Hexaware Technologies Limited — Q3 FY26

Hexaware Technologies Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=CnVPhA0uYzE Published: 3 months ago

0:00 Ladies and gentlemen, good day. Welcome to Hexawware Technologies limited conference call for the Q4 CY25 earnings 0:07 7 seconds call. We'll begin today's session with a presentation from the Hexaware management team, followed by a Q&A segment. To ask a question during Q&A, 0:16 16 seconds please use the raise hand feature located at the bottom of your Zoom interface. This will place you in a virtual queue. I will now hand the conference over to Mr. Niraj Kuma, head 0:25 25 seconds of investor relations. Thank you. Over to you, Mr. Niraj. 0:29 29 seconds Hello everyone. Uh hello everyone. Can you uh I hope I'm audible. Welcome to Xavier Technology C4 Q4C25 0:37 37 seconds earnings call. In the call today we have with us Mr. Ashri Krishna CEO, Mr. 0:42 42 seconds Vikage Jan, CFO. In the course of this call, we may make certain forward-looking statements which may involve a number of risk and 0:49 49 seconds uncertainties. All forward-looking statements made herein are based on the information available currently with the management and the company does not 0:57 57 seconds undertake to uh update any of these statements in the made made in the course of this call. In this regard there's a full disclosure which has been 1:05 1 minute, 5 seconds provided in the u earnings presentation and in the press release. We consider that as read with this I'll hand over the call to k over to you k. 1:14 1 minute, 14 seconds Thank you. Um if you could move slides please. Now you know one announcement 1:21 1 minute, 21 seconds from Anthropic yesterday before um shook our stock markets right 1:28 1 minute, 28 seconds globally for our industry. So I thought I'll start with that today. We were anyway going to do the topic that we were going to deep dive on strategy is 1:37 1 minute, 37 seconds on AI. So actually I will start with that. One more slide please. 1:42 1 minute, 42 seconds So at the highest level, our goal with customers is that every single day, 1:50 1 minute, 50 seconds every single client, the work we do is positively impacted by air. And I think we're going to get there sooner than we 1:58 1 minute, 58 seconds originally imagined. Now, to do that, we're doing four things. First, we're building AI into all of our platforms 2:07 2 minutes, 7 seconds and reimagining our platforms. So whether it's tenzi for IT operations, rapidex um for software engineering or maze. 2:17 2 minutes, 17 seconds The second thing we're doing is to create and launch new services that deliver new revenue streams which are 2:26 2 minutes, 26 seconds enabled by AI. The third are workforce training. We are already in a second 2:33 2 minutes, 33 seconds generation of retraining a workforce on AI. And fourth and most importantly 2:40 2 minutes, 40 seconds processes need to be redone in AI. For example, SDLC as we know it in the past is 2:49 2 minutes, 49 seconds completely being redone. Now if AI is in the SDLC, it is not just that the same people, same talent, same process don't 2:57 2 minutes, 57 seconds run sprints the same way. So these are four things that we are doing to get to 3:04 3 minutes, 4 seconds our goal of impacting positively every single customer every single day. 3:11 3 minutes, 11 seconds So what do we tell our clients? You know there is at the highest level there is AI for IT and AI for business. 3:20 3 minutes, 20 seconds We tell our clients when it comes to AI for IT leave it once. 3:25 3 minutes, 25 seconds We we know how to get productivity and velocity executed for clients. Well, 3:35 3 minutes, 35 seconds you set the guard rails, you set the rules and leave the execution to us. And I think this narrative has found 3:44 3 minutes, 44 seconds resonance. I think early earlier I would say last year people are not quite willing to do that. But I would say far 3:52 3 minutes, 52 seconds more so right now. Especially when it comes to IT operations and data engineering. In SDLC, I think it's a little more complicated. 4:05 4 minutes, 5 seconds We tell them on AI for business. Uh the roles are a little different. Our role 4:12 4 minutes, 12 seconds is to enable you to meet what you dream of. Now we certainly have multiple ideas 4:20 4 minutes, 20 seconds on what they could do but our first job is to enable the technology to realize 4:28 4 minutes, 28 seconds with velocity the use cases that they want to execute. 4:34 4 minutes, 34 seconds Now on AI for IT, we have been first off the block multiple times and 4:42 4 minutes, 42 seconds consistently so we were the first to launch a product uh Rapidex that focuses 4:51 4 minutes, 51 seconds on legacy u re-engineering or legacy reverse engineering which is actually a crucial 4:59 4 minutes, 59 seconds pre-step required to any coding that is needed. 5:04 5 minutes, 4 seconds In July last year, we were actually the first company to launch a white coding offering. 5:14 5 minutes, 14 seconds And 3 weeks ago, we launched an offering that goes to the heart of the anthropic 5:23 5 minutes, 23 seconds u release which says, "Hey, software products or SAS products can be replaced 5:29 5 minutes, 29 seconds by agentic AI." We agree or actually we think it's a massive opportunity for us 5:36 5 minutes, 36 seconds and the service we launch is a reflection of that in these ones I spoke about are all as 5:46 5 minutes, 46 seconds it pertains to AI for SDLC but in AI for outsourcing our Tenzi platform 5:54 5 minutes, 54 seconds um we would have built uh in the next I would say less than two quarters and 6:01 6 minutes, 1 second quite a bit of us already done. uh I'll say 80 supervisory agents and underpinned by 400 what you call atomic 6:09 6 minutes, 9 seconds agents that um can operate you know in a mode which is assisting humans to all 6:18 6 minutes, 18 seconds the way autonomous over time in AI for business 6:25 6 minutes, 25 seconds what while we are telling customers we don't know your business as well as you do for a number number of industries we 6:34 6 minutes, 34 seconds operate in. We detailed out level five to level one process or level one to 6:40 6 minutes, 40 seconds level five processes and for each business process we have a point of view 6:47 6 minutes, 47 seconds on how can AI impact that process and if all of that is executed what kind of 6:55 6 minutes, 55 seconds business value will it deliver to customers. 6:59 6 minutes, 59 seconds So we make we we've been like I said first off on a number of fronts. 7:07 7 minutes, 7 seconds Now legacy modernization that we've been now talking about for over a year as a growth accelator for us is a very 7:15 7 minutes, 15 seconds specific use case of new revenues cost per AI and we've been making good 7:23 7 minutes, 23 seconds progress in that. I think in this year I can say with confidence that we will have at least two or three scale uh 7:32 7 minutes, 32 seconds legacy modernizations completed and multiple other of smaller ones that we continue to execute 7:40 7 minutes, 40 seconds yet I think that the biggest opportunities are still ahead of us. 7:46 7 minutes, 46 seconds Now um we um we spoke about a key key growth driver for us is launching a 7:54 7 minutes, 54 seconds technology vertical. So we hired somebody last quarter that we spoke about. We launched a new vertical called 8:02 8 minutes, 2 seconds uh we renamed it as TPP technology products and platform. And from Q1 onwards you will see us reporting on 8:11 8 minutes, 11 seconds this vertical as a separate vertical from where it is currently in HTTPS. 