L&T Technology Services Ltd — Q4 FY26

L&T Technology Services Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=bxZ-0gOFw3s Published: 3 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the Q4 FY26 conference call of L&T Technology Services Limited. 0:09 9 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:18 18 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. 0:28 28 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. Sesh Nikk, head of investor relations. 0:37 37 seconds Thank you and over to you Mr. Sesh. 0:40 40 seconds Thank you Saga. Hello everyone. I am Sesh and welcome to the earnings call of L&T technology services for the fourth 0:46 46 seconds quarter of FI26. Our financial results, investor release and press release have been filed on the stock exchanges and 0:55 55 seconds are also available on our website www.lts.com. 1:00 1 minute I hope you have had a chance to go through them. This call is for 60 minutes. We will try to wrap up the management remarks in 20 minutes and 1:08 1 minute, 8 seconds then open up for Q&A. The audio recording of this call will be available on our website about an half hour after 1:15 1 minute, 15 seconds the call ends. With that let me introduce the leadership team present on this call. We have with us Amit Chada 1:22 1 minute, 22 seconds CEO and MB Alin Saka executive director and president Rajiv Gupta CFO and Munjay 1:31 1 minute, 31 seconds Singh COO. We will begin with Amit providing an overview of the company's performance and outlook followed by Rajiv who will walk you through the 1:38 1 minute, 38 seconds financial performance. I now invite Amit for his opening remarks. 1:46 1 minute, 46 seconds Perfect. Um, audible, clear loud and clear. 1:52 1 minute, 52 seconds Perfect. So, thank you. So, thank you all for joining us on the call today on a very busy uh results day. Uh, first of 2:01 2 minutes, 1 second all, I would like to congratulate and welcome our CFO Rajiv Gupta as executive director and chief financial officer on the board of LTS. 2:10 2 minutes, 10 seconds I would also like to extend a warm welcome to Mr. Amitab Khan on his appointment as an independent director on the board of LTS. We are delighted to 2:20 2 minutes, 20 seconds have him join the board. A governance reformer and public policy change agent, Mr. Kant also serves on the board of 2:28 2 minutes, 28 seconds directors of the L&T group. Now, let me share the key highlights for FI26. In 2:34 2 minutes, 34 seconds FI26, the total revenue including continued and discontinued operations 2:41 2 minutes, 41 seconds grew 5% to $1.321 billion as indicated in the previous quarter. 2:51 2 minutes, 51 seconds The X SWC business has been classified uh as continued discontinued going 2:58 2 minutes, 58 seconds forward and therefore the revenue from continued operations delivered a higher growth of 8.3% 3:08 3 minutes, 8 seconds at 1233 uh million. 3:13 3 minutes, 13 seconds Here on we will only talk about the continued operations. Sustainability continued to do well with 12.8% growth 3:22 3 minutes, 22 seconds while tech including Intellis swift grew 19.7%. 3:27 3 minutes, 27 seconds North America did well with a growth of 12%. All other geos positive growth. Our 3:34 3 minutes, 34 seconds FI26 large deal wins came up at $855 million up 40% over the previous year. 3:43 3 minutes, 43 seconds Now let me provide you key highlights for quarter 4 FY26. 3:49 3 minutes, 49 seconds Revenue was $36 million grew.3 annually while we regrrew 1.7% 3:56 3 minutes, 56 seconds sequentially reflecting a deliberate shift towards improving the quality of revenue over the last two quarters with 4:04 4 minutes, 4 seconds strategic portfolio rationalization leading to a more resilient business baseline. This is as we had informed you 4:11 4 minutes, 11 seconds during the Q3 results call. This is reflected in our EBIT margins expanding 4:17 4 minutes, 17 seconds by 40 bips sequentially to 15.2% second quarter in a row. Raji will share more details in his commentary. 4:26 4 minutes, 26 seconds Sustainability grew sequentially continuing with its doubledigit yearon-year growth momentum and mobility remained steady. Our large deal wins 4:35 4 minutes, 35 seconds continued its momentum with a healthy TCB of $182 million in the quarter reflecting our deep client relationships 4:43 4 minutes, 43 seconds and validation of our new technology investments. We finalized our Lakshia 31 plan and completed the strategic 4:51 4 minutes, 51 seconds portfolio realignment exercise resulting in pruning businesses based on regional focus and offerings and divestment of 4:58 4 minutes, 58 seconds SWC business to pivot on engineering intelligence and core AI digital engineering services. 5:07 5 minutes, 7 seconds Let me now provide you a segment performance and outlook mobility. 5:13 5 minutes, 13 seconds The mobility segment remained steady with revenues almost flat on a sequential basis. Over 40% of our large 5:21 5 minutes, 21 seconds deal wins in Q4 were in the mobility segment indicating a turnaround in CY and for CY26. We see momentum in auto 5:30 5 minutes, 30 seconds subsegment particularly North American automotive showing good growth over the previous quarter. Arrow and rail subsegment has been resilient while 5:39 5 minutes, 39 seconds trucks and off highway has been slightly subdued. We are gaining traction significantly in optimizing products and 5:46 5 minutes, 46 seconds software life cycle through generative AI and agentic AI like delivery models enhancing uh enablement of product experience for 5:55 5 minutes, 55 seconds end customers. A global premier technology group selected LTS as a strategic engineering partner to drive 6:02 6 minutes, 2 seconds digital transformation across its entities and establish a high value engineering hub with us. Second, LGD has 6:10 6 minutes, 10 seconds entered into a strategic collaboration to establish a center of excellence for next generation recreational marine solutions leveraging its cross domain 6:18 6 minutes, 18 seconds expertise in software defined vehicles, electrification, AI and digital engineering. Finally, LTD selected as 6:25 6 minutes, 25 seconds was selected as a strategic partner for cargo logistics major to develop nextgen air mobility solution leveraging LTDS's 6:33 6 minutes, 33 seconds capabilities across aerospace, engineering, electrification, manufacturing to accelerate aircraft 6:40 6 minutes, 40 seconds readiness. From a geo standpoint, the US market, particularly automotive, is seeing positive traction with increased 6:48 6 minutes, 48 seconds investments in SDV technology, and we have been gaining market share in Japan. 6:53 6 minutes, 53 seconds Steady wins in programs for future model launches has led to our growth in our geography. For European OEM cost 7:00 7 minutes optimization remains a priority through strategic partnerships. We are well positioned to benefit from these as we go forward in the number of deals in the 7:08 7 minutes, 8 seconds pipeline. In summary, mobility segment is showing early signs of growth. We expect sustained momentum in CY26 driven 7:16 7 minutes, 16 seconds by a robust pipeline and stronger deal rampups of the large deals. Moving on to our second segment of sustainability. 7:24 7 minutes, 24 seconds Sustainability grew 11% yearon year on the back of strong execution of deals that we have done in the previous quarters. 7:32 7 minutes, 32 seconds Over 50% of large deal uh wins in Q4 were in a segment ensuring strong 7:39 7 minutes, 39 seconds momentum uh growth. This segment established its strong credentials by forging a strategic partnership with a 7:47 7 minutes, 47 seconds leading global energy major to be its engineering service and technology partner for digital expertise in India with 500 plus engineers. This was filed 7:55 7 minutes, 55 seconds soft exchanges earlier last week. The industrial sub segment is benefiting from capeex tailwinds and AIEL data 8:02 8 minutes, 2 seconds centers spending globally combined with our strong engineering capabilities in power electronics uh embedded systems expertise enabling 8:11 8 minutes, 11 seconds cross domain solutions combined with EI which integrate digital automotive automation and AI powered platforms across PDC offerings. 