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Good evening, ladies and gentlemen. A very warm welcome to the Q4 and FY '23 Earnings Conference Call of Hinduja Global Solutions Limited.
From the senior management, we have with us today Partha DeSarkar, Executive Director and Group CEO; Mr. Srinivas Palakodeti, Global CFO; Mr. Vynsley Fernandes, Whole Time Director, HGS; and Mr. Lakshminarayanan C S, Chief of Staff, NXTDIGITAL and Chief Finance Officer, OneOTT Intertainment Limited.
[Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Darshan Mankad from Ad Factors. Thank you, and over to you, sir.
Thank you, Lizanne. Good evening, everyone. We welcome you to the fourth quarter and financial year ended March 31, 2023, earnings call of Hinduja Global Solutions Limited.
Before we begin the earnings call, I would like to mention that some of the statements made today might be forward-looking in nature, and hence, it may involve risks and uncertainties, including those related to the future financial and operating performance of the company. Please bear with us if there is a call drop during the course of the conference call, to ensure the call is reconnected the soonest.
I will now hand over the call to Partha, sir to share his views. Over to you, Partha, sir.
Thank you, Darshan, and a very warm welcome. Good evening to all of you who are joining our earnings call for quarter 4 and for the full year '22, '23. I wanted to start with a very quick update, which is there on Slide 4 of our deck, which I'm hoping that all of you are able to access over Internet. Between the optional significant delay, the buyback plan opened in May 22, 2023 and then on June 2, 2023. What is on offer is a final buyback price of INR 1,700 per equity share, and an aggregate consolidation of INR 1,020 crores, excluding buyback tax.
The total number of shares to be bought back in the buyback shall be up to 60 lakh equity shares. So this issue is now open. We should be able to do this online, and we would have received information about this from [indiscernible] technologies and hope you are participating in this effort of HGS to return money to its shareholders.
With that, let me quickly jump over to give you the headlines for 2023 year. I think post-COVID, 2023 was a different kind of year? The two years post-COVID, we were scrambling to maintain our service levels, sending people home; globally, 40,000 people went home to start working from home.
During January 2022, we also exited our healthcare BPO business. And a year of 2023 has been consumed in converting the business that was let behind. It is something which is digital, it is technology enabled and which is also set up for the future. With that in mind, you will remember, February 2022, we set our footprint in Australia for acquisition of a company called Diversify. That is now fully integrated into digital cloud services.
We also merged the NXTDIGITAL business in our business. And Vyns later on during the call will tell you about how that is going. And the exciting piece is on February of 2023, we completed our acquisition of a data analytics and financing planning company called TekLink based out of Chicago, Illinois. So you will recognize that this has been a very big year trying to get the company ready for digital businesses.
In our assets, we have opened up a greenfield center in a city called Barranquilla in Colombia, and I'm going to cover that later in the call. We set up Mysuru in India -- Mysuru and Indore in India. We opened up a small site in Belfast in UK, and in media, we opened our first digital marketing-oriented office towards the end of quarter 4, we will come to that later.
The important part is that we have focused on real estate footprint rationalization. 95% plus of our workforce in North Americas and in Canada are working from home. And we have attempted this year to try and reduce our footprint because [indiscernible] footfalls was lying empty. To the extent that our leasing allowed us to exit us and with those real estate facilities, we have done that.
So significantly focused on Canada. But even U.K., we have reduced our footprint significantly. U.S., we are in the process of reducing the footprint [indiscernible]. Unfortunately, there are few leases which are longer duration, we're not able to exit. And there are few profit leases in the U.S., which are own properties. We're trying to exit all of them, to sell them. The valuation of promotion property in the U.S. unfortunately is not great for reasons that I'm sure you can understand.
We are not in a rush. We have closed down those facilities. We are operating those facilities to save on maintenance costs, but we will be trying to sell them as and when we get a good valuation. So overall, you understand that this business has now completely changed from the significantly BPO business that used to be earlier. This is more technology focused, is more forward-looking, and hopefully, we will also be able to improve the margin profile of the business as we transform the [indiscernible].
This is the news that I have already with you. Late March 2023, we inaugurated our newest headquarters in New York. This is where I have relocated as a CEO of the company. So I now operate out of the U.S. I did that because a large part of our business today is generated from North America and also the acquisition that we did in February required very close over size. So I decided to relocate from Bangalore to New York.
