Tata Consultancy Services Ltd — Q4 FY26

Tata Consultancy Services Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=4FBLVh40AYU Published: 1 month ago

0:00 Ladies and gentlemen, good day and welcome to the TCS earnings conference call. As a reminder, all participant lines will be in the listen only mode 0:09 9 seconds and there will be an opportunity for you to ask questions after the presentation concludes. 0:14 14 seconds Should you need assistance during the conference call, please signal an operator by pressing start then zero on the touchstone. 0:21 21 seconds Please note that this conference is being recorded. I now hand the conference over to Miss Nhal Sha from the investor relations team at TCS. 0:29 29 seconds Thank you and over to you. 0:32 32 seconds Thank you operator. Good evening and welcome everyone. Thank you for joining us today to discuss TCS's financial results for the fourth quarter and full 0:41 41 seconds year FY 2026 that ended on March 31st, 2026. This call is being webcast through our website and an archive including the 0:50 50 seconds transcript will be available on the site for the duration of this quarter. The financial statements, quarterly fact sheet and press releases are also 0:58 58 seconds available on our website. Our leadership team is present on this call to discuss our results. We have with us today Mr. 1:05 1 minute, 5 seconds Kiti Vasan, chief executive officer and managing director. Hi everyone. 1:09 1 minute, 9 seconds Miss Arti Subramanyan, chief uh operating officer and executive director. Good evening everyone. 1:16 1 minute, 16 seconds Mr. Sam Sakiraa, chief financial officer. Hello everyone. And Mr. Sudep Kunal, chief HR officer. 1:22 1 minute, 22 seconds Hello everyone. Our management team will give a brief overview of the company's performance followed by a Q&A session. 1:29 1 minute, 29 seconds As you are aware, we don't provide any specific revenue or earnings guidance and anything said on this call which reflects our outlook for the future or 1:37 1 minute, 37 seconds which could be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. We have outlined 1:45 1 minute, 45 seconds this risk in the second slide of the quarterly fact sheet available on our website and emailed out to those who have subscribed on our mailing list. 1:53 1 minute, 53 seconds With that, I would like to turn the call over to Kiti. Thank you, Nahil. Good day everyone and thank you for joining us 2:00 2 minutes today. I would like to open with five key messages for the quarter and the year. First about Q4. We are very 2:09 2 minutes, 9 seconds pleased to announce the third consecutive quarter of sequential growth. We delivered a strong 1.2% sequentially on a constant currency 2:17 2 minutes, 17 seconds basis in the backdrop of intensifying geopolitical conflicts and macroeconomic uncertainty. 2:24 2 minutes, 24 seconds This momentum was broadbased across major markets with North America growing 1.4% Q1Q, UK growing 2.4% and Europe 2:33 2 minutes, 33 seconds growing 1% on CC basis. Most of the industry segments also grew. Our order book performance was also very strong in 2:41 2 minutes, 41 seconds Q4 with 12 billion in TCV including three mega deals been from Martin Spencer the leading telecom operator in 2:50 2 minutes, 50 seconds UK and a leading American healthcare and pharmacy traces. 2:54 2 minutes, 54 seconds This underscores the strength of our five pillar strategy and our AE positioning across services. 3:01 3 minutes, 1 second The second message key message is our on client metrics. You will see from the fact sheet that every revenue band saw 3:09 3 minutes, 9 seconds healthy additions this quarter after a gap of about two years. This speaks to the yearly signs of stability and growth 3:17 3 minutes, 17 seconds return into our midsized and large accounts. The number of accounts where we generate more than 100 million annually increased by four quarteron 3:26 3 minutes, 26 seconds quarter bringing the total to 66. We added three more clients in the 50 million band bringing the total to 139 3:34 3 minutes, 34 seconds and 14 more clients in the 1 million plus band bring the total to 1397 from last quarter. The third message is on the announcement of salary increments. 3:45 3 minutes, 45 seconds We announced salary increment for all our associates across all grades all eligible associates across all grades 3:52 3 minutes, 52 seconds effective 1st of April. Fourth, the momentum we see in our AI services, this continues to accelerate very 4:00 4 minutes impressively standing at $2.3 billion on an annualized basis. Lastly, the promise 4:07 4 minutes, 7 seconds we see in our hyperwall business, which has made significant progress this quarter on its journey to build out 1 gawatt of capacity. 4:17 4 minutes, 17 seconds This includes winning customer commitments, land parcel finalizations, and partnering agreements. They're 4:24 4 minutes, 24 seconds actively engaging across the full ecosystem of hyperscaler, semiconductor companies and model pro providers while 4:31 4 minutes, 31 seconds TCS is the integration partner across infrastructure engineering and AI services. Demand signals remain strong 4:39 4 minutes, 39 seconds and are translating into structured engagements and commitments positioning TCS at the forefront of this buildout. 4:46 4 minutes, 46 seconds As we progress, this infrastructure layer is forming the foundation of CIS's full spectrum play for infrastructure to 4:53 4 minutes, 53 seconds intelligence. Coming to our full year performance, even though our FI26 revenue declined by 2.4% in constant 5:02 5 minutes, 2 seconds currency, we delivered a strong 40.7 billion in TCV including five mega days. 5:09 5 minutes, 9 seconds We maintained a strong focus on execution to deliver an operating margin of 25%. This is the highest operating margin achieved in the last four years. 5:18 5 minutes, 18 seconds And as enterprises navigate increasing complexity across technology, operating models and business transformation, the 5:26 5 minutes, 26 seconds role of trusted system integrators has become even more vital. Clients are looking for partners who can bring deep 5:34 5 minutes, 34 seconds technology excellence, strong enterprise and industry context and take end to-end accountability with confidence on the 5:41 5 minutes, 41 seconds outcome and ROI. In FI26, TCS was uniquely positioned to meet these expectations through sustained 5:49 5 minutes, 49 seconds investments in ALE engineering, a highly skilled and scalable talent base, differentiated solution and a strong partner ecosystem. 5:59 5 minutes, 59 seconds This has translated into the major highlights I talked about earlier. 6:03 6 minutes, 3 seconds Broad-based client traditions across revenue bank strong KCV and continued momentum in large deals with clients showing greater willingness to commit to 6:11 6 minutes, 11 seconds long-term multi-year multi-million dollar partnerships reflecting the trust they place in TCS to deliver certainty 6:19 6 minutes, 19 seconds and value at scale over extended transformation journeys. I will now invite Samir, Arti and Sud to go over 6:27 6 minutes, 27 seconds different aspects of our performance during the quarter. I'll step in later to provide more color on the demand trends we are seeing in our key 6:34 6 minutes, 34 seconds verticals and our outlook for the next year. Over to you Samir. Thank you Ky. 6:40 6 minutes, 40 seconds Good day to I'll start with the comment on the recent quarter and then proceed to the full year numbers. In the fourth 6:48 6 minutes, 48 seconds quarter of financial year 2026, our revenue was Rs 70,698 KES which is a quarteron quarter growth of 5.4%. 6:59 6 minutes, 59 seconds In dollar terms revenue was 7.621 billion a quarteron quarter growth of 1.5%. 7:07 7 minutes, 7 seconds In constant currency we had a sequential revenue growth of 1.2%. Our Q4 operating margin stood at 25.3%. 7:16 7 minutes, 16 seconds a sequential increase of 10 basis points. During the quarter, we saw an improvement in realization driven by continued focus on valueled delivery. 7:28 7 minutes, 28 seconds Currency was also supportive during the quarter providing a uh translation tailment. 7:35 7 minutes, 35 seconds These factors contributed to a a benefit of around 40 basis points and 110 basis points respectively. 7:42 7 minutes, 42 seconds Consistent with the build partner acquire strategy, we shared our an uh that we shared at our analyst day, we 7:50 7 minutes, 50 seconds consciously reinvested these tailwinds back into strengthening our capabilities and growth engines. Under build, we saw 7:57 7 minutes, 57 seconds higher external consultants cost of 40 basis points to capture the demand and to ensure delivery timelines and quality 8:04 8 minutes, 4 seconds were protected while we continue to scale internal capab capabilities. 