Infosys — Q4 FY26

Infosys Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=-rAdbtchxeg Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, greetings and welcome to Enforcers Limited Q4 FI26 earnings conference call. As a reminder, 0:10 10 seconds all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds you need assistance during this conference call, please signal an operator by pressing star then zero on your touchdown phone. Please note that 0:27 27 seconds this conference is being recorded. I now hand the conference over to Mr. Sandeput Mindra. Thank you and over to Mr. 0:34 34 seconds Mahindra. 0:39 39 seconds Thanks everyone. Welcome to this earnings call to discuss Infosys Q4 FI26 financial results. Joining us on this call is CN MP Mr. Savan Parik CFO Mr. 0:50 50 seconds Jung Rajka along with other members of the leadership team. 0:54 54 seconds We'll start the call with some remarks on the performance of the company. 0:59 59 seconds Subsequent to which we'll open up to call for questions. 1:02 1 minute, 2 seconds Please note that anything we say that refers to our future outlook is a forward-looking statement and must be read in conjunction with the risk that the company faces. A complete statement 1:12 1 minute, 12 seconds explanation of these risk is available in our filing with the FCC which can be found on www.se.gov. 1:18 1 minute, 18 seconds I now like to pass on the call to Sal. 1:21 1 minute, 21 seconds Thanks. Uh good afternoon, good evening, good morning to everyone. Thank you for joining in. 1:28 1 minute, 28 seconds Uh we delivered a strong performance in the financial year 2026. We had a growth of 3.1% 1:36 1 minute, 36 seconds for the full year in constant currency terms. 1:40 1 minute, 40 seconds Our Q4 revenue growth was 4.1% yearonear in constant currency terms. We 1:47 1 minute, 47 seconds had strong growth in financial services, in the communications uh industry, in manufacturing industry and for the 1:56 1 minute, 56 seconds Europe geography. For the full year, large deals were strong. For the full year, we had 14.9 billion of large 2:04 2 minutes, 4 seconds deals. This is a growth of 24% over the prior year. And for Q4, we were at $3.2 2:12 2 minutes, 12 seconds billion, a strong showing for the quarter. 2:17 2 minutes, 17 seconds We shared our AI strategy during our AI investor day a few weeks ago. We see a 2:25 2 minutes, 25 seconds large addressable market for AI services across six areas. AI strategy and 2:32 2 minutes, 32 seconds engineering, data process, legacy modernization, physical AI and trust. 2:38 2 minutes, 38 seconds With our topaz fabric platform for AI, our cobalt platform for cloud, we have differentiated capabilities to serve our clients across the six areas of AI. 2:51 2 minutes, 51 seconds Some examples of the work we're doing for a consumer products retail company, Ralph Floral Floren. We helped build a 2:59 2 minutes, 59 seconds con conversational and personalized AI tool that led to converting customer interest into a shopping experience. 3:08 3 minutes, 8 seconds This resulted in an increase in their revenue by 12% and customer engagement by 50%. 3:16 3 minutes, 16 seconds For a large transport company, Hertz, we helped with a legacy migration to bring 3 million lines of cobalt code to a 3:25 3 minutes, 25 seconds modern microservices environment using AI foundation models. The cost was 60% 3:32 3 minutes, 32 seconds lower. The timeline was 60% quicker than how they would have done it with without AI. 3:42 3 minutes, 42 seconds For a large energy company, BP, we deployed 50 AI agent initiatives across trading, supply chain, sustainability, 3:49 3 minutes, 49 seconds and core operations to transform the software development, knowledge automation, legacy modernization, 3:57 3 minutes, 57 seconds and digital decision support. This resulted in 95% payment accuracy, 50% 4:04 4 minutes, 4 seconds faster contract validation, and 18% improvement in IT operations efficiency. 4:11 4 minutes, 11 seconds We have strategic collaborations with emerging foundation model companies such as Anthropic and OpenAI which help us 4:18 4 minutes, 18 seconds support our clients transformation for software development, legacy modernization and agent building. We also have established strategic AI 4:26 4 minutes, 26 seconds collaborations with Google Gemini, Nvidia, Microsoft, AWS, Google Cloud and Intel among others. We've deployed over 4:36 4 minutes, 36 seconds 30,000 deployer developers on GitHub copilot. 4:42 4 minutes, 42 seconds As we look ahead to financial year 2027, we see large opportunities in AI services, 4:49 4 minutes, 49 seconds continued comparative intensity and AI productivity impact. 4:55 4 minutes, 55 seconds With a clear AI strategic roadmap and real world toolkit of Topaz fabric, we are well positioned to support our 5:03 5 minutes, 3 seconds client's transformation technology and operations objectives. 5:08 5 minutes, 8 seconds The revenue growth guidance of financial year 27 is 1.5% to 3.5% yearonear in constant currency uh terms. 5:19 5 minutes, 19 seconds We expect acceleration in growth in financial services and the energy, utilities, resources, services vertical uh from financial year 26 to 27. 5:31 5 minutes, 31 seconds We expect H1 to be stronger than H2 consistent with our normal seasonality. 5:38 5 minutes, 38 seconds Operating margin guidance for financial year 27 is 20% to 22%. With that, let me hand it over to J for his update. 5:49 5 minutes, 49 seconds Thank you sir. Good morning, good evening everyone and thank you for joining the call today. 5:55 5 minutes, 55 seconds Financial year 26 performance demonstrates our ability to maintain financial discipline and operational excellence in a challenging and invol 6:03 6 minutes, 3 seconds evolving business environment. Client spending is guarded with greater focus on cost optimization engagement as against growthled transformation 6:11 6 minutes, 11 seconds programs. We are seeing increasing momentum in AIdriven initiatives particularly around productivity automation and platform like modernization initiatives. 6:21 6 minutes, 21 seconds Let me start with the key highlights for the year and the quarter. FI26 revenues crossed 20 billion and grew 3.1% in 6:29 6 minutes, 29 seconds constant currency term within the upgraded guidance band given in January. 6:34 6 minutes, 34 seconds This was after lower third party cost which was down by 1% as percentage of revenue and 7% reduction in onset mix. 6:42 6 minutes, 42 seconds Acquisitions contributed about 70 bits on folia growth for FY26 communication 6:50 6 minutes, 50 seconds manufacturing vertical and Europe geography grew more than double the company average led by ramp up of the large deal. Additionally, FS and EURS 6:59 6 minutes, 59 seconds grew above the company average in consequences. Volumes for the year were flattish. 7:04 7 minutes, 4 seconds Growth was led by increase in realization thanks to project maximus. 7:08 7 minutes, 8 seconds Adjusted operating margin was stable at 21% gains from currency and maximus were reinvested in talent AI investment and failed from marketing. 7:17 7 minutes, 17 seconds Q4 revenues grew by 4.1% yearon year. 7:20 7 minutes, 20 seconds Sequentially re revenues declined 1.3% in constant currency due to seasonality and slower decision- making in the month of March. Both in Q4 was broad-based 7:29 7 minutes, 29 seconds across major geographies. Communication EURS and LS vertical grew well above the company average on a year-on-year basis 7:37 7 minutes, 37 seconds in conurren operating margin stood at 20.9% down.3% sequentially existed for the labor code 7:45 7 minutes, 45 seconds impact in QC onsite link further reduced to 22.8% 8% from 23.1% in Q3. 