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Good evening, ladies and gentlemen. A very warm welcome to the Q3 and 9 months FY '23 Earnings conference call of Hinduja Global Solutions Limited. Partha DeSarkar, Executive Director and Group CEO; Mr. Srinivas Palakodeti, Global CFO, Mr. Vynsley Fernandes, Whole Time Director, HGS; and Mr. Ru Ediriwira, Chief Technology Officer, Digital Media Business, HGS. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Darshan Manka from Adfactors. Thank you, and over to you, sir.
Thank you, Sima. Good evening, everyone. We welcome you to the third quarter and 9 months ended December 31, 2022 Earnings Call of Hinduja Global Solutions Limited.
Before we begin the earnings call, I would like to mention that some of the statements made during today's call might be forward-looking in nature, and hence, it may involve risks and uncertainties, including those related to the future financial and operating performance.
I would now request, Partha, sir, and hand over to share his views. Partha, sir, over to you.
Thank you, and a very good afternoon to all of you for taking the time to listen to all the parts for this earnings call. I hope you have our earnings presentation in front of you that was uploaded on our website, and I'm going to refer to it as we speak. So first slide talks about the key highlights of the quarter without getting into much ado, let me tell you that it's been a really good quarter. Our total income growth was about 8.3% on a year-on-year basis and an EBITDA growth of about 57.1% on a year-on-year basis. Our net profit at the rate of INR 51.83 crores was a big improvement over the loss of INR 37.88 crores a year ago.
I'm also happy that the Board has announced the third interim dividend of INR 2.50 per equity share. The BPM business has signed a definitive agreement to acquire 100% stake in TekLink. The diligence has been in progress for some time since we've signed. And we have also set up our new center in the city of Barranquilla in Colombia. That is going to be our second near source center in addition to the center in Kingston from that we have in Jamaica.
Our Digital Media business launched its broadband over satellite solution. It's named NXTSkyFi, and the first variant of that product supports education enablement.
Quick input on where we stand on the much anticipated buyback plan. You would be aware that the final buyback price has been fixed at INR 1,700 per equity share. The total consideration for this buyback would be INR 1,020 crores, excluding buyback tax. The record date of this is the 6 of March 2023. And the total number of shares to be bought back in the buyback shall be up to 60,00,000 equity shares.
We'll move on to Slide 6, where we talk about specific financials. Here, you have the revenue numbers in front of you. Our revenues on a Q-o-Q basis have grown from INR 1,075 crores to INR 1,165 crores, that is 8.3% growth that I talked about. Our EBITDA has also grown handsomely from INR 81 crores to INR 128 crores. That's a growth of 57.1%. Our profit before tax was negative last year. It's a small number of INR 5 crores this quarter and profit after tax is a number of INR 52 crores. I'd like to mention that the EBITDA here includes other income as well.
Move to Slide 7. Here, we are talking about on a YTD basis for FY 2023 overall. Compared with last year, similar YTD FY '22, the growth of 18.2%, a handsome growth, I would say, from INR 3,262 crores to INR 3,855 crores. Our EBITDA has grown almost double, I would say, INR 322 crores was what it was last year. We've grown by 94.6% to INR 627 crores last year.
PBT stands at INR 205 crores, and profit after tax stands at INR 279 crores. Once again, we want to highlight that the EBITDA here includes other income.
Slide 8 captures the trend line of the improvement of this business on a quarter-on-quarter basis. You will see that the team is able to -- after the health care divestment, we have been working on the profitability of the company, which was impacted by the divestment of a fairly highly profitable business. We have been working on quietly improving the profitability of this -- you can see the trend line. I expect that we would be able to improve this further in the years to come.
But as it stands, the margin expansion has been about 220 basis points. The Digital Media business, similar trend line, you will see that a big improvement in profitability of about 220 basis points during quarter 1 and quarter 3.
Coming to the business as a whole, the performance of the CES business onshore has been showing good steady growth, significant expansion in clients and a healthy pipeline. I've been talking about the pressures that we have in the U.K. business. You would recall that the U.K. business won a large contract from the health services industry, which was around track, trade and treat for COVID. Thankfully, COVID is now under control. And therefore, the volumes coming out of this contract are significantly reduced from what we had initially thought it would be, and that is why there are some headwinds in this business.
We have hired a new CEO of the business, Mr. Patrick Elliott, who brings an extensive experience in outsourcing business.