8:22 8 minutes, 22 seconds The energy and automation and industrial machinery sector continue to see strong demand with reindustrialization of the US supported by a healthy pipeline and 8:29 8 minutes, 29 seconds asset management and backed by large yield wins. 8:33 8 minutes, 33 seconds Plant engineering a subsegment of sustainability. Uh demand continues to hold steady across EPD and we were 8:41 8 minutes, 41 seconds selected by a leading oil and gas operator for strategic initiative to build digital foundation across global assets enabling engineering operations 8:49 8 minutes, 49 seconds and digital transformation. We were awarded a multi-year program by a North American energy major for data modernization and asset integrity 8:58 8 minutes, 58 seconds support across onshore operations leveraging advanced digital platforms across multiple geographies. We expect the growth momentum to continue for 9:06 9 minutes, 6 seconds sustainability segment across both industrial and plant on the back of ramp up in large deals and strong pipeline. 9:14 9 minutes, 14 seconds Moving on to tech. As mentioned earlier, we have recalibrated our business in this segment to focus on profitable 9:22 9 minutes, 22 seconds growth driven by forward-looking technologies. The subdued revenues in tech segment reflect the conscious exit 9:30 9 minutes, 30 seconds from non-strategic businesses where we have also incurred some one-time expenses on account of the same. The media and tech sub segment is rapidly 9:38 9 minutes, 38 seconds evolving with strong focus on AIEL platformcentric offerings resulting in execution of more high-end um and high 9:48 9 minutes, 48 seconds margin work for our clients. We do see growth in semiconductor and tech infra accounts while media business has been 9:55 9 minutes, 55 seconds steady. Deal wins we have won the previous quarters in the telecom and subsegment have been steadily ramping up. the 10:03 10 minutes, 3 seconds medtech segment sub segment. The deal momentum is evolved through ramp ups in certain new accounts, strategic programs 10:11 10 minutes, 11 seconds and deeper relationships. We have secured multiple design and development mandates in human biologics and drug 10:18 10 minutes, 18 seconds delivery devices from two leading global pharmaceutical companies. We also partnered with top 10 newbased medical 10:26 10 minutes, 26 seconds device manufacturer to bring camerabased AI intelligence to the operating room. 10:31 10 minutes, 31 seconds This sub segment grew in line with company revenue annually. 10:35 10 minutes, 35 seconds The software and platform subsegment which includes Intellis swift is leading our engineering intelligence framework 10:43 10 minutes, 43 seconds for datadriven intelligence and automation. A large empowerment received from our leading hyperscaler is expected to start ramping up Q1 10:52 10 minutes, 52 seconds onwards. Let me now cover a bit on our technology quotient. EI or engineering intelligence is LTDS's approach to 11:01 11 minutes, 1 second embedding AI across products, processes, nextG manufacturing, translating deep engineering expertise into reliable real 11:09 11 minutes, 9 seconds world outcomes powered by multimodal agentic and edge AI. EI delivers autonomous production grade systems 11:18 11 minutes, 18 seconds driving differentiated high value outcome reflected in our large deals. 11:23 11 minutes, 23 seconds LTS has also strengthened its partnership with MIT Media Labs to explore and incubate 11:31 11 minutes, 31 seconds forward-looking technologies such as multiensory intelligence, signal kinetics, and personal robotics. 11:39 11 minutes, 39 seconds We have surpassed the 1,700 mark in our patent filings for FI26. A congratulations to all our employees and 11:47 11 minutes, 47 seconds technologists including 673 patents filed by LTDS and 133 co-authored with 11:55 11 minutes, 55 seconds clients. Of these 237 patents now are in AI and Gen AI alone. Finally, let me 12:04 12 minutes, 4 seconds share a glimpse of our Lakshia 31 plan and the way forward. After careful consideration and deep analysis of the 12:12 12 minutes, 12 seconds futuristic technologies and evolving market needs, LTS has defined its course for the next five years. The company is 12:19 12 minutes, 19 seconds doubling down across technology, manufacturing and industrial domains. 12:24 12 minutes, 24 seconds Under its five-year strategic auction plan, LGDS is sharpening its focus with six large technology bets including EI, 12:32 12 minutes, 32 seconds which will accelerate growth further in the three segments of mobility, sustainability, and tech while consolidating our position as a global 12:40 12 minutes, 40 seconds engineering, intelligence partner for our clients. Our six bets are software defined mobility, plant buildout and 12:48 12 minutes, 48 seconds modernization, energy and industrial automation to digital manufacturing, 12:55 12 minutes, 55 seconds nextgen compute and AI infra software platforms in EI and medtech. These are 13:01 13 minutes, 1 second the six bests that we have bet on to ensure strong execution of Laksha 31 strategy. We have reorganized and 13:10 13 minutes, 10 seconds promoted our leadership from within to sharpen accountability, deepen segment focus and accelerate 13:18 13 minutes, 18 seconds market share gains through a differentiated growth approach. To this end, I already shared with you the 13:24 13 minutes, 24 seconds elevation of Rajiv on the board. Uh, additionally, Alin Sakenna who's currently executive director and and 13:33 13 minutes, 33 seconds president for mobility and tech will take responsibility for strategic initiative, large deals and growth 13:41 13 minutes, 41 seconds markets. In his role, he will drive scale to deals bringing in additional 13:49 13 minutes, 49 seconds revenues and growth to the company as well as drive partnerships and complex deal wins. Sugatarti 13:57 13 minutes, 57 seconds who was been in the company for more than 15 years and has led our plant engineering portfolio as segment head will now lead the entire sustainability 14:06 14 minutes, 6 seconds segment IT plus PE and is being promoted to chief growth officer sustainability strengthening our play in energy 14:14 14 minutes, 14 seconds physical AI automation plant and manufacturing modernization finally Sha Nagur who's been in the 14:22 14 minutes, 22 seconds company again for six plus years is being promoted Ed to chief growth officer for mobility and medtech driving 14:29 14 minutes, 29 seconds growth across softwaredefined technologies in mobility as well as advancing remote diagnostics robotics 14:36 14 minutes, 36 seconds and genai agentic AI solutions in the metric space. Shri in his past has worked on mobility medical and tech all 14:45 14 minutes, 45 seconds the three spaces and brings that rich experience. All these leaders have been part of the LTPS executive management 14:52 14 minutes, 52 seconds team for between six to 15 years and bring the right blend of energy, experience, experience, humbleness and 15:01 15 minutes, 1 second strong client relationships to accelerate our growth agenda. 15:06 15 minutes, 6 seconds Now about moving on to outlook, the last 5 years saw LTS grow at 12.4% 4% Kaggar 15:16 15 minutes, 16 seconds outpacing industry growth of 8% as per Zenov estimates. We believe we continue 15:23 15 minutes, 23 seconds to be in a position to grow faster than the industry over the medium term supported by strong core capabilities and execution discipline on revenue and 15:32 15 minutes, 32 seconds margins. We remain cautiously optimistic in the near term and as part of our 5-year luxury 31 plan, we aspire to 15:40 15 minutes, 40 seconds deliver 13 to 15% kagger over the next 5 years with EBIT margins in the range of 15:47 15 minutes, 47 seconds 16 to 17%. With that said, I would like to truly thank all of you for the support you provided me over these last 15:56 15 minutes, 56 seconds five years. I look forward to the next five and would now hand over to Rajiv to uh to take this uh to provide his 16:04 16 minutes, 4 seconds commentary and then we'll stay back for questions. Thank you so much. 16:09 16 minutes, 9 seconds Thank you Amit. U before getting into the commentary I'd like to thank our chairperson the board for imposing trust 16:16 16 minutes, 16 seconds in me and having me on the board and to Amit for his continued support. 