Firstsource Solutions Limited — Q3 FY26

Firstsource Solutions Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=gbyI24e132k Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to First Solutions Limited Q3 FY26 earnings conference call. As a 0:09 9 seconds reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:17 17 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on 0:24 24 seconds your touchtone phone. Please note that this conference is being recorded. On this call, we have Mr. Reteshani, MD and 0:32 32 seconds CEO and Mr. Dhin, CFO to provide an overview on company's performance followed by Q&A. Please note that some 0:41 41 seconds of the matters that we'll discuss on this call including the company's business outlook are forward-looking and as such are subject to known and unknown 0:48 48 seconds risks. These uncertainties and risks are included but not limited to what company has mentioned in its prospectus file 0:56 56 seconds with sebi and subsequent annual report that are available on its website and I hand the confidence over to Mr. Reshani. 1:04 1 minute, 4 seconds Thank you and over to you sir. 1:08 1 minute, 8 seconds Hello everybody. Thank you for joining us today to discuss our financial results for the third quarter of FI26. 1:17 1 minute, 17 seconds My name is Reteshad Nani and I'm the CEO at First Source. 1:21 1 minute, 21 seconds Before I start with the discussion on our Q3 performance, I would like to welcome our colleagues from past due 1:28 1 minute, 28 seconds credit and teley medic who have joined the first source team over the last two months. 1:34 1 minute, 34 seconds I would also like to thank them and each one of our 36,689 first sources around the world for their 1:43 1 minute, 43 seconds relentless commitment to delivering value to our clients. 1:48 1 minute, 48 seconds Q3 marks the seventh straight quarter of doubledigit year-on-year revenue growth. 1:55 1 minute, 55 seconds Our revenue grew by 16.2% year-on-year and came in at rupees 24.4 4 billion. In 2:02 2 minutes, 2 seconds US dollar terms, the growth was 10.2% yearonear and 3.6% quarteron quarter to 2:09 2 minutes, 9 seconds US 274 million. In constant currency terms, our revenue grew 10.6% yearonear and 4.6% quarteron quarter. 2:20 2 minutes, 20 seconds These numbers are inclusive of the past due credit acquisition which we integrated during the quarter and contributed to about 2% to our 2:28 2 minutes, 28 seconds year-on-year growth in constant currency terms. EBIT margin for the quarter was 11.9%. 2:36 2 minutes, 36 seconds Up 80 basis points and 40 basis points on a year-on-year and quarteronquarter basis respectively. 2:44 2 minutes, 44 seconds It's also the fifth straight quarter of margin expansion and the increase over the trailing 12 months has been ahead of 2:52 2 minutes, 52 seconds our guided band of 50 to 75 basis points expansion every year. 2:58 2 minutes, 58 seconds Our net profit adjusted for exceptional items was rupees 2 billion and the diluted EPS for the quarter was rupees 2.87. 3:09 3 minutes, 9 seconds Coming to the business highlights, I will start with our deal wins and other client related metrics. 3:16 3 minutes, 16 seconds In Q3, we signed five large deals. As you're aware, we consider a deal with an ACB over 5 million as a large deal. 3:27 3 minutes, 27 seconds Some of the deals include a leading ondemand manufacturing marketplace in the US selected us to provide account 3:34 3 minutes, 34 seconds servicing and customer experience services. 3:38 3 minutes, 38 seconds We gained additional business from one of the largest communications and media companies for customer onboarding and account service processes that are currently managed by in-house teams. 3:48 3 minutes, 48 seconds We were also selected as a global operations outsourcing partner by a leading UK based MBNO to support account 3:57 3 minutes, 57 seconds servicing, billing and customer inquiry management across multiple markets. This incidentally is also a new logo for us. 4:05 4 minutes, 5 seconds One of the leading global online fashion retailers also selected us to drive customer operations. This again is a new 4:14 4 minutes, 14 seconds logo for us. In Australia, we won a large onshore customer experience engagement with a leading health insurer focused on member services. 4:25 4 minutes, 25 seconds During the quarter, we added nine new logos which included five strategic logos. 4:32 4 minutes, 32 seconds As you're aware, we define a strategic logo as one where we see the potential of at least a $5 million revenue run 4:39 4 minutes, 39 seconds rate annually, and we run a structured program to handhold and monitor such relationships to grow them at an accelerated pace. 4:47 4 minutes, 47 seconds As I mentioned, two of the five large deals in Q3 were from new logos. In fact, we have been able to hit our 4:54 4 minutes, 54 seconds aspirational target of a $5 million relationship size in 10 of the 20 strategic logos that we added over the past four quarters, including Q3. 5:05 5 minutes, 5 seconds This conversion is about 60% if we consider the 33 strategic logos we added over the past eight quarters. 5:13 5 minutes, 13 seconds Let me now provide you a flavor from a vertical standpoint. Let's start with banking and financial services. In Q3 of 5:21 5 minutes, 21 seconds FI26, our financial services vertical grew 9% year-on-year and was flat sequentially in constant currency terms. 5:30 5 minutes, 30 seconds We added five new logos during the quarter. From a demand perspective, clients are increasingly prioritizing, 5:37 5 minutes, 37 seconds regulatory adherence, customer experience, and cost efficiency, which play directly to our strengths. 5:44 5 minutes, 44 seconds We see a strong client interest in our tech- enabled capability portfolio anchored around AI automation and datadriven transformation. 5:54 5 minutes, 54 seconds For example, our consulting led mortgage transformation offerings are resonating very strongly with clients seeking low origination and refinance volumes given 6:03 6 minutes, 3 seconds a prolonged high interest rate environment. 6:07 6 minutes, 7 seconds They're looking for structural cost reduction, productivity uplift, and end-to-end process simplification. Our consulting-led model deploying AI 6:15 6 minutes, 15 seconds enabled optimization and workflow redesign particularly for monoliner mortgage customers who are operating under sustained margin pressure is finding good acceptance. 6:26 6 minutes, 26 seconds This approach has enabled us to move beyond pure execution and play a more strategic role in reimagining mortgage operations across several accounts. 6:36 6 minutes, 36 seconds We're also partnering more closely with midsize banks and fintexs as they accelerate platform modernization, embed AI across customer journeys, and 6:45 6 minutes, 45 seconds enhance their digital experience, especially across onboarding, servicing, and collections workflows. Our Q3 exit 6:53 6 minutes, 53 seconds deal pipeline was amongst the strongest in recent quarters with at least one large deal in advanced stages of closure, giving us confidence in 7:01 7 minutes, 1 second sustaining growth momentum in this vertical. 7:05 7 minutes, 5 seconds In healthcare, the revenue grew 6% year-on-year but were flat sequentially in constant currency terms. We added one new logo during the quarter. 7:15 7 minutes, 15 seconds Healthcare continues to be a core growth pillar and a key area of strategic differentiation for first source. We are amongst the few companies with a strong 7:24 7 minutes, 24 seconds and well- diversified presence across both the payer and provider segments giving us a unique end-to-end view of the healthcare value chain. While 7:33 7 minutes, 33 seconds clients across both segments are navigating similar macro pressures of rising costs, increasing regulatory complexity, and the need to deliver 7:40 7 minutes, 40 seconds better experiences and outcomes, we believe payers and providers are at very different stages of their transformation journeys and therefore require 7:48 7 minutes, 48 seconds differentiated approaches. To sharpen our focus on these distinct needs, dynamics, and growth opportunities, we 7:56 7 minutes, 56 seconds have created dedicated leadership roles for both the payer and the provider segments. 8:01 8 minutes, 1 second Matthew Barlo and Scott Schrader each bring over two decades of industry experience, deep client relationships, and they will drive our NBO approach to 8:10 8 minutes, 10 seconds build domain technology enabled solutions that help health plans and health systems respectively, operate 8:17 8 minutes, 17 seconds smarter, scale responsibly, and adapt faster to change. 