Redington Limited — Call Transcript 2025

Ladies and gentlemen, good day and welcome to Redington Limited Q2 and H1 FY 2026 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V. S. Hariharan, Managing Director and Group Chief Executive Officer of Redington Limited. Thank you, and over to you, sir. Thank you. A very good morning to everyone. It's a pleasure to be here, and I'm delighted to share with you our results for Q2 2026. This has been our best quarter so far from a revenue perspective, recording nearly INR 29,118 crore of revenue, with a quarterly profit of INR 388 crore. The profitability was the best Q2 ever. Our revenues grew at 17%, with EBITDA and PAT growing faster than revenues. Overall, PAT for the group was standing at 1.33% for the quarter, and excluding ARENA, PAT was at 1.57%. It is a continuing story of profitable growth, with growth coming back strongly across all business segments and many geographies. From a geography perspective, the revenue growth was contributed by a strong growth in many geographies. As I said earlier, India at 23%, UAE at 23%, Saudi Arabia at 10%. If you remember, last year, around the same quarter, we had a growth challenge, and we have recovered well. GCC, a newly formed cluster consisting of GCC countries outside of UAE and Levant countries, grew at 22%. Africa continued to be stable at 8%. Overall, a very strong performance, with PAT growing faster than revenues across most geographies. As I said earlier, all business units contributed well to the growth. Mobility grew by 18%, contributing to 35% of the top line. Driven by stronger demand in the premium segment. Impactful NPIs. This quarter, we have NPIs, and that had a good impact. A very strong execution in the direct-to-retail segment in India during the quarter. The ESG business, consisting of PCs, grew by 11%, contributing to 32% of the top line. Due to PC business growth, both in India and Middle East. PC signs of the PC refresh cycle, and we also see increased AI PC penetration, especially in the commercial space. We see that in India. An estimate that the growth could be higher in the second half of the year if the trend continues. Technology solutions grew by 9%, contributing to 16% of the top line due to higher enterprise demand. I wanted to spend some specific time on the Software Solutions Group. As you remember, over the last few quarters, we've been talking about our increased focus on software solutions, and now we have brought the various pieces into one Software Solutions Group, consisting of hyperscaler business, cybersecurity business, application software, and professional services. This is the first quarter we are reporting the results as this group in this new form. It grew by 48%, contributing to 16% of the top line. If you remember, we talked about it the previous quarter, that this group, for last year, grew somewhere between 20-25%. We clearly see signs of accelerated growth in this area. As I said earlier, there are four pieces in it. There is the cloud hyperscaler business, cybersecurity, application software, and professional services, and all of them recorded good double-digit growth. It also delivered higher-than-average PAT compared to the group, which contributed to our results being what it is. In the cloud segment, we are working with the hyperscalers and continue to take advantage of the cloud transition and digital transformation, which enterprises and large SMEs are going through. In the cybersecurity and the software business, we have been focused on increasing the breadth of our offering, signing up more brands as it makes sense, and increasing the intensity of our go-to-market and the focus with the brands towards gaining wallet share. This is reflected in our growth in SSG of 53% in CISA and 44% in the rest of the world. Overall, there are umpteen opportunities that SSG can offer through subscription models and solutions. Now, where are we investing? We continue to invest in the digital platform, CloudQuarks. We have been talking about that. We already have the platform, and we are continuing to improve it, to add more analytics, to add white labeling, to add automation, to add marketplaces, et cetera. We are investing in technical presales teams. We are investing in a Redington Academy to train and create certified professionals both inside and outside the company. We are creating ecosystems such as marketplaces where we can bring management service providers and ISVs together with the products to get complete solutions for our customers, which is what increasingly, in this new world of cloud and AI, people are looking for. All in all, I think we have had good growth on SSG, and we hope to continue to maintain this momentum with our investments. I think the beginning of a journey. Moving on to operations. I want to talk a little bit about working capital and OpEx. Very efficient management of working capital and a higher mix towards mobility led to the overall lowering of working capital base to 31. OpEx continues to be managed well and grow slower than revenue. Grew at 9% year-on-year, giving us good operating leverage. Now, talking a little bit about our subsidiary ARENA. They continue to wait through economic challenges in the country while inflation and policy rates have been coming down over the last couple of months. Interest rates, the central bank rates, have gone below 40, and the inflation rates have also come down, while still remaining at stress levels. We continue to remain watchful in the concorded cases. This quarter, in order to reduce interest costs in Turkey and to minimize local currency exposure, ARENA has decided to divest from their Connect Vodafone contract. This was announced earlier. This should help us as we navigate forward in terms of improvement in our profitability. There were some one-off impacts as a result of this transaction in the current quarter. The overall loss in ARENA was INR 370,000,000, our share of the loss. Over the last few quarters, just to bring everyone's memory up in terms of the actions that have been taken, ARENA has taken a series of actions, starting with payment divestment, tightening of working capital and OpEx, managing AR more closely, divesting from the local currency business, all heading to improve the health of the business. We remain hopeful to steer this in the right direction with ARENA leadership. We are also proud to share the news that VAR India for FY 2025 has awarded Redington as number one IT distributor in India. This is the third consecutive year in a row, and we are also happy to share that the lead has increased between number one and number two. This could not have been possible without the support of brands and partners, and of course, a fantastic leadership and execution team in India, the Redington team. During this quarter, we have participated in many customer and partner events in many of the geographies we are in. The notable amongst them was the GITEX in Dubai, which happened last month. It was a great event where we connect with many brands and many partners across the Middle East, Africa, and Turkey region and build on our growth story further. We're also investing in many AI capabilities, and we will share the plans and the executions in the upcoming quarters. I'd like to thank every one of you for believing in us through our journey, and we look forward to your questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nitin Padmanabhan from Investech. Please go ahead. Yeah, hi, good morning. Thank you for the opportunity. You have disclosed the SSG, I think, combined it and given it, so thanks for that. Just wanted your thoughts on, since we have it as a separate sort of thing, both cloud and I think put together, how would the working capital intensity here be related to the rest of the business? If you could just give a comparison. Versus the company average working capital, how would this look? Okay. Hi, Nitin. Morning. Good morning. SSG will have normally lower working capital, but not significantly lesser. When compared to the company average, you can take it will be at more or less similar level. What you should note is the company average is mainly on account of MSG, where the working capital is much lower. That gives us an advantage. SSG is around the company average. Got it. Perfect. The second thing was, I think you had mentioned that there is a pickup in the PC refresh cycle and the AI PCs and so on and so forth. If it continues, it is possible that the second half could be stronger. Is this common true across markets, or is this specific to India? Thanks, Nitin. I think we largely see the trend in India. Overseas, it's still a little bit flattish. It's a single-digit growth, but we are seeing a higher single-digit and lower double-digit in India. Specifically on AI, we've seen about 22% of our commercial PCs in this quarter came from the AI classified PCs. We see a good trend. If I see the last six, seven months of activation of PCs from the numbers we see, clearly there is a growth compared to the previous years. There's a growth consistently every month in India. We definitely see the trend in the right direction in India. Overseas, yet to be seen. There is encouragement, but not enough of a window to call out that we are going to see growth going forward. Got it. And then just two quick ones. One is on the ARENA, the INR 37 crore, which is our share of it. That entire. How much would be the one-off? Last quarter, there were provisions, and that led to a INR 40 crore kind of a loss. This time, those provisions are maybe significantly lower, but we still have a INR 37 crore loss. How much would be the one-off there? The second question was. By when do you think we should start seeing the benefits of the Vodafone Connect sale in our numbers? When should we sort of resume that broadly? Those were the two questions. Thank you. Nitin, for the current year in terms of dollar terms, $8.5 million is a loss. The service overall for previous quarter, about $9.5 million. If that need to get split into what relates to one-off, very specific to the Connect sale, it is about $3.4 million. One-off, which are outside of this, it could relate to some rediscounting charges, etc., it is about $2.5 million. What is steady-state ARENA IT plus loss is about $2.6 million, which for last quarter, about $3.6 million. Has that come down? The loss has come down in the core business, but others are one-off for the current quarter. Sure. Yeah. Sale benefit, yeah. Sorry, I haven't addressed your second question. See, that sale got concluded towards the end or beginning of the current quarter. We are in the process of consuming it, this thing, consuming it, which will also involve a collection of some outstandings that will continue till this thing, Q3 and some part in Q4. A good part of the benefit should start kicking in towards the later part of the current quarter and mostly from Q4. Fully from next financial year. Perfect. Perfect. Thank you so much. I'll get back for a follow-up. All the best. Thank you. The next question is from the line of Deepak Lalwani from Unifi Capital. Please go ahead. Yeah, hi. Congratulations, team, for stellar performance from a delivery standpoint. It is a very strong execution quarter. Kudos to the entire management team and the efforts that you have been doing to turn around the business. It is a great reflection this quarter of the efforts and the return of rewards of the same. With that, I have a couple of questions. The first one is, sir, could you call out that due to ARENA, what would be the extent of revenue, EBITDA, interest, and debt reduction that we will see in Turkey? Okay. Revenue will be in the range of about $300 million. Debt, if all this gets fully closed, we could have an advantage of between $50 million-$55 million. Krishnan, sir, the EBITDA and interest cost element as well, too? See, interest cost, you can see. At $50 million-$55 million, I mean, $55 million at 43%-44% rate, you can work that out. EBITDA would be positive. I do not have the ready-made number, but at the PBT level, it is a clear loss. Understood. Okay. Sir, could you specifically also speak about the $20 million receivables that we had spoken about earlier? Will there be any incremental provisioning required for the same? Also, what do you think would be the key timelines in which the Connect business would wind down, and when will that start to reflect in the operational uptick in our numbers? Yeah, maybe. Yeah. One will answer the second one when you need time to speak to my question. See, the second part of the question is just answered to Nitin's question. The benefit will start kicking in from Q3, but since the sale got consummated just now. In terms of ensuring all the inventories are handed over to them, all the ARs are collected, the benefit will be fully seen from beginning of next year and mostly from Q4. The first question on concarded. Some collections have happened in this quarter. If you recollect the previous quarter, I had mentioned all these are concarded cases. Definitely, it's going to be slow, and in our expectation, it will take about 18 months-24 months. This is going to happen only slowly. Are there increases in the concarded cases? I mean, still the higher number of concarded cases is still there. Roughly in the current year, between January to September. About 4,400 cases had got reported, which normally would be in the range of 2,000-3,000 entities in a year. We feel whatever is balanced, we should be able to collect, and we have to take a call as it stands at every quarter. We do not foresee any major challenge, but it is going to take some time. Understood, sir. Understood. Okay. The next one, sir, is could you just call out what has been the reason for the slightly more higher increase in the interest cost this quarter? Also, what has been the factoring cost for this number for this quarter? Okay. So overall, the factoring cost for this quarter is about INR 45 crore. And for last year, same period, about INR 33 crore. That takes the total interest and factoring cost to INR 161 crore, which was INR 117 crore last year, a 37% increase. There is an increase in ARENA. From INR 69 crore last year to INR 101 crore in the current year and an increase of 46%. If you take that out, in the rest of the business, the increase is from INR 48 crore to INR 60 crore, which is a 24% year-on-year increase. Understood. Sir, incrementally, how should we think about the interest cost going forward, sir? Okay. In the rest of the markets, because of higher business growth, there will be absolute increase in the working capital. However, interest rates are coming down a bit slowly. We think the interest costs as a percentage of revenue should come down. Rest of ARENA, outside of ARENA. In ARENA. The two steps which Hari mentioned, one, the sale of Connect, and we are also in the process of winding down our Turkish Lira business. These two, ideally in the next six months, should be fully affected too. If that happens, you will see a significant reduction both in the debt levels as well as in the interest costs. See, the important point is. The interest cost today is very high in ARENA because of Turkish Lira loans. If we exit or wind down significantly the Turkish Lira business. The debt that we need to raise in the local currency is much lower, and to that extent, the incremental benefit will be significant. The interest reduction will be significant. Understood. Sir, it's fair to assume that the Connect business that we've sold had a large component of the Turkish Lira. As that business is going off. 100% Turkish Lira. Got it, sir. It's a 100% Turkish Lira business. Noted, sir. Sir, just my final question is, how should we think about your incremental OpEx? Is your current OpEx adequate to support this high revenue growth that you continue to do? Also, could you specifically call out an outlook region-wise for the businesses in the second half? Okay. Let me try and attempt that. So firstly, we continue to see growth on SSG with the momentum we are building, and that will require continued investment, as I mentioned, on presales, platforms, academy, a whole lot of things. So clearly, we will invest, and there will be more OpEx going there, but the return on investment will also be very good. As I mentioned, the gross margins are higher on that business, and the profitability levels are higher than the Redington average. So we clearly see more investments. We're getting leverage because of the larger revenue size and growth. In terms of outlook, so far, India, UAE, KSA, all three geographies, we definitely see good outlooks, at least in the near term, the next two, three quarters. There is good reason to believe, and all business units as well, including mobility. There is a strong momentum on mobility, and we see that continuing for the next two, three quarters. As I mentioned, PC, we expect the PC growth to pick up if the trending, what we see in India, is right. We also have several deals in the pipeline on technology solutions, which we expect to fruition in Q3 and Q4, both in India and overseas. Definitely, the outlook is positive and promising. I'm not able to give you a number, but it's promising. We will continue to invest, some in the core business, more in the SSG business going forward. We're actually crafting up, as we speak, three-year plans on how to look at multi-year investments for things like SSG in a way that we can get the right return on investment. Understood. Sir, on the OpEx, could you just suggest that is the current OpEx enough to support the adequate high revenue growth as a percentage of revenues, or should we think that that can go up incrementally? I would think it can go up incrementally. The OpEx as a percentage of revenue. You got good leverage this quarter. See, you need to look at OpEx in two forms. One, the core business. And the other one, investments related. What you see now, while there is an overall control on OpEx, if you see the core business removing the investment, the optimization is even further, right? On the investment part, which is what Hari mentioned, that we feel the investment needs to be more to ensure the capability building is in proper form, and SSG is definitely looking very attractive, and that's our focus area, this thing area also. We think we need to make right investment, and we should not miss the opportunity. We will be mindful to keep OpEx percentage growth lower than the gross margin growth. That was always our intention. We will definitely be working our own action plans to see how to keep that leverage going. See, I need to tell you one thing, which is a very important point. You all know. If the gross margin is X percentage, operating profit is about 1/2 of that, and PAT is about 1/4 of that. What we had observed, I mean, you can see from the numbers, from the incremental gross margin, what we have derived is almost half of that into the PAT, which very clearly shows, which is a point we have been making even in the last earnings call also on the large deals, right? When we are able to generate incremental gross margin, keep OpEx and working capital under control, what will flow through into the profit will be significant. That is what we had seen very clearly this quarter. Wonderful, sir. I wish you more quarters of such execution. All the best. Thank you once again. Thank you. Thank you. Thank you. Before we take the next question, a reminder to all, you may press star and one to ask a question. The next question is from the line of Pratik Kothari from Unique PMS. Please go ahead. Yes, Hi. A very good morning. First of all, congratulations. A very strong and quick comeback in numbers. One on TFG. Last quarter or last two quarters, we had called out some profitability pressures there. I mean, we were winning large deals, but there was on working capital and profitability, we were seeing some issues. One growth this year is an outcome of that where we have let go of a few contracts. Just overall, how is that space shaping up? Let me just set the context. TFC, now the new TFC for us is really server, storage, networking, the hardware components. It had some of the software pieces which have moved to SSG. When we start comparing, we'll compare TFC to TSC likewise. The actual size of the business has got restated. As you will see, the percentage contribution of TSC to the overall business. We are definitely seeing good enterprise demand. We are seeing large deals. We will be selective. We will not let go of deals because, as we mentioned in the last few quarters as well, it's important for us to be relevant in the space with our brands and vendors. There is also a lot of Make in India brand coming up, and the data center deals in India are growing up. We will participate in these deals. I think Krishnan had mentioned in the previous earnings call that we always look at, by deal, what will be the ROSÉ that we'll get, and what will be the profitability. We will look at a balance of both. Clearly, if I look at a pure margin perspective, it might pull down the weighted average margin, but with the incremental margin and profitability we'll get on the deals, we'll only increase our leverage. That's how we will look at it. Clearly, we will go after deals, and we'll balance our risk and return. That's how we're looking at it. You will see we do have several deals in the pipeline coming up for the next two quarters, and some of them are fairly large. We will go after them, and as and when we make them happen, we'll also report and share with the group. See, these large deals are incremental revenue, Pratik. That's the way you should see it. Outside of it, we will still ensure there is an interesting growth. If there are opportunities which are incremental where our cost increases are going to be marginal, we would want to handle those. Correct. Fair enough. Suppose this Vodafone agreement exits, I mean, how much more Lira business stays in ARENA? Or is it all USD? It is a progressive approach we are taking. As Krishnan mentioned earlier, the Vodafone contract, all of it is 100% Lira. There is some amount of consumer electronic business within the IT business that we have, which also we are exiting. It might take another quarter, quarter and a half to get exit from that. There is some channel business which has to be done in Lira. It is not a perfect market where I do not become relevant for a brand. If I go with a brand, I have to operate in multiple channels. There might be some amount remaining there, but a smaller amount where some channels do only business in Lira. I cannot work with a brand if I do not do both. Largely by Q4, as Krishnan mentioned, both from the Vodafone contract and we call it the mixed business internally, which is basically Lira business on specific products that we'll exit. We might have a small mix of channel business, which is I have to work with a brand which has got both. Fair enough. Sir, last, more of a discussion point than a question, this 40% dividend payout, I mean, in years like this where we are seeing strong growth and possibly even going forward, I mean, should we think of being more flexible in terms of maybe paying out lower? Maybe instead of paying out 40% every year, do it over three-five years, such that we do not do it at cost of balance sheet. Obviously, ramp this up when the growth slowers. Any thoughts around this, anything we can think of instead of doing 40% every year? Thanks for the. Sir, thanks for the feedback. That's very heartening. We will bring it to our board as well and have a discussion. Your point is bang on because if we don't want to leave growth on the table at the cost of dividend, because our current dividend policy and profitability allows us to grow 10%-12%, and there is market growth available, we definitely value feedback like this, and we will bring it for discussion to the board. Sir, sorry. Very good opportunities for growth. We just want to be mindful not having enough leverage advantage should not be impacting. We capturing that business. We are very mindful of that. Exactly. Exactly. I mean, just that dividend payout should not come in the way. I mean, it's better you reinvest a 20% ROCE than give it back to us. Thank you. Thank you and all the best. See, when we do not have requirement for money, we would be very happy to give it back to you. If you think there are requirements, we would want to give you better returns. That is the objective. Correct. Correct. Correct. And there are peer companies in markets who are doing this where they change this dividend ratio based on the balance sheet that they have. We can discuss this more later, but yeah, thank you. Thank you. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchstone telephone. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Good morning, sirs. Congratulations on a good set of numbers. I think most of my questions have been answered, but just one question related to ARENA, which I could not fully understand. On the EBITDA side, basically, we were incurring some losses. Now we have sold our Lira business substantially. Let's say from FY 2027 onwards, on a quarterly basis, what would be the change in EBITDA because of this transaction? Sarvesh. Frankly, the EBITDA percentage in ARENA is the highest within the group. The reason why it does not matter is because you know well, EBITDA is a factor of the interest rate. At those interest rates, it is still not working out, and hence we are making loss. From an EBITDA perspective, it may not be a big difference, but from a profit before tax or after tax, it will make a difference. Our objective is to turn to profits. Right now, the visibility is reducing loss. Maybe to make it nominal, but there is a lot of work to do in terms of converting the loss into profit. Work has started, but it will take some time. Okay. Sir, you mentioned that the interest cost saving would be around, I think, $23 million. What would be the EBITDA, let's say, for this quarter? If you take out the sale-related expenses and all, what will be the EBITDA for the remaining part of the ARENA business for this quarter? Okay. I don't have a ready-made number. I think it would be north of 3%. North on 3%. What is the remaining sale that we have, sir? After the sale of the business, what is the going concerns quarterly revenue? We have the ARENA IT business, right? There are three parts of business. One is Connect, which has got divested, we discussed. Second, there are still more some TL-related businesses that we handle, and we are in the process of reducing that. The third portion is the ARENA IT business. If you recollect, Hari also mentioned it is predominantly US dollar, and it is like any other IT business that we handle in the other parts of the world. I think we're roughly around $500 million, plus minus, Sarvesh. That business will continue. Right now, it's flat to decline because of the market situation. We expect it will be, depending on the market size and our share, roughly $500 million next year as a number if we have to start with. Okay. On the working capital side, is there a substantial difference between the Lira business which we sold and the remaining part of the business? It is higher. I won't say substantially higher. It is higher. On one hand, we have working capital more than the normal. Second, the interest rates are higher, and hence it's not viable. Okay. Understood. Finally, sir, on the inorganic side, are we inclined to look at some of the opportunities in the market? Are there such opportunities that we are finding, or does it not add any value to us as such to do any inorganic? We always explore this. One area where we are exploring is the Software Solutions Group because that's an area that's evolving very nicely in terms of a lot of new things, new areas of capability, new areas of competency we need to build. More small inorganic opportunities is what we're looking at. I don't think we are ready at this stage because we are learning as well. Cybersecurity, for example, is a big growth area, and it is ripe for distribution because the MSSP, the security practices, is almost at 20% of the security product business's security practices. A lot of our existing partners do this, but this is a very complex area and growing very rapidly. Clearly, between security, between cloud, and some of the competencies we want to build, we are exploring, I would say, very early stages right now. Understood, sir. Thank you. All the best for the coming quarters. Thank you. Thank you. The next question is from the line of Lakshminarayanan from Tunga Investments. Please go ahead. Yeah. Good morning. Just one question. In terms of the Visa business, how the Android phones are actually growing, just want to understand that particular part. I'll give two perspectives. I'll give India and then overseas. Clearly, that's been one of our very nice growth drivers, and I think I alluded to it in my opening presentation. We work with two premium brands. The premium part of the market in India is growing very nicely. Of course, Apple is a very strong player there, but a couple of the Android brands have also moved very, very nicely. I would say it has been a big contributor over the last two to three years on our growth numbers. This quarter also, it has done well. The D2R channel, the direct-to-retail channel that we have built with over 5,000 outlets targeting only premium phones, has been one of the key drivers for this. Overseas, we do work on a few premium brands as well, and both in KSA, UAE, as well as Africa. It has also been a good contributor. Android premium brands has been a good growth trajectory for us. Got it. Yeah. It was mentioned recently that Apple, they called out in their earnings call that India has actually grown very well. Now, our growth is ahead of Apple's growth in India in the sense that are we getting higher market shares? Second, is the Android phones are actually outstripping the growth of Apple phones, especially in the premium segment we are capturing? Is hard to really give relative numbers, but because Apple reaches some part of the market directly and some part is distribution. Clearly, in the distribution space, we have been playing a role on upcountry as well, and there is a lot more growth on upcountry, which could have resulted in the distribution time being a little bit higher than for the discipline market. As you may be aware, there are only two players in India, Ingram and us, in the Apple space. There are times when we do a bit better, and there are times when they do a little bit better. The numbers are roughly 50 plus minus. We are not able to give exact numbers on this, but yes, the market for us is growing because of the many SKUs they have in the upcountry. That is what I would say in terms of Apple itself. Do you have a second question? That's good. Okay. Yeah. We're doing well. You talked about numbers as well. I think the value business, from a value perspective, Apple continues, and you can see the published numbers. You can see Apple continues to gain share from a value perspective because they sell into the super premium, ultra premium space very well. Clearly, they're doing very, very well, and we're taking, obviously, advantage of that growth as well. From a value perspective, Apple continues to become better and better from a share. Got it. On the SSG, which is the professional services, just want to understand what kind of, how many resources we have providing these professional services. Second, what kind of liability you actually assume because these professional services also mean that your person is there in the premises, and there could be issues, etc. Just want to understand how are you thinking about this SSG business, how many professionals, and what kind of liabilities you actually come across. Sure. Our own resources, we roughly have about 125 resources in the company, mostly in India on professional services. These resources are focused on things like migration, modernization, FinOps, DevOps, a range of services. In most cases, we work with customers through channel partners. We closely watch our liabilities. Because we want to scale this business, the approach we are also taking is how to create cookie-cutter models rather than every service becoming a bespoke service deal. Take migration, for example. If there are 100 customers, does it have to be 100 instances of migration, or can I find commonalities and find a way to automate this and have different, similar sets of migration for similar sets of customers? That will be our approach. In all of this, the approach we will take is productize the professional services business so that we can scale up with our partners. We do want to bring our partners along in the journey, people who are providing professional services, and we can share the margins and the revenues with them. Got it. Any specific areas which actually led to an excellent growth in that group in the first half? Particularly CISA? I think it's sometimes. I think it's a matter of focus. I think as we moved within the organization, the different groups around. And also put all the focus because clearly what's happening is the cloud part of the business had moved completely subscription. Whereas when you look at cybersecurity and software, some products were subscription, some were still licensing multi-year contracts. We believe directionally, everything will move subscription. Similar go-to-market motions where people want to work on a digital platform, they want to automate the renewal process, they want to bundle professional services even from vendors. All that instinct, once you put it together, it becomes similar. We still work with many brands, so we need to get focused and build practices around each one of these areas separately. I think the shared focus and attention has created breadth and depth on all the brands. We have taken on more brands. We have looked at our wallet share brand by brand and where we are weak and what actions we need to take. It is the beginning of a journey, as I said, because the last three months, this transition has happened, and we are encouraged by what we see. Now, does it mean that next quarter will be as good or better? I think directionally, if I look at the next 6-12 quarters, clearly this area we want to grow between 30%-50%. Last year, we grew about 22%-23% if I aggregate all of the SSG pieces year over year. This year, we can already see directionally we are headed 40%+. We will continue to work on it. The opportunity is there. It is a question of good execution and good focus. Okay. All right. Just to also add. You recollect a couple of years back, cloud was part of the current SSG. At that time, we used to call it as enterprise segment. And it was growing at about 20%-25%. When it got separated out, then we started seeing a 30% growth and then a 40% growth. That is the same thing we would want to do in SSG. And as Hari said, we just started the journey there. Got it. Got it. This was the last question from my side. When you set out this financial year and we are half year through, what are the areas which have actually done ahead of your expectations, and which are the areas or strategies that have done behind your expectations broadly? Very good question. Clearly, SSG. We expected things will transition, but not so quickly. Definitely, it has done ahead of expectation, and we would like to maintain it, but there is a lot of work, and we want to make sure there are no missteps here. MSG mobility has been ahead of expectation for a variety of reasons. We did not expect the market to continue at the same growth rate. Overseas actually surprises even more. In Middle East, Africa, the monthly run rate on Apple and some of the Android businesses has been quite ahead of our thinking and plans. Both those are ahead. I wish we could do more in the ESG space. The PCs have long promise of Windows 10 to 11 refresh, which has been slow and not there yet. The AI PC, we are quite. Inspired by the numbers in this quarter, especially in India. That has not lived up to its promise. I would say it is a bit behind. TSG is thereabouts there. I think a lot of the business in TSG is becoming larger deals. Also, margin and profitability is an area on technology solutions that we need to work very hard on to bring that up in terms of value Redington brings to the table and our ability to grow the size and share there. If I had to take a quick shot at your question, clearly, SSG and mobility are ahead of our plan and thinking, and TSG and ESG is behind. Yeah. Okay. Thank you so much. Thank you. The next question is from the line of Rucha Sumaiya from Old Bridge Mutual Fund. Please go ahead. Hi. I'm transferring my question. Congratulations on a good set of numbers. I just had one question with respect to the growing data center capacity in India. Specifically, how is Redington contributing to this trend? Are there any specific partnerships or initiatives, technological enabling efforts in place? Are you referring to the Make in India? No, the growing data center efforts or actions, that is the trend that is going on around. How is Redington placed? Is there any capability that is positioning, that is enabling our positioning to be a little stronger around the data center ecosystem? Very, very good question. There are two parts to this question. One, of course, how can we engage in deals? Some of the large deals I alluded to are actually data center related. You are aware that the hyperscalers, when they put the data centers, they work directly, and we have no role to play in it. Increasingly, local deals, which are Make in India products being sold to data centers in India, we are being asked to come in to stitch deals together. We play a role, and you will hear some of those as we go along. They are fairly large deals, some of them. That is a starting point. We are actually in the middle of crafting a data center strategy. There are definitely many opportunities we see. For example, once a data center is set up or getting set up. What about cooling systems? What about power for the data center? We do work on some of those categories, types of categories. Should we get into them wholeheartedly and work with vendors to develop products in those is one question. Similarly, once data centers are set up, clearly, there is a requirement for software, a whole range of software from platforms to application software that will go into it. That is clearly an area we will play a role. Then fulfilling capacity because once data centers are built up. Whether they are public data centers or co-locations or private data centers, there will be clearly a requirement for the people who are building these data centers to fill them up with capacity, either with mid-market customers or enterprise customers. We are consciously looking at. Each of these areas and saying, "What kind of action planning teams that we can have to get into these areas and get a share of this piece of the market?" It has been a recent phenomenon, the non-public and then more Make in India data center growth. We are in the middle of that discussion and strategy formation. Okay. Works. Thank you so much. Thank you. The next question is from the line of Nikunj Mehta from Wealth Guardian. Please go ahead. Good morning, sir. Congratulations and very good execution. My question was pertaining to Turkey. What are the other steps that you all are planning to take apart from this Vodafone deal that you've done? Any similar deals that you all are looking at, or are you all looking at completely exiting Turkey? Any update on that, if you could give it? That would be useful, please. Nikunj, I'm sure you acknowledge there have been a lot of steps that we have been taking in the last one and a half years, and we think all in the right direction. I mean, we sold off PayNet. There had been a lot of debates internally. Is that a crown jewel? Should we keep investing? What should we do? We felt core business is much more important. We divested. The process took some time. The market did not recover. We took some decisions in terms of cutting down some costs. It wasn't sufficient. Still, we continued to make some loss. We decided to sell the TL business, and we had moved on. That's what you see in the form of Connect getting divested. Unfortunately, last quarter, another event happened which was unexpected, and we need to handle it. Overall, the ecosystem is quite challenging. As I keep mentioning, the full credit to the leadership team there. They have been trying to maintain above board as much as possible. Right now, our decision after Connect is also to exit from the rest of the TL business. As I had mentioned for the previous query, we think it will not automatically move into a profitable situation. We will still have loss, maybe a lesser loss. For us to get converted into profits, there are certain strong steps that are required, which we are in the process of doing. Maybe in about six months, we should see some light at the end of the tunnel. That is where it stands. We are taking right steps, Nikunj. That is what I can tell you at this point. If I can add to what Christian said, Nikunj. There are two or three parts to it. The light at the end of the tunnel. We have a business in Redington, Turkey, that's very software-centric. That business actually has been growing good double-digit profitably. There are parts of the Arena business, which is Microsoft-centric, also has grown very well this quarter. It has actually contributed to the SSG part of the business, where there is cloud and security and all of that. In the DTAM space, we have more than 50% share of the Microsoft business in the market in Turkey, also quite profitable. We are clearly working on action plans there. On one side, reduce dependence on Lira business and really manage the working capital down, working capital required, and be more US dollar dependent. The growth on the software cloud-centric area in Turkey is definitely. Looking promising. That can balance off everything else. We are headed in that direction as well. Thank you so much. Really appreciate the answers and the clarifications and wishing you all the best for the future quarters. Thank you, Nikunj. Thank you. The next question is from the line of P. Venkatesh from Corporate Database India Private Limited. Please go ahead. Hello. Good morning, sir. Yes, you are audible. Please go ahead. Yeah. I want to know what would be the debt levels in ARENA currently? What has been the amount of debt that has been divested, that has been repaid post PayNet divestment? Also, I want to know what would be the investment that you are talking for SSG? We have been referring to some investments that we'll be making going ahead. What would be the outflow in those investments? Lastly, I want to know, you had referred to the four areas in SSG. Broadly, what would be the mix of those four areas in SSG revenues? Thank you. Okay. I'll answer the first part of the question, Venkatesh. ARENA debt levels are currently at about $130 billion and odd. Used to be about $160 billion+. Assume those concarded cases had not happened, we would have definitely been better off with about $15 million-20 million. That is where we stand. Yeah. Talking about the investment in SSG, too early to talk about those investments since there was a question, I did say that we are exploratory stage right now. We cannot even talk about investment levels, etc. In terms of the mix of the business, you can say that there is somewhat of an equal mix between security, cloud, and software business, with software being a little bit higher, but somewhat of an equal mix. The professional services part of it is less than 10% right now, but it will definitely be an area of growth for us. Between the remaining three businesses, you can say fairly equal, with software business being slightly higher weighted. Thank you, sir. Thank you. The next question is from the line of Sunil Kothari from Unique AMC. Please go ahead. Thank you for inviting me, sir. First, congratulations on the agility and the flexibility. We are slowly now adapting to remove some businesses. We are giving enough thought before removing those because ultimately, we are serving those same customers and same suppliers across the other part of the world also. Really, very sensible decision we are taking. Hearty congratulations for that. My question is, we have one slide on our presentation. It talks about key technology trend, growth, CAGR, and what it means for Redington and on. Combining this slide, I would like to understand is, since last three, four years, we have grown our top line really well. I am talking yearly, nothing to do with this quarter or the next quarter. Our bottom line is almost static, having some reason of one-time some currency-related interest and everything. Now, another 10 years, if you look at the last 10 years, the way we've grown is around 13%-15% top line, similar CAGR of bottom line. What's your thought process for the next three to five years? Which are the challenges which can derive from this trend or maybe accelerate this trend? Something qualitative will be really helpful. Okay. Let me try and answer that question. See, you already mentioned that we have been growing at 15% top line and 15% bottom line. If we can maintain that kind of growth, obviously, that would be very interesting for us and will be a good vision. Now, to answer your question, we clearly, the world is transforming. 25% of the total distribution market has become software globally and software and services. With AI, it is only going to deepen and accelerate. In our mix of the business, last year it was 15, now it is become 16. If I look at the different business units, clearly, the Software Solutions Group today has an ability to appropriate higher margin to drive higher-than-average profitability. There is also a professional services, a bundle services attached to it, which can also get you higher margins and higher profitability. That's one of the reasons we embarked on this journey to grow that piece of the business faster. Now, to do this right, Software Solutions Group business right, capable digital platforms because everything is done on subscription on the digital platform. And we will have to do renewals on it. We'll have to find a way to create a lot of value on the digital platform by bringing a multitude of solution providers together so that this business remains sticky to Redington because it is over digital. We are bringing in software brands, we're bringing service brands to resellers and customers. We have to keep it sticky. We have to make sure that we add a lot of value to brands and agentic AI solutions. That will be critical. Those are the positives and the risks. Now, clearly, hardware part of the market is getting more commoditized. As it gets more commoditized, the expectation from brands and OEMs is to really give lower and lower margins to you. What are the risks? The risks can be in the hardware areas of technology solutions and PCs where they are commoditized. That is the balance we'll have to seek. We'll have to keep working on higher margin solutions, and we'll have to make sure that we bring a lot of value over the digital platforms. That's really how we are thinking about it. Looking at the last four, five years, the way we have grown our top line, bottom line was not matching with reasons. Next three, five years. Should we expect better bottom line because of this strategy? Because we are SI, we are discontinuing some tough businesses or loss-making businesses. Those should be the very realistic expectations from you. Sunil, let me answer this. See, you are looking at from a window of three, five years' time frame. Please understand your start point is COVID period. Which, believe me, is completely unreal for this business. That is a time where demand was peaking, supply was restricted. You can imagine for an intermediary like Redington. What one-off opportunity that is, right? To maintain that profitability, that profit amount. You cannot imagine what we need to go through, right? I would urge you to make a comparison between various global players in this industry. This is Redington numbers. I am sure your question will get very clearly answered. In terms of growth. In terms of the profit percentage, we keep talking about profit percentage. I do not think anyone does. Third is the return ratios. All the three of us is significantly superior compared to the rest of the players. I think that's what, in our view, is important. Yeah, we knew that we haven't grown the absolute numbers, but it's not easy. We feel happy that we are able to protect our profitability. I mean, your question was into the future. I hope Hari has answered. We remain very positive into the future, and we think SSG will be a very important contributor in terms of our profitability into the future. Great, sir. Good luck. Thanks a lot. Thank you, Sunil. Thank you. The next question is from the line of Vinay Menon from Monarch Capital. Please go ahead. Thank you, sir. Congratulations on a great set of results. Just a few questions. One is, sir, Windows support end support has ended, and are you seeing any impact already of a switch to Windows 11? Is it any visible trends in the market? As I mentioned earlier, we have not really seen a big uptick because of the migration. Clearly, consumers are still waiting, and a lot of them have not migrated. Commercial maybe a little bit more, but I think there seems to be a wait-and-watch approach rather than a whole lot of people trying to migrate from 10 to 11. We also hear that there may be extended support provided beyond the timelines given. We have not really seen a big impact of the 10 to 11 refresh yet. Okay. Okay. That helps. One thing on the data center side, sir, in terms of large deals. Are we looking to get large deals which might be a little lower on margins, or are we going to steer away from anything which impacts our margins or our OpEx in any way? This got answered already, Vinay. These are really incremental business. And these business, you need to ensure that you have adequate capital. You are able to manage the complex logistics and structuring of the transaction. If we are okay with that, we are quite okay to go ahead. I mean, provided it gives us incremental revenue and incremental margin, as Hari said, our key decision-making principle on some of this is return on capital employed. We would want to ensure our ROCE is secured. From a profit percentage perspective, these being large deals, I do not think we can expect similar profit percentage. That is why when it becomes larger, we would want to call out and disclose so that you are able to track our performance otherwise very, very clearly. Thank you, sir. Thank you. All the best too. Thank you. Thanks, Vinay. Thank you. Ladies and gentlemen, due to time constraint, this was the last question for today. I now hand the conference over to the management for closing comments. Thank you so much for all your questions, and thank you for listening. We hope we answered most of them adequately. Thank you for your trust in us, and we look forward to another good quarter. We'll be in touch. Bye for now. Thank you. Thank you very much, sir. On behalf of Redington Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Speaker 3: Ladies and gentlemen, good day and welcome to Redington Limited Q2 and H1 FY 2026 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V. S. Hariharan, Managing Director and Group Chief Executive Officer of Redington Limited. Thank you, and over to you, sir. Ladies and gentlemen, good day and welcome to Redington Limited Q2 and H1 FY 2026 earnings conference call. ladies and gentlemen good day and welcome to redington limited q2 and h1 fy 2026 earnings conference call This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. this conference call may contain forward-looking statements about the company which are based on the beliefs opinions and expectations of the company as on date of this call These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. these statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict 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. 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 Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. should you need assistance during the conference call please signal an operator by pressing star then zero on your touchstone phone Please note that this conference is being recorded. please note that this conference is being recorded I now hand the conference over to Mr. V. i now hand the conference over to mr. v S. s Hariharan, Managing Director and Group Chief Executive Officer of Redington Limited. hariharan managing director and group chief executive officer of redington limited Thank you, and over to you, sir. thank you and over to you sir