16:22 16 minutes, 22 seconds Uh with that let me begin by giving you an overall picture for the year. FI26 FI26 total revenue included continuing 16:31 16 minutes, 31 seconds and discontinued operations came in at 1.3 to1 million and year in yearon-year growth of 4.9%. 16:43 16 minutes, 43 seconds A bit margin for FI26 came to 14.1%. 16:48 16 minutes, 48 seconds Net income margin for FI26 came in at 11.3%. 16:54 16 minutes, 54 seconds Now talking about disinvestment of SWC business. In March of 2026, we announced the disinvestment of SWC business. 17:03 17 minutes, 3 seconds Accordingly, SWC business has now been classified as discontinued operations beginning quarter 4 FI26. 17:11 17 minutes, 11 seconds With that context, my commentary here and after will address the continuing operations. 17:17 17 minutes, 17 seconds Starting with the key highlights for quarter 4 FI26, we had consistent deal momentum 17:24 17 minutes, 24 seconds resulting in average large deal TC wins of $200 million across six consecutive 17:31 17 minutes, 31 seconds quarters. Our focus on improving the quality of revenue and operational efficiencies has further boosted the 17:39 17 minutes, 39 seconds gross margin in Q4 FI26 with 150 basis points increase on sequential basis. 17:47 17 minutes, 47 seconds All three segments have shown sequential improvement in gross margins. Further, our collection efforts have led to improvement in DSO metrics during the 17:56 17 minutes, 56 seconds quarter. Moving to both quarter 4 FI26 and FI26 financials. Starting with P&L, 18:04 18 minutes, 4 seconds our revenue for the quarter came in at 2,858 crores, a growth of 2.5% on sequential basis, while year-on-year grew at 8.3%. 18:16 18 minutes, 16 seconds Revenue for FI26 was at 10,996 crores, a growth of 14% over FI25. 18:25 18 minutes, 25 seconds Abit margins for the quarter came to 15.2% an improvement of 40 bits over the previous quarter. 18:32 18 minutes, 32 seconds EIT margin for FI26 was at 14.5% of revenue. 18:38 18 minutes, 38 seconds Effective tax rate for the quarter came in at 26.6%. 18:43 18 minutes, 43 seconds For the year, effective tax rate was at 26.5% showing an improvement of 90 bits over 18:51 18 minutes, 51 seconds previous year. Going ahead we expect this to be in the range of 26 and a half to 27%. 19:00 19 minutes Net income for the quarters stood at 346 crores which is 12 12.1% of revenue showing an improvement of 70 bits over 19:09 19 minutes, 9 seconds previous quarter for FI26 net income was 1282 crores at 11% 11.7% of revenue 19:20 19 minutes, 20 seconds EPS from continuing operations stood at rupees 30.14 for the quarter translating to an annualized EPS EPS of rupees 120.56. 19:32 19 minutes, 32 seconds This represents an improvement over the reported FI25 EPS of rupees 119.7 19:40 19 minutes, 40 seconds underscoring the success of our portfolio rationalization strategy and the strengthened performance of our continuing business. 19:48 19 minutes, 48 seconds Other income for the quarter was 38 crores higher compared to previous quarter. Now moving to the balance sheet 19:55 19 minutes, 55 seconds highlighting a few key line items. The combined DSO was at 83 days compared to 20:02 20 minutes, 2 seconds 93 days in Q3 and improvement of 10 days. Build DSO also improved from 68 20:09 20 minutes, 9 seconds days as compared to 77 days in quarter 3. The combined DSO is expected to be in 20:16 20 minutes, 16 seconds the range of 85 to 90 days going forward. In FI26 free cash flow came in at 1280 crores. 20:26 20 minutes, 26 seconds Our FI26 FCF as a percentage of net income stood at 100%. 20:32 20 minutes, 32 seconds Our cash in investments improved to 3,555 crores end of FI26 versus 2981 crores end of FI25. 20:44 20 minutes, 44 seconds on capital reserves or sorry on capital return the board today recommended a final dividend of rupees 40 per share 20:51 20 minutes, 51 seconds taking the total dividend for FI26 to 58 rupees per share this translates to a 20:59 20 minutes, 59 seconds dividend payout ratio of 48% for FI26 our return on equity stand at 20.4% 4% for FI26. 21:10 21 minutes, 10 seconds With respect to revenue metrics in dollar terms, we reported revenue of 305.9 million, growth of.3% 21:19 21 minutes, 19 seconds on year-on-year basis, while a decline of 1.7% on sequential basis. The 21:26 21 minutes, 26 seconds sequential decline reflects the conscious exit from low margin and non-strategic portfolio. In addition to 21:33 21 minutes, 33 seconds the disinvestment of SWC business, FI26 revenue came in at $1,233 million year-on-year growth of 8.3%. 21:46 21 minutes, 46 seconds Talking about segment margin performance for quarter 4, FI26, mobility segment margins for quarter 4 came in at 16.1%. 21:55 21 minutes, 55 seconds a sequential improvement of 130 bits over previous quarter. 22:01 22 minutes, 1 second Healthy deals in mobility in the previous quarters and sign of improvement in the automotive sector 22:07 22 minutes, 7 seconds should lead to revenue growth in FI27 leading to further improvement of margins in this segment. 22:14 22 minutes, 14 seconds Sustainability segment margins for quarter 4 remain steady on sequential basis at 28.7%. 22:21 22 minutes, 21 seconds Strong execution of the deal wins in recent quarters led to improvement in quality of revenue and will continue to 22:28 22 minutes, 28 seconds aid revenue growth and margins in FI27 for sustainability. 22:34 22 minutes, 34 seconds Tech segment margins for the quarter came in at 12.6% sequential improvement of 210 bits over 22:41 22 minutes, 41 seconds previous quarter. This is due to continued improvement in intelligence margins and restructuring efforts in this segment to focus on sustainable and 22:50 22 minutes, 50 seconds profitable growth. On operational metrics, the offshore mix was 53.5% 22:58 22 minutes, 58 seconds slightly better compared to Q3. We do see improvement opportunities in this mix in the coming future quarters. The 23:07 23 minutes, 7 seconds TNM revenue mix was at 66.1% in Q4, higher compared to quarter 3. 23:14 23 minutes, 14 seconds Client profile, we have the first $50 million plus account in facility segment and as formally reported in the IR 23:22 23 minutes, 22 seconds report and in also an increase in number of clients across 5 million 1 million accounts compared to previous quarter. 23:31 23 minutes, 31 seconds With our deep relationships with clients and new age offerings, we expect this profile to improve further. Client contribution to revenue improved as compared to Q3 across categories. 23:43 23 minutes, 43 seconds Headcount improved sequentially by 522 to 23,830 at year end. As we onboarded fresher 23:51 23 minutes, 51 seconds during the quarter, attrition remained rangebound at 14.7% levels. realized 23:58 23 minutes, 58 seconds rupee for quarter 4 was around 93.43 to the dollar a depreciation of 4.3% 24:06 24 minutes, 6 seconds versus Q3. As I conclude, let me provide visibility on margin trajectory going forward. 24:13 24 minutes, 13 seconds We did refer in our Q3 commentary that margins will continue to improve and indeed have seen Q4 margins improve to 15.2%. 