7:53 7 minutes, 53 seconds Utilization excluding trainees was 83% in Q4 and 84.4% in FI26. 7:59 7 minutes, 59 seconds Utilization including trainee was at 81.1% for FI26 reflecting the investment made towards creating future capacity. 8:08 8 minutes, 8 seconds Strong focus on collections aided by technology interventions helped us reduce DSO including an unbuilt net of unarn to 78 which is the slowest in seven years. 8:19 8 minutes, 19 seconds which is the lowest in seven years. 8:21 8 minutes, 21 seconds Reported EPS in INR terms due 20 on 8% Y in Q4 and 11% in FI26. EPS existed for 8:29 8 minutes, 29 seconds income tax orders and the labor code view double digits for the year at 13.9% in Q4 and 12.1% for the full year in AN 8:39 8 minutes, 39 seconds cash flow adjusted for the labor codes and income tax refund stood at 3.5 billion for FY and 882 million for Q4. 8:48 8 minutes, 48 seconds Adjusted free cash as a percentage of net profit continue to be well above 100% at 106 for FI26 and 111 for Q4. 8:57 8 minutes, 57 seconds We had a strong large deal win in financial year with a PCB of 15 billion with 55% net. Large deal pipeline 9:04 9 minutes, 4 seconds continues to remain strong. Our 50 million plus uh dollar plus client increased by three and 100 million plus 9:11 9 minutes, 11 seconds clients also increased by three. 400 million by two in uh financial year last year. Head count at the end of the year 9:19 9 minutes, 19 seconds was over 328,000. Voluntary attrition reduced by 1.5% to 12.6 for the year reflecting continuous dropness in our 9:27 9 minutes, 27 seconds and our interventions toward talent retention. 9:31 9 minutes, 31 seconds We onboarded more than 20,000 freshers in FI26 and expect to hire a similar number in FI27. We will continue to calibrate the overall requirement 9:39 9 minutes, 39 seconds depending on growth expectations and attrition trends. 9:43 9 minutes, 43 seconds Operating margins for Q4 declined by 0.3% to 20.9% sequentially. Major components of the changes are as below. 9:50 9 minutes, 50 seconds Headwinds of 50 basis points impact from past acquisition on account of additional amotization of intangibles. 9:57 9 minutes, 57 seconds 30 basis points for normalization of last quarter's one-off gain. 20 basis point from compensation related cost offset by lower variable. 10:06 10 minutes, 6 seconds This is partially offset by tailwinds of 40 basis point for currency and 30 basis point for maximus comprising of value selling lean and automation and critical 10:14 10 minutes, 14 seconds portfolio for yield on cash and investments balance was at 6.2% and 6.7% for the year ro stood at 31.6%. 10:24 10 minutes, 24 seconds Consolidated cash and investments were at 4.5 billion after returning over 4 billion to shareholders in FI26 reflecting our strong cash generation. 10:33 10 minutes, 33 seconds We signed 19 large deals during the quarter with CCV of 3.2 billion. This includes five age in financial services and manufacturing, four in retail, two 10:42 10 minutes, 42 seconds in uh two each in life science and communication and one in ERS. Region wise, we signed 11 deals in Europe, five in America, and three in the rest of the 10:50 10 minutes, 50 seconds world. In FI26, we signed 96 large deals with DPS of 15 billion uh 55% net new. 10:58 10 minutes, 58 seconds This includes three mega deals for the year. Tax rate for the quarter is lower due to reversion of prior tax prior year tax provisions as a result of favorable 11:06 11 minutes, 6 seconds tax orders. We expect effective tax rates for the financial year 27 to be in the range of 29 to 32. 11:14 11 minutes, 14 seconds In line with the capital allocation policy board has proposed a final dividend of rupees 25 per share which will result in a total dividend of 48 11:21 11 minutes, 21 seconds per share an increase of 11.6% over last year once the final dividend is approved by the shareholders. 11:28 11 minutes, 28 seconds Coming to vertical financial services for FI26 grew above company average at 4.4% led by Ranhost for large deal and continued momentum in AI le 11:36 11 minutes, 36 seconds transformation legacy modernization and vendor consolidation overall market sentiment remains positive resulting in 11:43 11 minutes, 43 seconds continued consumer spendings across US banking capital markets and Europe 26 budgets are expected to grow in US. 11:51 11 minutes, 51 seconds We signed a large GCC deal for a regional bank in the US, an industry first and a large AI first GCC deal. We 11:59 11 minutes, 59 seconds are strategic AI partner for 18 out of the top 20 clients in this vertical. 12:02 12 minutes, 2 seconds Significant large deal closes and a new account opening in FI26 along with a strong large deal pipeline will drive growth acceleration in FI2. 12:12 12 minutes, 12 seconds Clients in manufacturing remain cautious amid softer demand particularly in auto automotive and parts of Europe. This is continued. There is continued 12:20 12 minutes, 20 seconds uncertainty on account of tariffs and ongoing Middle East conflict which is resulting into delayed decision-m in pockets. Discretionary spending remains 12:28 12 minutes, 28 seconds constrained while clients prioritizing cost optimization and operational resilience. 12:33 12 minutes, 33 seconds Large deal pipeline comprises of infraing AMS for HANA rollouts etc. Near-term and FI27 growth will be impacted due to low 12:42 12 minutes, 42 seconds revenue from one large client. Across EUR segment, demand environment remain constructive supported by a strong large 12:49 12 minutes, 49 seconds deal pipeline. Clients continue to prioritize cost reduction and operational efficiency which is a driving vendor consolidation. In energy, 12:57 12 minutes, 57 seconds we see increased outsourcing leading to healthy deal momentum. Utility demand is structurally higher driven by grid constraint, renewable integrations and 13:06 13 minutes, 6 seconds acceleration uh electricity needs for data centers. 80% of the larger GPV of FI26 was net new which will which will 13:15 13 minutes, 15 seconds help growth and acceleration in FI27 in retail segments clients are operating in continued uncertaintity from supply 13:22 13 minutes, 22 seconds chain con supply chain disruption geopolitical conflict and shifting trade policies consumer demand remains muted across the sector and budgets are 13:30 13 minutes, 30 seconds tightly controlled with discretionary spends under pressure clients expect savings from AI like productivity to do more with the similar budget we will see 13:39 13 minutes, 39 seconds higher demand for AI assisted legacy modernization. Topas fabric and AI next platforms are helping clients in 13:46 13 minutes, 46 seconds ideation from concept to deployable deployable stage with the right guard rates for privacy, ethics and control. 13:53 13 minutes, 53 seconds In communication sectors, growth for FY26 was led by large deal ramps. 13:58 13 minutes, 58 seconds Overall environment remains cautious amid macro uncertainty and margin pressures for clients. Budgets are flat to negative which is impacting 14:06 14 minutes, 6 seconds discretionary spend. Non-discretionary spends are selective and increasingly Aless. There is a shift from generative 14:13 14 minutes, 13 seconds to AI to agent AI with client consolidating IT and VPN cuts. We are strong we see a strong uptick in AI in 14:22 14 minutes, 22 seconds areas like IT operation software replacement and mainframe migration. 