking about in 2 or 3 years, yes.
So definitely, as I said, is I think it all depends upon the adoption ratio and most of the adoption ratio is happening now. Most of the enterprise customers are now getting well educated to understand the advantage of using this digital platform. We're talking about new products. So I think we see a lot of traction happening. Right now, we're doing lots of POC with the customers. Large banks, like large enterprise customers, those POCs are still going out as we speak. And probably in coming quarters, you will see the growth. But at the same time, you need to also understand the adoption of SMS itself is so high right now.
In India, even the classic example of Google Pay, people are paying INR 5 using Google Pay nowadays, which means that the entire transaction of SMS is also going to grow multifold -- even if we do sell $1 billion revenue in next 3 years down the line and out of that, probably you will see INR 7,000 crores coming from SMS only. So we cannot just avoid the SMS side of business, which is growing at simultaneously along with the digital new channel for communication.
What we are very confident of like what we have built as a product as a portfolio as the entire stack, which has e-mail SMS, voice, RCS, you name it, right now? Every single product, which we have a live customer and paid customer. And we are very happy to say that every single channel, which we have built in-house are generating revenue for us, and which also has a great pipeline for the coming quarters to come?
Okay. So firewall business also comes in inside this product revenue or?
No, no, No, no, Yes. That is separate, yes.
That is separately reported, yes.
Okay. And the last question I have regarding the next year guidance, right? So how much we can expect from the organic because I see this year, we have done pretty good in the organic side. And in organic also we've done pretty good. But the next year, you are giving guidance of 20%. So majority, the high ratio, yes.
So the idea is very simple. Even I have given 70% growth last year and then we did 78%, right. It is always good to be conservative and then aggressive and then overachieve. So I think based on the current INR 3,500 crores, INR 3,700 crores, it will be 25% -- 20% growth, it is definitely a good growth guidance to the market, but we have always overachieved our guidance in past so many years, and we will try to do the same thing this year also.
It will be from the organic or the more from the inorganic?
Organic, completely organic.
We'll take the next question from the line of Mohit Motwani from Nuvama.
Just wanted to get your thoughts on the acquisitions that you spoke about. You'll be evaluating. So I just wanted to understand, these will be more buyout kind of transactions where you will look at some players like Masivian and Mr Messaging or more like bolt-on acquisitions. And any amount that you will earmark for this? Any sense you can give on that would be helpful.
Yes. So at this point in time, I think there are certain product capabilities that we have been kind of scouting since for some time. So we continue to kind of look for the quality asset on virtual contact center with a strong voice stack. So that is one area, which is kind of a white space, and we will definitely look at opportunities, I mean, is that, that comes up in that space. Besides that, we have aspirations to get into U.S., but again, it's at a drawing board stage right now.
So nothing has kind of reached a stage where we can kind of come and give you some sense of how things are setting up from an inorganic acquisition standpoint. At this point in time, I think on the organic front itself, there are a lot of opportunities that are coming up, not only from an enterprise CPaaS standpoint, but also from a lot of those firewall deals that are kind of there and there are big opportunities from a size and scale standpoint. So the focus right now is to focus on some of these organic opportunities in a big way, and some of the new strategic business units that we have created for product-specific approach, essentially TruSense. We're very, very bullish on TruSense. And at this point in time, I think we are building a very strong foundation for that product. And the intent is, at this point in time to do a lot of POCs with as many enterprises as possible and take it live in some of these larger density populated countries like India and some of the joining markets here.
The product is already live tested in Colombia with a lot of marquee enterprises, including the largest banks in those countries. So we see a lot of potential for such products, especially into fintech, BFSI and e-commerce domain. So a significant chunk of our energy today is now focused on some of these organic initiatives. And for the inorganic opportunities, I mean, we will see, I mean, if there are quality assets that come by, I mean, we'll not shy away from -- we are evaluating and contributing systems actions.
We'll take our next question from the line of Suresh Kumar, an investor.
Sir, I have 2 questions. Regarding this acquisition side. Anything is planned in this financial year, particularly in next quarter or so, how many companies are being planned for acquisition? And what will be the growth expected from those companies? The second question is regarding your market share in India.
Can you just repeat the question, please?
And sir, in the inorganic growth, you will be acquiring companies. Sir, for this financial year, from '23, '24, how much [indiscernible] how much is planned for this financial year? And what is the growth you expected out of those acquisitions?
So let me just answer this question. As I said before also, we are not right now looking out for any acquisition. But as I said, we will look for it if there is a right company in which we want to -- which matches with us in our like DNA. Right now, there is no plan of acquisition as we speak. But we are definitely looking out. It may take 2 years, it may take 1 year, but I cannot quantify what kind of revenue and what kind of margin right now, I think you can just take it as a statement. We are not looking for the acquisition, we are integrating, and we are building product in-house, and I think we are on the right track of doing that thing right now.
Okay. Okay, sir. My second question is, sir, in the inorganic growth, what is the guidance, sir, any growth for this financial year?
So we are giving the overall growth guidance of 20% as a company.
Yes, sir. That was told for organic growth. For this Inorganic, around 30% is contributed from this acquisition partner, Any growth guidance for this financial year only for those ...
Yes. So everything will become organic from 1st of April because most -- all the companies that we have acquired was fully integrated for the last year. So everything is organic. And this 20% organic growth rate that we have kind of given a guidance includes all the companies, including the companies that we had acquired in the past.
Okay, sir. Sir, my third question, sir. Sir, regarding in the Indian market, you said your market share is around 20%. Any plan of increasing that? Or how you are planning to increase that market share, sir?
Yes. That's a good question. I think my market share in India is over 20% now, as we speak. Definitely, as I said, there are a few number of large banks where we are already doing our POC and we are in talks with them. There are large enterprise customers, e-commerce customers, where our team is focused working with them. So I think we are looking forward to increase our market share to 25% this financial year. That is just something, which we, as a company have taken a target internally, and we want to make sure that our market share to grow by almost 25% this year in India.
We'll take next question from the line of Vivek Sethia from HDFC Securities.
I just have one question on borrowings part, if you could please repeat like what are the INR 100 crores borrowings pertaining to as it was 0 in FY '22? Now I see it's INR 100 crores, both short term and long term. So if you could throw some -- shed some light on it?
No. So as I said, we have net cash of INR 737-odd crores. And some of these borrowings are essentially more treasury management wherein we are getting positive carry. So these are backed by cash collaterals.
Okay. And just to confirm on the ILD price hike, which you said this was done last year, April, right?
No, no, this April.
April 2023, okay. So like a month back you're seeing.
That's right.
Okay. And just to add, last April 2022 was also at the same time when they increase the pricing.
Right, right. So that was the confusion, which I had.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments. Over to you, gentlemen.
Thank you, everyone. Have a great evening. Take care. Bye.
Thank you, sir. Ladies and gentlemen, on behalf of Route Mobile Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.