HCL Technologies Ltd — Q4 FY26

HCL Technologies Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=J0RtGft757U Published: 3 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to HCL Tech's Q4 and annual FY26 earnings conference call. 0:10 10 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:18 18 seconds concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. 0:30 30 seconds I now hand the conference over to Mr. 0:32 32 seconds Nitan Ma, head investor relations. Thank you and over to you sir. 0:38 38 seconds Thank you Darwin. Good morning and good evening everyone. A very warm welcome to HCL Tech's Q4 and annual FI26 earnings 0:45 45 seconds call. We have with us Mr. C. Vijay Kumar CEO and managing director at CLTech, Mr. 0:52 52 seconds Shivalia, chief financial officer along with the broader leadership team to discuss the performance of the company during the quarter followed by a Q&A. In 1:01 1 minute, 1 second the course of this call, certain statements that will be made are forward-looking which involve a number of risks, uncertaintities, assumptions, 1:08 1 minute, 8 seconds and other factors that could cause actual results to differ materially from those in such forward-looking statements. 1:15 1 minute, 15 seconds All forward-looking statements made herein are based upon information presently available to the management and the company does not undertake to 1:23 1 minute, 23 seconds update any forward-looking statements that may be made in the course of this call. In this regard, please do review the safe harbor statements in the formal 1:30 1 minute, 30 seconds investor release documents and all the factors that can cause the difference. Over to you CVK. 1:37 1 minute, 37 seconds Thank you Nitan. Good evening, good afternoon and good morning to all of you. Thank you for joining HCL Tech Q4 1:45 1 minute, 45 seconds and FY26 earnings call. This year marks 50 years of HCL group. 50 years of 1:52 1 minute, 52 seconds building, reinventing, and leading and giving back. It's the start of the next one. The next 50 starts now. It's 2:00 2 minutes fitting that as we mark this milestone, uh HCL Tech has been named to Fortune's world's most admired companies 2026 list. 2:11 2 minutes, 11 seconds Coming to business performance, FY26 unfolded with an uncertain outlook. Uh tariff volatility remained a persistent 2:20 2 minutes, 20 seconds uncertaintity. Discretionary spending contracted in traditional areas but emerged in new pockets and client 2:27 2 minutes, 27 seconds behavior reflected familiar patterns of cost takeout initiatives coupled with accelerated adoption of AIEL 2:35 2 minutes, 35 seconds productivity gains. Notably, AI momentum remains strong with nearly all deals incorporating an AI or 10AI component. 2:46 2 minutes, 46 seconds Given this backdrop, the year marks the third consecutive year of HCL techs uh 2:53 2 minutes, 53 seconds likely to deliver the highest organic revenue growth amongst scale players. I sincerely thank all HCL techies for 3:01 3 minutes, 1 second their dedication and outstanding performance. Coming to our Q4 performance, our revenue for the quarter was $3.7 billion, 3:11 3 minutes, 11 seconds decline of 3.3% quarteron quarter and an increase of 2.4% yearonear. Our services 3:18 3 minutes, 18 seconds business declined.1% sequentially and an increase of 4.2% year-on-year. 3:26 3 minutes, 26 seconds Our software business declined 28% sequentially and 14% on a year-on-year basis. 3:33 3 minutes, 33 seconds Advance A revenue for the quarter stood at 155.1 million marking a 6.1% QoQ 3:41 3 minutes, 41 seconds growth. Our operating margin for the quarter came at 16.5% and it would be 17.7% excluding restructuring costs. 3:53 3 minutes, 53 seconds Apart from sequential decline due to seasonality in the software business, we saw delay in procurement decisions in 4:00 4 minutes the month of March that resulted in revenue coming below our expectations. 4:05 4 minutes, 5 seconds In case of services, our performance during the quarter came in at the lower end of our expectations. 4:12 4 minutes, 12 seconds This was primarily due to reduction in discretionary spending on telecom vertical 4:20 4 minutes, 20 seconds as well as discontinuation of the two SAP programs. Uh some of this became 4:27 4 minutes, 27 seconds visible only towards end of the quarter mostly in early March. While the annuity 4:34 4 minutes, 34 seconds programs in the telecom vertical uh performed as per expectations, the discretionary spend both in digital 4:42 4 minutes, 42 seconds business and engineering services was cut by select telecom customers specifically two large clients in the US 4:51 4 minutes, 51 seconds during the quarter. We expect the impact to continue for rest of the calendar year as well which is accounted for in the guidance we will provide. 5:01 5 minutes, 1 second In FY26 we reported a consolidated revenue of 14.7 billion an increase of 3.9% in 5:09 5 minutes, 9 seconds constant currency. All growth rates referred are in constant currency. This growth includes growing contribution 5:17 5 minutes, 17 seconds from advanced AI and AI offerings. Our operating margin for the full year was 17.2, a dip of 107 basis points compared 5:27 5 minutes, 27 seconds to last financial year. Excluding the restructuring cost, our fullear margins were 17.9, 5:34 5 minutes, 34 seconds down 40 basis points on a year-on-year basis. 5:39 5 minutes, 39 seconds In FY26, our services business achieved a growth of 4.8%. 5:45 5 minutes, 45 seconds The performance was driven by IT and business services which reported an increase of 3.7% 5:52 5 minutes, 52 seconds and engineering and R&D services which recorded growth of 9.8%. 5:57 5 minutes, 57 seconds Hriel software revenue stood at $1.4 billion and annual recurring revenue at 6:03 6 minutes, 3 seconds $1.05 billion a decline of 4.1% and.5% respectively. 6:10 6 minutes, 10 seconds Our annualized advance a revenue for the fiscal reached $620 million after two quarters of strong booking. 6:20 6 minutes, 20 seconds New deal booking for the quarter moderated to $1.93 billion. 6:26 6 minutes, 26 seconds Bookings for the fiscal was good. TCV of net new bookings for the year clocked $9.3 billion, same as last year. uh in 6:35 6 minutes, 35 seconds spite of some of the AI deflation that you see in the TCV net booking. 6:42 6 minutes, 42 seconds As we close the quarter and fiscal year, our AI strategies translating into deeper client engagement and clear 6:49 6 minutes, 49 seconds market leadership. Momentum across our advanced AI offerings and overall AI portfolio remains strong, reflecting the 6:58 6 minutes, 58 seconds strength of our early bets and our continued focus on AI that scales from experimentation to measurable business 7:06 7 minutes, 6 seconds impact. Our ambition is to be the best AI solutions company leveraging our engineering pedigree. Our AI growth 7:15 7 minutes, 15 seconds strategy is based on one proactive transformation of our services. Two, building differentiated IP that help 7:23 7 minutes, 23 seconds clients scale AI adoption within the enterprises. Uh, three, expanding into new AIEL services. Four, strengthening 7:31 7 minutes, 31 seconds our AI partnerships. And five, grooming our AI talent. 