8:22 8 minutes, 22 seconds Rampsups in our previously won large deals are progressing well, and we see a healthy deal pipeline. 8:29 8 minutes, 29 seconds This actually gives us the confidence to bring forward the planned rationalization of low margin low growth accounts particularly in the provider segment aligned with the recent 8:37 8 minutes, 37 seconds leadership changes. While this may weigh on the optical optical growth in this vertical in the short term, it gives us a strong push up on our medium-term margin aspirations. 8:49 8 minutes, 49 seconds Coming to the CMT vertical, revenues grew 14% year-on-year and 2% on a quarter-onquarter basis. We added two 8:56 8 minutes, 56 seconds new logos during the quarter and three of our large deal wins in Q3 came from this segment. Q3 tends to be seasonally soft due to the holiday period which 9:05 9 minutes, 5 seconds affects the timing and flow of work packets particularly across our consumer technology clients. That aside, CMT remains one of our fastest growing 9:13 9 minutes, 13 seconds verticals. Growth continues to be driven by deepening engagements with leading consumer tech companies spanning both 9:21 9 minutes, 21 seconds our core service offerings as well as a growing set of non-traditional technology-led solutions that support the integration of AI into client product ecosystems. 9:31 9 minutes, 31 seconds We exited the quarter with a well balanced and healthy pipeline covering opportunities across both traditional media and telecom clients as well as the 9:39 9 minutes, 39 seconds new age technology companies giving us confidence in the sustained growth momentum of this vertical. Lastly, coming to the diverse portfolio that 9:48 9 minutes, 48 seconds grew 21% year-on-year and 37% quarteronquarter in constant currency terms. As you're aware, this portfolio includes our businesses with utilities 9:57 9 minutes, 57 seconds and retail clients mainly in the UK. We have a healthy deal pipeline across both retail and utilities verticals. With the 10:04 10 minutes, 4 seconds past due credit capabilities, we plan to double down, especially in the utilities segment where the acquisition adds several large and new logos to our portfolio. 10:14 10 minutes, 14 seconds We're also optimistic about growth in our retail portfolio where we've been able to expand our footprint as well as win additional business with several clients during recent renewals. 10:24 10 minutes, 24 seconds Moving to the geographies, from a geographic standpoint, North America delivered 1% sequential growth and 13% 10:31 10 minutes, 31 seconds year-on-year growth in constant currency terms. We continue to see broad-based momentum across our three core verticals in the region and expect to sustain this 10:40 10 minutes, 40 seconds over the coming quarters. In parallel, we are also incubating new growth opportunities in North America by setting up our sales presence in Canada 10:48 10 minutes, 48 seconds and by replicating capabilities where we have demonstrated strength in other markets such as utilities and retail from the UK. 10:56 10 minutes, 56 seconds Europe grew 14% quarteron quarter and 2% yearon-year in constant currency terms. 11:02 11 minutes, 2 seconds As we've highlighted in the past, we have seen an accelerated move towards offshore and nearshore delivery over the past few quarters with several of our clients. 11:12 11 minutes, 12 seconds While this may continue in the near term, we believe our proactive steps to make the business more resilient by broadening both our geographic and vertical presence are yielding results. 11:23 11 minutes, 23 seconds Our pitch for transformational programs and nearshore delivery from South Africa has been resonating strongly with clients. During Q3, we also renewed our 11:31 11 minutes, 31 seconds contract with a UK banking based client, one of our largest and oldest clients, and we've now been recognized as the primary partner for both onshore and offshore work. 11:41 11 minutes, 41 seconds We believe this places us well to further deepen and expand our relationship with this client. With another large communications and media 11:48 11 minutes, 48 seconds clients, we continue to gain additional estate mostly from their in-house teams. 11:53 11 minutes, 53 seconds We also won three large deals in Q3 and our pipeline continues to build up well. 11:57 11 minutes, 57 seconds In fact, it's up about 40% over the last four quarters. We see an improving growth trajectory in this market, though 12:04 12 minutes, 4 seconds the pace could be gradual. In Australia, we continue to win additional business with existing clients while building a pipeline in new logos. One of the 12:13 12 minutes, 13 seconds largest deal wins in Q3 was in this market. 12:18 12 minutes, 18 seconds On the people front, we closed the quarter with a headcount of 36,689 first sources, which is a net increase of about 690 employees over the last quarter. 12:28 12 minutes, 28 seconds Offshore and nearshore hires accounted for close to 80% of gross additions. Our trailing 12-month attrition continued to 12:36 12 minutes, 36 seconds trend down to 27.4% marking an improvement of almost 10 percentage points over the last eight quarters. 12:46 12 minutes, 46 seconds During the quarter, we laid the foundation for a fundamental shift from a rolebased to a skills first organization with the launch of Unbound, 12:53 12 minutes, 53 seconds our skills and talent platform, enabling every First Source employee to build a unique skill profile to support internal 13:00 13 minutes mobility, targeted development and future workforce planning. 13:05 13 minutes, 5 seconds This transformation was reinforced through nearly 44,000 learning hours delivered globally focused on building 13:12 13 minutes, 12 seconds capability in AI and data fluency, leadership and cognitive skills. 13:18 13 minutes, 18 seconds We also further strengthened our people operations backbone by improving onboarding speed and accuracy, scaling 13:25 13 minutes, 25 seconds HR platforms across geographies and reinforcing payroll and statutory governance to support seamless business 13:32 13 minutes, 32 seconds continuity. Our people first culture was further reflected in recognitions earned this quarter, including being named amongst the top 25 best workplaces for 13:41 13 minutes, 41 seconds IT and ITBM in 2025, honors of the great manager awards 2025 and a repeat great place to work certification across our key key markets. 13:52 13 minutes, 52 seconds From an awards, recognition and sustainability standpoint, Firstource continues to earn strong recognition from leading industry analysts for 14:00 14 minutes delivering strong client value and driving innovation through technology-led solutions in our focus markets. 14:07 14 minutes, 7 seconds During Q3, Nelson Hall named First Source as a leader in banking for both operation services and process 14:14 14 minutes, 14 seconds automation services and a leader in CX services transformation. 14:19 14 minutes, 19 seconds Everest group recognized us as a leader and star performer in its banking operations services peak matrix assessment of 2025. Additionally, ISG 14:29 14 minutes, 29 seconds positioned first source as a leader in both generative AI services and contact center CX services. ISG also featured 14:36 14 minutes, 36 seconds first source in its booming 15 list based on the annual value of commercial contracts awarded over the past 12 months for the fifth consecutive 14:44 14 minutes, 44 seconds quarter. I'm also proud to share that First Source achieved an ESG and CSA score of 87 by S&P Global Sustainable 14:54 14 minutes, 54 seconds One assessment, a third year of significant improvement, rising from 61 in FI23 and 81 in FI24 to 87 in FI25. 15:04 15 minutes, 4 seconds This performance positions first source as the number one ranked company globally in the professional services sector. 15:11 15 minutes, 11 seconds These recognitions reflect not just external validation but the collective commitment of our teams to driving sustainable and responsible growth. 15:21 15 minutes, 21 seconds Let me talk a little bit about the telemetic acquisition. 15:25 15 minutes, 25 seconds We announced this acquisition last month. As you're aware, Telmedic is a Porto Puerto Rico based pioneer with close to three decades of operations 15:34 15 minutes, 34 seconds well aligned with the fast growing Medicaid, Medicare Advantage, and dual eligible segments, including Spanish-sp speakaking and underserved communities. 