Protean Egov Technologies (NSE:PROTEAN) Q1 2027 Earnings Call

0:01 Good day, and welcome to Protean eGovnance Technology q one FY twenty seven earnings conference call hosted by Go India Advisors. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Pushpa Mani, Head Investor Relations, Protean eGov Technologies. Thank you, and over to you, ma'am. Thanks, Sonia. Good evening, everyone. I welcome you all to the Coke Q1 FY twenty twenty seven results discussion.

0:47 You must have received the results, press release and the investor presentation of the company, which is available on BSC, NFC and as well as on the company's website. As usual, we will start the forum with the opening remarks by our MD and CEO, followed by CFO, and then we will open the floor for the question and answer session. If any of you, your questions remain unanswered, you may reach out to us afterwards. The management on today's call would be represented by Mr. Ajay Rajan, Managing Director and CEO Mr. V. Iswaran, Hold Time Director and COO Mr. Akesh Doshi, Chief Business Officer Mr. Sandeep Mantri, Chief Financial Officer and myself, Head, Investor Relations. Before we begin, I would like to mention that some of the statements in today's discussion may be forward looking in nature, and we believe that the expectations contained in these statements are reasonable.

1:42 However, these statements involve a number of risks and uncertainties that may lead to different results. With this, I invite our Managing Director, Mr. Ajay Rajan. Thank you and over to you sir. Thank you, Kushpa. Good evening, everyone, and thank you for joining us for our Q1 FY twenty twenty seven earnings call. Within two months into the organization, it's a privilege for me to be here in the first interaction with you as the MD and CEO of Protean. For those who don't know me, I have spent over three decades in banking between twenty one plus years with Deutsche Bank, a large global bank and close to nine years in Yes Bank, one of India's most digital savvy bank. Most of my experience has been spent building and scaling businesses and at one point, as you're all aware, rebuilding one.

2:32 I have been part of the management team that helped ride Yes Bank through the twenty twenty crisis, rebuilding the franchise and most importantly, rebuilding the trust with customers, regulators and investors. That experience taught me two things that are directly relevant to the role I took over at Protean. First, that institutions are ultimately valued for the trust they hold and second, that innovative mindset with the right product solutioning, disciplined execution, sharp capital allocation and relentless focus on profitability is what helps build a strong franchise. Few organizations have had the privilege of contributing to platforms that touch the lives of millions of citizens while simultaneously supporting economic growth and institutional transformation.

3:21 For over three decades, Protean has been that quiet custodian of India's digital trust, having built digital public infrastructure at population scale for the country and now taken steps towards globalizing these capabilities in line with India's vision of becoming a global exporter of DPI. To put some tangibility in this statement, let me share some numbers. Protean has issued more than INR 58 crore PAN cards till date, opened more than INR 9 crore pension accounts across NPS and Adult Pension Neusla, completed over INR 1,500 crore online PAN validations, INR $2.50 crore e KYC transactions, INR 400 crore Aadhaar authentication and INR 70 crore eSigns till date.

4:10 This proves that the real infrastructure is not always the servers or the APIs, it is the trust earned transaction by transaction and that trust is Protean's moat, which we have earned over thirty years. Coming to the agenda of this call, I would like to use this opportunity to not only share the Q1 financial update, but given that it's my first investor call, I'm sure all of you would like to hear from me about the future we intend to create. Protean possesses something truly special, talented and a committed team with deep institutional knowledge and a legacy of building innovative population scale PPI over three decades. At the same time, I also see that the organization has an important inflection point.

4:58 The opportunities before us are immense, but so are the expectations of our customers, regulators, shareholders and the ecosystem partners. So the next phase of our journey will require us to combine our legacy strengths with newer ideas, sharper and more agile execution, stakeholder centricity and a focus on outcomes. So let me start with sharing with you some immediate strategic priorities that I have set for myself. First is deepening the core franchise with sharpened execution. We are continuously reviewing our portfolio and will allocate capital and bandwidth towards businesses where returns are the strongest. Our focus will be on high margin businesses and product profitability by building adjacencies around our core strength, which is the DPI.

5:49 Second, we are closely relooking at our cost structures and using AI to drive efficiency across the organization, while also embedding AI into making our product solutioning more intelligent and intuitive. Third, we are sharpening our approach towards international expansion in a very focused partnership led model in a defined set of geographies with sharply identified solutions. In order to do all this, we will also pursue inorganic growth opportunities that create long term strategic value, strengthen our capabilities and contribute meaningfully to our top line, but more importantly, our bottom line. The earlier chapter of India's DPI story was about building the foundational rails. We saw solutions around identity, payments, data and as you're aware, Protean has built several of them.