7:37 7 minutes, 37 seconds If you look at our client categories, we've grown them across the board. 7:41 7 minutes, 41 seconds Starting with an increase of one for clients greater than $100 million, an increase of eight $50 million clients, 7:49 7 minutes, 49 seconds and all the way at $1 million, we added 28 clients. All 100 million and 50 million client additions are through 7:57 7 minutes, 57 seconds organic growth. This is a great proof of our AI strategy and the relevance of AI 8:04 8 minutes, 4 seconds propositions and most importantly the client relevance which is helping us increase wallet share in a number of our 8:14 8 minutes, 14 seconds top clients. Let me share an update on each one of these five AI uh strategic 8:21 8 minutes, 21 seconds pillars. Uh starting with proactive transformation of our services. Uh we have deployed AI across delivery and 8:29 8 minutes, 29 seconds operations to augment velocity, quality and efficiency across delivery workflows. Our service transformation 8:36 8 minutes, 36 seconds platform AI force is now deployed across 75 distinct accounts. This continued momentum is translating into large and 8:45 8 minutes, 45 seconds strategic deal wins that demonstrate the tangible value of our AI capabilities. 8:52 8 minutes, 52 seconds Beyond delivering measurable, scalable AI impact for our clients, we are also transforming internally towards an 8:59 8 minutes, 59 seconds autonomous zerorion enterprise by reimagining core operations and employee experiences. 9:06 9 minutes, 6 seconds For example, Lumi, our enterprise AI agent, enables seamless employee interactions and instant query 9:13 9 minutes, 13 seconds resolution and talent navigator, our talent acquisition platform, which I talked about last quarter. We released 9:21 9 minutes, 21 seconds our responsible AI transparency report, the first among gsis, outlining the progress we've made in embedding 9:28 9 minutes, 28 seconds responsible AI across our organization and client engagements. The report details our governance model, how we 9:35 9 minutes, 35 seconds operationalize accountability, fairness, security, privacy and transparency 9:42 9 minutes, 42 seconds aligned with global standards. On the second strategic pillar of building differentiated IP which is AI force and 9:50 9 minutes, 50 seconds all industry AI solutions, a key focus of our strategy is building differentiated IP that help clients move from experimentation to scaled impact. 10:00 10 minutes In this fiscal, we have filed 38 patents across advanced AI technologies. In parallel, we continue to broaden our AI 10:09 10 minutes, 9 seconds services portfolio to meet industry specific needs. 10:14 10 minutes, 14 seconds This quarter, we launched two new AI force SKUs for SAP and METTE. We also 10:20 10 minutes, 20 seconds unveiled 2.0 zero release of A force which further strengthens its agentic capabilities with a sharper focus on 10:28 10 minutes, 28 seconds extensibility, modularity, enterprisegrade governance and interoperability. 10:34 10 minutes, 34 seconds This was followed by Aforce 2.1 which enhanced platforms administrative controls and enriched contextual 10:43 10 minutes, 43 seconds responses through knowledge graphs. Our existing vertically aligned industry AI solutions are gaining strong market 10:51 10 minutes, 51 seconds traction and we continue to invest in building scalable repeatable offerings with three currently under development and more in our pipeline. 11:02 11 minutes, 2 seconds Expanding into the third pillar which is AI new AIE services in physical AI we unveiled vision X 2.0 our AJI platform. 11:12 11 minutes, 12 seconds The release introduces a multimodel AI engine, LLM based surveillance agent, 11:18 11 minutes, 18 seconds vertical specific use cases, zero-ouch architecture, zero-ouch provisioning and a scalable edgetocloud design. Vision X 11:27 11 minutes, 27 seconds integrates with Nvidia Metropolis and supports flexible edge infrastructure through Dell and HPE. In physical AI, we 11:36 11 minutes, 36 seconds also launched kinetic AI.DC DC Ops integrated with AI factory. Under AI 11:42 11 minutes, 42 seconds advisory services, we hosted 123 new engagements in our AI labs in Q4 with a 11:49 11 minutes, 49 seconds notable increase in CEO and CEO transformation programs. These engagements are increasingly focused on 11:56 11 minutes, 56 seconds agentic AIdriven enterprise transformation, value stream re-engineering and workforce transformation. 12:03 12 minutes, 3 seconds I want to mention two of the many advanced AI deals we won. A global technology major selected HCL Tech for 12:12 12 minutes, 12 seconds another AI factory program worth over hund00 million. A Hfield Tech solution will fasttrack the client requirements 12:20 12 minutes, 20 seconds of building and operating next generation AI data centers to supporting cuttingedge AI workloads using latest 12:29 12 minutes, 29 seconds GPU technologies. A global semiconductor major selected HCltech AI engineering 12:35 12 minutes, 35 seconds services to support ASIC development across multiple advanced node chips strengthening its position in physical AI. 12:46 12 minutes, 46 seconds I would also encourage you to view some of the client success stories we've delivered in the new advanced AI services showcased through our editorial 12:55 12 minutes, 55 seconds series with Wired magazine titled pioneers of enterprise AI available on our website homepage. Coming to the 13:03 13 minutes, 3 seconds fourth pillar AI partnerships across the entire technology stack. Our ecosystem continues to be a force multiplier for 13:10 13 minutes, 10 seconds innovation and scale. We announced an expanded collaboration with Google Gemini, leveraging Gemini enterprise and 13:17 13 minutes, 17 seconds Gemini models to build custom AI agents for global clients while strengthening security and collaboration through 13:24 13 minutes, 24 seconds Google workspace. HCLTech was selected by AWS as a global capability center 13:30 13 minutes, 30 seconds partner with AWS under initiative and also named an official launch partner 13:37 13 minutes, 37 seconds for AWS European sovereign cloud. uh a new independent cloud for Europe. 