15:42 15 minutes, 42 seconds Its service portfolio spans clinical operations, utilization management, teley health enabled care, and contact center solutions. This acquisition 15:51 15 minutes, 51 seconds meaningfully strengthens our end-to-end clinical and utilization management capabilities and expands our on ground 15:58 15 minutes, 58 seconds presence in the payer market in Pure Rico. With that, let me turn over the call to DH to give a detailed color on 16:07 16 minutes, 7 seconds the quarterly financials. I will come back to talk about our progress on the strategic priorities as well as the outlook for FI26. 16:15 16 minutes, 15 seconds Over to you Dish. Thank you Resis and hello everyone. 16:20 16 minutes, 20 seconds Let me start by taking you through our quarterly financial numbers. Revenue for the Q3 FI26 came in as rupes 24.4 16:28 16 minutes, 28 seconds billion or US274 million. This implies a yearon-year growth of 16.2% in rupee 16:35 16 minutes, 35 seconds term and 10.2% in dollar terms. In constant currency, this translate to a year in yearon-year growth of 10.6%. 16:44 16 minutes, 44 seconds Our operating profit stood at rupees 2.9 billion up 24.9% over Q3 of last year and translate to a bit margin of 11.9%. 16:56 16 minutes, 56 seconds Up 40 b up 40 bips quarteron quarter as ret earlier mentioned this is the fifth straight quarter of sequential margin 17:04 17 minutes, 4 seconds expansion and translate to a 80 bips improvement in the last four quarter. 17:09 17 minutes, 9 seconds This is a little above our stated objective of a 50 to 75 base margin expansion every year. 17:16 17 minutes, 16 seconds Effective tax rate in Q3 was 21% and for the 9 month it was 20% which is within the guided 19 to 21% range for FY26. 17:26 17 minutes, 26 seconds As I mentioned, there is a onetime charge of rupees 914 million on account of increased provisioning for gratuty only when cachment in accordance with 17:34 17 minutes, 34 seconds the new labor code announced by by announced by the government of India. As well as there is except exceptional item related to provision of rupees 88 17:43 17 minutes, 43 seconds million for the diminuation in the value of a one of the legacy investment. 17:49 17 minutes, 49 seconds Profit after tax adjusted for these exceptional item came in at rupes 2 billion a yearon-year growth of 26%. 17:57 17 minutes, 57 seconds DSO was 67 days for the quarter versus 69 days in the Q2. Tighter working capital days helper on improved cash 18:05 18 minutes, 5 seconds conversion. Our OCF to EPITA was 93% and FCF to adjusted PAT was 164% for the quarter. 18:14 18 minutes, 14 seconds For 9 months, our revenue grew at 14.3% in constant currency terms and 15.1% in US dollar terms. Our EBIT has grown by 18:23 18 minutes, 23 seconds 26.5% year-onear and adjusted PAT has grown 27% over last year. Gas conversion continued to be strong. 18:32 18 minutes, 32 seconds Our OCF to beta for 9 months was 86% and FCF to adjusted PAT was 159%. 18:40 18 minutes, 40 seconds Our cash balance including investment stood at rupees 4 billion at the end of the quarter 3. Our net debt stand at 18:47 18 minutes, 47 seconds rupes 11.7 billion as of 31st December 2025 versus 10.8 billion as of 31st 18:54 18 minutes, 54 seconds September 2025 and rupees 13.2 billion as of 31st March 2025. 19:02 19 minutes, 2 seconds Our hedgebook as of 31st December was as follows. We had coverage of GBP 95.3 million for the next 12 months with an 19:09 19 minutes, 9 seconds average rate of 114 per pound and coverage of US dollar 178 million with an average rate of 88.6 for for per dollar. 19:21 19 minutes, 21 seconds During the quarter we have paid rupees 2.2 billion towards the acquisition of past due credit for which we have received the regulatory approval during 19:28 19 minutes, 28 seconds the quarter. As we have reported earlier, we have acquired 100% stake in the company at a purchase consideration 19:34 19 minutes, 34 seconds of GBP 22 million which include GBP 4.4 million as a handout link to achieving predefined milestone. 19:43 19 minutes, 43 seconds I'm also pleased to share that the board has declared in dividend of rupees 5.5 per share. This is all from my side. I 19:51 19 minutes, 51 seconds will hand over the call back to ret to talk about our strategic priorities and the outlook for the coming quarter. 19:58 19 minutes, 58 seconds Thank you, Zesh. 20:01 20 minutes, 1 second I'm pleased with the progress we are making on our agenda to leverage the current fault lines created by technology and macroeconomic shifts to 20:09 20 minutes, 9 seconds broadbase our client footprint and curate new growth engines. Let me give you a few data points. We closed Q3 with 20:18 20 minutes, 18 seconds 141 clients with over $1 million of revenue from a run rate standpoint. an addition of 34 clients over the same period in Q3 of FI25. 20:28 20 minutes, 28 seconds During the same period, our US dollar 10 million as well as our 5 million plus clients increased by 4 and 13 respectively. 20:36 20 minutes, 36 seconds Over the last eight quarters, the revenue share of top five and top 10 clients has come down by 8% and 11% respectively. Importantly, this has 20:45 20 minutes, 45 seconds happened even as our top five clients continue to grow at industry growth rates despite a significant onshore to nearshore delivery in at least a couple 20:53 20 minutes, 53 seconds of them. As you have noticed, we had back-to-back large deal bins in the form of additional business in one of our largest clients over the past two 21:02 21 minutes, 2 seconds quarters. So, the broad-basing of growth that you see is a result of focused account management strategy which is driving a faster growth in our non-top 21:10 21 minutes, 10 seconds five top 10 accounts in many cases through large deals. 21:14 21 minutes, 14 seconds We are also now winning a higher number of large deals and also doing so more consistently. 21:19 21 minutes, 19 seconds We have a dedicated team to bring more focus to our efforts and ensure we're covering all the aspects that go into a large deal pursuit. This has helped us 21:28 21 minutes, 28 seconds report at least four large deal wins in each of the past four quarters with five deals in the current quarter. 21:35 21 minutes, 35 seconds Importantly, despite the strong closure, our deal pipeline has stayed above a billion dollars. Let me give you some additional insights. We have won 13 21:44 21 minutes, 44 seconds large deals in the first 9 months of FI26 versus 14 wins in entire FI25 and close to the double the number of wins in FI24. 21:54 21 minutes, 54 seconds Not just that, while previously our large deals almost always came from existing clients, six of the large deals this year so far came from new logos versus five in FI25. 22:06 22 minutes, 6 seconds This underlies the strength of our differentiated solutions, attractiveness of our commercial construct and a 22:13 22 minutes, 13 seconds growing client acceptance of us as a disruptor. 22:17 22 minutes, 17 seconds This gives me confidence that we are on the right trajectory to deliver sustainable, profitable and industry-leading growth. As you can see, 22:24 22 minutes, 24 seconds we have delivered continued improvement in our sequential growth rates throughout the course of FI26 in line with our initial commentary. This has 22:33 22 minutes, 33 seconds given us the confidence to bring forward the account rationalization program especially in the healthcare provider segment to coincide with the recent leadership changes in that vertical that 22:42 22 minutes, 42 seconds I mentioned earlier. As such, we now expect our constant currency revenue growth for FI26 to be in the 13 to 14% 22:50 22 minutes, 50 seconds range. This does not include the recent past due credit solutions and telemetic acquisitions. Including these two acquisitions, we expect our FI26 22:58 22 minutes, 58 seconds constant currency growth revenue growth to be in the 14 1.5 to 15 1.5% range. We are also raising our EBIT margin 23:07 23 minutes, 7 seconds guidance for FI26 to 11.5% to 12% range. 23:12 23 minutes, 12 seconds This concludes our opening remarks and we can now open the floor for questions. Operator, over to you. 23:20 23 minutes, 20 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. 