8:11 8 minutes, 11 seconds In parallel, we have uh we made targeted interventions in critical talent, certifications, upskilling and creation 8:19 8 minutes, 19 seconds of niche delivery parts. These investments are aimed at building a scalable future ready AI delivery model 8:27 8 minutes, 27 seconds that straddles the entire stack across our intra to intelligence uh strategy layout. Also, the ongoing impact of 8:36 8 minutes, 36 seconds India wage code is included. Together these two accounted to for an impact of 40 basis points. Under under partner we 8:44 8 minutes, 44 seconds stepped up investments in eos uh ecosystem partnerships reflected in multiple announcements such as open AI, 8:51 8 minutes, 51 seconds AMD and service now made during the quarter. These investments are focused on industrializing AI solutions are 9:00 9 minutes increasing cross-ell opportunities and improving speed to value for clients through deeper hyperscaler and platform collaborations. 9:10 9 minutes, 10 seconds We also increase go-to market activity with higher participation in client events, showcases and industry forums. 9:18 9 minutes, 18 seconds This is directly linked to expanding demand pipeline and improving conversions by demonstrating our AI and platform D offerings. Together these two 9:27 9 minutes, 27 seconds accounted for a margin impact of 50 basis points. Finally aligned to acquire we in incurred integration related 9:36 9 minutes, 36 seconds investments of approximately 10 basis points as we embedded acquired capabilities in our operating model. 9:42 9 minutes, 42 seconds This included talent alignment, platform integration, go to market enablement, and delivery readiness, all aimed at 9:50 9 minutes, 50 seconds accelerating synergy realization and scaling new offerings. 9:55 9 minutes, 55 seconds Net margins for Q4 were 19.4% and our EPS grew 12.2% yearonear. 10:03 10 minutes, 3 seconds Our accounts receivable stood at 74 DSO in dollar terms for Q4 down 2 days 10:09 10 minutes, 9 seconds sequentially. Our cash conversions this quarter continues to be strong exceeding 100% of our net profits. Net cash from 10:18 10 minutes, 18 seconds operations was dollar 1.6 billion which is in 106.7% of our net income. Invested 10:27 10 minutes, 27 seconds funds at the end of the period stood at dollar 5.3 billion. Coming to the uh the full year FI26 uh our revenue was uh 10:36 10 minutes, 36 seconds rupes 267,21 kes which is a growth of 4.6% on a year-on-year basis. In dollar terms the 10:45 10 minutes, 45 seconds reported revenue was $130.017 billion a decline of uh 50 basis points. 10:52 10 minutes, 52 seconds In constant currency terms revenue declined 2.4% 4% on an annual basis. 11:00 11 minutes For FI26, our operating margin was 25% uh an expansion of 70 basis points over the prior year and a 4-year high. 11:11 11 minutes, 11 seconds In FI26, our investments in talent and capability building led to uh 200 basis points headwind. 11:19 11 minutes, 19 seconds We also incurred an additional 100 basis points uh headwind on account of other investments from strengthening ecosystem 11:27 11 minutes, 27 seconds partnerships and increasing our GTM pipeline. We successfully mitigated these by improving our business mix 11:34 11 minutes, 34 seconds productivity and realization by 100 basis points. Rebalancing of pyramid helped by 80 basis points and support 11:42 11 minutes, 42 seconds from currency also benefited margins by another 190 basis points. 11:48 11 minutes, 48 seconds The operating margin for the year excludes a few one-off recognized during this year. These exceptional items 11:55 11 minutes, 55 seconds relate to severance related expenses, legal provisions and the impact of changes in India wage. 12:02 12 minutes, 2 seconds Net margins for FI26 were 19.8% and our EPS grew 8.8% year on year. Our 12:10 12 minutes, 10 seconds effective tax rate for the year was 24.6%. 12:13 12 minutes, 13 seconds Going forward, we continue our investments to maximize growth. Our operational vigor will uh continue uh will continue to focus on optimizing 12:22 12 minutes, 22 seconds margins uh robust cash conversion and strengthening the balance sheet. 12:28 12 minutes, 28 seconds We remain uh uh firmly committed to returning substantial free cash flows to our shareholders through a consistent 12:35 12 minutes, 35 seconds and shareholder friendly dividend policy while prudently expanding investments under the build partner acquire 12:42 12 minutes, 42 seconds framework to strengthen long-term growth. The board has recommended a final dividend of 31 rupees per share 12:49 12 minutes, 49 seconds taking the total dividend uh in the year to rupees 110. I'll now invite Arti. 12:58 12 minutes, 58 seconds Thank you Samir. Uh good evening to all of you. FYI26 was a pivotal year for enterprise AI adoption across 13:05 13 minutes, 5 seconds industries. For the first time since the advent of Gen AI in late 2022, the shift from experimentation to scaled AI deployment showed a marked improvement. 13:16 13 minutes, 16 seconds AI became a core part of our every customer conversation and solutioning, creating a tailwind for enterprise AI 13:24 13 minutes, 24 seconds adoption. In Q4, our annualized AI revenue surpassed 2.3 billion, driven by the accelerated deployment of AI 13:33 13 minutes, 33 seconds solutions across industries. We experienced strong deal momentum across new services in enterprise transformation, digital engineering, and 13:42 13 minutes, 42 seconds cloud modernization. Our hyperwall business has made significant progress since the announcement in October 2025. 13:51 13 minutes, 51 seconds Last quarter, I spoke about a twopronged approach to engaging deeply with our 13:58 13 minutes, 58 seconds customers on AI. One to help them get ready with AI and two to partner with 14:04 14 minutes, 4 seconds them to lead with AI. Let me share some more detailed updates on both of these areas. While our customers want to 14:13 14 minutes, 13 seconds accelerate AI adoption, their current enterprise stack lacks the readiness for what it takes to scale. We're working 14:22 14 minutes, 22 seconds with our customers to address this gap by upgrading their infrastructure to be scalable and secure, modernizing their core applications and setting up modern 14:31 14 minutes, 31 seconds data foundations. Significant part of the technology spend is being invested in these areas. Let me share a few 14:38 14 minutes, 38 seconds examples. PC has modernized missionritical queue management systems with generative AI for a European 14:46 14 minutes, 46 seconds airline with reverse engineered complex legacy systems to reconstruct the core business logic embedded in these 14:54 14 minutes, 54 seconds systems. This modernization was powered by Google Gemini platform. 14:59 14 minutes, 59 seconds The airline now has a scalable foundation to build new age crew operation solution for a car rental 15:07 15 minutes, 7 seconds company in US. We executed a complex highstake legacy data warehouse migration moving over 20 terabytes of 15:14 15 minutes, 14 seconds missionritical data to a modern data platform. This program decommissioned their legacy systems delivering an 15:22 15 minutes, 22 seconds estimated 2.5 million savings but more importantly it established a scalable data foundation for them to get ready 15:31 15 minutes, 31 seconds for AI. To help our customers implement AI in their own context, we have created an AI acceleration playbook, innovate 15:39 15 minutes, 39 seconds with AI, build with AI, and scale with AI. This year, we deployed this playbook across a significant number of our 15:46 15 minutes, 46 seconds customers to solve high value business problems in rapid deployment cycles of 12 to 16 weeks. for a leading utility 15:55 15 minutes, 55 seconds company in the US. We conducted CXO level AI immersion programs to identify challenges that can be best solved with 16:03 16 minutes, 3 seconds AI. We also built their enterprise AI platform which provides a secure scalable foundation to industrialized AI 16:12 16 minutes, 12 seconds adoption. Physical AI deployment is also gaining traction in industrial sector. 16:19 16 minutes, 19 seconds Digital twins computer vision quadriped based solutions are driving efficiency, throughput and safety for a electronics manufacturer in the fabrication 16:28 16 minutes, 28 seconds facility. We are integrating Nvidia omnivor driven digital twin with autonomous quadbased inspection systems. 