13:43 13 minutes, 43 seconds At NVIDIA GTC 2026, Nvidia highlighted HCL Techch as a key partner using Cosmos 13:50 13 minutes, 50 seconds to accelerate physical AI training and video analytics, the only gsi referenced in this context. We recently hosted a 13:59 13 minutes, 59 seconds virtual hackathon focused on agentic AI to accelerate AI innovation in partnership with Microsoft. In the AI 14:06 14 minutes, 6 seconds security space, we expanded our partnership with CrowdStrike with the launch of continuous threat exposure management services, enabling continuous 14:15 14 minutes, 15 seconds intelligenceled identification, prioritization, and remediation of exposure across endpoints, cloud, identity, applications, and data. 14:26 14 minutes, 26 seconds We continue to bring academia and industry together through partnerships like MIT. Recently, we expanded our 14:33 14 minutes, 33 seconds collaboration with MIT Media Lab to include an applied AI research internship program and an Agentic AI 14:40 14 minutes, 40 seconds hackathon, building on a shared ambition to advance agentic AI innovation with real world impact. Lastly, our 14:48 14 minutes, 48 seconds partnership with OpenAI is delivering measurable impact. We're helping clients scale enterprise AI operating systems 14:57 14 minutes, 57 seconds and agentic workflows through our dedicated OpenAI enterprise consulting and OpenAI badged agentic engineering teams working in close collaboration with OpenAI forward deployed engineers. 15:09 15 minutes, 9 seconds Recent examples include two large retailers in Europe and US. More partnerships to come in the coming 15:17 15 minutes, 17 seconds weeks. On the fifth pillar of developing our AI talent, we continue to expand our talent pipeline. To date, we've trained 135,000 employees in Genai Technologies. 15:29 15 minutes, 29 seconds Additionally, 11.8K AI builders and more than 700 plus black bills for service transformation have been trained and 15:37 15 minutes, 37 seconds certified. Taken together, these outcomes reflect not just strong quarterly execution but a strategy that 15:44 15 minutes, 44 seconds is clearly resonating with clients as they move decisively into an AI accelerated future. Coming to bookings, 15:53 15 minutes, 53 seconds bookings in Q4 were well balanced across service lines, geographies and verticals. calling out a few large deals 16:01 16 minutes, 1 second other than the large AI factory deal for a global tech major and AI engineering work we're doing for a global semiconductor major which I mentioned as 16:10 16 minutes, 10 seconds a part of advanced AI deals and US-based biioarma major selected HCL's physical 16:16 16 minutes, 16 seconds AI solution trace to strengthen inventory visibility and control the engagement will enable the client to 16:24 16 minutes, 24 seconds improve operational efficiency accuracy enhance supply chain maintain resilience and create a scalable digital 16:31 16 minutes, 31 seconds foundation to support its broader smart manufacturing transformation program. A US-based global medtech company selected 16:39 16 minutes, 39 seconds HfieldTech to set up a state-of-the-art cyber security center of excellence by leveraging its nextgen cyber security 16:47 16 minutes, 47 seconds fusion center and AI force.cure platform. HCltech will help establish an 16:54 16 minutes, 54 seconds adaptive security posture, secure connected health devices, and support regulatory compliances across a client's 17:02 17 minutes, 2 seconds global value chain. A US subsidiary of a global memory semiconductor group that powers next generation AI factories and 17:10 17 minutes, 10 seconds hypers scale data centers worldwide selected Hiltech to provide end-to-end firmware development and sustenance services helping strengthen the 17:19 17 minutes, 19 seconds reliability performance and scalability of clients high performance storage platforms. HLTech's advanced engineering services will strengthen the client's 17:28 17 minutes, 28 seconds enterprisegrade storage portfolio. A Europe based industrial engineering and manufacturing company selected HCL Tech 17:36 17 minutes, 36 seconds to modernize its IT infrastructure and application landscape. Heltech will leverage its AI force platform to 17:43 17 minutes, 43 seconds improve productivity and agility across the client's organizations technology environment. A few other business 17:50 17 minutes, 50 seconds updates in the India AI summit. We were privileged to host the honorable prime minister of India Sri Narendra Modi uh 17:59 17 minutes, 59 seconds to our booth where he engaged with us to explore how HCL Techch is advancing AI for people, planet and progress. 18:07 18 minutes, 7 seconds HLTech is the only service provider rated as customers choice across all six published Gartner voice of the customer 18:16 18 minutes, 16 seconds assessments for IT services. We signed a definitive agreement to acquire Finergic Solutions, a boutique wealth consulting 18:23 18 minutes, 23 seconds firm headquartered in Singapore. Fineric will enhance our financial services portfolio, adding specialized capabilities in core banking and wealth 18:31 18 minutes, 31 seconds management transformation. This quarter, we also completed the acquisition of WBI, a data intelligence AI offering to 18:39 18 minutes, 39 seconds augment our data offerings in our software space. We are also recognized as one of the world's most ethical 18:46 18 minutes, 46 seconds companies by Ethisphere for the third consecutive year. We're also included in S&P global sustainability yearbook for 18:54 18 minutes, 54 seconds the fourth year in a row. Coming to our pipeline market trends and business outlook, our pipeline remains robust and 19:02 19 minutes, 2 seconds broad-based across segments, verticals, and regions with AI increasingly integral to every deal conversation. 19:09 19 minutes, 9 seconds While we continue to sim see demand in traditional buying motions through cost takeout, vendor consolidation and 19:16 19 minutes, 16 seconds modernization dominate the deal mix. We are continuing to invest in AI aligned go to market advanced AI offerings and 19:24 19 minutes, 24 seconds AIE service transformation to exploit when client spend ramps up on the AI transformation program. If you look at 19:31 19 minutes, 31 seconds the industry today and categorize it, 40% of the industry runs the risk of being disrupted by AI and can shrink 3 19:39 19 minutes, 39 seconds to 5% kaggger for a few years and can eventually be 25% of the enterprise spend. This spend is what I would call 19:48 19 minutes, 48 seconds as AI disrupted and is in traditional areas like application development support, traditional infrastructure 19:55 19 minutes, 55 seconds operations, customer support etc. Then there is a 55% of the industry that can take advantage of AI like data, cyber 20:04 20 minutes, 4 seconds security, cloud uh and grow healthy at about 10% plus and grow its share of enterprise spend marginally. We would 20:13 20 minutes, 13 seconds call this as AI amplified or AI augmented services. Finally, there is a market that is AI native uh currently at 20:22 20 minutes, 22 seconds 5% of the market growing at 30%. And can become 20% plus of the market in 5 20:28 20 minutes, 28 seconds years. This includes AI factory, AI engineering, custom silicon engineering and many other advanced AI services. Our 20:38 20 minutes, 38 seconds AI growth strategy is customized to to align to the differential growth rates of each of these three categories that I 20:46 20 minutes, 46 seconds mentioned. We believe it will help us grow faster than the market and the 3 to 5% uh deflation that I mentioned uh in 20:56 20 minutes, 56 seconds the AI disrupted services uh based on the mix of services that we have it would translate to 2 to 3% uh for our portfolio. 