23:31 23 minutes, 31 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 23:38 23 minutes, 38 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 24:13 24 minutes, 13 seconds The first question is from the line of Fibhor Singhal from Noama Equities. Please go ahead. 24:20 24 minutes, 20 seconds Yeah. Hi. Uh thanks for taking my questions and congrats on a good quarter. Uh a couple of questions from 24:28 24 minutes, 28 seconds my side on the business side. Uh basically uh in the healthcare segment we have uh very recently heard a lot of 24:35 24 minutes, 35 seconds concerns about uh the government spending that was supposed to be is much lower uh just increased by.5% on a buy basis as compared to general 24:44 24 minutes, 44 seconds expectations around 5%. So how does that play out in terms of our overall demand demand environment? What kind of uh 24:52 24 minutes, 52 seconds basically business risk do we have? uh because of which we do get impacted or do not get impacted because of this lower increase in spend that was uh that 25:01 25 minutes, 1 second has come out to be and uh similarly in the uh BFSI segment uh what are we seeing on the mortgage business side at 25:09 25 minutes, 9 seconds this point of time as you mentioned that we have some very niche capabilities uh which is helping us our clients especially in the in higher interest 25:17 25 minutes, 17 seconds rate regimes uh are we seeing any uh revival uh in that business from industry point of view and How are we kind of placed to uh take care of that? 25:26 25 minutes, 26 seconds Uh that will be my first couple of questions. Uh if you can thank thank you vibbor for uh for those two questions. Uh let me uh respond to the first one on the healthcare uh side. 25:38 25 minutes, 38 seconds Uh you know clearly uh you know all of us have seen the recent CMS proposal uh to keep the Medicare advantage rates 25:46 25 minutes, 46 seconds largely unchanged. uh what I would say is that it's a little early to give a specific view because the final rates will uh only come out in a few months 25:54 25 minutes, 54 seconds from now. But what I can say based on conversations that we've been having is this is obviously adding to the pressure 26:01 26 minutes, 1 second on margins for the payers which are already under stress from rising medical and utilization costs. You guys saw the 26:08 26 minutes, 8 seconds uh the the stock market reaction last week uh with the with most of the payers uh probably reporting a decline of 26:15 26 minutes, 15 seconds anywhere from 10 to 20% in stock price in response to some of the proposals itself. Uh our view is that look this should lead to not just more outsourcing 26:23 26 minutes, 23 seconds but also more offshoring and clients looking for more transformational programs that give them a structural uplift in their cost structures. So we 26:32 26 minutes, 32 seconds think it's a net net positive in terms in terms of a tailwind. But let me also give you one more data point which uh I think strengthens our own position. So 26:40 26 minutes, 40 seconds our recent acquisition of tele um in Puerto Rico uh is a potential advantage 26:47 26 minutes, 47 seconds in this environment uh recognizing fully well that the Medicaid work cannot move outside the foreshores of the US itself. 26:54 26 minutes, 54 seconds Uh Pure Rico being a US territory uh has a structural cost advantage compared to the rest of the US mainland itself. And 27:03 27 minutes, 3 seconds uh for for organizations uh the healthcare payers that are looking to potentially get the benefit of that uh they now have a viable alternative 27:10 27 minutes, 10 seconds available in terms of scaling up in on the island itself. Uh so we think that these two uh you know one is what it 27:18 27 minutes, 18 seconds does do to their cost structure and how we can uh benefit from that in terms of supporting their transformation journeys but the other is the uh location benefit 27:28 27 minutes, 28 seconds that we might be able to bring. We are already having conversations around how that can act as a competitive advantage uh for healthcare uh clients itself. On 27:36 27 minutes, 36 seconds the market side uh look uh the business itself from our perspective has been stable. Uh but you know you guys have 27:44 27 minutes, 44 seconds been probably reading the same commentary that I have. You have the president uh of the US asking for you know the Fed chairman to to drop rates 27:54 27 minutes, 54 seconds down. you know, I heard I saw last week as low as a percentage point or whatever else, right? But um if you look at the 30-year mortgage rate, it's still been 28:01 28 minutes, 1 second hovering around the 6.1 to 6.25% for the past few weeks. 28:06 28 minutes, 6 seconds And while on a secular basis, this has been trending down um to have a more 28:14 28 minutes, 14 seconds meaningful impact on the refinance market. I think you start seeing some some tailwinds or uh some early green 28:22 28 minutes, 22 seconds shoots emerge once you start hitting the five 5% mark or thereabouts right given the fact that you still have uh close to 28:30 28 minutes, 30 seconds uh 88% of all existing mortgages uh below 5% right so I think what we've been doing at least in terms of response 28:38 28 minutes, 38 seconds and which has been yielding results is broadbasing our portfolio both both in terms of the profile of clients that we're going after and also the offerings that we're taking to the clients as 28:46 28 minutes, 46 seconds Well, right. Um, and there we have seen uh opportunities emerge on both the origination and the servicing side. And that's the reason why what you're seeing 28:55 28 minutes, 55 seconds is that we are able to get a stable growth in this part of our portfolio without any macro support. 29:02 29 minutes, 2 seconds Right. Right. Indeed. In fact, despite no macro support, I think our BFSI has held very well. So, full points on that. 29:09 29 minutes, 9 seconds Just a bit on the BFSI segment again. Uh we had heard uh a few weeks back the announcement by again the US president 29:17 29 minutes, 17 seconds about uh uh the uh basically capping the uh interest rate on credit card late payment fees. uh now given that we had 29:26 29 minutes, 26 seconds acquired this company ARSI which was probably in the recovery business is the I mean I know it's still a statement I don't know what is the stage of that 29:34 29 minutes, 34 seconds being implemented but how are you seeing that as a development it is adverse is it adverse for our business how does this impact our business going forward 29:41 29 minutes, 41 seconds if eventually it comes to comes is enforced so look uh it's a little too early to uh 29:50 29 minutes, 50 seconds to react to it because you know uh as as I understand as I'm sure you're also seeing this. This is still a proposal at 29:57 29 minutes, 57 seconds this point in time. Uh details on the implementation and compliance requirements associated with this are 30:05 30 minutes, 5 seconds still awaited. So at least from a near-term impact standpoint, I don't see any uh any challenges to the business 30:12 30 minutes, 12 seconds itself. uh but from a medium per medium-term perspective you know as far as uh I know you know with our 30:19 30 minutes, 19 seconds interactions with banks as well as fintex um you know banks are putting their point of view across since uh you know 30:27 30 minutes, 27 seconds the APR has a wider linkage to the overall unit economics of the card business itself and you know there are talks that 30:34 30 minutes, 34 seconds obviously a cap will lead to lower credit limits tightening of underwriting and so on and so forth. Some banks may also pull back from riskier segments at 30:42 30 minutes, 42 seconds this stage. Look, there's a lot of chatter and um there's a fair amount of ambiguity at this this point in time and uh what I can only tell you is at this 30:50 30 minutes, 50 seconds point in as of now it's not come up specifically in our client conversations. So we don't see any business impact yet. If anything else uh 30:59 30 minutes, 59 seconds what I will say uh in the collections business we've been doing some very interesting uh uh stuff around the 31:08 31 minutes, 8 seconds agentic AI side in terms of uh creating virtual collectors and how that can change the profile of how this business itself has rendered itself and that's 31:15 31 minutes, 15 seconds receiving broad-based acceptance both amongst banks as well as fintex itself. 