So apart from being the corporate headquarters, this is also going to be the hub of digital marketing, social engagement services hub, is what we are calling it. We will be delivering social media, content production and digital marketing services to corporate marketing teams. We are also trying to sell our services to about 1,000 plus ad digital marketing agencies that exist in and around the greater New York area.
So this is an exciting business that we are trying to get into. We have a small footprint in this business, but we're trying to enlarge this footprint. The value prop is we will act as an agency of agencies, we will get agencies that are based in high-cost locations to get the work offshored for development in India and Philippines.
We move to Slide 7. I wanted to talk about Barranquilla, our newest network addition. Barranquilla is a city, which is about an hour's flight from Bogota, which is the capital of Colombia. With a population of 2.3 million, a labor pool of 1 million workers, 11 major universities, highly talented workforce which can speak fluently in Spanish and are able to address the Hispanic population in the U.S. They are also good in bilingually. It is aligned to the U.S. Eastern and Central Zone. And because it is in the same time zone and is a short flight from Miami, many U.S. companies are now looking at Latin America to diversify from the traditional supply countries of India and Philippines.
I'm happy to say that since it started in November, we've already added about 121 people. We are supporting English-Spanish and a smattering of Portuguese as well. We are doing primarily voice processes, but also backroom processes for our financial services client and the lines of businesses are customers support, tech support and sales.
We move to Slide 8. Turning to financial numbers. The top lines improved significantly. You can see 12.2% growth from INR 4,479 crores to INR 5,000 crores plus, a strong year. EBITDA has also improved, 62.5% growth from INR 469 crores to INR 762 crores. This business had profitability challenges last year. The PBT has improved as well and the PAT has improved as well.
So overall, as I said, in the midst of all the turmoil caused by the transformation that we are going through, all the uncertainties that you're hearing about in the developed economies, about the uncertainties caused by war, fuel prices and in general, the shares of recession in the United States, the bank failures that have happened in the United States and in Europe, we are very proud and we were able to produce these kind of numbers in the midst of all these uncertainties.
So this is the year as a whole. I do have to cover quarter 4. The quarter 4 numbers will have some wrinkles that you will see, and we'll explain what those wrinkles are. It is not something that you need to worry about. I think the bigger picture is how we performed in 2023.
As I was saying, quarter 4, the numbers don't look great. And there is a reason for this, and I want to explain and Pala will probably cover this in greater detail in his session. These are not numbers that are impacted by operational metrics. These numbers are significantly impacted by foreign exchange movements of the different currencies that we deal with in this particular quarter, okay?
So yes, all the numbers out here show negative, and Pala can cover this in greater detail in his financial section. But let me just step back and tell you that I don't think you should worry about quarter 4 because these were really caused by foreign exchange fluctuations, not the global currencies that we deal with. It's not under management control, but the business continues to perform very well.
If you look, I think the headline on Slide 20 captures it all. We are transforming into a technology-led CX business. Our traditional CX business has shown steady growth. So out of the $400 million odd revenue that you have today, with the addition of TekLink, our digital revenues were about $100 million which is pretty good, I would say. In a short while, we have been able to grow a business that we started only in 2018 with the acquisition of Element Solutions, which was a small [indiscernible] revenue. We have grown our technology business to $100 million run rate for this fiscal.
Offshore revenues have also grown, which is again good news because offshore revenues are clearly lot more profitable. We have had good growth from existing clients, and we have a very good pipeline as well. The only caution I'll have would be for U.K. You would recall that we have signed up with the health services agency in the U.S. to provide pandemic-related track-and-trace services. It was a massive contract of GBP 211 million that we signed, and it was meant to help the U.K. government cope with COVID and find other pandemic-related services that we were providing to the U.K. population.
We were also supporting the U.K. government to Brexit. Now, the reality is that Brexit is now into its third year. So therefore, people have become more used to trade with the Republic of Ireland, and the demand for that particular helpline, which was meant to be for Ireland and U.K. trade has come down significantly.
The other good news is COVID is no longer the threat that it was in the last 2 years, and you are aware that WHO has declared an end of the pandemic. While that is excellent news or is it a brilliant news, there's nothing that could have been better for humanity. The impact on that of our revenue is, that our revenues from that particular contract, which was at one point of time for one particular time, projected to be in excess of GBP 200 million is now much lower. In fact, last year, our revenues from that particular contract was in the region of GBP [ 30 ] million only. That was half of what we had expected this project will be.