16:37 16 minutes, 37 seconds This physical AI solution is driving better construction accuracy and proactively identifying safety hazards. 16:45 16 minutes, 45 seconds Redefining every service line is central to our pipillar strategy. TCS has created a services reer services 16:53 16 minutes, 53 seconds redesign framework which we call our human plus AI service autonomy model. 16:58 16 minutes, 58 seconds This model integrates service line specific industryleading tools which are integral to delivering value in the customer context. This is resonating 17:07 17 minutes, 7 seconds well with our customers as it provides well-defined framework for consistent deployment across the enterprise. We are 17:15 17 minutes, 15 seconds taking AIEL redesign services proactively to our existing customers and new prospects. In last 2 years, AI 17:24 17 minutes, 24 seconds model capabilities have evolved tremendously and rapidly. Yet there is a gap in enterprises realizing the true 17:31 17 minutes, 31 seconds potential of these technologies. One of the challenges our customer face is that they have invested in these tools but 17:39 17 minutes, 39 seconds not yet reaping the expected productivity benefits. Our goal is to systematically help our customers address these gaps with our human plus 17:48 17 minutes, 48 seconds AI service autonomy model for a [clears throat] retailer in UK. We deployed the AI engineering framework with agents through the software life 17:56 17 minutes, 56 seconds cycle from translating unstructured requirements into structured specifications as well as executing specdriven coding, testing and 18:05 18 minutes, 5 seconds deployment. Our human plus AI approach accelerated software delivery and reduced the deployment cycle time by 18:13 18 minutes, 13 seconds about 40%. Business process services is becoming a fast adopter of agentic AI. 18:19 18 minutes, 19 seconds We are working with multiple customers on their AIE GBS transformation. For a steel major, TCS proactively deployed AI 18:28 18 minutes, 28 seconds agents in procurement bridge management process resulting in order to invoice cycle reducing from 28 days to under 10 18:36 18 minutes, 36 seconds days. In FY26, [clears throat] all nextgen services delivered strong growth across industries and max and 18:44 18 minutes, 44 seconds markets back backed by our continued investments in AI talent and innovative solutions. In FY26, we invested 18:52 18 minutes, 52 seconds significantly in strengthening our AI partnerships. This in includes enterprise partners, hyperscalers, deep 18:59 18 minutes, 59 seconds tech AI native partners and domain specific partners. In Q4, we for several strategic partnerships that have 19:08 19 minutes, 8 seconds expanded our joint collaboration. This includes our partnership with Service Now, Google Cloud, and with AB. With 19:17 19 minutes, 17 seconds open AI, we announced a partnership spanning multiple high impact areas, empowering Tata Group employees with 19:24 19 minutes, 24 seconds chat GPT enterprise, building industry specific agents, joint go to market initiatives, and creating a state-of-the-art AI 19:33 19 minutes, 33 seconds infrastructure. Finally, I would like to provide an update on PCS HyperV. Our engagements with hyperscalers and 19:40 19 minutes, 40 seconds frontier AI model companies have moved beyond early exploration into design alignment, security frameworks, site due 19:48 19 minutes, 48 seconds diligence and commercial structuring. We see the demand converging around large anchor AI workloads in the 100 to 200 19:57 19 minutes, 57 seconds megawatt range per customer. Hypervolt has aligned a deep partner ecosystem 20:04 20 minutes, 4 seconds including Tata power, Tata project, Sata communications as well as GE, Honeywell, ABB, Cement 20:12 20 minutes, 12 seconds and many of our customers to cover EPC power cooling controls network and security and many such areas. Some of 20:21 20 minutes, 21 seconds the key announcements we made this quarter. As I said earlier is the open AI partnership to build 100 megawatt capacity with an option to scale to 1 20:30 20 minutes, 30 seconds gawatt. In collaboration with AMD we are combining their worldclass helio rack scale AI architecture with Tata group 20:39 20 minutes, 39 seconds synergies to drive to create high density AI capacity in India. We also signed an MOU with ABB to strengthen 20:48 20 minutes, 48 seconds joint collaboration across IT infrastructure applications, digital and industrial AI initiatives as well as 20:55 20 minutes, 55 seconds data centers and other emerging technologies. In summary, FY26 saw a good momentum on AI and new services. As 21:04 21 minutes, 4 seconds we move into FY27, we will continue to accelerate deployment of our five-pillar AI strategy. We are well positioned to 21:12 21 minutes, 12 seconds support our customers with the deep knowledge of the enterprise context that we possess and our ability to integrate 21:20 21 minutes, 20 seconds AI into the customer business and technology landscape to create customer value. Thank you. I would now like to hand it over to Sudep. 21:30 21 minutes, 30 seconds Thank you Arti. Hello again everyone. At the outset, I would like to thank all our employees and their families stationed in West Asia for their utmost 21:39 21 minutes, 39 seconds dedication and resilience during these tough times. All our employees and their families in the Middle East are safe and we are in constant touch with them 21:47 21 minutes, 47 seconds providing the necessary support. At the end of March 2026, our global headcount stood at 584,519 21:56 21 minutes, 56 seconds with associates from 149 nationalities of whom 35.2%age 2 percentage are women. 22:02 22 minutes, 2 seconds We have announced annual increments to all eligible employees across grades effective April 1st with top performers 22:10 22 minutes, 10 seconds getting a double-digit increase. We are focused on building a future ready organization by strategically hiring 22:18 22 minutes, 18 seconds both fresh graduates and experienced professionals. Our recruitment efforts have been concentrated on individual 22:24 22 minutes, 24 seconds with expertise in AI, data, enterprise solutions, software engineering, cloud, cyber security, and digital engineering. 22:34 22 minutes, 34 seconds In FI26, we also hired over 750 employees with deep advisory and consulting expertise. We stepped up our 22:42 22 minutes, 42 seconds investment in talent development initiative as well. In FI26, a total of 69 million learning hours has been completed and 5.2 2 million competencies have been attained by our associates. 22:54 22 minutes, 54 seconds Over 270,000 associates now possess advanced proficiencies in AI and machine learning. TCS demonstrates its 23:01 23 minutes, 1 second commitment to innovation by being its own customer zero, adopting and refining AI technologies across internal HR practices before deploying them 23:10 23 minutes, 10 seconds externally. Within the human resources functions, we are embracing AI as follows. Nearly half of the internal resource allocations occurs through our 23:18 23 minutes, 18 seconds internal talent marketplace which uses AIdriven recommendations to match demand and supply. Our Genai powered learning 23:27 23 minutes, 27 seconds coach platform has helped over 100,000 TCS employees improve their proficiency through targeted role specific learning. 23:36 23 minutes, 36 seconds Our genai enabled in your accelerates hiring with technical assessments while our AI recruitment platform and answers 23:43 23 minutes, 43 seconds post offer engagement to help answer very specific queries. The AI assistant 23:50 23 minutes, 50 seconds provides instant multilingual contextual HR policy support improving employee experience. We have further strengthened 23:58 23 minutes, 58 seconds our position as employer of choice globally and are pleased to have been recognized as an enterprisewide top 24:06 24 minutes, 6 seconds employer for the 11th consecutive year by the top employers institute reflecting our commitment to foster an 24:14 24 minutes, 14 seconds inclusive and engaging workplace where our people can thrive and grow. I would now like to invite backers. 24:22 24 minutes, 22 seconds Thank you Sudep. 24:24 24 minutes, 24 seconds Scaling enterprise adoption requires organizations to address technology debt, data readiness and operating model 24:31 24 minutes, 31 seconds complexity. AI will enable clients to rapidly move from end customer feedback to demand identification to code. With 24:40 24 minutes, 40 seconds every tech cycle, clients have realized far greater value and TCS has scaled its business with a TCS aspires to be the 24:49 24 minutes, 49 seconds world's largest aled tech services company. 