31:19 31 minutes, 19 seconds So uh if anything else that that's creating differentiation for us in the marketplace and allowing us to win uh win more. 31:27 31 minutes, 27 seconds Got it. Got it. Just one last bookkeeping question from my side. Our offshoring has increased very uh smartly to around 43.4% in this quarter up by 31:35 31 minutes, 35 seconds almost 13 14 percentage points over the last 9 to 10 quarters. Do you think we still have room to go from current levels or do you think we've kind of will plateau out or maybe find an equilibrium close to these levels? 31:47 31 minutes, 47 seconds Um so again before u I I think the if I'll give you one data point right the first data point is that if you look 31:55 31 minutes, 55 seconds at our gross hiring 80% of our gross hiring is still uh uh happening offshore and nearshore we don't see that changing 32:02 32 minutes, 2 seconds so if we have to go out there and continue to hire that will continue to be the nature of how this business evolves and if that plays out my sense 32:10 32 minutes, 10 seconds is that uh this ratio should continue to improve. move uh towards more offshore and nearshore versus onshore. 32:20 32 minutes, 20 seconds Got it. Got it. Great. Thank you so much for taking my question s and wish you all the best. Thank you. 32:28 32 minutes, 28 seconds Thank you. The next question is from the line of Abhishek Bandari from Namura. Please go ahead. 32:35 32 minutes, 35 seconds Yeah, thank you for the opportunity uh team. Congrats on a good execution in the quarter especially on margins. Uh I had two questions you know. First is you 32:43 32 minutes, 43 seconds know if I look at your guidance now uh you know on the organic side x of past you at the midpoint we are talking about 32:51 32 minutes, 51 seconds 13 and a half uh you know compared to 14 which was the Q2 exit number uh so in the context of the large deals what we 32:59 32 minutes, 59 seconds had announced in Q1 which was anchored or associated with an IT company if you can just you know tie the two is there any delay in that ramp up or uh is this 33:08 33 minutes, 8 seconds you know we probably going to be slightly towards the bitcoin Is that the new assumption? 33:16 33 minutes, 16 seconds So uh look um I'm not going to comment on the specific numbers itself but you know one of the things that we stated even in the last earnings call if you 33:24 33 minutes, 24 seconds recall is to say that uh directionally the guidance has built on a improved growth in the second half of of FI26. 33:33 33 minutes, 33 seconds You've seen that with Q3 where uh you know the growth rate was you know sequentially better than what it was in 33:39 33 minutes, 39 seconds Q2 and obviously uh the the guidance builds directionally on the fact that there will be an improved growth in Q4 as well right it's consistent with the 33:48 33 minutes, 48 seconds commentary that we have provided right from the start of the year that we expect an upward trend in our quarter on quarter growth through the course of the year itself u 33:57 33 minutes, 57 seconds I'm going to reiterate one comment from what we have said uh all along right our guidance band is based on a clear line 34:04 34 minutes, 4 seconds of sight to the business at a of over FI26 at the lower end of the guidance and the upper end is based on how things pan out you know particularly with 34:12 34 minutes, 12 seconds pipeline and so on and so forth and at the same time the guidance does not assume anything from a macro perspective itself right so that's broadly the 34:20 34 minutes, 20 seconds philosophy that we have still continued to follow um as it pertains to uh you know what what you see in the numbers itself with specific reference to the 34:30 34 minutes, 30 seconds large deal wins etc we don't see anything which has changed etc from that standpoint. 34:36 34 minutes, 36 seconds Got it. Thanks. My last question is you know on the margin side now that you know we are exceeding uh what we had initially thought in terms of annual 34:44 34 minutes, 44 seconds expansion of margin how should one think about the path from here on would you be reinvesting some of the incremental 34:50 34 minutes, 50 seconds gains or you would let the margins you know expand in the natural way. 34:56 34 minutes, 56 seconds So um let me go back to what we had said in in the beginning of FI25 right uh we 35:03 35 minutes, 3 seconds had said at that point in time in FI25 that our margins for that fiscal year would be flat as we were looking to make 35:11 35 minutes, 11 seconds investments in the business from both a go to market as well as a capability standpoint to ensure that we were competitive. Um and then we said that we 35:20 35 minutes, 20 seconds would look to do 50 to 75 basis points margin expansion in FI26, 27 and 28 respectively such that we would be in a 35:28 35 minutes, 28 seconds 14 to 15% uh band which we felt would would be relevant uh in terms of where we think 35:35 35 minutes, 35 seconds this business should be at. We've not deviated from any of that. We still stand uh true to that and as you can see 35:42 35 minutes, 42 seconds from an execution perspective uh you've seen the first three quarters we ended up at 11.6 6% YTD which is roughly about 35:50 35 minutes, 50 seconds 60 basis points uh and clearly uh you know ahead of the low and that's the reason why we you know up the lower end 35:57 35 minutes, 57 seconds of the guidance from 11.25 to 11.5 um at the same time what I will say is that while we want while we are you know 36:06 36 minutes, 6 seconds we we feel good about the 50 to 75 basis points going forward as well the environment around us continues to 36:13 36 minutes, 13 seconds evolve. uh this is probably the most uh most uh uh uh relevant platform and 36:21 36 minutes, 21 seconds technology shift that we are all going to experience in our lifetimes. Uh and therefore in that context where it's appropriate we are continuing to make 36:29 36 minutes, 29 seconds the necessary investments accepting that we are able to manage those investments while we are continuing to to drive out efficiency in the business itself. So uh 36:37 36 minutes, 37 seconds the investments will continue to be to happen as as as appropriate. uh but I don't think it's going to come in the way of the margin guidance that we have uh outlined. 36:48 36 minutes, 48 seconds Got it. Thanks Res. All the best. Thank you. 36:54 36 minutes, 54 seconds Thank you ladies and gentlemen. In order to ensure that the management will be able to address questions from all the participant in the conference, kindly 37:02 37 minutes, 2 seconds limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Tipesh Mata from MK Global. Please go ahead. 37:15 37 minutes, 15 seconds Uh thanks for the opportunity. Uh couple of question. First about the data perspective. Can you share uh how many 37:23 37 minutes, 23 seconds headcount addition happened because of the PDC acquisition? I believe tele has not yet integrated at the end of 37:30 37 minutes, 30 seconds December. So there might not be any addition from it but you can clarify that part also. Uh second question is about just to get sense about this 37:38 37 minutes, 38 seconds account rationalization on provider side which you highlighted. Can you help us understand what would be the end outcome which you are expecting from it and what 37:47 37 minutes, 47 seconds would be the impact on revenue margin which you can envisage based on the action which we are taking currently. 37:53 37 minutes, 53 seconds Uh if I can squeeze one more question on the PDC business I think can you help us understand uh profit profitability of 38:01 38 minutes, 1 second that business and any seasonality in that business because first source collection business do have some seasonality in quarter 4. So whether PDC 38:09 38 minutes, 9 seconds also has some seasonality there and uh PDC related emotages and impact seems to be missing this quarter. So if you can 38:18 38 minutes, 18 seconds maybe help us understand how to understand that part. Thank you. 38:24 38 minutes, 24 seconds Uh thank you uh Desh. That seemed almost like four questions instead of two but uh let me try and take a stab at uh uh 38:32 38 minutes, 32 seconds addressing the first three and then uh I'll turn it over to Desh on the PDC amotization pit. Uh the first point that 38:40 38 minutes, 40 seconds you had was related to headcount. Uh on the total headcount that we added roughly about 300 plus people came from 38:46 38 minutes, 46 seconds the PDC uh acquisition itself. That's uh data point one. Uh the second comment question that you had was related to the 38:55 38 minutes, 55 seconds tail account rationalization itself in Q3. Uh look uh the impact in Q3 was uh about a couple of million dollars. Uh we 39:03 39 minutes, 3 seconds think it'll be a little higher in Q4. Um so roughly about a 50 basis points on our FI26 revenue growth itself. uh what 39:13 39 minutes, 13 seconds I can say is that look u the invisible impact of trimming of any of these tail accounts will typically be visible in the first couple of quarters two to 39:21 39 minutes, 21 seconds three quarters or so and thereafter it's critical but what what was important for us is uh with the leadership changes we brought forward some of the account 39:29 39 minutes, 29 seconds rationalization particularly for low margin low growth accounts itself which we felt was critical from a business standpoint itself um 39:38 39 minutes, 38 seconds I what was the third question uh the pitch Yeah. So, another question was about the 39:46 39 minutes, 46 seconds uh PDC business seasonality, seasonality and profitability. 