24:23 24 minutes, 23 seconds We expect margins to continue to improve further based on capital allocation towards high growth segments 24:31 24 minutes, 31 seconds and newer technologies in line with our Luxia 31 strategy. Also, we will see improved segment mix with now 24:39 24 minutes, 39 seconds sustainability segment contributing 36% of overall revenues in FI26. The recent deal wins will allow to continue this 24:48 24 minutes, 48 seconds trend in FI27 leading to improvement in overall margins. Further operational efficiency parameters around AIEL 24:56 24 minutes, 56 seconds delivery initiatives to improve operational levers, nonlinearity of revenue and rationalization of SGNA cost 25:04 25 minutes, 4 seconds in line with continuing business are further opportunities to improve margins. With this, we now advance our 25:11 25 minutes, 11 seconds aspiration to achieve mid6% debit margin levels on or before quarter 4 FYI 27. 25:18 25 minutes, 18 seconds And as part of our five-year Laksha 31 plan, we aspire to deliver 13 to 15% kagger over the next five years with the bitid margins in the range of 16 to 17%. 25:30 25 minutes, 30 seconds I thank everyone for their support and with that I hand it over to the moderator for any questions. 25:37 25 minutes, 37 seconds Thank you very much. We will now begin with the question and answer session. 25:42 25 minutes, 42 seconds Anyone who wishes to ask a question may press star and then one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and two. 25:54 25 minutes, 54 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment 26:01 26 minutes, 1 second while the question assembles. Again, to ask a question, please press star and one. 26:14 26 minutes, 14 seconds Our first question comes from the line of Vibore Singer from Noama Equities. Please go ahead. 26:21 26 minutes, 21 seconds Uh yeah. Hi. Uh thanks for taking my question. I hope I'm audible. Yes sir, you are audible. 26:29 26 minutes, 29 seconds Yeah. Yeah. Okay. Thank you so much. Uh and congrats to Alen and Rajiv for their elevation. U uh Amit couple of questions 26:38 26 minutes, 38 seconds from my side. A very bold decision uh indeed in terms of divestment of the SWC business uh something that we had 26:45 26 minutes, 45 seconds acquired just three years ago. Uh just want to understand uh the thought process behind this step. Uh I think uh 26:53 26 minutes, 53 seconds we had earlier talked about this business uh offering us opportunities in the Middle East and some other places as well. Uh so was the uh consideration 27:01 27 minutes, 1 second here just the profitability of the business that we were looking at or was it also that basically the growth opportunities that we saw in other 27:08 27 minutes, 8 seconds segments were much better and that is where we basically decided to allocate our capital to any basically color on what the purpose was behind this decision would be really helpful. 27:19 27 minutes, 19 seconds Sure I'll start and then I'll request Rajie to add to it. So see when we acquired smart world there were three components in smart world. There was the 27:26 27 minutes, 26 seconds smart cities part which uh had uh which uh which was there. The second part was the telco infra piece and the third was 27:36 27 minutes, 36 seconds the cyber piece. Right? So what we did was that our whole thesis was that we will take these three and we will 27:43 27 minutes, 43 seconds immediately work on taking them international. Right? That was our whole ploy that we had done. Now as we have 27:50 27 minutes, 50 seconds moved forward what has happened is the telco infra piece we were able to take it international we've been able to deliver two accounts that are upwards of 27:59 27 minutes, 59 seconds $20 million in the company and then very profitable at that and growing right and and gaining market share over competition with differentiated 28:06 28 minutes, 6 seconds offerings. The cyber business which was running actually at record margins again we were able to take those capabilities 28:14 28 minutes, 14 seconds and be able to infuse them within the company and take those forward. 28:18 28 minutes, 18 seconds Smart cities however we were not able to inter internationalize because a lot of that work is done by local governments 28:27 28 minutes, 27 seconds and is done for creating local jobs. So after we have done it for three years with different kind of management as 28:34 28 minutes, 34 seconds well as attention what we have done is we have therefore decided to divest. So the entire uh mostly India and slightly 28:43 28 minutes, 43 seconds international operations of smart world uh has been uh has been divested and at 28:49 28 minutes, 49 seconds the same time we have retained uh u you know some of the capabilities that we built organically being disassociated 28:57 28 minutes, 57 seconds those have continued on in the company and continue to provide leverage to us as we move forward. Uh so that's broadly 29:04 29 minutes, 4 seconds where where it is uh right now. Um would you like to add anything at this stage R A R A R A R A R A R A R A R A R A R A I think Amit you've covered broadly 29:13 29 minutes, 13 seconds about the only thing I would add to it that look you know when SWC business was acquired back in start of 2023 the 29:21 29 minutes, 21 seconds rational was to take SWC global right and much like Amit said there were three areas of business there was smart city 29:28 29 minutes, 28 seconds smart city there was infra and cyber I think infra and cyber have shown positive results smart city for 29:35 29 minutes, 35 seconds particularly India business is where we could not see it taking global and that le led to making a strategic decision uh 29:44 29 minutes, 44 seconds for the purpose of disinvestment. So largely that's where it is. Hopefully it answers your question. 29:50 29 minutes, 50 seconds Uh yes it's definitely thanks for that explanation and since you're at it Rajiv I may I just ask a couple of more questions bookkeeping questions on the 29:59 29 minutes, 59 seconds basically accounting of that. So we have basically the 1 2 3 uh million dollar revenues that we have mentioned that 30:06 30 minutes, 6 seconds basically takes into account uh the SWC revenue being not being considered for the entire FI26 and so does the penal revenue am I right? 30:14 30 minutes, 14 seconds That's correct. So what you see on the investor report uh is reflecting the continued part of the business and does 30:22 30 minutes, 22 seconds not have SWC in any of the prior quarters. So it has competitivity and it likes the like and we are not expecting any more 30:30 30 minutes, 30 seconds divestment or any more basically modifications to the financial from Q1 onwards. 30:37 30 minutes, 37 seconds So from Q1 onwards we will report the continued operations only only. Got it. Got it. And the research exercise is complete. Nothing is left in the part of that. 30:47 30 minutes, 47 seconds Yes it is complete. 30:49 30 minutes, 49 seconds Got it. And just one last question and then I'll probably switch back to uh Amit for another question. uh yeah now that we have devastated SWC business and 30:58 30 minutes, 58 seconds we know that basically the margins and the working capital days of the business were significantly uh inferior to our core business uh do we expect I mean you 31:07 31 minutes, 7 seconds mentioned the margin guidance we're looking at around 16 to 17%. uh uh I mean uh is that a kind of a target for the next 5 years or do you believe it 31:15 31 minutes, 15 seconds can be achieved over the next two to three years itself and also do we expect a improvement in the DSOS immediately in the near term given that SMC business 31:23 31 minutes, 23 seconds will be out of the books so on the margin fat ribor I did clarify so we continue to aspire to get to mid6% 31:32 31 minutes, 32 seconds levels by quarter 4 FI27 of this year and if you've got an ability we would like to deliver that prior to quarter 4 31:40 31 minutes, 40 seconds FI27 the 16 that is correct and the 16 to 17% is in line 31:47 31 minutes, 47 seconds with the Lakshia FI 31 strategy so over the period of five years we'd like to maintain a bit margins in that band the 31:55 31 minutes, 55 seconds third on DSO metrics you are already seeing the improvement I talked about the improvement in DSO metrics and I I 32:03 32 minutes, 3 seconds highlighted right what was the uh DSO metrics excluding the SWC business So 32:10 32 minutes, 10 seconds for quarter 4 we came in at 83 days. So you're already seeing the benefit of you know DSO days coming down and we will be 32:18 32 minutes, 18 seconds in the band of say between 85 to 90 days. What used to be including SWC if I were to recall quarter 3 we were closer to between 110 and 150. 