Route Mobile (NSE:ROUTE) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to ROUTE MOBILE LIMITED Q2 FY 'twenty seven Earnings Conference Call. Concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Tushar Agnihotri, Chief Executive Officer, ROUT MOBILE LIMITED. Thank you, and over to you, sir. Thank you. Good evening, everyone, and thank you for joining us for ROUTE MOBILE's earning call for the second quarter and first half of fiscal year twenty twenty seven. I'm Pishad, and it's my pleasure to welcome you all.

0:48 Joining me today are Vinay Benyala, who will take you through the operational and strategic highlights of the quarter and Rajkil, who will walk you through our financial performance in detail. Following our opening remarks, we will open the floor for questions. Before we begin, a quick note, our quarterly earnings presentation was uploaded yesterday, and I hope you had an opportunity to review it. Some of these statements made during the call may be forward looking in nature and are subject to risks and uncertainties. Please refer to disclaimers in our presentation for further details. Now let me begin by setting the context for the quarter. At our strategy of data name, the outsider ambition to move through mobile, up the value chain from a messaging provider to a full stack AI enabled customer engagement platform, while continuing to strengthen our operator business.

1:44 Six months into this journey, we are beginning to see this strategy taking shape in what our customers are buying, in the capabilities we've added, and in how we are working with the wide approximants group. When we spoke in July, we explained that the dip in gross margin was driven by the loss of traffic from few large high margin customers. We also indicated that we expected to recover from this. Now this quarter, we made progress on that front. Gross margin recovered from 22.4% in quarter two from 20.9% in quarter one. Also, revenue on a Y on Y basis grew by 5.4%. Our focus this quarter was not simply in adding volume, but also on improving the quality and mix of our revenue.

2:32 And that distinction is very important. Our portfolio of new products, including RCS, WhatsApp and other IT messaging solutions grew more than 30% on a year on year basis and now contribute to over a tenth of our revenue. This is the shift in revenue mix we committed to add our strategy of creating main, and we are now seeing it reflected clearly in our numbers. Q2 was also our first quarter with Heltar as part of ROUTE MOBILE. As you heard, Heltar adds AI native, no code engagement player to our existing channels. We're already taking these capabilities to our enterprise customer base through the ROUTE MOBILE and Proxima sales teams.

3:19 This strengthens our move up the value chain from messaging towards full stack customer engagement platform. Now alongside our enterprise team, the enterprise business, we're also building the operator business. Our AI driven firewall solutions are now deployed at 12 operators, and we see a healthy pipeline of new opportunities. These solutions offer the potential for high margin recurring revenues. Together with network API, which we are developing with the Proximus global ecosystem, they provide an additional growth opportunity alongside enterprise messaging. Our association with Global Telecom Group gives us an important advantage as we develop these capabilities and take them to the market. We've also strengthened our leadership and presence in key markets. In Latin America, Marco has joined us as CEO of Massive, a Colombian subsidiary to lead the next phase of growth across the region.

4:16 And in India, our participation at Global Fintech Fest has deepen our engagement with financial service leaders and ecosystem partners. BFSI continues to be our largest vertical, making this as an important market for us. Looking ahead to the second quarter second half of the year, sorry, our priorities are clear. First, we will focus on converting our pipeline, particularly in high margin opportunities across fiber solution and new products. Second, we will scale health care across markets, leveraging deep ROUTE MOBILE and Proximus global sales ecosystem. And third, we will maintain a large focus on cost discipline. Our priority remains execution, improving the quality of revenue, building high value capabilities and delivering sustainable long term value for our stakeholders.

5:08 With that, let me hand over to Vinay, who will take you through the operational and strategic highlights of the quarter in greater detail. Over to you, Vinay. Thank you, Dushar. Good evening, everyone. I hope you're all doing well. As Dushar mentioned, we uploaded our quarterly earnings presentation earlier, and I hope you had a chance to review it. Let me structure my comments in four parts. First, the shape of our revenue growth this quarter second, gross margin and how the specific items we discussed in Q1 have played out third, a few key business metrics and finally, the key business developments of the quarter. Starting with revenue. In Q2 FY 'twenty seven, revenue from operations was INR $11.80 crore, up 5.4% year on year and 2.4% quarter on quarter.