21:08 21 minutes, 8 seconds overall geopolitical escalations and a rapidly evolving situation that limits everyone from having a very definitive 21:15 21 minutes, 15 seconds view of things that will evolve over the next 12 months. We are seeing some of this impact already uh hurting the 21:22 21 minutes, 22 seconds growth outlook in Europe. While there are no broad macro challenges in North America, while our business remains 21:29 21 minutes, 29 seconds strong, two client specific challenges in America's would have close to 50 basis points growth headwind in FY27. 21:38 21 minutes, 38 seconds These customers are going through business challenges which are not related to the specifically to the macroeconomic conditions and have 21:46 21 minutes, 46 seconds decided to scale down their IT budget significantly. 21:50 21 minutes, 50 seconds For the software segment, we continue to work on pivoting the business to more and more subscription and steady revenue 21:57 21 minutes, 57 seconds streams away from the perpetual license sale. On the margin front, underlying profitability of our portfolio is 22:04 22 minutes, 4 seconds resilient and the EBIT adjusted margins uh margins adjusted for restructuring are indicative of the same. While we 22:13 22 minutes, 13 seconds work through the specific growth challenges of FY27, the benefit of currency depreciation would be used to continue our 22:21 22 minutes, 21 seconds investments in sales and genai capabilities. 22:24 22 minutes, 24 seconds Now coming to guidance, our guidance for financial year 27 is as follows. The revenue growth guidance for the full 22:32 22 minutes, 32 seconds year is 1 to 4% in constant currency and 1.5 to 4.5% for services. EBET margin 22:40 22 minutes, 40 seconds guidance is 17.5 to 18.5%. 22:46 22 minutes, 46 seconds At the lower end, this assumes continued soft discretionary spend environment and the two clients that I referenced ramd 22:54 22 minutes, 54 seconds down beyond the planned ramdowns. At the midpoint, the two clients land at planned revenue and discretionary spend trajectory remaining constant. 23:06 23 minutes, 6 seconds At the higher end, moderate pickup in discretionary spend and couple of large deals materializing in the first half. 23:14 23 minutes, 14 seconds By the way, this guidance does not include the two acquisitions. The telecom solutions group from uh HPE that we announced to carve out and Jasperoft. 23:26 23 minutes, 26 seconds Both of these are not closed yet. They are delayed due to US government approval. uh that's 23:34 23 minutes, 34 seconds delayed due to the US government shutdown of the specific departments. 23:39 23 minutes, 39 seconds Now I would request ship to walk you through more details on our financial numbers. 23:45 23 minutes, 45 seconds Thank you CK. Good morning, good afternoon and good evening to all of you. Thank you for joining our Q4 financial year 26 earnings call. 23:55 23 minutes, 55 seconds Let me walk you through our financial performance for the quarter first. Uh starting with the revenue performance 24:02 24 minutes, 2 seconds please note all the growth numbers quoted are in constant constant currency unless noted otherwise. 24:10 24 minutes, 10 seconds Total revenue for the quarter is dollar 3,682 million a drop of 3.3% 24:19 24 minutes, 19 seconds Q1Q but with a growth of 2.4% 4% yearonear. 24:25 24 minutes, 25 seconds Services revenue for the quarter came in at dollar3,386 million, a drop of.1% 24:33 24 minutes, 33 seconds quarter on quarter and a growth of 4.2% year on year. The ITbased services 24:40 24 minutes, 40 seconds grew.1% quarter on quarter and 4.3% yearonear. 24:46 24 minutes, 46 seconds The ERS segment dropped by 1.3% quarteron quarter and grew by 3.8% year 24:55 24 minutes, 55 seconds on year. Software revenue for the quarter is dollar 307 million, a drop of 28.1% 25:03 25 minutes, 3 seconds quarteron quarter and a drop of 14.1% yearonear. 25:09 25 minutes, 9 seconds In terms of geographies during the quarter, USA grew at 4.9% yearonear. 25:17 25 minutes, 17 seconds Europe dropped 2.9% yearonear while rest of the world ro grew 16.6% 25:25 25 minutes, 25 seconds yearonear and India reported an increase of 5.3% yearonear. In terms of verticals, our Q4 25:34 25 minutes, 34 seconds growth was growth based with six out of seven verticals resisting yearon-year growth. Growth was led by technology and 25:43 25 minutes, 43 seconds public services up 17.8% yearonear and 10.7% yearonear respectively. 25:52 25 minutes, 52 seconds In terms of crime, our relentless focus on services serving our customer has helped us to grow our client 26:01 26 minutes, 1 second relationship on a yearon-year basis. We added one client in the 100 million 100 million category, eight clients in the 26:10 26 minutes, 10 seconds 50 million category and 11 in the 20 million category and 26 in the 10 million category. Uh in terms of 26:18 26 minutes, 18 seconds profitability, our EBIT is $67 million at 16.5% of revenue. If you were to 26:28 26 minutes, 28 seconds adjust the restructuring expense of 120 of 120 basis point this quarter, our Q4 26:35 26 minutes, 35 seconds margins are at 17.7% just 20 basis point down year on year. 26:43 26 minutes, 43 seconds Net income for the quarter is dollar486 million at 13.2% of revenue. Uh in terms 26:52 26 minutes, 52 seconds of margin walk software in software business due to seasonality and delayed client decisions 27:01 27 minutes, 1 second making 181 basis point drop in margins at the company level. 27:06 27 minutes, 6 seconds Services margins dropped by 27 basis point quarter quarter on quarter due to second cycle of increments in this 27:15 27 minutes, 15 seconds quarter which had an impact of 45 basis point. Restructuring expense had an 27:22 27 minutes, 22 seconds incremental impact of negative 41 basis point and higher bed debt provision had an impact of 19 basis point and project 27:31 27 minutes, 31 seconds ascent helped us to obtain 13 basis point gain during the quarter and forex had a positive impact of 65 basis point. 27:41 27 minutes, 41 seconds Uh now moving on to our financial performance for April 26. Here again please note that all the growth numbers 27:50 27 minutes, 50 seconds quoted are in constant currency unless noted otherwise. 27:55 27 minutes, 55 seconds Starting with the revenue performance total revenue for the year is $114,664 million a growth of 3.9% yearonear. 28:08 28 minutes, 8 seconds Coming to the services side, services revenue came in at dollar3,315 million, a growth of 4.8% 28:17 28 minutes, 17 seconds year on year. Software revenue for the year is dollar1,395 million, a D growth of 4.1% yearonear. 