8:18 8 minutes, 18 seconds Um we did launch um you know three new uh services on AI uh squad. One of the most exciting things we did is this. 8:31 8 minutes, 31 seconds I think we are the first company in the world to implement a completely AI first 8:40 8 minutes, 40 seconds global multilingual help desk in production. So we now have 33,000 employees who if they call our help desk 8:50 8 minutes, 50 seconds it'll be answered by AI and I think we are the first company in the world to put it in production. 8:58 8 minutes, 58 seconds Um you know we we private equity markets uh private markets in a more broad sense uh 9:07 9 minutes, 7 seconds is a critical growth driver. Um companies are staying private for longer and for larger and there is no more 9:15 9 minutes, 15 seconds important time than now in for value creation in these companies. Ahmed Winch 9:22 9 minutes, 22 seconds joined us as the chief private markets officer. He's done this for a living for over 20 years in different firms most recently in Tech Mahindra. So we pleased 9:31 9 minutes, 31 seconds to have Ahmed. He joined us about two weeks ago. 9:36 9 minutes, 36 seconds Um our revenue and PE our people metrics continue to be positive. Um we closed 9:43 9 minutes, 43 seconds with close to 34,000 uh headcount. We continue to have amongst the lowest attrition in the industry. In it was at 11%. 9:54 9 minutes, 54 seconds Uh our utilization ticked down a bit uh in anticipation mainly of uh growth in 26. We'll talk about that later. 10:05 10 minutes, 5 seconds Um we last year we crossed one customer with a 100 million. This year we crossed 10:12 10 minutes, 12 seconds two customers with 100 million and we added one client in the north of $50 million category. 10:22 10 minutes, 22 seconds our revenues for Q4 were I would say a tad lower than what we expected. Um 10:31 10 minutes, 31 seconds I would say there are you know three things to call out. One um is that 10:39 10 minutes, 39 seconds one of the GSC's again had uh I would say a substantial cut which amounts to 10:47 10 minutes, 47 seconds about 70 bips annualized. This had an impact in Q4. 10:52 10 minutes, 52 seconds It also will have an impact in Q1. We'll talk about 26 later. 10:59 10 minutes, 59 seconds Um the second thing is a client that normally does not do furlows actually did a significant furlow. And the third 11:06 11 minutes, 6 seconds and you'll see our numbers that our pass through revenues are materally lower than normal and average. 11:14 11 minutes, 14 seconds Um so but g given all that uh it was a tad lower than what we expected. Um 11:23 11 minutes, 23 seconds on profitability uh again we were um you know in absolute terms uh in reported 11:30 11 minutes, 30 seconds profitability um we were solid but there's a number of puts and takes on our IITA and profitability which I think Vikash will 11:39 11 minutes, 39 seconds walk you through later. And as always, we had outstanding cash conversion and an outstanding cash balance. 11:49 11 minutes, 49 seconds If you'll go to the next slide, please. 11:50 11 minutes, 50 seconds The best part of the quarter for us is that we won any number of deals. Um, we 11:59 11 minutes, 59 seconds won pretty much everything that we expected to win, expected to close, and um and some more. 12:09 12 minutes, 9 seconds And last quarter I'd said hey just given kind of the volume closures in Q4 maybe our pipeline will reduce actually intent 12:18 12 minutes, 18 seconds uh our pipeline continue to go up and actually it is crossed 4 billion for the first time. 12:26 12 minutes, 26 seconds So some of the deals I think the most important one is a very large uh 12:33 12 minutes, 33 seconds consolidation deal in a big tech. Uh this is a process that's been going on for a very long time. Um to be sure this 12:43 12 minutes, 43 seconds doesn't come with like a predefined book of work, but it does give us the right 12:50 12 minutes, 50 seconds to hunt and the right to receive RFPs in a very very large uh pool of spend. 13:00 13 minutes Um the second one here is um a bank that we had won earlier last year but there's a 13:08 13 minutes, 8 seconds significant deal in this. So you know what the deal does is to put us in a position of nice growth for us in 26 and forward. 13:21 13 minutes, 21 seconds the product the single largest deal actually the single largest deal we did um is who's now probably the globally 13:30 13 minutes, 30 seconds largest pet insurance company they've been acquiring companies uh at a rapid pace and we do multiple 13:39 13 minutes, 39 seconds things for them starting from integrating the acquired entities into a common IT framework and now we are 13:49 13 minutes, 49 seconds running uh all of it um everything in tech infrastructure applications and in future also their modernization for a new platform. 14:02 14 minutes, 2 seconds Um there's another very large insurance company that is modernizing their core to guide wire and we have a role in 14:10 14 minutes, 10 seconds that. We're not the leaders uh we're not the only people but we have a significant role to play in that modernization. 14:18 14 minutes, 18 seconds I was talking to you about AI for business where for multiple industries 14:24 14 minutes, 24 seconds we mapped out the process and showing what are the are possible to clients of 14:32 14 minutes, 32 seconds where can agent AKI play a significant role in transforming operations. 14:37 14 minutes, 37 seconds So this deal here global CRO is an example of that where we building agents 14:44 14 minutes, 44 seconds for multiple steps in a clinical research process that'll bring substantial efficiency to the customer. 14:53 14 minutes, 53 seconds We're a deal with uh the world's largest casual dining. It's a holding company. 14:58 14 minutes, 58 seconds They own multiple large brands uh in the US and some elsewhere in the world as 15:04 15 minutes, 4 seconds well. And again um we will do uh much of tech for them. 15:11 15 minutes, 11 seconds Um a a very large uh tech services company in Asia. Uh there's a scale GCC deal that we won uh late last year. 15:24 15 minutes, 24 seconds And finally um one of the large PBMs which is also happened is owned by uh PE 15:31 15 minutes, 31 seconds firm. We are doing product development and platform support and engineering support for this organization. Um there 15:39 15 minutes, 39 seconds are more models we we stuck to the 8 year um you know we will talk about 26 15:45 15 minutes, 45 seconds uh later uh after Vicash goes a little bit into details but at the highest level our deal wins with the best part of Q4. 15:57 15 minutes, 57 seconds Thanks H. Thanks H. If you can go to the next page please. 16:06 16 minutes, 6 seconds A little bit more color in terms of our revenue. So Q4 revenue was 389 million uh sequential decline of 1.5%age. 16:16 16 minutes, 16 seconds In absolute terms this represents a $6 million of decline. The decline was primarily driven by calendars and 16:23 16 minutes, 23 seconds furlows which are seasonal in nature close to $9 million. a lower license revenues of 7 million and marginal 16:31 16 minutes, 31 seconds headwinds from forex. So FX was a headwind in the current quarter on revenues and also in terms of margins. 16:38 16 minutes, 38 seconds The 16 million of headwind that we had in the current quarter was partially offset by a robust volume growth and a 16:46 16 minutes, 46 seconds little bit of contribution from cyber saw which we closed in the middle of the quarter. Now calendar and furlows are 16:53 16 minutes, 53 seconds seasonal items and will come back in future quarters. However, the way the calendar days line up in 26, 17:02 17 minutes, 2 seconds it comes back in a more positive way in Q2 and Q3, Q1 will still be a net headwind versus Q4. 