6:02 For the first half of FY 'twenty seven, revenue grew 7.4% year on year to INR2331 crore. We processed INR47.6 billion billable transactions during the quarter and INR93.4 billion in the first half, approximately 11% more than in the first half of last year. I would again highlight the quality of this growth. Our new products portfolio comprising RCS, WhatsApp and other IP based messaging solutions grew 36.7% year on year and 35.8% quarter on quarter to INR 128 crore in Q2. It now contributes more than 10% of our revenue compared with approximately 8% a year ago and continues to grow meaningfully faster than the company as a whole.

6:50 We are seeing this growth across use cases such as conversational commerce, customer care and banking journeys as well as in RCS supported by the expansion of our direct operator coverage. ILD business continues to face growth challenges, and we remain focused on managing it for absolute gross profit rather than volume. Second, on gross profit. Last quarter, we explained that our gross profit margin of 20.9% was affected primarily by a temporary disruption in traffic from select large high margin customers while we deployed new solution capabilities for them. A smaller part of the impact came from the security incident at our Colombian subsidiary. As I said then, this was not business we had lost.

7:36 In Q2, gross profit margin recovered to 22.4% compared to 20.9% in Q1 and 22.1% in Q2 last year. Gross profit was INR $2.64 crores, up 9.8% sequentially and 6.8% year on year. The improvement was driven primarily by higher margin traffic from our new products and existing customers. Third, a few key business metrics that I would like to discuss. As detailed in the presentation, net revenue retention for the first half stood at 105%. Recurring revenue, which we define as revenue from customers billed in every month of the period, accounted for 93% of revenue over the twelve months from September last year to September this year, up 89% as we reported in FY 'twenty six.

8:26 On an annualized basis, 80% of the customers now generate more than $1,000,000 of revenue each in annual billing compared with 73 in FY 'twenty six. Client concentration has also eased slightly with our top five customers accounting for 30% of revenue as compared to 33% last year. By vertical, financial services remains our largest segment, contributing 15% of revenue, followed by digital natives at 12%. Finally, the business developments the key business developments that we experienced in this quarter. The most significant development of the quarter was the completion of our Heltar acquisition in July 2026.

9:12 We acquired Heltar Technologies' AI driven customer engagement business through a slump sale. The acquisition strengthened our non SMS portfolio across WhatsApp, RCS, voice and communication analytics, while adding AI native, no code customer journey orchestration capabilities for enterprise customers across India and international markets. We signed the business transfer agreement on July 13 and completed the transaction on July 29. The total consideration was INR 33.7 crore, of which INR 23.9 crore was paid at closing from internal accruals, while the remaining INR 9.8 crore is deferred and payable eighteen months from closing. The operating model remains as outlined in our July presentation.

10:00 Heltar is sold through the ROUTE MOBILE and Proximus Global sales teams and supported by our existing support teams. Product development continues to be led by Helta's core team, which we are strengthening through targeted hiring. The early signs are encouraging. Several blue chip enterprises were already live on the platform when we acquired the business, and we are now seeing early wins across banking, health care, retail, consumer durables and education. We are also seeing opportunities emerge in the Middle East and Latin American market. Let me share two examples from India. A health care provider in India is using Heltar to enable appointment booking, doctor search, test reports, and hospital information through WhatsApp.

10:46 A fashion brand in India is using the platform for conversational commerce, covering the customer journey from product catalogs and recommendations through to purchase. Commercially, Helter provides an opportunity to expand our subscription based and AI led revenue streams as customer accounts grow. Over time, it also creates the potential to move towards outcome based pricing models rather than pricing based solely on the number of transactions. In Latin America moving on, in Latin America, we strengthened our leadership with the appointment of Marco Eckish as CEO from Asevian, our Colombian subsidiary. Marco will support the continued growth of the business across Latin America and its integration within the broader Proximus global ecosystem.