28:29 28 minutes, 29 seconds Uh moving on to the profitability, our EBIT is at 2526 28:36 28 minutes, 36 seconds million at 17.2% of revenue which is down by 107 basis point yearon-year 28:44 28 minutes, 44 seconds basis. Adjusted to for restructuring our EIT margins for FY26 stood at 17.9% down 42 basis point versus last year. 28:56 28 minutes, 56 seconds Project Ascent has been instrumental in helping us stabilize our margins as we navigate a tough FY26 with uncertain demand environment. 29:06 29 minutes, 6 seconds Net income for the year is at dollar1,959 million at 13.3% of revenue. EIT and net 29:16 29 minutes, 16 seconds income exclude the one-time impact of new labor codes including the same FY26 29:22 29 minutes, 22 seconds EIT is at 2,417 million and net income is at dollar 29:29 29 minutes, 29 seconds $1,877 million. Moving on to return on invested capital ROIC. 29:38 29 minutes, 38 seconds Our ROIC continues to improve thanks to our ongoing focus on profitability and efficient capital management. 29:47 29 minutes, 47 seconds The last 12 months ROIC is at 40.3% for the company, up 235 basis point year and 29:57 29 minutes, 57 seconds services ROIC now is at 4 47% up 155 basis point year on year. software 30:05 30 minutes, 5 seconds continued to improve it with ROIC at 42.6% up 275 274 basis point year. Uh in terms 30:15 30 minutes, 15 seconds of cash generation over the last 12 months, operating cash flow is at 2.25 30:21 30 minutes, 21 seconds billion with free cash flow amounted to 2.09 billion. Operating cash flow to net income conversion is healthy at 115 15%. 30:33 30 minutes, 33 seconds And free cash flow to net income is at 107%. 30:37 30 minutes, 37 seconds Our balance sheet continues to strengthen with gross cash at dollar 3.53 billion and net cash at dollar 3.51 million. 30:48 30 minutes, 48 seconds uh our DSO is currently at 84 days increased by 3 days quarter on quarter. 30:56 30 minutes, 56 seconds In terms of EPS and dividend uh for our shareholder the diluted EPS for the last 31:02 31 minutes, 2 seconds 12 months came in at rupees 64.01 01 which is down 0.1% yearonear including 31:11 31 minutes, 11 seconds the impact of labor new labor code the diluted EPS is at INR 61.36 31:18 31 minutes, 18 seconds the board has declared an intimid rupees 24 per share for the quarter the report 31:25 31 minutes, 25 seconds date is 25th of April April 26 and the payment of the same shall be on 5th of May 31:34 31 minutes, 34 seconds that brings our last 12 months pay out to rupees 60 per share effectively distributing 97.6% 31:43 31 minutes, 43 seconds of our net income. Now the capital allocation policy uh over the last 5 years since 31:50 31 minutes, 50 seconds introducing our capital allocation policy in FY22 we have paid out 89.9% 31:59 31 minutes, 59 seconds of our net income to our to our shareholders. 32:02 32 minutes, 2 seconds This translates into a record USD8.5 billion in cashbacked shareholders. Uh 32:10 32 minutes, 10 seconds we are pleased to share that the board has extended the capital allocation policy today for a period of another 5 32:17 32 minutes, 17 seconds years. In line with our previous policy, we are committed to return at least 75% of our net income back to the shareholders over the next five years. 32:29 32 minutes, 29 seconds Uh that's all from my side for now and I would like to hand over the session to to our moderator for for a Q& Q&A session. Thank you. 32:40 32 minutes, 40 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 32:48 32 minutes, 48 seconds telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. 32:59 32 minutes, 59 seconds You are also requested to please restrict yourselves to one question only per participant. If you have any further questions, you may rejoin the queue. 33:08 33 minutes, 8 seconds Ladies and gentlemen, we will now wait for a moment while the question queue assembles. 33:15 33 minutes, 15 seconds Our first question comes from the line of Abhishek Patak from Motila Losal Financial Services Limited. Please go ahead. Yeah. Hi, thank you for the opportunity. 33:23 33 minutes, 23 seconds Am I audible? Yes, you're audible. 33:27 33 minutes, 27 seconds Yeah. Hi. Hi, Dean. uh so I think my first question is on uh the deflation number that uh that that CVK referenced. 33:33 33 minutes, 33 seconds So so CVK on the 3 to 5% deflation estimate that we have what is the the risk that this number kind of keeps 33:40 33 minutes, 40 seconds keeps expanding over let's say the next two to three years as as model capabilities improve and kind of you know more and more of uh what IT 33:48 33 minutes, 48 seconds services uh you know kind of provides comes under the gambit of of of what GI can do. Um that's the first question. Uh 33:55 33 minutes, 55 seconds and the second question as an offset to that is um you know you did you did mention uh you know your geni offerings uh you know across speed chip design be 34:04 34 minutes, 4 seconds it a genti etc. Um uh so across those five offerings that you have which of the offerings do you think are you know 34:11 34 minutes, 11 seconds seeing the maximum uptake and and you know where where you feel like you know overindexing a lot over the next two to three years so the impact of deflation 34:20 34 minutes, 20 seconds kind of gets uh gets offset. And if I could just squeeze in one more on the guidance front um how much of the of the 34:27 34 minutes, 27 seconds of the guidance um sort of you know uh I should say you know softness comes from geopolitical pressures and how much of 34:35 34 minutes, 35 seconds it comes from sort of you know the event that that has happened between uh the last let's say you know two three months uh uh that includes let's say the 34:42 34 minutes, 42 seconds release of opus 4.6 or the geopolitical impact that that we've had. Thank you. 34:48 34 minutes, 48 seconds Yeah, thank you Aisha. Let me answer one by one. uh starting with the deflation number uh 3 to 5% that I shared is uh 34:58 34 minutes, 58 seconds mostly uh based on the industry mix of services and uh for the specific question on how 35:05 35 minutes, 5 seconds does it change with respect to uh the model effectiveness um I think uh most 35:12 35 minutes, 12 seconds of the enhancement in models are really uh driving more and more velocity and efficiency in uh in the SDLC life cycle. 