17:11 17 minutes, 11 seconds License revenue for the port was at $1 million versus $18 million in Q3. A drop 17:17 17 minutes, 17 seconds of 7 million on sequential basis. This was also lower than our historical average which is anywhere around 12.5 to 17:25 17 minutes, 25 seconds $13 million a quarter. So the volume growth is also reflected in our headcount additions that we have done during the quarter and Keith spoke about 17:34 17 minutes, 34 seconds the fact that it also had an impact particularly with respect to some bit on the utilization given the fact that we 17:42 17 minutes, 42 seconds have been building up capacity to service the demand that we have been seeing on margins 17:49 17 minutes, 49 seconds reported up for the quarter was 17%age this includes impact of few one-times during the quarter 17:57 17 minutes, 57 seconds Normalized for the one-times the margin for the quarter was 15.4%age. 18:03 18 minutes, 3 seconds Now it's a drop of 210 pips sequentially. 18:08 18 minutes, 8 seconds The major contributors were forex which was a headwind during the quarter of 20 bips. Operationally it was a tailwind 18:16 18 minutes, 16 seconds but then from a hedge perspective for the hedges that we had started taking it was close to a 40 pips of headwind. So 18:24 18 minutes, 24 seconds the net of operational tailwind plus the hedge headwind we had a net impact of close to 20 pips of uh headwinds. 18:33 18 minutes, 33 seconds Calendar was a 60 pips of headwind. 18:36 18 minutes, 36 seconds Utilization was close to another 60 pips and we did give merit increases which was close to 90 pips. So if you think 18:43 18 minutes, 43 seconds about it a lot of the drop that we had in the current quarter were seasonal in nature and will come back. Forex we 18:51 18 minutes, 51 seconds expect will recover back soon. calendar is going to come back starting Q2 and utilization I'll talk through in terms 18:58 18 minutes, 58 seconds of details how we are thinking about it in terms of recovering some of it one times uh during the quarter I spoke 19:06 19 minutes, 6 seconds about the adjusted view one times during the quarter in ITA were on three fronts the first one was we acquired soft click 19:14 19 minutes, 14 seconds in 2024 and there was an earnout related to the deal which was payable based on the asset delivering a great financial 19:23 19 minutes, 23 seconds milestones. Soft click missed those targets. So the earnouts are reversed out. This was close to $25 million. 19:31 19 minutes, 31 seconds Associated with that and for the others assets we did an impairment testing. 19:36 19 minutes, 36 seconds It's an annual exercise which we do uh every year and based on that there was an impairment testing done on client 19:45 19 minutes, 45 seconds relationships and a charge of close to 15 million. So when you think about the reversals, you need to think about the reversals and the impairment charges at 19:54 19 minutes, 54 seconds the highest levels in conjunction because they are closely interlin. So those were the two items. The third one 20:00 20 minutes in IITA in terms of one-timers is an additional expected credit loss of 20:08 20 minutes, 8 seconds credit loss provision of close to $4 million. Now last couple of years we have seen an increase in credit risk and account collections on a prudent basis. 20:18 20 minutes, 18 seconds We have taken an additional provision during the current quarter. Now this is one timer in nature. This is an additional generic credit risk provision 20:27 20 minutes, 27 seconds and not related to any client specific issue. Now if the collection pattern improves in future this will come back 20:35 20 minutes, 35 seconds into the P&L in future years. So this is I I just want to call out that what you see as an expected credit loss provision 20:42 20 minutes, 42 seconds is generic in nature and not associated with any specific client. 20:49 20 minutes, 49 seconds So the net of the three is close to 160 bits of one-time credit at any level. In 20:57 20 minutes, 57 seconds addition there are two more items which are onetime in nature. If you recall in Q2 we had announced a restructuring in 21:06 21 minutes, 6 seconds one of our European countries. Now that's progressing on track. Now with the labor footprint reducing in that 21:14 21 minutes, 14 seconds country in in the European country there's a need to optimize on the rental state footprint we have now. Some of 21:23 21 minutes, 23 seconds these leases are committed and are long-term in nature. Now as these offices are underutilized we have taken an accelerated amotization towards the 21:32 21 minutes, 32 seconds unused office space that impact is close to $3.5 million. Now this impact has 21:39 21 minutes, 39 seconds been taken at an EBIT level. So that makes the total onetime credit of close to 64 pips at EBIT level. 21:48 21 minutes, 48 seconds Last one is the impact of labor code. Um all of you are aware of the context on labor code change. So I'm not going to 21:56 21 minutes, 56 seconds get into that detail. Impact for the same for us is close to $12.5 million in Q4. On a continuing basis, we expect the 22:05 22 minutes, 5 seconds impact to be close to 20 pips on margins for the full year next year. 22:11 22 minutes, 11 seconds Let's go to the next page. 22:16 22 minutes, 16 seconds Revenue for the full year was uh 7.6%age. 22:20 22 minutes, 20 seconds 7.1%age in constant currency. Performer growth was close to 6.6. 6 percentage. 22:26 22 minutes, 26 seconds Now reported margin for the year is 17.1 uh versus 15.9%age last year. An 22:33 22 minutes, 33 seconds improvement of 120 pips. Even if you normalize it for the Q4 one-times, the margin is 16.8%age. So that's a 22:41 22 minutes, 41 seconds significant improvement on a full year basis compared to where we were from a 25 perspective. 22:48 22 minutes, 48 seconds Next page, a little bit of color on the unit level 22:56 22 minutes, 56 seconds performance. Uh for the quarter, all vertical except HTPS delivered year one-on-one growth and on a fullear 23:04 23 minutes, 4 seconds basis, all verticals delivered year-on-year growth. uh financial services has been the strongest 23:10 23 minutes, 10 seconds performing vertical and delivered and has delivered both sequential and year-on-year growth in all the four quarters of the year. And if you recall 23:19 23 minutes, 19 seconds this is after absorbing a material headwind from budget cuts in one of the GSC's in Q1 and some bit of it in from a 23:27 23 minutes, 27 seconds Q4 perspective. growth was delivered and and the growth in this vertical was delivered by a combination of scaling existing clients and new wins. 23:37 23 minutes, 37 seconds HNI for the full year growth was largely in line with the company average. The decline during the quarter as we had 23:45 23 minutes, 45 seconds called out in the last earnings call was driven by an increased license revenue in Q3. 23:51 23 minutes, 51 seconds This is a vertical where we are seeing the maximum amount of deal traction from a new logo perspective. 23:59 23 minutes, 59 seconds MNC uh manufacturing and consumer. We started the year with significant headwind driven by macro and tariff uncertaintity. 24:08 24 minutes, 8 seconds We called out in our last earnings that the headwinds in the vertical has started to bottom out and we see growth coming back at a gradual pace. There are 24:18 24 minutes, 18 seconds green shoots both in terms of existing account and new logos. We delivered a healthy yearon-year growth for the quarter and back to grain from a fullear perspective. 