11:34 In BFSI, our largest vertical, we participated in Global Fintech Fest twenty twenty six as a cloud communications partner and exhibitor. We showcased our omnichannel messaging, intelligent routing and digital engagement capabilities, engaging with financial services leaders, technology partners and other ecosystem stakeholders. We also introduced our omnichannel communications and conversational AI capabilities to prospective customers and partners at the event. Discussions focused on how digital customer journeys are evolving across onboarding, servicing, payments and customer support. To summarize the quarter, revenue growth has continued, gross profit margin has recovered, and new products now contribute more than a tenth of our revenue. With Helta, we have added an AI native engagement layer to our portfolio and are already taking these capabilities to the market.

12:29 With that, I will hand over to Raj to walk you through the detailed financial performance. Over to you, Raj. Thank you, Vinay, and good evening, everybody. I'll summarize our financial and operating performance during the quarter ending September 26 before opening the call to Q and A. As described by Tushar and Vinay, we delivered growth in revenue and gross margin, both sequentially and year on year. Our Q2 revenue from operations was INR 11,797 million, representing an increase of 5.4% year on year and 2.4% sequentially, continuing the momentum from the previous two quarters. This quarter, our new products portfolio grew meaningfully quarter on quarter, which demonstrates the strong demand for our solutions and continued customer engagement.

13:21 In Q2, we reported a gross profit of INR2640 million, which is higher by 6.8% year on year and higher by 9.8% sequentially. This growth was driven primarily by our new products portfolio, which I mentioned earlier. These carry higher margins than our core messaging traffic. Gross profit margin for the quarter stood at 22.4% versus 22.1% in the same quarter last year and 20.9% in the previous quarter, an expansion of around 30 basis points compared to the prior year, reflecting the richer mix from our new products. On a reported basis, operating costs were higher than the previous quarter, mainly due to nonrecurring impacts related to the civilian security incident and timing of a provision for performance related bonuses.

14:09 Let me be clear. These one off costs do not impact the run rate and will moderate and return to normal levels in the coming periods, hence positively impacting EBITDA. Adjusted EBITDA for Q2 was $1,184,000,000, which is higher by 8.7% compared to the previous quarter, as the strong DN performance more than offsets the nonrecurring costs. This all contributes to an adjusted EBITDA margin of 10% for the quarter, which is 50 basis points ahead of the previous quarter. We are working on multiple levers, both growth and cost optimization, to revert to EBITDA margin of around 12%, which would result in a mid single digit EBITDA growth year on year.

14:57 Adjusted profit after tax was INR825 million, which is lower 70.8 year on year, but up 20.4% sequentially on the last quarter. I will now hand over to the moderator for the Q and A session. Thank you very much, sir. We will now begin the question and answer Participants are requested to use handset while asking a question. First question is from the line of Bharat Gulati from Dallaland Procha. Please go ahead.

15:52 Just a few questions around the recurring revenue and NRRs for the quarter and the reported years that you've shown. Just trying to understand what is the nature of the recurring... Nonrecurring revenues? Or let's say, it's been 10% in f y twenty five and eleven percent in f y twenty six, and last twelve months, it's been around seven odd percent. So what's the quality of those revenues? Do they come in again, or are they completely nonrecurring in nature where those revenues are one off? Yeah. Sure. So let me take that. And so so, you know, if you look at the kind of business that we do, it's basically supporting the same kind of use cases for enterprises.