35:23 35 minutes, 23 seconds Uh so I think that piece could go through a little higher deflation uh 35:31 35 minutes, 31 seconds based on the model outcomes. In rest of the areas it is agent take it is human 35:37 35 minutes, 37 seconds in the loop and uh even the the latest model on uh uh anthropics mythos uh 35:46 35 minutes, 46 seconds ability to run production environment fixes uh uh without human in the loop is 35:54 35 minutes, 54 seconds very limited and this is being acknowledged even in their own release notes. uh so it depends on the service 36:01 36 minutes, 1 second mix uh and for us we called out 2 to 3% and I think uh that holds true even now 36:09 36 minutes, 9 seconds in terms of new services I think uh that's a great question uh we have uh obviously called out five uh key areas 36:18 36 minutes, 18 seconds uh which is uh physical AI AI factory uh custom silicon engineering for inferencing 36:26 36 minutes, 26 seconds uh AI marketing services and IP and platforms. Of course, IP and platforms are integral to a lot of service 36:35 36 minutes, 35 seconds transformation. It has a very small component of IP embedded into it. Uh I think AI factory is where we are seeing 36:42 36 minutes, 42 seconds tremendous traction. Uh one of the large deals that we called out this quarter is a $und00 million plus AI factory deal uh 36:51 36 minutes, 51 seconds for design uh implementation and support of an AI uh data center nextgen AI data center uh for a large technology 37:00 37 minutes company. So I think we are seeing good traction. Uh we are already now into two major clients for this and we hope to 37:08 37 minutes, 8 seconds get to another three or four more in this uh coming year. Uh similarly semiconductor engineering I mean we also 37:16 37 minutes, 16 seconds announced uh a new deal this quarter on uh uh physical AI and uh which is really 37:24 37 minutes, 24 seconds some async development work on advanced nodes which is also the cutting edge work and these are the areas which we 37:31 37 minutes, 31 seconds are doubling down and we see great uh great uh traction u and coming to the 37:37 37 minutes, 37 seconds guidance what it bakes in um like u I don't want to kind of say that 37:45 37 minutes, 45 seconds geopolitics is driving this. I would want to be more specific. Uh like of course there has been some 37:53 37 minutes, 53 seconds impact uh in March which is what is reflected uh in our uh I mean significantly uh lower revenue in Q4. 38:04 38 minutes, 4 seconds And as I said two telecom large telecom clients are cutting down have cut down on the discretionary spend for this 38:12 38 minutes, 12 seconds calendar year. I see that continuing till end of the year and a couple of SAP programs got discontinued that will also 38:19 38 minutes, 19 seconds have an impact and uh I mean we seeing some softness in Europe and US seems to be quite robust except for this specific 38:28 38 minutes, 28 seconds client uh situations that I called out and uh for FY27 two clients uh we see a 38:36 38 minutes, 36 seconds half a% reduction due to their own business u it's we continue to have a very high wallet share but their own uh 38:45 38 minutes, 45 seconds business pressures they have reduced uh significant spend and that's what is driving uh the overall uh guidance. 38:55 38 minutes, 55 seconds Uh thank you CBK all the best. Thank you. 38:59 38 minutes, 59 seconds Thank you. Our next question comes from the line of Sudhir Gupali from Kotak Mahindra Asset Management Company. Please go ahead. 39:08 39 minutes, 8 seconds Uh yeah uh hi uh sika just uh one clarification uh so this two events and the two telecom accounts are they uh 39:17 39 minutes, 17 seconds overlapping or are they two separate events that is number one and number two uh what gives us the confidence that 39:24 39 minutes, 24 seconds these two might be isolated events and there is no underlying factorial or causality uh driving this at a vertical 39:32 39 minutes, 32 seconds level at either a telecom vertical level or maybe in a broader set of SAP implementation programs uh or in any 39:40 39 minutes, 40 seconds particular uh uh geography at this stage and if the third one if I may squeeze in uh if you add back that 50 basis points 39:47 39 minutes, 47 seconds of impact because of these two accounts uh still it would be like uh you're you're essentially talking about 2 to 39:54 39 minutes, 54 seconds 5%ish kind of growth in services uh which might be a bit tad softer than what we are anticipating. Uh so anything 40:02 40 minutes, 2 seconds to explain uh that delta uh that would be helpful. Thank you. 40:08 40 minutes, 8 seconds Yeah. Uh two telecom clients and the two other clients are completely different. 40:13 40 minutes, 13 seconds The two other clients where there is half a percent uh decrease in FY26 40:19 40 minutes, 19 seconds guidance whatever 75 plus million uh one is in large manufacturing client other 40:28 40 minutes, 28 seconds one is a retail client. So there is no overlap in these clients. Uh now 40:34 40 minutes, 34 seconds uh what gives us confidence? Uh this is uh restricted. Uh as I said in the lower end of our guidance we are baking in 40:43 40 minutes, 43 seconds that the softness continues. That's what we've baked in in the lower end of our guidance and uh I think I mean given uh 40:53 40 minutes, 53 seconds it's a well-known fact that 2 to 3% deflation uh happens I think uh barring this getting to 2 to 5% 41:03 41 minutes, 3 seconds uh is is a reasonable uh growth uh I think in the given environment and uh in 41:10 41 minutes, 10 seconds a in a so much of uncertainty I think it's it's good and this of course does not include any acquis positions and 41:17 41 minutes, 17 seconds they will get closed sometime during the year and we will call it out separately. 41:25 41 minutes, 25 seconds Fair enough. Thanks for all. Yeah, thank you. 41:30 41 minutes, 30 seconds And actually outside of these two data points that we shared the business continues to perform at the same pace. 41:37 41 minutes, 37 seconds So I think we've done enough uh whatever validations. So that that's how we've arrived at our guidance. 41:47 41 minutes, 47 seconds Thank you. Our next question comes from the line of Rushab Jen from Access Capital. Please go ahead. 41:58 41 minutes, 58 seconds Rushab Jen, your line has been unmuted. 42:01 42 minutes, 1 second You may proceed with your question as there's no response from 42:10 42 minutes, 10 seconds we're not receiving a response from the current participant. We will move to the next questioner. Our next question is from the line of Nitan Padman from Invest. Please go ahead. 42:22 42 minutes, 22 seconds Yeah. Hi, good evening. Thank you for the opportunity. U so the uh uh impact we had in telecom this quarter I I think 42:30 42 minutes, 30 seconds sequentially it's some 12 odd million dollars. U so that's uh that began in March. So we should assume that you will 42:37 42 minutes, 37 seconds see a full quarter kind of an impact in the next quarter. 42:42 42 minutes, 42 seconds Um so over and above this 50 basis points which is with those two other clients this itself is quite a drag. Uh is that a fair understanding? 