Quess Corp Ltd — Q4 FY26

Quess Corp Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=tK40pmSjiGo Published: 8 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the quiz call Q4 FI26 earnings conference call hosted by 0:10 10 seconds Capital Services Limited. As a reminder, all participant lines will be in the listening on remote and there will be an 0:18 18 seconds opportunity for you to ask questions after the presentation concludes. 0:23 23 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on the touchstone. 0:31 31 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. 0:37 37 seconds Siddhak from Capital Services Limited. Thank you and over to you sir. 0:45 45 seconds Thank you ladies and gentlemen. Good morning and thank you for joining us on the post Q4 FI26 and FYI 26 results 0:52 52 seconds conference call for West Cop limited. It is my pleasure to introduce the senior management team of West Cop who are here 1:00 1 minute with us today to discuss the results. We have Mr. Gurupat Srian executive director Mr. Lu Batya CEO Mr. Kushel 1:09 1 minute, 9 seconds Maheshwari head investor relations and treasury Mr. Nita Jen CFO Mr. Kapil Ji 1:16 1 minute, 16 seconds CEO of IT Staffing and Mr. Nin, CEO of West Staffing Solutions. We will begin the call with opening remarks by the 1:24 1 minute, 24 seconds management team and thereafter we will open the call for the session. I would like to now hand over the call to Mr. 1:30 1 minute, 30 seconds Kush Maheshwari to take the proceedings forward. Thank you and over to you. 1:36 1 minute, 36 seconds Thank you Sat. Good morning everyone and thank you for joining us for our Q4 FI26 and FI2 26 earnings call. The 1:45 1 minute, 45 seconds information data and outlook shared by the management during the call are forward-looking and subject to prevailing business conditions and 1:53 1 minute, 53 seconds government policies. All forward-looking statements are subject to economic growth or other risks faced by the company. Please refer to slide number 2:02 2 minutes, 2 seconds two of the investor presentation for the safe harbor clause. With that straightforward clause, I will now hand over the call to our CEO, Mr. Lo Batya 2:11 2 minutes, 11 seconds for his opening statements. Over to you Lo. 2:16 2 minutes, 16 seconds Thank you Kushil. Good morning everyone and thank you for joining us for Quest Cops Q4 and full year FY26 earnings call 2:24 2 minutes, 24 seconds today. We are pleased to report a quarter of year with steady execution, strong margin expansion and improved 2:32 2 minutes, 32 seconds quality of earnings. For Q4 FI26, we delivered a revenue of 3,892 2:40 2 minutes, 40 seconds crores, reflecting a 6% year-on-year growth, while the EITA came in at 86 crores, up 28% yearonear with the margins expanding to 2.2%. 2:52 2 minutes, 52 seconds PAT stood at 64 crores with an EPS of 4.3 rupees. For the full year FI26, 3:00 3 minutes revenues stand at 15,305 crores with an EIA at 3112 crores, 3:08 3 minutes, 8 seconds reflecting 19% growth in EIA and a PAT excluding one-time exceptional item at 3:14 3 minutes, 14 seconds 230 crores up 10% yearon-year. This marks a healthy roe of 20%. 3:22 3 minutes, 22 seconds Importantly, our EPIA to operating cash flow conversion remained strong at 80%. 3:28 3 minutes, 28 seconds Highlighting the disciplined working capital management and high quality earnings. The board has thus approved a 3:35 3 minutes, 35 seconds special dividend of 3 rupees per share on account of the 10th anniversary of our IPO and a final dividend of 3 rupees 3:44 3 minutes, 44 seconds per share. Staying true to our commitments to reward our shareholders. Now moving to the business performance. 3:52 3 minutes, 52 seconds This is scale with improving quality. 3:55 3 minutes, 55 seconds FI26 reflects a clear shift in our business towards higher margin more sustainable segments. Even as we maintained our leadership position in 4:04 4 minutes, 4 seconds co-staffing, we ended the year with a headcount of approximately 4 lak 78,594 4:12 4 minutes, 12 seconds associates, reinforcing our position as India's largest staffing platform. 4:17 4 minutes, 17 seconds During the year, we added 281 new contracts in general staffing. Continued scaling high margin professional 4:25 4 minutes, 25 seconds staffing with strong GCC traction, adding 61 new logos during the year. We 4:32 4 minutes, 32 seconds added 125 new logos in overseas business. As well, at a portfolio level, high margin businesses now contribute 4:41 4 minutes, 41 seconds 50% of the total profitability. A structural shift that is beginning to reflect in our margin trajectory as 4:48 4 minutes, 48 seconds well. General staffing scale leadership with execution discipline. The general staffing 4:55 4 minutes, 55 seconds business continued to demonstrate resilience and strong execution at scale. For the year FI26, 5:03 5 minutes, 3 seconds we added approximately 26,000 net ad in our headcount in the staffing solutions business. However, 5:11 5 minutes, 11 seconds discontinued projects have resulted in a 7,000 loss during the year as well. 5:17 5 minutes, 17 seconds Revenue has come out at 13,176 crores, growing modestly year on year 5:24 5 minutes, 24 seconds despite a year marked by structural transitions including the labor code implementation, the geopolitical instability and portfolio recalibration. 5:35 5 minutes, 35 seconds Epita remains stabled at 189 cr with significant investments made in verticalization technology investments 5:43 5 minutes, 43 seconds and hiring of recruiters to make our business future proof and future ready. 5:49 5 minutes, 49 seconds During Q4 we added 59 new contracts taking FI26 total addition of new contracts and customers to 281. 6:00 6 minutes The headcount growth remained measured owing to global factors and supply side talent shrinkage especially in the later 6:07 6 minutes, 7 seconds part of the financial year. DSO remained tightly managed at 24 days including 9 6:14 6 minutes, 14 seconds days of UBR days as well. This also shows strong collection discipline within the unit. While certain verticals 6:23 6 minutes, 23 seconds such as BFSI and CRT saw near-term softness, this was offset by the stability in other lines of businesses 6:32 6 minutes, 32 seconds recently created in the last few years, including manufacturing and the infrastructure-led construction demand. 6:39 6 minutes, 39 seconds Our focus will continue to be improving profit per associate, enhancing client 6:45 6 minutes, 45 seconds mix, driving operational efficiency at scale, moving to our professional staffing business, the high quality 6:54 6 minutes, 54 seconds growth engine. Professional staffing has delivered another record strong quarter for us and a year of profitable growth. 7:03 7 minutes, 3 seconds The revenue for the year has come out at 930 crores which is up 13% yearonear. 7:10 7 minutes, 10 seconds Epitar increased sharply to 111 crores up 43% yearonear. Margins have expanded 7:19 7 minutes, 19 seconds to 12% plus. In the quarter 4 epida has grown 47% yearonear with continued 7:26 7 minutes, 26 seconds margin strength. GCC's continue to account for 71% of total headcount deployment in our professional staffing 7:35 7 minutes, 35 seconds business reflecting our strategic position in high value niche roles and segments. This pro this performance has 7:43 7 minutes, 43 seconds been driven by the focus on high margin digital and technology roles, rationalization of low yield 7:51 7 minutes, 51 seconds engagements, strong demand from GCPs. We believe the double-digit margin in this segment are sustainable supported by the 8:00 8 minutes structural demand and disciplined execution. 8:05 8 minutes, 5 seconds Moving to our overseas business, diversified growth with margin expansion. Our overseas business 8:11 8 minutes, 11 seconds continued to deliver consistent growth and improving margin for the year FI26. 