The offshore and mutual businesses have actually grown very well. It's grown better than the onshore businesses, and I talked about Colombia. Our new center in Barranquilla has been setup with a team of 30 and it's going to ramp up in the coming months. We have a good pipeline for Colombia delivery. This is going to be a primary destination for Spanish language work as well as some bilingual work.
Our Digital Solutions business has been a stellar performance. It grew the revenues by whopping 36% on a year-on-year basis at quarter 3. And 51.2% on a year-on-year on a 9-month basis.
Focused on deepening relationships with core digital clients drive with digital-led solutions for traditional CES clients. We are significantly strengthening the integrated sales team. We have both the digital team and the CES sales teams together under a single leadership so that we get a benefit of revenue synergies across our traditional BPM service and our new HGS digital service. We focus on longer-term deals such as managed services and cloud, and I talked about the diligence process that has been -- it's almost close to completion. Commission precedents are being closed and the stacking expectation is expected. The TekLink acquisition is expected to close shortly.
Moving to Slide 12. A little futuristic. We are shifting gears and Ru will talk about this later on in our presentation from being a services and a label-led business into solution accelerator and platform-led business.
Some of the key solutions that we have developed in-house in the last 2 years is something that's been proudly called Agent X. We've also built a cloud accelerator model for cloud telephony transformation based on platforms like Twilio, Genesys, AWS.
And we've also got our new analytics platform called DaVinci. The addition of TekLink will fast track this evolution with a diversified portfolio in data and analytics. We are still on the outlook for relevant acquisitions that can bring new skillsets and accelerate our growth in this business.
By 2025, we want to be a significant digital player with a large percentage of our revenues coming from digital and technology businesses.
Few were backing from our clients. We had a net promoter score of 65. That has been the highest in our history. And I'm also happy to state that this is a third-party survey that is done by feedback consulting and is done for many of our peers in the IT services and the BPM space. And this score of 65 actually puts us in the 19th percentile compared to our PS score.
Some of -- I won't quote the main quote. You can look into the slides that we have out there. Obviously, our clients are extremely happy.
Looking ahead, as I said, we've made good strides by improving profitability by 220 basis points. There is continuous focused on improving profitability further to get to a point of at least 10%. Work goes on. We have -- the Demand for BPM services is strong, so we have to write a way by investigating -- by investing in an integrated sales and go-to-market strategy. We are leading with digital in client engagements The digital media services, huge opportunity ahead, especially in areas such as submerging broadband satellite, education, and government, et cetera. And Vyns is going to talk about that in the next section.
Over to you, Vyns.
Thank you, Partha. Good afternoon, everyone. I'm Vynsley. I'm going straight to Slide #16. As Partha spoke about it, our entire focus as Hinduja Global Solutions, the next digital being a part of the HGS global picture. We are looking at how to innovate and continue the acceleration into the digital space.
Slide 16 will tell you that the innovative product that we launched called ONEDigital is already beginning to see significant traction, and one of the reasons why we believe we are seeing traction is on the right side of that slide, which actually shows rather than just launching a product, we also as HGS continue to walk the talk. We are training people across the country to be able to deliver these digital solutions and the digital upskilling program that we launched in August last year. Has already about trained nearly 740 people. And these are basically franchisees who connect about a subscriber base of just over -- under 150,000, and the process is ongoing even as we speak. That is in terms of what we're doing in terms of product.
Our big foray, which is on Slide #17, is that we have successfully launched NXTSkyFi, which is our broadband-over-satellite solution.
Interestingly, rather than launch a [indiscernible] product or a [ PR ]via platform, we've actually launched a solution through a very innovative retail and enterprise model. So we've partnered with TATA ClassEdge, and we've already rolled out education to places in the North and Northeast, including Jang and Arunachal Pradesh And Pulwama and Jammu and Kashmir. Students have already signed up there for the education. We're very happy because not only are we delivering value, but also we were happy that it's in line with the Prime Minister's vision of digital acceleration and digital inclusion of India. That's something we're quite cloud that NXTSkyFi has done.
In line with that, we have also received our VSAT Letter of Intent last month. This reduces our operating costs further besides reducing our lead times, obviously. And we will be accelerating the Direct Service solution under our broadband-over-satellite product shortly.
In line with that, if you go to Slide 18, we took the lead and brought together all our competitors from across the country, all the independent competitors. We brought everyone to a single table to a single room in December.