Again, this is something that is difficult for a shareholder to obviously appreciate. But you have to step back and look at the bigger picture. The contracts would have been large had the pandemic continued. And frankly, as I speak to all of you, I'm so happy that we are out of that problem, and yes, it does impact our contract. We have downsized the teams. And the contact will never be the GBP 200 million that we had expected it to be, but I think that's rough.
On the Technology Solutions business, we continue to focus on long-term wins in areas such as Managed Services and Cloud. The TekLink acquisition brings us new capabilities in the area of data analytics and also financial planning. And on top of that, if you understand what the digital business -- the NXTDIGITAL business does for us, the net digital business is all about access, providing access, removing the digital divide between people who have access to Internet and people who don't have access to Internet.
Internet today is like oxygen. You cannot survive without Internet. And NXTDIGITAL provides the technology that can provide excellent quality content and access to remotest areas of India and Vyns will talk to.
So all of this, obviously, the backbone of everything that we are trying to do is digital access, and that's where NXTDIGITAL kicks in. So a quick look at our local footprint; Canada, 2,000 people; U.S., 1,200 people; Jamaica 1,500 people; Colombia, our latest addition, 121 people; U.K., 1,600 people; India, 10,000 people; Philippines, 3,200 people; Australia, got sales and marketing office, we have one person who has joined in sales and marketing from Australia.
Next slide in summary, 2023 has been strong. We continue to focus on sustained growth. We've talked about all the investments and all the embracing of digital and AI technologies. I think the most important development in the technology filed is in the arena of generative AI that all of you talked about -- all of you heard about, ChatGPT and Bard and all of that.
I think, it opens up huge ocean of possibilities for people who are in the CX field like HGS is, and we are extremely happy than this technology advancement has happened because it's going to transform how CX was delivered world over. This is the growth plan that I want to talk to you for HGS 2.0. We want to provide frictionless customer journeys, and that is where generative AI is going play a big role. [indiscernible], our technology revenues today is $100 million plus if you were to look at this company, we had our first technology addition in 2018. So I'm very proud to say we are $100 million plus. Beyond traditional CX and digital media, we are providing a range of interconnected services to enable impactful change to our clients' businesses and to provide access and remove the digital divide.
If you go to Slide 16, you will see that if you look at these two extremities of this venn diagram, one side you will see that traditional IT companies do what you have on the left-hand side of venn diagram -- digital services. What HGS used to do earlier before when we had health care was pure-play BPM. We are trying to create a new business model, which operates at the intersection of these 2 circles, which is this thing in the middle, social engagement, digital marketing, artificial intelligence driven process engineering, unattended CX, robotized CX, AI supported data tagging/labeling and generative AI.
So these are all new fields, and we are acquiring capabilities as we speak, both organically and inorganically in these spaces and that is the future of all of HGS. And encompassing out of this is NXTDIGITAL, which provides the backbone of Internet access that enables all these things to work. So that is the services portfolio that we are taking just to point out to. With that, I'm going to hand it over to Vynsley for his section on Digital Media. Vyns, over to you.
Thank you very much, Partha. Thank you, much appreciated. I am just going to start with what's happening right now on the -- in the space. Everyone knows that this year has been emerging out of the pandemic and everyone is trying to redo and restructure their businesses and technology and operations.
As I shared with everyone in the last couple of calls that we've been -- that have been there, our focus has been effectively on future technology and leveraging the three As that Partha has mentioned for a long time and that's so important, which is right from automation and analytics to artificial intelligence and their deployment.
And one of those things has been the enterprise business unit, which we launched just over the last 6 to 9 months. We focused in this quarter, in quarter Q4 on validating our value proposition of the products that we have to offer, and we've seen significant amount of response in terms of key industry segments, not just in terms of saying, yes, this is a product that works, but also more importantly, engaging with customers.
So effectively, there are 4 products that we have launched. The first is the mesh network where we are providing a single window clearance to customers, and we've already -- I will -- we have some levels of [indiscernible] in place, but the companies have been very kind to help us, and we will be hoping to share that shortly as soon as the installation is complete, where we, as NXTDIGITAL, are a single window -- of single vendor providing rational connectivity for these companies for fiber and satellite-based broadbands. So I'll give you one example. One is a very well-known digital cinema organization. So we connect all their cinemas not just with terrestrial fiber but also satellite-based broadband. So there's no question of losing signal. The moment fiber goes down if there's any problem, it switches over to satellite. So that is the first product that's already been rolled out successfully and already is engaged with the client.