39:51 39 minutes, 51 seconds No, actually uh you know uh there isn't a typical seasonality to that business itself. Uh so, you know, we we do end up 40:00 40 minutes you know seeing a more secular trend play out across the four quarters itself. Uh that's a that's a simple response to that business itself. DH you 40:07 40 minutes, 7 seconds want to take on the fourth point on the amotization side. What is the profitability there? Sorry. 40:13 40 minutes, 13 seconds Profitability is in line with company numbers itself because you're looking about the amotation value on the PDC acquisition. 40:22 40 minutes, 22 seconds What are you looking for? 40:23 40 minutes, 23 seconds I am referring to depre and amotization absolute number. PQ not much change. 40:30 40 minutes, 30 seconds Yeah, it cannot be enough. Now the small acquisition like 22 million pound acquisition probably the amotization cost will be 2 or2 million pound. 40:40 40 minutes, 40 seconds not only large number we not able to see the change because the charge which is coming in the balance sheet will be larger than the increase which is adding 40:48 40 minutes, 48 seconds so I don't think it will be matter but the number is around2 million pound for a 4year amortization 40:56 40 minutes, 56 seconds okay thank you thank you the next question is from the line of Sadha Agraal from AM securities 41:04 41 minutes, 4 seconds please go ahead yeah hi two questions from my Right. Uh congratulations first of all on a good executional margin. But on growth, how 41:13 41 minutes, 13 seconds would you rate this quarter versus your expectations at the beginning when you got into the quarter? 41:20 41 minutes, 20 seconds Uh no, thank you Shreddha for the question. Uh look uh Q3 was broadly in line with our expectations at the start of the quarter you know except for the 41:29 41 minutes, 29 seconds trimming of the tail accounts in the provider segment which we decided to bring forward in the quarter itself. 41:35 41 minutes, 35 seconds Okay. Um and if you look at the guidance um I know there's a seasonality in the collections business that we see every 41:41 41 minutes, 41 seconds year in Q4 but uh even if we exclude that uh there's a huge uh ask rate implication for 4K to get to the full 41:49 41 minutes, 49 seconds year guided number. So what gives us confidence of a 4% plus organic number in 4Q 41:56 41 minutes, 56 seconds despite the despite incremental impact of carving out the healthare business some portion of healthare business. 42:04 42 minutes, 4 seconds Yeah. So look, I think one of the things that we have we stated right at the outset right when we provided the uh 42:11 42 minutes, 11 seconds guidance at the beginning of FI26 was uh you know we expected a upward trajectory 42:18 42 minutes, 18 seconds in our Q growth uh through the course of the year itself and if you look at how this has played out from Q1 to Q2 to Q3 42:26 42 minutes, 26 seconds uh that we've pretty much delivered against the same itself. So we expect the same trend line to continue. we had line of sight to how this was going to 42:34 42 minutes, 34 seconds play out itself. So, uh you're you're right directionally this is building on on an improved growth growth in Q4 42:41 42 minutes, 41 seconds itself. But also what you what you also have seen now consistently in terms of how we have performed uh over the last 42:48 42 minutes, 48 seconds several quarters not just in this fiscal but before our guidance is based on a clear line of sight to the lower end of the uh uh lower end itself and the upper 42:58 42 minutes, 58 seconds end is based on a bunch of other variables which can create upside whether it's related to pipeline conversion and so on and so forth. Again 43:05 43 minutes, 5 seconds the guidance is uh conservative to the extent that it does not factor in any impact of macro. Uh so those are the 43:13 43 minutes, 13 seconds variables that that we have that we have considered and therefore you know with that context I I know the ask translates to a 4% Q growth at the lower end. You 43:23 43 minutes, 23 seconds know we we we feel comfortable with what we see at this point. 43:26 43 minutes, 26 seconds Right. And just one last question if I can. uh I mean the new deals that we've been announcing in the last one or two quarters do they also follow a staggered 43:34 43 minutes, 34 seconds ramp up schedule like the deals that we had been we had announced in 1 Q and 2Q in 1 Q and 4Q of 25 yeah 43:43 43 minutes, 43 seconds so it's a mixed mixed bag right so not every deal has a has a similar uh execution pattern right there are uh 43:50 43 minutes, 50 seconds there's one deal where we have got to finish the implementation first and then there is a ramp that happens on the part of that uh it's a implementation of a 43:58 43 minutes, 58 seconds contact a transformation platform uh as an as a case in point. There are a couple of other deals which follow a 44:05 44 minutes, 5 seconds standard more linear ramp uh that is there uh and and uh you know that's part of the winds that that that's reflected. 44:14 44 minutes, 14 seconds Great. Thanks and all the best. Thank you Shrea. 44:20 44 minutes, 20 seconds Thank you. The next question is from the line of Ankur Pan from Capital Services Limited. Please go ahead. 44:29 44 minutes, 29 seconds Uh hi uh am I audible? Yes ma'am. 44:33 44 minutes, 33 seconds Yeah. Hi Resh. Uh thank you uh for taking my question and congrats on good execution this quarter. Uh so when I'm 44:41 44 minutes, 41 seconds looking at your growth uh the overall number is good but it's primarily driven by the diverse industry. 44:47 44 minutes, 47 seconds Sorry to interrupt uncle could you please speak a little louder? 44:51 44 minutes, 51 seconds Yeah sorry. Uh so I'm saying that uh is it better? Yeah. 44:58 44 minutes, 58 seconds I'm saying that uh the growth was primarily driven by the diverse vertical and BFSI, healthcare, 45:06 45 minutes, 6 seconds CMT, all other verticals were not really that strong. Uh understand that some of the impact would be because of uh the account rationalization you have done. 45:17 45 minutes, 17 seconds But we also had the BPAS deal ramping up. So just wanted your thoughts on how you saw the quarter. Uh was this the expected outcome? 45:25 45 minutes, 25 seconds So I I think Shredda asked the same question right was the quarter in line with what we saw. Uh look u I I'll repeat the same comment first and then 45:33 45 minutes, 33 seconds talk a little bit about the diverse business itself. Uh broadly the the quarter was in line with our expectations. uh you know at the start 45:40 45 minutes, 40 seconds of the quarter barring the the trimming of the tail accounts that we talked about in the provider segment which we decided to move forward uh during the 45:49 45 minutes, 49 seconds quarter itself. Uh but I think one comment that I would state right at the outset there is you know the the don't 45:56 45 minutes, 56 seconds think of the just the diverse portfolio itself that's probably not the right way to look at the overall numbers. Uh one 46:03 46 minutes, 3 seconds of our main differentiators is that we run a uh you know a a range of segments a portfolio of different 46:12 46 minutes, 12 seconds businesses in which different segments have have push and pulls at various points in time in the year right so 46:19 46 minutes, 19 seconds example if you take a take retail there is a seasonal strength that is there but at the same time typically Q3 which is 46:28 46 minutes, 28 seconds the October to December quarter tends to