24:53 24 minutes, 53 seconds This aspiration is powered by capitalizing on AIE renewals, vendor consolidation and cost optimization 25:01 25 minutes, 1 second deals resulting in market share gains using new age services and adjacencies that enable enterprises to get ready for 25:10 25 minutes, 10 seconds AI becoming a AI full stack becoming a fullstack AI services player that is infrastructure to intelligence thereby 25:19 25 minutes, 19 seconds delivering maximum ROI to clients on their AI investments. ments through end to end industry value chain reimagination and building new revenue 25:28 25 minutes, 28 seconds streams such as building AI infrastructure in FI26 we made good progress across all the above 25:35 25 minutes, 35 seconds opportunities the strong order book closure was led by vendor consolidation a le modernization 25:43 25 minutes, 43 seconds scaling a across the enterprise digital core and digital core and data platform modernization operating model 25:51 25 minutes, 51 seconds transformation and regulatory compliance. 25:54 25 minutes, 54 seconds Let me show sh now share some specific details of our industry-wise performance during this quarter. 26:01 26 minutes, 1 second In BFSI the the BFSA vertical continued to grow this quarter. In BFSI, client specific 26:08 26 minutes, 8 seconds demand remained tech remained technologyled and outcome focused through Q4 shaped by heightened macro and geopolitical volatility. 26:18 26 minutes, 18 seconds Increased uncertainty around interest rates, inflation and central bank actions influence client sentiment resulting in cautious investment 26:26 26 minutes, 26 seconds decision making. Despite this backdrop, BFSA clients continued to prioritize core and legacy modernization, data 26:35 26 minutes, 35 seconds estate transformation, cloud migration and scale a gen deployments, but productivity operating model transformation and vendor consolidation. 26:47 26 minutes, 47 seconds Spending patterns increasingly shifted from experimentation to industrialized business-driven transformation with the 26:54 26 minutes, 54 seconds strong emphasis on cost discipline, regulatory resilience and measurable outcomes. Our consumer business group 27:02 27 minutes, 2 seconds saw another quarter of good growth supported by market share gains and emerging pockets of technology conviction, resilience and guarded optimism. 27:13 27 minutes, 13 seconds Retail globally and TTH in UK and EMIA led the growth while CPG and TTH North America segments declined. 27:22 27 minutes, 22 seconds Enterprises continue to tightly align spending to initiatives delivering near-term efficiency, cost control, and 27:28 27 minutes, 28 seconds operational resilience with growing emphasis on vendor consolidation, technology simplification, legacy modernization, and selective AI engine adoption. 27:39 27 minutes, 39 seconds TBG had two mega deal wins this quarter. 27:43 27 minutes, 43 seconds which helped propel its TCV to an all-time high. 27:47 27 minutes, 47 seconds One of the two mega deals was the renewal and expansion of our services to Marx and Spencer, a customer of TCS for 27:54 27 minutes, 54 seconds well over a decade. The deal is a testimony to the deep trust and strong partnership between the two organizations. 28:03 28 minutes, 3 seconds The other mega deal is the leading American healthcare and pharmacy retailer with another long-standing and trusted 28:12 28 minutes, 12 seconds strategic partnership of TCS that we are proud we are very proud to have retained this particular partnership as well. 28:21 28 minutes, 21 seconds Clients are appreciating TCS track record of successfully delivering transformation programs more than ever. 28:27 28 minutes, 27 seconds An excellent example is what we are doing for this pharma retailer. 28:33 28 minutes, 33 seconds For them, TCS partnered with uh to modernize it mission critical claims for sync system 28:41 28 minutes, 41 seconds operating at a massive scale processing over 5 million prescriptions daily. The platform underpins core pharmacy 28:48 28 minutes, 48 seconds operations including claims validation, accumulation and track tracking of patients out of pocket expenses, 28:55 28 minutes, 55 seconds ordering, replenishment, reporting. As prescription volumes continue to rise, the legacy architecture began to limit 29:03 29 minutes, 3 seconds performance, realtime visibility and scalability, creating operational bottlenecks across the ecosystem. 29:11 29 minutes, 11 seconds Leveraging deep domain expertise and contextual knowledge, CCS reimagined process flows and led the comprehensive cloudnative rearchitecture of the 29:20 29 minutes, 20 seconds platform. The transformation introduced event-driven processing, complex multi-system integration and worldclass 29:29 29 minutes, 29 seconds enterprise grade security to ensure resilience and complex. This has enabled near realtime processing compressing 29:37 29 minutes, 37 seconds claim cycle from 48 hours to just 12 hours. datadriven decisioning leveraging a and autoscaling to support growing 29:45 29 minutes, 45 seconds prescription volumes and rapid onboarding of new entities positioning the client for sustained future growth. 29:53 29 minutes, 53 seconds Now let me talk about our life sciences and healthcare group which saw a marginal growth this quarter. Healthcare 30:01 30 minutes, 1 second payers are managing raising cost and growing friction with providers due to pre-authorization and claims issues. Key 30:08 30 minutes, 8 seconds priorities include affordability, transparency, simplicity, and better patient experience. Organizations are 30:17 30 minutes, 17 seconds focusing on data marketplaces, cyber resilience, and a to boost productivity while regulatory changes add to 30:25 30 minutes, 25 seconds compliance cost and administrative burdens, prompting selective modernization focused on efficiency. The 30:32 30 minutes, 32 seconds pharmaceutical industry is streamlining pipelines and adopting AI to tackle growth and pricing pressures. 30:39 30 minutes, 39 seconds Companies in the Americas and UK and EU are focusing on efficiency through vendor consolidation, tech modernization and enterprisewide transformation. 30:50 30 minutes, 50 seconds The manufacturing vertical also saw good growth this quarter despite the macro uncertaintities and the impact to the 30:56 30 minutes, 56 seconds global supply chains. Client demand across manufacturing remain cautious in Q4 shared by macroeconomic uncertainty, 31:05 31 minutes, 5 seconds tariff volatility, recalibration of EV demand and continued restraint in cap capital expenditure across automotive, 31:13 31 minutes, 13 seconds industrial and chemicals. Customers prioritize near-term cost optimization and operational resilience with 31:20 31 minutes, 20 seconds sustained focus on AI productivity, including predictive maintenance and quality automation alongside ERP and 31:28 31 minutes, 28 seconds cloud modernization to streamline operations and improve reliability. 31:33 31 minutes, 33 seconds The technology and software segments saw reasonable growth this quarter given the environment. 31:40 31 minutes, 40 seconds Plant demand in Q4 remained disciplined amid a challenging macro environment. 31:45 31 minutes, 45 seconds shaped by heightened geopolitical tensions, tariff related uncertainty, and increasingly stringent manufacturing and data sovereignity requirements. 31:54 31 minutes, 54 seconds Customers continue to prioritize cost rationalization to fund a strategic pivot towards AIA transformation with 32:02 32 minutes, 2 seconds spend focus on vendor consolidation, GCC expansion and structural efficiency and the resulting savings reinvested into 32:10 32 minutes, 10 seconds scaling a across core operations and product portfolios. 32:14 32 minutes, 14 seconds Incremental investments were also directed towards digital sovereignity and supply chain resilience. 