The second is software-defined wide area networks, SDWAN, and we've seen traction. Again, there is a customer that has been signed up for SDWAN because more importantly, and this works in the premise of economical pricing more than it be a innovative solution only. So that's been happening.
With so many people working from home recently, we've developed a solution -- a work-for-home solution. There is -- there are POCs currently going on, proof of concepts across the country. And this is the product as Partha also is strongly -- one of the sponsors of this project. We'll look to take this to overseas customers once the POC is successful.
Effectively, what it does, it provides customers with -- it provides companies to allow their staff to work from home, not just using a simple broadband connection in the telephone line, but providing online security, services, modules, everything that a customer -- that a work-from-home executive would require to ensure he delivers maximum productivity and efficiency.
The last of course is our pure-play broadband over satellite that is working -- has been working significantly. We already have gained traction in education, as I've shared in the past. We are running -- with Partha's study, we are running education initiatives, and we're looking to take that further as well.
This, by far, is the big driver for us in Q4, which we were focusing on. In terms of -- as I mentioned to you, our focus as an organization is has been over the last couple of years, at least 3 or 4 years, we've been transforming into a potability-driven organization and into a future-proof organization.
For us, growth is not just top line or not just subscriber base, and that is something that you can see as well very effectively for us. It is how to transform customers into being customers for the future, right? Because we all know cable television has some level of structural decline, not just cable, DTH, any linear television, there is some level of moving to OTT, some level of moving to free services.
So the idea is how to build a digital product, and we launched ONEDigital, if you all will recall, around October last year, September actually. And we've seen some incredible progress on this product. It's a very unique product. It offers customers broadband just for the sake of being repetitive. It offers customers speeds up to a broadband product, which is -- with speeds up to 1,000 MBPS, 650 television channels, OTT from the best regional and international content, voice over IP services intercom, CCTV and of course, WiFi -- building WiFi. So this has really worked pretty well and quarter-on-quarter, it has been growing significantly.
Now having a great product, as I mentioned even in the last call is great, but there's no use of having a great product if you don't have a team that knows how to sell it and install it, implement it. So our project called NXT Sangram that we launched to train digital services partners across the country has been going full swing.
We've trained -- as of today, we've trained over 1,500 last mile owners of franchisees across the country, which covers about 231,000 customers. So we are focusing on making sure they get trained, and we focused on markets slowly. We're also looking at other places where new and emerging digital technologies can be rolled out, and that is something that's in play.
If I come to the KPIs for this year, we were very, very clear that we wanted to focus on quality of customer and quality of revenue. And our entire focus has been on how to ensure we not only grow revenues, but also be able to improve profitability, be able to improve ARPUs. And therefore, you can see while we -- while our subscriber bases, both in terms of digital television, and broadband have remained flattish, and there's been no significant growth. That has been deliberate because we've been focusing on the KPIs that matter the most, which is retention and therefore, improving the quality of revenue.
If you look at the box in the center, which talks about the 90-day net churn, we are looking at being well below 2% net churn, which is fantastic for our entire industry. And that is something that we're very proud about because it also translates into revenue, and it also translates -- it means the fact that we're able to get in more customers at a qualitative price.
The same thing in broadband. If you look at broadband, while the base we've insured remains the same. In fact, we've been conscious enough to let go of customers that we believed were not really adding value to the business. We've actually grown the ARPUs. That has seen some tremendous amount, thanks to a project that we launched in Q2 to be able to fix and grow the business.
The ARPUs, the average revenue per user in a year when we've seen everyone else's ARPUs come down, and that's why the headline that performing above the industry-wide trend and key parameters is very clear from the ARPUs. The ARPUs have grown from about 259 in Q3 to 292. That is commendable ARPU for anyone in the broadband industry.
And most importantly, if you look at the other 2 KPIs on the lower center and the lower right, those point out to the efficacy of the business, the profitability of the business, the drive towards ensuring a strong profitable business, where churn of direct points has been brought down to below 4%.
The industry-wide trend is anywhere between 4.8 to about 5.5 or some places 4.2, but we've been able to bring it down to sub 4%. And at the same time, bandwidth cost, which is another critical aspect, and I'm only sharing this year -- this time, to show that this is the kind of efficacy project that was brought about in Q3 of how to improve the quality of revenue and the quality of the product to be able to deliver this kind of model going forward.
So overall, the media and entertainment industry, no question, specifically the digital distribution industry has faced some significant growth challenges in Q4 as well as across the entire fiscal year. But what we've done as an organization is focused on the tomorrow rather than just only today.