14:28 14 minutes, 28 seconds As we enter FYI 2010, we continue to see a measured and selective approach to enterprise budget amid macro and geopolitical uncertaintities, higher 14:36 14 minutes, 36 seconds interest rates, rapid technology shifts, and high competitive intensity. We expect FI27 growth to be 1.5% to 3.5% in 14:44 14 minutes, 44 seconds constant currency. The FI27 guidance includes contributions from status, which we closed earlier this week, but 14:52 14 minutes, 52 seconds excludes wor and uh wor JV and optimum healthcare acquisitions that are yet to be closed. 14:58 14 minutes, 58 seconds reduction of 75 to 1% due to a lower revenue from one of our large European manufacturing client. This was due to reduced client spend on account of 15:06 15 minutes, 6 seconds challenging metro environment along with our conscious decision to not pursue a certain deal that were not aligned to our return expectation. 15:15 15 minutes, 15 seconds Further reduction in onset mix by 75 to 1%. We expect third party costs for FI27 to remain at similar levels as FI26. 15:25 15 minutes, 25 seconds Our operating margins guidance for the year is 20 to 22%. This assumes headwinds from wage height, productivity passroughs and AI investments offset by 15:33 15 minutes, 33 seconds initiatives under project maximum. The impact of optimum optimum healthcare status and worsen on operating margin will be approximately 7 on a full year 15:42 15 minutes, 42 seconds annualized basis post closure. With that we can open up for the questions. 15:47 15 minutes, 47 seconds Thank you very much. We'll now begin with the question and answer session. 15:52 15 minutes, 52 seconds Anyone who wishes to ask a question may press R and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press R and two. 16:02 16 minutes, 2 seconds Participants are requested to use handsets while asking a question. 16:07 16 minutes, 7 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. 16:12 16 minutes, 12 seconds Participants, you may press star and one to ask a question. 16:20 16 minutes, 20 seconds First question is from man of Yogi Shagarwal of HSBC securities. Please go ahead. 16:26 16 minutes, 26 seconds Yeah. Hi. Uh there's couple of questions. Firstly u uh s can you talk about uh the push pulls for the guidance like at the lower end at the upper end. 16:35 16 minutes, 35 seconds What are you assuming? And secondly you guys had a very successful project maximus. the quality of business the 16:42 16 minutes, 42 seconds revenues has also improved but the entire INR depreciation which is very significant has not uh impacted the 16:50 16 minutes, 50 seconds margin outlook. So I was just curious which are the areas where all the INR depreciation has been invested and uh if you can talk a little bit uh about that. 16:59 16 minutes, 59 seconds Thank you. 17:03 17 minutes, 3 seconds This is Jar. At the lower end of the guidance, we have assumed you know higher uh deterioration in the environment and the at the upper end we 17:12 17 minutes, 12 seconds have assumed uh improved uh environment um like similar to what we done in the last year as well. Um in terms of margin 17:21 17 minutes, 21 seconds walk I did give you know broad margin walk but largely we have invested uh you know all the benefit that we got from 17:28 17 minutes, 28 seconds rupee as well as from maximus back into the business whether it is sales and marketing cost which has gone up by uh 40 basis points on a full year basis the 17:36 17 minutes, 36 seconds AI talent and the you know the AI partnerships etc that that we have so I think all of all of that is has been 17:44 17 minutes, 44 seconds absorbed um in in the margin in uh in the financial And just a quick followup, you you 17:53 17 minutes, 53 seconds mentioned productivity pass through impacted margins. I was just wondering why should that be the case? Uh if there was productivity improvement 18:06 18 minutes, 6 seconds market is competitive, right? As I said, the competitive intensity in the market has has gone up and the productivity will get passed back uh to the plant last year. 18:17 18 minutes, 17 seconds Right. Thank you. 18:20 18 minutes, 20 seconds Thank you. Next question is from the line of Ankor Rudra from JP Morgan. Please go ahead. 18:28 18 minutes, 28 seconds Hey, thank you. Um I noticed you've chosen to guide in a 200 basis point band uh versus a slightly wider band in the last couple of years. Is your 18:36 18 minutes, 36 seconds visibility better this year versus the last few years? And furthermore, if you can, you know, look a bit better a bit more into the guidance, you know, as a 18:43 18 minutes, 43 seconds follow up to the previous question, the guiding for 2.25% 25% organic at the midpoint approximately which appears to be a bit of a slowdown versus the 2 and a half% or 2.4% organic in fiscal 26. 18:54 18 minutes, 54 seconds Can you maybe talk about what are the takes of the outlook? Um and you know if you can especially elaborate on if the 19:02 19 minutes, 2 seconds slowdown is because of a demand environment b structuring a recreation or c the impact from that one large account which is ramping down this year. 19:10 19 minutes, 10 seconds Thank you. 19:14 19 minutes, 14 seconds Yeah. So uh Yish if you sorry Ankur if you look at the uh the guidance last year we we gave a three-point guidance 19:21 19 minutes, 21 seconds because uh the whole environment changed you know pretty much very close to the time when we were giving guidance right 19:28 19 minutes, 28 seconds and we had no we had very little clarity in terms of how that environment changed because of on the back of tariff tariff 19:36 19 minutes, 36 seconds changes is going to impact uh the client behavior etc where we stand today I think there's a better clarity in terms 19:43 19 minutes, 43 seconds of you know what's happened the environment has been like this for last last few quarters and we know how clients are behaving at this point at 19:51 19 minutes, 51 seconds least at this point in time of course if things change you the plan behavior we think that's given always but at this point in time from a comparative 19:59 19 minutes, 59 seconds perspective we have a better clarity and that will have better handle work through the last year on the 20:07 20 minutes, 7 seconds so with the like the construction of the guidance what we are seeing positive where the changes is are 20:16 20 minutes, 16 seconds the the J mentioned many of those points I'll elaborate we seeing the growth on AI services 20:25 20 minutes, 25 seconds we seeing very good traction on that uh we seeing we've started a program where we are working with large companies with 20:34 20 minutes, 34 seconds a smaller footprint that Infosys has we're expanding that quite nicely uh then we saw the large deals the net 20:42 20 minutes, 42 seconds new was 55% So that will contribute for the next for this financial year uh in a significant way. And then 20:52 20 minutes, 52 seconds uh on the other hand there is the productivity benefits that are coming through which the 20:59 20 minutes, 59 seconds clients are looking for with AI on the existing portfolios. 21:06 21 minutes, 6 seconds Then uh J shared a couple of situations with manufacturing Europe with uh on-site mix of some technical factors. 