32:31 32 minutes, 31 seconds Got it. Got it. Thanks for the detailed explanation with just one more question from my side. uh uh you your commentary alluded to some very positive signals 32:39 32 minutes, 39 seconds from the auto segment. Now this is a very positive sign because this vertical has been under pressure for quite a while for almost all of the players. Uh 32:47 32 minutes, 47 seconds is you mentioned that the North American auto specifically is looking positive. 32:50 32 minutes, 50 seconds So any color on basically how we are looking at uh is are there any more are there good frequencies that we're looking at in North American auto and 32:57 32 minutes, 57 seconds also will European auto also expected to follow suit or will there be some time before that kind of recover 33:06 33 minutes, 6 seconds sure so so thank you so much you want to make one more point in your previous question on the continued business so if you look at the quarter four results the 33:14 33 minutes, 14 seconds quarter four number that we published for continued business uh that does have the business that we stop doing also. So 33:22 33 minutes, 22 seconds Q1 onwards it's all clean as you see it moving forward. So it's not just SWC it's also the you know the the other part that we divested we talking about 33:30 33 minutes, 30 seconds $19 million annualized that we taking out that has been taken out in quarter four. So quarter one onwards it is all all all up first and that's why you see the revenue is important and margins in 33:39 33 minutes, 39 seconds Q4 gross margin itself going up in the business right now moving on to automotive right number one on automotive see US 33:48 33 minutes, 48 seconds automotive what has happened is that our our customers as well as overall as you've seen they have taken a chunk of whatever hits they had on EV last year 33:57 33 minutes, 57 seconds and they are all surefootedly moving ahead with hybrid and gas vehicles. This is a good thing because it provides 34:05 34 minutes, 5 seconds clear decision now that it pro clear up the path for design cycles to start yet again and we have seen some of that positive impact in NV coming to us. 34:15 34 minutes, 15 seconds That's number one. In Europe uh they are still between losing market share in uh 34:23 34 minutes, 23 seconds in Asia etc. But in Europe there is a number of deals that we are fighting right now and competing for uh 34:31 34 minutes, 31 seconds consolidation against European majors as well as uh other India inc companies. So there's a lot of that pipeline. So both 34:40 34 minutes, 40 seconds have got slightly different shall I say context and contours to it but we are seeing positive momentum in automotive coming back. 34:50 34 minutes, 50 seconds Got it. Got it. Andre thank you so much for taking my question. Congrats again on the very strong fit and wish you all the best. 34:58 34 minutes, 58 seconds Thank you. 34:59 34 minutes, 59 seconds Thank you. Your next question comes from the line of Sep Sha from Equidius Securities. Please go ahead. 35:07 35 minutes, 7 seconds Yeah, thanks. Thanks for the opportunity. Uh just wanted to understand within mobility and 35:14 35 minutes, 14 seconds sustainability one can assume the worst is behind sustainability we were anyway doing better. So mobility you expect we 35:23 35 minutes, 23 seconds can start growing Q on Q starting from the first quarter and uh even in tech when do you expect the words to get over? 35:36 35 minutes, 36 seconds So thank you Sep. So one sustainability will continue to grow as we move forward right. Uh mobility has stabilized this 35:44 35 minutes, 44 seconds quarter. You will start seeing growth from next quarter. 35:48 35 minutes, 48 seconds And um in tech there are three components. there's medtech and there's you know Mnt media tech which includes 35:54 35 minutes, 54 seconds MCON and then there is software and uh we do believe that next quarter onward we should start seeing that growth again 36:02 36 minutes, 2 seconds so we should see growth in all three um as we move forward now the quantum of that of course will depend on as the quarter closes as you know we are still 36:10 36 minutes, 10 seconds in the quarter now new quarter so we'll come back to the end of the quarter yeah yeah and uh just in terms of luxury 36:19 36 minutes, 19 seconds outlook Is it fair to assume whatever we are targeting which is 12 to 15% growth 36:26 36 minutes, 26 seconds CADR is largely organic or it also incorporates some inorganic. 36:33 36 minutes, 33 seconds So what we have stated right now is will largely be uh it's 13 to 15 not 12 to 15 36:43 36 minutes, 43 seconds then again there'll be a new comment question will come is it 12 or 13. So I'm being very clear 13 to 15 and 36:51 36 minutes, 51 seconds largely organic with some tuck in acquisitions as opportunities arise. 36:57 36 minutes, 57 seconds Okay. Okay. Thanks and all the best. 37:01 37 minutes, 1 second Thank you. Thank you. The next question comes from the line of Net Pagban from Investic. Please go ahead. 37:11 37 minutes, 11 seconds Yeah. Hi, good evening. Uh thanks for the opportunity. Uh so for question first question is that from a uh 13 to 37:18 37 minutes, 18 seconds 15% growth kagger um uh you mentioned that historically it's grown at uh 12 1/2%. 37:26 37 minutes, 26 seconds So these numbers the 12 and a half% is excluding the ESWC bit but how should we 37:33 37 minutes, 33 seconds understand that and second this 13 to 15% kagger is uh where basically this all the dollar CC is that how you're 37:42 37 minutes, 42 seconds thinking about it I'm going to actually look at Rajiv to clarify on the dollar CC part um uh and 37:51 37 minutes, 51 seconds this one you want to take these so um Nathan to your first question on 37:57 37 minutes, 57 seconds 12.4% 4% this is actually excluding SWC and second in terms of the constant 38:04 38 minutes, 4 seconds currency uh it'll be of course we will predict more constant currency but yeah over a 5year period there may be some 38:12 38 minutes, 12 seconds areas where we'll talk even on reported currency as well so this 13 to 15 is uh rupee or dollar 38:21 38 minutes, 21 seconds it's it's dollar it's dollar yes it's dollar okay okay okay See so far 38:28 38 minutes, 28 seconds despite we seeing very strong deal wins u obviously we have had uh leakage in 38:36 38 minutes, 36 seconds the business and that's been sort of a drag. 38:40 38 minutes, 40 seconds uh do you think uh this year onwards we should start seeing uh the 13 to 15% 38:48 38 minutes, 48 seconds sort of kagger beginning to show from this year itself or uh you think it'll be a little uh beyond that uh was the 38:57 38 minutes, 57 seconds question u the uh only other thing is uh from a growth perspective uh do you 39:06 39 minutes, 6 seconds believe uh that u at least At least from an automotive perspective or in terms of 39:14 39 minutes, 14 seconds the large accounts that you have uh the largest account is 50 million plus when do we really start seeing for our scale 39:22 39 minutes, 22 seconds uh at least a few hundred million kind of accounts uh that we settled with. 39:28 39 minutes, 28 seconds Okay. So uh I'll take part of that because I will add number one we not providing any annual guidance. So I'm 39:36 39 minutes, 36 seconds not going to fish in the waters of what will be next year. All I will say is 13 to 15 and we are working towards various deals in play. Let's see what closes 39:44 39 minutes, 44 seconds first, what closes second. I can assure you we'll be faster than industry be better than industry and engineering industry and IT industry of ourselves. 