So our tomorrow is how do we ensure our existing customers, how do we provide greater services to them, enter a product like ONEDigital? How do we go on a new segment of customers mainly the enterprise business unit, leveraging all the infrastructure and investments we've made in the business? And how do we leverage the incredible network and technology of Hinduja Global Solutions, in terms of the aspects that have been put out.
So when we look at combining all of that together, we've been able to end up -- and end the year on a very strong note, giving us a great driver for the next -- this quarter, of course, and for this new fiscal. Yes. I think that is pretty much it from me. If I'm not mistaken, there is -- yes, can you change the slide. I'll hand over to Pala from a perspective of updating everyone on the financials. Pala, over to you.
Thank you, Vyns. Good evening, everyone. Thank you for joining us on the Q4 earnings call. I am on Slide 22. This is the financial performance of the year. A couple of things I wanted to call out. These are completely like-to-like comparisons. In FY '22, we had the health care business up to January 22.
And then that has been excluded and all performance relating to that has been shown under the discontinued operation. Also in FY '22, as required we've added the NXTDIGITAL media business, which has become part of HGS during the year. So it's a like-to-like comparison. As you would see, there has been an increase in revenues from operations of 5.4%, a significant increase in other income from about INR 205 crores to INR 518 crores.
So this has 3 broad components. The FX gains, the interest income from the funds treasury -- surplus funds from the sale of the health care business, plus as Partha mentioned, during the course of the year, we've rationalized our real estate footprint. And there are also profits from the sale of some real estate overseas as part of the other income.
Our EBITDA, as you see, is up by about 62.5%. At the PBT level, we closed the year at INR 202 crores profit as compared to a loss of about INR 109 crores. There are tax reversals of roughly INR 102 crores. And so PAT from continuing operations has come in at around INR 305 crores as compared to a loss of INR 39 crores, and we have shown separately profit from the discontinued operations.
In the current year, in FY '23, there are profits of about INR 46 crores that is primarily coming in from the working capital adjustment. So total PAT for the year has come in at roughly about INR 351 crores.
Moving on to next slide. This is the quarterly performance. As you would see, there is a drop in the total revenue, and you would also see there is a drop in the other income. So if you see the quarter ended March '22, other income came in at around INR 117 crores, whereas that has dropped by about INR 18 crores to about INR 98.4.
And as you would see from the publication page during quarter ending FY '22, last quarter, there were FX gains of INR 62 crores that has become a loss of about INR 15.1 crores in Q4 FY '23. So that accounts for the drop in the other income. There is -- so there's a drop in EBITDA on a year-on-year basis from about INR 153 crores to INR 134 crores, primarily on account of drop in other income. And at the overall level, PAT for the quarter was INR 25.8 crores as compared to INR 45.9 crores for the quarter ending March '22, again primarily coming from the drop in other income.
Moving on to the next slide. This is our summary financial profile. Our net worth as of 31st March is INR 8,719 crores. Obviously, this will change based on the final buyback amounts and the transaction costs, the taxes relating to this. As things stand against a market price of INR 1,156 per share, book value per share is 1,661. We have declared total dividends of INR 15 during the year. This includes the final dividend of INR 2.5 per year. Our total dividend outgo including the final dividend comes to roughly about INR 72 crores, which is roughly about 20.5% of our consolidated profits of INR 350 crores.
On the gross debt, we have debt of about INR 321 crores. We have cash and bank balances. These are not only in India, these are across different geographies of overseas subsidiaries as well, leaving us with the net position of about INR 822 crores -- net cash position.
If I move to Slide 25, this gives a little more detail in the total liquidity position of the company. We have short-term loans of INR 2,814 crores. We have cash and bank deposits of INR 1,143 crores and we have investments in debt instruments of about INR 2,734 crores. So that gives us a total cash and treasury surplus of INR 6,691 crores and netting of debt of INR 321 crores, it gives us net cash and surplus position -- treasure surplus position of INR 6,370 crores.
Moving on to Slide 26. This is the total revenue of about INR 5,023 crores, a little over INR 500 crores of other income. The BPM business accounts for around 61% of total revenues and digital services, which includes the media business as well as the digital BPM business that accounts for about 29% of total revenue.
From a revenue split perspective, this is on the operating revenues only of about -- so on the base of INR 4,500 crores. From an origination perspective, this is a graph on the right-hand side. U.S. continues to be the biggest market at 32%. India, which includes the Digital Media business, our HRO business is about 28%, Canada is 13% and U.K. is about 21% of total revenues.