32:21 32 minutes, 21 seconds PMI saw a modest decline this quarter but we are witnessing promising signs of a rebound in IT spending in CMI. 32:28 32 minutes, 28 seconds Telecommunication companies are advancing their journeys to expand into adjacent businesses while simultaneously enhancing the efficiency of their core 32:38 32 minutes, 38 seconds operations. This strategic shift is paving the way for growth and innovation. Momentum remains strong in 32:45 32 minutes, 45 seconds securing large deals within the telecommunications telecommunication sector. We have signed our first mega deal in CMI. 32:55 32 minutes, 55 seconds That's this quarter. This first mega deal in CMI in this quarter, a significant expansion of its long-standing partnership with a leading 33:03 33 minutes, 3 seconds UK based telecom operator. This 5-year contract will see TCS lead the operator's comprehensive IT 33:10 33 minutes, 10 seconds transformation IT transformation journey for its consumer business leveraging advanced AI cloud and digital 33:17 33 minutes, 17 seconds engineering cap capabilities. The expansion built on the strength of years of trusted partnership and demonstrated 33:24 33 minutes, 24 seconds delivery. We'll see TCS take end toend responsibility for running the entire IT system of the operator's consumer base 33:32 33 minutes, 32 seconds and become its strategic technology partner consolidating the entire landscape previously spread across multiple service providers. 33:41 33 minutes, 41 seconds ERU demonstrated robust growth this quarter. Within ERU the energy and resources segment performed well led by 33:49 33 minutes, 49 seconds supply chain modernization initiatives gathering momentum in the near term. 33:53 33 minutes, 53 seconds However, the utility segment is experiencing stress and significant cost optimization opportunities are opening 34:00 34 minutes up. In summary, even in a year marked by global uncertainty, we have demonstrated 34:07 34 minutes, 7 seconds resilience, discipline, and the ability to lead through complexity. Our performance in FI26 reflects not just 34:14 34 minutes, 14 seconds strong execution but enduring trust from clients who are committing to longerterm partnerships and from associates who continue to drive transformation at 34:23 34 minutes, 23 seconds scale with robust order book expanding client relationships across revenue bands accelerating AI momentum and 34:32 34 minutes, 32 seconds foundational investments like hyper walls. We are building the next phase of TCS with conviction. As enterprises 34:39 34 minutes, 39 seconds increasingly seek partners who can deliver certainty, accountability and outcomes end to end. TCS stands 34:47 34 minutes, 47 seconds exceptionally well positioned. Combining technology excellence, deep contextual knowledge and scale to help our clients 34:54 34 minutes, 54 seconds navigate change and create sustainable value. We enter the new year with confidence, clarity of purpose and an 35:02 35 minutes, 2 seconds unwavering focus on delivering growth with resilience and trust. With this, I will now open the line for questions. 35:11 35 minutes, 11 seconds Thank you very much. We will now begin the question and answer session. 35:16 35 minutes, 16 seconds Participants who wish to ask a question may press star and one on their touchtone phone. If you're using a speaker phone, please pick up your 35:24 35 minutes, 24 seconds handset while asking a question. This is required to ensure optimum audio quality on the call. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 35:37 35 minutes, 37 seconds We'll take a first question from the line of Sudil Gupali from Kotak Mahindra AMC. Please go ahead. 35:44 35 minutes, 44 seconds Uh uh hi. Uh thanks for the opportunity. 35:47 35 minutes, 47 seconds Uh my first question uh is there any perceivable change in quantity or quality of client inquiries or even 35:54 35 minutes, 54 seconds bookings around agentic implementation post first week of when anthropic announced a string of aentic launches. 36:04 36 minutes, 4 seconds uh sud I won't say there is definitely clients are curious to know about the capabilities and expanding I'm sorry 36:12 36 minutes, 12 seconds expanding capabilities of all the models and they also want to leverage their models or to the achieve their both 36:19 36 minutes, 19 seconds productivity as well as uh business uh value chain the imagination but is it because after post anthropic uh I won't 36:28 36 minutes, 28 seconds say that there's been a general as the model capability improve there'll be more and more interest in seeing how they can leverage 36:35 36 minutes, 35 seconds client interest and demand uh actually increases with new capabilities uh coming out of the model providers. 36:45 36 minutes, 45 seconds Fair enough. Uh the second question uh many of these frontier model companies they are just announcing a new project or agent which may be in their 36:53 36 minutes, 53 seconds development pipeline but not yet launched. Uh the latest example being cloud methods. uh is this in any way leading to clients sort of deferring 37:01 37 minutes, 1 second their existing IT spends to maybe wait and watch uh once the product actually hits the shelf maybe few months or years down the line. 37:09 37 minutes, 9 seconds We have not seen that Sudi like the it's been a client as I said client our clients are quite interested in leveraging it they know this will be 37:17 37 minutes, 17 seconds constantly evolving and uh there is no major benefit in waiting for the next best model to come. So clients are 37:25 37 minutes, 25 seconds willing to invest now and they know and we have been helping them with the overall philosophy of the the architecture is built for change. So 37:34 37 minutes, 34 seconds we're helping them in building that architecture so that they can exploit and leverage the models as they come in. 37:42 37 minutes, 42 seconds Last question from my side. uh so how do you think of S57 growth uh given the exit run rate and where our order 37:50 37 minutes, 50 seconds booking is and also uh expectations around some AI duration. 37:56 37 minutes, 56 seconds So uh at least you also mentioned like we have a good order book getting into FI27. We have uh strong three mega deals 38:05 38 minutes, 5 seconds booked in this quarter and uh as you also described most of the industry verticals we see a positive momentum and 38:15 38 minutes, 15 seconds uh our new age services are also gaining traction. So overall we are getting into the next year with lot of positivity and confidence. 38:26 38 minutes, 26 seconds Thank you Dr. Thank you. 38:30 38 minutes, 30 seconds We'll take our next question from the line of Kumar Rakkesh from BNP Pariba. Please go ahead. 38:36 38 minutes, 36 seconds Hey, hi, good evening and thank you for taking my question. My first question was around what you were just talking about that getting into FI27 we are 38:44 38 minutes, 44 seconds exiting at a healthy growth. We are also exiting with bulk of multiple mega deals and across verticals as well. seems like 38:53 38 minutes, 53 seconds demand has started improving at least growth for TCS has started improving. Um so would you call out and say that we 39:01 39 minutes, 1 second should start getting back to 3 4% sort of a growth in the international business where we used to be or or better than that or the recovery is 39:09 39 minutes, 9 seconds going to be far more gradual uh uh this year. 39:15 39 minutes, 15 seconds uh Kumar I don't want to put a number but I would say that again as I was telling Sudi you're quite positive about 39:23 39 minutes, 23 seconds FI27 quite positive about the international growth got it thanks for that and my second 39:30 39 minutes, 30 seconds question was around margins so SGNA the second half has been elevated um so is this the new normal we should now start 39:38 39 minutes, 38 seconds looking at or it should normalize back to below 15% where it used to be Yes. 39:45 39 minutes, 45 seconds So as you know we have been investing on the build partner acquire strategy and incremental investments like on 39:54 39 minutes, 54 seconds partnerships on recruitment and training on uh the new businesses are all reflecting on the SCNA side. So some 40:02 40 minutes, 2 seconds part of it will uh will see an elevated one both on uh the absolute amount as 40:09 40 minutes, 9 seconds well as on uh as a percentage of revenue. 40:14 40 minutes, 14 seconds Got that. And just for a clarification, a restructuring is done or there's more cost associated to that that has to come through. 40:21 40 minutes, 21 seconds So if you look at Q4, we have not called out anyone else. So it is business as usual. 40:27 40 minutes, 27 seconds Yeah. But there is a restructuring charge which you have booked in the quarter rate. 40:32 40 minutes, 32 seconds We have not called off any oneoff but so it's uh so the oneoff we had called off was only in Q3 uh of about uh 1,300. The 40:41 40 minutes, 41 seconds combined for the year is 1,300 KS. No one else in but uh Kumar just to get the clarity be 40:48 40 minutes, 48 seconds specific. Okay. The the program that we started we have completed that program. 40:54 40 minutes, 54 seconds The program towards researching has been completed. Got it. Perfect. Thanks a lot for that. 41:02 41 minutes, 2 seconds Thank you. We'll take our next question from the line of Yogesh Agarwal from HSBC securities. Please go ahead. 