24:28 24 minutes, 28 seconds high-tech and professional services on a go forward basis which is starting next quarter we'll report it as two different 24:35 24 minutes, 35 seconds verticals one as a professional services the other as uh TPP which is going to be technology platform and products and 24:44 24 minutes, 44 seconds platforms now on a combined basis performance for the quarter was impacted by decline in two large accounts of the 24:51 24 minutes, 51 seconds unit now these are in line with what was expected and ke had in fact called it out in the last earnings score. We 24:58 24 minutes, 58 seconds expect both the units to get back to the growth from a 26 perspective and more color on that which we'll anyway provide 25:05 25 minutes, 5 seconds at the at the end of the pres at the subsequently in the in the presentation. 25:11 25 minutes, 11 seconds Banking a third straight quarter of strong sequential and yearon-year growth and again here growth is being driven by 25:18 25 minutes, 18 seconds a combination of scaling existing accounts and opening new logos. Travel and transportation delivered a healthy 25:25 25 minutes, 25 seconds yearon-year growth both in Q4 and fullear terms. On geos um for the quarter all the geos grew year on year. 25:34 25 minutes, 34 seconds Sequentially what you see as a decline in North America was actually driven by lower licenses and calendar plus furlow. 25:42 25 minutes, 42 seconds The underlying volume growth continues to be very strong from a North America perspective. On a fullear basis, North 25:49 25 minutes, 49 seconds America growth was contributed by FS and banking which were one of the best performing even from a unit perspective. 25:56 25 minutes, 56 seconds AP pack is trailing growth. However, we expect to see a turnaround in 26. More commentary on the 26 outlook uh will be 26:04 26 minutes, 4 seconds covered by K later during the call. If you go to the next page, 26:13 26 minutes, 13 seconds uh we continue to add meaningful clients to our client base. K speak uh spoke about the fact that now we have $200 million clients and we have also added one to our $15 million client base. 26:25 26 minutes, 25 seconds Next page please. 26:30 26 minutes, 30 seconds Now this chart lays out the key operational parameters on the offshore mix. Now offshore mix 26:37 26 minutes, 37 seconds has improved by close to 440 dips on a yearon-year basis. Now there's a bit of a decline in the current quarter is a 26:44 26 minutes, 44 seconds mix of a few aspects related to how the deals have shaped up. But at the highest level if you zoom out and look into it 26:51 26 minutes, 51 seconds on a yearon-year basis there's an improvement of close to 440 pips. 100 pips of this was contributed by SMC. Uh 26:59 26 minutes, 59 seconds SMC being in the GCC space is completely offshorecentric. So that is helping an edict. Outside of SMC 2, we continue to 27:08 27 minutes, 8 seconds make significant progress in terms of improving our offshore mix dur uh on the headcount side. During the quarter we 27:15 27 minutes, 15 seconds added close to 254 resources, 10th straight quarter of headcount addition. 27:21 27 minutes, 21 seconds Now during the quarter it was a net headcount add of 585 and BPS was a decline of 331. On a full year basis, we 27:30 27 minutes, 30 seconds added close to 1535 resources with it adding close to 2,000 and a net 27:37 27 minutes, 37 seconds reduction in BPS of close to 500 resources. 27:43 27 minutes, 43 seconds Utilization kit spoke about the fact that we did have a bit of a softness from a utilization perspective. There 27:50 27 minutes, 50 seconds was a 300 bips decline in utilization compared to the prior quarter. The 300 bips is contributed 100 bips each by 27:59 27 minutes, 59 seconds three factors. Two of which are seasonal in nature and will is expected to sharply recover in the in the next quarter or or or the quarter after. 28:10 28 minutes, 10 seconds Close to 100 bips of the decline was followdriven. 28:14 28 minutes, 14 seconds The next 100 BPS was on account of employees taking higher number of leaves during the quarter being the year end and and and how the holidays stacked up. 28:24 28 minutes, 24 seconds The employees took a higher number of holidays in in in Q4 compared to Q3 and the last 100 BS drop was driven by the 28:33 28 minutes, 33 seconds bench we are building during the quarter to support the new deal rampups. We expect the utilization to materially improve next quarter. 28:43 28 minutes, 43 seconds Uh let's move to the next page. 28:49 28 minutes, 49 seconds We continue to generate very healthy uh cash. Our closing cash balance is close to $235 million plus. It's the balance 28:58 28 minutes, 58 seconds sheet is completely debtree. DSO for the quarter came in at 67 days. It's a combination of both build plus unbuild 29:06 29 minutes, 6 seconds and is one of the lowest in the industry. In fact, the 67 days is lower than our guided range of 70 70 to 72 29:14 29 minutes, 14 seconds days and that helped a lot in our cash conversion. Our toa on an LDM basis was 76%age which was higher than our guided range of 70%. 29:25 29 minutes, 25 seconds Um ETR for the quarter came in at 10.4%age. 29:30 29 minutes, 30 seconds This had a one-time impact associated with earnout reversals. adjusted for that EDR for the quarter was at 25%age. 29:38 29 minutes, 38 seconds We expect the EDR for CY 26 to be between 25 to 26%age. 29:44 29 minutes, 44 seconds EPS for the quarter what you look at 4.79 obviously has a onetime impact associated with labor code if we adjust 29:52 29 minutes, 52 seconds for that uh just the labor code impact our EPS for the current quarter is close to 6.15 30:00 30 minutes with that I'll hand it over back to keash if you go to the next slide please I'm going to end by talking about uh the 30:09 30 minutes, 9 seconds future okay first I'm going to say demand environment is improving and decision making is better and I will say 30:18 30 minutes, 18 seconds the specific to the customer base and the deals that we fighting need not it doesn't necessarily mean macro I think 30:26 30 minutes, 26 seconds macro is still spotted right you saw the jobs report from yesterday in US was pretty bad uh but certainly the 30:34 30 minutes, 34 seconds customers and the deals we seeing it is better in the long term um like I said we are progressing very 30:42 30 minutes, 42 seconds well on deals in Q4. We won pretty much everything we expected to win and more. 30:49 30 minutes, 49 seconds H and the headline was the consolidation deal in the big tech. Um the other there 31:00 31 minutes is one the the one deal that is not desired yet which was you know could have been late Q4 early Q1 31:10 31 minutes, 10 seconds um is the GSC consolidation deal that is still WIP. Now um little more on that uh 31:19 31 minutes, 19 seconds you know later. Okay. Um I think AI you know I'll say it has two factors okay 31:28 31 minutes, 28 seconds one it does have a dampener for our um 31:37 31 minutes, 37 seconds for you know whether it's software engineering testing um IT operations it is a dampener on our 31:46 31 minutes, 46 seconds revenue and you know we have whatever best estimate we have we've included 31:53 31 minutes, 53 seconds that. Okay. Um there's I'll say for now two maybe three quarters every single 32:01 32 minutes, 1 second deal we do uh has kind of productivity and impact from AI baked in and we 32:09 32 minutes, 9 seconds expect more of that will continue through the year. That's why I said there will be a dampener on uh revenue 32:17 32 minutes, 17 seconds growth due to it which we've accounted for. On the other hand, I think um it is 32:24 32 minutes, 24 seconds creating exciting new opportunities and avenues for growth. 