be a weak quarter for our technology business because most of them are looking to take decisions in in Q1 46:37 46 minutes, 37 seconds itself right so you'll see a little bit of that those puts and takes playing out itself so that's why what I would recommend is look at this from an 46:44 46 minutes, 44 seconds overall portfolio standpoint because when you think about these on a year-on-year basis over a four quarter time horizon you'll see a much more u uh 46:54 46 minutes, 54 seconds you'll see a more representative view of the portfolio itself rather than just a quarteronquarter view. Yeah. 47:02 47 minutes, 2 seconds Uh understood. Uh and the other question is I'm sorry to get back to this question but uh you had so 47:09 47 minutes, 9 seconds hypothetically if the 10% uh cap does go through then what is what is the likely 47:17 47 minutes, 17 seconds impact on on our business uh in that case uh how much of it would be linked to credit card volumes or uh in that 47:25 47 minutes, 25 seconds sense I you know uh I I think at this point in time there is no foreseeable impact that 47:35 47 minutes, 35 seconds we end up seeing as as as as we as I stated earlier also at this point in time 47:42 47 minutes, 42 seconds this is a tweet uh there is a you know the the president tweets a bunch of things and details of 47:50 47 minutes, 50 seconds implementation compliance requirements etc are still awaited right and from a business perspective therefore I'm I'm not seeing any impact there's no 47:59 47 minutes, 59 seconds conversation that we're having with clients today on this topic at this stage at all. Um, 48:07 48 minutes, 7 seconds and as I said also earlier from a medium-term perspective, banks at this point in time and fintex are putting across their point of view to the 48:15 48 minutes, 15 seconds government since the uh APR has a wider linkage to the unit economics of the cards business itself. Right? So given 48:23 48 minutes, 23 seconds the fact that this can result in uh lower credit limits, tightening of underwriting uh when on one hand you 48:31 48 minutes, 31 seconds know the president also wants a lower uh interest rate environment to drive greater growth there may be a little bit of a paradox out there right so uh 48:41 48 minutes, 41 seconds that's creating the ambiguity uh in terms of how how this is the case. So that's why you know you know from at this point in time given the fact that 48:49 48 minutes, 49 seconds it's not featuring in any of our client conversations we're not seeing any business impact at all. 48:56 48 minutes, 56 seconds Thank you so much for clarifying. Just one last bookkeeping question. This PDC uh integration was for the entire quarter or part of the quarter for was for the entire quarter. 49:07 49 minutes, 7 seconds Sure. Thank you. All the best. Thank you. Thank you uncle. 49:12 49 minutes, 12 seconds Thank you. The next question is from the line of Shushan from Anantrati. Please go ahead. 49:19 49 minutes, 19 seconds Hi, I hope my voice is horrible. Yes. 49:24 49 minutes, 24 seconds So, thank you uh the opportunity and uh congrats on the good execution. Just a bookkeeping question uh regarding the tax rate right what we think will be the 49:33 49 minutes, 33 seconds uh steady state tax rate and when do you think these tax breaks will basically uh see the sunset? Uh that's basically the question as such. Thanks. 49:43 49 minutes, 43 seconds Oh, I think we looked into the budget which have been just now announced and I think there will be no choice for first 49:50 49 minutes, 50 seconds not to move to new regime because there is a mad credit available in the company and when I looked into the what the 49:58 49 minutes, 58 seconds going forward rate will be I think we see 1% plus or minus can be when we really going to go back in detailing but it seems to be that we should be within 50:06 50 minutes, 6 seconds the range of 1% higher or lower to the current guided rate which is 21%. 50:13 50 minutes, 13 seconds Thank you so much. 50:18 50 minutes, 18 seconds Thank you. The next question is from the line of Kiresh Pi from BOB Capital Markets Limited. Please go ahead. 50:26 50 minutes, 26 seconds Uh yeah, thanks for the opportunity. Uh Retesh. Uh if you look out over the various verticals uh over the next 12 50:33 50 minutes, 33 seconds months, how does the overall demand look to you compared to say how it was say 12 months back at the beginning of calendar year 2025? 50:42 50 minutes, 42 seconds That's my first question. 50:46 50 minutes, 46 seconds So, Kirish, uh I think from our vantage point, it's fairly broad-based, right? 50:52 50 minutes, 52 seconds Uh we still seeing demand across all our verticles. When I look at our pipeline and and the composition of the pipeline, 51:00 51 minutes uh I think we see almost a you know even distribution plus minus you know 3 to 5 percentage points in terms of the 51:08 51 minutes, 8 seconds distribution across different vertical segments itself. 51:12 51 minutes, 12 seconds I will only caveat it by putting one data point to you which is see as we are opening more and more growth engines 51:20 51 minutes, 20 seconds right what it does do is sometimes just by virtue of being in a starting up a a new growth engine example we got when we 51:29 51 minutes, 29 seconds acquired asensus we got the retail industry in the UK but now as we're trying to build up our footprint in retail in the US just by virtue of hands 51:37 51 minutes, 37 seconds and having hands and feet on the ground you'll start seeing pipeline out there that you weren't necessarily the beneficiary of in the past, right? Because the the focus was not there. 51:45 51 minutes, 45 seconds Similarly, if you take utilities in the UK, we are translating that capability into the US market and therefore we seeing additional pipeline that we otherwise would not have seen just 51:54 51 minutes, 54 seconds because you know the the focus was restricted to a few other verticals. So that's the only only additional data point that I would throw out there. But 52:01 52 minutes, 1 second if anything else uh UNBO is creating a significant amount of 52:08 52 minutes, 8 seconds traction in the marketplace, um I think people are looking for an alternative. 52:16 52 minutes, 16 seconds They want to move away from the traditional linear contracts. 52:22 52 minutes, 22 seconds Uh they want to have a tech first play. 52:26 52 minutes, 26 seconds They want somebody who can guide them in that journey. And I think all of those elements we play well to. So that's creating demand for both reactive as 52:36 52 minutes, 36 seconds well as places where we can proactively put proposals on the table. 52:41 52 minutes, 41 seconds Okay. Now that you're discussing UNBO uh your play that you have what percentage of revenue currently comes from uh 52:50 52 minutes, 50 seconds nonpnm or non-fixed price related which are seeds oriented towards say outcome based or any other new commercial structure. 53:01 53 minutes, 1 second So uh look uh while we will start providing some more details in terms of the some of these metrics going forward 53:09 53 minutes, 9 seconds uh you know as we get into the next fiscal year itself and and beyond uh what I will state is uh you know upwards 53:17 53 minutes, 17 seconds of uh 50% of our business today is nonlinear in construct. 53:23 53 minutes, 23 seconds Okay. Uh one last question bookkeeping uh I did I hear right when you say past due constitute were there for all the 53:30 53 minutes, 30 seconds three months of the quarter and uh tele uh got consolidated when 53:37 53 minutes, 37 seconds so tele is uh is integrated this quarter it it it's the current quarter that we are in Q4 but past you was last quarter 53:46 53 minutes, 46 seconds full of last quarter full of last quarter that's right okay thank you thank 53:53 53 minutes, 53 seconds Thank you. The next question is from the line of Manik Panera from JM Financial Capital Private Limited. Please go ahead. 54:02 54 minutes, 2 seconds Uh thanks for the opportunity. Uh I basically you mentioned about the fact that 54:10 54 minutes, 10 seconds through the course of X52 you've had uh significant shift both related to offing 54:17 54 minutes, 17 seconds and reaching with some of your larger customers. 