6:44 The country is now entering into the second chapter, which is all about value added sectoral services and AI driven intelligence that ride on these rails. And I'm putting deliberately thrust on AI here since the API and AI can create together something which is profoundly different. A living public infrastructure that is predictive, personalized, preventive and more importantly, citizen first. AI can enable services to find citizens based on their preference and consent instead of today's having to search and wait for services to be rendered. That is the future that Protean is building and will continue to want to build. I'll now spend some time on our Q1 FY 'twenty seven performance before I get into the details of the near term, medium term and long term strategy for Protean because that, I'm sure, is something that each one of you would like to hear given this is the first call. So on Q1, we followed on a very strong Q4, but Q1 has been a mixed quarter for Protean.

7:52 We reported a resilient and steady operating performance in terms of revenue from operations, which grew 19% year on year to $2.51 crores. EBITDA stood at INR 28 crores in Q1 compared to INR 45 crores in similar quarter in FY six. This reflects a decline of 38% year on year and EBITDA margin of 10%. The margin for this quarter was primarily impacted by some upfront investments worth INR 1 crores, which we incurred towards the implementation of some of our prestigious RFP led mandates. In addition, we also saw the margins getting affected by cost inflation driven by ongoing geopolitical tensions, which resulted in higher procurement costs for technology, hardware, white goods and the key inputs required for some of these benefits of We We On a normalized basis, however, excluding these investments, the EBITDA for the quarter would have been approximately INR 46 crores, which would have translated to EBITDA margin of around 17.2%.

9:09 The company remains confident that these investments will begin contributing meaningfully to revenue in the coming quarters, which will result in improved operating leverage and margin recovery. Moreover, our balance sheet continues to remain strong with zero debt and more than INR800 crores of cash and marketable securities. This gives us the flexibility to absorb these costs and also invest in strategic opportunities that will help us boost our product capabilities and resulting revenue and profitability. I'll give some details on the way businesses have delivered. Our tax services, which is source of transactional revenue for us, remained largely stable year on year despite the industry wide decline in pan issuances.

9:55 This temporary decline in industry volumes can be attributed to certain change in income tax rules, which required applicants to submit additional document for date of birth proof since Aadhaar was no longer accepted for this purpose in past. Past. We We distribution capabilities and we gained two seventy five basis points in market share, moving from 59% in FY twenty twenty six to 62% in Q1 FY twenty twenty seven, while we issued over a crore PAN cards. Our CRA services, which generates both annuity and transactional revenue, continues to present a significant long term opportunity.

10:46 We onboarded around 3,900,000 new subscribers during the quarter. We captured 95% of incremental subscriber additions. And I'm also proud to share that we onboarded more than 1,000 new corporates, the highest ever in a single quarter since inception. We continue to hold a dominant 97% share across NPS, APY and UPS and are the primary CRA for the unified pension schemes. Another encouraging development has been the NPS Vaxalaya, which gained strong traction following revised guidelines offering greater withdrawal flexibility. While the total scheme subscriber base itself crossed over two lakhs, 78,000 of that was added by Protean during the last quarter itself.

11:37 So while maintaining full focus to retain and grow our government segment, where we hold dominant position, we will accelerate our growth in the non government segment where overall market penetration is low, but the annuity opportunity is the largest. Our highest ever corporate onboarding in a single quarter is the early proof of that focus. More importantly, the retirement registry as a service is a business where we will leverage our two decades of dominant experience and double down internationally enabling governments across the world to modernize the retirement system using India's and Protean's proven experience. Third is our identity services, which is a strong source of transactional revenue.

12:24 We delivered 16% revenue growth year on year, supported by 20% combined volume growth. So we remain the only company in the country which offers all four foundational identity services, and we are well positioned to remain and grow as a preferred partner for the BFSI ecosystem, which is primarily driving these volumes. I want to call out here that businesses like eSign and more importantly, eSign Pro, which is a complete digital documentation workflow solutions from workflow to stamping to signing. This is a unique mode for Protean and is a massively scalable and a very, very profitable opportunity, both domestically and internationally.

13:10 BFSI, especially and every government enterprise and institution has the opportunity and need to digitize this documentation workflow. So I remain very, very confident that we will be able to monetize eSign Pro in the going future very, very well. I'm also encouraged by our new initiatives, which continue to deliver robust outcomes. This contributed 17% of our quarterly revenues as compared with 10% in FY twenty twenty six. This is in line with our stated objective to diversify our businesses and revenue lines, and this will continue to remain a key focus area. Some of the drivers here will be the strategic mandates like exercise, CKYC, Bema Sugarm, Aadha, Seva, Kendra, the AgriStack.