And effectively, the idea was to tell the entire ecosystem that now is the time to connect together to converge in terms of products and therefore, collaborate. So we shared various presentations were made.
One was by KPMG, which gave us clear insight that the television industry is still the David of the industry -- David to Goliath, and there's plenty of room for growth. We also have Accenture presenting Metaverse and the challenges around it and the way it goes. And there were a lot of other sessions, and there is a link available on that slide.
Please feel free if anyone would like to know more about those sessions. There is a link -- a YouTube link embedded on that slide. You can click on that and go to the -- to that presentation.
In terms of KPIs and the next slide, which is 19 tells you very clearly of how strong the Digital Media business has been in Q3. Our focus has been clearly on improving the quality of revenue and the sustainability of the business rather than just aiming for top line. So while we haven't really focused on growing our business, our focus has been on quality, and that is reflected as Partha pointed out in the EBITDA performance, where quarter-on-quarter, we've seen an expansion of about 220 basis points in Q3.
The same story is relevant even for the Y-o-Y performance for the 9 months where we've been able to grow in terms of our EBITDA performance, not just in terms of absolute value, but also in terms of margins over the previous year.
Staying on this slide a bit, if you look at it, there's been a clear focus in terms of stabilizing the video business, which did go through across the board, across the country went through some significant challenges in the last 3 years owing to the headwinds of the pandemic. But that, as you can see, is fairly stable and growing. Our broadband business, which is our focus, continues to grow. And all the key parameters, the 3 key parameters that you see on the second half of the slide, which is the 90-day net churn, the Same Month Renewal as well as the On-Time Renewal. All of that is seeing very, very positive traction.
That is the summary for the Digital Media business. I'm going to hand over to Srinivas Palakodeti, who is the Global CFO for HGS, to take you all through the financial slides. Thank you, everyone. Over to you.
Thank you, Vyns. Good afternoon, everyone. Thank you for joining us on this session. I move to Slide 21 on the financial performance. As you know, in the last one a little year-over-year, there have been multiple changes in HGS. The healthcare business was sold off in Jan '22. And during the year, the media business became part of HGS, right?
So these results are purely [indiscernible] comparable on a like-for-like basis. So it includes all the revenues margins coming in from the Digital Media business and excludes anything pertaining to the Healthcare business. So it's a like-for-like comparison.
So on a year-on-year basis, our revenues are up by about 6.4%. Other income is up by about 94.4% And total income, including other income and revenue from operations is higher at 8.3%.
Other, as you have seen from the results, we've had a loss of about INR 60 crores. This is coming from exchange rate radiation. These are primarily mark-to-market in nature. So that's the reason there has been a dip in the other income for in quarter ended December 22 as compared to the quarter ended September '22. At the EBITDA level on a year-on-year basis, revenue, EBITDA is up by about 57%. Depreciation is up by about 44%. And the interest expense, there is a reduction. So there is a drop of about 6% there. We do have an exceptional item, a reversal of some excess expenses recovered. And that's why there is a negative sign. So this added to the other income exceptional item.
So we have a PBT of INR 4.7 crores. And we have tax reversals of about INR 47 crores, giving us a PAT of INR 52 crores, which compares very well compared to a loss of about INR 37.9 crores, which we entered in quarter ending December 21. So there's substantial increase on a year-on-year basis between December '21 and the separate regulatory.
Moving on YTD basis. I'm on Slide 22. Total income is up 18.2% and out of which other income with includes FX variation as well as interest income, that's up about 326%. Our EBITDA is more -- come close to doubling from our INR 322 crores to INR 627crores, giving us total EBITDA margin of 16.3%, including the other income after taking into account depreciation, interest and the exceptional items.
The profit before tax has come in at about INR 205 crores compared to a loss of INR 125 crores for 9 months of the previous financial year.
And at a PAT level, the profit after tax is about INR 279 crores as compared to a loss of INR 78 crores in the quarter ending December. So again, on a 9-month basis, a substantial increase in profit after tax.
Moving on to Slide 23. The book value per share taking to account shareholders' funds as of December of about INR 8,880 crores comes through about INR 1,692. And if you recall, the buyback price is at around INR 1,700 per share, which is at a significant premium to the current market price of INR 1,300.