8:18 8 minutes, 18 seconds The revenue stands at 1,197 cr up 5% yearonear. EPIA increased to 77 8:27 8 minutes, 27 seconds crores up 21% year-on-year. For the quarter 4, revenue grew 16% 8:33 8 minutes, 33 seconds year-on-year. EPIA grew 28% yearonear with steady margins above 6% at a 8:40 8 minutes, 40 seconds blended rate. The key highlights for international are 125 new logos added 8:47 8 minutes, 47 seconds during the year. Middle East has closed financial year 26 with 11% EITA margin. 8:54 8 minutes, 54 seconds boosting revenue and EITA growth of 27 and 40% respectively. 9:00 9 minutes Quest Singapore general staffing has added 68 new contracts and an over 491 9:07 9 minutes, 7 seconds local headcount, taking our total headcount in the geography to over 1,026. 9:14 9 minutes, 14 seconds Malaysia has delivered strong revenue growth of 83% year-on-year, scaling to 900 headcount and an EIA margin of 4.3%. 9:23 9 minutes, 23 seconds Free fields posted 49% revenue growth at a 10% EITA margin crossing over 700 9:31 9 minutes, 31 seconds headcount milestone. Overall, the international portfolio is now better balanced, structurally more profitable 9:38 9 minutes, 38 seconds as well. Our digital platforms continue to remain investment focused with a 9:45 9 minutes, 45 seconds layer of AI. Our digital platforms businesses continue to be in an investment focus. We have sharpened our 9:53 9 minutes, 53 seconds focus towards AIled solutions with a plan for the coming three years. We are building a blue collar marketplace 10:02 10 minutes, 2 seconds AIdriven recruitment and workforce solutions. This will further strengthen our long-term position in technology-led workforce management platforms. 10:13 10 minutes, 13 seconds Moving on to people and ESG highlights. 10:17 10 minutes, 17 seconds I'm proud to share that Quest has been certified as a great place to work for seventh consecutive year 10:25 10 minutes, 25 seconds with recognition across India, Singapore and Middle East. We were also recognized 10:32 10 minutes, 32 seconds with LinkedIn talent award 2025 for AI pioneer reflecting our focus on innovation in talent acquisition. 10:44 10 minutes, 44 seconds Some closing remarks to summarize the FY26. 10:49 10 minutes, 49 seconds The year has been led by margin expansion, improved profitability, strong cash flow generation, portfolio 10:57 10 minutes, 57 seconds shift towards higher margin businesses, disciplined execution across segments. 11:04 11 minutes, 4 seconds While revenue growth remained moderate, the quality of growth has significantly improved, positioning us well for the 11:12 11 minutes, 12 seconds next phase. As we move into FI27, our focus will be on scaling professional staffing and overseas 11:19 11 minutes, 19 seconds business, drive margin expansion across segments, leveraging technology and AI platforms, and continuing our disciplined capital allocation. 11:31 11 minutes, 31 seconds We remain confident in our ability to deliver sustainable profitable growth with improving return ratios. 11:40 11 minutes, 40 seconds With that I will now hand over to Nish to walk you through the financials in more details. Thank you. 11:47 11 minutes, 47 seconds Thank you Lis. Good morning everyone and thank you for joining us for Quest COP Q4 and full year FY26 earnings call. I 11:56 11 minutes, 56 seconds will begin with our headline financial performance for the quarter and full year and then I'll follow with a segment wise financial review and conclude it 12:04 12 minutes, 4 seconds with key balance sheet cash flow and capital allocation highlights. I'll start with financial highlights for the 12:11 12 minutes, 11 seconds quarter. Q4 FY26 was a quarter of strong margin expansion, improved profitability reflecting continued benefits from our 12:19 12 minutes, 19 seconds focus on our mix improvement, operating discipline and cost optimization. 12:25 12 minutes, 25 seconds Consolidated revenues uh for the quarter stood at 3,892 cr representing 6% year-on-year growth 12:34 12 minutes, 34 seconds with broadly stable sequential performance. IITA for the quarter came in at 86 cr up 28% yearonear and 8% 12:43 12 minutes, 43 seconds sequentially with IITA margins improving to 2.2%. 12:48 12 minutes, 48 seconds Representing an expansion of 37 basis points yearon year. This margin expansion indicates improved operating 12:55 12 minutes, 55 seconds leverage, a more favorable business mix and sustained cost discipline across the organization reflecting in operating 13:02 13 minutes, 2 seconds margins for all businesses combined and crossing 100 cr for the quarter. 13:08 13 minutes, 8 seconds Uh reported pad stood at 64 cr reflecting a 167% year or increase 13:16 13 minutes, 16 seconds supported by operating leverage and lower exceptional impacts on an adjusted basis. PAT remained stable sequentially 13:23 13 minutes, 23 seconds reflecting underlying business trend and consistency in earnings quality. Our EPS for the quarter stood at 4.3 per share. 13:32 13 minutes, 32 seconds Importantly, our operating cash flow conversion remained robust at 80% of underscoring strong working capital discipline and high quality earnings. 13:42 13 minutes, 42 seconds I'll come to fullear uh FI26 performance. For the full year, FI26 consolidated revenue stood at 15,35 cr reflecting 2% year-on-year growth. 13:54 13 minutes, 54 seconds While revenue growth remained calibrated during the year, the financial performance reflects a deliberate focus on profitability and earnings quality 14:02 14 minutes, 2 seconds rather than volume expansion. IITA increased to 312 cr delivering a 19% yearon yearon-year growth with a margin 14:11 14 minutes, 11 seconds expansion to 2%. Our adjusted back for the year stood at 250 cr up 10% 14:18 14 minutes, 18 seconds yearonear with adjusted EPS of 15.4 per share. Our return on equity remained 14:25 14 minutes, 25 seconds strong at 20% reflecting improving profitability and capital efficiency. 14:32 14 minutes, 32 seconds This reflects disciplined execution in a year of external transitions particularly around labor code implementation. 14:40 14 minutes, 40 seconds Uh I'll now talk about uh segment wise financial performance journal staffing uh scale with stable profitability. Our 14:48 14 minutes, 48 seconds journal staffing continues to provide scale stability and strong cash flow generation even as margins remain sensitive to mix and sectoral demand. 14:58 14 minutes, 58 seconds For quarter 4 FI26, our revenue stood at 3,328 cr up 6% yearonear while quarteron 15:07 15 minutes, 7 seconds quarter decline is due to one-time incentive pass through and graduity building in Q3 which was because of the labor code implementation. 15:15 15 minutes, 15 seconds Our segment stood at 52 cr reflecting 21% year-on-year growth. And for FI26, 15:21 15 minutes, 21 seconds our revenue stood at 13,176 cr contributing 86% of total revenue for 15:29 15 minutes, 29 seconds the company. Our stood at 189 crores for the segment. Operationally, we added 59 15:35 15 minutes, 35 seconds new contract in Q4, taking our total FI26 additions of new contracts to 281. 15:43 15 minutes, 43 seconds Our DSO remained tightly controlled at 24 days including unbuild revenue with 15:49 15 minutes, 49 seconds the AR DSO standing at 15 days. Our collect and pay mix remained strong at 76%. 15:58 15 minutes, 58 seconds Our margins remained stable supported by pricing discipline and cost control even as certain verticals such as BFSI and CRT saw moderate softness. 