32:29 32 minutes, 29 seconds um the most recent one we've been speaking about it for a while uh for a bit uh but you know suddenly you know 32:38 32 minutes, 38 seconds the whole world is speaking about it you know an opportunity to replace SAS now if you think about it that's a massive 32:46 32 minutes, 46 seconds opportunity and I'm not sure about the of course some of the reaction is initial but if you think about it SAS 32:54 32 minutes, 54 seconds want to replace itself you need um somebody needs to work on it and I 33:02 33 minutes, 2 seconds think there are two parts to it. One part is if you know what to build, um you still need somebody to work on it to build it. 33:12 33 minutes, 12 seconds But there's the bigger part of knowing what is in something you want to replace or rewrite. 33:19 33 minutes, 19 seconds And that uh is a pretty tough problem to solve. And frankly, that's a secret 33:26 33 minutes, 26 seconds sauce that we built. And that's one of the services that uh we launched this quarter. And I think eventually all 33:35 33 minutes, 35 seconds these services will create net new uh after accounting for the dampness positive growth for us. 33:43 33 minutes, 43 seconds Now what does kind of all this mean for 26 right now we 33:51 33 minutes, 51 seconds given where we kind of how 25 panned out you know clearly we um have some lessons learned on how to communicate with you. 34:03 34 minutes, 3 seconds Um so what we're saying is that we expect our revenue growth to be better than what we reported in 25 which is 34:12 34 minutes, 12 seconds 7.6. six I I don't want to mention that we don't think of this as like a new baseline 34:20 34 minutes, 20 seconds uh our core thesis of growth in base growth in teens low teens and 34:27 34 minutes, 27 seconds acceleration uh levers to get us to mid to high teens remains completely intact. 34:35 34 minutes, 35 seconds We've been through many bad growth cycles in the past and we've recovered pretty quickly. Okay. In the last 11 34:42 34 minutes, 42 seconds years, I think we've been through three times when we've grown less than 10%. 34:48 34 minutes, 48 seconds One is co the other interestingly was in 2016 for those of you that may have followed us then. uh at that time one of 34:57 34 minutes, 57 seconds our largest starts who still is um had a significant drop uh in that client and 35:04 35 minutes, 4 seconds um but we recovered very quickly from there in the following years and we fully expect um that that theme will continue. 35:15 35 minutes, 15 seconds Now C26 can be better depending on the following better depending on deal rampups. 35:24 35 minutes, 24 seconds Um I I told you for example the consolidation deal in big tech and actually even the consolidation deal we 35:31 35 minutes, 31 seconds announced the prior quarter on a big bank. These don't come with uh big books of work attached 35:40 35 minutes, 40 seconds um ramp ups and how well we execute in those and how much market share we can grab. 35:47 35 minutes, 47 seconds um the fact that the largest consolidation deal is still WIP and here unlike in other cases we are an 35:55 35 minutes, 55 seconds incumbent so we actually accounted for some downside in that when we called the 7.6 fixed number. So depending on how 36:03 36 minutes, 3 seconds all of those pan out, uh we can do better. 36:08 36 minutes, 8 seconds Now um I'll come to vertical outlook in a second. Um Q1 is always seasoning week 36:16 36 minutes, 16 seconds for us and you already heard Vicash say this year actually Q4 Q1 also there will be a um headwind on calendar that 36:25 36 minutes, 25 seconds doesn't happen every year but it is going to happen this year. Um but we're also going through some additional 36:32 36 minutes, 32 seconds one-off uh negatives. Okay. Uh I told you about the GSC that cut uh another 36:39 36 minutes, 39 seconds significant chunk. Uh this is the one where the the consolidation deal is still WIP. Um 36:48 36 minutes, 48 seconds that impact for us full year is 70 pips and so there was some impact in Q4. There is a full quarter impact in Q1. 36:57 36 minutes, 57 seconds area I I think customers have um there is a lag between when they get budgets at a company level to when it gets 37:05 37 minutes, 5 seconds allocated to projects. Um that's one of the reasons why Q1 is seasonally weak but I'll say this year it's a little 37:12 37 minutes, 12 seconds more than what we see normally. uh it was in the beginning of the year but you know even a few days lost revenue means 37:20 37 minutes, 20 seconds a lot um at and and so we bake that all into kind 37:29 37 minutes, 29 seconds of the fullear growth outlook and we're saying Q1 will be weaker uh will always 37:35 37 minutes, 35 seconds be in seasonally weak and it will be weak for us this year we will accelerate 37:42 37 minutes, 42 seconds kind of growth every spot uh after Q1 and you will see that um in our numbers 37:51 37 minutes, 51 seconds um from a vertical perspective banking and HNI will lead growth for the company. They will be higher or probably quite a bit higher than company average. 38:02 38 minutes, 2 seconds Um MNC will back to growth. 38:07 38 minutes, 7 seconds um professional services. I called up the two clients last time that that led 38:14 38 minutes, 14 seconds to kind of uh one which had a significant ramp down the other um which had a specific beginning of their year 38:22 38 minutes, 22 seconds budget issue. Um we'll kind of get back to growth uh but lower than uh company average. 38:32 38 minutes, 32 seconds Now TPP which is the new vertical uh will grow but from a small base um 38:41 38 minutes, 41 seconds and finally um GTT and FS will grow at company average. So this is our 38:48 38 minutes, 48 seconds expectation begin the year MNC and HNI lead FS and GTT will be at or uh 38:56 38 minutes, 56 seconds thereabouts of company average. MNC and profit services will trail. TPP will be faster but from a small base. 39:06 39 minutes, 6 seconds Finally on margins we will change our reporting to EIT uh from Q1. This is of 39:15 39 minutes, 15 seconds course based on we had from you what we see in the market. You know there various reasons from an IPO we had to do 39:21 39 minutes, 21 seconds a but we're going to change it. Our evit outlook for the year is at a 13 to 14%. 39:30 39 minutes, 30 seconds Which is lower than the current year. 39:34 39 minutes, 34 seconds Um what will happen essentially is that um the first half of the year you will see actually quite a reduction. 39:44 39 minutes, 44 seconds This is on account in Q1 um apart from other things it's also an account of 100 whips headwind and calendar. 39:52 39 minutes, 52 seconds Um but there is lots of deal ramp ups in the first half of the year including two or three that include rebadging 40:00 40 minutes components quite a bit of rebatchging components that will uh depress our margins. It will recover pretty sharply 40:09 40 minutes, 9 seconds as we kind of write sure those deals that we execute in the first part of the year um in H2. So actually you'll see 40:19 40 minutes, 19 seconds funny H2 exiting at better than the current year but uh in aggregate because 40:25 40 minutes, 25 seconds we start with a low u lower um start point in aggregate it will be at 13 to 40:34 40 minutes, 34 seconds 14% but with a stronger exit that's margin with that I will pause and take questions. Thank you all. 40:48 40 minutes, 48 seconds Thank you very much. We will now begin the question and answer segment. To ask a question, please click on the raise hand button at the bottom of your Zoom 40:56 40 minutes, 56 seconds interface to enter the queue. Once announced, kindly unmute yourself, state your name and organization, and proceed with your question. If your query is 41:05 41 minutes, 5 seconds addressed before your turn, you may press the lower hand button to exit the queue. We will pause briefly to allow the team to assemble the list of participants. 