21:17 21 minutes, 17 seconds So those if I sort of add and and subtract is where we came on that 21:23 21 minutes, 23 seconds guidance. The environment I find is good. Our large deal pipeline is 21:30 21 minutes, 30 seconds good. uh the the way we had done it on that AI investor day we had sort of said look there's a growth uh side 21:40 21 minutes, 40 seconds with uh what will be the AI we have a couple of other growth uh drivers and then there's a compression side and and 21:47 21 minutes, 47 seconds that's the balance that we are seeing in the past year with 3.1% and if you adjust for the one-timers the one time 21:56 21 minutes, 56 seconds uh uh from the prior year we had a growth rate which was uh more than the 22:03 22 minutes, 3 seconds compression we were seeing and this coming year the guidance that we have started with also sees that uh and then 22:11 22 minutes, 11 seconds we'll see as JS on the environment how it changes u improving or not improving and then see how the year goes after that. 22:23 22 minutes, 23 seconds Thank you for the elaboration s if I could you know just a quick followup what what would need to happen for you to see an acceleration at the midpoint uh on a organic basis. Thank you. 22:36 22 minutes, 36 seconds Um these are things which are always more difficult to estimate as you know well anal. 22:47 22 minutes, 47 seconds However, the view emerging is that the situation uh in the in the Middle East may find 22:56 22 minutes, 56 seconds some sort of a good good out resolution then the underlying economic sense are 23:03 23 minutes, 3 seconds pretty good in the markets where we are large. So that could give you know sort of rise to a more stable uh macro 23:13 23 minutes, 13 seconds environment. uh our AI traction and partnerships are good. So if those things you know the first and the second 23:21 23 minutes, 21 seconds accelerate then we will see some good uh good outcomes but it's more of going in 23:28 23 minutes, 28 seconds you know we see the environment today it's not we've not seen some big change to give us a view that you know we have 23:37 23 minutes, 37 seconds to do a threepoint range and so on at this stage and overall we see growth which is more than compression. 23:47 23 minutes, 47 seconds Appreciate it. Thank you. 23:50 23 minutes, 50 seconds Thank you. Next question is from the land of Brian Bergen from TD Coven. Please go ahead. 23:59 23 minutes, 59 seconds Hi, thank you. I wanted to ask on the AI AI productivity that you're seeing here. 24:04 24 minutes, 4 seconds So, so with the AI model advances happening as fast as they are, has the amount of productivity during compression that you're seeing changed 24:13 24 minutes, 13 seconds in the current contracts relative to what you may have been seeing say one or two quarters ago? And can you mention 24:20 24 minutes, 20 seconds maybe the the mix of the business that is directly exposed to the productivity passroughs versus maybe the mix of the business that is more insulated? 24:32 24 minutes, 32 seconds on the first one. Uh we we [clears throat] have not with the models and the technologies moving uh with great innovation. 24:42 24 minutes, 42 seconds We have not seen in one or two quarters the change that you referenced. Though what we are seeing is a competitive 24:50 24 minutes, 50 seconds intensity is pretty high. So every now and then uh we see you know a competitor 24:57 24 minutes, 57 seconds doing something which looks outside the range of what we think the models can do today. So that that sort of thing we do 25:04 25 minutes, 4 seconds see uh but uh not that that's just the tech in the last two quarter meaning over the last two years of course there 25:11 25 minutes, 11 seconds have been changes in the terms of expose I think we have not like shared that uh data but I I 25:22 25 minutes, 22 seconds think we've shared very clearly what our service line data is and you know you you you can make some estimates with that I 25:33 25 minutes, 33 seconds Okay. And then my thoughts on on kind of how you're thinking about the overall business and headcount, you know, hiring 25:40 25 minutes, 40 seconds intentions for fiscal 27. I think I heard you say, you know, roughly targeting the fresher uh target of around 20,000 again, but do you envision 25:48 25 minutes, 48 seconds a scenario where I guess the total headcount could ultimately be down in total when the year is over? and also if 25:56 25 minutes, 56 seconds you can help talk about the subcontractor intensity that you're anticipating in the year ahead 26:04 26 minutes, 4 seconds on the overall headcount first as you pointed out we will recruit 20,000 college graduates that's our plan today we have a model which does some of some 26:12 26 minutes, 12 seconds of it at at a at a one particular time and the rest of it throughout the year so we have like a variability built in 26:20 26 minutes, 20 seconds if we see some changes but what we see today we think 20,000 looks like a good good place to start. 26:27 26 minutes, 27 seconds We still have at least now I look out for this quarter next quarter very good demand for people which are coming at 26:35 26 minutes, 35 seconds higher levels lateral recruitment. So I think that will continue. Uh my I I 26:42 26 minutes, 42 seconds don't see that our headcount is going to be like we don't have a plan that the headcount will be less at the end of the 26:49 26 minutes, 49 seconds year. Now we'll see how the demand environment plays out but it's not going in sort of a view that we have. Of course we have you know we basically 26:57 26 minutes, 57 seconds look at Q1 Q2 and and the rest we build out on the models we have subcom 27:05 27 minutes, 5 seconds yeah and on the subcomm if you look at last few years uh you know subcon as a percentage of revenue has come down obviously it's also a factor of the 27:13 27 minutes, 13 seconds growth so typically you know we use subcons to to meet the demand uh which is which comes in immediately we don't 27:20 27 minutes, 20 seconds have the the requirements skills etc and then we we backfill that uh through to through the employees uh and and that's 27:28 27 minutes, 28 seconds a cycle that goes on. So we don't really expect subcons to significantly change uh from this numbers over a over a medium-term period. We expect uh to 27:36 27 minutes, 36 seconds maybe go towards uh the lower end I mean to slightly go down from the current level but at this point in time not significantly change. 27:46 27 minutes, 46 seconds Okay that's thank you very much. Thank you. 27:51 27 minutes, 51 seconds Next question is from the land of Goro of Rotaria from Urban Stanley. Please go ahead. 27:57 27 minutes, 57 seconds Hi, thank you for taking my question. My first question is on the construct of growth. When I look at that, there are 28:05 28 minutes, 5 seconds broadly three factors that comes to my mind. The first is the macro. Compared to last year, it appears that the 28:13 28 minutes, 13 seconds headwinds related to tariff etc. not there. So there is slight improvement which is reflected in 40% of your portfolio that you talked about. The 28:21 28 minutes, 21 seconds second factor is AI services which probably has become larger than the last year and growing faster which again is a tailwind and the last factor could be 28:30 28 minutes, 30 seconds the you know deflationary impact on existing business on account of productivity savings. So the fundamental 28:38 28 minutes, 38 seconds question is that the first two tailwinds look better than last year and the growth rates in organic terms does not look better at the midpoint of guide. Is 28:46 28 minutes, 46 seconds it that the uh deflationary impact assumed in your guidance at the midpoint is slightly higher than what you have seen in the last year. 28:58 28 minutes, 58 seconds Hi governor this is Khalil. I think uh what what you described uh is uh the way uh it starts off which is we see very 29:07 29 minutes, 7 seconds strong uh activity on AI services on the macro uh 29:15 29 minutes, 15 seconds you know as the year progressed last year the situation of the tariff got better and better understood as as as 29:23 29 minutes, 23 seconds you know