16:09 16 minutes, 9 seconds I'll now talk about professional staffing. Um I think the highlight for the segment was marginled growth continues. Professional staffing 16:16 16 minutes, 16 seconds continues to be our key driver for profitability and margin expansion. For quarter 4 FI26 the revenue stood at 232 16:25 16 minutes, 25 seconds cr. The IITA stood at 30 cr which is up by 47% yearonear and margins for 16:33 16 minutes, 33 seconds professional staffing remained strong at 12% plus. For the full year, revenue grew to 930 cr which is 13% year-on-year 16:42 16 minutes, 42 seconds growth and IITA increased to 111 cr which is a 43% yearon-year increase. Uh 16:51 16 minutes, 51 seconds key highlights for the segment GCCled engagements now account for 70% plus headcount. Our continued focus on high 16:59 16 minutes, 59 seconds margin digital and technology roles and strong operating leverage driven by portfolio rationalization. 17:06 17 minutes, 6 seconds Professional staffing now contributes a high share of profitability relative to revenue reinforcing its role as our 17:14 17 minutes, 14 seconds structural margin driver for the company. Uh I'll move on to the overseas business. Uh the overseas business 17:21 17 minutes, 21 seconds delivered steady growth with continued margin improvement supported by diversification across geographies. 17:29 17 minutes, 29 seconds Starting with Q4, our revenue stood at 332 cr which is up by 16% yearonear. 17:36 17 minutes, 36 seconds Arbita was at 21 cr uh which is up by 18% yearonear and for the full year 17:42 17 minutes, 42 seconds revenue for overseas business is 1,197 cr and arbita increased to 77 cr which is a 21% year-on-year increase. 17:54 17 minutes, 54 seconds Moving on to operational highlights, we added 125 new logos during the year and with least maintained doubledigit margins. 18:03 18 minutes, 3 seconds Malaysian Philippines showed strong growth and margin expansion and Singapore performance stabilized during the year with improved revenue mix and cost efficiency. 18:13 18 minutes, 13 seconds The segment continues to demonstrate improving profitability and cash generation with IITA margins in the 18:20 18 minutes, 20 seconds range of 6 to 7%. These results demonstrate consistent sequential execution and margin sustainability 18:26 18 minutes, 26 seconds during the year. Our portfolio mix and margin evolution from a portfolio perspective approximately now 50% of the 18:34 18 minutes, 34 seconds total operating profitability comes from high margin businesses namely professional staffing and overseas segments. This structural shift in mix 18:44 18 minutes, 44 seconds combined with cost discipline and pricing optimization, improved execution has been the primary driver of margin 18:52 18 minutes, 52 seconds expansion for us during the year. The impact of this mix improvement complemented by cost management and 18:59 18 minutes, 59 seconds delivery efficiencies has been our key driver for margin expansion during the year. Importantly, this strategy has 19:06 19 minutes, 6 seconds been executed without compromising our cash flows and with strong focus on capital efficiency and liquidity discipline. 19:15 19 minutes, 15 seconds I'll move on now to balance sheet, cash flow and capital allocation. Our balance sheet remains strong and well capitalized. 19:22 19 minutes, 22 seconds The net cash position as of close is it is 271 cr. We have zero gross debt in 19:30 19 minutes, 30 seconds the company. Our free cash flow generation remains healthy supported by strong IITA growth and tight working capital management. 19:39 19 minutes, 39 seconds Talking about capital allocation and shareholders return based on our cash generation and balance sheet. The board has proposed a final dividend of 3 19:48 19 minutes, 48 seconds rupees along with a special dividend of 3 rupees marking our 10 years of IPO. 19:54 19 minutes, 54 seconds This reflects confidence in our cash generation and our commitment to shareholder returns. continued discipline in capital allocation. This 20:03 20 minutes, 3 seconds translates into a total payout aligned with free cash flow reflecting our commitment to shareholder returns while maintaining adequate liquidity for our growth objectives. 20:13 20 minutes, 13 seconds In closing remarks, uh to summarize Q4 and FI26, consistent margin expansion despite 20:20 20 minutes, 20 seconds modest revenue growth, strong IITA and profitability growth, high quality earnings with robust cash conversion, 20:29 20 minutes, 29 seconds structurally improving our business mix and a strong balance sheet with disciplined capital allocation. 20:36 20 minutes, 36 seconds As we move into FI27, our financial priorities remain sustaining our margin expansion trajectory while maintaining 20:43 20 minutes, 43 seconds strong cash conversion, driving higher return on capital, and supporting growth investments while ensuring capital 20:51 20 minutes, 51 seconds discipline. With that, I will now hand it over back to the moderator for Q&A. 20:59 20 minutes, 59 seconds Thank you very much. We will now begin with the question and answer session. 21:04 21 minutes, 4 seconds Anyone who wishes to ask a question may press star and then one on the red throne telephone. If you wish to remove 21:12 21 minutes, 12 seconds yourself from the question queue, you may press star and then two. 21:17 21 minutes, 17 seconds Participants are requested to use handsets while asking the question. 21:22 21 minutes, 22 seconds Ladies and gentlemen, we will wait for a moment while the question to send. 21:33 21 minutes, 33 seconds A reminder to all you may press star and then one to ask a question. 21:44 21 minutes, 44 seconds We will take the first question from the line of Sedat Zabak from Capital Services Limited. Please go ahead. 21:52 21 minutes, 52 seconds Thank you. Congratulations on a strong set of regles and thank you for taking my question. I have two questions. 21:59 21 minutes, 59 seconds Firstly on the overseas business we saw a task profuse. Could you help us understand what was the drivers behind 22:06 22 minutes, 6 seconds this growth and to what to what extent is this sustainable versus being one of in nature? Additionally any color on how the Middle East business will be 22:14 22 minutes, 14 seconds impacted by the ongoing geopolitical situation and uh secondly on general staffing margins margins expanded by 20 basic 22:22 22 minutes, 22 seconds points uh year on year. What are the key drivers behind this improvement and should we uh view this level of margin as sustainable going forward? 22:35 22 minutes, 35 seconds Thank you Sedat. Uh this is Loit. I will take that question and then hand over briefly to my colleague. Uh your first 22:43 22 minutes, 43 seconds question was on overseas and how sustainable is the margin profile and the growth that we've seen in the fourth quarter. Fourth quarter has been 22:52 22 minutes, 52 seconds particularly aided by the revenue jump from 290 crores to 332 crores. This is 22:59 22 minutes, 59 seconds uh actually demonstrated by three moving parts and segments. Number one is core organic revenue growth as well as 23:07 23 minutes, 7 seconds one-time pass through put together that has expanded uh the book. The second has 23:13 23 minutes, 13 seconds been expanded by new customer edition during this quarter as well. And third has been an advantage of the currency 23:20 23 minutes, 20 seconds devaluation of the Indian rupee against the currencies that we are operating in all of these geographies. So it's a 23:28 23 minutes, 28 seconds combination of three factors. Uh if I were to moderate the one-time pass through out of the 42 cr revenue jump 23:37 23 minutes, 37 seconds during this quarter about 10 crores is the one time the rest 32 is because of organic revenue growth new customer growth and forex gain. 23:48 23 minutes, 48 seconds Your second question you briefly asked was about Middle East and what do we see there? As the Middle East uh issues 23:57 23 minutes, 57 seconds unfolded in front of all of us at Quest Corp also first we were absolutely cognizant of the fact that both our core employees as well as our associate 24:06 24 minutes, 6 seconds employees have to remain safe. Our treasury operations, balance sheet and finance has to be robust to take care of 24:13 24 minutes, 13 seconds all eventualities and to be able to pay everyone as per the laws on time. Uh I 24:21 24 minutes, 21 seconds must tell you that we've had a record revenue closing even in Q4 in Middle East. In spite of all of these factors, 24:30 24 minutes, 30 seconds we've had a record collection at almost 17%. Our OCS has been healthy this year and we've crossed at an operating level. 