42:52 42 minutes, 52 seconds Yeah I mean uh almost a 1% drag. 42:56 42 minutes, 56 seconds Yeah, I wouldn't say that it was only in March though the decision got communicated to in in March but it does 43:03 43 minutes, 3 seconds have a little more impact than just one month because uh I think these were uh 43:09 43 minutes, 9 seconds the s which were expected as a part of a calendar year 26 spend and it was dragging and finally it was called off. 43:20 43 minutes, 20 seconds uh so I would say it's a little more than a month and u yeah I think that will create a significant uh and we are 43:27 43 minutes, 27 seconds assuming at least that is there till end of the year and that is all accounted in our guidance 43:36 43 minutes, 36 seconds sure sure that that's helpful uh the uh second uh one I wanted to ask you was on the cancellation of SAP programs is 43:45 43 minutes, 45 seconds purely a uh budget decision or is it a techn technology or uh that kind of a 43:53 43 minutes, 53 seconds strategic decision on the cancellation of the SAP programs. 43:58 43 minutes, 58 seconds I think this were related to the client budgets. Uh I think they kind of deprioritized this modernization. 44:07 44 minutes, 7 seconds I think there is a general understanding that the timelines for some of this is also going to get extended 44:14 44 minutes, 14 seconds um from SAP. I mean some of that is probably playing into these decisions. 44:21 44 minutes, 21 seconds Sure that's helpful. Uh just one last one from my end on the products business. uh considering that uh the a 44:28 44 minutes, 28 seconds lot of these were end of life which were built on and tried to modernize uh in the context of uh whatever we are seeing 44:36 44 minutes, 36 seconds with AI and all of that uh how are you thinking about the long-term trajectory 44:42 44 minutes, 42 seconds of this business and uh are we likely to see uh some maybe a higher cadence on 44:50 44 minutes, 50 seconds new product launches from your end to sort of make up for that yeah uh I mean first of all this Q3 44:58 44 minutes, 58 seconds revenue decline is not related to anything on AI or any of the latest uh whatever developments. Uh as you know 45:07 45 minutes, 7 seconds the last fortnight of the quarter is crucial for all the deal closures in the software segment. I think the situation 45:14 45 minutes, 14 seconds in West Asia led to deferral inclined decision making and also um some of the 45:21 45 minutes, 21 seconds delays in the US government also caused this uh we expected it to get done before March but they didn't get done 45:29 45 minutes, 29 seconds and this and then then of course a couple of other uh situations where some client stakeholder changes and all that 45:36 45 minutes, 36 seconds overall led to little more scrutiny and little more review of the deals. uh I think uh it's very specific and our 45:45 45 minutes, 45 seconds long-term trajectory for software business uh we it remains intact. I mean there are three broad portfolios. One is 45:54 45 minutes, 54 seconds data, second one is operations which is all our Intelly ops and uh AEX platforms 46:01 46 minutes, 1 second and the third is experience which has got some of the declining products. uh so I think the two categories which I 46:09 46 minutes, 9 seconds called out data and operations are growth oriented they will get offset by the declines in the uh experience 46:18 46 minutes, 18 seconds portfolio so it's our expectation is low singledigit uh or or flattish or marginally 46:26 46 minutes, 26 seconds declining that's what we are expecting uh in the coming year and as the recurring part of the portfolio improves 46:34 46 minutes, 34 seconds that will also help because right now there is still a if you see on a year on year we had a decline bigger decline in 46:41 46 minutes, 41 seconds the um perpetual licenses and maybe a slight decline or flattish uh uh the 46:50 46 minutes, 50 seconds steady state steady stream revenue uh so I think we need to kind of go through the entire cycle but it's not something 46:57 46 minutes, 57 seconds we are able to predict because especially government buying is all perpetual licenses so we are not able to clearly predict it at this Sure. 47:07 47 minutes, 7 seconds Uh that's very helpful. Uh thank you so much and all the very best. Thank you. 47:13 47 minutes, 13 seconds Thank you. Our next question comes from the line of Kumar Rakkesh with BNP Pariba. Please go ahead. 47:21 47 minutes, 21 seconds Hi, good evening and thank you for taking my question. My first question was more of the near-term performance. 47:25 47 minutes, 25 seconds So in first quarter we usually see a seasonality when there is a productivity pass through which happens. uh given there are a couple of account specific 47:33 47 minutes, 33 seconds issues which will have a full quarter impact. So should we see higher than usual seasonality going into the first quarter and also on the DTCV you spoke 47:42 47 minutes, 42 seconds about that there was some deflationary impact of AI as well in that so from at least near-term should we expect the DTC 47:50 47 minutes, 50 seconds also to remain muted around 2 billion odd dollars? 47:53 47 minutes, 53 seconds Yeah. Yeah. Um uh Rakkesh uh see uh you can assume the usual Q1 seasonality uh 48:00 48 minutes you in spite of uh uh the the headwinds that we had in Q4 which will continue 48:07 48 minutes, 7 seconds into Q1 uh the mega deal ramp up is on track and uh that growth will offset uh 48:14 48 minutes, 14 seconds the headwinds from the two client challenges that we talked about. So otherwise you can assume a usual Q1 48:21 48 minutes, 21 seconds seasonality and the UTCB AI impact. 48:28 48 minutes, 28 seconds Uh yes of course I mean whatever $100 million deal normal ITO deal would be 48:36 48 minutes, 36 seconds much lesser today maybe 80 million just on a a rough ballpark. 48:41 48 minutes, 41 seconds uh so dealt TCB is flat but technically it has required at least 25 30% more 48:48 48 minutes, 48 seconds effort uh to convert and get to the same number but uh I also want to call out 48:55 48 minutes, 55 seconds like there are uh I mean we have lost some deals which are voluntary losses right we have walked away from some 49:03 49 minutes, 3 seconds deals which will not make sense and that would have easily contributed at least a billion dollar more to this number So 49:11 49 minutes, 11 seconds it's uh it's only uh prudent to be a little bit more uh uh careful about this and u and spend the energy and uh 49:19 49 minutes, 19 seconds organizational uh bandwidth on more uh reinventing for the future and uh enhancing our AI 49:27 49 minutes, 27 seconds positioning and uh delivering more value to our clients uh using AI uh instead of really fighting some of the traditional 49:35 49 minutes, 35 seconds deals uh where it's uh of course hyper competitive And uh if it doesn't make sense, we've walked out on quite a few in the last 6 months. 49:47 49 minutes, 47 seconds Thanks for that. The second question was more on the capability side. So the infrastructure managed services work that we do for enterprise customers. Uh 49:56 49 minutes, 56 seconds do we have a scope of work with hyperscalers as well? And if how does that differ from the work that we do for enterprise customers? 