Sonata Software Limited — Q4 FY26

Sonata Software Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=0DmkFxuLRc8 Published: 2 days ago

0:01 1 second ing today's session. Welcome to the Sonata software limited analyst and investor conference call for the fourth quarter and FI 2026 ended March 31st 2026. 0:13 13 seconds We have with us today on the call Mr. 0:15 15 seconds Shria Reddi executive vice chairman of the company Mr. Rajar Dataroy CEO of 0:22 22 seconds international services Mr. Sujit Moanti CEO of domestic business Mr. Jaganatan 0:29 29 seconds CN chief financial officer. We also have our extended leadership team on the call. 0:36 36 seconds Please know that there will be an opportunity for all the participants to ask questions after the management's opening remarks. Please note that this 0:44 44 seconds call is being recorded. During the call, please note that the management may make certain forward-looking statements that 0:51 51 seconds involve risk assumptions and are based on information currently available to the management. Sonata does not undertake any obligation to update any 1:00 1 minute such forward-looking statements that may be made in course of this call. We advise participants to exercise discretion while making any investment decisions. 1:10 1 minute, 10 seconds We will begin with the opening remarks from the executive vice chairman followed by a business overview and 1:17 1 minute, 17 seconds financial highlights. After that we will open the floor for questions. With that I hand over the call to Mr. Shika Reddi 1:25 1 minute, 25 seconds for his opening remarks. Over to you sir. 1:32 1 minute, 32 seconds Good evening everybody and uh thanks for attending the call and welcome to the analyst call. Before you hear from the 1:41 1 minute, 41 seconds management team uh on the financial performance and the their view of the future outlook 1:48 1 minute, 48 seconds and the plans. uh we felt uh that's important from a board board's perspective to share uh our views on the uh leadership transition. 1:59 1 minute, 59 seconds Uh since uh Samir Deir expressed his uh inability to uh extend uh his contract 2:06 2 minutes, 6 seconds beyond the current contract period, the board had to take a call on the succession. Uh as you know the board has 2:15 2 minutes, 15 seconds appointed uh Raja Data Roy as the CEO with the main focus on the international 2:21 2 minutes, 21 seconds business. Uh the reasons are many. Uh Raj has been with the company for 2:27 2 minutes, 27 seconds greater than 30 years. Uh understands the uh culture uh and the DNA of the 2:34 2 minutes, 34 seconds company. uh focused on uh customers, employees and uh investment in uh new 2:42 2 minutes, 42 seconds technologies. Uh Raj has also held multiple roles in the organization including uh business development 2:50 2 minutes, 50 seconds uh as the chief technology officer and as the chief delivery officer. uh he's also been a primary architect of 2:58 2 minutes, 58 seconds Sonata's uh AI uh strategy built on the harmony uh concept 3:07 3 minutes, 7 seconds as the uh tech world uh is uh adopting itself to the new paradigm shift uh to 3:15 3 minutes, 15 seconds the uh AI space. Uh we believe uh Raj is the right leader to lead the company um 3:22 3 minutes, 22 seconds into the new uh world of uh a AI. Uh the board is extremely confident uh on his 3:30 3 minutes, 30 seconds leadership and the rest of the leadership of the company to take it to the uh next level in terms of uh 3:37 3 minutes, 37 seconds transforming the company and adopting and adopting the new uh strategies aimed on uh AI. 3:45 3 minutes, 45 seconds Uh the board is also fully supportive of the management and will continue to assist, help, guide uh the management uh wherever required. 3:57 3 minutes, 57 seconds Uh thank you for your continued support. 4:00 4 minutes Uh I'll now hand over the uh mic uh to the management to make their uh presentations. Thank you all again. 4:12 4 minutes, 12 seconds Thank you uh speaker. 4:15 4 minutes, 15 seconds Good morning, good afternoon and good evening everyone. I will provide the key updates on Q426 and FI26 business and financial performance. 4:25 4 minutes, 25 seconds Starting with international business during the fourth quarter we benefited from few growth drivers. We clocked a le 4:33 4 minutes, 33 seconds order book of 16.9 million in Q426 and for the whole year it was USD 49 4:39 4 minutes, 39 seconds million of order book AIE order book and now contributed to around 18% of overall 4:46 4 minutes, 46 seconds order book AI pipeline ra $280 million as on Q426 we are actively pursuing AI 4:54 4 minutes, 54 seconds opportunities across 100 plus client helping them unlock the value through operational efficiency gain 5:01 5 minutes, 1 second Time to market through enhanced velocity and customer experience. Transformation of business model is a Q2 large deals in Q4 FI26. 5:12 5 minutes, 12 seconds The total large deals in FI26 was about eight large deal with a major global fintech company as a part of the 5:20 5 minutes, 20 seconds program. Sonata will execute their modernization of the core banking platform. 5:28 5 minutes, 28 seconds Am I audible now? 5:31 5 minutes, 31 seconds Uh yes sir you you may continue speaking. Okay. 5:37 5 minutes, 37 seconds We secured two large deals in Q4 FI26 for total of financial year 26. We had 5:44 5 minutes, 44 seconds total of eight large deals with a major global fintech company as a part of 5:51 5 minutes, 51 seconds program. Sonata will execute their modernization of core banking platform and a le implementation to unify their users experience enable better 5:59 5 minutes, 59 seconds institutional customer experience and faster outcomes for their client with sonat with software folding company 6:06 6 minutes, 6 seconds backed by a P firm focus on acquiring and scaling founder own vertical B2B SAS companies. This is a multi-year managed 6:14 6 minutes, 14 seconds services cloud support contract across geography. We added seven new customers in Q4 26. 6:21 6 minutes, 21 seconds In FI26, total 23 new customers have been added. 6:26 6 minutes, 26 seconds Top 10 clients contributed revenue share of 54%age. Number of client greater than 5 million. 6:32 6 minutes, 32 seconds Uh run rate student 12 in Q4 26. Number of client greater than 3 million to 5 million. Revenue stood at 9 in Q4 26 up 6:43 6 minutes, 43 seconds by one number from Q3 26. Q426 order book stood at $95 million with bookto ratio of 1.166. 6:52 6 minutes, 52 seconds We remain confident that our investment vertical healthcare uh HLS and banking financial services together these two 7:00 7 minutes verticals now contribute 30% of our total revenue in Q426. 7:05 7 minutes, 5 seconds Total headc count stood at 6283 Q426 against 6,44 in Q326 with attrition of 7:13 7 minutes, 13 seconds 11 percentage 90% of workforce are a trained on-site offshore revenue mix to 7:20 7 minutes, 20 seconds 32 32% to 68% in Q4 26 against Q3 of 37 7:27 7 minutes, 27 seconds is to 63 utilization reported at this quarter is 91.8%age 8 percentage in Q4 compared to 90% in Q326. 7:37 7 minutes, 37 seconds Let us now walk through our financial performance for the fourth quarter in the financial year 2026 for international services. In Q426 USD 7:46 7 minutes, 46 seconds revenue stood at 82.4 million platic quarteron quarter in constant currency term it represents a growth of 6%age 7:54 7 minutes, 54 seconds quarteron quarter rupee revenue stood at 779.2 two growth growth of 5.5% quarteron total evita before other 8:03 8 minutes, 3 seconds income and forex for the quarter 426 improved to 20.2%age up 70 basis point Q1 Q from 19.5%age in 8:11 8 minutes, 11 seconds Q326 this accretion is primarily driven by operational improvements across delivery H& reflecting better delivery efficiency 8:20 8 minutes, 20 seconds and cost optimization utilization improved to 91.8%age 8%age up from 90% in Q326. 