39:53 39 minutes, 53 seconds Right? That's one. Second uh is that in terms of uh uh accounts 39:59 39 minutes, 59 seconds um our last investor meet which I think we did last year or the year prior ra year prior investor meet. 40:07 40 minutes, 7 seconds Yeah. Two years ago. year two years ago uh we had created a plan to get to 100 million accounts. Our aspiration uh if I 40:15 40 minutes, 15 seconds may uh is to have x number of 100 million accounts y number of 50 million accounts. I'm happy to share that we 40:23 40 minutes, 23 seconds finally were able to deliver a 50 million account uh trailing 12 months in this quarter. This is the first one after a long time for us and there is a 40:31 40 minutes, 31 seconds path forward. In fact, uh the fact that we moving uh having Alin the focus entirely a very senior member on the board of the company been with us for 40:40 40 minutes, 40 seconds you know as long as I've been there in the company uh to focus only on large deals and growth markets should signal to you that there's a lot of seriousness 40:48 40 minutes, 48 seconds in the organization uh towards this uh so please uh allow us some time most of this is organic so it takes a little 40:56 40 minutes, 56 seconds time to build out uh the CIP perfect one last clarification uh from a earlier practice of this 41:05 41 minutes, 5 seconds annual guidance we are moving away from that permanently is that it or is this only for this year 41:12 41 minutes, 12 seconds again can I take the fifth and say I don't want see we'll see at the end of it there's no reason to not provide something or provide something uh we're 41:21 41 minutes, 21 seconds comfortable you know as we look at our five year if I go back and look at the thesis of the company see we are here to 41:27 41 minutes, 27 seconds build and stay and grow right We are not we that's the long-term objective of the 41:34 41 minutes, 34 seconds company that comes from the LNT parents right so the whole idea is to take longerterm decisions and deliberative 41:41 41 minutes, 41 seconds steps to move uh thematically if you look at it the company would like to deliver you know a candle sooner than later but to be seen uh to be tested. 41:53 41 minutes, 53 seconds Perfect. Thank you so much and all the best. Thank you sir. 41:58 41 minutes, 58 seconds Thank you. The next question comes from the line of Deep Mata from MK Global. Please go ahead. 42:05 42 minutes, 5 seconds Uh thanks for the opposite. 42:10 42 minutes, 10 seconds Um between this uh continued and overall combined business, I think margin gap seems to be 40 digits from uh in FI6. 42:20 42 minutes, 20 seconds Uh so headwind from SSWC used to be only 40 bits. uh uh there are any one-off in 42:27 42 minutes, 27 seconds the numbers I can take it. So what I mean we did 42:35 42 minutes, 35 seconds talk about you know realignment of portfolio back in quarter 3. So what you see as SWC revenues have actually come 42:43 42 minutes, 43 seconds down from Q3 onwards and it was a deliberate intent. So while it assumes that there's only a 40 bits improvement, actually it's much more than that is 42:52 42 minutes, 52 seconds closer to almost 70 to 80 bits of improvement. 42:57 42 minutes, 57 seconds Now Raj my question was April 26 combined business you reported 14.1 margin and continuing operation you 43:05 43 minutes, 5 seconds reported 14.5 margin for the full year which in a way impression SWC digestion was around 40 business that is not I 43:12 43 minutes, 12 seconds just want to understand what we can do maybe we'll have Sunday talk offline give you clarification 43:21 43 minutes, 21 seconds because like I said uh second question yeah uh Second question is about the uh 43:29 43 minutes, 29 seconds the bet which we have indicated let's say about the uh six technology bet uh 43:36 43 minutes, 36 seconds and obviously five focus areas can you provide some let's say current mix of the business around those how big are 43:43 43 minutes, 43 seconds those businesses currently in overall scheme of things and what kind of growth and investment you intend to make in each of them. 43:54 43 minutes, 54 seconds Sure. So right now as we we look at it um for these bets that we have got uh if 44:02 44 minutes, 2 seconds you give me a minute I will exactly this contributes to approximately about give 44:09 44 minutes, 9 seconds me one minute I'll just open this up so investments you know as we do this I'll let you take a minute and talk 44:17 44 minutes, 17 seconds about the investments while I bring up the exact data Are you on mute? 44:27 44 minutes, 27 seconds Can you uh can you hear me? Yes, we can hear you. 44:32 44 minutes, 32 seconds Yes. Would you like to talk about some of the investments that we're making? Yeah. 44:36 44 minutes, 36 seconds Yes. Yes. See um um when you look at it broadly the space that we had to ourselves given the customers that we 44:43 44 minutes, 43 seconds work with is around the whole uh physical AI and where we have very consciously looked at making investments 44:51 44 minutes, 51 seconds and we can walk you through the um all the different um segments that we have is to continue to deepen our presence uh 45:01 45 minutes, 1 second in this area that includes the collaboration that we are doing which you may have seen um on uh or posting as 45:08 45 minutes, 8 seconds well earlier. Uh but that's where we are investing and ensuring that we bring those solutions back to our customers in 45:16 45 minutes, 16 seconds the physical AI space which is very unique to us in our business. So that's one. Uh two, we um if I were to go by 45:24 45 minutes, 24 seconds segments, um we have talked about the investment that we have made in solutions and STV. Uh that continues to 45:31 45 minutes, 31 seconds be there for us and uh if anything we are actually doubling down to increase more on connectivity and HTV solutions. 45:40 45 minutes, 40 seconds So that's there on the mobility side. Um similarly extending to sustainability we are in a very unique position where we 45:47 45 minutes, 47 seconds uh work with bringing uh AI in um in construction related uh areas as well as 45:54 45 minutes, 54 seconds the investment in data center uh AI and data centers. So those two again become very formidable for us. uh in tech we 46:03 46 minutes, 3 seconds have talked about where earlier um we'll be working with hot tables closely and working on the solutions that they have 46:10 46 minutes, 10 seconds and building our own solutions to bringing back to our customers across the industry that we work with. Uh that's the philosophy and that's what we 46:19 46 minutes, 19 seconds uh we are very clear that will give us the edge uh to be close to our customers and can grow with them. Um I'll take a 46:27 46 minutes, 27 seconds pause and if you have a follow on question on this. 46:30 46 minutes, 30 seconds Yeah and if you want to take a minute and talk about the EI pivot and the software pivot that we doing and then I'll give the numbers. 46:38 46 minutes, 38 seconds Yeah sure I uh good good to meet you here let me uh let me explain what we are 46:47 46 minutes, 47 seconds doing on the EI because that's where the bulk of the pivot shift is going to happen. uh we are looking at AI in three 46:54 46 minutes, 54 seconds distinct parts and one is to help improve our productivity. So we have uh bunch of products we have created. We're 47:03 47 minutes, 3 seconds going to make them robust enough so that they can deliver anything between 10 to 30 40% productivity in the work that we do. So that's one part of the AI that we 47:11 47 minutes, 11 seconds are building. The second part of the AI is to embed this in the processes for client end processes. So for example, if 47:19 47 minutes, 19 seconds somebody's running a supply chain, I can optimize that. You have an inventory, I can optimize that. You have a you know maintenance cost, I can probably do a 47:27 47 minutes, 27 seconds preventive maintenance and optimize that. Uh and the last bit is to embed AI in the products which will go to my 47:34 47 minutes, 34 seconds customers customers. So some of the physical AI that Alin was referring to are like products that will go into my 47:41 47 minutes, 41 seconds customers product. Now these three pivots will require us to do a lot of um you know 47:50 47 minutes, 50 seconds solutioning or do a quick prototyping delivering solutions on our AI stack and as you know AI stack is constantly going 47:58 47 minutes, 58 seconds to keep evolving. So we are going to invest heavily in uplifting not just talent also building tools bringing 48:06 48 minutes, 6 seconds alliances which can actually help us deliver this. So there's a significant uh shift happening in our business due 48:12 48 minutes, 12 seconds to uh AI across the board processes uh in for the client processes of our SDLC 48:20 48 minutes, 20 seconds PDLC and the products that will go out to the customer. 