Speaker 11: Thank you. A very good morning to everyone. It's a pleasure to be here, and I'm delighted to share with you our results for Q2 2026. This has been our best quarter so far from a revenue perspective, recording nearly INR 29,118 crore of revenue, with a quarterly profit of INR 388 crore. The profitability was the best Q2 ever. Our revenues grew at 17%, with EBITDA and PAT growing faster than revenues. Overall, PAT for the group was standing at 1.33% for the quarter, and excluding ARENA, PAT was at 1.57%. It is a continuing story of profitable growth, with growth coming back strongly across all business segments and many geographies. From a geography perspective, the revenue growth was contributed by a strong growth in many geographies. As I said earlier, India at 23%, UAE at 23%, Saudi Arabia at 10%. Thank you. thank you A very good morning to everyone. a very good morning to everyone It's a pleasure to be here, and I'm delighted to share with you our results for Q2 2026. it's a pleasure to be here and i'm delighted to share with you our results for q2 2026 This has been our best quarter so far from a revenue perspective, recording nearly INR 29,118 crore of revenue, with a quarterly profit of INR 388 crore. this has been our best quarter so far from a revenue perspective recording nearly inr 29,118 crore of revenue with a quarterly profit of inr 388 crore The profitability was the best Q2 ever. the profitability was the best q2 ever Our revenues grew at 17%, with EBITDA and PAT growing faster than revenues. our revenues grew at 17% with ebitda and pat growing faster than revenues Overall, PAT for the group was standing at 1.33% for the quarter, and excluding ARENA, PAT was at 1.57%. overall pat for the group was standing at 1.33% for the quarter and excluding arena pat was at 1.57% It is a continuing story of profitable growth, with growth coming back strongly across all business segments and many geographies. it is a continuing story of profitable growth with growth coming back strongly across all business segments and many geographies From a geography perspective, the revenue growth was contributed by a strong growth in many geographies. from a geography perspective the revenue growth was contributed by a strong growth in many geographies As I said earlier, India at 23%, UAE at 23%, Saudi Arabia at 10%. as i said earlier india at 23% uae at 23% saudi arabia at 10% If you remember, last year, around the same quarter, we had a growth challenge, and we have recovered well. GCC, a newly formed cluster consisting of GCC countries outside of UAE and Levant countries, grew at 22%. Africa continued to be stable at 8%. Overall, a very strong performance, with PAT growing faster than revenues across most geographies. As I said earlier, all business units contributed well to the growth. Mobility grew by 18%, contributing to 35% of the top line. Driven by stronger demand in the premium segment. Impactful NPIs. This quarter, we have NPIs, and that had a good impact. A very strong execution in the direct-to-retail segment in India during the quarter. The ESG business, consisting of PCs, grew by 11%, contributing to 32% of the top line. Due to PC business growth, both in India and Middle East. If you remember, last year, around the same quarter, we had a growth challenge, and we have recovered well. if you remember last year around the same quarter we had a growth challenge and we have recovered well GCC, a newly formed cluster consisting of GCC countries outside of UAE and Levant countries, grew at 22%. gcc a newly formed cluster consisting of gcc countries outside of uae and levant countries grew at 22% Africa continued to be stable at 8%. africa continued to be stable at 8% Overall, a very strong performance, with PAT growing faster than revenues across most geographies. overall a very strong performance with pat growing faster than revenues across most geographies As I said earlier, all business units contributed well to the growth. as i said earlier all business units contributed well to the growth Mobility grew by 18%, contributing to 35% of the top line. mobility grew by 18% contributing to 35% of the top line Driven by stronger demand in the premium segment. driven by stronger demand in the premium segment Impactful NPIs. impactful npis This quarter, we have NPIs, and that had a good impact. this quarter we have npis and that had a good impact A very strong execution in the direct-to-retail segment in India during the quarter. a very strong execution in the direct-to-retail segment in india during the quarter The ESG business, consisting of PCs, grew by 11%, contributing to 32% of the top line. the esg business consisting of pcs grew by 11% contributing to 32% of the top line Due to PC business growth, both in India and Middle East. due to pc business growth both in india and middle east PC signs of the PC refresh cycle, and we also see increased AI PC penetration, especially in the commercial space. We see that in India. An estimate that the growth could be higher in the second half of the year if the trend continues. Technology solutions grew by 9%, contributing to 16% of the top line due to higher enterprise demand. I wanted to spend some specific time on the Software Solutions Group. As you remember, over the last few quarters, we've been talking about our increased focus on software solutions, and now we have brought the various pieces into one Software Solutions Group, consisting of hyperscaler business, cybersecurity business, application software, and professional services. This is the first quarter we are reporting the results as this group in this new form. It grew by 48%, contributing to 16% of the top line. PC signs of the PC refresh cycle, and we also see increased AI PC penetration, especially in the commercial space. pc signs of the pc refresh cycle and we also see increased ai pc penetration especially in the commercial space We see that in India. we see that in india An estimate that the growth could be higher in the second half of the year if the trend continues. an estimate that the growth could be higher in the second half of the year if the trend continues Technology solutions grew by 9%, contributing to 16% of the top line due to higher enterprise demand. technology solutions grew by 9% contributing to 16% of the top line due to higher enterprise demand I wanted to spend some specific time on the Software Solutions Group. i wanted to spend some specific time on the software solutions group As you remember, over the last few quarters, we've been talking about our increased focus on software solutions, and now we have brought the various pieces into one Software Solutions Group, consisting of hyperscaler business, cybersecurity business, application software, and professional services. as you remember over the last few quarters we've been talking about our increased focus on software solutions and now we have brought the various pieces into one software solutions group consisting of hyperscaler business cybersecurity business application software and professional services This is the first quarter we are reporting the results as this group in this new form. this is the first quarter we are reporting the results as this group in this new form It grew by 48%, contributing to 16% of the top line. it grew by 48% contributing to 16% of the top line If you remember, we talked about it the previous quarter, that this group, for last year, grew somewhere between 20-25%. We clearly see signs of accelerated growth in this area. As I said earlier, there are four pieces in it. There is the cloud hyperscaler business, cybersecurity, application software, and professional services, and all of them recorded good double-digit growth. It also delivered higher-than-average PAT compared to the group, which contributed to our results being what it is. In the cloud segment, we are working with the hyperscalers and continue to take advantage of the cloud transition and digital transformation, which enterprises and large SMEs are going through. If you remember, we talked about it the previous quarter, that this group, for last year, grew somewhere between 20-25%. if you remember we talked about it the previous quarter that this group for last year grew somewhere between 20-25% We clearly see signs of accelerated growth in this area. we clearly see signs of accelerated growth in this area As I said earlier, there are four pieces in it. as i said earlier there are four pieces in it There is the cloud hyperscaler business, cybersecurity, application software, and professional services, and all of them recorded good double-digit growth. there is the cloud hyperscaler business cybersecurity application software and professional services and all of them recorded good double-digit growth It also delivered higher-than-average PAT compared to the group, which contributed to our results being what it is. it also delivered higher-than-average pat compared to the group which contributed to our results being what it is In the cloud segment, we are working with the hyperscalers and continue to take advantage of the cloud transition and digital transformation, which enterprises and large SMEs are going through. in the cloud segment we are working with the hyperscalers and continue to take advantage of the cloud transition and digital transformation which enterprises and large smes are going through In the cybersecurity and the software business, we have been focused on increasing the breadth of our offering, signing up more brands as it makes sense, and increasing the intensity of our go-to-market and the focus with the brands towards gaining wallet share. This is reflected in our growth in SSG of 53% in CISA and 44% in the rest of the world. Overall, there are umpteen opportunities that SSG can offer through subscription models and solutions. Now, where are we investing? We continue to invest in the digital platform, CloudQuarks. We have been talking about that. We already have the platform, and we are continuing to improve it, to add more analytics, to add white labeling, to add automation, to add marketplaces, et cetera. We are investing in technical presales teams. We are investing in a Redington Academy to train and create certified professionals both inside and outside the company. In the cybersecurity and the software business, we have been focused on increasing the breadth of our offering, signing up more brands as it makes sense, and increasing the intensity of our go-to-market and the focus with the brands towards gaining wallet share. in the cybersecurity and the software business we have been focused on increasing the breadth of our offering signing up more brands as it makes sense and increasing the intensity of our go-to-market and the focus with the brands towards gaining wallet share This is reflected in our growth in SSG of 53% in CISA and 44% in the rest of the world. this is reflected in our growth in ssg of 53% in cisa and 44% in the rest of the world Overall, there are umpteen opportunities that SSG can offer through subscription models and solutions. overall there are umpteen opportunities that ssg can offer through subscription models and solutions Now, where are we investing? now where are we investing We continue to invest in the digital platform, CloudQuarks. we continue to invest in the digital platform cloudquarks We have been talking about that. we have been talking about that We already have the platform, and we are continuing to improve it, to add more analytics, to add white labeling, to add automation, to add marketplaces, et cetera. we already have the platform and we are continuing to improve it to add more analytics to add white labeling to add automation to add marketplaces et cetera We are investing in technical presales teams. we are investing in technical presales teams We are investing in a Redington Academy to train and create certified professionals both inside and outside the company. we are investing in a redington academy to train and create certified professionals both inside and outside the company We are creating ecosystems such as marketplaces where we can bring management service providers and ISVs together with the products to get complete solutions for our customers, which is what increasingly, in this new world of cloud and AI, people are looking for. All in all, I think we have had good growth on SSG, and we hope to continue to maintain this momentum with our investments. I think the beginning of a journey. Moving on to operations. I want to talk a little bit about working capital and OpEx. Very efficient management of working capital and a higher mix towards mobility led to the overall lowering of working capital base to 31. OpEx continues to be managed well and grow slower than revenue. Grew at 9% year-on-year, giving us good operating leverage. Now, talking a little bit about our subsidiary ARENA. We are creating ecosystems such as marketplaces where we can bring management service providers and ISVs together with the products to get complete solutions for our customers, which is what increasingly, in this new world of cloud and AI, people are looking for. we are creating ecosystems such as marketplaces where we can bring management service providers and isvs together with the products to get complete solutions for our customers which is what increasingly in this new world of cloud and ai people are looking for All in all, I think we have had good growth on SSG, and we hope to continue to maintain this momentum with our investments. all in all i think we have had good growth on ssg and we hope to continue to maintain this momentum with our investments I think the beginning of a journey. i think the beginning of a journey Moving on to operations. moving on to operations I want to talk a little bit about working capital and OpEx. i want to talk a little bit about working capital and opex Very efficient management of working capital and a higher mix towards mobility led to the overall lowering of working capital base to 31. very efficient management of working capital and a higher mix towards mobility led to the overall lowering of working capital base to 31 OpEx continues to be managed well and grow slower than revenue. opex continues to be managed well and grow slower than revenue Grew at 9% year-on-year, giving us good operating leverage. grew at 9% year-on-year giving us good operating leverage Now, talking a little bit about our subsidiary ARENA. now talking a little bit about our subsidiary arena They continue to wait through economic challenges in the country while inflation and policy rates have been coming down over the last couple of months. Interest rates, the central bank rates, have gone below 40, and the inflation rates have also come down, while still remaining at stress levels. We continue to remain watchful in the concorded cases. This quarter, in order to reduce interest costs in Turkey and to minimize local currency exposure, ARENA has decided to divest from their Connect Vodafone contract. This was announced earlier. This should help us as we navigate forward in terms of improvement in our profitability. There were some one-off impacts as a result of this transaction in the current quarter. The overall loss in ARENA was INR 370,000,000, our share of the loss. They continue to wait through economic challenges in the country while inflation and policy rates have been coming down over the last couple of months. they continue to wait through economic challenges in the country while inflation and policy rates have been coming down over the last couple of months Interest rates, the central bank rates, have gone below 40, and the inflation rates have also come down, while still remaining at stress levels. interest rates the central bank rates have gone below 40 and the inflation rates have also come down while still remaining at stress levels We continue to remain watchful in the concorded cases. we continue to remain watchful in the concorded cases This quarter, in order to reduce interest costs in Turkey and to minimize local currency exposure, ARENA has decided to divest from their Connect Vodafone contract. this quarter in order to reduce interest costs in turkey and to minimize local currency exposure arena has decided to divest from their connect vodafone contract This was announced earlier. this was announced earlier This should help us as we navigate forward in terms of improvement in our profitability. this should help us as we navigate forward in terms of improvement in our profitability There were some one-off impacts as a result of this transaction in the current quarter. there were some one-off impacts as a result of this transaction in the current quarter The overall loss in ARENA was INR 370,000,000, our share of the loss. the overall loss in arena was inr 370,000,000 our share of the loss Over the last few quarters, just to bring everyone's memory up in terms of the actions that have been taken, ARENA has taken a series of actions, starting with payment divestment, tightening of working capital and OpEx, managing AR more closely, divesting from the local currency business, all heading to improve the health of the business. We remain hopeful to steer this in the right direction with ARENA leadership. We are also proud to share the news that VAR India for FY 2025 has awarded Redington as number one IT distributor in India. This is the third consecutive year in a row, and we are also happy to share that the lead has increased between number one and number two. This could not have been possible without the support of brands and partners, and of course, a fantastic leadership and execution team in India, the Redington team. Over the last few quarters, just to bring everyone's memory up in terms of the actions that have been taken, ARENA has taken a series of actions, starting with payment divestment, tightening of working capital and OpEx, managing AR more closely, divesting from the local currency business, all heading to improve the health of the business. over the last few quarters just to bring everyone's memory up in terms of the actions that have been taken arena has taken a series of actions starting with payment divestment tightening of working capital and opex managing ar more closely divesting from the local currency business all heading to improve the health of the business We remain hopeful to steer this in the right direction w ith ARENA leadership. We are also proud to share the news that VAR India for FY 2025 has awarded Redington as number one IT distributor in India. we remain hopeful to steer this in the right direction w ith arena leadership. we are also proud to share the news that var india for fy 2025 has awarded redington as number one it distributor in india This is the third consecutive year in a row, and we are also happy to share that the lead has increased between number one and number two. this is the third consecutive year in a row and we are also happy to share that the lead has increased between number one and number two This could not have been possible without the support of brands and partners, and of course, a fantastic leadership and execution team in India, the Redington team. this could not have been possible without the support of brands and partners and of course a fantastic leadership and execution team in india the redington team During this quarter, we have participated in many customer and partner events in many of the geographies we are in. The notable amongst them was the GITEX in Dubai, which happened last month. It was a great event where we connect with many brands and many partners across the Middle East, Africa, and Turkey region and build on our growth story further. We're also investing in many AI capabilities, and we will share the plans and the executions in the upcoming quarters. I'd like to thank every one of you for believing in us through our journey, and we look forward to your questions. Thank you. During this quarter, we have participated in many customer and partner events in many of the geographies we are in. during this quarter we have participated in many customer and partner events in many of the geographies we are in The notable amongst them was the GITEX in Dubai, which happened last month. the notable amongst them was the gitex in dubai which happened last month It was a great event where we connect with many brands and many partners across the Middle East, Africa, and Turkey region and build on our growth story further. it was a great event where we connect with many brands and many partners across the middle east africa and turkey region and build on our growth story further We're also investing in many AI capabilities, and we will share the plans and the executions in the upcoming quarters. we're also investing in many ai capabilities and we will share the plans and the executions in the upcoming quarters I'd like to thank every one of you for believing in us through our journey, and we look forward to your questions. i'd like to thank every one of you for believing in us through our journey and we look forward to your questions Thank you. thank you

Speaker 3: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nitin Padmanabhan from Investech. Please go ahead. Thank you very much. thank you very much We will now begin the question and answer session. we will now begin the question and answer session Anyone who wishes to ask a question may press star and one on their touchstone telephone. anyone who wishes to ask a question may press star and one on their touchstone telephone If you wish to remove yourself from the question queue, you may press star and two. if you wish to remove yourself from the question queue you may press star and two Participants are requested to use handsets while asking a question. participants are requested to use handsets while asking a question Ladies and gentlemen, we will wait for a moment while the question queue assembles. ladies and gentlemen we will wait for a moment while the question queue assembles The first question is from the line of Nitin Padmanabhan from Invest ech. the first question is from the line of nitin padmanabhan from invest ech Please go ahead. please go ahead

Speaker 4: Yeah, hi, good morning. Thank you for the opportunity. You have disclosed the SSG, I think, combined it and given it, so thanks for that. Just wanted your thoughts on, since we have it as a separate sort of thing, both cloud and I think put together, how would the working capital intensity here be related to the rest of the business? If you could just give a comparison. Versus the company average working capital, how would this look? Yeah, hi, good morning. yeah hi good morning Thank you for the opportunity. thank you for the opportunity You have disclosed the SSG, I think, combined it and given it, so thanks for that. you have disclosed the ssg i think combined it and given it so thanks for that Just wanted your thoughts on, since we have it as a separate sort of thing, both cloud and I think put together, how would the working capital intensity here be related to the rest of the business? just wanted your thoughts on since we have it as a separate sort of thing both cloud and i think put together how would the working capital intensity here be related to the rest of the business If you could just give a comparison. if you could just give a comparison Versus the company average working capital, how would this look? versus the company average working capital how would this look Okay. Hi, Nitin. Morning. Okay. okay Hi, Nitin. hi nitin Morning. morning

Speaker 10: Good morning. Good morning. good morning SSG will have normally lower working capital, but not significantly lesser. When compared to the company average, you can take it will be at more or less similar level. What you should note is the company average is mainly on account of MSG, where the working capital is much lower. That gives us an advantage. SSG is around the company average. SSG will have normally lower working capital, but not significantly lesser. ssg will have normally lower working capital but not significantly lesser When compared to the company average, you can take it will be at more or less similar level. when compared to the company average you can take it will be at more or less similar level What you should note is the company average is mainly on account of MSG, where the working capital is much lower. what you should note is the company average is mainly on account of msg where the working capital is much lower That gives us an advantage. that gives us an advantage SSG is around the company average. ssg is around the company average