14:00 So these are not only core DPI implementation, most importantly, each of them significantly opens up adjacent value added opportunities for us where we can monetize on top of some of these initiatives. A quick update on the Alhar mandate. We have rolled out 75 ASKs across 24 states and union territories as of July 26. We expect to complete the implementation by Q3, and revenue from these centers has already commenced and it gives us visibility into a recurring transaction based revenue stream. So this is the some of the numbers on performance in terms of the quarterly numbers. Sandeep will provide more details in terms of that. But I would like to spend some time now in terms of our forward strategy.

14:52 So as I think about our present and futures, I am seeing Protean's business through three important pillars. The pillar number one would be scaling our DPI proposition through DPI 2.0, which is about strengthening the trusted platforms that has defined Protean's legacy and accelerating the new foundational digital rails across sectors such as financial service, insurance, agri, health, education, commerce. So more sectoral will be the focus on BPI 2.0. The second pillar for us would be monetizing our core capability through solutioning for the enterprise digital ecosystem. Slide, slide, key impact COVID-nineteen pillar is the pillar significant opportunities and we will ensure that that we we innovate are responsibly, more importantly, deliver consistently and execute with speed, all while maintaining financial discipline.

16:19 So let me spend a few minutes on what we will do differently now. In terms of our core strength, which is DPI, we will apply both domestically as well as internationally, a concept of DPI in a box approach. This will be the most scalable expression of the solutioning approach that I spoke about earlier. So this approach, what does it mean, right? It will be providing modular digital building blocks that a government can adapt for its own needs. For three decades, you will realize that Protean has built nearly most of these blocks today, whether it is digital identity, master registries for citizens, consent based data sharing across frameworks, real time verification services, secured data exchange, pension systems, tax administration platforms, compliance with design, all of these Protean has had role to play in all of these, right? But when you look at the DPI box approach, we package these now as a modular, interoperable, configurable and scalable stack.

17:30 The objective is to take the benefit of a bundled citizen service proposition, accelerate implementation while retaining flexibility and ownership rather than just commissioning a DPI built from scratch. So this approach, we will deploy both in India as well as in the international markets. And this will be a very differentiated but a more comprehensive approach where the intent will be ready to deploy digital foundation rather than spending time on a multiyear integration program. In terms of our approach to monetize the DPI and creating value for the ecosystem, we will also move from a product selling approach to a solution led approach.

18:18 The future of DPI, I believe, will be defined by how effectively we convert the access which we are creating into outcomes. And this, I believe that success will be measured by how effectively our platforms improves lives and expands opportunity for citizens and businesses. The rails that we built carry enormous volumes, and I alluded to some of those volumes at the starting of my session. But volume on its own is not value. If we simply chase more transactions of the same kind, we will grow revenue, but the margins will not grow. And I'm sure a lot of you have thoughts on that, right? So that is exactly what I am planning to address via this. So this is not the business we intend to build. We want to build a business where the margins are profitable.

19:10 So let me make this whole approach that I mentioned about with let me make it real with two examples. Today, if you look at a bank, and for us, banks, banking or financial institutions actually reflect a very, very large significant opportunity, which is where the fintechs are building a lot of solutions, right? So that is exactly what we would like to do. So today, when you look at a bank, it operates today in terms of onboarding customers digitally. But for that, they take e KYC from one partner. They may take document verification and execution from another partner. They may take fraud and AML screening from a third partner. They may take a bank statement analysis from a fourth partner, e signing and stamping of documents from a fifth partner and CKYC reporting from a sixth partner.

20:05 Then they build and maintain the plumbing between all of them. And that fragmentation is expensive for them. It is fragile and it accumulates technical debt, which in every handoff between systems becomes a target for a customer drop off. And I have seen it for thirty years on the other side that this is a real life situation, which every financial institution in the country today grapples with. So this is where Protean with its dominance in some of these foundational products will adopt a client centric approach by bundling the right combination of our platforms, APIs and most importantly, the delivery capability to deliver a end to end solution. So when you look at what I spoke earlier, all the underlying components, whether it is identity, verification, consent, signing, the registries, everything gets configured differently for each customer.

21:03 And this changes the conversation from selling a product to owning an outcome. By bringing together all this technology domain expertise and execution capabilities into an integrated solution, we not only achieve scalability of our offerings, we deepen our customer relationship, we create a greater stickiness and most importantly, we build sustainable, profitable, high margin business. Another example, if I may take, is retail lending, and this is where maximum volumes are seen by banks and BFCs, etcetera, right? Now when a customer applies for a personal loan on a lender's app, This is where our CKYC solution with Aadhaar authentication can help establish the identity in seconds.