For the trailing 12 months, basis, our EPS comes to about INR 62 per share. We have gross debt of about INR 330 crores and cash of about INR 1,343 crores, leaving a net cash portion of INR 1,014 crores.
Moving on to Slide 24. This gives us a better picture in terms of where we have in terms of borrowing, which is INR 330 crores. And taking into account the cash investment in debt instruments as well as short-term loan period, the total amount of cash in treasury surplus the sum of these 3 items comes to about INR 6,716 crores.
Moving on to Slide 25. This is the -- revenues split of our operating revenues of INR 1,165 crores. The BPM business accounts for about 65%. This is voice as well as numbers . The Digital Services comprising digital media, digital cloud services, analytics, all that put together comes to about 31% and other income comprises of 4%.
Moving on to Slide 26, on the revenue from operating revenue. From an origination perspective, the U.S. continues to be the largest source for Origination that was 33%, 29% from India. This includes the digital media services. U.K. is about 20%; 13% is from Canada and others, basically Philippines, Jamaica, Middle East account for 6%.
On the left-hand side, the revenue by delivery, India owns about 33%; U.S., 26%; Philippines accounts for about 9%.
Moving on to Slide 27. This is the split against revenue by vertical. The largest vertical is media, followed by consumer -- business consumer, e-commerce products, anything consumer-facing. Telecom and technology is the third largest sector at 11%. And our same size as public sector, which is predominantly from U.K.
Moving on to the client concentration. Again, this is based on the clients' total revenues, operating revenues of INR 1,119 crores. The top customer accounts for about 7.3%; 28% will be the top 5; and top 10 account for above 43%.
Our business in terms of DSO Days continues to be healthy, and it comes in at about 62 days compared to 60 days as of 31st of March.
Moving on to Slide 29 that shows the HGS' share price movement, and we were at about 1,300 on close of [ CNXIT ], and we are up at the same level today. So share rate.And this factor into account the 1:1 bonus which was issued in February '22. So our shares have been trading ex-bonus from about a year ago.
With this mine section comes to an end. So I now hand it back to Partha , sorry, Ru, to discuss the digital future and how HGS will deliver the distributor.
So before [indiscernible], I wanted to take a moment to take various foot features for this business. So if you would now see that we've got a portfolio of services at Hinduja . We have all the rational [indiscernible] businesses, we have technology businesses. We have digital media businesses. We have [ HR Solutions ] as well. Our goal is to deliver compelling digital solutions and services to fulfill client needs globally today and for future. And to take you through what that looks like, I'm going to hand over to Ru to take us through the next 3 slides of what the future of this business looks like and what the new [indiscernible] of HGS.
Thanks, Partha. So as Partha said, our aim is to look at how we can deliver a widest variety of solutions and products and services to the market so that we can provide a larger solution offerings to clients from multiple different industries, right? Whether that is through -- and through our acquisitions over the last couple of years, we've really built up a huge technology base. We've really invested in new talent and new products and service offerings that put together offer clients a much wider selection of service offerings.
So if we just move to the Slide #32. So from being a traditional business process management organization, we are now able to look at technology services, Software as a Service, Platform as a Service, which we're already doing to products like Agent X and DaVinci We have a very strong software development organization with the merger of NXTDIGITAL. We now have a very strong engineering base also to complement all of these technologies. The data services with TekLink and with our own internal development. We're starting to look at business intelligence and analytics, the capabilities around artificial intelligence in various industries and how those can improve processes and processes for companies. And we have a very strong base through NXTDIGITAL itself with respect to networking and connectivity, both for media and telecommunications which can expand well beyond India to the rest of Asia Pacific and potentially globally. So the whole aim of this slide is to really demonstrate how we are expanding and we are now able to offer all of these tight range of services as I said, to multiple different industries, whether that is media and telecommunications, financial services, energy, healthcare, or any other sort of industry line we can now develop sort of end-to-end solution offerings for them.
So if we just quickly move to Slide 33. This is just a snapshot of one of these types of end-to-end solution offerings we are starting to develop. Using all the skill sets and acquisitions and capabilities within the organization. So in this first example, really, we are looking at a series of network management solutions aimed at any industry really that is based that has multiple different networking and connectivity requirements. And this is not geography-specific. This can be applied any way globally, any geography.