8:27 8 minutes, 27 seconds As informed previously, our utilization and count levels were driven by sustainable productivity improvement and operational efficiency in delivery 8:35 8 minutes, 35 seconds enabled by AI adoption, differentiated AI solution, agentic implementation across project. Our revenue mix improved 8:43 8 minutes, 43 seconds to 68% from 63% in Q3 22nd. We also benefited from pyramid optimization and 8:50 8 minutes, 50 seconds price increases. Forex fluctuation was beneficial in quarteron quarter and all these levers were partially offset by 8:58 8 minutes, 58 seconds higher a CSP bundle deal costa after other income and forex for Q426 9:04 9 minutes, 4 seconds stood at 183.8 crores growth of 25.2% quarteron quarter and 50.9%age yearon 9:10 9 minutes, 10 seconds year in Q426 PA stood at 84.2 crores growth of 40.6% 6% quarter on quarter 9:17 9 minutes, 17 seconds and 35% yearon year reported ROC and RW for the quarter stood at 24.5% and 30.3% 9:25 9 minutes, 25 seconds respectively. International services DSO for Q426 reported at 64 days against 71 9:31 9 minutes, 31 seconds days in Q326. In the financial year 2026 our international services dollar revenue stood at 328.4 million a deg 9:39 9 minutes, 39 seconds growth of 2.1% yearonear rupee revenue stood at 2948 cr growth of 4.2%. 2% year on year before other income and forex 9:49 9 minutes, 49 seconds for the financial year 26 to 18.4% 1.4% 4% accretion compared to 17% in FI25A 9:58 9 minutes, 58 seconds after other income and forex for FI26 stood at 67.7 cr of 18% year on year 10:06 10 minutes, 6 seconds FI26 P at 292.7 cr of 18.7% year on year now 10:13 10 minutes, 13 seconds let me provide an update on domestic business despite hen with headwinds from one large client renewal this year due 10:20 10 minutes, 20 seconds to direct MS relationship with continue to make a good progress in financial performance. Revenue for Q4 26 stood 10:28 10 minutes, 28 seconds at,759.2 crores. This may reflect a degrowth of 25% Q1 Q and 8.3% yearon year. Growth 10:37 10 minutes, 37 seconds growth contribution for Q426 stood at 75.3 crth of 1% quarteron quarter and D growth of 3.9% year on year. Bad for 10:46 10 minutes, 46 seconds Q426 stood at 46.3 crores, deg growth of 3.9% quarteron quarter and growth of 2.5% yearon year. DSO for Q426 is 47 days compared to 42 days in Q326. 10:58 10 minutes, 58 seconds Reported ROC and RO NW for the quarter stood at 43.5% and 39% respectively. 11:05 11 minutes, 5 seconds Domestic business revenue for FI26 stood at 7,772.1 crores growth of 5.9% yearon year. Gross 11:14 11 minutes, 14 seconds contribution for FI 26 stood at 288.7 crores deg growth of 3.5% year on year 11:22 11 minutes, 22 seconds back for FI26 looked at 171.7 cr deep deg growth of 3.6% yearon year update on 11:29 11 minutes, 29 seconds the consolidated business now for the quarterly update consolidated revenue for Q4 26 to 2536.2 2 crores deg growth 11:38 11 minutes, 38 seconds of 17.7% each quarter on quarter and deg growth of 3.1% year on year bad for Q426 11:44 11 minutes, 44 seconds stood at 130.5 crores growth of 25% Q1 Q and 21.4% yearon year reported ROW for 11:53 11 minutes, 53 seconds the quarter stood at 28.1% and 32.5% respectively consolidated revenue for the financial year at 26 stood at 12:01 12 minutes, 1 second 10,71.2 crores with growth of 5.4%. 4% year on year back for financial a 26 stood at 12:09 12 minutes, 9 seconds 464.4 crores in FI26 compared to 424.7 crores in FI25. Consolidated EPS 12:17 12 minutes, 17 seconds reported for FI26 stood at 16.74 per share against last year 15.3 per share. 12:24 12 minutes, 24 seconds We have recommended a final dividend of 4.15 per share. Update on cash flow. 12:30 12 minutes, 30 seconds Cash generation remained strong during the year with a closing cash balance of 606 crores and a net cash position 12:38 12 minutes, 38 seconds positive of 31 cr a significant improvement from Q3 FI26. 12:43 12 minutes, 43 seconds To conclude, in a difficult year characterized by macroeconomic challenges and climate ramdown, Sonata displayed a resilient performance by 12:52 12 minutes, 52 seconds growing part 18.7% year on year for international and 9.3% for consolidated business for FI26. 13:00 13 minutes We also were able to win and ramp up few large deals during the year which gave us some tailwind as we enter the new 13:07 13 minutes, 7 seconds financial year. Our Q426 performance continue to reflect disciplined execution and continue progress across 13:14 13 minutes, 14 seconds our strategic priorities. The benefits from AA productivity initiatives are becoming increasingly visible across delivery and enterprise operations. 13:24 13 minutes, 24 seconds strengthening our confidence in driving sustainable efficiency over a long-term period. Our endeavor will be to maintain AITA at similar level. While the macro 13:33 13 minutes, 33 seconds environment continues to remain dynamic and client decision cycles remain elongated, we are encouraged by momentum 13:41 13 minutes, 41 seconds in our pipeline especially around digital and a transformative initiative. 13:46 13 minutes, 46 seconds We remain cautiously optimistic and expect gradual improvement in growth over medium-term. I now hand over to Raj 13:54 13 minutes, 54 seconds for his commentary on international business. 14:01 14 minutes, 1 second Thank you Jagan and um u uh thank you everyone for joining us today. Um it's 14:07 14 minutes, 7 seconds an absolute honor um to address you for the first time as the chief executive officer of of this company focusing largely on the international business. 14:19 14 minutes, 19 seconds um having spent three decades uh here uh at Sonata and have worked in various roles from 14:27 14 minutes, 27 seconds um business development uh technology delivery and recently as a chief technology officer and chief delivery 14:35 14 minutes, 35 seconds officer. uh I fairly understand the business, the clients, the employees and the culture very well and I think it 14:42 14 minutes, 42 seconds provides a unique opportunity uh for all of us to build uh uh on the foundation that has already been laid and what the 14:51 14 minutes, 51 seconds opportunity uh is presented in uh front of us. Um I think we proudly inherit a company with very strong customer 15:00 15 minutes relationships. Uh depth of engineering uh operational discipline which has been at core culture um uh with people and 15:08 15 minutes, 8 seconds how we operate and these strengths will remain central as we move forward and will also continue to guide us as we go 15:16 15 minutes, 16 seconds to the next uh phase of growth. Um at the same time um I think it's important 15:22 15 minutes, 22 seconds to also appreciate the context in which we are operating. One I think is the technology shift that we are seeing with 15:31 15 minutes, 31 seconds AI and u and and the various opportunities as well as uh the headwinds it presents and I think uh how 15:40 15 minutes, 40 seconds that's an interesting um area and how we and we'll talk more as we go along. Second is the macroeconomic 15:48 15 minutes, 48 