Speaker 4: Got it. Perfect. The second thing was, I think you had mentioned that there is a pickup in the PC refresh cycle and the AI PCs and so on and so forth. If it continues, it is possible that the second half could be stronger. Is this common true across markets, or is this specific to India? Got it. got it Perfect. perfect The second thing was, I think you had mentioned that there is a pickup in the PC refresh cycle and the AI PCs and so on and so forth. the second thing was i think you had mentioned that there is a pickup in the pc refresh cycle and the ai pcs and so on and so forth If it continues, it is possible that the second half could be stronger. if it continues it is possible that the second half could be stronger Is this common true across markets, or is this specific to India? is this common true across markets or is this specific to india

Speaker 11: Thanks, Nitin. I think we largely see the trend in India. Overseas, it's still a little bit flattish. It's a single-digit growth, but we are seeing a higher single-digit and lower double-digit in India. Specifically on AI, we've seen about 22% of our commercial PCs in this quarter came from the AI classified PCs. We see a good trend. If I see the last six, seven months of activation of PCs from the numbers we see, clearly there is a growth compared to the previous years. There's a growth consistently every month in India. We definitely see the trend in the right direction in India. Overseas, yet to be seen. There is encouragement, but not enough of a window to call out that we are going to see growth going forward. Thanks, Nitin. thanks nitin I think we largely see the trend in India. i think we largely see the trend in india Overseas, it's still a little bit flattish. overseas it's still a little bit flattish It's a single-digit growth, but we are seeing a higher single-digit and lower double-digit in India. it's a single-digit growth but we are seeing a higher single-digit and lower double-digit in india Specifically on AI, we've seen about 22% of our commercial PCs in this quarter came from the AI classified PCs. specifically on ai we've seen about 22% of our commercial pcs in this quarter came from the ai classified pcs We see a good trend. we see a good trend If I see the last six, seven months of activation of PCs from the numbers we see, clearly there is a growth compared to the previous years. if i see the last six seven months of activation of pcs from the numbers we see clearly there is a growth compared to the previous years There's a growth consistently every month in India. there's a growth consistently every month in india We definitely see the trend in the right direction in India. we definitely see the trend in the right direction in india Overseas, yet to be seen. overseas yet to be seen There is encouragement, but not enough of a window to call out that we are going to see growth going forward. there is encouragement but not enough of a window to call out that we are going to see growth going forward

Speaker 4: Got it. And then just two quick ones. One is on the ARENA, the INR 37 crore, which is our share of it. That entire. How much would be the one-off? Last quarter, there were provisions, and that led to a INR 40 crore kind of a loss. This time, those provisions are maybe significantly lower, but we still have a INR 37 crore loss. How much would be the one-off there? The second question was. By when do you think we should start seeing the benefits of the Vodafone Connect sale in our numbers? When should we sort of resume that broadly? Those were the two questions. Thank you. Got it. got it And then just two quick ones. and then just two quick ones One is on the ARENA, the INR 37 crore, which is our share of it. one is on the arena the inr 37 crore which is our share of it That entire. that entire How much would be the one-off? how much would be the one-off Last quarter, there were provisions, and that led to a INR 40 crore kind of a loss. last quarter there were provisions and that led to a inr 40 crore kind of a loss This time, those provisions are maybe significantly lower, but we still have a INR 37 crore loss. this time those provisions are maybe significantly lower but we still have a inr 37 crore loss How much would be the one-off there? how much would be the one-off there The second question was. the second question was By when do you think we should start seeing the benefits of the Vodafone Connect sale in our numbers? by when do you think we should start seeing the benefits of the vodafone connect sale in our numbers When should we sort of resume that broadly? when should we sort of resume that broadly Those were the two questions. those were the two questions Thank you. thank you

Speaker 10: Nitin, for the current year in terms of dollar terms, $8.5 million is a loss. The service overall for previous quarter, about $9.5 million. If that need to get split into what relates to one-off, very specific to the Connect sale, it is about $3.4 million. One-off, which are outside of this, it could relate to some rediscounting charges, etc., it is about $2.5 million. What is steady-state ARENA IT plus loss is about $2.6 million, which for last quarter, about $3.6 million. Has that come down? The loss has come down in the core business, but others are one-off for the current quarter. Nitin, for the current year in terms of dollar terms, $8.5 million is a loss. nitin for the current year in terms of dollar terms $8.5 million is a loss The service overall for previous quarter, about $9.5 million. the service overall for previous quarter about $9.5 million If that need to get split into what relates to one-off, very specific to the Connect sale, it is about $3.4 million. if that need to get split into what relates to one-off very specific to the connect sale, it is about $3.4 million One-off, which are outside of this, it could relate to some rediscounting charges, etc., it is about $2.5 million. one-off which are outside of this it could relate to some rediscounting charges etc it is about $2.5 million What is steady-state ARENA IT plus loss is about $2.6 million, which for last quarter, about $3.6 million. what is steady-state arena it plus loss is about $2.6 million which for last quarter about $3.6 million Has that come down? has that come down The loss has come down in the core business, but others are one-off for the current quarter. the loss has come down in the core business but others are one-off for the current quarter

Speaker 4: Sure. Yeah. Sure. sure Yeah. yeah

Speaker 10: Sale benefit, yeah. Sorry, I haven't addressed your second question. See, that sale got concluded towards the end or beginning of the current quarter. We are in the process of consuming it, this thing, consuming it, which will also involve a collection of some outstandings that will continue till this thing, Q3 and some part in Q4. A good part of the benefit should start kicking in towards the later part of the current quarter and mostly from Q4. Fully from next financial year. Sale benefit, yeah. sale benefit yeah Sorry, I haven't addressed your second question. sorry i haven't addressed your second question See, that sale got concluded towards the end or beginning of the current quarter. see that sale got concluded towards the end or beginning of the current quarter We are in the process of consuming it, this thing, consuming it, which will also involve a collection of some outstandings that will continue till this thing, Q3 and some part in Q4. we are in the process of consuming it this thing consuming it which will also involve a collection of some outstandings that will continue till this thing q3 and some part in q4 A good part of the benefit should start kicking in towards the later part of the current quarter and mostly from Q4. a good part of the benefit should start kicking in towards the later part of the current quarter and mostly from q4 Fully from next financial year. fully from next financial year

Speaker 4: Perfect. Perfect. Thank you so much. I'll get back for a follow-up. All the best. Perfect. perfect Perfect. perfect Thank you so much. thank you so much I'll get back for a follow-up. i'll get back for a follow-up All the best. all the best

Speaker 3: Thank you. The next question is from the line of Deepak Lalwani from Unifi Capital. Please go ahead. Thank you. thank you The next question is from the line of Deepak Lalwani from Unifi Capital. the next question is from the line of deepak lalwani from unifi capital Please go ahead. please go ahead

Speaker 5: Yeah, hi. Congratulations, team, for stellar performance from a delivery standpoint. It is a very strong execution quarter. Kudos to the entire management team and the efforts that you have been doing to turn around the business. It is a great reflection this quarter of the efforts and the return of rewards of the same. With that, I have a couple of questions. The first one is, sir, could you call out that due to ARENA, what would be the extent of revenue, EBITDA, interest, and debt reduction that we will see in Turkey? Yeah, hi. yeah hi Congratulations, team, for stellar performance from a delivery standpoint. It is a very strong execution quarter. congratulations team for stellar performance from a delivery standpoint. it is a very strong execution quarter Kudos to the entire management team and the efforts that you have been doing to turn around the business. It is a great reflection this quarter of the efforts and the return of rewards of the same. kudos to the entire management team and the efforts that you have been doing to turn around the business. it is a great reflection this quarter of the efforts and the return of rewards of the same With that, I have a couple of questions. with that i have a couple of questions The first one is, sir, could you call out that due to ARENA, what would be the extent of revenue, EBITDA, interest, and debt reduction that we will see in Turkey? the first one is sir could you call out that due to arena what would be the extent of revenue ebitda interest and debt reduction that we will see in turkey

Speaker 10: Okay. Revenue will be in the range of about $300 million. Debt, if all this gets fully closed, we could have an advantage of between $50 million-$55 million. Okay. okay Revenue will be in the range of about $300 million. revenue will be in the range of about $300 million Debt, if all this gets fully closed, we could have an advantage of between $50 million-$55 million. debt if all this gets fully closed we could have an advantage of between $50 million-$55 million

Speaker 5: Krishnan, sir, the EBITDA and interest cost element as well, too? Krishnan, sir, the EBITDA and interest cost element as well, too? krishnan sir the ebitda and interest cost element as well too

Speaker 10: See, interest cost, you can see. At $50 million-$55 million, I mean, $55 million at 43%-44% rate, you can work that out. EBITDA would be positive. I do not have the ready-made number, but at the PBT level, it is a clear loss. See, interest cost, you can see. see interest cost you can see At $50 million-$55 million, I mean, $55 million at 43%-44% rate, you can work that out. at $50 million-$55 million i mean $55 million at 43%-44% rate you can work that out EBITDA would be positive. ebitda would be positive I do not have the ready-made number, but at the PBT level, it is a clear loss. i do not have the ready-made number but at the pbt level, it is a clear loss

Speaker 5: Understood. Okay. Sir, could you specifically also speak about the $20 million receivables that we had spoken about earlier? Will there be any incremental provisioning required for the same? Also, what do you think would be the key timelines in which the Connect business would wind down, and when will that start to reflect in the operational uptick in our numbers? Understood. understood Okay. okay Sir, could you specifically also speak about the $20 million receivables that we had spoken about earlier? sir could you specifically also speak about the $20 million receivables that we had spoken about earlier Will there be any incremental provisioning required for the same? will there be any incremental provisioning required for the same Also, what do you think would be the key timelines in which the Connect business would wind down, and when will that start to reflect in the operational uptick in our numbers? also what do you think would be the key timelines in which the connect business would wind down and when will that start to reflect in the operational uptick in our numbers

Speaker 11: Yeah, maybe. Yeah. One will answer the second one when you need time to speak to my question. Yeah, maybe. yeah maybe Yeah. yeah One will answer the second one when you need time to speak to my question. one will answer the second one when you need time to speak to my question

Speaker 10: See, the second part of the question is just answered to Nitin's question. The benefit will start kicking in from Q3, but since the sale got consummated just now. In terms of ensuring all the inventories are handed over to them, all the ARs are collected, the benefit will be fully seen from beginning of next year and mostly from Q4. The first question on concarded. Some collections have happened in this quarter. If you recollect the previous quarter, I had mentioned all these are concarded cases. Definitely, it's going to be slow, and in our expectation, it will take about 18 months-24 months. This is going to happen only slowly. Are there increases in the concarded cases? I mean, still the higher number of concarded cases is still there. Roughly in the current year, between January to September. See, the second part of the question is just answered to Nitin's question. see the second part of the question is just answered to nitin's question The benefit will start kicking in from Q3, but since the sale got consummated just now. the benefit will start kicking in from q3 but since the sale got consummated just now In terms of ensuring all the inventories are handed over to them, all the ARs are collected, the benefit will be fully seen from beginning of next year and mostly from Q4. in terms of ensuring all the inventories are handed over to them all the ars are collected the benefit will be fully seen from beginning of next year and mostly from q4 The first question on concarded. the first question on concarded Some collections have happened in this quarter. some collections have happened in this quarter If you recollect the previous quarter, I had mentioned all these are concarded cases. if you recollect the previous quarter i had mentioned all these are concarded cases Definitely, it's going to be slow, and in our expectation, it will take about 18 months-24 months. definitely it's going to be slow and in our expectation it will take about 18 months-24 months This is going to happen only slowly. this is going to happen only slowly Are there increases in the concarded cases? are there increases in the concarded cases I mean, still the higher number of concarded cases is still there. i mean still the higher number of concarded cases is still there Roughly in the current year, between January to September. roughly in the current year between january to september About 4,400 cases had got reported, which normally would be in the range of 2,000-3,000 entities in a year. We feel whatever is balanced, we should be able to collect, and we have to take a call as it stands at every quarter. We do not foresee any major challenge, but it is going to take some time. About 4,400 cases had got reported, which normally would be in the range of 2,000-3,000 entities in a year. about 4,400 cases had got reported which normally would be in the range of 2,000-3,000 entities in a year We feel whatever is balanced, we should be able to collect, and we have to take a call as it stands at every quarter. we feel whatever is balanced we should be able to collect and we have to take a call as it stands at every quarter We do not foresee any major challenge, but it is going to take some time. we do not foresee any major challenge but it is going to take some time

Speaker 5: Understood, sir. Understood. Okay. The next one, sir, is could you just call out what has been the reason for the slightly more higher increase in the interest cost this quarter? Also, what has been the factoring cost for this number for this quarter? Understood, sir. understood sir Understood. understood Okay. okay The next one, sir, is could you just call out what has been the reason for the slightly more higher increase in the interest cost this quarter? the next one sir is could you just call out what has been the reason for the slightly more higher increase in the interest cost this quarter Also, what has been the factoring cost for this number for this quarter? also what has been the factoring cost for this number for this quarter

Speaker 10: Okay. So overall, the factoring cost for this quarter is about INR 45 crore. And for last year, same period, about INR 33 crore. That takes the total interest and factoring cost to INR 161 crore, which was INR 117 crore last year, a 37% increase. There is an increase in ARENA. From INR 69 crore last year to INR 101 crore in the current year and an increase of 46%. If you take that out, in the rest of the business, the increase is from INR 48 crore to INR 60 crore, which is a 24% year-on-year increase. Okay. okay So overall, the factoring cost for this quarter is about INR 45 crore. so overall the factoring cost for this quarter is about inr 45 crore And for last year, same period, about INR 33 crore. and for last year same period about inr 33 crore That takes the total interest and factoring cost to INR 161 crore, which was INR 117 crore last year, a 37% increase. that takes the total interest and factoring cost to inr 161 crore which was inr 117 crore last year a 37% increase There is an increase in ARENA. there is an increase in arena From INR 69 crore last year to INR 101 crore in the current year and an increase of 46%. from inr 69 crore last year to inr 101 crore in the current year and an increase of 46% If you take that out, in the rest of the business, the increase is from INR 48 crore to INR 60 crore, which is a 24% year-on-year increase. if you take that out in the rest of the business the increase is from inr 48 crore to inr 60 crore which is a 24% year-on-year increase

Speaker 5: Understood. Sir, incrementally, how should we think about the interest cost going forward, sir? Understood. understood Sir, incrementally, how should we think about the interest cost going forward, sir? sir incrementally how should we think about the interest cost going forward sir

Speaker 10: Okay. In the rest of the markets, because of higher business growth, there will be absolute increase in the working capital. However, interest rates are coming down a bit slowly. We think the interest costs as a percentage of revenue should come down. Rest of ARENA, outside of ARENA. In ARENA. The two steps which Hari mentioned, one, the sale of Connect, and we are also in the process of winding down our Turkish Lira business. These two, ideally in the next six months, should be fully affected too. If that happens, you will see a significant reduction both in the debt levels as well as in the interest costs. See, the important point is. The interest cost today is very high in ARENA because of Turkish Lira loans. If we exit or wind down significantly the Turkish Lira business. Okay. okay In the rest of the markets, because of higher business growth, there will be absolute increase in the working capital. in the rest of the markets because of higher business growth there will be absolute increase in the working capital However, interest rates are coming down a bit slowly. however interest rates are coming down a bit slowly We think the interest costs as a percentage of revenue should come down. we think the interest costs as a percentage of revenue should come down Rest of ARENA, outside of ARENA. rest of arena outside of arena In ARENA. in arena The two steps which Hari mentioned, one, the sale of Connect, and we are also in the process of winding down our Turkish Lira business. the two steps which hari mentioned one the sale of connect and we are also in the process of winding down our turkish lira business These two, ideally in the next six months, should be fully affected too. these two ideally in the next six months should be fully affected too If that happens, you will see a significant reduction both in the debt levels as well as in the interest costs. if that happens you will see a significant reduction both in the debt levels as well as in the interest costs See, the important point is. see the important point is The interest cost today is very high in ARENA because of Turkish Lira loans. the interest cost today is very high in arena because of turkish lira loans If we exit or wind down significantly the Turkish Lira business. if we exit or wind down significantly the turkish lira business The debt that we need to raise in the local currency is much lower, and to that extent, the incremental benefit will be significant. The interest reduction will be significant. The debt that we need to raise in the local currency is much lower, and to that extent, the incremental benefit will be significant. the debt that we need to raise in the local currency is much lower and to that extent the incremental benefit will be significant The interest reduction will be significant. the interest reduction will be significant

Speaker 5: Understood. Sir, it's fair to assume that the Connect business that we've sold had a large component of the Turkish Lira. As that business is going off. Understood. understood Sir, it's fair to assume that the Connect business that we've sold had a large component of the Turkish Lira. sir it's fair to assume that the connect business that we've sold had a large component of the turkish lira As that business is going off. as that business is going off

Speaker 10: 100% Turkish Lira. 100% Turkish Lira. 100% turkish lira

Speaker 5: Got it, sir. Got it, sir. got it sir

Speaker 10: It's a 100% Turkish Lira business. It's a 100% Turkish Lira business. it's a 100% turkish lira business

Speaker 5: Noted, sir. Sir, just my final question is, how should we think about your incremental OpEx? Is your current OpEx adequate to support this high revenue growth that you continue to do? Also, could you specifically call out an outlook region-wise for the businesses in the second half? Noted, sir. noted sir Sir, just my final question is, how should we think about your incremental OpEx? sir just my final question is how should we think about your incremental opex Is your current OpEx adequate to support this high revenue growth that you continue to do? is your current opex adequate to support this high revenue growth that you continue to do Also, could you specifically call out an outlook region-wise for the businesses in the second half? also could you specifically call out an outlook region-wise for the businesses in the second half