50:05 50 minutes, 5 seconds Yeah. Yes, of course it is uh it is different because you're managing uh the hyperscaler networks, the AI factory, uh 50:15 50 minutes, 15 seconds lot of the operational work, all of that is different, the tools used are different, the underlying network technology is significantly different. 50:25 50 minutes, 25 seconds Uh so it's uh it's really a similar uh kind of uh uh uh capability but it's 50:33 50 minutes, 33 seconds different technologies on which we have to work. So we have invested in training and retraining a lot of our uh 50:40 50 minutes, 40 seconds infrastructure data center uh teams uh to drive uh uh or to really participate 50:47 50 minutes, 47 seconds in the new AIDC programs and we've also hired a lot of lateral talent because a lot of this is also very geography 50:56 50 minutes, 56 seconds specific. uh so we have been uh hiring a lot more lateral talent uh on this front in the last maybe a year or so. 51:08 51 minutes, 8 seconds Thank you. Our next question comes from the line of Vibore Singal from Equity. Please go ahead. 51:16 51 minutes, 16 seconds Yeah. Hi. Uh thanks for subing my sorry to interrupt you. Your line isn't clear. 51:26 51 minutes, 26 seconds Uh okay. I'm so sorry. Yeah, go ahead. Go ahead. 51:36 51 minutes, 36 seconds Yeah. So my question was on the product business. You mentioned that u uh basically there was couple there was a spillover of the last 14 days in this 51:44 51 minutes, 44 seconds quarter because of which the revenue was a bit down. Uh if I see for the full year also our product business is down on a uh 4% on a yon-y basis. So is the 51:54 51 minutes, 54 seconds revenue that we missed in this quarter is kind of a spillover. We can expect that to come back in Q1 uh and hence the 52:02 52 minutes, 2 seconds next year performance for product business could look better or what is the I mean what is the kind of uh let's say trajectory that we're looking for the product business given the 52:10 52 minutes, 10 seconds circumstances that we have at this point of time with the tariffs and the war and uh other uh excellent factors. 52:18 52 minutes, 18 seconds Yeah, I think uh whether these deals will come back uh there are too many variables. So it's too early to say and the timing of closure is unpredictable. 52:27 52 minutes, 27 seconds But you would have noticed this would be the first time we would have given a I mean in the recent years uh the total 52:34 52 minutes, 34 seconds revenue growth is half a percent below the services revenue growth. So at the lower end you can compute what our assumptions for the software business has been. Yeah. 52:45 52 minutes, 45 seconds Right. Right. Right. Got it. And uh if I look at this, the second question is if I look at the uh client specific issues that you mentioned, two in telecom, uh one in manufacturing and one in retail. 52:55 52 minutes, 55 seconds I would assume the three of them would probably be in the erd part and the retail would be in the pure IT services part. 53:01 53 minutes, 1 second No, no. I I mentioned the telecom is in the discretionary spend. It's a digital business which is part of our ITbased 53:07 53 minutes, 7 seconds portfolio. And uh the uh the the manufacturing client is both uh 53:14 53 minutes, 14 seconds engineering services and BO uh both uh is pretty large uh thing and the retail client is also mostly in a digital business. 53:25 53 minutes, 25 seconds So we were building a new platform and uh some of that is related to this right. So considering only part of 53:33 53 minutes, 33 seconds we request you to please rejoin the queue if you have any further questions. 53:36 53 minutes, 36 seconds Okay sure got it. Thanks a lot. Thanks for our next question comes from the line of Rushab Jen from Access Capital. Please go ahead. 53:46 53 minutes, 46 seconds Hi, thanks this is Jam from Access Capital. Uh so you talked about you know 3 to 5% deflation but you know that's 53:53 53 minutes, 53 seconds kind of what we see anyway even before I in renewal deals we were seeing 10 to 15% uh cut in pricing uh over the life 54:02 54 minutes, 2 seconds of the deals uh which will translate to more or less 3 to 5%. So doesn't look like with AI there is anything uh 54:10 54 minutes, 10 seconds significantly different right would would that be right? No, I think uh we were always careful that this is the incremental impact. I mean the 54:19 54 minutes, 19 seconds traditional uh productivity what we normally commit in an in a green field 54:25 54 minutes, 25 seconds or you know in a gen one outsourcer uh would we should be now looking at an incremental kind of impact or reduction in the overall solution. Right. 54:38 54 minutes, 38 seconds I agree. And then should we think about this then being uh you know uh low to mid single digits being closely equivalent to you know high single 54:47 54 minutes, 47 seconds digits uh you know sort of uh the demand or the lack of uh you growth in the last three years and now this is the fourth 54:56 54 minutes, 56 seconds year of poor demand. I mean can we say that some of this is also due to AI uh the deflation impact? 55:04 55 minutes, 4 seconds No, I would I would say that it's we expect I mean very little has really played out in the already reported 55:11 55 minutes, 11 seconds numbers. We expect this to happen in 20 FY27 and onwards. Um and that's also why 55:20 55 minutes, 20 seconds you'll see this guidance lower than what we had given last year. Thanks. 55:29 55 minutes, 29 seconds Thank you. 55:32 55 minutes, 32 seconds Thank you ladies and gentlemen. and we will take that as the last question for today. I would now like to hand the conference over to Mr. C. Vijayakumar, 55:40 55 minutes, 40 seconds CEO and MD for closing comments. Over to you sir. 55:44 55 minutes, 44 seconds Yeah, thank you everyone for joining us on the on our earnings call for financial year 26 closing. Uh I think 55:53 55 minutes, 53 seconds given the backdrop of the external environment uh HCL Techch has delivered uh uh good performance uh dealing with 56:02 56 minutes, 2 seconds all the different variables that are playing and our business remains very resilient and we continue to focus on 56:10 56 minutes, 10 seconds reinventing the company to be an uh the best AI solutions company uh with the 56:16 56 minutes, 16 seconds engineering pedigree uh on the basis of which uh we want to focus and reinvent and uh we will see differential growth 56:24 56 minutes, 24 seconds rates in all the three different categories AI disrupted AI amplified and a native or advanced AI services and we 56:33 56 minutes, 33 seconds really look forward to growing our AI native services uh in 25 30% range and that will truly 56:41 56 minutes, 41 seconds be the validation of how we are evolving as a as a company uh and thank you for your support and I look forward to 56:48 56 minutes, 48 seconds talking to all of you in due Thank you and good evening. 56:54 56 minutes, 54 seconds Thank you. On behalf of HCL Tech, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.