seconds uh environment uh and the uncertaintity that it's present. But one thing is for sure is that that AI is now on top of 15:56 15 minutes, 56 seconds the agenda of every enterprise and how they're planning to utilize to um leverage in each of their business uh 16:03 16 minutes, 3 seconds context. Um our point of view is that u that all organizations 16:11 16 minutes, 11 seconds will reimagine how they operate, how they use technology with AI, right? And the need to adapt and evolve will be 16:18 16 minutes, 18 seconds faster than before. um the speed will go up in the midterm in terms of the velocity with what we call the enterprise velocity and that will lead 16:27 16 minutes, 27 seconds to demand especially where organizations move from system of record intelligence to system of autonomous action. Um this 16:36 16 minutes, 36 seconds presents multiple opportunities uh for uh Sonata uh and I think um we 16:44 16 minutes, 44 seconds are well positioned uh today because of uh few things that I want to mention. Uh number one I think is our strategic and 16:53 16 minutes, 53 seconds long-term relationship with client which we intend to uh strengthen partner. We are working with many of them already on their AI initiatives and I think that will only benefit us going forward. 17:04 17 minutes, 4 seconds Number two, our mix of business. I think predominantly we have a larger part of engineering versus managed services. And we see the need for engineering and the 17:12 17 minutes, 12 seconds speed that it needs uh from delivering value to customer uh driving more demand in that uh space. Um third is our size. 17:22 17 minutes, 22 seconds Um that gives us a uniquely positioned to have more headroom um to grow in even in this situation. Um 17:31 17 minutes, 31 seconds we also have uh invested over the last u year or more on building capabilities. I 17:40 17 minutes, 40 seconds think we are our people have largely been certified about 90%. We have built differentiated capability with harmony.ai and a region bridge right and 17:49 17 minutes, 49 seconds that shows in the pipeline increase that we have in the AIEL opportunities. Uh we also have a strong partnership 17:57 17 minutes, 57 seconds ecosystem. um Microsoft of course and AWS and um and others and that also 18:04 18 minutes, 4 seconds gives us um confidence that we are well positioned going forward. I think um there are value pools where I think we 18:12 18 minutes, 12 seconds can be uh very well positioned and one is to how to reimagine uh the business 18:19 18 minutes, 19 seconds processes in the context of AI. Second is uh the legacy modernization and uh 18:25 18 minutes, 25 seconds how do we modernize legacy applications and platforms um also around SAS around 18:33 18 minutes, 33 seconds environments that is going to unlock value for our clients and how do you transform our delivery um in into an AIE 18:42 18 minutes, 42 seconds delivery. I we have made progress on that already and I think we need to accelerate we can accelerate that much faster and of course the responsible 18:49 18 minutes, 49 seconds first AI services that is needed more and more as people adopt AI. So these are important value pools that Sonata 18:56 18 minutes, 56 seconds can um distinctly operate in and going forward um I think we'll 19:03 19 minutes, 3 seconds strengthen this further and you will see us um looking at new ecosystem partnerships and in focusing on certain 19:13 19 minutes, 13 seconds verticals and subsegments and at the intersection of subsegments and um and the partnership we'll have a very 19:21 19 minutes, 21 seconds differentiated potent capab capability to take to the market and that will be a focus as we build on this. Um we'll 19:28 19 minutes, 28 seconds continue to invest on uh uh our capabilities workforce readiness ecosystem partnerships um to enable this 19:37 19 minutes, 37 seconds and my uh focus um lies that where is that in the understanding of the where 19:44 19 minutes, 44 seconds the market is headed and uh remain confident on how we can proactively position the company to um get best of the opportunities that lies ahead of us. 19:55 19 minutes, 55 seconds Um my immediate focus is to first ensure continuity um um and that we have the we continue to be deeply focused on our 20:04 20 minutes, 4 seconds short-term priorities strengthen further our client relationships um accelerate the delivery transformation to be AIE um 20:13 20 minutes, 13 seconds and build a road map for the AI uh capabilities u um and um not not the last but the most one of the most 20:21 20 minutes, 21 seconds important is to continue to drive our operational improvement momentum that we have built in recent times. I thank you 20:28 20 minutes, 28 seconds very much um for your continued trust and partnership and look forward to the next chapter uh together um positively. 20:37 20 minutes, 37 seconds Thank you. 20:46 20 minutes, 46 seconds Um so maybe we open the lines for questions now. Hey uh hey Shilpa here IA we have Mr. 20:56 20 minutes, 56 seconds Sujit is going to take a few minutes to talk about uh domestic business post that we can open the line please. Go ahead S. 21:05 21 minutes, 5 seconds Thanks everybody for joining this call. 21:08 21 minutes, 8 seconds Our domestic product business continue to demonstrate resilience and relevance in a dynamic market environment. 21:15 21 minutes, 15 seconds uh you know despite facing the headwind due to one of our OEM partners starting direct billing with some selected large 21:22 21 minutes, 22 seconds customers uh we continue to make good progress in our business uh revenue for Q4 FI26 stood at 1,759 21:32 21 minutes, 32 seconds crores gross contribution is at 75.3 crores and pad for Q4 FI26 stood at 46.3 21:43 21 minutes, 43 seconds crores which is a growth 3.9% quarteron quarter. Uh we are making steady progress across the strategic pillars 21:51 21 minutes, 51 seconds which you have spoken before. Uh we are expanding our market coverage and we are having a sharper focus on the SMC and 21:58 21 minutes, 58 seconds corporate segment. Uh we have grown this business around 27% yearon year. We have boarded our partnership with other hyperscalers and OEM partners. 22:10 22 minutes, 10 seconds uh we are executing multiple GTMs with each of these hyperscalers. We are also expanding our business related to tools 22:18 22 minutes, 18 seconds and platform offering from OEM partners other than the just hyperscalers. 22:24 22 minutes, 24 seconds Uh we are also focusing on large hybrid system integration deals that integrate physical server storage and other ISB 22:31 22 minutes, 31 seconds infrastructure including IT security with leading cloud platforms. These strategic bits are core to building a 22:38 22 minutes, 38 seconds more diversified, resilient and future business for us in accordance with the current interest for the use of 22:45 22 minutes, 45 seconds artificial intelligence in most of the enterprises along with our OEM partners their AI tools and platform offerings. 22:53 22 minutes, 53 seconds We are working with most of our customers in their AI initiative. We are setting up their AI infrastructure, implementing and helping them in using 23:00 23 minutes the AI tools and working with them in building the AI user cases and PC's. 23:06 23 minutes, 6 seconds Over the first few quarters, we have remained focused on strengthening the quality of our revenue mix, deepening strategic customer relationship and 23:14 23 minutes, 14 seconds building scalable cloudlet managed services capabilities. Overall, we remain confident in the direction of the domestic business. Our focus is not only 23:23 23 minutes, 23 seconds on the growth but on building a diversified, scalable and future business with sustainable value creation for customers, shareholders, employees and partners. 