24:40 24 minutes, 40 seconds We've crossed our AOP targets at revenue, EITA and margin all three uh during the quarter in Middle East. We 24:49 24 minutes, 49 seconds remain concerned and we continue to keep watching that situation extremely carefully. Uh we are also in touch with all of our customers. 24:59 24 minutes, 59 seconds One of the things that when we deep dive our Middle East results has been something that we've been structurally doing for the last 7 to 8 years. We are 25:07 25 minutes, 7 seconds not embedded to any one segment, any one customer or any one market there. We are actually in mostly essential services 25:16 25 minutes, 16 seconds which is technology, insurance, telecommunications, e-commerce and logistics, 25:23 25 minutes, 23 seconds banking and then uh retail. So the portfolio diversification in the last 7 8 years and the strength of the quality 25:32 25 minutes, 32 seconds of customers that we work with backed up by the essential services nature of the work we have done. We continue to close 25:40 25 minutes, 40 seconds Middle East for this financial year and this quarter at a high point of more than 2,300 contractors. We will continue 25:48 25 minutes, 48 seconds to watch the situation as it unfolds very very closely. I will briefly move to the general staffing. I believe you 25:57 25 minutes, 57 seconds were asking the question on overall margin at 2.2%. Am I right? Sedat no for for general staffing. 26:06 26 minutes, 6 seconds General staffing our margins are at 1.5%. So general staffing uh Sedat very 26:13 26 minutes, 13 seconds specifically if you look at a very holistic picture of quests as it has been unfolding in the last three or four 26:21 26 minutes, 21 seconds years this has been backed up by the three distinct platforms. The second you would notice that in each platform we 26:29 26 minutes, 29 seconds have a volume and a value strategy. The third you would notice that while we are chasing growth at a volume level specifically in the general staffing 26:38 26 minutes, 38 seconds business as well in each of the segments and platforms including general staffing we are also going after the higher 26:44 26 minutes, 44 seconds margin businesses. Uh GS also has modeled their next 4-year trajectory on 26:51 26 minutes, 51 seconds value and volume. We have today customers in construction. We have customers in value added services and 27:00 27 minutes manufacturing which has been yielding slightly higher margin than the margins that we've seen traditionally in this business. 27:11 27 minutes, 11 seconds Got it. Thank you so much and all the best for the coming quarters. Thank you. 27:18 27 minutes, 18 seconds Thank you. We will take the next question from the line of Vic Auja from Antique Stock Broken. Please go ahead. 27:28 27 minutes, 28 seconds Hi uh thank you for the opportunity and congrats on good execution. So I have a couple of questions on margin and then one related to that discontinued project 27:37 27 minutes, 37 seconds which resulted in 7 7,000 headquart loss. So firstly you know on professional staffing margins are now 12.7%. 27:46 27 minutes, 46 seconds And we have seen this improvements it's it's a consistent improvement we have seen over last five six quarters. uh do 27:53 27 minutes, 53 seconds we think there is more room to improve uh these margins further and overseas at 6.2 to as well uh while journalist 28:01 28 minutes, 1 second staffing remains at 1.5 as the higher margin segments scale what is the expected blended margins we expect over 28:09 28 minutes, 9 seconds next two to three years that is my first question thank you thank you Vikas for the uh professional 28:17 28 minutes, 17 seconds staffing I'll ask no to uh give you a color uh yeah Vikas thanks for that question 28:24 28 minutes, 24 seconds um to your question on uh professional staffing and how did we scale to 12.7% and is this something which will remain 28:32 28 minutes, 32 seconds for the long term or are we further anticipating uptick in margin? Uh this has been a structural story which Quest 28:41 28 minutes, 41 seconds has been working in our professional staffing side since 2020 2021. We've done multiple things. One we have moved 28:49 28 minutes, 49 seconds away from the low margin 0 to 3 years of experience category. Second, we have pivoted ourselves to GCC's and today our 28:58 28 minutes, 58 seconds book is almost 71% built on the back of GCC's followed by another 20% on IT 29:05 29 minutes, 5 seconds customers within enterprises followed by 9 to 10% only from the IT services pack. 29:12 29 minutes, 12 seconds The third is we've gone higher on the uh execution capability both with the niche segment as well as with the experience 29:20 29 minutes, 20 seconds skill set. All of this has yielded to higher margin which is a plan that our professional staffing team has made. We 29:28 29 minutes, 28 seconds will continue to remain with that focus and that trajectory in times to come. As far as the guidance is concerned, it would be safe to say that we would 29:37 29 minutes, 37 seconds continue to remain and measure ourselves in the 11 to 12% margin category uh for 29:44 29 minutes, 44 seconds for the medium term. as well. As far as overseas is concerned, the book is today built on multiple countries. Middle East 29:52 29 minutes, 52 seconds and Philippines both are doubledigit margins at 11 and 10% today. Uh Singapore, which had some challenges in 30:00 30 minutes the last six quarters, which we've spoken about in every call in the past, has now come out of that trough and has 30:07 30 minutes, 7 seconds built a general staffing business as well. yields a close to a 5 and a half% margin profile and Malaysia yields about 30:15 30 minutes, 15 seconds a 4.3% margin profile. So the blended margin is at about 6.2. We would continue to keep working ourselves 30:23 30 minutes, 23 seconds towards a 6% plus margin as far as our international mix and book is concerned. 30:29 30 minutes, 29 seconds Uh you briefly mentioned that you wanted to know about the 7K discontinued project. 30:37 30 minutes, 37 seconds Yeah. Yes. I I think that that that question is actually uh so so before that you know I wanted to get some 30:45 30 minutes, 45 seconds understanding on overall blended margins for next two to three uh three years and the question on that 7,000 was can you 30:53 30 minutes, 53 seconds you know you provide uh more details on the revenue and margins impact of this continuation and and also are we largely done with 31:02 31 minutes, 2 seconds this restructuring or do we think that in F27 there could be some revenue hit because of further the discontinuation of project. 31:12 31 minutes, 12 seconds So for the question on the overall margin basically is it sustainable and for the next two to three years I will ask L to answer this thing followed by 31:21 31 minutes, 21 seconds the question on discontin. So as you see Vicas this year started with a range of 1.6 to 1.8% margin across our various 31:30 31 minutes, 30 seconds quarterly calls. uh we had said that we want to be at 2% and create that as a new uh baseline and foundation for our 31:38 31 minutes, 38 seconds company. Uh today we are glad that at a full financial year FY26 basis we have 31:44 31 minutes, 44 seconds crossed the 2% mark but as we exited Q4 it was 2.2%. 31:50 31 minutes, 50 seconds If the blending of our current portfolio remains where it is a 2.2% is possible. 