41:22 41 minutes, 22 seconds Our first question comes from Pratik Maheswari at HSBC. 41:26 41 minutes, 26 seconds Your line is open. You may now unmute and ask your question. Hello. U thank you for the opportunity. 41:36 41 minutes, 36 seconds So Ke uh I had uh one question around um the uh the expectation for next year. 41:42 41 minutes, 42 seconds So, so I I understand that uh probably 1Q has lot of headwinds uh both around the calendar days and uh some client 41:51 41 minutes, 51 seconds specific issues, right? So, uh but to hit again the uh mid team guidance, right? Uh do you think how how do you think probably 2Q and 3Q will pan out? 42:02 42 minutes, 2 seconds Right. Uh the deal wins and the deal pipeline is very strong as you've said. 42:09 42 minutes, 9 seconds So see but it seems that there'll be it'll be a very high ask rate for those two quarters as well. So just wanted to kind of if you could double down on that. 42:19 42 minutes, 19 seconds Yeah Prik uh you know I said our growth will be better than 7.6. 42:25 42 minutes, 25 seconds Um I said a long-term thesis of uh teens and mines low teens to mid teens is 42:33 42 minutes, 33 seconds intact. Um but you're right no matter what number you pick the uh growth asked 42:41 42 minutes, 41 seconds in Q2 and Q3 will be high. Uh like I said we do expect to kind of accelerate 42:47 42 minutes, 47 seconds growth every quarter uh from Q1. Um so yes that is the expectation that there will be a growth. Now the the calendar 42:57 42 minutes, 57 seconds in itself this year actually is going to give little bit higher than usual growth from Q1 to Q2. Much like it is a 43:05 43 minutes, 5 seconds tailwind for Q4 to Q1 uh it's a little more than normal headwind for Q1 Q2 as well. 43:15 43 minutes, 15 seconds Okay. And beside the uh beside the headwind from the GC client, do you think the uh headwind which uh company 43:23 43 minutes, 23 seconds phase from the professional services client uh do you think that is curtailed now and probably we that should start growing as a renate basis. 43:32 43 minutes, 32 seconds So there were two clients in PS um one where we kind of won the consolidation deal. We've been gaining 43:40 43 minutes, 40 seconds market share. there was a kind of plateauing at the beginning of their fiscal year which is July and that is that'll come back to growth. 43:50 43 minutes, 50 seconds uh the other one where we had a very sharp decline you know I'll say like 75% uh decline from where we were a year ago 43:59 43 minutes, 59 seconds that stabilized so I think what you will see is that uh we will get growth growth again from Q2 in this vertical on the 44:09 44 minutes, 9 seconds other one the GSC I mean our best read is this right now that the the they 44:19 44 minutes, 19 seconds still haven't decided on the consolidation deal. Um you know the the cuts and and the lack of allocation of 44:28 44 minutes, 28 seconds budgets early in the year uh is essentially kind of we think pending the decision. 44:35 44 minutes, 35 seconds Um so we expect that um once they make a decision those factors will change. 44:43 44 minutes, 43 seconds Nevertheless, you know, again, in our base growth that we put here, we haven't assumed that. In fact, we've assumed 44:51 44 minutes, 51 seconds because we're an incumbent, we've assumed some uh downside case because they haven't decided we could win or 44:58 44 minutes, 58 seconds lose. Uh we assumed a downside case, too. But, you know, that's the commentary on the GFC. 45:08 45 minutes, 8 seconds Okay. Uh thank you, Kate. Those are my questions. 45:14 45 minutes, 14 seconds Our next question comes from Anku Rudra from JP Morgan. Your line is open. You may unmute and ask your question. 45:24 45 minutes, 24 seconds Thank you. uh just you know thank you for your comments on uh AI ke just zooming out a bit what's the best way to 45:31 45 minutes, 31 seconds assess your relative competitive competitiveness here and I'm asking this because in the lack of anything else investors normally look at growth and on 45:39 45 minutes, 39 seconds that basis if one looks at the growth trajectory on the last five quarters we've gone from 16% organic growth CC basis to perhaps flat this quarter maybe 45:48 45 minutes, 48 seconds 1% it's a bit of a contrast versus what we've seen in you know your peers with broadly similar mixes so maybe you can highlight said, you know, why the 45:56 45 minutes, 56 seconds investors should not assume AI is more negatively impacting you versus others. 46:01 46 minutes, 1 second Yeah. So, you know, um if you recall in I think last quarter or even last 46:09 46 minutes, 9 seconds quarter prior to that, I said that for 25 our performance issues are not to do 46:16 46 minutes, 16 seconds with AI. Okay. And u I'll say that's my view in general for the industry. Um I 46:25 46 minutes, 25 seconds do think there'll be an impact uh on growth for the industry and for us and 46:30 46 minutes, 30 seconds we've accounted for it um in 25. Now I I will reiterate um why I think actually 46:40 46 minutes, 40 seconds not are we at par I think we are way better. We've been first off on a number of fronts. Yeah. uh and I'll recount 46:49 46 minutes, 49 seconds them again some of them again and what you will see is that these are all long-term large opportunities don't 46:56 46 minutes, 56 seconds necessarily translate to um bookings or revenues uh in any material term in the 47:03 47 minutes, 3 seconds short term. So we were the first to launch a legacy modernization platform. 47:11 47 minutes, 11 seconds Um there are any number of clients that have uh given us a trial run. 47:18 47 minutes, 18 seconds These are very large customers that don't do it only with us. They've benchmarked us with any number of others 47:26 47 minutes, 26 seconds in the industries and they think we're the best. 47:31 47 minutes, 31 seconds Um I I could, you know, potentially think of having one of those clients speak to 47:38 47 minutes, 38 seconds you guys. Okay. Um if it's of interest we can certainly show you what we do and I think seeing will be believed. 47:48 47 minutes, 48 seconds Um July last year we launched a whiteboarding offering. Essentially we 47:54 47 minutes, 54 seconds said we can build software 10x faster and nobody else went to market with that at that point of time. 48:05 48 minutes, 5 seconds Three weeks ago, we launched an offering called zero license. 48:12 48 minutes, 12 seconds Essentially, it's a think of it as a SAS kill. 48:16 48 minutes, 16 seconds What we're telling clients is we can get you to uh license. We can exit all your license software over time. 48:26 48 minutes, 26 seconds Um we've identified a number of what we think will be easier to execute uh use 48:34 48 minutes, 34 seconds cases and types of software to do initially before people kind of start getting closer to the core. 48:43 48 minutes, 43 seconds Um so and lastly these are all the more you 48:50 48 minutes, 50 seconds know I'll say uh esoteric stuff. The base stuff is 48:56 48 minutes, 56 seconds the AI embedded in our platforms for outsourcing. We certainly went through a 49:03 49 minutes, 3 seconds phase where that was weak. I think in Q3 and Q4 a good significant wins uh to be 49:11 49 minutes, 11 seconds sure that performance is not demonstrated in our numbers yet but you will see it in future. 