23:34 23 minutes, 34 seconds Uh with this uh let me hand over to the moderator for question and answer session. Thank you. 23:43 23 minutes, 43 seconds Thank you very much sir. Ladies and gentlemen, we will now move to the Q&A segment. To ensure we provide space for 23:51 23 minutes, 51 seconds as many participants as possible, we request you to limit yourselves to two questions per turn. For participants 23:58 23 minutes, 58 seconds connected on Zoom, please raise please click on the raise hand icon located at the bottom toolbar on your screen. When 24:06 24 minutes, 6 seconds called upon, you will receive a prompt to unmute. 24:10 24 minutes, 10 seconds For participants connected via telephone call to join the queue, please press star 9 on your telephone keypad. When 24:17 24 minutes, 17 seconds it's your turn, you will be prompted to unmute by pressing star six. Please state your name and company name before asking your questions. 24:26 24 minutes, 26 seconds Ladies and gentlemen, we will wait for a moment while the question cue assembles. 24:48 24 minutes, 48 seconds We'll take the first question from uh Deepesh Maha of MK Global. Please go ahead. 24:56 24 minutes, 56 seconds Yeah. Uh thanks for the opportunity. Uh couple of question. Just first uh want to get sense about the uh tweaking in 25:04 25 minutes, 4 seconds the strategy uh plan in IIT business. Uh can you help us understand what will be the focus area of investment? partly you 25:12 25 minutes, 12 seconds covered in your prepared remark but if you can elaborate further in terms of vertical and subvertical where you I think indicated some of the subvertical 25:20 25 minutes, 20 seconds kind of strategy so vertical subvertical where we intend to make investment and how one should look at it from medium-term perspective and if you can 25:29 25 minutes, 29 seconds touch upon also M&A in that part how M&A fit into overall growth strategy uh second question is about the IIT 25:37 25 minutes, 37 seconds growth performance perspective I think last four quarter largely remain flat is uh between 0ero 25:44 25 minutes, 44 seconds to 1%age kind of growth rate. Uh how one should look uh growth trajectory there. 25:50 25 minutes, 50 seconds Uh earlier we growth was impacted for couple of client specific issues as well as uh RMD vertical kind of challenges. 25:58 25 minutes, 58 seconds Can you provide some update on those uh some of the challenges how we expect it to play out? And last question is about 26:06 26 minutes, 6 seconds the overall if I look let's say last four quarter there is a significant movement across vertical and GTM or service line uh so there is a sharp 26:16 26 minutes, 16 seconds volatility kind of thing can you provide broad sense on near-term demand trend and any specific headwind across this 26:23 26 minutes, 23 seconds vertical and GTM which we report and which vertical likely to lead the growth. Thank you. 26:32 26 minutes, 32 seconds Yep. Uh Raj will you take the call? 26:36 26 minutes, 36 seconds Yes. Yes. Um thank you Jagan and um um let me um um give you a quick commentary 26:42 26 minutes, 42 seconds um I think on where uh we are thinking um you will appreciate that it's about I think 15 days since I have just taken 26:51 26 minutes, 51 seconds over. Um but I'll give you a preliminary direction on where we are looking at. I think we will continue to have uh the 26:59 26 minutes, 59 seconds verticals that we have. So we'll have continuity on the verticals. what we will do is we'll sharpen focus on particular areas of the vertical where 27:07 27 minutes, 7 seconds we are strong and where we see the demand growing. I think that's what it is the exact specificity of uh which areas is something that we'll formulate 27:16 27 minutes, 16 seconds um in the next couple of months and then we'll provide you an update uh in detail about that. Number two is on investments 27:24 27 minutes, 24 seconds that you have worked. I think we will expand on building our uh offerings and capability both in terms of what go to 27:34 27 minutes, 34 seconds market capabilities that we have that we will invest in aligned to this strategy of subverticals. We'll look at new 27:41 27 minutes, 41 seconds partnerships um as we go forward while it might take some time to fractify but the new partnerships and third is how do 27:49 27 minutes, 49 seconds we uh build on uh differentiated capabilities in delivering with AI. I think there are three large buckets that 27:57 27 minutes, 57 seconds we are uh looking on going forward but um as I said we'll provide more specific thing in couple of months from now. Um the the second thing was around growth. 28:09 28 minutes, 9 seconds I think we continue to maintain resilience in the in the short term and have the current uh momentum continuing 28:18 28 minutes, 18 seconds for now. Um uh as we move forward and as we move forward and make some of these changes, we'll come back and update you 28:26 28 minutes, 26 seconds on further. Um the good part of this is that we we see a healthy pipeline um on 28:33 28 minutes, 33 seconds on AI uh opportunities that's coming up and our focus will be that how to quickly convert them and convert them 28:42 28 minutes, 42 seconds into revenues. But despite the macroeconomic and the general challenges that we face with clients in terms of 28:51 28 minutes, 51 seconds decision making um uh and stuff. Um uh the third point that you mentioned is 28:58 28 minutes, 58 seconds about um how do we look at um our what's driving which verticals are going to 29:05 29 minutes, 5 seconds drive. I think we still see growth being driven by our technology um BFSI and HLS in the short term as we try and see uh 29:14 29 minutes, 14 seconds how to bring back RMD into the growth path. Thank you. 29:20 29 minutes, 20 seconds Yep. So to add to Raj's uh uh no update on the business on the M&A front uh we 29:30 29 minutes, 30 seconds are uh we are looking for in case there is an opportunity come for us with a good prospect in the particularly new 29:38 29 minutes, 38 seconds technology area we may evaluate for it but at present we don't have any plan specifically to grow the business uh 29:45 29 minutes, 45 seconds through the M&day leverage we will wait for couple of more quarters and in the medium We may open up this further. 29:58 29 minutes, 58 seconds Uh thank you. I have one a couple of more I will come up in followup. Thank you. Thank you. 30:07 30 minutes, 7 seconds We'll take a next question from Amit Chandra of HDFC Securities. Please go ahead. 30:15 30 minutes, 15 seconds Hello. I'm audible. Yes sir. 30:18 30 minutes, 18 seconds Yeah. Yeah. Uh so thanks for the opportunity. So uh know my first question is in the continuation of what 30:25 30 minutes, 25 seconds the earlier participant asked. So know last year uh last few quarters you know there were few like client specific 30:34 30 minutes, 34 seconds issues specifically in the retail uh also in healthcare and you know largely in the BFSI vertical that we're facing 30:41 30 minutes, 41 seconds and that impacted the growth for the full year. F26 BFSI was the vertical which had the maximum damage and we have 30:49 30 minutes, 49 seconds seen some stability there. So you know if you can elaborate more on how we are you know 30:56 30 minutes, 56 seconds planning to uh scale up the BFSI and also you mentioned about the subverticals within BFSI. So which subvertical are we focusing and we also 31:05 31 minutes, 5 seconds had some deal wins uh in the BFSI vertical. So uh how to know how to look at the growth coming back in the BFSI 31:12 31 minutes, 12 seconds and is it they is it also coming from existing clients or or we are hunting for new clients in the in the vertical. 