48:25 48 minutes, 25 seconds Awesome. Thank you. So, so ask your question here less than 50% of the revenue today comes from these debts. In 48:32 48 minutes, 32 seconds five years time, we expect more than 70% of business will be coming from these six bets. 48:40 48 minutes, 40 seconds Okay, understood. Thank you. Thank you. 48:45 48 minutes, 45 seconds Thank you. Your next question comes from the line of Sha Agarwal from MC. Please go ahead. 48:53 48 minutes, 53 seconds Yeah. Hi, am I audible? Yes ma'am. 48:58 48 minutes, 58 seconds Yeah. So two questions Amit. I think uh in one of the comments you indicated that apart from LWC restructuring there 49:05 49 minutes, 5 seconds was some other uh restructuring as well in which uh there was an impact of $19 million. So what does that relate to? 49:16 49 minutes, 16 seconds Second question. 49:18 49 minutes, 18 seconds Second question is we've seen a smart uh headcount addition of almost 3% to our base. So is it in anticipation of some 49:25 49 minutes, 25 seconds large scale ramp up that we can expect and also in terms of restructuring are we done with uh all low margin 49:33 49 minutes, 33 seconds businesses realignment or are there any other businesses that we need to think about going 49:42 49 minutes, 42 seconds so thank you so much so let me answer the happy question first headcount has gone up you added 49:50 49 minutes, 50 seconds about 500 people net in the company or 400 net in the quarter one quarter. We do expect to add another 500 sometime in quarter two, 49:58 49 minutes, 58 seconds quarter 1, quarter two, quarter three as well. Uh because we believe that there's this new skill set around forward requirement engineer that is required. 50:06 50 minutes, 6 seconds It requires a lot more uh a slightly different skill set. So we are bringing people on as we speak and this is for 50:14 50 minutes, 14 seconds billable headcount and it is in anticipation of ramp up of wins that we have had. So this is not future business 50:23 50 minutes, 23 seconds we are ramping up current business we are ramping up or business that is already won. So therefore there is some sureootedness around the reason why we 50:31 50 minutes, 31 seconds have added. So when we um right so that's that answer. Now in terms of the $19 million as I talked about annualized 50:40 50 minutes, 40 seconds that you can see that impact coming out in shrinkage of Q3 to Q4 or Q4 over Q3 in continuing business and that has been 50:49 50 minutes, 49 seconds a deliberate attempt. There has been some work that we were doing in a certain geography in the Middle East which we shut down and we had talked 50:56 50 minutes, 56 seconds about it in the last quarter. There is a little bit in Europe that we have uh we've shut down. Uh there was in telecom infra there was a couple of low margin 51:06 51 minutes, 6 seconds uh nonvalue ad businesses that we were on. We returned the lab equipment and shut that down very respectfully for the 51:13 51 minutes, 13 seconds client. As far as I'm concerned, this completes the entire uh restructuring and cleanup that we had to do. We do 51:21 51 minutes, 21 seconds believe going forward you will see growth in the continuing portfolio as we move forward. 51:26 51 minutes, 26 seconds Great. Thanks Amit. I can squeeze in one more question. Uh I know that you advanced the margin guidance but without giving any timeline to it but uh now we 51:35 51 minutes, 35 seconds have two tailwinds. One coming from SWC going away and the second from with depreciation. So can we expect an 8% 51:42 51 minutes, 42 seconds margin by as soon as second half of 2016 we just got the we just got the CFO 51:50 51 minutes, 50 seconds promoted to the board you got to be nice to him at least today right and he has also improved he also brought it forward he this you know what he said he said he 51:59 51 minutes, 59 seconds said Q4 or prior now you want him to say H2 or prior I don't know if we can say that right now but look at the end of it we want to say what we can deliver and 52:08 52 minutes, 8 seconds we are very sure about Q4 or prior we're working towards it. Raji, do you want to add anything? 52:14 52 minutes, 14 seconds No, I think SA has been nice to me. You already said it. 52:20 52 minutes, 20 seconds I think our intent is to deliver quarter four or prior but we certainly have advanced it and 52:27 52 minutes, 27 seconds you have seen the results for quarter 4 I mean what we talked two to three years you know ago in terms of margin were a 52:35 52 minutes, 35 seconds lot lower right we were talking more 13.3 13.6 six we are now at 15.2 too. So it has certainly accelerated. I've 52:43 52 minutes, 43 seconds talked about the timeline and let's I mean we'll continue to work around it. Got it. Thank you. 52:49 52 minutes, 49 seconds The only other thing I'd like to add the only thing I would like to add there is think again look at continuing business and look at the gross margins there. I 52:57 52 minutes, 57 seconds think we are in a good state now. Knock on wood. As I look forward with the uh you know the differentiated service 53:05 53 minutes, 5 seconds offerings that we have got and the deep client relationships I do believe and hope that uh you will see uh you will see improvement in growth and margin growth. Yeah. 53:15 53 minutes, 15 seconds Sure. Thank you. 53:18 53 minutes, 18 seconds Thank you. Your next question comes from the line of Bhavik Ma from JP Morgan. Please go ahead. 53:25 53 minutes, 25 seconds Hi. Thank you on AI. How are the client conversations progressing across the three different 53:33 53 minutes, 33 seconds segments because on the IT services side we had a lot of ask from clients for productivity pass through the pricing discounts uh you know but but it's 53:42 53 minutes, 42 seconds curious to hear in uh how the progress over the past few months I development on the AI kind of thing since February March. 53:54 53 minutes, 54 seconds Sure. So, so just like thank you, just like Mun was mentioning, there are three parts to what we are seeing. Number one is uh efficiencies in PDLC and SDLC. 54:06 54 minutes, 6 seconds So that is being one is being asked for by clients but second we are ourselves implementing our own tools to bring it 54:15 54 minutes, 15 seconds about to almost all our programs. This is a work in progress. Right now 65% of the company or 60% of the company has 54:24 54 minutes, 24 seconds been trained on AI tools. Another 40% is being done to be completed in the next 6 months. Right? So that is SDLC PDSC. In 54:32 54 minutes, 32 seconds fact website also shows a couple of tools that we have developed that are already industrialized and being improved. Right? Mood is taking control 54:39 54 minutes, 39 seconds of that taking it forward. The second part is all about the Aentic AI IQ platform that we have launched for 54:47 54 minutes, 47 seconds engineering and manufacturing. There are specific engineering work processes we are dabbling to change in that we are actually partnering uh with industry 54:56 54 minutes, 56 seconds majors to see we can bring their tools in to take it forward. So that's the second area that we are dabbling playing with. Third is physical AI which can be 55:06 55 minutes, 6 seconds broken up into industrial AI and device AI and that again is new area that that we are trying to implement and and add 55:14 55 minutes, 14 seconds on. So we are definitely seeing a lot more conversations on AI a lot more what can be done u usability improvement etc 55:23 55 minutes, 23 seconds and uh of course trends are also changing people are wanting to put more money in AI it's actually a bold question that is coming down to the engineering head as opposed to 55:32 55 minutes, 32 seconds engineering head reply you know taking it ground up so some work to be done in engineering and manufacturing AI uh will 55:40 55 minutes, 40 seconds come in but it will take over the course of this year and next 18 months to uh to expand and I do believe still we are 55:48 55 minutes, 48 seconds about 6 months 8 months ahead of competition and the cycle. So if we continue to keep our head up head up and continue to work hard I do believe that 55:56 55 minutes, 56 seconds it will become a net positive and tailwind for all of us. Okay. Thank you. 56:06 56 minutes, 6 seconds Thank you. Your next question comes from the line of Rahul from Dalat Capital. Please go ahead. 