16:45 So, you know, it could be transaction related communication. It could be promotional or specific campaign related communication. And then there are authentication related communication. Now with WhatsApp, we also have more conversational or bidirectional or interactive kind of communication which gets supported. But primarily, when you look at nonrecurring, it is largely onetime campaigns or certain marketing campaigns that enterprises run. And these are typically not recurring because these are specific to a particular promotion or a particular product, you know, placement that the the brands or the enterprises want to run. And sometimes they go away, but then, you know, again, these are sporadic. Once again, the same enterprise might come back with a new product promotion or a new campaign that they want to run for a certain certain customer set. So you can consider them as one time campaigns which come and go, but the same enterprise might continue certain other businesses with us. Now we classify them under various buckets, you know, depending upon how the engagement with the particular enterprise is, and that kind of contributes to the nonrecurring part of the business.

17:56 So let's say if we were to quantify it in terms of our 105% NRR that we've reported for h one, you know, that comes out to around $22,007.87 per million rupees of revenue. How much of this NRR would be recurring and nonrecurring? I mean, you know, I'm just trying to understand the quality of growth over here because if you see the nonrecurring mix, if we eliminate that out of the business, there's basically no growth. So is nonrecurring business a part of... I mean, is that part of our growth, or is that just getting... Coming into the business to aid numbers temporarily and then again going out in the next year? Yeah. So, typically, you know, even even what might be nonrecurring could could be on an on an annual basis, it might come back to the way we we define a net net recurring revenue is, you know, we only look at customers whom we have built consistently through the entire period.

18:58 So, you know, that customer, if if, for example, you know, in the last six months, if that particular customer has not run a campaign with us, it would drop out of the nonrecurring sorry, of the net recurring revenue. But the same customer might come back in the season next year and provide us certain revenues for a new campaign or certain seasonal campaigns that we run typically on an annual basis. So that's the way it works. Might drop out for a certain month because of which it might not appear in the net recurring revenue. But, you know, to give a very accurate answer, we need to do a little bit more deep dive into the numbers and get back to you. So because, you know, it's it's it's basically a more mathematical calculation here, but we can do another deep dive and come back to you with more specifics.

19:45 And if I just may add, you know, as you correctly pointed out, that's... There's some seasonality factor comes in. As you will see that, you know, some will see is typically the OND, which is October, November, December is the period where we see a bump in numbers, and that's can be placed in the bond recruiting category. But also that we are selling solutions where we... Based on the number of plan hours we devote to develop a solution, we charge customer one time monies as well. A lot of these factors go in on the creation of this nonrecurring revenues. As we keep on adding customer, in in a particular quarter, it may be slightly higher and and the falling maybe slightly lower, and then seasonality also comes in play.

20:30 So it's very difficult to very accurately predict that how would be next quarter be on the nonrecruiting revenues. But, yeah, as Vinay suggested, we can deep dive, but you will never get a very, very accurate answer because there can be a campaign done by a PSU bank on a certain activity they want to conduct in a given quarter. There can be citizen communication coming from, let's say, a state government to suggest that there is a hurricane or there's some communication going towards agriculture or anything. So while while while we we we keep on working closely with all the customers, it's very difficult to very accurately make a prediction how my subsequent quarters would be like.

21:19 Sir, understood. Understood. Would it be possible to share what GRR we've done for h one? We can work that. We can work that out, but we'll take it offline. I need to do the calculation on that. We can get back to you. Done. Done. Okay. And just just last few questions. On growth, I mean, sort of volume growth has been dipped this quarter, so... Which was pretty healthy over the past four quarters. So anything specific to call out how volume growth would be looking like in, let's say, the coming few quarters, given that we sort of hit a plateau at that 45,000,000,000 mark and then now moving to the 48,000,000,000 mark? So any commentary on the volume based front? It's very difficult to make a prediction on volumes in the in the following quarters, but we see that there should be an upward movement primarily because we are hitting the season now.

22:16 And, you know, a lot of e com companies, a lot of other retail companies do a lot of communication around this time, around this period. So we're hopeful that these volumes will continue building up for us in the O and D quarter. We cannot make a long term prediction, but, of course, for this quarter, we're hopeful of looking at a slightly improved volume numbers. Understood. Understood. And just if you talk about our, you know, portfolio of long long distance messaging, how has that played out during this quarter? Do we continue to see it flatlining, or has there been an improvement in terms of uptake over there? What's been the outlook on that?