31:24 31 minutes, 24 seconds So I think um three question namit um on um um that we had I think um yes I think 31:30 31 minutes, 30 seconds we had um issues in the past with some of the vertical RMDBSI that you mentioned some client specific issues I 31:38 31 minutes, 38 seconds think we are largely uh behind us today on on those 31:45 31 minutes, 45 seconds those issues and we need to build it but that said I think BFSI is still under 31:51 31 minutes, 51 seconds pressure uh and We we need to be be clear that there might be further 31:58 31 minutes, 58 seconds pressures in existing clients for u contraction um if any but not very 32:04 32 minutes, 4 seconds significant as we see um the second thing is on your um subvertical focus 32:11 32 minutes, 11 seconds like I mentioned that we'll work on this further we have a view today but we want to validate that and then we'll come here and provide you u those inputs um 32:20 32 minutes, 20 seconds as we as we get build further clarity amongst ourselves. U the number three is I think on on how do we see um growth. 32:32 32 minutes, 32 seconds So I think in the short term looking at all the decision-m cycles and u what we have um I think we'll continue to maint 32:40 32 minutes, 40 seconds in in a similar growth trajectory in the short term as we build for uh future uh the I think the new winds is in a very 32:50 32 minutes, 50 seconds interesting uh financial services space um in largely in u payments area and 32:59 32 minutes, 59 seconds that remains an interesting opportunity for us because we are helping them modernize some of their core system in providing a unified client uh experience 33:08 33 minutes, 8 seconds and that definitely will be something that will help us consolidate in the payment space. So that's that's the uh quick summit. 33:17 33 minutes, 17 seconds Okay. And answer we have seen like AMD coming back in this quarter and obviously you know it has been the 33:23 33 minutes, 23 seconds strength of Sonata. So how are we seeing this know spending from the top line there? If you can give some picture uh 33:32 33 minutes, 32 seconds in in in the sense that you know how do you see spending coming back there or the AIL benefits that uh know all or the 33:40 33 minutes, 40 seconds passroughs is now behind or we can see uh you know some increased spends or some increased engagement with the top client in the TMT vertical. 33:49 33 minutes, 49 seconds Um I think interesting question Amit on the top client in the TMT vertical. Yes, we I think we see a little bit of u 33:56 33 minutes, 56 seconds upturn now from them and I think we should look at it um on that u clients 34:03 34 minutes, 3 seconds but as you know with some of these clients I think it changes and there are some recent developments so we need to 34:10 34 minutes, 10 seconds watch out how much of that is sustainable. We are watching this very very carefully um that that whatever we are seeing the upturn is actually 34:18 34 minutes, 18 seconds sustainable. Number two is we are trying to pivot to areas where the spends are going up versus the spends which were 34:26 34 minutes, 26 seconds getting cannibalized so as to speak and I think uh that's working out but we still need to see as you might know that 34:33 34 minutes, 33 seconds some of these things the uh the their financial year and um are is shortly 34:40 34 minutes, 40 seconds coming up and we need to see what this means uh and is this sustainable. So we are watching this out carefully but we have had a slight upturn. 34:50 34 minutes, 50 seconds Okay. So the last question is on the margins. Obviously we have know been able to scale up the margins that we have talked about earlier and uh in 34:58 34 minutes, 58 seconds terms of utilization we are operating at know the max utilization uh like levels. 35:03 35 minutes, 3 seconds So but know now that we have reached the margins that we desire to. So you know can we expect some you know increased investments in the business for growth 35:11 35 minutes, 11 seconds or we are planning to keep uh the margins at this level uh until unless we have the clarity for growth and uh you 35:18 35 minutes, 18 seconds know what is the you know like medium-term margins that we are likely to operate in. Yeah. 35:26 35 minutes, 26 seconds Okay. I'll take this call. 35:31 35 minutes, 31 seconds Amit the margins of we will be we are you know evaluating the options for the investment. We will continue to grow 35:39 35 minutes, 39 seconds investment because the growth particularly the transformation into a will continue to happen for us and which has got a very good traction. If you see 35:48 35 minutes, 48 seconds the the order book levels have become 18%age of our total order book. We have progressed very well. We'll continue to 35:54 35 minutes, 54 seconds invest on this. Our efficiencies have uh and utilization have reached the best 36:02 36 minutes, 2 seconds possible uh uh place where it can be. Uh we will continue to invest, we'll continue to monitor, we will for the short run we'll have a similar kind of margin. 36:13 36 minutes, 13 seconds Uh so we'll see based on the requirements for the future growth. We will definitely be open for investments and for the growth to come in in future. 36:23 36 minutes, 23 seconds Okay. So, thank you and all the best. Thank you. 36:29 36 minutes, 29 seconds Before we take our next question, we'd like to remind participants to ask a question, you may click on the raise hand icon or if you've connected via telephone call, you may press star 9. 36:41 36 minutes, 41 seconds We'll take our next question from Pravin Kumar from Equitus Capital Advisers. Please go ahead. 36:49 36 minutes, 49 seconds Hello. Uh, thanks for the opportunity. I had a couple of questions. Uh the first one was on the disclosure on the large deal pipeline. Uh if I compare the 36:58 36 minutes, 58 seconds current uh quarters number at 11 uh to the previous quarters which used to be in the 28 to 32 kind of a range that 37:05 37 minutes, 5 seconds seems to be a sharp drop off in the large deals pipeline on the international business. So can you throw some light on what's happening there? 37:12 37 minutes, 12 seconds Why this sharp drop off? And is there any uh specific issue that you would like to call out here? That's the first question. Thank you. 37:22 37 minutes, 22 seconds Uh hi uh hi shil am I audible? 37:28 37 minutes, 28 seconds Yeah yeah yeah yeah u so uh if you look at the large deal pipeline continues to be strong uh 37:36 37 minutes, 36 seconds I think the uh overall trajectory hasn't changed the reason pipeline would have come down is because we have announced 37:43 37 minutes, 43 seconds two large deals this quarter if you uh see in one of the prepared commentaries. 