41:10 41 minutes, 10 seconds Hi. Okay. Um uh thanks u Ki just firstly on uh the the next few quarters do can 41:18 41 minutes, 18 seconds we expect the similar type of seasonality going forward or uh because the reason I'm asking is there's not been much headcount addition so the 41:26 41 minutes, 26 seconds typical seasonality of better first half does that still work uh going forward 41:34 41 minutes, 34 seconds uh see like I don't know what you mean by seasonality like see essentially we are looking uh it means see it more likely to be 41:43 41 minutes, 43 seconds regular Q1 regular Q2 that we are used to seeing is the way we are looking at as we stand now Yog 41:51 41 minutes, 51 seconds no Ky I was asking so usually the first and the second quarter are stronger than the fourth right we are also we are also 41:59 41 minutes, 59 seconds expecting uh we have our planning assumption is along those lines only okay great and uh secondly just going 42:06 42 minutes, 6 seconds back to this AI uh uh stuff So uh usually in the past you had all these historically uh relationships and 42:15 42 minutes, 15 seconds partnerships with uh software companies like SAP and all these diamond platinum uh you know ratings. Uh can you talk a 42:24 42 minutes, 24 seconds little bit about what are these partnerships with the AI uh model especially anthropic what is the level 42:30 42 minutes, 30 seconds of tearing uh with them and does it really matter anymore? Thanks. 42:37 42 minutes, 37 seconds No Yogesh I think uh with all the model companies uh we are uh building 42:44 42 minutes, 44 seconds strategic partnerships we have announced with open AI we are already working significantly with anthropic and we'll 42:52 42 minutes, 52 seconds be you know uh announcing strategic partnerships with them in the near future we are very closely working with 42:58 42 minutes, 58 seconds MSR so with all model companies uh it's extremely important for us to build the strategic partnership but I would say 43:06 43 minutes, 6 seconds that we are all trying to shape these partnerships differently than the traditional GTM partnerships of the 43:14 43 minutes, 14 seconds past. So we want to make them 360deree partnerships not just so one is because 43:20 43 minutes, 20 seconds of our investment in hyper world we have a very unique opportunity where they can become our customers. So you saw the 43:28 43 minutes, 28 seconds announcement that we made with open AI where there is a committed capacity of 100 megawatt and the opportunity to grow 43:36 43 minutes, 36 seconds that to 1 gawatt. So similar conversations are uh are opportunities with these model companies and hyperscalers. 43:44 43 minutes, 44 seconds So that's one new pillar of collaboration right of strategic collaboration. Apart from that using 43:51 43 minutes, 51 seconds their products right chat GPT enterprise we made an announcement. So using anthropic clouds. So that's the second 43:59 43 minutes, 59 seconds pillar of a collaboration. Third is industry specific solutions with uh them. The fourth one is again GTM very 44:08 44 minutes, 8 seconds specific GTM motions which is very you know sort of what you uh take away from u how we do strategic partnerships of 44:17 44 minutes, 17 seconds the past. So that definitely is a pillar. So this again like I said we are trying to shape this partnerships 44:23 44 minutes, 23 seconds differently more deep more strategic and value for both. 44:31 44 minutes, 31 seconds Got it. Thank you. Thank you so much. 44:34 44 minutes, 34 seconds Thank you. We'll take our next question from the line of Nitan Padman from Invest. Please go ahead. 44:42 44 minutes, 42 seconds Yeah. Hi, good evening. Uh thank you for the opportunity. Uh uh Kit initially you mentioned some uh caution in BFSI 44:52 44 minutes, 52 seconds um uh during the quarter. Um I just wanted your thoughts on how clients are actually thinking about spending going 44:59 44 minutes, 59 seconds forward considering the macro. Uh do you think this ends up like uh last year where you had the liberation day and we 45:08 45 minutes, 8 seconds thought we were getting probably getting into good start but then you had all these headwinds. So in the context of 45:15 45 minutes, 15 seconds what you see today uh what are the conversations with clients will be great to have your perspective there maybe 45:22 45 minutes, 22 seconds across a few key sectors at least uh see what at this time if you look at 45:29 45 minutes, 29 seconds our direct impact from the uh geopolitical situation uh so far has been restricted to Middle East and to 45:38 45 minutes, 38 seconds some extent into the our travel and transportation industry And we have not seen major impact in other industries so 45:47 45 minutes, 47 seconds far. But uh Nathan as you would know like if things go continue and if it leads results in further supply chain 45:54 45 minutes, 54 seconds disruption or uh any other uh secondary issues, it may have a impact but uh at 46:02 46 minutes, 2 seconds this time uh I think the impact will be limited to our travel and transportation and probably the work we do in Middle 46:10 46 minutes, 10 seconds East and we have not been hearing any other specific uh concerns uh from our clients in other industries. ries or other geographies. 46:20 46 minutes, 20 seconds So, so the caution that you mentioned was very geospecific. It's not a broad-based caution. Uh and also yeah that's correct. Yeah. 46:30 46 minutes, 30 seconds Sure. Perfect. That's very helpful. Uh the second is on uh from a margin perspective. Uh how should we think 46:38 46 minutes, 38 seconds about margins going forward? Because on one hand you do have the currency giving you a tailwind and on the other side uh 46:48 46 minutes, 48 seconds you have uh you have you have to invest on capabilities and 46:54 46 minutes, 54 seconds multiple other things. Um so just uh how should we broadly think from a margin perspective as we get into the next year? 47:03 47 minutes, 3 seconds Yeah, we are exiting FI26 at a 4year uh high on annual re uh margins at 25%. 47:11 47 minutes, 11 seconds And uh we see continued positive momentum. A focus will be to ensure growth with profitability. So we'll not 47:20 47 minutes, 20 seconds be shying away from making the right investments for ensuring strategic growth. So if you look at uh stepping 47:27 47 minutes, 27 seconds into FI27 the immediate headwinds would be the annual increments which we have talked about and also as you rightly 47:34 47 minutes, 34 seconds mentioned u we'll continue our focus on the build acquire and partner framework and uh investments around that would be 47:44 47 minutes, 44 seconds uh part of it. uh while uh some of those we would want to uh you know mitigate 47:51 47 minutes, 51 seconds through better uh operational rigor uh in terms of uh the usual levers which we have called out and also look at 48:00 48 minutes optimization on some of the non-employee expenses and um as you rightly called out the rupee depreciation uh uh does 48:09 48 minutes, 9 seconds help uh not guaranteed always uh overall we'd want to balance and 48:17 48 minutes, 17 seconds keep within a tighter range. We'd like to move towards 26 but on a longerterm basis. 48:24 48 minutes, 24 seconds Perfect. That's helpful. Just one last from my end. Um overall uh coming out of last year and getting into the next uh 48:32 48 minutes, 32 seconds do you believe that all known client specific headwinds are behind and uh we should see better revenue accretion from 48:39 48 minutes, 39 seconds deal wins and uh uh from a deal win momentum perspective as well but do you think that that is on an accelerating trajectory? 48:48 48 minutes, 48 seconds That's the last one. Thank you. like uh by and large most of the headwinds we know probably are behind us excepting 48:56 48 minutes, 56 seconds few that may come up or that we have already accounted for but uh at this time like we are not expecting like of 49:05 49 minutes, 5 seconds course nobody can predict what will happen down the line but I think uh most of the issues are behind us 49:16 49 minutes, 16 seconds that's thank you so much and all the We'll take a next question from the line of Vibore Single from Nwama Equities. 49:24 49 minutes, 24 seconds Please go ahead. 49:26 49 minutes, 26 seconds Yeah. Hi. Uh thanks for taking my uh questions. Uh just two questions from my side. One is uh Kinty, we mentioned our 49:35 49 minutes, 35 seconds AI revenue to be around $2.3 billion analyzed. So that's basically almost 6 and a half to 7% of our total revenue. 