then when the war started that again had a little bit of a constraining 29:30 29 minutes, 30 seconds effect on the macro. There's a general view that there's coming to a resolution but it has not happened. So while some 29:39 29 minutes, 39 seconds of the economic indicators are forecasted in a better way, it's not yet into the system in that sense. So we'll see where it actually comes in. 29:48 29 minutes, 48 seconds Then if you look at the couple of things that J shared on the specific on the manufacturing Europe on the specific on 29:58 29 minutes, 58 seconds the on-site mix uh when you put all that together we see actually something which looks stronger in that sense to what we saw last year. 30:11 30 minutes, 11 seconds Now the compression is definitely there but it's not I I don't know if I have a 30:18 30 minutes, 18 seconds sense that it's more than last year. We we are definitely seeing the compression but we also seeing the growth and that's 30:24 30 minutes, 24 seconds how we sort of u uh sort of dissecting it if you will and Jes 30:34 30 minutes, 34 seconds said if you look at last year we started with 0 to 3% then you know as the visibility improved u every quarter we 30:41 30 minutes, 41 seconds either tightened the band or improved uh the guide from where we are right the idea of guidance is you know to to 30:49 30 minutes, 49 seconds reduce customer and provide a view as to where where we see what we see today and this is what we see today. Uh we do have 30:56 30 minutes, 56 seconds a you know a planned in uh in manufacturing in Europe uh where we have stayed away from from a deal where it 31:04 31 minutes, 4 seconds did not make us make uh you know meet our uh return estimations. There's some ramp downs on on the client happening 31:12 31 minutes, 12 seconds because the client is going through a a challenging macro environment. So that is baked in. We have also baked in uh you know the on-site mix that will 31:20 31 minutes, 20 seconds impact uh in the guidance the the exit trajectory of on-site mix is already uh you know pretty much 40 to 50 basis 31:28 31 minutes, 28 seconds point from from the future year perspective. So that is baked in in the guidance already um and and the 31:34 31 minutes, 34 seconds resultant is one 1.5 to 3.5% guidance that uh that we have announced. Of course, if they if the visibility 31:42 31 minutes, 42 seconds improves as we go through the year, uh we will uh we will reook at that. 31:47 31 minutes, 47 seconds Thank you for the detailed answer. The second question is on uh you know the new AI services uh would it be fair to say they come at relatively higher 31:55 31 minutes, 55 seconds revenue productivity than the core business and also better gross margins or not? Lii J any color on when would 32:03 32 minutes, 3 seconds the wage hike cycle uh kick in during the current financial year? Thank you. 32:09 32 minutes, 9 seconds So brother generally the AI projects come at a you know at a better pricing and therefore uh you know it it reflects 32:17 32 minutes, 17 seconds in a better uh margin. Of course uh it also has a has a higher cost compared to um the regular project because the 32:25 32 minutes, 25 seconds talent is is a premium talent at this point in time right. So it it's always a factor of you know how much ahead of the 32:34 32 minutes, 34 seconds curve you are in terms of benchmark and that's that's what will define u the premium that you'll get in the market right if you are at the uh at the 32:42 32 minutes, 42 seconds benchmark level you wouldn't get a premium if you are at ahead of the curve uh you do get a premium and at this point in time if you look at the you 32:50 32 minutes, 50 seconds know uh the the numbers in terms of deals that we are winning we have won $15 billion deal that kind of talks 32:58 32 minutes, 58 seconds about our position positioning in the market. You did see uh on the AI day uh you know everything that we presented in terms of our capabilities and what 33:06 33 minutes, 6 seconds clients are saying in terms of our AI capabilities. So I think that kind of gives us the comfort and confidence that uh you know we we are in the right 33:14 33 minutes, 14 seconds direction and it's also reflected in in the pricing and the margins uh on the 33:21 33 minutes, 21 seconds uh in terms of wage co wage increases we haven't really decided the timing at this point in time. uh we do take 33:28 33 minutes, 28 seconds multiple factors when we decide that in terms of you know uh the level of attrition that we have uh you know when did we do the last uh wage increases uh 33:37 33 minutes, 37 seconds what the market scenario what's the inflation etc we will take all of those uh decision into consideration and decide 33:44 33 minutes, 44 seconds thank you and all the very best thank you next question is from the line of summit 33:52 33 minutes, 52 seconds Jen from CLSA India please go ahead Yeah, thanks for the opportunity. So, Sal firstly wanted to check in the last 34:01 34 minutes, 1 second two months with the latest launch of anthropic models, have you seen increased productivity demand from the clients? I mean, you mentioned in the 34:09 34 minutes, 9 seconds press conference that nothing material has changed in the last 3 months. Can you just specify what kind of client conversations are you happening around productivity? 34:20 34 minutes, 20 seconds So there the the sense I have is the need for productivity is similar. There 34:28 34 minutes, 28 seconds is uh some level of competitive intensity which is higher which then leads to more 34:37 34 minutes, 37 seconds uh sort of demand. There are some cases where u where it's way outside the bound where 34:46 34 minutes, 46 seconds you know there is not a lot of uh engagement then that meaning that is something which we don't see a way of 34:53 34 minutes, 53 seconds getting to so we are not you know going down those paths but those are very infrequent if you look at the vast 35:01 35 minutes, 1 second majority we see uh the the not just like something is complete uh big changes 35:08 35 minutes, 8 seconds This has come literally in the last two months or so at this stage. things are moving fast productivity over time uh 35:16 35 minutes, 16 seconds which is you know over multiple quarters year that that has changed but it's not that something suddenly is like a step 35:24 35 minutes, 24 seconds change in the last two months that we've seen and con can you also help throw some light in the new deals what you have 35:33 35 minutes, 33 seconds signed I mean are the productivity levels with usage of AI tools similar to what you are in a way passing on on the 35:41 35 minutes, 41 seconds existing business. Can you give some you know because order book looks pretty strong on a Yi basis for the full year but that is not translating into your 35:50 35 minutes, 50 seconds improved organic growth in FI27. So is it like the base business is seeing a much higher deflation than you know what 35:58 35 minutes, 58 seconds each one of us were expecting and with the improvement in AI models can it actually further accelerate in the coming few coming quarters. So can you 36:07 36 minutes, 7 seconds show uh throw some light as to how you are seeing the market? 36:12 36 minutes, 12 seconds So there I mean we are not we are not uh let's say sharing the specifics on what we're seeing uh in the portfolio in the 36:22 36 minutes, 22 seconds growth deflate uh compression side as opposed to what we've shared which is our overall guidance with some of the 36:30 36 minutes, 30 seconds points that J mentioned u the the on-site makes the manufacturing etc. So 36:38 36 minutes, 38 seconds I think we see with that u a solid growth outlook where we're keeping pace 36:46 36 minutes, 46 seconds making sure that what we're seeing in the AI services growth some of the other areas of growth that we see uh is is the 36:55 36 minutes, 55 seconds [clears throat] growth which then u manages the compression that we see on some of the other parts of our business. 