49:21 49 minutes, 21 seconds Thank you. Just if you could clarify you know you mentioned you've baked in the AI is a dampener in the existing business as you renew things for this 49:28 49 minutes, 28 seconds year also how should we think about the level of uh impact uh you know on an existing renewal is it 30 40% is it a 49:35 49 minutes, 35 seconds lot more and given it's evolving at a very rapid pace as you mentioned as well you know how is this changing 49:42 49 minutes, 42 seconds yeah so so I'll say if the scope were to remain the same 49:48 49 minutes, 48 seconds um it could be in that 30 to 40% uh you know I'll say 20 to 40% depending 49:56 49 minutes, 56 seconds on the type of work uh but we in some cases at least I think it comes with a higher volume but for 50:05 50 minutes, 5 seconds the same scope that's the automative production thank you just the last question uh you 50:13 50 minutes, 13 seconds know you mentioned 1Q is going to be softer than seasonal fourth quarter is seasonally soft so the bulk of your ability to beat last year's 7 and a 50:21 50 minutes, 21 seconds half% number overall perhaps organic of 6% falls to the two quarters. Just wanted to know how much visibility do you have to hit those sort of mid single 50:28 50 minutes, 28 seconds digit kind of growth rate you need sequentially for those two quarters? 50:34 50 minutes, 34 seconds We like I said we we kind of have some lessons learned from um communicating and setting expectations. 50:44 50 minutes, 44 seconds Um so you know there there's a 50:51 50 minutes, 51 seconds basis that deal wins there's a lot of confidence in these numbers. Okay. What can happen more is 51:00 51 minutes if the deal wins that don't have a number like the consolidation deal some of the consolidation deals if they grow 51:07 51 minutes, 7 seconds and we grab a lot of market share there will grow but the base is based on deals that have won 51:17 51 minutes, 17 seconds appreciate it. Thank you and best of luck. Thank you. 51:23 51 minutes, 23 seconds Our next question comes from Vibhor Singhal at Nuvama Equities. Your line is open. You may unmute and ask your question. 51:33 51 minutes, 33 seconds Yeah. Hi. Uh thanks for uh taking my question. Uh each couple of questions from my side and then I have one question for Vikas. Uh so uh to on the 51:42 51 minutes, 42 seconds healthcare vertical just wanted to pick your brains on how are you looking at the outlook given that the US government uh Medicare spending next year is 51:51 51 minutes, 51 seconds expected to be flattish as against it has been growing around 5% historically this quarter also we saw basically a 51:58 51 minutes, 58 seconds sharp correction in the healthcare vertical. So how do we tie these two things together and the overall outlook for the healthcare vertical for us 52:06 52 minutes, 6 seconds specifically and maybe for the industry in CY26. Uh and second my second question was on the margin outlook for 52:13 52 minutes, 13 seconds uh the next year from the face of it looks like that we're kind of downgrading the margin band by almost 100 points. Uh so if you could basically 52:22 52 minutes, 22 seconds call out the puts and takes for this that what are the major reasons for this and also do we expect this band to be 52:29 52 minutes, 29 seconds back to the 14 15% uh uh in CY 27 or do you think this is where we will kind of settle it and find the little 52:38 52 minutes, 38 seconds Okay. So the first one on health care for good or bad we don't have exposure to uh much exposure to 52:48 52 minutes, 48 seconds payers or providers. Okay. Now that's a huge net new opportunity for us. Our his we do have some but our historic 52:56 52 minutes, 56 seconds presence is in the insurance side and uh life sciences less so on core healthcare 53:03 53 minutes, 3 seconds and that's a net new opportunity for growth. So notwithstanding the headwinds in the industry, our start point is at a 53:09 53 minutes, 9 seconds much lower level. The person we hired um Chantru was u twice I think rated as top 53:17 53 minutes, 17 seconds 25 healthcare IT execs. Um so you know we feel good about where we're going in that business and we will do very well. 53:28 53 minutes, 28 seconds On the the second question, um I'll reiterate a 53:35 53 minutes, 35 seconds couple of things I said. Uh the margins are going to be lower because of deal ramp ups in the first part of the year. 53:43 53 minutes, 43 seconds And including some 53:54 53 minutes, 54 seconds Sorry, somebody needs to go on. 54:07 54 minutes, 7 seconds Sorry, moderate. Can you figure out? 54:09 54 minutes, 9 seconds Okay, thank you. Um the said the the margins will be lower 54:17 54 minutes, 17 seconds primarily because in the first half the year especially primarily because of deal ramp popups and the deal ramps also 54:26 54 minutes, 26 seconds have three of them actually have rebadging components which will depress our margins as we 54:32 54 minutes, 32 seconds normalize the right the the shoring for those deals it'll actually improve in second half of the year. So actually if 54:41 54 minutes, 41 seconds things go right we will not only get back to normal in 27 actually we'll get back to normal a little better even in 54:49 54 minutes, 49 seconds the second half of the year. So the the margins that I'm talking about in this are not the new base. Uh actually there 54:57 54 minutes, 57 seconds there will be quite a bit of difference you'll see between H1 and H2 and H2 will be higher than or at least as much as the normal base. 55:09 55 minutes, 9 seconds Our next question comes from Anmma at Dam Capital. Your line is open. You may unmute and ask your question. 55:19 55 minutes, 19 seconds Yeah. Hi. Hi. Thanks for the opportunity. A couple of uh questions. 55:23 55 minutes, 23 seconds Um firstly uh if uh a bookkeeping one if I look at our note 13 in our BSC uh 55:31 55 minutes, 31 seconds release results then the impairment there is written at around 107 crores. 55:36 55 minutes, 36 seconds However in our PPT the impairment is you know near about 3.7% of revenues um which comes a little higher than that. 55:45 55 minutes, 45 seconds So wanted to understand where is the 60 to 70 basis point uh kind of difference coming from. 55:53 55 minutes, 53 seconds There's no difference in terms of the uh numbers. It's the same number what I called out in terms of the impairment. 56:03 56 minutes, 3 seconds So basically what I'm referring to is u in the note 13 uh the impairment charge return is around 107 kores whereas we 56:13 56 minutes, 13 seconds have indicated 3.7% of revenues in the as no in the notes if you see there are two 56:21 56 minutes, 21 seconds nodes with respect to the impairment you need to add both the amounts to the impairment to get to the same number what we have from a presentation 56:30 56 minutes, 30 seconds perspective of what I covered so it's been split into two different line items in the notes. 56:37 56 minutes, 37 seconds I'll give you the specific note reference numbers. If you have any other questions, you can continue. I'll come back on the specific note references. 56:46 56 minutes, 46 seconds Sure. Sure. Second question is uh basically on on the growth for uh next 56:52 56 minutes, 52 seconds year. U so uh there will be some uh incremental impact uh of cyber solve as 56:59 56 minutes, 59 seconds well uh which will add in uh around three odd quarters uh uh or three and a half odd quarters of impact. So um are 57:08 57 minutes, 8 seconds we saying that growth next year would be better than that uh you know uh excluding the acquisition impact uh as well. 57:19 57 minutes, 19 seconds So, so we saying our growth will be better than the 7.6 which is reported this year. This year also there was an impact due to acquisitions said also 57:28 57 minutes, 28 seconds there will be some carry forward impacts but what we saying is our reported number uh will be better than 7.6. 