21:51 Then with the customer consent, Protean's account aggregator can pull a bank statement, which our analyzer can convert into an income cash flow view for the underwriter. Through our eSign Pro, the sanction letter, loan agreement can be generated from a template, stamped with the relevant state eStamp and then e signed with the Aadhaar, making the lender ready for disbursement. Now this is where Protean in a consented and intelligent favor with one journey, one contract, one integration can help eliminate that friction which today exists across every financial journey. Earlier, what used to be multi vendors, multi month integration program can become a very seamless one step integration.

22:40 So that's the whole point, right? The building blocks don't change, but the configuration does. We are also how does it impact our margins? We are moving from being priced per API call to being priced per journey per outcome, which becomes a very different conversation fundamentally on value and which leads to better margin improvement. So our mix shift from higher margin value added services and away from just pass through volume, which currently what the case. Also more importantly, the client stickiness improves and which is where our product penetration also improves with the ecosystem. So in summary, we intend to move from volume and growth to value creation, better margins, better profitability, deeper, long lasting customer relationships and everything that we build in this layer will be distributed through a multi sector API service platform, which we will deliver in a sandbox enabled ready to consume workflow.

23:41 And why do I believe that Protean is most uniquely placed to creating this digital ecosystem on top of the foundational DPI raise? Because we own or operate almost every component required end to end under the relevant regulatory license. And for the rest, we always can have a partnership approach where we bring in the right partner and in due course, maybe the right acquisition to bring it in house. The third pillar will be our international strategy. And this, we will be very deliberately focused and prioritize a smaller number of geographies where the need is real, funding is identifiable and where our reference credentials adds value for Protean.

24:30 More importantly, we will enter it in a light touch model through which is partnership led, capital light, and we will work with multilateral institutions and local system integrators in those locations. The more important part is the whole DPI in a box approach, which I detailed about. I see a big opportunity for us to contribute to the global digital transformation initiatives from a Protean perspective. So this export of India's model Another area that I would like to draw attention for everyone is the CKYC mandate, which we are building for them.

25:26 And I believe this will be a game changer mandate. Today, a citizen must prove who they are again and again to the bank, insurer, mutual fund, every financial institution. Same documents, same friction, same cost every time. Vision of CKYC is simple, prove it once and with consent, carry the trust everywhere, build trust once, reuse it a billion times. And this is what Protean is building under the mandate, maintaining the next generation central KYC record registry, API first cloud native overall, which is migrating over 1,000,000,000 plus records backed by all the four financial regulators. But that's only one side of the equation, which is the sovereign record of the financial identity.

26:14 The equally or more valuable side is the other side because once the registry is modernized, every regulated entity in the country will need to connect to it to search, download, report, build onboarding journeys on top of it and digitize their own processes. We have built that side also, not only the SeekKYC APIs, but also bundling them with our broader API stack to give comprehensive proposition to our BFSI customers who are going to be the biggest users of this. We are not only building the database, we are building the on ramps onto it. And while the registry was a fee mandate, the on ramps will be a mix of recurring opportunity across thousands of regulated entities and also certain fee based mandates.

27:06 So operating the trust registry and monetizing the access layer, that is what we intend to replicate across all our infrastructure assets. So this is going to be the approach on every DTI mandate that Protean is running to. On the cost and capital allocation side, I also want to assure everyone that I'm preempting maybe some of the questions which will come up. So I would like to assure everyone that we are also reviewing our portfolio through clear capital allocation lens. Some of our businesses will depend on the pace at which wider ecosystem matures. But while we may decide to stay passively invested, we will calibrate our incremental energy towards some of these initiatives where we see maximum immediate revenue maximization.

27:52 Cloud and account aggregator, both are at for in today's day, a small business for now, but remains strategically relevant assets for us and we are very actively sharpening the commercial model for both of them. Our Metis certified sovereign cloud in particular is genuinely differentiated for mission critical and regulated workloads, and it is an important enabler of this sovereign by design proposition we take to our government customers. Our approach here will be to look at strategic partnerships and investments, which will build a clear path to scale and profitability. So to conclude, Protean has spent thirty years quietly, reliably building the foundations of India's digital future.

28:38 That work has made us India's national trust architect. Our ambition now is to carry that role forward from building rails to building the intelligence layer above them from products to solutions and from India to the world. My commitment to you is to pair these three decades of trust with sharper execution, stronger profitability, more importantly, a bolder ambition and in doing so, create durable long term value for all our stakeholders. I would also encourage you to go through our investor presentation, where we have articulated our forward strategy and long term growth roadmap in more detail. And I really thank you sincerely for the confidence in Protean. And I would hand over to our CFO, Sandeep Mandri to take you through additional details on the financials.