37:47 37 minutes, 47 seconds So that is the reason in the short run there will be a you know drop there but overall pipeline momentum and uh the count of large deals as you can see on 37:55 37 minutes, 55 seconds that you know investor day continues to be strong. Thank you. 38:00 38 minutes Uh sorry I'm confused a little bit because in the previous quarters the number used to be around 28 32 or in that range right now even if I account 38:09 38 minutes, 9 seconds for a couple of deals converting the deal the last deal pipeline which have disclosed the numbers if I add up that is 11. So that's is quite a sharp drop 38:16 38 minutes, 16 seconds off right so I'm not 100% clear on what you're implying. 38:21 38 minutes, 21 seconds No this is a no uh just to add a flavor to it. It is not it is not a particular 38:29 38 minutes, 29 seconds point of time what is the open large deals we are just reflecting on this it uh the number from this time uh March 38:37 38 minutes, 37 seconds 31st to now it is already changing that uh for the during the year and time we would have converted many of the deals 38:45 38 minutes, 45 seconds into a large deal and then subsequently it is uh getting added more and more on this it it is just a point of time it 38:53 38 minutes, 53 seconds doesn't reflect anything on a pipeline now overall Understood. Understood. Uh second question was on the domestic business. 39:00 39 minutes So uh we understand the challenges that are there from the uh large uh you know from from uh large client going direct 39:08 39 minutes, 8 seconds etc. But so how do we see that panning out and when do we see uh the domestic business returning to growth on a on a 39:16 39 minutes, 16 seconds gross contribution basis and on a beta basis. 39:20 39 minutes, 20 seconds So hi provin this is sujit. Uh so you would have seen u you know uh last financial year we started with this 39:28 39 minutes, 28 seconds little bit of headwind where uh we lost one of our largest customer but you would have seen over the last four 39:34 39 minutes, 34 seconds quarters we have almost cover up the whole loss and as we stand today we 39:41 39 minutes, 41 seconds believe that uh during this fiscal year we should be back to our growth trajectory. Thank you. 39:50 39 minutes, 50 seconds Understood. Thanks for the clarification. Thank you. 39:55 39 minutes, 55 seconds Thank you. We'd like to remind our participants if you wish to ask a question, you may click on the raise hand icon again. 40:05 40 minutes, 5 seconds Participants connected via telephone call may please enter star and nine. We will wait for a moment while the question Q assembles. 40:22 40 minutes, 22 seconds We take the next question from Bat Gulati from Dalal and Brocha. Please go ahead. 40:31 40 minutes, 31 seconds Uh Mr. Gulati, could you please unmute your microphone and ask your question? Hello. Am I audible? 40:39 40 minutes, 39 seconds Yes. Yes, sir. Please go ahead. Yeah. Uh thank you for the opportunity. Just a couple of questions from my side. 40:45 40 minutes, 45 seconds So firstly just wanted to understand on the margin trajectory on the international business uh in the short term you said it would be stable. So do 40:53 40 minutes, 53 seconds we expect these utilization levels to sustain at this 91.8 92% range or just trying to understand what is going to 41:01 41 minutes, 1 second drive this constant margin uh trajectory. Yeah. 41:06 41 minutes, 6 seconds So we have guided that we'll be in the similar kind of a margin um on with respect to utilization. Yeah, depending 41:14 41 minutes, 14 seconds on the business requirements, utilization may come down a little bit because we have reached the best possible situation for us in the 41:22 41 minutes, 22 seconds utilization frame. But going forward also the if the operational improvements because of the adoption of AA and agent 41:30 41 minutes, 30 seconds KA will continue to help us to maintain the margins in the in the in the 41:36 41 minutes, 36 seconds business trajectory what is coming in our onsite offshore mix is also one of the best at present situation. So we 41:44 41 minutes, 44 seconds will be able to maintain the similar margin over a period of time over a period of time in case it requires 41:52 41 minutes, 52 seconds additional investments for the growth we are open for it. 41:57 41 minutes, 57 seconds Got it. Got it. And just on the domestic business uh just wanted to add on to the last participant's question. Uh what I 42:05 42 minutes, 5 seconds just wanted a clarification on are we in uh keeping our uh you know outlook intact uh to get the growth that we 42:12 42 minutes, 12 seconds historically had in that uh segment of our business and how do we look at you know our existing uh business in that 42:19 42 minutes, 19 seconds segment given that direct competition has come in and how are customers you know panning out. Yeah. 42:27 42 minutes, 27 seconds So hi this is sujay. uh so on the on the direct competition uh 42:34 42 minutes, 34 seconds from the OEM partners I think see uh uh you know as a policy they have not given anything in writing but as for our 42:42 42 minutes, 42 seconds understanding we don't see that we'll be losing any of any further of our large customers that is point number one uh 42:50 42 minutes, 50 seconds point number two uh even if now some customers are going to be directly built because 42:58 42 minutes, 58 seconds they are not in the top 2030 list materially it will not impact that much if at all it happens but as I said as 43:07 43 minutes, 7 seconds for our understanding of the current situation our understanding though we have Microsoft India 43:13 43 minutes, 13 seconds uh talking about their future policies uh we don't see any further hit in the 43:21 43 minutes, 21 seconds coming quarters in fact you know in the recent past there were two three customers who were in discussion uh 43:30 43 minutes, 30 seconds regarding direct building but we have we worked with Microsoft and customers and jointly we made sure that those 43:38 43 minutes, 38 seconds customers finally signed through in a partner route through us. So this is where we stand. So from uh from direct 43:46 43 minutes, 46 seconds building point of view we're not expecting to lose much. Uh hope I have answered your question 43:53 43 minutes, 53 seconds and so just on you know how do we see growth uh I mean new customers how do we see that addition and how do we see uh 44:01 44 minutes, 1 second just on the growth front do we see that historical growth come back or will there be a slight impact to growth going forward 44:08 44 minutes, 8 seconds no I think in in one or two quarters we'll be back to our old growth rate and see the you know 44:17 44 minutes, 17 seconds during this whole four quarters it's not that we are not winning other customers are not adding business. It's just the fact that such a large customers who was 44:26 44 minutes, 26 seconds with us almost for 15 16 years we had build up a huge business you know the impact was such high that you know we 44:34 44 minutes, 34 seconds took few quarters to cover it up and I just mentioned in the you know few minutes back we have almost covered it 44:41 44 minutes, 41 seconds up so uh we are hopeful and we are very confident that uh this financial year uh we'll be back to our business. Thank you. 44:50 44 minutes, 50 seconds Fair enough sir. Thank you. Thank you for your answer. 44:53 44 minutes, 53 seconds Thank you. Our next question is a followup from the Mahhata of MK Global. Please go ahead. 44:59 44 minutes, 59 seconds Yeah. Uh thanks for the opportunity. Uh just want to understand on the domestic business. Uh earlier we indicated about 45:07 45 minutes, 7 seconds one client impact in last November and another client in H2 of FI27. 