23:09 On the long listing messaging inwards to India, when I've already touched upon that there is... There's certain headwinds, but it's largely flattish. On the outward, which is message which are going from India to other countries, now that we're working with other banks, we've managed to pick up couple of contracts, which are outward traffic, which is going to countries outside of outside of India, originating from the lightning platforms in India that we we see to build in the in the months to come. Vinay, may you like to add? Yes. So on the long distance, we've seen some trends there. You know, we've seen some slight decline with certain aggregators, but then we've added some direct enterprise volume in the last quarter. So it's a mix of events which is happening there.

23:58 Certain aggregators are losing revenue. But as we mentioned in the previous quarter commentary, we were working on initiatives to see what we can do on the long distance and we've been able to win back some of the enterprise traffic, which is helping compensate some of the losses that we had. It's still not in a growth phase, but we are, as we mentioned in the last quarter, looking at different initiatives where we can sustain or create some momentum around the long distance business. Next question is from the line of Dipesh Mehta from MK Global. Please go ahead.

24:46 Thanks for the opportunity. Couple of questions. First, just want to get sense about case challenge. We have roughly around thirteen thirteen point five million Dipesh, your voice not very clear. Is it better now? Can you hear me? This is better. Yeah. This is better. Thank you. Yeah. So we have a case balance of 13,500,000,000. I just want to understand what will be the free cash, which exclude, let's say, security deposit and all those kind of balance. Can you give me that number? What is the free balance? And what is the, let's say, our plan to use that free balance, if you can give some sense? Because I think we are accumulating there. So far, seeing, let's say, any specific use which we have called out. So if you can give some sense around it. It is roughly 50% of market share, what we have overall business.

25:40 Second question is on the business side. Can you help me understand that any changes in the pricing which we have observed in last few months, particularly with RPS and WhatsApp? And how it is, let's say, affecting business dynamic? And last question is on the Q3 seasonality. How you expect Q3 seasonality to play out this time? I didn't get the last part. Last question, please. Can you say it again? The third one. The third question. Seasonal eighteen quarter three business. Generally, this is a festival period when you generally benefit from traffic. Okay. I'll take the second and third one, and I'll let Vinay answer the first question. On the RCS, if there have been price changes, which has been communicated by that goes to us, this is coming to effect from September 1.

26:32 In fact, our RCS numbers are looking still healthy as we talk. Will there be impact in the long run? Look, we're getting into season right now, so I don't see much impact coming immediately. But in the long run, we have to see how brands see the ROI is coming from RCS. And they, of course, will take the corrective measures or they may add more business also if the the the response is encouraging. So, yes, the the prices have gone up. In fact, for marketing, it's gone up by multiple folds. But we haven't... Our numbers are encouraging, but we will wait, for the season to pass by and then perhaps we'll in a better position to, see how the long term impact of this price change will be like. On the seasonality, we are fairly confident that business will build up from where we are right now. We will see sort of marketing campaigns coming away.

27:29 It's only that the blend may shift this time, you know, what it used to be heavily SMS, maybe now split across SMS, WhatsApp and RCS. How will that split happen between RCS and WhatsApp is again something you'll observe during the quarter, and then we'll be in a better position to go to comment about that in the coming months. So there we are optimistic of the business to grow because of the season in this quarter because of the seasons setting in. But the split is very difficult to comment because of this recent price changes. And I'll ask Rene to take the first part, please. Yeah. Maybe... Sorry to interrupt before we may start. I just want to get, like, a sense about what changes happened because we are not that familiar. If you can give some quantification, what was earlier rate, how it is changing?

28:21 See, the earlier rates were in vicinity of the pricing of SMS. They have seen that it was growing in a very rapid manner and they wanted to the telcos wanted to bring some sense around the growth. So and also they wanted to be somewhere compared and compatible with the pricing of WhatsApp. So they have taken the prices up. I'm sure they will evaluate this and perhaps take actions as I suggested earlier. But the truth is, as I said, it's nearly double of what the pricing put earlier. The pricing on the utility and authentication is marginal.