37:03 37 minutes, 3 seconds So I we don't we don't have a way of sharing you know that this is the compression this is the gross growth and 37:12 37 minutes, 12 seconds then this is a net sort of a growth if you will. 37:16 37 minutes, 16 seconds No got it got it. I think uh that's always a difficult uh thing to quantify but also if you can just flag in terms 37:24 37 minutes, 24 seconds of any quantification you can give the impact of the European manufacturing client uh sort of ramp down or maybe uh 37:32 37 minutes, 32 seconds some competition uh kicking in there and I guess uh Jes also mentioned that uh the shift to more offshore will have a 37:40 37 minutes, 40 seconds 40 to 50 bits impact in SI27 and I guess uh there were some you know articles around Vanguard in sourcing If 37:47 37 minutes, 47 seconds you can quantify these three things, how much is the impact on your guidance in this year? Yeah. 37:54 37 minutes, 54 seconds you know if you look at sorry if you look at uh what I said earlier u you know 1% impact or so 75 is 38:04 38 minutes, 4 seconds to 1% impact will come from u the the European client which is combination of a deal uh which does not uh meet our uh 38:13 38 minutes, 13 seconds you know returns expectation and and the ramdowns in the client uh through the year as as the macro environment is 38:20 38 minutes, 20 seconds challenging in the sector um the 70 basis points uh is a reduction in onset mix. We are expecting 40 to 50 basis 38:28 38 minutes, 28 seconds points is already uh visible in the exit trajectory and we do uh as we see forward we still believe uh there'll be uh you know even further improvement on 38:37 38 minutes, 37 seconds the onsite mix. So that will also impact uh the revenue work from that. 38:44 38 minutes, 44 seconds Got it. That's very helpful and all the best. Thank you. Thank you. Thank you. 38:52 38 minutes, 52 seconds Next question is from land of Jonathan Lee from Guggenheim Partners. Please go ahead. Great. Thanks for taking my questions. 39:01 39 minutes, 1 second Percentage of net new deals came in at the lowest level we've seen in recent years. Can you help unpack whether that's a function of capability set AI 39:10 39 minutes, 10 seconds pressure potentially impacting the man environment or any other factor there? 39:13 39 minutes, 13 seconds And can you walk us through your expectations for NG deals for the year given what you're seeing today in the pipeline? 39:23 39 minutes, 23 seconds Jonathan, can you repeat the question? 39:29 39 minutes, 29 seconds We're seeing percentage of net new deals come in at the lowest level we've seen in recent years. So, can you help us unpack whether that's a function of 39:37 39 minutes, 37 seconds capability set or AI pressure impacting the demand environment or any other factor there? And can you walk us through what you expect for net new 39:45 39 minutes, 45 seconds deals for the year given what you're seeing in your pipeline today? 39:51 39 minutes, 51 seconds So Jonathan if you look at uh you know the the combination of net new and the renewal is uh is what percentage of 39:59 39 minutes, 59 seconds deals are coming into uh coming in for renewal and what percentage of deal are in the pipeline from net percentage for 40:06 40 minutes, 6 seconds the full year if you look at we did sign 50 uh $15 billion of deals 96 of them 40:13 40 minutes, 13 seconds you know bring a 55% net in that so I think by any stretch of imagination That's that's a strong performance. It's 40:20 40 minutes, 20 seconds a 35% uh almost 25% growth on a yellow day. 40:30 40 minutes, 30 seconds Yeah. And as a followup, you know, can you help us understand what transpired over the course of the quarter and how that may have tracked relative to your internal expectations? I'm hoping to get 40:38 40 minutes, 38 seconds a better understanding of when you may have started to see some of the outside of deflationary impact or some of the downtick in revenue realization or any other dynamics play there. 40:52 40 minutes, 52 seconds I I mean we we don't really give a you know a visibility in terms of what were we uh setting as goals or you know uh 41:00 41 minutes looking at um looking at plans in terms of large deals and uh you know performance against that I think uh in 41:08 41 minutes, 8 seconds our view $3.2 2 billion is uh uh is a strong uh performance. Yeah, we do see in some pockets some slower decision 41:16 41 minutes, 16 seconds making in March but I I I don't know if it has got a significant impact on you know in the last deal signups. I I wouldn't call that at this point. 41:29 41 minutes, 29 seconds Appreciate the cover. Thank you. 41:33 41 minutes, 33 seconds Thank you. Next question is from the line of Sing from Noama. Please go ahead. 41:39 41 minutes, 39 seconds Yeah. Hi. Uh thanks for uh taking my uh question. Uh two questions from my side. 41:44 41 minutes, 44 seconds U the first question is basically on the uh AI deflation or the compression part that we've been discussing a lot. So 41:52 41 minutes, 52 seconds just wanted to get some uh color as to where do you think we are in that uh uh revenue depletion cycle. So let's say if 41:59 41 minutes, 59 seconds I were to compare it to the last digital cycle we had revenue compression which kept kind of increased and then we reached a trough and from there 42:07 42 minutes, 7 seconds basically that started coming down and uh along with we had incremental revenue coming from the digital business uh I would assume the cycle would should 42:16 42 minutes, 16 seconds pretty much follow the same order. So while our geni revenue and which is for the other companies also is reporting very strong growth the revenue 42:23 42 minutes, 23 seconds compression continues to be quite substantial at this point of time. So do you think we are uh already at the trough of that revenue decision cycle? 42:32 42 minutes, 32 seconds If not uh I mean I mean I know it's because of the quantified timeline. So basically uh are we still away there's more deflation that you think that that 42:39 42 minutes, 39 seconds might come in or do you think we are basically uh done with the the behind and the deflation will still continue 42:46 42 minutes, 46 seconds but it might be not as much as let's say going forward as it was before and then I have a followup for J. 42:54 42 minutes, 54 seconds Uh so hi Sal on on that um what we are seeing is uh 43:01 43 minutes, 1 second there are different uh sort of dimensions to the concretion meaning we are now working with clients where 43:10 43 minutes, 10 seconds some of the productivity discussions were baked into the deals over the past year or so and then you 43:19 43 minutes, 19 seconds have a multiple year outlooks. All of that has not happened on the first year. 43:23 43 minutes, 23 seconds it it goes through it. So the the actual compression will be dependent on the mix you know 43:32 43 minutes, 32 seconds first second and so on. We have not like uh we've not got a sense of where we are on 43:41 43 minutes, 41 seconds that uh uh path but we have a sense of like what the foundation models and 43:49 43 minutes, 49 seconds other tools are able to sort of support and use use that uh as a basis for what 43:59 43 minutes, 59 seconds you know we're doing with forward deals like three or five year deals and