So we're looking at the development we are developing network management solutions, both as Software as a Service as well as the Platform as a Service, which will enable companies to really procure connectivity services in a much more organized fashion than they can do today as well as be able to monitor and manage large network connectivity platform. So think of the financial services -- financial services industry, banks which have hundreds, if not thousands of branches across the geography can now manage all of that connectivity in a much more organized and clear fashion.
We're also developing -- we're working on developing work from home solutions. So now after COVID, as we're still hybrid working very much is the scheme of things in this new world post COVID. How do we really improve the work from home sort of conditions such that we ensure not just secure connectivity to back-end systems but also that we can monitor and ensure that people are actually delivering what they're supposed to be delivering.
As Vynsley discussed earlier on, another key area that we are working on is live interactive with education. Again, this is not India specific. This is something that can be rolled out on a global and a larger geography basis in terms of how can we deliver to more rural and that if it is areas that are not well connected, live educational facilities that really improve the quality of life in those areas.
Managed Services, we are implementing managed service offerings, which take -- with the advantage of NXTDIGITAL engineering teams and HGS's existing customer support team really end-to-end solution of managing customers' networks, designing, deploying and then really managing them going forward.
On Infrastructure, particularly in India, we have a pan-India connectivity networks and really be able to expand those with partners and with competitors to be able to deliver wider connectivity services and broadband over satellite, as Vynsley mentioned with NXTSkyFi, the opportunities that, that offers within the world, I just [ keen ] on this , All Right, whether that is monitoring remote wind farms, tower generators, education, there's a whole suite of services that really broadband and NXTSkyFi can start to deliver both within India as well as internationally.
So these are just some of the integrated solutions that we are already starting to develop as a combined organization, and there will be many more of these as we go along.
Over to you Partha.
Yes. So we have come to the end of our presentation. We better hand it over to the moderator for the Q&A session. Over to you.
[Operator Instructions]
The first question from the line of Mr. Gunit Singh from CCIP.
So can you please help me understand the other income component of our financials. Because I believe without that we would even not be PBT positive. So could you help me understand what this is this other income that we see every quarter in the end. [Technical Difficulty]
Please, go ahead.
Yes, So i just had -- my first question was regarding other income component in our financial statement. We see other income -- a large amount of other income every quarter. And I believe without that we would be -- our PBT would also not be positive. So can you help me understand what all does that in deal?
So there are 2, 3 different components. One is the interest income. As I mentioned, the company is sitting on large territory balance. So that's the one with treasury income which comes there. OpEx in the current quarter is an FX loss, and you'll see here on the publishing page. That comes to about INR 60 crores of losses which come from the FX variation. So the other income not only positive, there's also the impact of INR 60-odd crores, which has come in the quarter and this quarter.
And from the digital media side, we had some additional income from sale of set-top boxes, those kind of things which come under other income.
All right. And sir, my second question is regarding the digital business that we acquired from NXT. So I believe that, that business was not a profitable business at the time of acquisition. And currently, we are competing with large players in the broadband space and also considering that most consumers are moving away from the traditional set-top box or the traditional TV channels to software's like Netflix and other Hotstar. So what would be our plan to compete with the bigger players? And how can we drive growth in such a segment where we see such big players and also a market that is against us.
Sure. So thank you for your question. This is Vynsley. I think you're absolutely right in terms of the changing dynamics of the industry, right? More and more people are moving to online more and more people are moving to content on demand. But there's also a significant part of India, which is still not connected.
And these are not -- this is not something I'm saying. This is what the numbers point to themselves. There's about 80 million homes that are still unconnected in terms of a television, and those are an aspirational market. So we are -- we've been smart about one thing rather than launch a wired connectivity service to the television business. In 2015, we launched a satellite service. So that means even the most rural part of India can go digital and receive television literally overnight. That's one side of the spectrum to answer your question.
The other side is that if you look at our focus in terms of growth. We are looking effectively at the broadband business and improving the quality of revenue in that area. Just to give you a very, very, very short sense, if you look at clearly the broadband parameters. We're already the fourth largest broadband private ISP in the country today with over 1 million customers. Our entire focus of growth is on that. So last year, this time, we were about 740,000 customers. We've grown by nearly 50% to where we are today at 1.18 million. And we see that growth continuing because more and more people want a wired broadband connection.
And as you know, the government recently changed the definition of broadband to MBPS. So that is something that we're delivering. I mean, we deliver up to even 1,000 MBPS, as you would probably know.