29:10 But on the marketing, the pricing have actually gone up substantially. Does that answer your question, Deepish? Yeah. And any change on WhatsApp messaging? No. WhatsApp? None... Nothing. Nothing major. Nothing major. Okay. So just adding to the seasonality point, what Dushar already said, in addition to that, we had that breach, which is now behind us. So again, we will see some good revival in the business because typically Q3 for them is fairly strong. So we are hoping to see some revival there. And going back to your first question on the free cash, Dipesh, we have around $1,150,000,000 to around 1,200,000,000 somewhere in that range of free cash. And in terms of use, as we've discussed earlier, one is obviously the dividends, which is still marginal.

30:06 But we are again looking at certain acquisitions in different so there are two categories, again, as you mentioned earlier, in specific markets like we are evaluating something in the Western markets, something in the Latin American market, but nothing is at a we are still early stage evaluation where we are still looking at the business performance and forming a view on valuation, deal structure, etcetera. So it's not something which has materialized to an agreement stage right now. But as we've mentioned, it's a critical area where we are looking at inorganic growth, and we are evaluating multiple targets in different markets, both for product and for market expansion. Whether at board level, let's say, any discussion about, let's say, till what point in time you will continue to deliberate about M and A and not returning back it to shareholder either through buyback or dividend?

31:00 So, Dipesh, we clearly see there are opportunities in certain markets. We're evaluating, as Vinay said, on both ends, geography expansion and product expansion both. We really see a couple of markets in that time, which are very interesting at this point of time. We would we are evaluating them. We are identifying targets in those pocket. If you are able to then we would, of course, prefer our choices will be to actually expand to some some acquisition in that market. Saudi is a very interesting market also. KSA is going at a very good pace. So that's another market. So we have few markets in mind. We are absolutely keen on using the monies with us to put expansion.

31:45 That's the primary goal. Understood. So we want to do for so we want to offer in our link opportunity. Can you give me the area... Focus area where, let's say, you want to plan to deploy some of this capital? Look. That's also what the dedication, but I will... Yeah. Go ahead, Greg. Yeah. So like I said, because there are certain companies which are very advanced conversational AI solution providers in the Latin American market. And, again, the reason I keep going back to that market is because the margin profiles in that region are very attractive. And, again, you know, the size and scale of assets is kind of fitting into our deal size criteria. So that is one important evaluation criteria. Obviously, we do not we want to restrict to the size that we can execute and that is where this particular market is very attractive. Again, certain other markets like in Southeast Asia, there are a few select companies that we are interacting with, potential targets that we are interacting with.

32:40 And again, the idea there is markets which are large. So you can guess which ones in the Southeast Asian market we will be looking at. And again, these are not the largest in that market, but the companies which are the immediate first contender for market share, etcetera. So that is how we are evaluating this. Essentially, what we are doing is we are not going after the SMS leaders. We are trying to pick targets who are stronger on some of these alternative channels and trying to build that out in the portfolio. Understood. And last question is on the guidance. Last time, we indicated about mid to high single digit revenue growth. We adjusted EBITDA margin of 12%. How comfortable we are to, let's say, deliver on? Yes. I'll take that question, Dipesh.

33:28 So you're correct on revenue. Our guidance was mid to high. So we will reconfirm that at the mid range. So that is trending positively as our as we noted sequentially, it's we see growth there. In terms of the EBITDA margin, as again, I also noted, H1 was impacted by some certain nonrecurring impacts and some customer specific items. So again, they will moderate. So we will see a recovery of them not happening in the coming period. So therefore, the EBITDA margin trajectory will improve in the coming quarters, not lapping those one off items. We will see a seasonal uplift, as Tushar mentioned as well. And we are targeting some high margin pipeline conversion opportunities as well as our normal cost optimization, which will be a continuous factor.