45:14 45 minutes, 14 seconds Are we indicating that another client hit which was supposed to happen is unlikely to play out now and that gives 45:21 45 minutes, 21 seconds us confidence about growth uh on sustainable basis from here on. And second question on the margin uh how 45:29 45 minutes, 29 seconds should one should look that business because when we uh indicated earlier about expansion to uh new client as well 45:38 45 minutes, 38 seconds as new partnership usually it start uh at either break even or loss. So which could have a ramification on margin 45:45 45 minutes, 45 seconds trajectory. So if you can address both of these question. Thank you. 45:49 45 minutes, 49 seconds Thanks. So as I just mentioned uh you know for the previous question uh we we 45:56 45 minutes, 56 seconds are not anticipating to lose any further customers to direct that is uh you know just to answer your 46:04 46 minutes, 4 seconds first part of the question. Now coming to the growth and uh you know in the future business 46:11 46 minutes, 11 seconds uh so we'll we we'll you know we'll we'll continue to have our GTMs uh we'll 46:19 46 minutes, 19 seconds continue to have our existing customers we have our plan to get new customers so 46:26 46 minutes, 26 seconds the future business will be uh as usual and uh we don't expect any further it 46:36 46 minutes, 36 seconds is that is there anything margin I was more interested because the new business may come at lower margin that was the expectation. 46:46 46 minutes, 46 seconds Yeah sir. Yeah sorry I just missed that. 46:49 46 minutes, 49 seconds Okay. So from the margin point of view you know in our business when you go for very large deals as you said very 46:56 46 minutes, 56 seconds rightly that uh when you enter enter to the contract there is a chance that you work or you operate at a very very low 47:04 47 minutes, 4 seconds margin or almost nil margin but that is built into our business plan and you know we have a mix of existing customers 47:12 47 minutes, 12 seconds what we call the farming and then uh we have a plan every year for new additions which you go for the hunting 47:20 47 minutes, 20 seconds So this is a you know we have a mix of these two businesses and uh the earning of low margin for the new business which 47:29 47 minutes, 29 seconds comes from new acquisition and compete accounts that is already built into the business. So when we say that we are 47:35 47 minutes, 35 seconds going to have a regular growth uh during this financial year that has already been taken into account. And the second point is that also we keep changing our 47:44 47 minutes, 44 seconds business nature in terms of you know from a pure play resale to get into little bit of system integration uh uh 47:53 47 minutes, 53 seconds you know multiloud management. So this is how the business is also changing and these are the requirements from the customers as they are also becoming much 48:02 48 minutes, 2 seconds more experienced in operating under multiloud situation. So multiloud management, security management all 48:10 48 minutes, 10 seconds these become a part of additional services which we are already started providing. So because of all these 48:17 48 minutes, 17 seconds things we are very confident that the margin situation from the market we can handle it. 48:24 48 minutes, 24 seconds Just to add a point to that what is highlighting is this is not changing the business model substantially what it was 48:31 48 minutes, 31 seconds last year to current deal. This is the situation for us for a long period of time and we know how to handle it over a period of time and the entry level 48:40 48 minutes, 40 seconds margin will not reflect the s sustained margin for the business. Later we add services we add other components of it 48:48 48 minutes, 48 seconds and keep expanding on and mine the account much much deeper. So in this business is is the current situation 48:56 48 minutes, 56 seconds exist in the past and this exist the current situation also. 49:02 49 minutes, 2 seconds Understood. And last question is about the IITs just want to get sense on the dynamics part that business remain uh 49:10 49 minutes, 10 seconds relatively weak through the year. Uh and the same on data part. So if you can provide G the revenue by GTM what we 49:17 49 minutes, 17 seconds disclose uh data it was expected it to be very strong growth kind of thing but somehow it remained under pressure. So 49:26 49 minutes, 26 seconds if you can give some perspective on data and dynamics these two GTM thank you. 49:32 49 minutes, 32 seconds Okay. No, thank you. And um um I think um um two questions. I think um dynamics 49:41 49 minutes, 41 seconds growth remains very very important to us and we are we continue to be in the top 49:49 49 minutes, 49 seconds level partnership with Microsoft and as we go forward uh we'll further streng strengthen our dynamics uh go to bar 49:57 49 minutes, 57 seconds market as uh AI business uh solution um and so that remains our key focus as a part of the go forward strategy we have 50:07 50 minutes, 7 seconds interesting pip pipeline which has come up with dynamics with AI u recently and we are looking forward to 50:14 50 minutes, 14 seconds convert them to get some tailwind as we move forward. uh as far as data goes, it's largely been contributed by the 50:22 50 minutes, 22 seconds BFSI one particular client uh ramd down and a little bit by the RMD client ramd down. Uh but thereafter I think we are 50:31 50 minutes, 31 seconds building go to market with data. I think one of the things with AI uh the opportunity is that what the data for AI 50:38 50 minutes, 38 seconds and we are creating a data product for AI um as a data source and that will 50:45 50 minutes, 45 seconds help drive further momentum as we go forward. But that also remains a focus. 50:54 50 minutes, 54 seconds Thank you. 50:57 50 minutes, 57 seconds We now move to our next question. That's a follow-up from Pravin Kumar of Aquitus Capital Advisors. Please go ahead. 51:04 51 minutes, 4 seconds Yes. Hi, thanks for the opportunity. 51:06 51 minutes, 6 seconds Again, I had a a quick followup on the international business. uh I think over the last several quarters the management has called out uh uh you know 51:15 51 minutes, 15 seconds lengthening deal uh uh session cycles and you know broader macro uh and today again Raj in his commentary has called 51:23 51 minutes, 23 seconds that out. So just wanted to understand that you know given that Sonata has been has a has had a significant AI focus and 51:32 51 minutes, 32 seconds significant AI readiness over a period of time and given the modest size of the business. Uh uh what are the hindrances 51:40 51 minutes, 40 seconds in terms of getting more traction in in this kind even in this kind of an environment? Uh if you could throw some light on that. Thank you. 51:49 51 minutes, 49 seconds Yeah, I think um I think all the three points I think it AI definitely presents 51:55 51 minutes, 55 seconds an opportunity at our size and I called that out when we made the initial commentary. Um the decision making 52:04 52 minutes, 4 seconds cycles is I think to for clients largely on AI has been on to take the larger 52:11 52 minutes, 11 seconds plunges rather than experimentation. We are trying we are seeing a green shoots of that coming up especially in the 52:18 52 minutes, 18 seconds engineering space but yet I think the decision making is continues to be elongated not so much by technology or 52:27 52 minutes, 27 seconds what it can do but but the macro environment in which the client is I think that's um the inhibiting factor uh 52:36 52 minutes, 36 seconds that said we we will continue to further strengthen our capability because at the end of this I think AI will u demand 52:44 52 minutes, 44 seconds will grow up in the medium term and Sonata will be more ready um in its focus areas to address that growth opportunities. 