Speaker 11: Okay. Let me try and attempt that. So firstly, we continue to see growth on SSG with the momentum we are building, and that will require continued investment, as I mentioned, on presales, platforms, academy, a whole lot of things. So clearly, we will invest, and there will be more OpEx going there, but the return on investment will also be very good. As I mentioned, the gross margins are higher on that business, and the profitability levels are higher than the Redington average. So we clearly see more investments. We're getting leverage because of the larger revenue size and growth. In terms of outlook, so far, India, UAE, KSA, all three geographies, we definitely see good outlooks, at least in the near term, the next two, three quarters. There is good reason to believe, and all business units as well, including mobility. Okay. okay Let me try and attempt that. let me try and attempt that So firstly, we continue to see growth on SSG with the momentum we are building, and that will require continued investment, as I mentioned, on presales, platforms, academy, a whole lot of things. so firstly we continue to see growth on ssg with the momentum we are building and that will require continued investment as i mentioned on presales platforms academy a whole lot of things So clearly, we will invest, and there will be more OpEx going there, but the return on investment will also be very good. so clearly we will invest and there will be more opex going there but the return on investment will also be very good As I mentioned, the gross margins are higher on that business, and the profitability levels are higher than the Redington average. as i mentioned the gross margins are higher on that business and the profitability levels are higher than the redington average So we clearly see more investments. so we clearly see more investments We're getting leverage because of the larger revenue size and growth. we're getting leverage because of the larger revenue size and growth In terms of outlook, so far, India, UAE, KSA, all three geographies, we definitely see good outlooks, at least in the near term, the next two, three quarters. in terms of outlook so far india uae ksa all three geographies we definitely see good outlooks at least in the near term the next two three quarters There is good reason to believe, and all business units as well, including mobility. there is good reason to believe and all business units as well including mobility There is a strong momentum on mobility, and we see that continuing for the next two, three quarters. As I mentioned, PC, we expect the PC growth to pick up if the trending, what we see in India, is right. We also have several deals in the pipeline on technology solutions, which we expect to fruition in Q3 and Q4, both in India and overseas. Definitely, the outlook is positive and promising. I'm not able to give you a number, but it's promising. We will continue to invest, some in the core business, more in the SSG business going forward. We're actually crafting up, as we speak, three-year plans on how to look at multi-year investments for things like SSG in a way that we can get the right return on investment. There is a strong momentum on mobility, and we see that continuing for the next two, three quarters. there is a strong momentum on mobility and we see that continuing for the next two three quarters As I mentioned, PC, we expect the PC growth to pick up if the trending, what we see in India, is right. as i mentioned pc we expect the pc growth to pick up if the trending what we see in india is right We also have several deals in the pipeline on technology solutions, which we expect to fruition in Q3 and Q4, both in India and overseas. we also have several deals in the pipeline on technology solutions which we expect to fruition in q3 and q4 both in india and overseas Definitely, the outlook is positive and promising. definitely the outlook is positive and promising I'm not able to give you a number, but it's promising. i'm not able to give you a number but it's promising We will continue to invest, some in the core business, more in the SSG business going forward. we will continue to invest some in the core business more in the ssg business going forward We're actually crafting up, as we speak, three-year plans on how to look at multi-year investments for things like SSG in a way that we can get the right return on investment. we're actually crafting up as we speak three-year plans on how to look at multi-year investments for things like ssg in a way that we can get the right return on investment

Speaker 5: Understood. Sir, on the OpEx, could you just suggest that is the current OpEx enough to support the adequate high revenue growth as a percentage of revenues, or should we think that that can go up incrementally? Understood. understood Sir, on the OpEx, could you just suggest that is the current OpEx enough to support the adequate high revenue growth as a percentage of revenues, or should we think that that can go up incrementally? sir on the opex could you just suggest that is the current opex enough to support the adequate high revenue growth as a percentage of revenues or should we think that that can go up incrementally

Speaker 11: I would think it can go up incrementally. The OpEx as a percentage of revenue. You got good leverage this quarter. I would think it can go up incrementally. i would think it can go up incrementally The OpEx as a percentage of revenue. the opex as a percentage of revenue You got good leverage this quarter. you got good leverage this quarter

Speaker 10: See, you need to look at OpEx in two forms. One, the core business. And the other one, investments related. What you see now, while there is an overall control on OpEx, if you see the core business removing the investment, the optimization is even further, right? On the investment part, which is what Hari mentioned, that we feel the investment needs to be more to ensure the capability building is in proper form, and SSG is definitely looking very attractive, and that's our focus area, this thing area also. We think we need to make right investment, and we should not miss the opportunity. See, you need to look at OpEx in two forms. see you need to look at opex in two forms One, the core business. one the core business And the other one, investments related. and the other one investments related What you see now, while there is an overall control on OpEx, if you see the core business removing the investment, the optimization is even further, right? what you see now while there is an overall control on opex if you see the core business removing the investment the optimization is even further right On the investment part, which is what Hari mentioned, that we feel the investment needs to be more to ensure the capability building is in proper form, and SSG is definitely looking very attractive, and that's our focus area, this thing area also. on the investment part which is what hari mentioned that we feel the investment needs to be more to ensure the capability building is in proper form and ssg is definitely looking very attractive and that's our focus area this thing area also We think we need to make right investment, and we should not miss the opportunity. we think we need to make right investment and we should not miss the opportunity

Speaker 11: We will be mindful to keep OpEx percentage growth lower than the gross margin growth. That was always our intention. We will definitely be working our own action plans to see how to keep that leverage going. We will be mindful to keep OpEx percentage growth lower than the gross margin growth. we will be mindful to keep opex percentage growth lower than the gross margin growth That was always our intention. that was always our intention We will definitely be working our own action plans to see how to keep that leverage going. we will definitely be working our own action plans to see how to keep that leverage going

Speaker 10: See, I need to tell you one thing, which is a very important point. You all know. If the gross margin is X percentage, operating profit is about 1/2 of that, and PAT is about 1/4 of that. What we had observed, I mean, you can see from the numbers, from the incremental gross margin, what we have derived is almost half of that into the PAT, which very clearly shows, which is a point we have been making even in the last earnings call also on the large deals, right? When we are able to generate incremental gross margin, keep OpEx and working capital under control, what will flow through into the profit will be significant. That is what we had seen very clearly this quarter. See, I need to tell you one thing, which is a very important point. see i need to tell you one thing which is a very important point You all know. you all know If the gross margin is X percentage, operating profit is about 1/2 of that, and PAT is about 1/4 of that. if the gross margin is x percentage operating profit is about 1/2 of that and pat is about 1/4 of that What we had observed, I mean, you can see from the numbers, from the incremental gross margin, what we have derived is almost half of that into the PAT, which very clearly shows, which is a point we have been making even in the last earnings call also on the large deals, right? what we had observed i mean you can see from the numbers from the incremental gross margin what we have derived is almost half of that into the pat which very clearly shows which is a point we have been making even in the last earnings call also on the large deals right When we are able to generate incremental gross margin, keep OpEx and working capital under control, what will flow through into the profit will be significant. when we are able to generate incremental gross margin keep opex and working capital under control what will flow through into the profit will be significant That is what we had seen very clearly this quarter. that is what we had seen very clearly this quarter

Speaker 5: Wonderful, sir. I wish you more quarters of such execution. All the best. Thank you once again. Wonderful, sir. wonderful sir I wish you more quarters of such execution. i wish you more quarters of such execution All the best. all the best Thank you once again. thank you once again

Speaker 10: Thank you. Thank you. Thank you. thank you Thank you. thank you

Speaker 3: Thank you. Before we take the next question, a reminder to all, you may press star and one to ask a question. The next question is from the line of Pratik Kothari from Unique PMS. Please go ahead. Thank you. thank you Before we take the next question, a reminder to all, you may press star and one to ask a question. before we take the next question a reminder to all you may press star and one to ask a question The next question is from the line of Pratik Kothari from Unique PMS. the next question is from the line of pratik kothari from unique pms Please go ahead. please go ahead

Speaker 8: Yes, Hi. A very good morning. First of all, congratulations. A very strong and quick comeback in numbers. One on TFG. Last quarter or last two quarters, we had called out some profitability pressures there. I mean, we were winning large deals, but there was on working capital and profitability, we were seeing some issues. One growth this year is an outcome of that where we have let go of a few contracts. Just overall, how is that space shaping up? Yes, Hi. yes hi A very good morning. a very good morning First of all, congratulations. first of all congratulations A very strong and quick comeback in numbers. a very strong and quick comeback in numbers One on TFG. one on tfg Last quarter or last two quarters, we had called out some profitability pressures there. last quarter or last two quarters we had called out some profitability pressures there I mean, we were winning large deals, but there was on working capital and profitability, we were seeing some issues. i mean we were winning large deals but there was on working capital and profitability we were seeing some issues One growth this year is an outcome of that where we have let go of a few contracts. one growth this year is an outcome of that where we have let go of a few contracts Just overall, how is that space shaping up? just overall how is that space shaping up

Speaker 11: Let me just set the context. TFC, now the new TFC for us is really server, storage, networking, the hardware components. It had some of the software pieces which have moved to SSG. When we start comparing, we'll compare TFC to TSC likewise. The actual size of the business has got restated. As you will see, the percentage contribution of TSC to the overall business. We are definitely seeing good enterprise demand. We are seeing large deals. We will be selective. We will not let go of deals because, as we mentioned in the last few quarters as well, it's important for us to be relevant in the space with our brands and vendors. There is also a lot of Make in India brand coming up, and the data center deals in India are growing up. We will participate in these deals. Let me just set the context. let me just set the context TFC, now the new TFC for us is really server, storage, networking, the hardware components. tfc now the new tfc for us is really server storage networking the hardware components It had some of the software pieces which have moved to SSG. it had some of the software pieces which have moved to ssg When we start comparing, we'll compare TFC to TSC likewise. when we start comparing we'll compare tfc to tsc likewise The actual size of the business has got restated. the actual size of the business has got restated As you will see, the percentage contribution of TSC to the overall business. as you will see the percentage contribution of tsc to the overall business We are definitely seeing good enterprise demand. we are definitely seeing good enterprise demand We are seeing large deals. we are seeing large deals We will be selective. we will be selective We will not let go of deals because, as we mentioned in the last few quarters as well, it's important for us to be relevant in the space with our brands and vendors. we will not let go of deals because as we mentioned in the last few quarters as well it's important for us to be relevant in the space with our brands and vendors There is also a lot of Make in India brand coming up, and the data center deals in India are growing up. there is also a lot of make in india brand coming up and the data center deals in india are growing up We will participate in these deals. we will participate in these deals I think Krishnan had mentioned in the previous earnings call that we always look at, by deal, what will be the ROSÉ that we'll get, and what will be the profitability. We will look at a balance of both. Clearly, if I look at a pure margin perspective, it might pull down the weighted average margin, but with the incremental margin and profitability we'll get on the deals, we'll only increase our leverage. That's how we will look at it. Clearly, we will go after deals, and we'll balance our risk and return. That's how we're looking at it. You will see we do have several deals in the pipeline coming up for the next two quarters, and some of them are fairly large. I think Krishnan had mentioned in the previous earnings call that we always look at, by deal, what will be the ROSÉ that we'll get, and what will be the profitability. i think krishnan had mentioned in the previous earnings call that we always look at by deal what will be the rosé that we'll get and what will be the profitability We will look at a balance of both. we will look at a balance of both Clearly, if I look at a pure margin perspective, it might pull down the weighted average margin, but with the incremental margin and profitability we'll get on the deals, we'll only increase our leverage. clearly if i look at a pure margin perspective it might pull down the weighted average margin but with the incremental margin and profitability we'll get on the deals we'll only increase our leverage That's how we will look at it. that's how we will look at it Clearly, we will go after deals, and we'll balance our risk and return. clearly we will go after deals and we'll balance our risk and return That's how we're looking at it. that's how we're looking at it You will see we do have several deals in the pipeline coming up for the next two quarters, and some of them are fairly large. you will see we do have several deals in the pipeline coming up for the next two quarters and some of them are fairly large We will go after them, and as and when we make them happen, we'll also report and share with the group. We will go after them, and as and when we make them happen, we'll also report and share with the group. we will go after them and as and when we make them happen we'll also report and share with the group

Speaker 10: See, these large deals are incremental revenue, Pratik. That's the way you should see it. Outside of it, we will still ensure there is an interesting growth. If there are opportunities which are incremental where our cost increases are going to be marginal, we would want to handle those. See, these large deals are incremental revenue, Pratik. see these large deals are incremental revenue pratik That's the way you should see it. that's the way you should see it Outside of it, we will still ensure there is an interesting growth. outside of it we will still ensure there is an interesting growth If there are opportunities which are incremental where our cost increases are going to be marginal, we would want to handle those. if there are opportunities which are incremental where our cost increases are going to be marginal we would want to handle those

Speaker 8: Correct. Fair enough. Suppose this Vodafone agreement exits, I mean, how much more Lira business stays in ARENA? Or is it all USD? Correct. correct Fair enough. fair enough Suppose this Vodafone agreement exits, I mean, how much more Lira business stays in ARENA? suppose this vodafone agreement exits i mean how much more lira business stays in arena Or is it all USD? or is it all usd

Speaker 11: It is a progressive approach we are taking. As Krishnan mentioned earlier, the Vodafone contract, all of it is 100% Lira. There is some amount of consumer electronic business within the IT business that we have, which also we are exiting. It might take another quarter, quarter and a half to get exit from that. There is some channel business which has to be done in Lira. It is not a perfect market where I do not become relevant for a brand. If I go with a brand, I have to operate in multiple channels. There might be some amount remaining there, but a smaller amount where some channels do only business in Lira. I cannot work with a brand if I do not do both. It is a progressive approach we are taking. it is a progressive approach we are taking As Krishnan mentioned earlier, the Vodafone contract, all of it is 100% Lira. as krishnan mentioned earlier the vodafone contract all of it is 100% lira There is some amount of consumer electronic business within the IT business that we have, which also we are exiting. there is some amount of consumer electronic business within the it business that we have which also we are exiting It might take another quarter, quarter and a half to get exit from that. it might take another quarter quarter and a half to get exit from that There is some channel business which has to be done in Lira. there is some channel business which has to be done in lira It is not a perfect market where I do not become relevant for a brand. it is not a perfect market where i do not become relevant for a brand If I go with a brand, I have to operate in multiple channels. if i go with a brand i have to operate in multiple channels There might be some amount remaining there, but a smaller amount where some channels do only business in Lira. there might be some amount remaining there but a smaller amount where some channels do only business in lira I cannot work with a brand if I do not do both. i cannot work with a brand if i do not do both Largely by Q4, as Krishnan mentioned, both from the Vodafone contract and we call it the mixed business internally, which is basically Lira business on specific products that we'll exit. We might have a small mix of channel business, which is I have to work with a brand which has got both. Largely by Q4, as Krishnan mentioned, both from the Vodafone contract and we call it the mixed business internally, which is basically Lira business on specific products that we'll exit. largely by q4 as krishnan mentioned both from the vodafone contract and we call it the mixed business internally which is basically lira business on specific products that we'll exit We might have a small mix of channel business, which is I have to work with a brand which has got both. we might have a small mix of channel business which is i have to work with a brand which has got both

Speaker 8: Fair enough. Sir, last, more of a discussion point than a question, this 40% dividend payout, I mean, in years like this where we are seeing strong growth and possibly even going forward, I mean, should we think of being more flexible in terms of maybe paying out lower? Maybe instead of paying out 40% every year, do it over three-five years, such that we do not do it at cost of balance sheet. Obviously, ramp this up when the growth slowers. Any thoughts around this, anything we can think of instead of doing 40% every year? Fair enough. fair enough Sir, last, more of a discussion point than a question, this 40% dividend payout, I mean, in years like this where we are seeing strong growth and possibly even going forward, I mean, should we think of being more flexible in terms of maybe paying out lower? sir last more of a discussion point than a question this 40% dividend payout i mean in years like this where we are seeing strong growth and possibly even going forward i mean should we think of being more flexible in terms of maybe paying out lower Maybe instead of paying out 40% every year, do it over three-five years, such that we do not do it at cost of balance sheet. maybe instead of paying out 40% every year do it over three-five years such that we do not do it at cost of balance sheet Obviously, ramp this up when the growth slowers. obviously ramp this up when the growth slowers Any thoughts around this, anything we can think of instead of doing 40% every year? any thoughts around this anything we can think of instead of doing 40% every year

Speaker 11: Thanks for the. Sir, thanks for the feedback. That's very heartening. We will bring it to our board as well and have a discussion. Your point is bang on because if we don't want to leave growth on the table at the cost of dividend, because our current dividend policy and profitability allows us to grow 10%-12%, and there is market growth available, we definitely value feedback like this, and we will bring it for discussion to the board. Thanks for the. thanks for the Sir, thanks for the feedback. sir thanks for the feedback That's very heartening. that's very heartening We will bring it to our board as well and have a discussion. we will bring it to our board as well and have a discussion Your point is bang on because if we don't want to leave growth on the table at the cost of dividend, because our current dividend policy and profitability allows us to grow 10%-12%, and there is market growth available, we definitely value feedback like this, and we will bring it for discussion to the board. your point is bang on because if we don't want to leave growth on the table at the cost of dividend because our current dividend policy and profitability allows us to grow 10%-12% and there is market growth available we definitely value feedback like this and we will bring it for discussion to the board

Speaker 8: Sir, sorry. Sir, sorry. sir sorry

Speaker 10: Very good opportunities for growth. We just want to be mindful not having enough leverage advantage should not be impacting. We capturing that business. We are very mindful of that. Very good opportunities for growth. very good opportunities for growth We just want to be mindful not having enough leverage advantage should not be impacting. we just want to be mindful not having enough leverage advantage should not be impacting We capturing that business. we capturing that business We are very mindful of that. we are very mindful of that

Speaker 8: Exactly. Exactly. I mean, just that dividend payout should not come in the way. I mean, it's better you reinvest a 20% ROCE than give it back to us. Thank you. Thank you and all the best. Exactly. exactly Exactly. exactly I mean, just that dividend payout should not come in the way. i mean just that dividend payout should not come in the way I mean, it's better you reinvest a 20% ROCE than give it back to us. i mean it's better you reinvest a 20% roce than give it back to us Thank you. thank you Thank you and all the best. thank you and all the best

Speaker 10: See, when we do not have requirement for money, we would be very happy to give it back to you. If you think there are requirements, we would want to give you better returns. That is the objective. See, when we do not have requirement for money, we would be very happy to give it back to you. see when we do not have requirement for money we would be very happy to give it back to you If you think there are requirements, we would want to give you better returns. That is the objective. if you think there are requirements we would want to give you better returns. that is the objective

Speaker 8: Correct. Correct. Correct. And there are peer companies in markets who are doing this where they change this dividend ratio based on the balance sheet that they have. We can discuss this more later, but yeah, thank you. Correct. correct Correct. correct Correct. correct and And there are peer companies in markets who are doing this where they change this dividend ratio based on the balance sheet that they have. and there are peer companies in markets who are doing this where they change this dividend ratio based on the balance sheet that they have We can discuss this more later, but yeah, thank you. we can discuss this more later but yeah thank you

Speaker 10: Thank you. Thank you. thank you

Speaker 3: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchstone telephone. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Thank you. thank you Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchstone telephone. ladies and gentlemen anyone who wishes to ask a question may press star and one on their touchstone telephone The next question is from the line of Sarvesh Gupta from Maximal Capital. the next question is from the line of sarvesh gupta from maximal capital Please go ahead. please go ahead