The third thing is -- as a business, we're very proud about one thing in the group and HGS in particular. We're always at the forefront of innovation. So right now, if you look at broadband over satellite. We're the only bundled solutions player in the country today with already launched. Everyone is talking about launching and of course, we welcome them because a lot of them are also looking to kind of align with us and become our partner. But we're not necessarily waiting for that. We've already launched our service. As I shared with you on the deck, we partnered with Tata Studi to deliver education and it's already working beautifully in places like the Northeast and the North, where connectivity is a challenge.
So I think as an organization, we are very clear that we focus on the trends and with the changing trends, we continuously innovate.
And one more thing, again, just last point to your question. If you saw the very -- when you go back to Slide #16, I specifically mentioned that our focus is not on the pure-play television. It's on an integrated solution for customers, which is basically not just television, but that also includes broadband with speeds up to 1,000 MBPS, includes international regional OTT, includes voice over IP and Intercom, includes CCTV and also community and building WiFi.
So I think we're well structured to take on the challenges. And like I said, our focus is to continue to innovate and grow. I hope that answered your question, sir.
Yes, sir. So I have another quick question regarding this [indiscernible]. Another thing that I want some clarification on the tax rate that we see currently, we see that negative 40% of integral tax rate. So can you elaborate on that as well.
Sorry. Can you repeat your question?
The tax rate where i am looking at currently in the finance statement It's a negative figure will be exact about -- the tax -- we're basically paying negative tax. So can you please help us understand the reason for that? And what should be the expected task rate going forward?
If you see the results of the quarter ending one and 2, this is the impact of the consolidation. And we have looked at the overall taxable positions of HGS plus the media business put together. And looking at taking into account the certainty of the future profit, we have created a deferred tax assets, right? So there is -- that's what you will see in Q3. That's why you're getting with the negative number. So the changes are coming primarily from the deferred tax item, but otherwise, at the overall level, we would be in the tax rate of our -- I mean the current tax would be in the 25% range.
All right, sir. My last question would just be regarding the future outlook given that the IP is under a bit of pressure and stress for the coming year? And how do you see our company doing in the next, say, one year, next couple of years in terms of the revenues and the margins.
Yes, look, we have always had a good Traffic rate of growth. So if you go back to our history, we define that we would -- we've grown at a minimum 10% year-on-year for very many long time. With the healthcare adjustment, obviously, there has been a pressure on our margin. That's pretty clear. And because healthcare extremely profitable business. My team is now focused on improving the profitability of the rest of the business. As you know you saw that the profitability is about mid-single digits. We would like to increase the profitability of the business to double digits. And therefore, there are some plans in place as well. It's going to come from taking some costs out. It's also going to come from acquiring more profitable revenue and businesses as we go forward.
Great, sir. So can we expect double-digit margins for FY '24?
Yes. Look, I cannot give you a committed time line when we want to achieve that because that's going to be almost like a guidance. We don't give guidance. If you look at our track record and then decide for yourself, we have been highly profitable from the beginning of -- from our inception, right?
So, And we've also seen that we've actually gone on improving the margin. There are some levers that we can pull around real estate rationalization. As you know, that large part of our workforce is now working from home.
In the North American, it's almost as high as 95%. So in last year, even to the third quarter this year, we had long lead liabilities that we were not able to do a bit of Thankfully We've been able to now exit some of these liabilities as a result of which margins will improve because our lease costs will go down. We've also been able to divest some of the properties that we need to own in Canada and U.K. and we've got reasonably good returns from those divestments. So that is also another lever that we can pull. We also believe that we can improve our IT cost, and that is the third lever that we can pull.
Unfortunately, leaving the time of [indiscernible] , we locked ourselves into some long-term IT costs that we can't exist right now without paying significant exit costs, but the current pricing of those services is actually much lower than the lock in that we have today. As and when we exit from those contracts as per contractual commitments, then even our IT costs will improve further.
So these are 4 levers that we have. And the third one is growing or acquiring businesses that are much more profitable, which is in the technology space.
So these are 5 things that we have in mind. I won't be able to tell you that will all happen by 2014, but this is directionally where I would like all of us to go.
[Operator Instructions]
We'll take next question from the line of Jyoti Singh from Arihant Capital.
So my question at our earlier, you did the more of the Healthcare business after that, we did buy that and now, we are doing like technical and also that educational thing we did. So overall, what's your view on the company and what's the big thing that we are planning to do going forward? And What are the strategies that we are following to make our company more stable.