so on but on that sort of a scenario we don't 44:08 44 minutes, 8 seconds have a view we can share on like where that path is. Um 44:16 44 minutes, 16 seconds but we are definitely very clear on where you know like when you're working with the foundation model and tools what 44:24 44 minutes, 24 seconds is uh possible where where is it effective different models or different tools are more relevant for different 44:33 44 minutes, 33 seconds parts of uh the AI work that we're doing with clients that that we are very I 44:39 44 minutes, 39 seconds would say close to Got it. Got it. If I may just extend a bit on that. So let's say the deals that 44:48 44 minutes, 48 seconds we are signing at this point of time, you mentioned many of them have that productivity benefit already baked in or let's say built into the original deal. 44:56 44 minutes, 56 seconds But as the cycle evolves, are we also seeing let's say deals which we have signed maybe 6 months ago or 12 months ago and there the client has come back 45:04 45 minutes, 4 seconds and asked for incremental productivity benefits to be passed. I'm talking about the recent deals not the early deals. 45:09 45 minutes, 9 seconds I'm sure the ladies are seeing that kind of a uh response sometimes but in these recent years also are we seeing that 45:16 45 minutes, 16 seconds kind of a movement uh in our kind of conversations 45:26 45 minutes, 26 seconds before I don't think we have seen you know scenarios where what we signed few months back the client has come back and 45:33 45 minutes, 33 seconds asked us uh you know um different productivity to be baked in again what Sal was talking about when when a deal 45:41 45 minutes, 41 seconds comes up for bid or when you're waiting for a new new new deal, right? 45:49 45 minutes, 49 seconds Got it. Got it. Sure. There's one last question for you Jes. Uh in terms of the margins, uh I think this quarter had a very uh good tailwind from depreciation. 45:59 45 minutes, 59 seconds Now we know that for a long industry has moved mature to a state where uh the rupee depreciation doesn't lead to much of margin expansion over the medium to 46:07 46 minutes, 7 seconds long term. But we have generally seen a temporary quarterly bump up in margins because of anode depreciation. Uh has 46:15 46 minutes, 15 seconds that benefit also kind of stopped trickling because not just for us but for most of the players in the industry we're not seeing any kind of a margin expansion. Is it that uh in this quarter 46:23 46 minutes, 23 seconds specifically is it that those benefits are being invested somewhere else or is it that those benefits have stopped occurring at at all and those are being passed to the client immediately? 46:34 46 minutes, 34 seconds The two points that uh both generally I mean uh you do have u rupee benefits that sometimes gets offeted but or most 46:42 46 minutes, 42 seconds of the times gets offset by cross currency headwinds right because when when US dollar appreciates it appreciates against uh most currencies 46:51 46 minutes, 51 seconds and that kind of offset each other and your portfolio of you know non US as it goes that offset becomes larger and larger uh you 47:00 47 minutes know across across us and across the industry also you have seen that I mean there were times when the US dollar used 47:07 47 minutes, 7 seconds to be 70 plus percentage uh or you know US used to be 70 75 plus percentage that obviously has gone down significantly and therefore the headwinds from the 47:15 47 minutes, 15 seconds other currencies come in if you look at this quarter specifically for us as I called out in the margin box um there was a you know close to 50 basis points 47:24 47 minutes, 24 seconds of headwind that that we got because of uh you know amotization of uh one of the 47:31 47 minutes, 31 seconds acquisition related intangibles Um last quarter we had a 30 basis points gain. So in a way this these two went 47:38 47 minutes, 38 seconds into two different directions for us in terms of margin impact both both became a headwind and then 20 basis points on 47:45 47 minutes, 45 seconds account of uh you know employee related costs. So all of those were headwinds that were offset by 40 basis points from currency and 30 days from from accident. 47:56 47 minutes, 56 seconds Got it. Great. Thank you so much for taking my question and I wish you all the best. Thank you. 48:03 48 minutes, 3 seconds Thank you. Next question is from the line of Abhishek from Please go ahead. Yeah. Hi, I'm audible. 48:11 48 minutes, 11 seconds Yes sir. 48:12 48 minutes, 12 seconds Yeah. Yeah. Hi. Hi Kim. So I had a question around um you know the deal that we left on the table. Um we saw similar comment from one of your sort of 48:21 48 minutes, 21 seconds peers as well. So just curious um sort of you know what is happening over here? 48:26 48 minutes, 26 seconds um are we being disrupted by let's say leaner sort of you know more AI native sort of companies who are pricing the 48:32 48 minutes, 32 seconds deals very low uh by by by the delivery model changing or is this a race to the bottom from traditional vendors who are just essentially you know sort of 48:41 48 minutes, 41 seconds creating a pricing um creating a rational pricing so I'm very curious as to you know what's happening here and over the next two to three years period 48:48 48 minutes, 48 seconds do you think um you know the investor needs to find uh you know newer user models to sort of price the deals and and and and and and you know how much is 48:56 48 minutes, 56 seconds sort of possible to kind of change over here in the short term. Thank you. 49:02 49 minutes, 2 seconds So there u it's not that this is something wide widely prevalent. We do see uh 49:11 49 minutes, 11 seconds uh sometimes a particular uh sort of competitor doing 49:18 49 minutes, 18 seconds pricing which seems sort of uh unusual but this is something that's happened you know over the course 49:26 49 minutes, 26 seconds of years for different reasons just now it may be linked with the client's mind to AI productivity in 49:35 49 minutes, 35 seconds other times it's got other things so I don't see that it's something which is sort of across everything at the end you 49:43 49 minutes, 43 seconds know we we had 96 deals with u close to 15 billion in large deals for last year 49:51 49 minutes, 51 seconds so which is a very sort of uh broad days robust uh outcome plus the pipeline is 50:00 50 minutes uh pretty good there are anecdotal things where uh some of the productivity thing looks uh out out of the range that 50:08 50 minutes, 8 seconds we see with what's possible with what we have understood you know with with sort of foundation model so it's more that sort of common not at least we don't see 50:17 50 minutes, 17 seconds that as being a sort of trend of some sort thank you so much for the question 50:26 50 minutes, 26 seconds thank you next question is from Keith Bachman from capital please go ahead 50:35 50 minutes, 35 seconds hi thank you very much I have two questions. Uh the first question is related to pricing and 50:43 50 minutes, 43 seconds I wanted to understand the context of how pricing competitiveness has changed 50:50 50 minutes, 50 seconds and you started the answer on the last question and really a is it more competitive today than it has been over 50:57 50 minutes, 57 seconds the last couple years but but be the spirit of the question is uh my understanding when some of your 51:04 51 minutes, 4 seconds competitors are getting more aggressive on pricing. They're in reaching cost curves associated with the deployment of 51:12 51 minutes, 12 seconds AI that may have more uncertainty surrounding those cost curves because this is new technology and we're I think 51:20 51 minutes, 20 seconds everybody's trying to figure out what it can and can't do at the current level. 