The Q4 revenue was a bit soft. What led to that? Was it a one-quarter impact or this weakness is going to stay for a few more quarters, you believe?
Hiral Chandrana: We reported Q4 revenues of $93.7 million and that was roughly 8.7% year-on-year growth. So, this is Q4 to Q4 of last year. Our full-year FY24 results were $368.4 million because it was the end of the fiscal year and that was 15.8% year-on-year growth over the previous fiscal year. Q4 was definitely below our expectations. We saw a couple of transitory things which we are confident of bouncing back in Q1 and beyond. Overall, our order book backlog, particularly the 12-month order book backlog, which we track very closely given it is a leading indicator, is very strong. It grew 19% year-on-year. And so, yes, we are optimistic as we look at FY25 going ahead.The other thing I wanted to talk about also was the fact that just last week you were approved as a supplier for the UK Ministry of Defence and I understand it is a $1.25 billion project. Give us some more details when the project scale-up begins, the timeline of completion, the margin profile, etc.
Hiral Chandrana: The Ministry of Defence has this framework called DIPS, which is Digital and IT Professional Services Framework. This is a large $1.2-billion framework. There are multiple lots. There are six specific lots. This is how the UK public sector adjudicates and awards business. We are shortlisted in two specific lots out of those six and within those two lots, in one of those lots, we are the prime supplier. Many suppliers compete in these lots. In this particular lot, there are about five or six suppliers and in the second lot where we have a subcontractor there are about eight other suppliers.
The way this works is that this is a very strategic entry for us because this is a four-year timeframe. We have already won our small first deal as part of this DIPS framework, which is in the architecture as a service area and we expect that over a period of four years we will have at least $50 million to $60 million worth of work that will get awarded to us as part of these different lots. It is a strategic programme that the Ministry of Defence engaged with Crown Commercial Service to award to multiple suppliers.Out of that $1.2-billion project, what will come to you as the total will be only $50-60 million, that is correct right?
Hiral Chandrana: $50 million to $60 million is what we expect to be awarded from the lots that we are shortlisted in. There are some lots which we might sub to other suppliers and that could be more. But this is the confidence level that we have over the next three-four years.You delivered about 19% year-on-year growth for FY24. With the given client conversations, the order backlog, etc, what kind of growth can one expect for FY25? Do you have visibility?
Hiral Chandrana: We do not guide financials, unfortunately, but let me give you maybe some flavour of the client conversations and market and customer behaviour. There is continued caution when it comes to spending areas. Customers are looking to optimise. They are repurposing. They cannot really stop their investments in digital cloud and AI. They are repurposing the savings into that, so that is one part of the dimension.
The second, which is more interesting, is that you have seen these different waves of cloud data, edge computing. You have seen AI more recently. So, what Gartner calls interwoven architectures or others might call integrated platforms, the key here is that customers are looking to now put together and piece together these various technology platforms in a way that is meaningful for them which is more business-centric use cases, so that is the second kind of dimension.
The third is what AI led to. There are cost and productivity expectations, but many of the customers are now expecting higher quality talent and more talent access and that is where an SI like us comes in. We feel that we are at a good intersection where our resources are a combination of domain expertise, functional expertise, as well as technology depth, and clients are breaking down some of these larger deals into more mid-size and smaller manageable chunks.
We are confident that as we look at the demand environment ahead, we are in a good position to be a differentiated business outcomes provider, which is where we work with our UK public sector, the example I gave you earlier, or for that matter, US healthcare or retail manufacturing and globally as well.I want to get a sense from you whether FY25 is going to be similar to FY24? Is it going to be better and with respect to margins because they have come to the level of 16% versus the 18% that we used to see in FY23, when do you see yourself scaling back in terms of margin profile as well?
Hiral Chandrana: We will get back to the margin profile and range that we are comfortable with – 17% to 18% range – that we have always wanted to be in, so that is as far as the operating EBITDA and margins are concerned. As far as the revenue and growth is concerned, in dollar terms, we grew 15.8% year-on-year. We expect that if you remove the small acquisition that we did in FY24, we still grew at a fairly healthy rate compared to competition. We expect FY25 to be along the same lines or potentially even better. It will be a little bit tough in the next two quarters. It seems customers are taking time, we had some impact in Q4 because of customer delays and ramp-ups but the second half of the year will be much stronger for the industry.