31:55 31 minutes, 55 seconds However, uh given the fact that general staffing is a 1.5% EITA margin business, we are anticipating a higher clip rate 32:04 32 minutes, 4 seconds growth in FI27 and thereafter in terms of headcount. So, it would be safe to say that in an immediate term a 2% plus 32:13 32 minutes, 13 seconds margin in a medium-term going towards a 2.4% uh as far as medium-term is concerned I 32:20 32 minutes, 20 seconds would call it a 3year period that would be a medium-term. So that's how we should kind of look at it. Uh to your question on the discontinued project as 32:29 32 minutes, 29 seconds you would remember closer to our de merger timeline we had said any business which does not meet the financial matrix 32:38 32 minutes, 38 seconds of the company and does not yield us the cash realization we will exit and discontinue such 32:45 32 minutes, 45 seconds businesses. This was one of the projects which we were doing which was 7,000 odd resources but a milestone based project which in this financial year we've 32:54 32 minutes, 54 seconds completely closed and dialed down. The impact of revenue from this is roughly about 1.3% 33:02 33 minutes, 2 seconds at about 200 crores. We do not have any such known event in front of us. 33:11 33 minutes, 11 seconds Okay. Thank you. And my uh final question is uh then I'll go back to the queue. uh that GCC within professional 33:18 33 minutes, 18 seconds staffing now contribute 71% of the headcount uh how does GCC margin profile compare 33:25 33 minutes, 25 seconds to the broader professional staffing and is there further GCCled margin upside we 33:32 33 minutes, 32 seconds foresee also uh do we see any risk to this GCC story we have seen in last couple of years as many of the large you 33:39 33 minutes, 39 seconds know US companies are talking about reducing headcounts this year so that could be you know trickling down to 33:46 33 minutes, 46 seconds their GCC's as well and could have some indepth impact on us. Thanks a lot. 33:52 33 minutes, 52 seconds So uh Vikas let's understand this difference and I think it's an important point that you raise. Why are GCC 34:00 34 minutes slightly different from IT services? I think it's a it's a very different business that both these are in. IT 34:08 34 minutes, 8 seconds services are primarily in the uh digital uh transaction as well as transformation space but a lot of volume is gathered at 34:17 34 minutes, 17 seconds the entry level which is 0 to 3 years and 3 to 5 years when you look at GCC's they are coming to India to solve a 34:25 34 minutes, 25 seconds certain uh technology problem for themselves and they're not just looking at India as a cheap base to solve talent 34:33 34 minutes, 33 seconds but they're also looking at India for transformation and beyond transformation as well. In GCC's you need ready talent 34:42 34 minutes, 42 seconds which comes with skills which comes with experience and which comes with minimum 7 to 8 years of exposure and more. 34:49 34 minutes, 49 seconds Hence, it's a very different segment of talent that we deal with. And likewise, for a higher experience, automatically 34:56 34 minutes, 56 seconds the revenues and thus the complexity of that enhances because we've created a 35:04 35 minutes, 4 seconds high value verticalization team within our professional staffing practice as well. We are able to yield the kind of 35:11 35 minutes, 11 seconds results that we do. I think uh I think there was a question around softness of GCC in the US for professional staffing. 35:19 35 minutes, 19 seconds So maybe what we are also seeing from our side is one the time and the opportunity for overall GCC that we can tap in India but more importantly we are 35:28 35 minutes, 28 seconds seeing a wider GCC demand coming in from the Asia Pacific. So as a as a company we are looking at you know new corridors 35:35 35 minutes, 35 seconds where we can tap toward GCC demand for this uh vertical. 35:43 35 minutes, 43 seconds Okay thank you. Thank you. 35:47 35 minutes, 47 seconds Thank you. We will take the next question from blind of depa from N global. Please go ahead. 35:55 35 minutes, 55 seconds Yeah thanks for the opportunity and congrats on strong execution. Uh my question is largely linked with revenue growth side and headcom side. First on 36:05 36 minutes, 5 seconds general staffing uh if I look revenue growth for 26 is largely muted and even if one adjust for 36:12 36 minutes, 12 seconds the accounting for labor code which we did on revenue expenses side and adjust rate for 7,000 project related impact 36:20 36 minutes, 20 seconds which you indicated it is largely flaties. So can you provide some sense how you expect the general staffing growth to play out considering your 36:28 36 minutes, 28 seconds margin focus and KS conversion whether you find uh enough double digit growth kind of opportunities uh starting FI27 36:36 36 minutes, 36 seconds or a growth likely to be tipped particularly on revenue side in general staffing that is question one second question on professional staffing if I 36:45 36 minutes, 45 seconds look at it over last few quarter growth started taping off on revenue side uh how you expect this revenue growth to play out even though our focus remain on 36:55 36 minutes, 55 seconds uh GCC and all those things but largely seems to be now growth is tapering out uh so trying to get your sense on revenue growth side and third question 37:04 37 minutes, 4 seconds is on the labor code kind of thing what percentage of our revenue or client would have accepted let's say revised 37:12 37 minutes, 12 seconds terms or revised rate based on the new labor code related revision and where discussion are still let's say happening if you can provide some sense on it 37:21 37 minutes, 21 seconds thank Dep I'll uh I'll answer the questions and then hand over to my colleagues 37:29 37 minutes, 29 seconds Nitin and couple to throw some more light on the specifics that you've asked. The first thing you've asked is revenue and headcount growth related to 37:38 37 minutes, 38 seconds general staffing. Let me clarify uh a few points. One with a year which kept us so busy in India starting from the 37:46 37 minutes, 46 seconds second quarter of GST 2.0, third quarter labor code and fourth quarter global factors including uh 37:53 37 minutes, 53 seconds state elections. In spite of that fact, our general staffing team this year has added 26,000 net addition to employment. 38:03 38 minutes, 3 seconds Uh while our historical average has always been 45 to 50,000 and we continue to uh run investments, teams and 38:12 38 minutes, 12 seconds technology to be able to deliver those kind of numbers. We see that this 26,000 has further been muted by the 7,000 38:20 38 minutes, 20 seconds which as a leadership team we took a conscious call to decline from those businesses and hence the like forl like number for an entire organization you're 38:29 38 minutes, 29 seconds noticing is only at 19,000 at 26,000 I would say we have performed 38:35 38 minutes, 35 seconds at 50% of our installed capacity but this 50% of installed capacities in spite of the structural things which 38:43 38 minutes, 43 seconds were happening both on the demand and the supply side as far as India is concerned in the last couple of years. 38:50 38 minutes, 50 seconds Uh I will ask Nathan to throw some more light on the kind of capacity that we 38:56 38 minutes, 56 seconds have from a safe execution sourcing reach perspective. 39:02 39 minutes, 2 seconds Yeah, [clears throat] thank you. This is Nitin D. Uh we in general staffing are well invested in terms of verticalization, new lines of business, 39:12 39 minutes, 12 seconds recruiters. We have a very resilient sales team that is in a position to deliver 275 to 300 new logos every year. 39:22 39 minutes, 22 seconds In fact, in the last 12 quarters, they have added more than 100,000 new headcount. The same is true for our 39:29 39 minutes, 29 seconds recruitment team. We have a very stable recruitment team which can consistently deliver headcount. So in a stable 39:36 39 minutes, 36 seconds environment, this team can consistently deliver headcount growth going forward. 