From a delivery perspective, India is up from 28% to 32%, that's on account of the onshore delivery. U.K. is about at 17%, U.S. at about 25%, Philippines and Canada accounting for 9% and 13%.
Moving on to slide -- to the next slide. This is, again, a split of revenue by vertical. The media business, which consists of the digital media business as well as our media clients for our BPO business. Media account as a vertical accounts for about 31%. Then we have the second one, 20% at consumer and retail. Public sector, primarily from U.K. and also some in Canada account for 12%.
Rest coming in from BFS, technology and telecom as well as miscellaneous verticals. From a client concentration perspective, all -- since the NXTDIGITAL Media Business is primarily on a B2C basis.
So from a revenue concentration, these account -- all these clients come from the BPM business. So the largest client accounts for about 8%, top 5 accounts for about 29% and the top 10 accounts for about 43%. Business continues to be strong from a cash flow perspective. It was about 61 days of sales as of FY '22.
On a -- while the revenues have grown, our DSO days have come down from 61 days to 59. Coming to CapEx. So the INR 498 crores of CapEx in FY '22, that consists of the BPM business, the erstwhile health care business as well as the CES or the non-health care business, along with the Digital Media business. That has come down from INR 498 crores to INR 294 crores during FY '23. So to some extent, we were not cyclic [indiscernible] because it also includes the erstwhile health care business of HGS.
Moving to the next slide. This is the last slide on my presentation. This is the stock price movement. HGS share price. This is share prices as on Friday, up by about 25% over the last 12 months as compared to a 13% on the growth in the NIFTY Index and about 2.5% on the CNXIT index. So clearly, from a sectoral perspective, we have done much better than the CNXIT index movement. That's all I had on the financial section.
We would now like to open the session for Q&A. Thank you. Thank you, everyone.
Ladies and gentlemen, we will now begin with the question-and-answer session.
[Operator Instructions] The first question is from the line of Jyoti Singh from Arihant Capital Markets Limited.
So my question, like I have 2, 3 questions. So sir, first, as you have mentioned about the AI impact on our business, if you can discuss a little bit more detail, like what is the impact of AI -- like ChatGPT and all? And second, what is your view on the growth outlook for '24, '25? And margin guidance going forward, if you can. And third is how the deal momentum we are seeing in TekLink as we are using cross-selling opportunity in it?
Yes. So let's take one by one. What is your first question?
I'll answer your first question then second, then third, then fourth. It will be difficult to remember all 4 questions in one go. What's your first question?
Yes, sure. So my first question is on the ChatGPT impact, like AI ChatGPT impact on our business, like you discussed a little bit on that. So if you can discuss, well explain if you can, little elaborate on that.
That is a very good question. I'm sure that question is on everybody's mind. And I think if any of you have used virtual assistance or chat in its current form today, while trying to do a transaction over the Internet, I'm sure all of you will share my frustration that today's chat technology is absolutely rudimentary and completely dissatisfactory.
From that position, the ChatGPT technology, I will call it generative AI because ChatGPT is just a brand that Microsoft uses. Generative AI gives you the ability to tremendously change knowledge management, and therefore, when you are interacting with a machine, today, the experience is thoroughly, thoroughly unsatisfactory.
Within generative AI technology being deployed, we will not be able to figure out whether you are interacting with a human being or whether you're interacting with a machine because the machine will have a lot more information than currently a chat system has. As a result, you will find a lot more information, the questions that you ask being available, being answered intelligently by the machine itself. And our job will be to train machines to be able to answer those questions based on our particular client.
For all -- for each of our clients, 100 of clients that we have, we will have to work with the generative AI technology to improve their CX front-end so that the machine can answer in a very satisfactory way all the questions that the consumer has.
And when it realizes that it is not able to answer the question, at that point of time, it will seamlessly transfer that to a human agent who will be overseeing every transaction that is going on with the machine. So -- the answer to your question is that this technology is completely transformative. It is going to completely change the way customer interaction with machines through the Internet happen and is going to be used well, generative AI, can be a game changer for our industry, and we are well leveraged because of our background in CX to be able to harness this technology towards [indiscernible]. So that is my answer to your question one. What is your second question?
Yes. So sir, my second question is on the outlook side. So what's the outlook for the '24, '25 on the revenue and margin side?