Speaker 9: Good morning, sirs. Congratulations on a good set of numbers. I think most of my questions have been answered, but just one question related to ARENA, which I could not fully understand. On the EBITDA side, basically, we were incurring some losses. Now we have sold our Lira business substantially. Let's say from FY 2027 onwards, on a quarterly basis, what would be the change in EBITDA because of this transaction? Good morning, sirs. good morning sirs Congratulations on a good set of numbers. congratulations on a good set of numbers I think most of my questions have been answered, but just one question related to ARENA, which I could not fully understand. i think most of my questions have been answered but just one question related to arena which i could not fully understand On the EBITDA side, basically, we were incurring some losses. on the ebitda side basically we were incurring some losses Now we have sold our Lira business substantially. now we have sold our lira business substantially Let's say from FY 2027 onwards, on a quarterly basis, what would be the change in EBITDA because of this transaction? let's say from fy 2027 onwards on a quarterly basis what would be the change in ebitda because of this transaction

Speaker 10: Sarvesh. Frankly, the EBITDA percentage in ARENA is the highest within the group. The reason why it does not matter is because you know well, EBITDA is a factor of the interest rate. At those interest rates, it is still not working out, and hence we are making loss. From an EBITDA perspective, it may not be a big difference, but from a profit before tax or after tax, it will make a difference. Our objective is to turn to profits. Right now, the visibility is reducing loss. Maybe to make it nominal, but there is a lot of work to do in terms of converting the loss into profit. Work has started, but it will take some time. Sarvesh. sarvesh Frankly, the EBITDA percentage in ARENA is the highest within the group. frankly the ebitda percentage in arena is the highest within the group The reason why it does not matter is because you know well, EBITDA is a factor of the interest rate. the reason why it does not matter is because you know well ebitda is a factor of the interest rate At those interest rates, it is still not working out, and hence we are making loss. at those interest rates, it is still not working out and hence we are making loss From an EBITDA perspective, it may not be a big difference, but from a profit before tax or after tax, it will make a difference. from an ebitda perspective it may not be a big difference but from a profit before tax or after tax it will make a difference Our objective is to turn to profits. our objective is to turn to profits Right now, the visibility is reducing loss. right now the visibility is reducing loss Maybe to make it nominal, but there is a lot of work to do in terms of converting the loss into profit. maybe to make it nominal but there is a lot of work to do in terms of converting the loss into profit Work has started, but it will take some time. work has started but it will take some time

Speaker 9: Okay. Sir, you mentioned that the interest cost saving would be around, I think, $23 million. What would be the EBITDA, let's say, for this quarter? If you take out the sale-related expenses and all, what will be the EBITDA for the remaining part of the ARENA business for this quarter? Okay. okay Sir, you mentioned that the interest cost saving would be around, I think, $23 million. sir you mentioned that the interest cost saving would be around i think $23 million What would be the EBITDA, let's say, for this quarter? what would be the ebitda let's say for this quarter If you take out the sale-related expenses and all, what will be the EBITDA for the remaining part of the ARENA business for this quarter? if you take out the sale-related expenses and all what will be the ebitda for the remaining part of the arena business for this quarter

Speaker 10: Okay. I don't have a ready-made number. I think it would be north of 3%. Okay. okay I don't have a ready-made number. i don't have a ready-made number I think it would be north of 3%. i think it would be north of 3%

Speaker 9: North on 3%. What is the remaining sale that we have, sir? After the sale of the business, what is the going concerns quarterly revenue? North on 3%. north on 3% What is the remaining sale that we have, sir? what is the remaining sale that we have sir After the sale of the business, what is the going concerns quarterly revenue? after the sale of the business what is the going concerns quarterly revenue

Speaker 10: We have the ARENA IT business, right? There are three parts of business. One is Connect, which has got divested, we discussed. Second, there are still more some TL-related businesses that we handle, and we are in the process of reducing that. The third portion is the ARENA IT business. If you recollect, Hari also mentioned it is predominantly US dollar, and it is like any other IT business that we handle in the other parts of the world. We have the ARENA IT business, right? we have the arena it business right There are three parts of business. there are three parts of business One is Connect, which has got divested, we discussed. one is connect which has got divested we discussed Second, there are still more some TL-related businesses that we handle, and we are in the process of reducing that. second there are still more some tl-related businesses that we handle and we are in the process of reducing that The third portion is the ARENA IT business. the third portion is the arena it business If you recollect, Hari also mentioned it is predominantly US dollar, and it is like any other IT business that we handle in the other parts of the world. if you recollect hari also mentioned it is predominantly us dollar and it is like any other it business that we handle in the other parts of the world

Speaker 11: I think we're roughly around $500 million, plus minus, Sarvesh. That business will continue. Right now, it's flat to decline because of the market situation. We expect it will be, depending on the market size and our share, roughly $500 million next year as a number if we have to start with. I think we're roughly around $500 million, plus minus, Sarvesh. i think we're roughly around $500 million plus minus sarvesh That business will continue. that business will continue Right now, it's flat to decline because of the market situation. right now it's flat to decline because of the market situation We expect it will be, depending on the market size and our share, roughly $500 million next year as a number if we have to start with. we expect it will be depending on the market size and our share roughly $500 million next year as a number if we have to start with

Speaker 9: Okay. On the working capital side, is there a substantial difference between the Lira business which we sold and the remaining part of the business? Okay. okay On the working capital side, is there a substantial difference between the Lira business which we sold and the remaining part of the business? on the working capital side is there a substantial difference between the lira business which we sold and the remaining part of the business

Speaker 10: It is higher. I won't say substantially higher. It is higher. On one hand, we have working capital more than the normal. Second, the interest rates are higher, and hence it's not viable. It is higher. it is higher I won't say substantially higher. i won't say substantially higher It is higher. it is higher On one hand, we have working capital more than the normal. on one hand we have working capital more than the normal Second, the interest rates are higher, and hence it's not viable. second the interest rates are higher and hence it's not viable

Speaker 9: Okay. Understood. Finally, sir, on the inorganic side, are we inclined to look at some of the opportunities in the market? Are there such opportunities that we are finding, or does it not add any value to us as such to do any inorganic? Okay. okay Understood. understood Finally, sir, on the inorganic side, are we inclined to look at some of the opportunities in the market? finally sir on the inorganic side are we inclined to look at some of the opportunities in the market Are there such opportunities that we are finding, or does it not add any value to us as such to do any inorganic? are there such opportunities that we are finding or does it not add any value to us as such to do any inorganic

Speaker 11: We always explore this. One area where we are exploring is the Software Solutions Group because that's an area that's evolving very nicely in terms of a lot of new things, new areas of capability, new areas of competency we need to build. More small inorganic opportunities is what we're looking at. I don't think we are ready at this stage because we are learning as well. Cybersecurity, for example, is a big growth area, and it is ripe for distribution because the MSSP, the security practices, is almost at 20% of the security product business's security practices. A lot of our existing partners do this, but this is a very complex area and growing very rapidly. Clearly, between security, between cloud, and some of the competencies we want to build, we are exploring, I would say, very early stages right now. We always explore this. we always explore this One area where we are exploring is the Software Solutions Group because that's an area that's evolving very nicely in terms of a lot of new things, new areas of capability, new areas of competency we need to build. one area where we are exploring is the software solutions group because that's an area that's evolving very nicely in terms of a lot of new things new areas of capability new areas of competency we need to build More small inorganic opportunities is what we're looking at. more small inorganic opportunities is what we're looking at I don't think we are ready at this stage because we are learning as well. i don't think we are ready at this stage because we are learning as well Cybersecurity, for example, is a big growth area, and it is ripe for distribution because the MSSP, the security practices, is almost at 20% of the security product business's security practices. cybersecurity for example is a big growth area and it is ripe for distribution because the mssp the security practices is almost at 20% of the security product business's security practices A lot of our existing partners do this, but this is a very complex area and growing very rapidly. a lot of our existing partners do this but this is a very complex area and growing very rapidly Clearly, between security, between cloud, and some of the competencies we want to build, we are exploring, I would say, very early stages right now. clearly between security between cloud and some of the competencies we want to build we are exploring i would say very early stages right now

Speaker 9: Understood, sir. Thank you. All the best for the coming quarters. Understood, sir. understood sir Thank you. thank you All the best for the coming quarters. all the best for the coming quarters

Speaker 10: Thank you. Thank you. thank you

Speaker 3: Thank you. The next question is from the line of Lakshminarayanan from Tunga Investments. Please go ahead. Thank you. thank you The next question is from the line of Lakshmin arayanan from Tunga Investments. the next question is from the line of lakshmin arayanan from tunga investments Please go ahead. please go ahead

Speaker 7: Yeah. Good morning. Just one question. In terms of the Visa business, how the Android phones are actually growing, just want to understand that particular part. Yeah. yeah Good morning. good morning Just one question. just one question In terms of the Visa business, how the Android phones are actually growing, just want to understand that particular part. in terms of the visa business how the android phones are actually growing just want to understand that particular part

Speaker 11: I'll give two perspectives. I'll give India and then overseas. Clearly, that's been one of our very nice growth drivers, and I think I alluded to it in my opening presentation. We work with two premium brands. The premium part of the market in India is growing very nicely. Of course, Apple is a very strong player there, but a couple of the Android brands have also moved very, very nicely. I would say it has been a big contributor over the last two to three years on our growth numbers. This quarter also, it has done well. The D2R channel, the direct-to-retail channel that we have built with over 5,000 outlets targeting only premium phones, has been one of the key drivers for this. Overseas, we do work on a few premium brands as well, and both in KSA, UAE, as well as Africa. I'll give two perspectives. i'll give two perspectives I'll give India and then overseas. i'll give india and then overseas Clearly, that's been one of our very nice growth drivers, and I think I alluded to it in my opening presentation. clearly that's been one of our very nice growth drivers and i think i alluded to it in my opening presentation We work with two premium brands. we work with two premium brands The premium part of the market in India is growing very nicely. the premium part of the market in india is growing very nicely Of course, Apple is a very strong player there, but a couple of the Android brands have also moved very, very nicely. of course apple is a very strong player there but a couple of the android brands have also moved very very nicely I would say it has been a big contributor over the last two to three years on our growth numbers. i would say it has been a big contributor over the last two to three years on our growth numbers This quarter also, it has done well. this quarter also it has done well The D2R channel, the direct-to-retail channel that we have built with over 5,000 outlets targeting only premium phones, has been one of the key drivers for this. the d2r channel the direct-to-retail channel that we have built with over 5,000 outlets targeting only premium phones has been one of the key drivers for this Overseas, we do work on a few premium brands as well, and both in KSA, UAE, as well as Africa. overseas we do work on a few premium brands as well and both in ksa uae as well as africa It has also been a good contributor. Android premium brands has been a good growth trajectory for us. It has also been a good contributor. it has also been a good contributor Android premium brands has been a good growth trajectory for us. android premium brands has been a good growth trajectory for us

Speaker 7: Got it. Yeah. It was mentioned recently that Apple, they called out in their earnings call that India has actually grown very well. Now, our growth is ahead of Apple's growth in India in the sense that are we getting higher market shares? Second, is the Android phones are actually outstripping the growth of Apple phones, especially in the premium segment we are capturing? Got it. got it Yeah. yeah It was mentioned recently that Apple, they called out in their earnings call that India has actually grown very well. it was mentioned recently that apple they called out in their earnings call that india has actually grown very well Now, our growth is ahead of Apple's growth in India in the sense that are we getting higher market shares? now our growth is ahead of apple's growth in india in the sense that are we getting higher market shares Second, is the Android phones are actually outstripping the growth of Apple phones, especially in the premium segment we are capturing? second is the android phones are actually outstripping the growth of apple phones especially in the premium segment we are capturing

Speaker 11: Is hard to really give relative numbers, but because Apple reaches some part of the market directly and some part is distribution. Clearly, in the distribution space, we have been playing a role on upcountry as well, and there is a lot more growth on upcountry, which could have resulted in the distribution time being a little bit higher than for the discipline market. As you may be aware, there are only two players in India, Ingram and us, in the Apple space. There are times when we do a bit better, and there are times when they do a little bit better. The numbers are roughly 50 plus minus. We are not able to give exact numbers on this, but yes, the market for us is growing because of the many SKUs they have in the upcountry. That is what I would say in terms of Apple itself. Is hard to really give relative numbers, but because Apple reaches some part of the market directly and some part is distribution. is hard to really give relative numbers but because apple reaches some part of the market directly and some part is distribution Clearly, in the distribution space, we have been playing a role on upcountry as well, and there is a lot more growth on upcountry, which could have resulted in the distribution time being a little bit higher than for the discipline market. clearly in the distribution space, we have been playing a role on upcountry as well and there is a lot more growth on upcountry which could have resulted in the distribution time being a little bit higher than for the discipline market As you may be aware, there are only two players in India, Ingram and us, in the Apple space. as you may be aware there are only two players in india ingram and us in the apple space There are times when we do a bit better, and there are times when they do a little bit better. there are times when we do a bit better and there are times when they do a little bit better The numbers are roughly 50 plus minus. We are not able to give exact numbers on this, but yes, the market for us is growing because of the many SKUs they have in the upcountry. That is what I would say in terms of Apple itself. the numbers are roughly 50 plus minus. we are not able to give exact numbers on this but yes the market for us is growing because of the many skus they have in the upcountry. that is what i would say in terms of apple itself Do you have a second question? That's good. Okay. Do you have a second question? do you have a second question That's good. that's good Okay. okay Yeah. We're doing well. You talked about numbers as well. I think the value business, from a value perspective, Apple continues, and you can see the published numbers. You can see Apple continues to gain share from a value perspective because they sell into the super premium, ultra premium space very well. Clearly, they're doing very, very well, and we're taking, obviously, advantage of that growth as well. From a value perspective, Apple continues to become better and better from a share. Yeah. yeah We're doing well. we're doing well You talked about numbers as well. you talked about numbers as well I think the value business, from a value perspective, Apple continues, and you can see the published numbers. i think the value business from a value perspective apple continues and you can see the published numbers You can see Apple continues to gain share from a value perspective because they sell into the super premium, ultra premium space very well. you can see apple continues to gain share from a value perspective because they sell into the super premium ultra premium space very well Clearly, they're doing very, very well, and we're taking, obviously, advantage of that growth as well. clearly they're doing very very well and we're taking obviously advantage of that growth as well From a value perspective, Apple continues to become better and better from a share. from a value perspective apple continues to become better and better from a share

Speaker 7: Got it. On the SSG, which is the professional services, just want to understand what kind of, how many resources we have providing these professional services. Second, what kind of liability you actually assume because these professional services also mean that your person is there in the premises, and there could be issues, etc. Just want to understand how are you thinking about this SSG business, how many professionals, and what kind of liabilities you actually come across. Got it. got it On the SSG, which is the professional services, just want to understand what kind of, how many resources we have providing these professional services. on the ssg which is the professional services just want to understand what kind of how many resources we have providing these professional services Second, what kind of liability you actually assume because these professional services also mean that your person is there in the premises, and there could be issues, etc. Just want to understand how are you thinking about this SSG business, how many professionals, and what kind of liabilities you actually come across. second what kind of liability you actually assume because these professional services also mean that your person is there in the premises and there could be issues etc just want to understand how are you thinking about this ssg business how many professionals and what kind of liabilities you actually come across

Speaker 11: Sure. Our own resources, we roughly have about 125 resources in the company, mostly in India on professional services. These resources are focused on things like migration, modernization, FinOps, DevOps, a range of services. In most cases, we work with customers through channel partners. We closely watch our liabilities. Because we want to scale this business, the approach we are also taking is how to create cookie-cutter models rather than every service becoming a bespoke service deal. Take migration, for example. If there are 100 customers, does it have to be 100 instances of migration, or can I find commonalities and find a way to automate this and have different, similar sets of migration for similar sets of customers? That will be our approach. Sure. sure Our own resources, we roughly have about 125 resources in the company, mostly in India on professional services. our own resources we roughly have about 125 resources in the company mostly in india on professional services These resources are focused on things like migration, modernization, FinOps, DevOps, a range of services. these resources are focused on things like migration modernization finops devops a range of services In most cases, we work with customers through channel partners. in most cases we work with customers through channel partners We closely watch our liabilities. we closely watch our liabilities Because we want to scale this business, the approach we are also taking is how to create cookie-cutter models rather than every service becoming a bespoke service deal. because we want to scale this business the approach we are also taking is how to create cookie-cutter models rather than every service becoming a bespoke service deal Take migration, for example. take migration for example If there are 100 customers, does it have to be 100 instances of migration, or can I find commonalities and find a way to automate this and have different, similar sets of migration for similar sets of customers? if there are 100 customers does it have to be 100 instances of migration or can i find commonalities and find a way to automate this and have different similar sets of migration for similar sets of customers That will be our approach. that will be our approach In all of this, the approach we will take is productize the professional services business so that we can scale up with our partners. We do want to bring our partners along in the journey, people who are providing professional services, and we can share the margins and the revenues with them. In all of this, the approach we will take is productize the professional services business so that we can scale up with our partners. in all of this the approach we will take is productize the professional services business so that we can scale up with our partners We do want to bring our partners along in the journey, people who are providing professional services, and we can share the margins and the revenues with them. we do want to bring our partners along in the journey people who are providing professional services and we can share the margins and the revenues with them

Speaker 7: Got it. Any specific areas which actually led to an excellent growth in that group in the first half? Particularly CISA? Got it. got it Any specific areas which actually led to an excellent growth in that group in the first half? any specific areas which actually led to an excellent growth in that group in the first half Particularly CISA? particularly cisa