29:29 Thank you, Ajay. First of all, let me welcome you to Protean and the first earning call of Protean. Very detailed explanation, quite helpful. And my last two months experience is quite enriching in terms of laying down the strategy so clearly for Protean for the next many years. With this, good evening, everyone. Thank you for joining us today. Before I discuss our financial performance, let me briefly touch upon the industry backdrop. The digital public infrastructure industry in India continue to benefit from strong policy support, increasing digital adoption across government and regulated sectors. We are seeing growing demand for interoperable API led platform that enable identity, on boarding, authentication, payment and data exchange at scale.

30:23 As institution move from standalone digital initiative to integrated digital ecosystem by Ajay, the opportunity for the trusted infrastructure provider is expanding. With our leadership position in tax, pension and identity services along with investment in next generation DPI platform, we believe that Protean is well positioned to participate in this structural growth opportunity through its solution led approach. Now let me take you through the financial performance for the first quarter ended 06/30/2026. I am pleased to share it our quarter on quarter performance aligned with this trend with healthy volume across most of the businesses, driven by market share expansion, growing traction in our value adder offering and other new initiatives.

31:15 Revenue from operation for quarter one FY 'twenty seven stood at INR251 crore, which is an impressive growth of 19% Y o Y as compared to INR $2.11 crore in last year same quarter. This was primarily driven by continued momentum across most of our core businesses as well as new initiatives. EBITDA for the quarter stood at INR 28 crore with an EBITDA margin of 10% compared to INR 45 crore and the margin of 18.7% in the corresponding quarter last year. The decline in margin was primarily driven by upfront investment of around INR 18 crore incurred towards the implementation of multiple RFP mandates. In addition, margins were also affected by concentration arising from ongoing geopolitical tensions, which resulted in high procurement costs for technology, hardware and software, wire goods and other key input required for implementing these projects.

32:15 It is important to note that these strategic mandates are currently in the development phase and are yet to reach steady state revenue generation. As a result, a significant portion of the implementation cost has been recognized ahead of the corresponding revenue, creating a temporary impact on profitability. On a normalized basis, excluding these upfront investment, EBITDA for the quarter would have been INR 46 crore, translating into an EBITDA margin of around 17.2%, broadly in line with our historical operating performance. Profit after tax for the quarter is INR 2.6 crore with paid margin of 2.2%. We delivered earnings per share of INR 1.44 for quarter one FY 'twenty seven, but as EBITDA was impacted by one timer, so the profit is. We remain confident that as these projects progress towards full scale deployment and revenue generation over the coming quarter, operating leverage will improve, supporting a recovery in margins while strengthening our company's long term growth trajectory.

33:20 From a cost perspective, we continue to maintain discipline while investing selectively for future growth. Employee benefit expenses increased primarily due to hiring for the Adarth Sewakane project and incentives, while other expenses reflected investment in infrastructure, technology and project execution. At the same time, we are actively reviewing our cost structure and identifying opportunity to improve efficiency through greater use of technology and AI across the organization, which was highlighted by Ajay also in his speech. While these investments have impacted near term profitability, they are being made against opportunity that we believe can create meaningful revenue streams, recurring revenue streams as these mandate movement to steady state operations.

34:07 Our focus, therefore, is to ensure that the growth we pursue must translate into sustainable and profitable growth over the medium to long term. An important part of this approach is our shift from pursuing volume growth towards creating greater value from our platform and capability. We are increasingly focused on a higher margin, value added solution and integrated offering that can deepen customer relationship, improve revenue quality and extend our profitability. Our approach to capital allocation will also remain disciplined. We will continue to evaluate our portfolio and prioritize investment opportunity where we see the strongest potential for revenue growth, margin improvement and long term value creation for the company. From a balance sheet perspective, we remain in a strong financial position. As of 06/30/2026, the company had more than INR 800 crore in cash equivalent and marketable securities and remained completely debt free. This provide us with significant flexibility to invest selectively in technology, innovation, strategic opportunity and growth initiatives while maintaining financial resilience.

35:11 To conclude, while the current quarter reflects the near term impact of investment being made to build the next phase of growth, our focus remains very clear, strengthen execution, improve operational efficiency, enhance the quality of our revenue and drive sustainable profitability. With our strong balance sheet, increasing contribution from new businesses and a robust pipeline of DPI led opportunity, we remain confident in our ability to build a stronger and more profitable Protean and deliver sustainable long term value for all our stakeholders. With that, I conclude my remarks and request the moderator to open the floor for question and answer. Thank you so much.