54:21 54 minutes, 21 seconds uh would be great to get some perspective how much of that would have been a hedged growth and similarly a tremendous 54:28 54 minutes, 28 seconds margin. Uh and a related question to that one even through the post F56 you've spoken about an accelerated 54:36 54 minutes, 36 seconds growth victory through the course of the year. How should we be thinking about that rhythm from NFI 27 standpoint given the difficulty that we enjoy right now? 54:48 54 minutes, 48 seconds And the partner question was basically a classation question. Uh while you you've spoken about the number of drawings that 54:56 54 minutes, 56 seconds came through the party solutions acquisition. Uh from a on-site offshore revenue standpoint would be included 55:05 55 minutes, 5 seconds with offshore and nearshore or there will be some element of contribution even from onore contribution for that. 55:15 55 minutes, 15 seconds Yeah. So um I'll give you one data point to your first question right which is um our UK onshore headcount has come down 55:23 55 minutes, 23 seconds by about 40% over the last four quarters while the corresponding headcount in South Africa 55:31 55 minutes, 31 seconds about 50%. So that will give you a little bit of the trade-off that's playing out, you know, as you're optically shifting work from from a high 55:40 55 minutes, 40 seconds cost, high revenue geography towards a low cost, low revenue lower revenue geography, right? But that's one data point that will hopefully amplify what what we have seen while we continue to grow the business. 55:50 55 minutes, 50 seconds Any sorry to interrupt you, any sense on absolute sizes because unless we know what your US onore or UK onore headcount 55:59 55 minutes, 59 seconds was, we all we we can all keep on guessing. So because this would have had some relevant to that as well. So it's good 56:08 56 minutes, 8 seconds to be good to understand how much of like onshore to reassure shift may have impacted your energy performance. 56:16 56 minutes, 16 seconds I don't have those data points but you know in some sense I think the way to think about it is from our vantage point at least the way we're tracking this is 56:25 56 minutes, 25 seconds we know that some of these things will continue to be opportunities that our clients will potentially look to take advantage of especially when you look at 56:32 56 minutes, 32 seconds the the economic condition of markets like the UK uh right and given the macro out there uh so the fact that you have a 56:40 56 minutes, 40 seconds muted economic growth the fact that there's high higher label labor costs I think it's forcing customers to continue to do that. So, you know, I know where 56:48 56 minutes, 48 seconds you're going with that question in terms of trying to model it for what this might play out. I think it's very hard to say because sometimes the regulatory 56:55 56 minutes, 55 seconds things regulatory situation actually might counterintuitively force you to continue to keep the work uh in the market whether it's in the UK or in the 57:04 57 minutes, 4 seconds US. For instance, in Australia, we have got a couple of customers where the work has to be done onshore in in in Australia itself, right? As a as a case 57:12 57 minutes, 12 seconds in point for regulatory reasons. So uh look that's been our strength as a business right where we can deliver this work end to end we understand what it 57:19 57 minutes, 19 seconds takes to work in regulated markets and and uh do that but at the same time the way to think about it is 80% of our 57:27 57 minutes, 27 seconds gross hiring is offshore and nearshore locations that we don't expect to change which means to your second question that 57:34 57 minutes, 34 seconds you asked uh you will continue to see just as you saw uh uh you know a 5743 57:42 57 minutes, 42 seconds mix you will continue to see that continue to trend uh you know in the same direction that directionally in the 57:50 57 minutes, 50 seconds same way that it has been over the last 6 to 8 quarters itself. Your third question was related to PDC. uh we already have active interest from 57:57 57 minutes, 57 seconds several of the PDC logos u towards uh doing work in South Africa uh you 58:06 58 minutes, 6 seconds know so for them what what what is a big benefit is the fact that uh with the first source uh portfolio and the 58:14 58 minutes, 14 seconds footprint they now have access to many more locations than just being in uh in Scotland itself which is where they were headquartered right so I think that's 58:23 58 minutes, 23 seconds that's an opportunity that that I think we we see as a competitive advantage for the for the PDC portfolio. 58:31 58 minutes, 31 seconds Sure. And the last one was just clarification question with regards to some of the rationalization that you spoken about on the provider side. If I 58:39 58 minutes, 39 seconds understand correctly, when the business was used to have a higher provider mix, 58:45 58 minutes, 45 seconds the margins of of or the or the segment margins for healthcare used to be higher and then over course of time when we 58:54 58 minutes, 54 seconds finish up the fair business uh the margins have got. So just trying to understand in that regard when you're 59:01 59 minutes, 1 second talking about rationalization of provider uh uh accounts how does that essentially in terms of impacting margin? 59:14 59 minutes, 14 seconds Yeah, but you know the the other way to think about it is the the accounts that we are rationalizing are essentially low growth low margin accounts right so yeah 59:22 59 minutes, 22 seconds it'll have a bearing on you know improving the margins for the for the provider portfolio itself but given the fact that we're talking of a smaller 59:29 59 minutes, 29 seconds base I mean I think that's one way to think about it in terms of you know is it going to have a material impact probably not but uh you know you'll 59:38 59 minutes, 38 seconds start you'll see some of this playing out in the next you know next two to three quarters also as we continue to you execute on this uh itself. 59:46 59 minutes, 46 seconds Okay. The last clarification question with regards to this onshoring to onore to reassure shift was that limited to 59:54 59 minutes, 54 seconds probably two of your large UK customers or and and and how should we be thinking about segmental margins in that regard? 1:00:03 1 hour, 3 seconds I don't want to comment on specific clients but what you will see is that uh a bunch of our UK as well as US customers are very interested in South 1:00:12 1 hour, 12 seconds Africa as a location and particularly Cape Town and so we continue to uh you know benefit from that being one of the 1:00:19 1 hour, 19 seconds largest uh local employers out there right so I think you're seeing this more broad-based than just restricted to uh you know one or two clients 1:00:27 1 hour, 27 seconds great and thank you also all the best thank Thank you very much ladies and 1:00:36 1 hour, 36 seconds gentlemen. We will take that as a last question. I would now like to hand the conference over to Mr. Rateshadani for closing comments. Over to you sir. 1:00:47 1 hour, 47 seconds Thank you all for uh joining the call and for your questions. Um I want to close with a few final comments. 1:00:54 1 hour, 54 seconds Our sales engine is working well. uh we had five large deal wins in Q3 which now is the fourth straight quarter of four 1:01:01 1 hour, 1 minute, 1 second or more large deals. At the same time, our deal pipeline continues to remain robust over a billion dollars. Our 1:01:08 1 hour, 1 minute, 8 seconds execution is on track as you can see uh with with the fact that we've executed well on improving our margins. Our EBIT margins have increased by 80 basis 1:01:17 1 hour, 1 minute, 17 seconds points over the last four quarters. Our cash conversion has been strong. Our OCF to EITA for the nine months of the year 1:01:24 1 hour, 1 minute, 24 seconds is 86% and our free cash flow to adjusted PAT is 159%. 1:01:30 1 hour, 1 minute, 30 seconds Our long-term aspirations continue to remain intact. As I stated in my opening remarks, we see our constant currency 1:01:37 1 hour, 1 minute, 37 seconds growth, revenue growth for FI26 uh in a 14 1.5 to 15% range including the recent acquisitions that place us in 1:01:46 1 hour, 1 minute, 46 seconds the top desile for the industry. And we also remain laser focused on taking our EBIT margin to the 14 to 15% brand over 1:01:53 1 hour, 1 minute, 53 seconds the next 3 to four years. That's all from our side and we look to interacting with you again in the next quarter call. Thank you all. 1:02:02 1 hour, 2 minutes, 2 seconds Thank you. On behalf of First Solutions Limited, that concludes this conference. Thank you all for joining us today.