34:24 If you add all those up, then we are working on multiple levers, again, on revenue and costs, and to revert to back to around 12 EBITDA margin, which would then result in about a 6% increase in EBITDA growth year on year. Understand. Thanks for answering my question. Thank you. Next question is from the line of Amit Chandra from HDFC Securities. Please go ahead. Yes. Thanks for the opportunity. So my first question is on the revenues from the new product sources. So there, we have seen a very healthy growth. Obviously, it is like acquisition led. But it's been, like, provide the organic growth there in terms of Q o Q and Y o Y. And also, in the organic growth, are we seeing some, like, one off in terms of some campaigns that were there in the market, especially on the WhatsApp. So is it also powering the revenue? And what would be the normalized growth there?

35:38 Amit, you're correct that we had definitely impetus in our business after we had held the owner side, which is added to other menu and gross margin support. But apart from that, and as mentioned earlier to by responding to one of the question on RCS that we've seen some decent RCS growth as well. So it's been a blend of organic and operating growth both. So we see a healthy growth. As I'm sure you would have read in our presentations that the new product contribution has gone to oneten of our overall revenues. So that's encouraging. This season, we expect this to even improve because we hope that and in fact, all indicators are that the contribution of the new products, on towards the marketing, messages which go out, would be more, towards the new product, which is SMS and our... Sorry, WhatsApp and RCS, then SMS.

36:37 So we are really optimistic and we are certain that this will keep improving in the months and quarters to come. Amit, just to add to what Prashad said on the split between organic and inorganic, so the acquisition is just mid single digit kind of revenue contribution in the quarter, around INR 5 crore odd number. The rest is all organic growth in the new product as well. So the acquisition was not a very large revenue scale. Acquisition is more product which we tucked into our LIMITED? Capabilities. So just assigning that detail there. No. No. So in that organic, is there any some, like, onetime campaign revenue in that? Or is it more, like, more, like, I don't know, the ROUTE No. This is this is this is not one time. We expect that that that swing to continue.

37:28 No. They they they were not like a marketing campaign or, you know, as we were responding to one of the questions earlier, recruiting and monitoring, this is... This we are fairly confident is gonna be a recurring business for us. Alongside, we have... As I said, you know, we've we've... We see a some trend where the shift is happening towards the new product. We would want to keep building on that shift so that new product contribution keeps improving from the place we are at this point of time. Okay. And in terms of margins, obviously, we have seen expansion in the gross margins, but the EBITDA margins are even on the adjusted basis, we're not the expansion was not in line with the gross margin. So, this is only because of the Helter acquisition?

38:17 Or is there any some onetime costs in employee expenses, which we have recorded in this quarter? Yes. So as I said earlier, in H1, were some definite onetime costs, and then they won't recur in the future period. So for example, we have we have some costs from the Mersavian security incident in terms of extra activity required in that region to get us back on track, which which we are now back on track. And there is a performance bonus, which we've provisioned for, which will help us support our kind of H2 plans, particularly on some good pipeline discussions we're having and look to convert those and then bring lift that H2 EBITDA margin back up to be around 12%.

39:03 And sir, on these margins that okay, you have mentioned this 12% like margin. So is it fair to assume that the exit for this year would be around somewhere around that? And if you can provide some bridge in terms of how do you see that bridge from like 10% to 12% happening? Look, again, the bridge from 10% to 12%, say you get so first of all, at 10%, if you take out the one off items, then they are meaningful. So you will see that 10% on a normalized basis lift naturally. So that goes up. The first thing that happens is that definitely goes up on a normalized basis. And then you have our multiple levers for H2, which I've mentioned before, which will then again further lift that trajectory.

39:50 And again, seasonality does help us. So these campaigns are decent margins. And as discussed, you see the new product portfolio margin, that's increasing quarter on quarter. And we see that trend a very positive thing. And it's a good high margin business. Yes, there is a pathway, and we're confident of working towards that pathway. I mean, important to note, it does come with execution issues, which we will then make sure we can actually address. Okay. And my last question on the ILD part, obviously, you mentioned that there is some softness there. But is there any change in terms of the trends that you're seeing? And what proportion of the overall portfolio sales seeing Y o Y kind of a degrowth? And in terms of the stress in the ILD portfolio, is it stable or is it increasing?