35:59 Thank you very much. We will now begin the question and answer session. The The first question is from the line of Rohan M from Equira Security. Please go ahead. Good evening, sir, and thanks for the opportunity. So firstly, during your opening remarks, you had talked about inorganic growth opportunities.

36:45 So which segments or which areas are you exploring those opportunities? See, we will we are actually right now, as I mentioned to you, looking at all opportunities which meet certain objectives for us, which is either it improves our health improves our processes or reduces our cost or it adds directly to our top line or more importantly, bottom line. I'm not at the liberty of right now sharing specific details, but as we speak, we are looking at a couple of very, very strong inorganic opportunities, which meets these particular objectives that I have mentioned. So right now, we are focusing on something which will either help me on my top line, bottom line or reducing my cost through automation.

37:40 Sure, sir. Sir, second is on Ada, Seva, Kendra. With respect to all the rollout that's expected in various districts, so is the people cost already baked in into this quarter numbers or can we expect the employee expenses to go further? And does the 1Q number also factor in the wage that the salary hikes that the organization would have taken? Yes. So for Aadharth Devar Tehindr, people kept having rent up for most of the Aadharth Devar Tehindr, but still there are quite a few Aadharth Devar Tehindr, which are yet to be operational in quarter three. So for those other tender, the cost will come in Q2 or Q3 depending on the rollout. But the hiring is on. Right. So what kind of an increase can we expect till by 3Q on employee expenses?

38:32 On the employee expenses on account of our... By 3Q. So overall employee expenses by 3Q, just to get a sense. Overall employee expenses, I would not be able to tell you right now because there are a lot of where we are still hiring is still going on. And there will be lot of changes, as I rightly said, in strategy toward building cost initiatives and achieving more and efficient initiatives to reduce the cost of operations. However, the cost will accept Aadhaar the cost will accept Aadhaar Seva employee, the cost will remain more or less same. Okay. So just want to ask, out of the INR69 crores, what will be the cost of Aadhaar Seva Kinder right now?

39:19 Can't specifically because tell we are not disclosing segment with us. On the Ada Seva Gendras, which have gone live, in terms of the revenue trends there, if you can just touch base on for the centers which are already operational for more than one month, like how is the margins that is shaping up? And are the revenues in line with what was the original expectation when the contract was awarded to us? This is the district mapping of ABCD? Rohan, very early to say right now because the other teleworking are operational for last three, four months. So I think we need to see the trend for at least one more quarter and then we can provide some visibility on what kind of revenues.

40:04 But having said that, the initial estimates are in line with our expectations. So we had always, Rohan, and we start a ramped up model because once the setup happens, takes a certain bit of time for people to start coming in and volumes getting ramped up. So whatever estimate that we had done at the time of the RFP, the initial assessments are more or less in line with those expectations. So the numbers seem to be on target, and that's in line with what we had expected. And maybe since you asked specifically on the inorganic, I'll give you a little more color on that. See, for us, the overall BFSI segment will be one of the most focused segment from an enterprise value creation perspective. So in my entire speech, I also alluded to the intelligence layer that we are creating. So a lot of the DPI that we have created in terms of benefit to the citizens, it will eventually have to be through culmination of some financial services for citizens or enterprises.

41:16 So very broadly, Arun, the acquisition that we will look at will be in this space so that it fastens our go to market towards delivering some of those solutions and start quickly generating revenue and more importantly, start generating profitability by us having the enablement to deliver some of those solutions to the enterprises or BFSI segment in a very fast GTN. So that just to the extent that I can share right now specifics, I am being transparent with you that this is the area that we are looking at. Sure. Thanks, sir. And lastly, on the PAN 2.0 readiness, like would we need to make any changes in the process or the offering that we do or maybe the people team structure like is there something required at our end, so whenever PAN 2.0 goes live, we get some share of the revenue?

42:19 Very early today, right now. I think Paint 2.0 is still away. So Paint 2.0, as of now, we are not required to make any changes in our platform, but we will see how things open. And again, from a clarity perspective, I think in the earlier calls also, this has been discussed and shared that a lot of the volumes are in fact, bulk of the volumes continue to come through assisted model. And even if you look at this quarter, while it was an aberration because of the form friction, but the volumes every quarter, we have only seen increasing in the assisted mode, which is basically our core distribution capabilities.

43:05 And more importantly, if you see even in a falling overall number quarter, which is this quarter, where the overall number went down, but Protean share increased close to almost two seventy five basis points increase in Protean share EBIT. So while we will look at more visibility in terms of how exactly PAN 2.0 will pan out, but we remain confident that we will remain relevant in this piece, of course, but more clarity on that as the date comes in, I think we'll get more clarity around that. And we want to further answer your question on employee benefit expenses, our endeavor will be to see that we create a scalable organization so that when we grow from here, we need not to hire additional people to deliver the project or the revenue. So at the end of the year, I think we will see some cost reductions, while it may be offset by the increments that we give. Otherwise, aside ask, I don't see any major increase in employee expenses.