So I think Ru tried to cover that in the last closing presentation slide. You should refer to those slides that tell you a broad spectrum of services that we want to get into some, we are already in. Some are at a nascent stage, we're going to scale them up. So that broadly answers your question. If you have any specific questions, happy to answer. But your question is generically what we're going to do, that question is already answered in the specific slide, you showed -- I'll give you the slide you should look at that.
Sure. So sir, my question is on the -- on a Slide #19, mentioned about the ARPU so that this is flat since last few quarters. Are we working on any strategy to improve ARPU or we're expecting to remain in the range with the company focusing on volume gain, both on the distal video also in a broadband subscriber?
[Technical Difficulty]
Yes, I would like the answer the question of the general direction of the company. We tried to answer that in a fair amount of detail in Slide #32. You should get to the slide, which give you directionally where we are headed. Okay, we're trying to do very new things. Some of these are already there. Some of this is in our base local business, some of the new rate service offerings.
So direction in the road map is there on Slide #32. That's the generic answer to that I can give to the generic question that you had. But if you have anything specific to us, then I can be more specific.
Yes, sir. I was asking about the ARPU things that trends sessions last few quarters. So are we working on any strategy to improve ARPU or are we are expected to remain in the range with the company focusing on volume gain. So both on the digital media ARPU and broadband subscribers?
Yes, sure. So thank you, Jyoti. This is Vynsley. As I was mentioning earlier, the focus over the last 3 quarters for us has been on ensuring sustainability and quality of revenue. We have, therefore, our SKU earlier used to be towards growth if you look at the last couple of years. These last 3 quarters coming out of the pandemic and the challenges phase. We focused on 2 things. One was improving the quality of revenue and sustainability and the second was coming out with innovative products. and If you look at the performance of Q3 and if you look at the -- If you actually, if you do analysis, and I'm sure you as an analysts would know. If you look at a peer-to-peer comparison or if you look for 9 months as well as Q-o-Q, you'll see that there has been a consistently improving an upward trend in terms of the margin, both in terms of value as well as the percentage margin.
That is reflective of the fact that we want to ensure growth and the retention of high-quality and high ARPU customers. So the ARPU that we provide in the data is a blended ARPU of enterprise and retail customers. But there is a very significant and stable ARPU, if you look at mapping it quarter-on-quarter, and that will continue. You'll see that continuing Q-o-Q as well as against last year as well. I hope that answers your question, Jyoti.
Yes, sir. And sir, second question is on the profit side that has been largely impacted by provision attributable to healthcare business. So I wanted to understand why the provision has not been transferred despite the entire business demerge?
So this particular part was not transferred because it's an old legacy items, and that has been settled and hence the reversal.
Okay. And sir, on the buyback side, the cash we will be going to utilize -- I mean what are the strategy on that side? And how are we going to ensure some cash on the book for continuing as the growth momentum.
So, as you know, we have announced a buyback of INR 1,020 crores. And so -- okay, the record date is 6th December -- 6th March. And we will see how we -- what the buyback goes. So there'll be some around INR 1,020 crores odd, which will go for the buyback. And But the rest of the cash is available for growth of the business. As we've announced, TekLink, and we hope to close that soon. And we will continue to look for opportunities to grow our overall predominantly digital strategy, what we discussed a little earlier in the call.
Okay. And sir, on the digital services, I have currently around contributing 30% of the revenue. So is there -- our intention to increase the same given the higher EBITDA margin?
Yes. Digital in general, has higher margins. And obviously, we would like to grow the share of the digital revenues.
[Operator Instructions]
We take next question from the line of Jin Park from Fintur Securities.
Can you let us know what's the strategy for the [indiscernible] Communication business? And is the loss has gone up year-on-year and quarter-on-quarter. So by when can we expect the business to turn profitable?
Okay. I'll start with the strategy. As I was explaining to Jyoti, if you look at the kind of product portfolio that we've been focusing on, if you look at individual verticals, you'll see cable television globally has a structural decline. So the wide broadband in terms of being a stand-alone product. But when you look at combining and offering these solutions under a single window or the single operating method. Obviously, the uptake is much higher. I mean I'll give you a simple example, you're at home, and imagine you get one person coming over home for the cable build another one coming from the broadband will address while some of the voice build the fourth person for your CCTV service. Third person for your OTT. OTT, of course, you can go into online. But all the other services tend to be a challenge. So the idea was of integrating all of this and bring it to the fold, which is something that we've done.