Speaker 10: I think it's sometimes. I think it's a matter of focus. I think as we moved within the organization, the different groups around. And also put all the focus because clearly what's happening is the cloud part of the business had moved completely subscription. Whereas when you look at cybersecurity and software, some products were subscription, some were still licensing multi-year contracts. We believe directionally, everything will move subscription. Similar go-to-market motions where people want to work on a digital platform, they want to automate the renewal process, they want to bundle professional services even from vendors. All that instinct, once you put it together, it becomes similar. We still work with many brands, so we need to get focused and build practices around each one of these areas separately. I think the shared focus and attention has created breadth and depth on all the brands. I think it's sometimes. i think it's sometimes I think it's a matter of focus. i think it's a matter of focus I think as we moved within the organization, the different groups around. i think as we moved within the organization the different groups around And also put all the focus because clearly what's happening is the cloud part of the business had moved completely subscription. and also put all the focus because clearly what's happening is the cloud part of the business had moved completely subscription Whereas when you look at cybersecurity and software, some products were subscription, some were still licensing multi-year contracts. whereas when you look at cybersecurity and software some products were subscription some were still licensing multi-year contracts We believe directionally, everything will move subscription. we believe directionally everything will move subscription Similar go-to-market motions where people want to work on a digital platform, they want to automate the renewal process, they want to bundle professional services even from vendors. similar go-to-market motions where people want to work on a digital platform they want to automate the renewal process they want to bundle professional services even from vendors All that instinct, once you put it together, it becomes similar. all that instinct once you put it together it becomes similar We still work with many brands, so we need to get focused and build practices around each one of these areas separately. we still work with many brands so we need to get focused and build practices around each one of these areas separately I think the shared focus and attention has created breadth and depth on all the brands. i think the shared focus and attention has created breadth and depth on all the brands We have taken on more brands. We have looked at our wallet share brand by brand and where we are weak and what actions we need to take. It is the beginning of a journey, as I said, because the last three months, this transition has happened, and we are encouraged by what we see. Now, does it mean that next quarter will be as good or better? I think directionally, if I look at the next 6-12 quarters, clearly this area we want to grow between 30%-50%. Last year, we grew about 22%-23% if I aggregate all of the SSG pieces year over year. This year, we can already see directionally we are headed 40%+. We will continue to work on it. The opportunity is there. It is a question of good execution and good focus. We have taken on more brands. we have taken on more brands We have looked at our wallet share brand by brand and where we are weak and what actions we need to take. we have looked at our wallet share brand by brand and where we are weak and what actions we need to take It is the beginning of a journey, as I said, because the last three months, this transition has happened, and we are encouraged by what we see. it is the beginning of a journey as i said because the last three months this transition has happened and we are encouraged by what we see Now, does it mean that next quarter will be as good or better? now does it mean that next quarter will be as good or better I think directionally, if I look at the next 6-12 quarters, clearly this area we want to grow between 30%-50%. i think directionally if i look at the next 6-12 quarters clearly this area we want to grow between 30%-50% Last year, we grew about 22%-23% if I aggregate all of the SSG pieces year over year. last year we grew about 22%-23% if i aggregate all of the ssg pieces year over year This year, we can already see directionally we are headed 40%+ . this year we can already see directionally we are headed 40%+ We will continue to work on it. we will continue to work on it The opportunity is there. It is a question of good execution and good focus. the opportunity is there. it is a question of good execution and good focus Okay. All right. Just to also add. You recollect a couple of years back, cloud was part of the current SSG. At that time, we used to call it as enterprise segment. And it was growing at about 20%-25%. When it got separated out, then we started seeing a 30% growth and then a 40% growth. That is the same thing we would want to do in SSG. And as Hari said, we just started the journey there. Okay. okay all All right. okay all right Just to also add. just to also add You recollect a couple of years back, cloud was part of the current SSG. you recollect a couple of years back cloud was part of the current ssg At that time, we used to call it as enterprise segment. at that time we used to call it as enterprise segment And it was growing at about 20%-25%. and it was growing at about 20%-25% When it got separated out, then we started seeing a 30% growth and then a 40% growth. That is the same thing we would want to do in SSG. when it got separated out then we started seeing a 30% growth and then a 40% growth. that is the same thing we would want to do in ssg And as Hari said, we just started the journey there. and as hari said we just started the journey there

Speaker 7: Got it. Got it. This was the last question from my side. When you set out this financial year and we are half year through, what are the areas which have actually done ahead of your expectations, and which are the areas or strategies that have done behind your expectations broadly? Got it. got it got Got it. it got it This was the last question from my side. this was the last question from my side When you set out this financial year and we are half year through, what are the areas which have actually done ahead of your expectations, and which are the areas or strategies that have done behind your expectations b roadly? when you set out this financial year and we are half year through what are the areas which have actually done ahead of your expectations and which are the areas or strategies that have done behind your expectations b roadly

Speaker 11: Very good question. Clearly, SSG. We expected things will transition, but not so quickly. Definitely, it has done ahead of expectation, and we would like to maintain it, but there is a lot of work, and we want to make sure there are no missteps here. MSG mobility has been ahead of expectation for a variety of reasons. We did not expect the market to continue at the same growth rate. Overseas actually surprises even more. In Middle East, Africa, the monthly run rate on Apple and some of the Android businesses has been quite ahead of our thinking and plans. Both those are ahead. I wish we could do more in the ESG space. The PCs have long promise of Windows 10 to 11 refresh, which has been slow and not there yet. The AI PC, we are quite. Very good question. very good question Clearly, SSG. clearly ssg We expected things will transition, but not so quickly. we expected things will transition but not so quickly Definitely, it has done ahead of expectation, and we would like to maintain it, but there is a lot of work, and we want to make sure there are no missteps here. definitely it has done ahead of expectation and we would like to maintain it but there is a lot of work and we want to make sure there are no missteps here MSG mobility has been ahead of expectation for a variety of reasons. msg mobility has been ahead of expectation for a variety of reasons We did not expect the market to continue at the same growth rate. we did not expect the market to continue at the same growth rate Overseas actually surprises even more. overseas actually surprises even more In Middle East, Africa, the monthly run rate on Apple and some of the Android businesses has been quite ahead of our thinking and plans. in middle east africa the monthly run rate on apple and some of the android businesses has been quite ahead of our thinking and plans Both those are ahead. both those are ahead I wish we could do more in the ESG space. i wish we could do more in the esg space The PCs have long promise of Windows 10 to 11 refresh, which has been slow and not there yet. the pcs have long promise of windows 10 to 11 refresh which has been slow and not there yet The AI PC, we are quite. the ai pc we are quite Inspired by the numbers in this quarter, especially in India. That has not lived up to its promise. I would say it is a bit behind. TSG is thereabouts there. I think a lot of the business in TSG is becoming larger deals. Also, margin and profitability is an area on technology solutions that we need to work very hard on to bring that up in terms of value Redington brings to the table and our ability to grow the size and share there. If I had to take a quick shot at your question, clearly, SSG and mobility are ahead of our plan and thinking, and TSG and ESG is behind. Yeah. Inspired by the numbers in this quarter, especially in India. inspired by the numbers in this quarter especially in india That has not lived up to its promise. that has not lived up to its promise I would say it is a bit behind. i would say it is a bit behind TSG is thereabouts there. tsg is thereabouts there I think a lot of the business in TSG is becoming larger deals. i think a lot of the business in tsg is becoming larger deals Also, margin and profitability is an area on technology solutions that we need to work very hard on to bring that up in terms of value Redington brings to the table and our ability to grow the size and share there. also margin and profitability is an area on technology solutions that we need to work very hard on to bring that up in terms of value redington brings to the table and our ability to grow the size and share there If I had to take a quick shot at your question, clearly, SSG and mobility are ahead of our plan and thinking, and TSG and ESG is behind. if i had to take a quick shot at your question clearly ssg and mobility are ahead of our plan and thinking and tsg and esg is behind Yeah. yeah

Speaker 7: Okay. Thank you so much. Okay. okay Thank you so much. thank you so much

Speaker 3: Thank you. The next question is from the line of Rucha Sumaiya from Old Bridge Mutual Fund. Please go ahead. Thank you. thank you The next question is from the line of Rucha Sumaiya from Old Bridge Mutual Fund. the next question is from the line of rucha sumaiya from old bridge mutual fund Please go ahead. please go ahead

Speaker 2: Hi. I'm transferring my question. Congratulations on a good set of numbers. I just had one question with respect to the growing data center capacity in India. Specifically, how is Redington contributing to this trend? Are there any specific partnerships or initiatives, technological enabling efforts in place? Hi. hi I'm transferring my question. i'm transferring my question Congratulations on a good set of numbers. congratulations on a good set of numbers I just had one question with respect to the growing data center capacity in India. i just had one question with respect to the growing data center capacity in india Specifically, how is Redington contributing to this trend? specifically how is redington contributing to this trend Are there any specific partnerships or initiatives, technological enabling efforts in place? are there any specific partnerships or initiatives technological enabling efforts in place

Speaker 10: Are you referring to the Make in India? Are you referring to the Make in India? are you referring to the make in india

Speaker 2: No, the growing data center efforts or actions, that is the trend that is going on around. How is Redington placed? Is there any capability that is positioning, that is enabling our positioning to be a little stronger around the data center ecosystem? No, the growing data center efforts or actions, that is the trend that is going on around. no the growing data center efforts or actions that is the trend that is going on around How is Redington placed? how is redington placed Is there any capability that is positioning, that is enabling our positioning to be a little stronger around the data center ecosystem? is there any capability that is positioning that is enabling our positioning to be a little stronger around the data center ecosystem

Speaker 11: Very, very good question. There are two parts to this question. One, of course, how can we engage in deals? Some of the large deals I alluded to are actually data center related. You are aware that the hyperscalers, when they put the data centers, they work directly, and we have no role to play in it. Increasingly, local deals, which are Make in India products being sold to data centers in India, we are being asked to come in to stitch deals together. We play a role, and you will hear some of those as we go along. They are fairly large deals, some of them. That is a starting point. We are actually in the middle of crafting a data center strategy. There are definitely many opportunities we see. For example, once a data center is set up or getting set up. Very, very good question. very very good question There are two parts to this question. there are two parts to this question One, of course, how can we engage in deals? one of course how can we engage in deals Some of the large deals I alluded to are actually data center related. some of the large deals i alluded to are actually data center related You are aware that the hyperscalers, when they put the data centers, they work directly, and we have no role to play in it. you are aware that the hyperscalers when they put the data centers they work directly and we have no role to play in it Increasingly, local deals, which are Make in India products being sold to data centers in India, we are being asked to come in to stitch deals together. increasingly local deals which are make in india products being sold to data centers in india we are being asked to come in to stitch deals together We play a role, and you will hear some of those as we go along. They are fairly large deals, some of them. we play a role and you will hear some of those as we go along. they are fairly large deals some of them That is a starting point. that is a starting point We are actually in the middle of crafting a data center strategy. we are actually in the middle of crafting a data center strategy There are definitely many opportunities we see. there are definitely many opportunities we see For example, once a data center is set up or getting set up. for example once a data center is set up or getting set up What about cooling systems? What about power for the data center? We do work on some of those categories, types of categories. Should we get into them wholeheartedly and work with vendors to develop products in those is one question. Similarly, once data centers are set up, clearly, there is a requirement for software, a whole range of software from platforms to application software that will go into it. That is clearly an area we will play a role. Then fulfilling capacity because once data centers are built up. Whether they are public data centers or co-locations or private data centers, there will be clearly a requirement for the people who are building these data centers to fill them up with capacity, either with mid-market customers or enterprise customers. We are consciously looking at. What about cooling systems? what about cooling systems What about power for the data center? what about power for the data center We do work on some of those categories, types of categories. we do work on some of those categories types of categories Should we get into them wholeheartedly and work with vendors to develop products in those is one question. should we get into them wholeheartedly and work with vendors to develop products in those is one question Similarly, once data centers are set up, clearly, there is a requirement for software, a whole range of software from platforms to application software that will go into it. similarly once data centers are set up clearly there is a requirement for software a whole range of software from platforms to application software that will go into it That is clearly an area we will play a role. that is clearly an area we will play a role Then fulfilling capacity because once data centers are built up. then fulfilling capacity because once data centers are built up Whether they are public data centers or co-locations or private data centers, there will be clearly a requirement for the people who are building these data centers to fill them up with capacity, either with mid-market customers or enterprise customers. whether they are public data centers or co-locations or private data centers there will be clearly a requirement for the people who are building these data centers to fill them up with capacity either with mid-market customers or enterprise customers We are consciously looking at. we are consciously looking at Each of these areas and saying, "What kind of action planning teams that we can have to get into these areas and get a share of this piece of the market?" It has been a recent phenomenon, the non-public and then more Make in India data center growth. We are in the middle of that discussion and strategy formation. Each of these areas and saying, "What kind of action planning teams that we can have to get into these areas and get a share of this piece of the market?" It has been a recent phenomenon, the non-public and then more Make in India data center growth. each of these areas and saying "what kind of action planning teams that we can have to get into these areas and get a share of this piece of the market?" it has been a recent phenomenon the non-public and then more make in india data center growth We are in the middle of that discussion and strategy formation. we are in the middle of that discussion and strategy formation

Speaker 2: Okay. Works. Thank you so much. Okay. okay Works. works Thank you so much. thank you so much

Speaker 3: Thank you. The next question is from the line of Nikunj Mehta from Wealth Guardian. Please go ahead. Thank you. thank you The next question is from the line of Nikunj Mehta from Wealth Guardian. the next question is from the line of nikunj mehta from wealth guardian Please go ahead. please go ahead

Speaker 6: Good morning, sir. Congratulations and very good execution. My question was pertaining to Turkey. What are the other steps that you all are planning to take apart from this Vodafone deal that you've done? Any similar deals that you all are looking at, or are you all looking at completely exiting Turkey? Any update on that, if you could give it? That would be useful, please. Good morning, sir. good morning sir Congratulations and very good execution. congratulations and very good execution My question was pertaining to Turkey. my question was pertaining to turkey What are the other steps that you all are planning to take apart from this Vodafone deal that you've done? what are the other steps that you all are planning to take apart from this vodafone deal that you've done Any similar deals that you all are looking at, or are you all looking at completely exiting Turkey? any similar deals that you all are looking at or are you all looking at completely exiting turkey Any update on that, if you could give it? any update on that if you could give it That would be useful, please. that would be useful please

Speaker 10: Nikunj, I'm sure you acknowledge there have been a lot of steps that we have been taking in the last one and a half years, and we think all in the right direction. I mean, we sold off PayNet. There had been a lot of debates internally. Is that a crown jewel? Should we keep investing? What should we do? We felt core business is much more important. We divested. The process took some time. The market did not recover. We took some decisions in terms of cutting down some costs. It wasn't sufficient. Still, we continued to make some loss. We decided to sell the TL business, and we had moved on. That's what you see in the form of Connect getting divested. Unfortunately, last quarter, another event happened which was unexpected, and we need to handle it. Overall, the ecosystem is quite challenging. Nikunj, I'm sure you acknowledge there have been a lot of steps that we have been taking in the last one and a half years, and we think all in the right direction. nikunj i'm sure you acknowledge there have been a lot of steps that we have been taking in the last one and a half years and we think all in the right direction I mean, we sold off PayNet. i mean we sold off paynet There had been a lot of debates internally. there had been a lot of debates internally Is that a crown jewel? is that a crown jewel Should we keep investing? should we keep investing What should we do? what should we do We felt core business is much more important. we felt core business is much more important We divested. we divested The process took some time. the process took some time The market did not recover. the market did not recover We took some decisions in terms of cutting down some costs. we took some decisions in terms of cutting down some costs It wasn't sufficient. it wasn't sufficient Still, we continued to make some loss. still we continued to make some loss We decided to sell the TL business, and we had moved on. we decided to sell the tl business and we had moved on That's what you see in the form of Connect getting divested. that's what you see in the form of connect getting divested Unfortunately, last quarter, another event happened which was unexpected, and we need to handle it. unfortunately last quarter another event happened which was unexpected and we need to handle it Overall, the ecosystem is quite challenging. overall the ecosystem is quite challenging As I keep mentioning, the full credit to the leadership team there. They have been trying to maintain above board as much as possible. Right now, our decision after Connect is also to exit from the rest of the TL business. As I had mentioned for the previous query, we think it will not automatically move into a profitable situation. We will still have loss, maybe a lesser loss. For us to get converted into profits, there are certain strong steps that are required, which we are in the process of doing. Maybe in about six months, we should see some light at the end of the tunnel. That is where it stands. We are taking right steps, Nikunj. That is what I can tell you at this point. As I keep mentioning, the full credit to the leadership team there. as i keep mentioning the full credit to the leadership team there They have been trying to maintain above board as much as possible. they have been trying to maintain above board as much as possible Right now, our decision after Connect is also to exit from the rest of the TL business. right now our decision after connect is also to exit from the rest of the tl business As I had mentioned for the previous query, we think it will not automatically move into a profitable situation. as i had mentioned for the previous query we think it will not automatically move into a profitable situation We will still have loss, maybe a lesser loss. we will still have loss maybe a lesser loss For us to get converted into profits, there are certain strong steps that are required, which we are in the process of doing. for us to get converted into profits there are certain strong steps that are required which we are in the process of doing Maybe in about six months, we should see some light at the end of the tunnel. maybe in about six months we should see some light at the end of the tunnel That is where it stands. that is where it stands We are taking right steps, Nikunj. That is what I can tell you at this point. we are taking right steps nikunj. that is what i can tell you at this point

Speaker 11: If I can add to what Christian said, Nikunj. There are two or three parts to it. The light at the end of the tunnel. We have a business in Redington, Turkey, that's very software-centric. That business actually has been growing good double-digit profitably. There are parts of the Arena business, which is Microsoft-centric, also has grown very well this quarter. It has actually contributed to the SSG part of the business, where there is cloud and security and all of that. In the DTAM space, we have more than 50% share of the Microsoft business in the market in Turkey, also quite profitable. We are clearly working on action plans there. On one side, reduce dependence on Lira business and really manage the working capital down, working capital required, and be more US dollar dependent. The growth on the software cloud-centric area in Turkey is definitely. If I can add to what Christian said, Nikunj. if i can add to what christian said nikunj There are two or three parts to it. there are two or three parts to it The light at the end of the tunnel. the light at the end of the tunnel We have a business in Redington, Turkey, that's very software-centric. we have a business in redington turkey that's very software-centric That business actually has been growing good double-digit profitably. that business actually has been growing good double-digit profitably There are parts of the Arena business, which is Microsoft-centric, also has grown very well this quarter. It has actually contributed to the SSG part of the business, where there is cloud and security and all of that. there are parts of the arena business which is microsoft-centric also has grown very well this quarter. it has actually contributed to the ssg part of the business where there is cloud and security and all of that In the DTAM space, we have more than 50% share of the Microsoft business in the market in Turkey, also quite profitable. in the dtam space we have more than 50% share of the microsoft business in the market in turkey also quite profitable We are clearly working on action plans there. we are clearly working on action plans there On one side, reduce dependence on Lira business and really manage the working capital down, working capital required, and be more US dollar dependent. on one side reduce dependence on lira business and really manage the working capital down working capital required and be more us dollar dependent The growth on the software cloud-centric area in Turkey is definitely. the growth on the software cloud-centric area in turkey is definitely Looking promising. That can balance off everything else. We are headed in that direction as well. Looking promising. looking promising That can balance off everything else. that can balance off everything else We are headed in that direction as well. we are headed in that direction as well

Speaker 6: Thank you so much. Really appreciate the answers and the clarifications and wishing you all the best for the future quarters. Thank you so much. thank you so much Really appreciate the answers and the clarifications and wishing you all the best for the future quarters. really appreciate the answers and the clarifications and wishing you all the best for the future quarters

Speaker 10: Thank you, Nikunj. Thank you, Nikunj. thank you nikunj

Speaker 3: Thank you. The next question is from the line of P. Venkatesh from Corporate Database India Private Limited. Please go ahead. Thank you. thank you The next question is from the line of P. the next question is from the line of p Venkatesh from Corporate Database India Private Limited. venkatesh from corporate database india private limited Please go ahead. please go ahead

Speaker 12: Hello. Good morning, sir. Hello. hello Good morning, sir. good morning sir

Speaker 3: Yes, you are audible. Please go ahead. Yes, you are audible. yes you are audible Please go ahead. please go ahead