51:24 51 minutes, 24 seconds Um so does that introduce incremental risk and how you're philosophically thinking about pricing? uh if you could just talk a little bit about pricing 51:32 51 minutes, 32 seconds dynamics with the introduction of AI and I do have a followup. 51:40 51 minutes, 40 seconds Uh I'll start on on that uh pricing sort of point. Uh the way we're seeing it is 51:49 51 minutes, 49 seconds the the point you made about competitive intensity. We we do see there is increased intensity. 51:57 51 minutes, 57 seconds If you look at last financial year, we had a growth. Some other players had negative uh revenue. So one can sort of imagine some of that sort of a scenario. 52:11 52 minutes, 11 seconds Uh in pricing it it's actually J should talk a little bit about it. I I think overall a 52:17 52 minutes, 17 seconds realization is better in the year than we have seen before. So maybe you know 52:25 52 minutes, 25 seconds the execution is better and the portfolio uh at least we feel is less risky in that sense. So I don't think we 52:34 52 minutes, 34 seconds have what I if I understood well what you were describing. 52:40 52 minutes, 40 seconds Okay. If I can just add to what S was saying, if you look at uh little elevated level, you know, despite the 52:47 52 minutes, 47 seconds softer volume through the year, uh most of our growth came from the realization that reflects in what we have been able 52:56 52 minutes, 56 seconds to get on the back of AI that reflects in the value that we're creating for our clients and to some extent that also 53:03 53 minutes, 3 seconds reflects the contribution from project maximus uh through the you know lean automation value based sellings and all 53:10 53 minutes, 10 seconds of those tracks, right? So that that is given. If you look at despite the competitiveness in the market, despite 53:18 53 minutes, 18 seconds all of that, we've been able to maintain our margins for the year. We've invested in back in the business 50 basis points 53:26 53 minutes, 26 seconds and or 40 odd basis points and uh sales in marketing, the AI talent that we are building, the AI capabilities that we are building, uh all other AI related 53:34 53 minutes, 34 seconds investments, all of that has been absorbed in the margin. uh um while keeping Martin uh cons. 53:43 53 minutes, 43 seconds Okay. Okay. Let me let me ask my second follow-up question and it also speaks to or questions to the growth algorithm. 53:52 53 minutes, 52 seconds And I'm trying to understand how the growth algorithm may change from a volume perspective given the AI 53:59 53 minutes, 59 seconds efficiency gains on the supply side. And the way I think about it and I've had this we've had this conversation with some of your competitors. If you're 54:07 54 minutes, 7 seconds trying to grow at 3% in the past years, uh you might have to grow volumes by five or 6% to to get to 3% growth. And 54:16 54 minutes, 16 seconds one of your competitors suggested that you know that volume variance may need to double because the efficiency gains to get to the same revenue growth 54:24 54 minutes, 24 seconds trajectory. And I just wanted to see if you could think about, you know, the how is how is the growth algorithm on a 54:32 54 minutes, 32 seconds volume basis different today because of those AI efficiency gains as you look out over the next 12 months versus what the what it's been over the last couple years. 54:51 54 minutes, 51 seconds The reality is we do see as S was saying earlier we do see some deflation uh from our existing services right and part 54:59 54 minutes, 59 seconds largely part of that is getting offset by the new services the new AIdriven services overall at this point in time 55:06 55 minutes, 6 seconds the volume for the last year has has remained flattish uh and as we go forward we we continue to see uh volumes 55:14 55 minutes, 14 seconds to remain you know flatter or margin marginally positive as we what we b we've baked in in the guidance at this point in time which is reflected 55:23 55 minutes, 23 seconds in the in the lower end and the upper end you know as as I said earlier we have expected uh you know better micro environment which would which should 55:31 55 minutes, 31 seconds reflect in better volumes okay all thanks good luck 55:38 55 minutes, 38 seconds thank you thank you next question is from the line of Abura Prasad from Franklin Templeton please go ahead 55:48 55 minutes, 48 seconds hey hi uh uh any any comments on the direction of the on-site mix? Uh I'm I'm 55:56 55 minutes, 56 seconds trying to understand if the AI compression or you know just AI embedded in services and contract structures is 56:03 56 minutes, 3 seconds that impacting the delivery mix I think it's a multi multiple factors 56:12 56 minutes, 12 seconds little bit of the environment little bit of uh you know the visa situations in some of the countries u little bit of 56:20 56 minutes, 20 seconds our own initiative uh to deliver uh you know deliver more from uh from offshore. 56:26 56 minutes, 26 seconds So I think it's it's a combination of all of that. 56:30 56 minutes, 30 seconds So there correct third party just to add the discretionary kind has also come down which generally needs um higher onsite. 56:42 56 minutes, 42 seconds Okay. and and for FY27 uh uh uh the on-site exit should be 56:50 56 minutes, 50 seconds similar uh and third party cost I think you said will be similar next year third party cost you know I did say that 56:58 56 minutes, 58 seconds earlier we expect it to be in the same uh similar range um FY27 exit is difficult to project at this point in 57:05 57 minutes, 5 seconds time you know as I say the FY26 exit itself gives you gives us approximately 40 50 basis points of u lower on-site 57:14 57 minutes, 14 seconds mix and you know we we think this uh trend will continue to some extent it's very difficult to you know uh predict 57:21 57 minutes, 21 seconds what will be FI27 exit thank you 57:29 57 minutes, 29 seconds thank you thank you very much ladies and gentlemen we'll take that as the last question I'll now hand the 57:37 57 minutes, 37 seconds conference over to the management for closing comments Uh thank you. Uh first thanks everyone 57:44 57 minutes, 44 seconds for joining. Just want to share a quick summary. Uh we we had a strong FI26 3.1% 57:51 57 minutes, 51 seconds growth 21% margin very good large deals close to 15 billion. We have a growth guidance for the coming year. We have a 57:59 57 minutes, 59 seconds mix of growth drivers and compression overall growth guidance and adjusting for some of the one-off technical 58:07 58 minutes, 7 seconds factors larger growth uh like for like basis. The AI services uh approach and 58:15 58 minutes, 15 seconds strategy I think uh we've laid out uh is resonating with our clients very well. 58:20 58 minutes, 20 seconds We see all of the six areas in our pipeline, very good partnerships with the uh AI uh foundation model companies 58:29 58 minutes, 29 seconds and other tool companies. With all of that, we look ahead to a strong successful year uh in this coming year and look forward to seeing all of you 58:38 58 minutes, 38 seconds catching up with all of you in the next quarterly go. Thank you. Take care. 58:43 58 minutes, 43 seconds Thank you very much members of management. Ladies and gentlemen, on behalf of Infosys Limited, that concludes this conference call. Thank 58:50 58 minutes, 50 seconds you for joining us and you may now disconnect your M.