So one digital is, obviously, our push. the second big thing, and this is in sync with the digital inclusion and the digital vision and mission of our prime ministers to take digital all across the country, and therefore, our broadband of a satellite offering, which obviously has an uptime way beyond what a conventional connectivity of fiber can provide.
We chose to launch it in the far regions of the Northeast and North. But however, having said that, broadband with satellite is a strong enterprise product, right? They're already in talking to corporate in terms of providing them a hybrid solution of wired and wireless connectivity. So imagine if you have a network of ATMs in the cities, you will connect them on wire wherever you have fiber. And as you know, we have over 10,000 kilometers of our own fiber and more than 120,000 kilometers of fiber from our franchisees.
The rest parts of India, which obviously requires satellite connectivity. And that's where those ATMs or those services will be facilitated by broadband of a satellite. So there is significant traction that we are looking at in terms of which are the areas that we want to target, which are the markets. We've taken it -- we're well on course. As you know, we signed an MOU for the service only in May and that we announced in June and vary in 3, 4 months' time, that is in October in just at Diwali, we launched the service. We expanded it in November. We applied for our VSAT license. We received our VSAT LOI in the month of January.
So I think you'll see a lot of traction in this space happening in terms of providing this solution. So yes, the focus will be on ARPUs. Yes, obviously, the focus is on improving the bottom line. Obviously, we have a strong EBITDA performance. But as a business, obviously, we're looking at several levels below the EBITDA to be able to make sure that the business is on course. So that's the kind of approach that we have.
And so the revenue for digital business has gone down in the last couple of quarters, but the EBITDA has increased. So is there any strategic shift in the clients that we are acquiring or serving to this shift?
You're absolutely right, Hina. That has been the focus. The line of the mantra for us is improving the quality of revenue and sustainability. During the lockdown, Hina, there was a lot of customers that were onboarded at very low ARPUs, obviously, with the challenges of the lockdown, et cetera, our job was to provide high-quality service to anyone and everyone who needed it. As we've come out of the pandemic, our teams are focusing on quality and sustainability, which is why while there is a marginal dip. In fact, if you look at the 9-month number, it's very about -- just under 2% -- 1.6% reduction in revenues, while as the EBITDA has actually improved as well. So that will keep on happening as we improve the quality of revenue.
We're also looking at improving to Absolutely. That's part of the focus as well. And we will see that happening over the next few quarters.
Okay. And sir, last quarter, you had mentioned that the healthcare business which is a kind of [ miss it ] and hence, it was demotion discontinued can we expect the EBITDA margin to improve from next financial year for the business without healthcare being included?
See, the healthcare business was sold off in January '22, right? So essentially, for the last 4 quarters, starting from Jan '22 to December '22, the results are available. Whatever results we have published are excluding anything -- any revenues or margins from the healthcare business.
And if you see the earlier part of the deck, we have shown you the quarter-on-quarter improvement in our business. And both the digital media business as well as the BPM business, excluding other income. They have shown a 220 basis point improvement in the EBITDA margin.
Okay. And one last question with regard to acquisition of TekLink. How do we expect the synergies to kick in? And what kind of contribution can we expect in next financial year?
So I would refer you to the call we had post -- we completed the transaction. But essentially, the transaction was signed in first week of December. We are in the stages where the condition residents have been fulfilled almost all of them are done. So we do expect that to close that accompany that. And of course, we will be making the announcement as and when we complete the transaction as we are required to do. That company would have revenues somewhere in the range of about [ 13 million ] is the current run rate.
Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to Mr. Srinivas Palakodeti for closing comments.
Thank you, everyone. Really appreciate your joining this call to go over the earnings for the quarter ending December. Again, I do apologize, a couple of times, you have to wait as we got disconnected, especially during the Q&A session. So apologies for that.
And as we end the financial year, we do look forward to your joining us when we go over the results for the quarter ended 31st March '23 as well as the financial year '23. So we look forward to interacting with you in the near future. Thank you, everyone.
Thank you, everyone. Signing off.
Thank you.
Thank you.
Thank you, everyone.
Ladies and gentlemen, on behalf of Hinduja Global Solutions Limited that concludes this conference. Thank you for joining us, and you may now disconnect your lines.