39:43 39 minutes, 43 seconds and new lines of business where also we are working they can also start kicking as we go forward couple 39:51 39 minutes, 51 seconds uh we will hand over to Kapil for the PS uh question professional staffing that you asked 40:00 40 minutes so professor I understand your concern but uh it is it is very cyclic if you see H1 versus H2 you know uh what 40:09 40 minutes, 9 seconds happened in H2 we have low impact and the number of working days since we work on Tandm model in professional staffing number of working days also impact our 40:17 40 minutes, 17 seconds revenue uh and Q3 and Q4 in specifically Q4 has the lowest working days in a 40:24 40 minutes, 24 seconds whole year. So probably the real efforts what we put in the sales or what we do headcount addition whole the year does 40:31 40 minutes, 31 seconds not reflect in Q3 Q4 performance because of the furlow and less working days but uh just to let you know we have acquired 40:39 40 minutes, 39 seconds 64 uh 61 logo in whole year out of this you know 50% plus has already gone active and we have 200 plus 40:48 40 minutes, 48 seconds uh you know resources already deployed in this uh you know in account which are acquired in this year only. So uh the 40:55 40 minutes, 55 seconds real impact probably will be visible in uh sorry to interrupt but let's say both the general staffing and professional 41:04 41 minutes, 4 seconds staffing let's say in professional starting I am referring to yi growth so seasonality which you are referring to as I think should not have any impact 41:11 41 minutes, 11 seconds when you look y growth your yi growth in specialized or professional staffing is double digit your exit is half of it 41:19 41 minutes, 19 seconds quarter for y growth so I was referring to that uh on general staffing uh you indicated let's say around 10 to 41:26 41 minutes, 26 seconds 15k per quarter kind of net addition which is what the capacity which we have and we achieve roughly half of it when you look let's say somewhere around 25k 41:35 41 minutes, 35 seconds for the year in terms of net addition excluding the 7,000 loss so my question is it is not getting captured in the re when I look let's say revenue number 41:44 41 minutes, 44 seconds right you are saying that addition happened but let's say at the end of day when I look whole year headcount addition or changes uh at least in 26 41:52 41 minutes, 52 seconds not played out are confident 27 the kind of capacity 10 to 15k addition per quarter should actually start getting reflected into your net revenue growth. 42:05 42 minutes, 5 seconds I will ask to answer your question on the general staffing and eventual reflection in the revenue growth for the 42:12 42 minutes, 12 seconds company. So Deep two quick points uh one on the general staffing business. You might remember there was a base decline 42:21 42 minutes, 21 seconds effect about a year ago in Q4 of last financial year. There was a BFSI regulatory based impact which caused a 42:30 42 minutes, 30 seconds 37,000 decline. This hap while this happened more than a year ago the shrinkage of revenue from that was to 42:38 42 minutes, 38 seconds the tune of 7%. Today like for like when you see the growth created by this year is actually 10% for the year in spite of 42:46 42 minutes, 46 seconds the three broad structural changes which happened in our economy in quick succession one after the other which is 42:52 42 minutes, 52 seconds GST 2.0 which is labor code as well as global factors and elections all happened in a matter of 7 months in the 43:01 43 minutes, 1 second last 7 months of the economy. Yet if you negate for that one-time event last year, you will actually notice that the business has grown 10% year on year. 43:12 43 minutes, 12 seconds Negated for that, the number on the balance sheet obviously comes to 2%. Uh do a quick follow on on what Capil has 43:20 43 minutes, 20 seconds already explained from a GCC perspective. I also like to bring to your notice that uh two quarters ago we 43:27 43 minutes, 27 seconds had said that we had one of the projects in our MSP which was run rating at close to about 10 crores revenue line and that 43:35 43 minutes, 35 seconds project was for one year. That project ended in the in that quarter and hence that is the one which has had a drop if 43:43 43 minutes, 43 seconds you see it from the slide itself from 244 crores revenue to 224. From 224 we 43:50 43 minutes, 50 seconds have been increasing and enhancing and come back to 232 uh 232 crores per 43:56 43 minutes, 56 seconds quarter and rest as capil explained 61 new contracts and logos predominantly 44:03 44 minutes, 3 seconds 90% of those are GCC customers itself have given us new mandates and we feel 44:10 44 minutes, 10 seconds that this year we will be able to uh come back on a 10 to 11% headcount growth and 12 to 13% revenue growth. 44:22 44 minutes, 22 seconds I think that answer double digit growth you are indicating to return. And last part which is answer is about the labor for how many client or percentage of 44:30 44 minutes, 30 seconds revenue uh agreed to and where you intend some effort to be made in subsequent period. 44:37 44 minutes, 37 seconds Yeah. This is Nirj. Uh so we closely monitoring uh the labor court situation. 44:43 44 minutes, 43 seconds I think uh given our expectation u the law is also evolving. So those are yet to be notified and to specifically 44:50 44 minutes, 50 seconds answer your question, I think we expect more and more responses to pick up in Q1 and Q2 from confirmation from the client 44:58 44 minutes, 58 seconds side in terms of which approach they want to take. So hopefully by Q1 and most likely by end of Q2 we should be able to have full confirmation from 45:06 45 minutes, 6 seconds client and accordingly we'll take that impact. Understood. Thank you. 45:14 45 minutes, 14 seconds Thank you. We will take the next question from the line of Amit Chundra from HTSC securities. Please go ahead. 45:22 45 minutes, 22 seconds Yeah, thanks for the opportunity. The first question is on the professional staffing that obviously know you 45:29 45 minutes, 29 seconds answered upon the margin expansion uh piece but it's very hardening to see uh the margin expansion coming back in the 45:36 45 minutes, 36 seconds sector at an overall level after a very long time. But uh if I just compare the professional staffing uh margins uh to 45:43 45 minutes, 43 seconds the competition uh we are just uh know almost almost like double of that uh irrespective of the uh know GCC 45:51 45 minutes, 51 seconds contribution know uh with being in the 70% range for the competition also. So 45:58 45 minutes, 58 seconds what exactly we are doing like differently here and uh know what gives us the confidence that these kind of uh 46:06 46 minutes, 6 seconds know margins in the professional stocking is sustainable over a you know like medium to long term. 46:13 46 minutes, 13 seconds Thank you Amit for your question. I'll ask Lu to answer your question followed by 46:21 46 minutes, 21 seconds uh thanks Amit for the question. Uh Amit I would like to speak for quests. I would not be able to speak on behalf of any other organization in the industry. 