44:17 Sure. Thanks a lot. The next question is from the line of Deepak Agarwal from Parem Capital. Go ahead. Evening, sir. Am I audible, Yes. So my question was like investors generally people would want to see consistency. So the fact is if you see over the last five, seven years, we have grown from about 800 growth top line to growth in last five, six years from 2019. Our EBITDA margin profile used to be as high as 23%, which has deteriorated to about 11% now. Would love to hear the thought in terms of where do you think this margin profile is sustainable? Obviously, we are investing ahead of, as we have mentioned in the press release as well for newer projects.

45:15 In the longer run, sir, where do you see the EBITDA margin for the overall entity stabilizing once you have two will be in the upfront investments, sir? Deepak, unfortunately, this quarter was affected by one timer, which was about 18 crore. The gross EBITDA margin was in the range of what we were declaring, it was consistent. But we need to make some of these investments to create a better future for the company. Therefore, these costs are front loaded, while the benefit of these investment or spend will come into the future. I'm not so worried about one quarter results, but I'm more excited about the future, which we are going to create for the company in along with the leadership of Ajay.

46:08 So Deepak, and it's a very valid question from your side. And if you actually look at the whole way when I spoke about in the first thirty minutes, you will find that every approach that I spoke about is towards making sure that we are moving from a a product approach to a solution approach. And the primary reason for doing that is that that enables us to do a, onboard more customers because then you are more curated, more customized, have a better proposition for the client. But more importantly, we move from being a transactional engagement for the client to a more solution driven strategic engagement to the customer, which enables So our margin when you go and sell one product versus when you sell a bouquet of multiple products packaged as a solution, your stickiness, your margins, everything improves. And that is really what the approach will enable. And that is how, at least in my three decades of even banking experience, we have worked on doing that and that's a very proven successful model.

47:26 Second is the global business and of course helped by some of these inorganic partnerships and acquisition that I mentioned, will be aimed towards making sure that you are generating higher margin in geographies where there is a better price point for some of these solutions that we are going to do. So like Sandeep very rightly mentioned, while of course we do appreciate the fact that margins have pretty much been consistent or maybe to some extent deteriorated over the last few years. But what we can definitely look forward with this new approach and outlook is that we would like to double down on higher margin businesses and that hopefully should reflect very soon once the investment period is over in tangible financial outcomes for the company. And as explained in my earlier calls as well, I see the margins are going to improve substantially from here in the two to three years. I think it will be a different margin trajectory.

48:36 Got it. Got it. Okay. So if you look at Investor Day as well, you will find that the growth pillars clearly reflect the approach in terms of how we will grow and build our businesses. And that is with single objective of making sure that our revenue and profit growth is justified. So rather than doing too many things, we will focus on few champion solutions and products, which will be high margin, scalable and globally deployable. Right. Right. So also that if you look at the eSeeva, Kailra, we have been talking about, we have rolled out over like last four months.

49:24 Again, from an investor context that although, obviously, it's a large volume business, but the perception is it will generally be a substantially lower margin business considering it is quite competitive, plus it's far more physical, right, compared to our product and a technology stack. So your thought is, is it like, can it become really big and is it that the margin there will be substantially lower? The margin in other would not be substantially lower. But as I said, we have to see how the volume picks up in Q3 or Q4 when these centers are stable and operational. Then only we could really figure out to what kind of margin we will earn. But having said that, I think these as I earlier also said, these are not EBITDA accretive, but at least they will generate sustainable stable margins in the business.

50:23 Other aspect to that is that we have to create adjacencies out of some of these projects, which will deliver higher end profitable opportunities for us. Got it. Got it. Great. Thank you so much. Thank you. Thank you. Our next question is from the line of Vinil Shah from Dallal and Protean. Please go ahead. Evening. Thank you for the opportunity. So sir, my first question is that as we have already mentioned that due to our higher upfront cost investment in Q1, we have had some margin impact. So are there any additional costs expected in Q2 and FY the balance of FY 2027 as well?

51:09 None to the my knowledge. The only thing which will have some temporary effect will be Adarthewa Kendra. That otherwise, I don't see any such one timers going forward. I think margin will get stabilized from Q2 or Q3. Okay. And sir, as I mentioned that we are trying to transition to a solution selling organization. So the of services that we are offering, the DPI in a box and all. So what is the internal timeline when the products will be ready? Like, it will be out from the testing phase and ready for commercialization? So these are see, most of these products are already foundational products that we already are delivering, right?