56:18 56 minutes, 18 seconds Hello. 56:20 56 minutes, 20 seconds Yeah. Uh I just wanted to uh clarify on this uh charge of exceptional cost that we have done in the quarter. Uh can you 56:30 56 minutes, 30 seconds uh let me know what uh to for what business uh this was done and is there anything more to happen on this plan going into next year? 56:48 56 minutes, 48 seconds Rahul I can take this question. This is Rajiv there. So Amit did talk about $19 million of analyzed business right 56:55 56 minutes, 55 seconds particularly in Europe and in Israel and parts of UK. uh this restructuring cost actually entails towards those 57:03 57 minutes, 3 seconds businesses and of course adjoining you know people and facilities uh that have been recorded in Q4 and like AIT said we 57:12 57 minutes, 12 seconds reconfirm that there are no more restructuring costs to continue from here on and from a revenue point of view is 57:20 57 minutes, 20 seconds there some part of the revenue from this business still in Q4 which may not happen in Q1 there is no revenue in Q4 because we 57:29 57 minutes, 29 seconds took quite a few of these actions at this probably the end of Q3 or start of Q4 and hence you see no revenues for 57:37 57 minutes, 37 seconds these businesses in Q4 right and just one last thing uh if I 57:44 57 minutes, 44 seconds take the outlook that was shared in the previous handless meet uh our current this fiveyear objective actually 57:53 57 minutes, 53 seconds increases the expected growth rate uh over next five years and four years and 58:01 58 minutes, 1 second at the same time it talks about uh lower margin than what we said a year back. Uh 58:08 58 minutes, 8 seconds with SWC transaction I think our margin thought process should have improved 58:15 58 minutes, 15 seconds while growth number should have cut down given the $90 million exit. uh so why there is a difference between what we 58:24 58 minutes, 24 seconds were thinking then versus now Rahul again this is Rajiv I can take that because of course you know we've 58:32 58 minutes, 32 seconds talked about our Lakshia FI31 aspiration to deliver at a kagger of 13 to 15% band 58:40 58 minutes, 40 seconds on revenue growth as for a bit margins I reiterate that the aspiration is to deliver mid 16% levels quarter 4 fi27 or 58:50 58 minutes, 50 seconds prior and we are working towards it. The 16 to 17% range over the course of next 5 years in line with Lakshia FI31 58:59 58 minutes, 59 seconds strategies to keep in mind that this growth might have some tuck in acquisitions and as you would appreciate right any tuck in acquisition might have 59:08 59 minutes, 8 seconds some you know dilution impact. So we will maintain the margin in that band. 59:14 59 minutes, 14 seconds It's not reducing but actually it's maintaining the band over a period of five years. 59:21 59 minutes, 21 seconds And just lastly from my side, I think uh this has been said earlier that we're not sharing the uh outlook for this 59:30 59 minutes, 30 seconds particular fiscal. Uh but looking at uh looking at uh the situation that we are 59:36 59 minutes, 36 seconds in uh is is it possible to share some thought process whether it will be uh double digit or any any uh qualitative way to represent it. 59:51 59 minutes, 51 seconds better than industry. 59:59 59 minutes, 59 seconds Sure. Thank you. That's from Thank you. 1:00:04 1 hour, 4 seconds Thank you. The next question comes from the line of Karan Open from Philip Capital India. Please go ahead. 1:00:12 1 hour, 12 seconds Yeah. Uh thanks for the opportunity. I make two questions from my side. uh firstly uh um any impact of the Middle 1:00:20 1 hour, 20 seconds East war price volatility you are seeing in in let's say the planting business especially in some of the sub segments 1:00:28 1 hour, 28 seconds like oil and gas chemicals any impact in general uh that would have an impact on the 1:00:35 1 hour, 35 seconds overall sustainability vertical that is one second is the six big breaks which is the bank uh any MLA you are planning 1:00:44 1 hour, 44 seconds to do in any of these six big breaks uh if you can also share the size of it and part to that question is that would you 1:00:51 1 hour, 51 seconds be open to take small margin again because of M& 1:01:00 1 hour, 1 minute okay so so one plant is a very small piece of our operations of course we can look at 1:01:08 1 hour, 1 minute, 8 seconds growth there we'll see uh we hopefully believe that over a five year period we do believe that plant will very soon 1:01:16 1 hour, 1 minute, 16 seconds grow for us. But let this situation get resolved. Will it have an impact on our current quarter or next quarter? The answer is no. Is a very small part of 1:01:25 1 hour, 1 minute, 25 seconds our operations. Unless something drastic happens in which case that very small piece of so so normal course of time no 1:01:34 1 hour, 1 minute, 34 seconds six bets have already shared the amount of revenue. My request will be that we will hold an investor day sometime in the year. We'll walk you through the six 1:01:42 1 hour, 1 minute, 42 seconds bets. It will be on our website. So at that point we'll spend a lot more color and time on it. What was your third question? 1:01:50 1 hour, 1 minute, 50 seconds I mean will you be open to take it on margins again because of yeah 1:01:57 1 hour, 1 minute, 57 seconds so Karan we talked about tuck in acquisition. We are not thinking of any large acquisition at this stage. Um I 1:02:06 1 hour, 2 minutes, 6 seconds think the acquisition that we made of Intellis start of last year has panned out well. uh we continue to build our 1:02:13 1 hour, 2 minutes, 13 seconds software capability. In fact, Mun is leading the entire effort of building the software and AI horizontal for the 1:02:20 1 hour, 2 minutes, 20 seconds company. So at this stage we're not talking of any large acquisition. We are more talking acquis acquisitions and hence I've given an a bit range of 16 to 1:02:28 1 hour, 2 minutes, 28 seconds 17%. But much like Amit mentioned when we host the investor and day we'll give you more clarity on big bets investments and the related M&A. 1:02:40 1 hour, 2 minutes, 40 seconds Cool. Thank Thank you. Okay. Thank you. 1:02:46 1 hour, 2 minutes, 46 seconds We will take that as our last question for today. I now hand the conference over to Mr. Sandesh Nikk for closing comments. 1:02:54 1 hour, 2 minutes, 54 seconds Thank you. Thank you all for joining us on the call today. We hope we were able to answer your queries. We look forward to interacting with you throughout the 1:03:02 1 hour, 3 minutes, 2 seconds quarter. Wish you all a very good evening and a good day. Thank you. Thank you. 1:03:11 1 hour, 3 minutes, 11 seconds On behalf of L&T Technology Services Limited, that concludes this conference. 1:03:16 1 hour, 3 minutes, 16 seconds Thank you for joining us and you may now disconnect your lines.