40:52 Can I take that? Yeah. So so, Amit, as I said in response to one of the earlier questions, what we are seeing is, you know, there are certain certain kind of ID traffic, which we are seeing from a specific aggregate that we saw a little bit of softness, but we have taken some specific measures to go direct with enterprises. So that is where we are able to bring back some of the revenue. So there is some mix, but as I highlighted earlier, growth is still not very easy in that sector, a segment of the business. So it's still not a very... How would I put it in? It's still not a very simple growth environment. We are trying to create benefits or value add for some of these customers and going back. But to put it very plainly, it's not a market where we can confidently say that we will experience 5% or 6% or 6% of growth. So if that answers your question.

41:49 Okay. Okay, sir. Thank you and all the best. Sure. Thank you. Thank you. Next question is from the line of Hemal Thunkey, an individual investor. Please go ahead. Hello, sir. Am I audible? Yes. Please go ahead. So my first question is like in q two, basically, we have covered the revenue or not. So clearly, basically, we have cracked few times ago. So probably in last phone call, you have mentioned that this revenue may start from the q two. So have we basically achieved any kind of revenue in this q two, or they they achieve it from the q three?

42:51 Sorry,. I I did not get the question clearly. You are referring to which component of the revenue? Sorry. So Clero deal. You wait... Okay. You're breaking up to us over here also. We can't hear you very clearly. Clero. Okay. I think Clero revenue. Yeah. Yeah. So I'm talking about the Clero deal. So Yeah. We basically received any kind of revenue in Q2 from the Claro deal or yet not received? So I think Claro revenue was there in the previous quarter as well, and it continues. So it has stabilized now. So maybe there was some confusion because we already had revenue in the last quarter as well and it continues. It's a stable customer for us now. Okay. Okay. So actually, what is the percentage of that particular deal if we compare it with the gross revenue?

43:37 So if I look at... So we don't give out individual customer revenue as such, but, you know, it's it's become a significant customer for us in our firewall business. Yeah. Yeah. So overall overall, basically, I need to have a idea about the oral firewall revenue, basically, what we have achieved. So what what is the oral firewall revenue as compared to the percentage of the total revenue? So these are some data points which we've not disclosed publicly, but it is still single digit percentage contribution to revenue. It's not a very large component of revenue. Okay. Okay. And what is the, like, average profit margin in that particular segment?

44:24 Profit is very strong. We have customers where we make even up to 70% gross profit in that product. But on a blended overall business basis, it would be somewhere in the 50% to 60% range. Okay. Okay. Thank you. Thank you very much. And and one one last question is that. So I've been looking about, like, more such kind of deals that, like, we are, like, ongoing deals or something like that? Yes. So that is definitely a very key segment for us because, one, the product is quite unique. There are not many players who are offering this product in the market. And I think Tushar in his opening remarks also mentioned that firewall will be a very critical growth segment for us. So we are actively scouting. We are actually in discussions with some customers at fairly advanced stage of discussions. So we should be ideally, we are hoping for certain conversions in the next few quarters.

45:16 Okay. Okay. Thank you, sir. Thank you. Participants to ask a question, you may press star and one. As there are no further questions from the participants, I now hand the conference over to Mr. Raj Gill for the closing comments. That's great. Thank you, moderator. So as usual, thank you all for your participation and your very engaging questions. Moderator. We look forward to engaging you in the next coming periods and on our next investor call. With that, I wish you all a good rest of your day wherever you are, and, hope you all, go into the weekend with with a good good good vibes.

46:17 And and, we won't see you again until next quarter maybe. So happy Diwali for you all and, and, season's greetings there. So goodbye, everybody. Thank you. Thank you very much, sir. On behalf of ROUTE MOBILE LIMITED, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.