49:43 49 minutes, 43 seconds Uh so just wanted to basically understand if I were to draw a parallel to the last digital cycle. Uh there also I think after certain stage we had 49:51 49 minutes, 51 seconds started quantifying our digital revenue and the way we saw that cycle play out is that initially there was cannibalization of revenue and at the same time we had growth from the uh 49:59 49 minutes, 59 seconds digital revenues and gradually the growth from the digital revenue was able to more than compensate the cannibalization of revenue. Are we 50:08 50 minutes, 8 seconds seeing a similar trend this time? Do we expect a similar cycle to follow this time also that there are productivity gears that we are passing on to the clients because of which we are losing 50:15 50 minutes, 15 seconds out revenue on the other hand your $2.3 billion going to grow much strongly and at some point of time in the coming quarters we'll probably reach an 50:22 50 minutes, 22 seconds inflection point is that a good way to look at the geni cycle how similar or different would it be from the last cycle last cycle that would be really 50:31 50 minutes, 31 seconds helpful like broad structurally what you are saying is correct I don't know whether it will be the same time period in which the whole will change but otherwise 50:40 50 minutes, 40 seconds structurally what you're saying is correct. You would expect the AI revenues to increase. You would expect the some of the traditional revenues to 50:49 50 minutes, 49 seconds slowly tap her down and a revenue to overcompensate for the reduction in the revenue in other parts of other service 50:57 50 minutes, 57 seconds lines but the timelines probably can vary. Uh I'm not able to predict the timelines on how all these different cycles will move. Arti want to add? 51:07 51 minutes, 7 seconds Yes, thank you Christie. Vibore if I may just add to that when you look at uh you know if you have to compare to the digital transformation that you alluded 51:15 51 minutes, 15 seconds to where is the transformation budget right largely bucketed as AI going right there are three buckets 51:24 51 minutes, 24 seconds one is okay enterprise transformation there is still you know lot to be done on digital which is still to be done in companies whether 51:32 51 minutes, 32 seconds it's cloud adoption migrating to cloud data modernization cyber security enterprise systems upgrade whether it's 51:40 51 minutes, 40 seconds a S4 HANA Salesforce so all those are ongoing right so that's that's a transformation uh bucket the second one 51:49 51 minutes, 49 seconds which is very purely AI le is the modernization opportunities that we see tech debt reduction was always a 51:58 51 minutes, 58 seconds priority but that was always postponed by enterprises because it would take long it would cost a lot but I think AI 52:05 52 minutes, 5 seconds is playing in there and helping customers clear tech debt better faster. 52:12 52 minutes, 12 seconds So that's big long way to go but that's the second sector of opportunity. The third is the pure play AI transformation 52:20 52 minutes, 20 seconds what Kiti earlier alluded to as industry value chain transformation where you're really doing AI engagements that create direct business impact. 52:33 52 minutes, 33 seconds Got it. Got it. That was really helpful. 52:35 52 minutes, 35 seconds Uh KPI one more question from my side and it's probably more at a strategy level maybe you and uh basically the team can answer on that if you look at 52:43 52 minutes, 43 seconds FI26 we ended the year at minus 2 and a half% CC on uh if I compare our revenue growth 52:51 52 minutes, 51 seconds this year with our closest competitor we would probably be the difference would be almost five to six percentage points this probably the widest that we have 52:59 52 minutes, 59 seconds ever been that the gap has ever been but on the other side our margins are very very strong probably one of the highest margins that we have and we of course 53:06 53 minutes, 6 seconds remain at the highest margin level in the industry and we are very strong in margin. So while the entire industry is facing a lot of margin pressure, what is 53:13 53 minutes, 13 seconds the company level strategy at this point of time? Like we want to continue to focus on the profitable growth part. 53:19 53 minutes, 19 seconds Have we ever discussed that should we be ready to compromise a bit of margins to maybe boost growth? uh what is the direction in which the board and 53:27 53 minutes, 27 seconds management is thinking in terms of balance between a better growth and uh 53:34 53 minutes, 34 seconds uh river I get the question uh to one fundamentally we believe okay 53:42 53 minutes, 42 seconds our focus on margin is not affecting our revenue growth okay of course at the 53:49 53 minutes, 49 seconds same time in fact we believe a good margin we have gives us greater flexibility ability to approach new 53:56 53 minutes, 56 seconds deals and be more competitive in gaining market share and uh and we have been pro been able to prove that time and again. 54:05 54 minutes, 5 seconds It's not that we are not we don't lose deals on pricing. We work with our customers. We ensure that we give the best solution and we've been able to win 54:15 54 minutes, 15 seconds deals and uh so this is our overall thesis. We believe uh margin and growth are not uh conflicting with one another. 54:25 54 minutes, 25 seconds We should be able to do well on both and we continue to stay close to our customers. We continue to invest like uh 54:32 54 minutes, 32 seconds the margin we have helps us to invest like what you saw in the uh the last two 54:39 54 minutes, 39 seconds acquisitions and the investment on hyper wall they are all possible because we are able to generate margin and give it gives us a ability to invest for growth. 54:48 54 minutes, 48 seconds So we don't believe these are at loggerheads with one another. 54:54 54 minutes, 54 seconds Okay. Thank you so much for answering my question and to all the best. 54:59 54 minutes, 59 seconds Thank you. Our next question is from the line of Ashwin Meta from Ambit Capital. Please go ahead. 55:07 55 minutes, 7 seconds Uh hi, thanks uh for the opportunity. Uh so one question from Samir uh what is the impact of wage hikes that we see in 55:15 55 minutes, 15 seconds terms of our margins next quarter? Uh and secondly any color in terms of this deal flow that we've announced which is 55:24 55 minutes, 24 seconds pretty strong. uh what uh is the renewal share in terms of that given that uh there are quite a few deals in the press 55:32 55 minutes, 32 seconds release where we have extended our uh relationship with these clients. 55:38 55 minutes, 38 seconds So on the uh wage increments uh you should expect a similar thing on what we have seen in the past annual increment 55:46 55 minutes, 46 seconds cycle which has been in the range of 150 to 200 basis points 55:52 55 minutes, 52 seconds on the ashin in terms of uh color on the or the characteristics of the deals TCV 55:59 55 minutes, 59 seconds I would say like about mostly like a 50/50 or 45 55 kind of in terms of 56:06 56 minutes, 6 seconds between renewal for and new programs. So I think this quarter maybe about 50 to 56:13 56 minutes, 13 seconds 55% could be on renewals around 40 to 45 40 around 45% would be on new programs and uh this varies typically in a 56:22 56 minutes, 22 seconds smaller band between 40 to 60% ban it varies one way or another. 56:27 56 minutes, 27 seconds Uh thanks Kit and just one followup uh in terms of deals are you seeing early renewals where in vendors like yourself 56:36 56 minutes, 36 seconds as well are going in for early renewals or uh the deals are largely getting renewed on time. 56:45 56 minutes, 45 seconds So like by and large on time but when we also see opportunity to go back to a customer uh and provide ensure that 56:53 56 minutes, 53 seconds there's a really a renewal can be done with greater AI infusion greater productivity delivered and at the same 57:01 57 minutes, 1 second time it's expansion in scope we do go to the customers and we offer to renew if they are also whenever the VC value and 57:09 57 minutes, 9 seconds whenever it's mutually beneficial uh thanks and thanks Sam and all the best. 57:16 57 minutes, 16 seconds Thank you. Our next question is from the line of Rishi Junjunwala from IFL. Please go ahead. 