52:55 52 minutes, 55 seconds Uh thank you. 52:58 52 minutes, 58 seconds Thank you. Our next question is from Ashish Dash of Mid Asset Securities India. Please go ahead. 53:08 53 minutes, 8 seconds Um hi, thank you for the opportunity. uh I would like to understand uh your thoughts around FI27 growth outlook. So 53:18 53 minutes, 18 seconds uh in previous call basically we highlighted that in TMT vertical the non-engineering segment continues to 53:26 53 minutes, 26 seconds face the budget pressure and also we saw that if in FY26 uh BFSI declined 53:33 53 minutes, 33 seconds significantly uh who and you know the basically the companies in in IT services space basically talking about 53:42 53 minutes, 42 seconds there is spending is uh remains healthy in the BFSI side. So I would like to 53:48 53 minutes, 48 seconds understand uh uh the the outlook of VFSI and TMT as well as the overall growth outlook for FI27. 54:00 54 minutes So I think um um um on the BFSI it it was largely affected by one large client 54:09 54 minutes, 9 seconds ramdown and that show showed rather than the BFSI in other other customers continued to be in 54:17 54 minutes, 17 seconds similar trajectory two part there is um of the answer one part of the answer I think the recent deal win in the BFSI 54:27 54 minutes, 27 seconds should further help us grow in BFSI and we also seeing some client uh client ramp ups especially as they modernize um 54:35 54 minutes, 35 seconds their application landscape with AI. I think that's a positive but we also notice that some large clients have the 54:44 54 minutes, 44 seconds economic situation is also leading to some contraction. So we are watchful about it but I think there is a um 54:51 54 minutes, 51 seconds slight um tailwind because of the ramp ups and the new wind that we have that's on BF side. Uh as far as TMT goes, yes I 55:00 55 minutes think we are seeing a increased u uh traction in TMT. Um but um I think we 55:09 55 minutes, 9 seconds need to see how much sustainable it is as we grow and that's what we watch out for continuously that it needs to be sustainable growth uh and so that it can be seen to continue as we grow forward. 55:22 55 minutes, 22 seconds Um um largely I think we see TMT, HLS and BFSI still driving our gold as um 55:29 55 minutes, 29 seconds overall growth in the FI27 as well as RMD continues to recover. 55:36 55 minutes, 36 seconds Okay. Uh thank you so much for answering my question. Thank you. 55:44 55 minutes, 44 seconds Thank you. Our next question is from Sushan Nayak of Anandraati. So could you please unmute your connection and ask your question? 55:59 55 minutes, 59 seconds U Mrs. Sushvin Nayak uh you may enter star six and unmute your mic. 56:14 56 minutes, 14 seconds Mr. N could you please unmute your microphone? Hello. I hope my voice is audible. 56:22 56 minutes, 22 seconds Yes sir. 56:23 56 minutes, 23 seconds Yeah. Uh just two uh bookkeeping questions. One is on the capeex, right? 56:28 56 minutes, 28 seconds Uh I think there's almost a 70% increase in the absolute value of the capeex. Any particular reason on what's the uh uh 56:35 56 minutes, 35 seconds what's exactly there and what do we expect as a steady state? That's one. 56:40 56 minutes, 40 seconds And on the uh IT services business uh the margins also I think they have gone up to 20%, uh what do we expect to be 56:47 56 minutes, 47 seconds the steady state? Do you expect some improvements uh over and above this? I think these were the two questions. Thank you. 56:54 56 minutes, 54 seconds I'll take this question both the capex because we had launched a new facility in Chennai for one large BFSA customer. 57:03 57 minutes, 3 seconds Uh this is like a uh it's a one-time activity. So hence there is an increase on the capex for the current quarter. 57:10 57 minutes, 10 seconds However, uh this will not continue and we don't have any plans of growing any other facility at present. So if there is any updates, we will come back to 57:18 57 minutes, 18 seconds you. This is a very smaller facility kind of a situation. Earlier quarters we didn't have anything. Uh we have optimized the facilities also possible earlier. The next one is on a margin. 57:31 57 minutes, 31 seconds Our endeavor is to maintain the at the similar levels. uh we will continue to strive for it. However, if there is an 57:39 57 minutes, 39 seconds opportunity for growth and that requires a investment, we we are very much open for that. 57:47 57 minutes, 47 seconds Uh so can we take the uh first half capeex annualized as the fair number uh for the cape going forward? Is that fair? 57:56 57 minutes, 56 seconds Yeah. Yeah, we can share that separately. uh uh not expecting it will be in the similar levels of previous year uh overall year not for the one 58:04 58 minutes, 4 seconds quarter one quarter into four is not a number whole year financial sure thanks 58:14 58 minutes, 14 seconds thank you that was the last question for today I turn the call back to Mr. Jaganatan Cen for closing comments. 58:23 58 minutes, 23 seconds So thanks uh thanks for that. In a difficult year character by macroeconomic challenges and client runs 58:31 58 minutes, 31 seconds out Sonata displays a resilient performance by growing pat by 18.7%age year on year for international business 58:39 58 minutes, 39 seconds and 9.3%age on consolidated business uh level. We also were able to win and ramp up large very few large deals during the 58:48 58 minutes, 48 seconds year which gave us some tailwind as we enter the new financial year. Our Q426 performance continue to reflect the 58:55 58 minutes, 55 seconds disciplined execution and continued progress across our strategic priorities. The benefit from our AI productivity initiatives are becoming 59:03 59 minutes, 3 seconds increasingly visible and across delivery and enterprise operation. strengthening our confidence in driving sustainable 59:10 59 minutes, 10 seconds efficiency over long-term period. Our endeavor is to maintain the AITA at similar level. While macroeconomic 59:17 59 minutes, 17 seconds environments continue to remain dynamic and client decision cycles remain elongated, we are encouraged by the 59:24 59 minutes, 24 seconds momentum in our pipeline especially around digital and AI transformation initiatives. We remain cautiously 59:32 59 minutes, 32 seconds optimistic expect gradual improvement in growth over medium term. Thank you all for joining for the call. Uh once again, 59:41 59 minutes, 41 seconds thanks for all the support and continued confidence in Sonata's office. Thank you. 59:47 59 minutes, 47 seconds Thank you very much sir. Ladies and gentlemen, on behalf of the leadership team, I would like to thank you for your time and for your continued interest in 59:54 59 minutes, 54 seconds Sonata software. Should you have any follow-up queries that were not addressed, please feel free to reach out to the investor relations team at investor at the ratesoftware.com. 1:00:08 1 hour, 8 seconds You may now click on leave button to exit the meeting. Thank you for your participation. Goodbye.