So both sides, we will do well. We are expecting margins to expand. I cannot give you a specific number guidance, but we are expecting margins to expand. Revenue growth also, we are expecting the revenue growth to be the strong revenue growth numbers that we have always traditionally been able to do.
Okay. So sir, as you are saying it's strong growth revenue. So are we have any strategy or any planning for that going forward FY '24, '25?
So the question on strategy is answered on Slide 16. Can you have a look at Slide 16?
Yes, sir.
You will see that there are 2 circles, okay? On the left-hand side is our technology circle -- digital services circle. And on the right-hand side, for the pure-play BPM circle that we used to be, right? And a large part of it was also health care, which we divested because we realized that we wanted to move more into technology services as opposed to pure to pure-play BPM services.
Now at the intersection of these circles, you will find our newest services, social engagement, digital marketing, AI, which is artificial intelligence driven processing CX, generative AI, everything is there in the middle. So this is the sector that is going to grow. And with the advent of generative AI, I think the future is going to be [indiscernible]. So this is the area that we would like to grow, the intersection of technology services and traditional BPO services. We are calling this digital operation.
And sir, how is the deal momentum we are seeing in TekLink as we are using cross-selling opportunity in it?
Very good, actually. So they have a lot of data analytics capabilities. They are getting into our existing customers, also financial planning. And they are selling our traditional cloud automation and traditional BPM services to their clients.
So I see that in the months -- it's been 3 months now, March, April, May, we are in the third month, I think the opportunities are ripening as we see that we are able to cross sell each of our services. We have something more concrete to talk about probably in the next quarter.
Okay. And sir, lastly, my question is on the U.K. side. What's your view going forward as we have some headwinds during quarter?
Repeat the question. I was not able to hear you.
Yes. Sorry, sir. So sir, lastly, your view on the U.K. front as we have seen some headwinds on that side. So what's your view going forward?
Yes. So I did mention that the U.K. growth for the last 2 years within Brexit and pandemic was on the foundations of one-off contracts. The Brexit contract is weaning down because it's been some time, and of course, COVID is no longer the pandemic that it used to be. So because of that, the U.K. is facing some growth challenges.
And I wanted to call it out upfront. We have a new CEO, we've brought in a new CEO. He is a very experienced person that has managed large businesses. We have to build the U.K. business back to its levels of growth that we have seen in the last few years. It's going to take some time. It's not going to happen this year.
The next question is from the line of Rahul Singh from Angel PMS.
Yes. First of all, sir, I had a few questions. The question is on the digital business. So it has contributed roughly 29% to revenue this financial year.
How do you see the contribution going up in this domain? And do you have any target in mind or objective to reach a certain figure in the next few years, sir?
Yes. So I mean, if you ask me, if I were to look at a crystal ball, then I would like to completely reverse the revenue mix in 3 years. So today, it is 30-70, 3 years from now, I would like to see it being 70-30. But this, as I said, there is a lot behind this statement, right? There's a lot of crystal ball gazing. There's a lot of future looking. But those are the themes that I would like to do.
Okay. Another question, sir, on NXTDIGITAL merger. So basically, the merger is now completed, and we are into the quarter 2 -- so what I'm trying to basically say is that when will these seamless synergies aligning with the business? And do you see the synergies strengthening in the next year?
So Vyns talked about the enterprise business in one of his slides. I believe that the beginning of access technology that is going to completely transform the way people work from home. The [indiscernible] technology is going to be very, very influential and also the ability to provide broadband as a satellite. Those are emerging technologies that will revolutionize access and will give a fillip to [indiscernible] digital divide. So I think that's where the future lies. Vyns, do you want to take this question and answer that in a little bit more detail?
Sure. Sure, Partha. Rahul, I think you're also aware, Rahul, there's so much being written about and spoken about broadbands over satellite, for instance, right? It's becoming a very significant aspect and it will change the way we do business. Not the way we do business, the way we even live, right? I mean whether it is at home, being able to have broadbands on tap anywhere in the country on demand, I think that is going to change significantly. So in that foray of NXTSKYFi is to be able to leverage that technology.
We've already launched. So the beauty is we're the first of the blocks to have already launched it. We already have commercial customers. I'll give you, we already are doing, for example, sensor management for a solar farm in Central Maharashtra, and we're doing a couple of other projects, as I mentioned, for a digital cinema.
So we'll see that being a strong driver for the business and enterprise business unit will continue to leverage all the new technologies and all the new infrastructure as an emerging technologies effectively to this space.