57:25 57 minutes, 25 seconds Yeah, thanks for the opportunity. I think my questions have been answered but maybe just a quick clarification uh um just if you think about you know your 57:34 57 minutes, 34 seconds uh thought process around wage hikes right so we've we've deferred it twice in the last five six years uh since co 57:41 57 minutes, 41 seconds um this time uh we have uh reinstated it um uh you know after uh when we 57:48 57 minutes, 48 seconds announced it in September back to the April cycle um you know just wanted to understand what's the thought process behind that given that uh the overall 57:57 57 minutes, 57 seconds demand environment, the supply side environment uh and the macro uncertainties largely remain there um 58:06 58 minutes, 6 seconds and haven't seem to be changing materially over the past 6 to 9 months. 58:12 58 minutes, 12 seconds uh she like it's a reflection as a first is we want to ensure that we properly reward all the associates 58:20 58 minutes, 20 seconds uh who have been working tirelessly for us and as you know that while uh in September we are able to give increments 58:29 58 minutes, 29 seconds to 80% of the associates the senior executives we did not give at that time so we wanted to ensure that when we 58:37 58 minutes, 37 seconds restart the uh our increment cycle we reset it start for everyone but it's also a reflection of the fact that we 58:46 58 minutes, 46 seconds believe that we have enough deal momentum and demand on our side so that we'll be able to handle the increased 58:55 58 minutes, 55 seconds wage cost wage bill uh because of increments got it and one very quickly while you've 59:03 59 minutes, 3 seconds started giving uh annualized AI revenues would be possible to throw some color on uh you know AI deals as well just to get 59:12 59 minutes, 12 seconds some sense if uh you know how those are progressing. 59:17 59 minutes, 17 seconds So she um if you look at it you know AI deals are uh uh I would say of two kinds 59:27 59 minutes, 27 seconds one is many of the mega deals that Kiti spoke about today. So they have a 59:34 59 minutes, 34 seconds significant of amount of AI embedded into them in terms of how we deliver the service also in terms of how we 59:42 59 minutes, 42 seconds transform client's business. Right? But apart from this when we are saying AI revenue we are only calling out the 59:50 59 minutes, 50 seconds specific AI for business transformation revenue which we said has exceeded 2.3 on an annual billion on an annualized 59:59 59 minutes, 59 seconds basis. So and uh when you look at the nature of programs it's across industries across markets and and we see 1:00:08 1 hour, 8 seconds that a lot of these programs are you know rapid build 12 to 16 week delivery 1:00:15 1 hour, 15 seconds type of uh solutions. Uh you know these are high impact problems that customers are choosing that we can deliver in 1:00:24 1 hour, 24 seconds faster cycles with the rapid uh you know with forward deployment engineers. So that is included some of the AI modernization I talked about which is 1:00:32 1 hour, 32 seconds you know starting to gain momentum is all included as part of that understood thank you 1:00:42 1 hour, 42 seconds and one last thing is agentic DPS which I missed talking about I think that's something which is gaining traction 1:00:49 1 hour, 49 seconds right agentic AI in business process services and we see that earlier in FI25 1:00:57 1 hour, 57 seconds the time taken to implement AI in uh you know in business process versus this year we are seeing faster adoption 1:01:05 1 hour, 1 minute, 5 seconds cycles from customers because customers are more confident now putting AI into production but obviously with all the 1:01:12 1 hour, 1 minute, 12 seconds guardrails focus on security governance and all of that thank you our next question is from the 1:01:20 1 hour, 1 minute, 20 seconds line of go Ratia from Morgan Stanley please go ahead hi thank you for taking my questions. I 1:01:28 1 hour, 1 minute, 28 seconds have two questions for Criti and one for Samir. Uh my first question for Priti is uh your comment that you made on the 1:01:36 1 hour, 1 minute, 36 seconds growth in the client's band of revenue bands uh in mid and large size and you talked about stability returning is this 1:01:43 1 hour, 1 minute, 43 seconds due to a lower leakage compared to the past or is it more led by better macro which is improving the spend in these 1:01:50 1 hour, 1 minute, 50 seconds accounts. The second question is on you know AI. Uh if you keep the macro aside 1:01:57 1 hour, 1 minute, 57 seconds for the moment, would you expect the new AI services to be a creative to revenue growth in fiscal 27 net of all the 1:02:06 1 hour, 2 minutes, 6 seconds deflation that you see in your renewals existing business or is it too early to confirm any such trend? And the last question for Samir is that AI for 1:02:15 1 hour, 2 minutes, 15 seconds business uh when you look at the revenue productivity and the margins in that portion of the business, how does it compare compared to company average? Is it better? Is it in line? Is it lower? 1:02:24 1 hour, 2 minutes, 24 seconds Thank you. 1:02:26 1 hour, 2 minutes, 26 seconds So Goro first on the clan metric improvement see it's a combination of all the factors because you will not be 1:02:33 1 hour, 2 minutes, 33 seconds able to grow uh if that there's no stability or there's no revenue coming and essentially it's a reflection of the 1:02:40 1 hour, 2 minutes, 40 seconds fact overall at a high level the clients are more comfortable in uh getting into uh larger sorry transformation programs 1:02:49 1 hour, 2 minutes, 49 seconds or some amount of discretionary spend improving uh and of course it's also So possible there are some cases vendor 1:02:56 1 hour, 2 minutes, 56 seconds consolidation happening where you gain market share but definitely it indicates that the stability and more confidence 1:03:04 1 hour, 3 minutes, 4 seconds from the clients as well and in question for your question about a again our expectation is a will be net accretive 1:03:14 1 hour, 3 minutes, 14 seconds like to see in the financial year our attempt would be to ensure that arrest the degrowth while uh you tend to while 1:03:22 1 hour, 3 minutes, 22 seconds the a revenue increase slow increase but of course over a period of time a revenue or a related revenue because it 1:03:31 1 hour, 3 minutes, 31 seconds will become very difficult to classify after some time on what is a what is a adjacent revenue but ensure that they all grow they will expect them to grow 1:03:40 1 hour, 3 minutes, 40 seconds much faster at that time uh the deflation in the other part may not 1:03:46 1 hour, 3 minutes, 46 seconds matter materially like same cycle whatever happened during the digital transformation cycle that trend will this year 1:03:55 1 hour, 3 minutes, 55 seconds and Goro on the uh AI and data part the revenue productivity uh is definitely much better than uh the TCS average or 1:04:04 1 hour, 4 minutes, 4 seconds the traditional business both at onsite and offshore margin I'll not call out because there would be investments which 1:04:11 1 hour, 4 minutes, 11 seconds would be temporary or in the initial phase so it wouldn't be like like to thank you very much and all the very 1:04:20 1 hour, 4 minutes, 20 seconds best thank you thank Thank you. 1:04:23 1 hour, 4 minutes, 23 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to management for closing comments. Over to you. 1:04:32 1 hour, 4 minutes, 32 seconds Thank you operator. We are very pleased with the continuous revenue growth growth momentum we have seen in the last 1:04:39 1 hour, 4 minutes, 39 seconds three quarters. In Q4, our revenue grew by 1.2% quarteron quarter in constant currency with an operating margin of 1:04:47 1 hour, 4 minutes, 47 seconds 25.3% at a net margin of 19.4%. 1:04:51 1 hour, 4 minutes, 51 seconds We had a very strong PCV of 12 billion in Q4 with three mega deals. Annualized AI services revenue crossed to $2.3 1:04:59 1 hour, 4 minutes, 59 seconds billion. We remain dedicated to our goal of establishing ourselves as the world's premier AIdriven technology services 1:05:08 1 hour, 5 minutes, 8 seconds provider. Our robust five-pillar strategy combined with sustained investments across infrastructure to intelligence continues to advance this 1:05:17 1 hour, 5 minutes, 17 seconds objective. I extend my appreciation to all TCS employees for their unwavering commitment and professionalism which has 1:05:25 1 hour, 5 minutes, 25 seconds been instrumental to the company's continued success. This concludes our call today. Thank you for participation. Thank you. 1:05:33 1 hour, 5 minutes, 33 seconds Thank you. 1:05:35 1 hour, 5 minutes, 35 seconds Thank you members of the management. On behalf of TCS that concludes this conference call. Thank you for joining us. And you may now disconnect your