Speaker 12: Yeah. I want to know what would be the debt levels in ARENA currently? What has been the amount of debt that has been divested, that has been repaid post PayNet divestment? Also, I want to know what would be the investment that you are talking for SSG? We have been referring to some investments that we'll be making going ahead. What would be the outflow in those investments? Lastly, I want to know, you had referred to the four areas in SSG. Broadly, what would be the mix of those four areas in SSG revenues? Thank you. Yeah. yeah I want to know what would be the debt levels in ARENA currently? i want to know what would be the debt levels in arena currently What has been the amount of debt that has been divested, that has been repaid post PayNet divestment? what has been the amount of debt that has been divested that has been repaid post paynet divestment Also, I want to know what would be the investment that you are talking for SSG? also i want to know what would be the investment that you are talking for ssg We have been referring to some investments that we'll be making going ahead. we have been referring to some investments that we'll be making going ahead What would be the outflow in those investments? what would be the outflow in those investments Lastly, I want to know, you had referred to the four areas in SSG. lastly i want to know you had referred to the four areas in ssg Broadly, what would be the mix of those four areas in SSG revenues? broadly what would be the mix of those four areas in ssg revenues Thank you. thank you

Speaker 10: Okay. I'll answer the first part of the question, Venkatesh. ARENA debt levels are currently at about $130 billion and odd. Used to be about $160 billion+. Assume those concarded cases had not happened, we would have definitely been better off with about $15 million-20 million. That is where we stand. Okay. okay I'll answer the first part of the question, Venkatesh. i'll answer the first part of the question venkatesh ARENA debt levels are currently at about $130 billion and odd. arena debt levels are currently at about $130 billion and odd Used to be about $160 billion+ . used to be about $160 billion+ Assume those concarded cases had not happened, we would have definitely been better off with about $15 million-20 million. assume those concarded cases had not happened we would have definitely been better off with about $15 million-20 million That is where we stand. that is where we stand

Speaker 11: Yeah. Talking about the investment in SSG, too early to talk about those investments since there was a question, I did say that we are exploratory stage right now. We cannot even talk about investment levels, etc. In terms of the mix of the business, you can say that there is somewhat of an equal mix between security, cloud, and software business, with software being a little bit higher, but somewhat of an equal mix. The professional services part of it is less than 10% right now, but it will definitely be an area of growth for us. Between the remaining three businesses, you can say fairly equal, with software business being slightly higher weighted. Yeah. yeah Talking about the investment in SSG, too early to talk about those investments since there was a question, I did say that we are exploratory stage right now. talking about the investment in ssg too early to talk about those investments since there was a question i did say that we are exploratory stage right now We cannot even talk about investment levels, etc. In terms of the mix of the business, you can say that there is somewhat of an equal mix between security, cloud, and software business, with software being a little bit higher, but somewhat of an equal mix. we cannot even talk about investment levels etc in terms of the mix of the business you can say that there is somewhat of an equal mix between security cloud and software business with software being a little bit higher but somewhat of an equal mix The professional services part of it is less than 10% right now, but it will definitely be an area of growth for us. the professional services part of it is less than 10% right now but it will definitely be an area of growth for us Between the remaining three businesses, you can say fairly equal, with software business being slightly higher weighted. between the remaining three businesses you can say fairly equal with software business being slightly higher weighted

Speaker 12: Thank you, sir. Thank you, sir. thank you sir

Speaker 3: Thank you. The next question is from the line of Sunil Kothari from Unique AMC. Please go ahead. Thank you. thank you The next question is from the line of Sunil Kothari from Unique AMC. the next question is from the line of sunil kothari from unique amc Please go ahead. please go ahead

Speaker 13: Thank you for inviting me, sir. First, congratulations on the agility and the flexibility. We are slowly now adapting to remove some businesses. We are giving enough thought before removing those because ultimately, we are serving those same customers and same suppliers across the other part of the world also. Really, very sensible decision we are taking. Hearty congratulations for that. My question is, we have one slide on our presentation. It talks about key technology trend, growth, CAGR, and what it means for Redington and on. Combining this slide, I would like to understand is, since last three, four years, we have grown our top line really well. I am talking yearly, nothing to do with this quarter or the next quarter. Our bottom line is almost static, having some reason of one-time some currency-related interest and everything. Thank you for inviting me, sir. thank you for inviting me sir First, congratulations on the agility and the flexibility. first congratulations on the agility and the flexibility We are slowly now adapting to remove some businesses. we are slowly now adapting to remove some businesses We are giving enough thought before removing those because ultimately, we are serving those same customers and same suppliers across the other part of the world also. we are giving enough thought before removing those because ultimately we are serving those same customers and same suppliers across the other part of the world also Really, very sensible decision we are taking. really very sensible decision we are taking Hearty congratulations for that. hearty congratulations for that My question is, we have one slide on our presentation. my question is we have one slide on our presentation It talks about key technology trend, growth, CAGR, and what it means for Redington and on. it talks about key technology trend growth cagr and what it means for redington and on Combining this slide, I would like to understand is, since last three, four years, we have grown our top line really well. I am talking yearly, nothing to do with this quarter or the next quarter. combining this slide i would like to understand is since last three four years we have grown our top line really well. i am talking yearly nothing to do with this quarter or the next quarter Our bottom line is almost static, having some reason of one-time some currency-related interest and everything. our bottom line is almost static having some reason of one-time some currency-related interest and everything Now, another 10 years, if you look at the last 10 years, the way we've grown is around 13%-15% top line, similar CAGR of bottom line. What's your thought process for the next three to five years? Which are the challenges which can derive from this trend or maybe accelerate this trend? Something qualitative will be really helpful. Now, another 10 years, if you look at the last 10 years, the way we've grown is around 13%-15% top line, similar CAGR of bottom line. now another 10 years if you look at the last 10 years the way we've grown is around 13%-15% top line similar cagr of bottom line What's your thought process for the next three to five years? what's your thought process for the next three to five years Which are the challenges which can derive from this trend or maybe accelerate this trend? which are the challenges which can derive from this trend or maybe accelerate this trend Something qualitative will be really helpful. something qualitative will be really helpful

Speaker 11: Okay. Let me try and answer that question. See, you already mentioned that we have been growing at 15% top line and 15% bottom line. If we can maintain that kind of growth, obviously, that would be very interesting for us and will be a good vision. Now, to answer your question, we clearly, the world is transforming. 25% of the total distribution market has become software globally and software and services. With AI, it is only going to deepen and accelerate. In our mix of the business, last year it was 15, now it is become 16. If I look at the different business units, clearly, the Software Solutions Group today has an ability to appropriate higher margin to drive higher-than-average profitability. There is also a professional services, a bundle services attached to it, which can also get you higher margins and higher profitability. Okay. okay Let me try and answer that question. let me try and answer that question See, you already mentioned that we have been growing at 15% top line and 15% bottom line. see you already mentioned that we have been growing at 15% top line and 15% bottom line If we can maintain that kind of growth, obviously, that would be very interesting for us and will be a good vision. if we can maintain that kind of growth obviously that would be very interesting for us and will be a good vision Now, to answer your question, we clearly, the world is transforming. 25% of the total distribution market has become software globally and software and services. now to answer your question we clearly the world is transforming 25% of the total distribution market has become software globally and software and services With AI, it is only going to deepen and accelerate. with ai it is only going to deepen and accelerate In our mix of the business, last year it was 15, now it is become 16. in our mix of the business last year it was 15 now it is become 16 If I look at the different business units, clearly, the Software Solutions Group today has an ability to appropriate higher margin to drive higher-than-average profitability. There is also a professional services, a bundle services attached to it, which can also get you higher margins and higher profitability. if i look at the different business units clearly the software solutions group today has an ability to appropriate higher margin to drive higher-than-average profitability. there is also a professional services a bundle services attached to it which can also get you higher margins and higher profitability That's one of the reasons we embarked on this journey to grow that piece of the business faster. Now, to do this right, Software Solutions Group business right, capable digital platforms because everything is done on subscription on the digital platform. And we will have to do renewals on it. We'll have to find a way to create a lot of value on the digital platform by bringing a multitude of solution providers together so that this business remains sticky to Redington because it is over digital. We are bringing in software brands, we're bringing service brands to resellers and customers. We have to keep it sticky. We have to make sure that we add a lot of value to brands and agentic AI solutions. That will be critical. Those are the positives and the risks. Now, clearly, hardware part of the market is getting more commoditized. That's one of the reasons we embarked on this journey to grow that piece of the business faster. that's one of the reasons we embarked on this journey to grow that piece of the business faster Now, to do this right, Software Solutions Group business right, capable digital platforms because everything is done on subscription on the digital platform. now to do this right software solutions group business right capable digital platforms because everything is done on subscription on the digital platform And we will have to do renewals on it. and we will have to do renewals on it We'll have to find a way to create a lot of value on the digital platform by bringing a multitude of solution providers together so that this business remains sticky to Redington because it is over digital. we'll have to find a way to create a lot of value on the digital platform by bringing a multitude of solution providers together so that this business remains sticky to redington because it is over digital We are bringing in software brands, we're bringing service brands to resellers and customers. we are bringing in software brands we're bringing service brands to resellers and customers We have to keep it sticky. we have to keep it sticky We have to make sure that we add a lot of value to brands and agentic AI solutions. we have to make sure that we add a lot of value to brands and agentic ai solutions That will be critical. that will be critical Those are the positives and the risks. those are the positives and the risks Now, clearly, hardware part of the market is getting more commoditized. now clearly hardware part of the market is getting more commoditized As it gets more commoditized, the expectation from brands and OEMs is to really give lower and lower margins to you. What are the risks? The risks can be in the hardware areas of technology solutions and PCs where they are commoditized. That is the balance we'll have to seek. We'll have to keep working on higher margin solutions, and we'll have to make sure that we bring a lot of value over the digital platforms. That's really how we are thinking about it. As it gets more commoditized, the expectation from brands and OEMs is to really give lower and lower margins to you. as it gets more commoditized the expectation from brands and oems is to really give lower and lower margins to you What are the risks? what are the risks The risks can be in the hardware areas of technology solutions and PCs where they are commoditized. the risks can be in the hardware areas of technology solutions and pcs where they are commoditized That is the balance we'll have to seek. that is the balance we'll have to seek We'll have to keep working on higher margin solutions, and we'll have to make sure that we bring a lot of value over the digital platforms. we'll have to keep working on higher margin solutions and we'll have to make sure that we bring a lot of value over the digital platforms That's really how we are thinking about it. that's really how we are thinking about it

Speaker 13: Looking at the last four, five years, the way we have grown our top line, bottom line was not matching with reasons. Next three, five years. Should we expect better bottom line because of this strategy? Because we are SI, we are discontinuing some tough businesses or loss-making businesses. Those should be the very realistic expectations from you. Looking at the last four, five years, the way we have grown our top line, bottom line was not matching with reasons. looking at the last four five years the way we have grown our top line bottom line was not matching with reasons Next three, five years. next three five years Should we expect better bottom line because of this strategy? should we expect better bottom line because of this strategy Because we are SI, we are discontinuing some tough businesses or loss-making businesses. because we are si we are discontinuing some tough businesses or loss-making businesses Those should be the very realistic expectations from you. those should be the very realistic expectations from you

Speaker 10: Sunil, let me answer this. See, you are looking at from a window of three, five years' time frame. Please understand your start point is COVID period. Which, believe me, is completely unreal for this business. That is a time where demand was peaking, supply was restricted. You can imagine for an intermediary like Redington. What one-off opportunity that is, right? To maintain that profitability, that profit amount. You cannot imagine what we need to go through, right? I would urge you to make a comparison between various global players in this industry. This is Redington numbers. I am sure your question will get very clearly answered. In terms of growth. In terms of the profit percentage, we keep talking about profit percentage. I do not think anyone does. Third is the return ratios. All the three of us is significantly superior compared to the rest of the players. Sunil, let me answer this. sunil let me answer this See, you are looking at from a window of three, five years' time frame. see you are looking at from a window of three five years' time frame Please understand your start point is COVID period. please understand your start point is covid period Which, believe me, is completely unreal for this business. That is a time where demand was peaking, supply was restricted. which believe me is completely unreal for this business. that is a time where demand was peaking supply was restricted You can imagine for an intermediary like Redington. you can imagine for an intermediary like redington What one-off opportunity that is, right? what one-off opportunity that is right To maintain that profitability, that profit amount. to maintain that profitability that profit amount You cannot imagine what we need to go through, right? you cannot imagine what we need to go through right I would urge you to make a comparison between various global players in this industry. i would urge you to make a comparison between various global players in this industry This is Redington numbers. I am sure your question will get very clearly answered. this is redington numbers. i am sure your question will get very clearly answered In terms of growth. in terms of growth In terms of the profit percentage, we keep talking about profit percentage. in terms of the profit percentage we keep talking about profit percentage I do not think anyone does. i do not think anyone does Third is the return ratios. third is the return ratios All the three of us is significantly superior compared to the rest of the players. all the three of us is significantly superior compared to the rest of the players I think that's what, in our view, is important. Yeah, we knew that we haven't grown the absolute numbers, but it's not easy. We feel happy that we are able to protect our profitability. I mean, your question was into the future. I hope Hari has answered. We remain very positive into the future, and we think SSG will be a very important contributor in terms of our profitability into the future. I think that's what, in our view, is important. i think that's what in our view is important Yeah, we knew that we haven't grown the absolute numbers, but it's not easy. yeah we knew that we haven't grown the absolute numbers but it's not easy We feel happy that we are able to protect our profitability. we feel happy that we are able to protect our profitability I mean, your question was into the future. i mean your question was into the future I hope Hari has answered. i hope hari has answered We remain very positive into the future, and we think SSG will be a very important contributor in terms of our profitability into the future. we remain very positive into the future and we think ssg will be a very important contributor in terms of our profitability into the future

Speaker 13: Great, sir. Good luck. Thanks a lot. Great, sir. great sir Good luck. good luck Thanks a lot. thanks a lot

Speaker 10: Thank you, Sunil. Thank you, Sunil. thank you sunil

Speaker 3: Thank you. The next question is from the line of Vinay Menon from Monarch Capital. Please go ahead. Thank you. thank you The next question is from the line of Vinay Menon from Monarch Capital. the next question is from the line of vinay menon from monarch capital Please go ahead. please go ahead

Speaker 1: Thank you, sir. Congratulations on a great set of results. Just a few questions. One is, sir, Windows support end support has ended, and are you seeing any impact already of a switch to Windows 11? Is it any visible trends in the market? Thank you, sir. thank you sir Congratulations on a great set of results. congratulations on a great set of results Just a few questions. just a few questions One is, sir, Windows support end support has ended, and are you seeing any impact already of a switch to Windows 11? one is sir windows support end support has ended and are you seeing any impact already of a switch to windows 11 Is it any visible trends in the market? is it any visible trends in the market

Speaker 11: As I mentioned earlier, we have not really seen a big uptick because of the migration. Clearly, consumers are still waiting, and a lot of them have not migrated. Commercial maybe a little bit more, but I think there seems to be a wait-and-watch approach rather than a whole lot of people trying to migrate from 10 to 11. We also hear that there may be extended support provided beyond the timelines given. We have not really seen a big impact of the 10 to 11 refresh yet. As I mentioned earlier, we have not really seen a big uptick because of the migration. as i mentioned earlier we have not really seen a big uptick because of the migration Clearly, consumers are still waiting, and a lot of them have not migrated. clearly consumers are still waiting and a lot of them have not migrated Commercial maybe a little bit more, but I think there seems to be a wait-and-watch approach rather than a whole lot of people trying to migrate from 10 to 11. commercial maybe a little bit more but i think there seems to be a wait-and-watch approach rather than a whole lot of people trying to migrate from 10 to 11 We also hear that there may be extended support provided beyond the timelines given. we also hear that there may be extended support provided beyond the timelines given We have not really seen a big impact of the 10 to 11 refresh yet. we have not really seen a big impact of the 10 to 11 refresh yet

Speaker 1: Okay. Okay. That helps. One thing on the data center side, sir, in terms of large deals. Are we looking to get large deals which might be a little lower on margins, or are we going to steer away from anything which impacts our margins or our OpEx in any way? Okay. okay Okay. okay That helps. that helps One thing on the data center side, sir, in terms of large deals. one thing on the data center side sir in terms of large deals Are we looking to get large deals which might be a little lower on margins, or are we going to steer away from anything which impacts our margins or our OpEx in any way? are we looking to get large deals which might be a little lower on margins or are we going to steer away from anything which impacts our margins or our opex in any way

Speaker 10: This got answered already, Vinay. These are really incremental business. And these business, you need to ensure that you have adequate capital. You are able to manage the complex logistics and structuring of the transaction. If we are okay with that, we are quite okay to go ahead. I mean, provided it gives us incremental revenue and incremental margin, as Hari said, our key decision-making principle on some of this is return on capital employed. We would want to ensure our ROCE is secured. From a profit percentage perspective, these being large deals, I do not think we can expect similar profit percentage. That is why when it becomes larger, we would want to call out and disclose so that you are able to track our performance otherwise very, very clearly. This got answered already, Vinay. this got answered already vinay These are really incremental business. these are really incremental business And these business, you need to ensure that you have adequate capital. and these business you need to ensure that you have adequate capital You are able to manage the complex logistics and structuring of the transaction. you are able to manage the complex logistics and structuring of the transaction If we are okay with that, we are quite okay to go ahead. if we are okay with that we are quite okay to go ahead I mean, provided it gives us incremental revenue and incremental margin, as Hari said, our key decision-making principle on some of this is return on capital employed. i mean provided it gives us incremental revenue and incremental margin as hari said our key decision-making principle on some of this is return on capital employed We would want to ensure our ROCE is secured. we would want to ensure our roce is secured From a profit percentage perspective, these being large deals, I do not think we can expect similar profit percentage. from a profit percentage perspective these being large deals i do not think we can expect similar profit percentage That is why when it becomes larger, we would want to call out and disclose so that you are able to track our performance otherwise very, very clearly. that is why when it becomes larger we would want to call out and disclose so that you are able to track our performance otherwise very very clearly

Speaker 1: Thank you, sir. Thank you. All the best too. Thank you. Thank you, sir. thank you sir Thank you. thank you All the best too. all the best too Thank you. thank you

Speaker 10: Thanks, Vinay. Thanks, Vinay. thanks vinay

Speaker 3: Thank you. Ladies and gentlemen, due to time constraint, this was the last question for today. I now hand the conference over to the management for closing comments. Thank you. thank you Ladies and gentlemen, due to time constraint, this was the last question for today. ladies and gentlemen due to time constraint this was the last question for today I now hand the conference over to the management for closing comments. i now hand the conference over to the management for closing comments

Speaker 11: Thank you so much for all your questions, and thank you for listening. We hope we answered most of them adequately. Thank you for your trust in us, and we look forward to another good quarter. We'll be in touch. Bye for now. Thank you so much for all your questions, and thank you for listening. thank you so much for all your questions and thank you for listening We hope we answered most of them adequately. we hope we answered most of them adequately Thank you for your trust in us, and we look forward to another good quarter. thank you for your trust in us and we look forward to another good quarter We'll be in touch. we'll be in touch Bye for now. bye for now

Speaker 10: Thank you. Thank you. thank you

Speaker 3: Thank you very much, sir. On behalf of Redington Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you very much, sir. thank you very much sir On behalf of Redington Limited, that concludes this conference. on behalf of redington limited that concludes this conference Thank you for joining us, and you may now disconnect your lines. thank you for joining us and you may now disconnect your lines