So whether it's the Mesh of connecting India everywhere, not just with terrestrial networks, but also satellite, whether it's SKYFi, which is the broadband as a satellite service, whether it is new solutions like work from home, digital work from home solutions, all of this is being bundled together to be able to push for a strong foray in the space.
Thank for such a detailed answer. Sir, the last question would be that as we are the fourth largest player right now in the market, and we are also dominated by other larger players -- dominated by larger players. What differentiates our company's bundled services approach. And how does the company plan to expand and gain market share in this current competitive landscape?
I'm assuming you're referring to the Digital Media business, right, Rahul? You're referring to the...
Right, right. Yes, sir.
So Rahul, I mean the simplest answer, Rahul, would be -- and you are an analyst as well would be for you to do a simple comparative of the KPIs across a peer-to-peer comparison, and you'll see that NXTDIGITAL is pretty much way up there in terms of the quality of revenue as well as the growth in EBITDA, et cetera.
But I won't use that as the answer because I'm sure you know that already. I think what we've done is we focus always on being different. So while everyone was saying, cable is the way to go, et cetera, we changed our approach nearly over 5 years ago and launched the Headend-In-The-Sky service, right, which is HITS, right?
And that has proven to be a main stake. When we changed our model -- not changed, we transformed our model over a year ago and said, listen, we need to push broadband big time, and we were barely in about 70 cities at that time, and we said the importance is to push broadband in Tier 2 and Tier 3.
Everyone said, oh, no, Tier 2 and Tier 3 aren't where the markets offer growth. We did. We crossed over 1 million subscribers with the fourth largest ISP, of course, private ISP and we've been able to grow there. Same thing with broadband over service, while everyone is talking about it being launched and Jio satellites coming in. We said, listen, a lot of people today are happy with Jio-based services because by latency, really low -- high latency is not really -- well, not high latency, but latency is not really an issue.
So I think our strategy is very clear that we've invested in significant amount of networks. We've invested in significant amount of technology. But more importantly, I think in innovation. The fact that we've always been ahead of innovation has kind of kept us up there to be able to provide a strategy. That's a mix of innovation, emerging technologies and a very, very strong ground network.
We have a presence in over 4,500 pin codes. That's been the mainstay for us, Rahul. Will we look to take this overseas, our product portfolio? Absolutely.
I think as Partha also mentioned, there's a lot of synergy that's already happened, and there's a lot of synergy between HGS and NXTDIGITAL that's currently being worked out, which I'm sure you'll get to know more as we kind of expand the portfolio of services, not just product-wise or portfolio-wise, but also geographically. I hope that answers your question, Rahul.
[Operator Instructions]. The next question is from the line of Saloni Desai, an individual investor.
Yes. So I had a couple of questions. Firstly, the company has entered new geographies in FY '23. So what kind of contribution to revenue is expected from these new geographies in FY '24?
Pala, you want to take that question -- though we don't disclose these numbers. Pala, you want to take that question?
So if you look at FY '23 as a whole, the new geographies we have entered in that sense, is Colombia. That's something which we started operations sometime in second half of the year and the quality has scaled up and as we mentioned, we have 120-odd people already there. So that is expected to grow, but the purpose of the Colombian business is to actually support clients who are from U.S., right? So -- and to give them abilities to service our clients in languages such as Spanish and Portuguese and so it's part of the overall strategy.
So obviously, given that we've started operations, it's still very small and while it will scale up, it will take time for it to add significant -- to account for significant share of total revenues, right? And we are only looking at U.S. clients, not local Colombian clients for servicing.
Okay. Okay. And I also had one more question. So what kind of contribution is expected from the new acquired business like TekLink and Diversify offshore?
So if you see the TekLink, that generated about close to $3 million of revenue in the first month post acquisition, right? So obviously, we expect the business to grow. But even if you take that as the run rate, that will mean about $36 million of revenue, if I take $3 million per month and annualize it, right? And as far as Diversify is concerned, for the year ended March '21, they've done roughly about $21 million in revenue.
Yes. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Srinivas Palakodeti for his closing comments.
Once again, thank you, everyone, for joining us on the earnings call for our results for the quarter ended March '23 as well as the year ended March '23. Thank you for your time, and we look to your questions and comments. And we look forward to interacting with you once our results for the quarter ended June 2023 are ready. Once again, thank you for joining us on this call.
Thank you, members of the management team. Ladies and gentlemen, on behalf of Hinduja Global Solutions Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you, everyone. Thank you, much appreciated.