51:59 The sir. The KPI in the box will be a modular approach of positioning these or selling this to the state governments, to international markets, etcetera. So in terms of delivery, it is approach which we will sell and whenever deployment is required, it is immediately available for deployment in terms of, of course, the implementation time line, which will obviously be there, but these are products and solutions that we have already built in some shape and form in various mandates that we have built so far. Okay, sir. So sir, any significant orders on customer that has already inquired about this and we are looking at a good response from the customers about this?

52:53 Absolutely. This whether it is internationally or even in discussions that we are currently having with various states, large states, this approach is absolutely in line with what governments expect. The reason being every state or government today would like to touch or improve the life of its citizens in every shape and form, right? Whether it is through a health solution or an agri solution or a DBT solution. So when you go and provide a overall package to someone, it is obviously there is high level of interest to look at that deployment, right? So to your point, yes, there is interest when such approach is discussed.

53:45 But like every large implementation, there will always be a lead time in terms of pitch to conversion or pitch to agreement. It might also go through RFP process and etcetera. But as a concept level, this is really where we see that both from a government perspective as well from a company perspective and more importantly from a citizen perspective. Such approach will become very meaningful and hopeful. Great, sir. Thank you so much and all the best for your future. Pant, our CBO will also make some traction on the enterprise side that Uday talked about, we are getting very strong tractions there. The pipeline looks very, very good and very well placed.

54:33 So that's on the other enterprise side, where the composable layers have been created to offer us product solutions and journeys. On the government side, as you know, it's a mandate and RFP process that participating in. So we are hopeful for some interesting wins soon. Okay, sir. Thank you. Thank you. The next question is from the line of Manan Palodhia from MKTEAN Securities. I understand that you may not be able to provide the economics or the breakeven for the Ada Seva Kheendra centers. But my question is with relation to the return on capital employed even at the breakeven level or even slightly above the breakeven level, if you could quantify something.

55:25 And secondly, if you could quantify the amount of working capital we would require to put into that business even at the breakeven level, I think that'd be really helpful, sir. So are you talking about project? Yes. Project. Because this is a managed operational project, so working capital will not be heavy in this except the initial furniture offices which we need to set up. Otherwise, this is a monthly recurring revenue and all the routine expenses except the CapEx part will be out of revenues. So just a quick follow-up on that. So are you saying the billings from the government side are either on a monthly or a quarterly basis? Because I'm assuming when we are processing others upfront costs are out there. Right?

56:15 Monthly basis, we will bill on a monthly basis based on the volumes which are there for each month. All right. Thank you, sir. In our experience also, I think we are getting money in time from government. Okay. Thank you. Thank you so much. Thank you. The next question is from the line of Bawi Johan from CarePMS. Please go ahead. Thanks for the opportunity. Just two questions from my side. The first one is related to the other entity business that has witnessed a significant increase in this quarter. Could you provide that which segment have contributed to this? You are talking about new initiatives.

57:04 Yes, new initiatives, I'm talking about the other business, which have been grown from INR 11 crores to INR 42 crores This in is primarily because of the one RFP mandate, some revenue recognized because of that. Second one is Aadhaar, wherein we started recognizing the revenue. And third one is our new product like ibuprofen or Ethane Pro, where we started getting some traction and therefore the revenue is there. These are the things... Could you quantify this? Like how much from... I can't give a quantification or further breakdown of new initiative because we are not disclosing any sub segment for these. But these are the three key services within new initiative, which has resulted into INR42 crore revenue.

58:02 Okay. And the second question is related to the geopolitical issue, which have been impacted the margins. So like if I look at the financials, the system implementation and support maintenance expense have been grown significant. So is it just related to the geopolitical issues? So what that I am not able to understand that how this cost is increasing related to? Yes. A part of this increase is because of geopolitical price increase in various hardware, software and technology products. So that is only the reason, right? Yes, that is the only reason. And so like excluding that, you have said that the 18 crores is impacted on the EBITDA?

58:52 INR 18 crores is impacted on the EBITDA because we as per accounting rules, we have to take these costs upfront. We can't defer these costs based on future revenues. Okay. Okay. Got it. Thank you. That's it from my side. Thank you. You. Thank As there are no further questions from the participants, I hand the conference over to Ms.

59:45 Pushpa Mani for closing comments. Thanks, Tania. On behalf of PROTEAN, I would like to thank you all for taking time out and also for your continued trust and support in us. We remain committed to delivering growth and value to our stakeholders. For any additional questions, please feel free to reach out to us and we look forward to staying connected. Thank you. Thank you. Thank you, Arun. On behalf of Go India advisers, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.