46:29 46 minutes, 29 seconds Uh having said that I think uh structurally what you are seeing as a results today in FI26 46:38 46 minutes, 38 seconds is very tireless efforts and execution which has been put way back in 2020 46:45 46 minutes, 45 seconds 2021. Postcoid we were of a clear realization that the market will undervamp on margin side across the 46:54 46 minutes, 54 seconds entire industry and our professional staffing team led by Kapil Jooshi and his entire leadership team worked very 47:02 47 minutes, 2 seconds uh hard on the facts of what would create future growth in India. The clear message there was coming out to be was 47:10 47 minutes, 10 seconds GCC's followed by IT within enterprise customers and then followed by IT services. That is the way Quest was 47:19 47 minutes, 19 seconds looking at demand for itself. I'm not talking about the Indian IT industry. 47:23 47 minutes, 23 seconds I'm saying this is how Quest was viewing what opportunities Quest will want to partake in. The second point was we also 47:30 47 minutes, 30 seconds realized that as customers the GCC customers will arrive in India they will want solutions with experience skill set 47:38 47 minutes, 38 seconds whether it's in data center whether it's in artificial intelligence whether it is in cyber security whether it's in 47:45 47 minutes, 45 seconds product based and those skill sets will be niche skill sets which will require different delivery different 47:52 47 minutes, 52 seconds recruitments a lot of technology embedded value in how we source and how we screen candidates How do we onboard? 48:00 48 minutes How do we retain the talent with us? And that was the work which is being done for the last 5 years. Way back in 2020 48:08 48 minutes, 8 seconds 2021 the EIA from the professional staffing business was at 4.7% 48:15 48 minutes, 15 seconds if I remember correctly and it has taken approximately 5 years to get to a 12% mark. Uh during this period it is not 48:24 48 minutes, 24 seconds just a margin expansion. It is a revamp and a rebalance of the nature of customer and type of contracts we have signed. It is the kind of revenue 48:33 48 minutes, 33 seconds pattern per person that we are doing. It is the niche skill set that we are working on. And we've strategically exited a few projects uh along the way. 48:44 48 minutes, 44 seconds So it's a structural story led by five years of intense execution. 48:51 48 minutes, 51 seconds Okay. Just to follow up on the stocking thing. So obviously you know FI26 has been a very strong year but the exit was 48:59 48 minutes, 59 seconds a bit weak in terms of the Y as has been highlighted earlier. So uh in terms of the overall uh growth for the next year 49:07 49 minutes, 7 seconds in the professional staffing especially in view of uh that the last two years or three years rather has been very strong for the you know number of GCC opening 49:16 49 minutes, 16 seconds up in India and most of this demand has been created by know opening up opening up of like new GCC's but once that slows 49:24 49 minutes, 24 seconds down and uh because you know because of the EI impact we are not seeing any you know hiring at the at the net level from 49:31 49 minutes, 31 seconds the existing ones or the existing like and obviously some services. No. Do we foresee any kind of a slowdown in terms 49:38 49 minutes, 38 seconds of the headdition here and any change in strategy for the block and stuff? 49:46 49 minutes, 46 seconds So first let me answer you on you know quarter 4 like I said quarter 4 has a lowest ever working days. Okay. And we 49:54 49 minutes, 54 seconds have some spill over you know in the first week of January on furlow also. So uh that revenue does not uh truly 50:02 50 minutes, 2 seconds reflect our net addition and uh you know the margin improvement for the quarter 4 uh and hopefully it it should reflect in 50:10 50 minutes, 10 seconds next one. Okay. Now second question on AI impact on GCC and the kind of work we do. So what what is happening uh and LIT 50:18 50 minutes, 18 seconds has already briefed about it. We have actually in last two years we have moved from volume to value business. you know 50:25 50 minutes, 25 seconds earlier your most of the contracting used to happen for your low-end L12 support maintenance job you know uh wise 50:34 50 minutes, 34 seconds non non-wise kind of support uh or testing kind of role what have happened in you know because of the GCC 50:42 50 minutes, 42 seconds penetration and because of the AI impact the skill requirement has completely changed two years back uh there was only 50:49 50 minutes, 49 seconds 30% demand in AI data cloud cyber security space now this contribute almost 60% of total demand where we have better build rate and better margin. 50:59 50 minutes, 59 seconds Second thing what happened in GCC space which Louis has already gripped that GCC do totally very different business than 51:06 51 minutes, 6 seconds IT services. Okay. So the contract stopping earlier used to be in zero to four year experience bracket. Now it 51:13 51 minutes, 13 seconds happens 4 year plus up to 10 years. So these two things has actually you know have changed the entire landscape and uh 51:22 51 minutes, 22 seconds you know probably a result of AI impact also. Uh more importantly there is a huge demand 51:30 51 minutes, 30 seconds supply gap uh on all this emerging technology and that is where you know uh staffing company play a big role. None 51:38 51 minutes, 38 seconds of this you know large organization has a batch resource are ready to deploy talent available and our delivery strong 51:47 51 minutes, 47 seconds delivery engine actually fuel this growth and it somewhere it help us in uh new sense also. 51:56 51 minutes, 56 seconds Okay. Okay sir. And uh my last question on the general stocking obviously we have know some impact of the 52:03 52 minutes, 3 seconds restructuring but uh in the base that we have right now u you know have we any further risk of any like regulatory lead 52:11 52 minutes, 11 seconds or any further restructuring which can impact the know additions because we have strong growth additions but it's not showing up in the net because of uh 52:19 52 minutes, 19 seconds the you know the high leakage or the high addition whatever you want to put it and also the margin expansion that we are seeing is is also a result of only 52:27 52 minutes, 27 seconds exiting the lower margin businesses or is it that we are uh know moving up in terms of uh know the value ad and also 52:36 52 minutes, 36 seconds collect and pay because the collect and pay we are not seeing any improvement. 52:39 52 minutes, 39 seconds So in ter business model is there any changes are just exiting lower margin business. 52:46 52 minutes, 46 seconds Yeah thank you for uh that uh question. 52:50 52 minutes, 50 seconds So if you see it from a general staffing business and Nathan the way our leader was explaining prior to this that the 52:57 52 minutes, 57 seconds way the business is modeled we grow from new customers where we added 281 clients 53:04 53 minutes, 4 seconds during this year. We continue to hold ourselves responsible for adding 275 to 300 unique clients every year. We have 53:12 53 minutes, 12 seconds an installed capacity of sourcing of up to 50,000 people per quarter from our sourcing le initiatives. The last two 53:20 53 minutes, 20 seconds quarters we've been able to deliver only 37 and 38,000 out of that installed capacity of 50,000. So we have an upside play there as well in our capacities. 53:31 53 minutes, 31 seconds The third is India's uh structural changes which were happening in the last 7 months. more or less we feel this is 53:40 53 minutes, 40 seconds done unless something new comes up and obviously uh west is a very integral part of Indian economy uh in many ways a 53:49 53 minutes, 49 seconds backbone to 2,300 plus corporate clients uh if something comes up obviously it'll impact the entire economy and so it 53:57 53 minutes, 57 seconds might impact us as well but at this moment we are poised for growth based on the capacities we have the execution the 54:07 54 minutes, 7 seconds reach and the technology that we have. 54:12 54 minutes, 12 seconds Okay. Thank you. I can Okay. Okay. You want to add something? 