57:38 57 minutes, 38 seconds Understood. And and one one last thing uh just want to uh tie up uh you know 57:45 57 minutes, 45 seconds utilization uh dip in this quarter along with the headcount increase uh that has uh uh come in and with that we are 57:54 57 minutes, 54 seconds indicating that 1h particularly uh would be a slight negative uh during the 58:01 58 minutes, 1 second quarter. So u why are we inching up headcount over the last couple of quarters? Just wanted to understand preparing for deal rampups. 58:16 58 minutes, 16 seconds Sure. And and just one last thing um is on the uh a uh on the license uh uh so 58:24 58 minutes, 24 seconds we are we have indicated that uh there is uh 6 to 7 million license drop uh uh during the quarter. So uh is there any 58:33 58 minutes, 33 seconds resale component as well uh into this license or this is something which uh which are our own products? 58:43 58 minutes, 43 seconds Sorry, I didn't hear the last phrase. Is there a resell component or uh or these are our own IPs? Uh or these 58:52 58 minutes, 52 seconds are our own IPs that we are No, no, these these are not our own IP. 58:56 58 minutes, 56 seconds These are third party licenses. It's you know gets baked in into the work we do. 59:02 59 minutes, 2 seconds Um but it has rental cycles. Um sometimes it gets baked in the work we do sometimes dependent. For example, 59:10 59 minutes, 10 seconds service now. Um some We do quite a bit of work. Uh some of the clients do the licenses also with us. Uh no these are not our IPs. 59:23 59 minutes, 23 seconds So uh assuming 59:37 59 minutes, 37 seconds our last question comes from Depes Ma at MK. Sorry, there was a there was a question. 59:42 59 minutes, 42 seconds Just wanted to clarify on one thing. The impairment numbers what we were trying to look for from a balance sheet perspective. If you look at note 10 on 59:51 59 minutes, 51 seconds the balance sheet, it calls out the console impairment impact of INR1302 million. So you can you can look into that. 1:00:03 1 hour, 3 seconds Yeah. Over to you for the opportunity. Can you hear me? 1:00:12 1 hour, 12 seconds We can hear you. We can hear you. 1:00:15 1 hour, 15 seconds Okay. Okay. Thank you. Uh thanks for the opportunity. Uh couple of question. 1:00:20 1 hour, 20 seconds First just want to understand uh about the acquisition how those acquisitions are playing out. If you can give some sense about SMC and cyber how those 1:00:29 1 hour, 29 seconds acquisition are playing out uh because now I think a number of quarters have played out in terms of synergy benefit 1:00:37 1 hour, 37 seconds what we envisage as well as capability expansion uh help us to extend our overall addressable market 1:00:46 1 hour, 46 seconds perspective. So if you can give some sense we made some impairment provision in some of the past acquisitions. if you can help us understand it pertains to 1:00:54 1 hour, 54 seconds vote. Uh second question is about the overall deal intake. We said we have a good healthy intake in quarter 4 but can 1:01:01 1 hour, 1 minute, 1 second you provide some sense about how the SCV played out in CI25 uh compared to let's say C24 kind of and 1:01:10 1 hour, 1 minute, 10 seconds any change we made to guidance practice the way we guide uh for future if any changes be made to uh give some comfort about the way we guide. 1:01:24 1 hour, 1 minute, 24 seconds Okay, there there are a number of questions in that. Um so um 1:01:34 1 hour, 1 minute, 34 seconds uh because just the the first question was about first was an M&A performance M&A performance okay so I I think our 1:01:42 1 hour, 1 minute, 42 seconds softic which is not in 25 which is in 24 is not doing well that's why you've seen the impairments 1:01:50 1 hour, 1 minute, 50 seconds to be sure the payout kind of goals were aggressive they they are for there are 1:01:56 1 hour, 1 minute, 56 seconds other acquisitions we made as well. So you know reversing payoffs doesn't necessarily made mean bad performance 1:02:04 1 hour, 2 minutes, 4 seconds but in this case I will say the performance was not good and I think that's part of the reason why we didn't do well in 25 1:02:12 1 hour, 2 minutes, 12 seconds uh I'll say kind of you know two of software clients went bankrupt during 1:02:20 1 hour, 2 minutes, 20 seconds the year uh two substantial ones okay during the year as in 25 1:02:26 1 hour, 2 minutes, 26 seconds um majority vast Majority of the work is also in the consumer sector manufacturing and consumer sector and 1:02:34 1 hour, 2 minutes, 34 seconds that's not a sector that's done well uh did well due to macros uh but whatever the reasons are in aggregate it didn't 1:02:41 1 hour, 2 minutes, 41 seconds do well um cyberol is still too early it is not even a quarter um not even a full 1:02:50 1 hour, 2 minutes, 50 seconds quarter yet so it's still too early u we expect it'll do well it's very adjacent to what we do in cyber security. 1:02:59 1 hour, 2 minutes, 59 seconds It's a service that we sell otherwise um when we have been selling we didn't have the capability to execute so we actually 1:03:08 1 hour, 3 minutes, 8 seconds sub a bunch of that work so very adjacent we expected to do well um SMC 1:03:17 1 hour, 3 minutes, 17 seconds you know the world you know is going to GCC who is not there is going to set up 1:03:24 1 hour, 3 minutes, 24 seconds one whoever is there is uh going to grow Um and of course you know it's not only 1:03:32 1 hour, 3 minutes, 32 seconds India right so I I think the the fact that you need a capability to do u what 1:03:40 1 hour, 3 minutes, 40 seconds SMC does is necessary I think it gives us um visibility you know lots of 1:03:48 1 hour, 3 minutes, 48 seconds customers who are thinking about GCCs who were not thinking about us before clearly do now because of this acquisition every quarter since we 1:03:56 1 hour, 3 minutes, 56 seconds acquired we've announced a deal including um in Q4 we said major IT 1:04:03 1 hour, 4 minutes, 3 seconds services firm in Asia uh scale GCC deal one the next question was on guidance 1:04:11 1 hour, 4 minutes, 11 seconds practice h yeah so I I think our most important kind of um is to 1:04:21 1 hour, 4 minutes, 21 seconds be more conservative right so is to make sure that we can meet uh what we said we will 1:04:30 1 hour, 4 minutes, 30 seconds AC trend if you can give some sense how it played out CI 25 versus C 24 where we ended in 25 is better than 1:04:38 1 hour, 4 minutes, 38 seconds where we ended in 24 quite a bit so in terms of bookings that we carry forward into the year 1:04:46 1 hour, 4 minutes, 46 seconds and in addition our pipeline is also materially better now we kind of spoken about some 1:04:54 1 hour, 4 minutes, 54 seconds structural things that went into is um we built a new hunting theme team 1:05:01 1 hour, 5 minutes, 1 second through 24 through the second half of 24. So essentially the current team as 1:05:08 1 hour, 5 minutes, 8 seconds it stands came together in end of 24. I think it took some time for them to 1:05:15 1 hour, 5 minutes, 15 seconds learn, settle in, become productive and it is now working well and the results 1:05:23 1 hour, 5 minutes, 23 seconds for us were in booking in second half of 24. That's why I said our uh where we ended the year was much better than 1:05:32 1 hour, 5 minutes, 32 seconds where we ended 24. You'll see that translated revenues through um the course of 26. 1:05:42 1 hour, 5 minutes, 42 seconds Understand? Thank you. 1:05:45 1 hour, 5 minutes, 45 seconds I think I think that is that's the last question that we'll take. We have significantly short over the time. I'll uh any final remarks and then we'll close the call. No sir. 1:05:55 1 hour, 5 minutes, 55 seconds Thank you all. I look forward to talking to you again next squad. Thank you.