54:16 54 minutes, 16 seconds I think uh this is n I think there was a question around collect and pay. I wanted to update that general staffing from a vertical standpoint is going to 54:25 54 minutes, 25 seconds diversify and expand their business in constructions and manufacturing as new verticals. So as of today our collect and pay 76% is a very healthy number and 54:35 54 minutes, 35 seconds we basically have a target to maintain this number as I said given the fact that we are now expanding into high margin construction and manufacturing 54:42 54 minutes, 42 seconds verticals where you know it is going to be a uh at least 30 days to 60 days uh 54:49 54 minutes, 49 seconds DSO trend uh overall at a GS level if we are able to you know peg oursel between 70 to 76% I think we are in good shape. 54:59 54 minutes, 59 seconds Okay. So, thank you. Thank you. 55:06 55 minutes, 6 seconds Thank you. Before we take the next question, a reminder to all the participants, you may press star and then one to ask a question. 55:16 55 minutes, 16 seconds We will take the next question from the line of Shankar Narayan from I thought PMS. Please go ahead. 55:24 55 minutes, 24 seconds Good morning, sir. Am I audible? Yes sir. Hello. Yes. Thanks for the go. 55:32 55 minutes, 32 seconds I wanted to understand the major drivers of the DC segment. 55:38 55 minutes, 38 seconds So in terms of headcount this year we have seen close to 7%age of uh headcount addition in uh headcount growth in 55:45 55 minutes, 45 seconds professional staffing segment and do you think this number can in slowly let's say uh 10 to 12%age growing forward and 55:53 55 minutes, 53 seconds if so will it be coming from the mature GCC's who are adding the headcount or the new GCC which are setting up uh in 56:02 56 minutes, 2 seconds India for the first time and to the B model that we are engaging. So I wanted to uh understand the difference between 56:10 56 minutes, 10 seconds two and how will it will impact the headcount of uh in the business. 56:15 56 minutes, 15 seconds Thanks unclear. I'll ask couple to answer your question on GCC. 56:21 56 minutes, 21 seconds Straight forward you know we have added our we have added roughly 400 plus net edition was there on our bill associates 56:29 56 minutes, 29 seconds for the last three years. 50% of that actually came from the new sign up uh the 61 logo what we have signed for the 56:37 56 minutes, 37 seconds year. So the new sales is definitely driving the net edition. Okay. Uh I'm 56:44 56 minutes, 44 seconds confident that uh the net edition for next couple of years will be in the double digit 10 to 12% what you are expecting and 50% of this should come 56:53 56 minutes, 53 seconds from the new signup and 50% from existing uh logo where we are serving right now. 57:00 57 minutes All right, sir. And uh in the engagement model, are we engaging directly with the clients or are we partnering with any of 57:08 57 minutes, 8 seconds the real estate uh developers who manage the property as well? 57:15 57 minutes, 15 seconds Um we look at every opportunity available in the market. There are uh consulting firms which bring businesses 57:23 57 minutes, 23 seconds to India but then they need a strong execution partner and Quest sits there. 57:29 57 minutes, 29 seconds There are developers who have large mandates uh for the space that is taken but again on talent which is 80% of the 57:38 57 minutes, 38 seconds problem that a GCC wants to solve again quest becomes a partner there. So there are multiple ways direct as well as 57:46 57 minutes, 46 seconds indirect with our teams through our teams as well as through partnerships in the market. We'll continue to keep 57:53 57 minutes, 53 seconds watching wherever an opportunity exists we will find quest being there. 58:00 58 minutes Correct sir and finally uh to model into our estimate what uh tax rate should be included for the next three years. 58:10 58 minutes, 10 seconds Sorry can you be repeat your question. 58:15 58 minutes, 15 seconds is asking on the effective tax rate tomorrow for the next 3 years. Needle to answer this question. 58:24 58 minutes, 24 seconds Um so yeah I mean um given our business and you know business makes and the new sector that we are looking at I would 58:32 58 minutes, 32 seconds say from a EDR perspective we should be looking at a 7 to 10% range. 58:39 58 minutes, 39 seconds 7 to 10% range. Yeah, got it sir. Because uh and regarding our 58:46 58 minutes, 46 seconds uh contingent liability as well. So uh if I go through the last year annual reports uh majorly it was saying that 58:53 58 minutes, 53 seconds the the the salaries that we are processing is higher than the 25,000 mark which is uh given in the ATJWA act. 59:02 59 minutes, 2 seconds So uh for the next next 2 3 years uh do you think this will increase the absolute tax uh amount that you are 59:10 59 minutes, 10 seconds paying because uh the wage inflation will also increase the salary of the associate. 59:16 59 minutes, 16 seconds Okay. So from a ETR standpoint and contingent liability standpoint um it is contingent liability is a component of 59:23 59 minutes, 23 seconds two elements. One is the ATJJ litigation that I think it's an industry litigation. It's an industrywide impact. 59:30 59 minutes, 30 seconds Um as we say uh while the matter is subjudice and we expect uh some concrete 59:38 59 minutes, 38 seconds progress to happen on this you know this subject in this year uh we continue to avail the ATJJ exemption so I don't see 59:45 59 minutes, 45 seconds any impact coming in from there. The other element of contingent liability is uh a GST litigation that we have where 59:54 59 minutes, 54 seconds it's an early stage litigation. I think it's going to be a little slow uh as we progress on this matter because there are a lot of insurance companies that 1:00:01 1 hour, 1 second need to be uh you know you know the the other parties there are almost 10 insurance companies that are part of the 1:00:09 1 hour, 9 seconds the litigation. So there will be an element of uh progression that we will see in this year but I don't expect a concrete uh conclusion on this matter. 1:00:19 1 hour, 19 seconds So from a contingent liability unfortunately till the time we get uh final conclusion at uh you know the next 1:00:26 1 hour, 26 seconds level we have to maintain the current stand but from our standpoint we don't expect any impact. 1:00:34 1 hour, 34 seconds Got it sir. Thank you. 1:00:41 1 hour, 41 seconds Thank you very much ladies and gentlemen. We will take that as a last question for today. And with that concludes the question and answer 1:00:49 1 hour, 49 seconds session. I now hand the conference back to the management for closing comments. Over to you sir. 1:00:58 1 hour, 58 seconds Thank you very much one for joining us and uh continuing to support Quest Cop in this journey. As we said, we are 1:01:07 1 hour, 1 minute, 7 seconds foundationally strong in a 19th year and one year post our de merger. Uh from a balance sheet perspective, there is 1:01:16 1 hour, 1 minute, 16 seconds strength in the organization and in the balance sheet both from a business and an execution point of view as well as from a treasury and a finance point of 1:01:23 1 hour, 1 minute, 23 seconds view. We will continue to keep looking forward for your questions and feedback. 1:01:28 1 hour, 1 minute, 28 seconds As always, we will appreciate your continued interest and support and sincerely look forward to catching up 1:01:35 1 hour, 1 minute, 35 seconds with all of you again. Thank you very much. 1:01:40 1 hour, 1 minute, 40 seconds Thank you members of the management. On behalf of ISL Capital Services Limited, that concludes this conference. Thank 1:01:47 1 hour, 1 minute, 47 seconds you all for joining with us today and we may now disconnect your lines. Thank you.