Wipro Ltd — Q4 FY26

Wipro Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=P7ctzY-qSqE Published: 3 weeks ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Vipro Limited Q4 FY26 earnings conference call. As a reminder, 0:10 10 seconds all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note 0:26 26 seconds that this conference is being recorded and the duration for today's call will be for 45 minutes. I now hand the conference over to Sabishek Jen, vice 0:34 34 seconds president, corporate treasurer and head of investor relations. Thank you and over to you. 0:41 41 seconds Yes, thank you. Warm welcome to our Q4 FI26 earnings call. We'll begin the call with the business highlights and 0:50 50 seconds overview by Shinaspalia our chief executive officer and managing director followed by updates on financial overview by our CFO Aerna here. We also 0:59 59 seconds have our CHRO Sab Goil and the chief strategist and technology officer Hayish Shetty on this call. Afterwards the 1:07 1 minute, 7 seconds operator will open the bridge for Q&A with our management team. 1:11 1 minute, 11 seconds Before Shini starts, let me draw your attention to the fact that during this call, he may make certain forward-looking statements within the meaning of the private securities litigation reforms act 1995. 1:22 1 minute, 22 seconds These statements are based on management's current expectation and are associated with uncertaintities and risk which may cause the actual results to defer materially from those expected. 1:32 1 minute, 32 seconds The uncertaintity and risk factors are explained in the details filing with the SEC. VIPro does not undertake any obligation to update the forwardlooking 1:39 1 minute, 39 seconds statements to reflect events and circumstances after the date of filing. 1:43 1 minute, 43 seconds The conference call will be archived and a transcript will be available on our website. With that, I would like to turn over the call to Shin Shini over to you. 1:52 1 minute, 52 seconds Thanks, Abishek. 1:54 1 minute, 54 seconds Hello everyone. Thank you for joining us today. 1:59 1 minute, 59 seconds Geopolitical and policy disruptions have become the new normal. 2:04 2 minutes, 4 seconds Despite these headwinds, IT spending has shown resilience. 2:09 2 minutes, 9 seconds Cloud, data, and AI continue to attract investment as they provide infrastructure for future growth. 2:18 2 minutes, 18 seconds Pride priorities are shifting with spending decisions increasingly tied to outcomes. 2:25 2 minutes, 25 seconds And at VIPRO, we continue to make decisive investments to navigate the AI first world. 2:33 2 minutes, 33 seconds With that context, let me now turn to our performance in quarter 4 and for the full year FI 202526. 2:44 2 minutes, 44 seconds All group numbers I share will be in constant currency. 2:49 2 minutes, 49 seconds Our IT services revenue for quarter 4 was dollar 2.65 65 billion reflecting a 2:57 2 minutes, 57 seconds sequential growth of 2% and degrowth of 2% on a yearon-year basis. 3:07 3 minutes, 7 seconds Our auditing margin came in at 17.3% a contraction of 30 basis points. 3:15 3 minutes, 15 seconds Sequentially, order booking for quarter 4 was at 3:21 3 minutes, 21 seconds dollar3.5 billion, which is a growth of 3.2% sequentially and a degrowth of 13.9% on a year-on-year basis. 3:33 3 minutes, 33 seconds We had 14 large deals totaling dollar 1.4 billion this quarter. 3:40 3 minutes, 40 seconds For the full year, IT services revenue were dollar 10.5 billion, reflecting a yearon-year degrowth of 1.6%. 3:52 3 minutes, 52 seconds Our operating margin was at 17.2% an expansion of almost 15 basis points as compared to FI25. 4:06 4 minutes, 6 seconds Now to our strategic market unit performance in quarter 4. America's one delivers sequential and eronia 4:14 4 minutes, 14 seconds growth driven by strong performance in consumer technology and communications. 4:24 4 minutes, 24 seconds The healthcare sector was impacted by seasonality and policy changes. 4:32 4 minutes, 32 seconds America's too declined sequentially and on a year-on-year basis. 4:37 4 minutes, 37 seconds The BFSI sector was impacted by delayed rampups on some large deals that were closed earlier this year and by certain client specific issues. 4:51 4 minutes, 51 seconds Europe grew sequentially and has remained flat on a year-on-year basis. 4:56 4 minutes, 56 seconds We see good traction in the UK, specifically in the PFSI sector. 5:02 5 minutes, 2 seconds We also see strong deal momentum in Germany. 5:07 5 minutes, 7 seconds Apnea grows sequentially and on a year-on-year basis. Growth is driven by Southeast Asia. 5:15 5 minutes, 15 seconds We are seeing traction in the PFSI technology and communication sectors. 5:25 5 minutes, 25 seconds We are encouraged by the momentum we are seeing in the APNA region both in performance and bets. we continue to make there. 5:34 5 minutes, 34 seconds A strong example is the strategic deal we announced recently with the OLAM group 5:42 5 minutes, 42 seconds expected to exceed dollar1 billion in contract value with a committed spend of dollar 800 million. This is one of our 5:51 5 minutes, 51 seconds largest engagements to date in a 5:59 5 minutes, 59 seconds in this water. We also closed several strategic engagements. 6:06 6 minutes, 6 seconds Let me highlight two examples with global technology leaders who drive AI at scale and how Vipro is partnering with them. 6:19 6 minutes, 19 seconds In my first example, a leading global technology company has engaged Vipro to 6:25 6 minutes, 25 seconds help run and improve its frontier AI model. 6:31 6 minutes, 31 seconds Vicro will manage the end to end operation of these EI models from training, 6:38 6 minutes, 38 seconds governance and evaluation to domain specific validation. 6:44 6 minutes, 44 seconds In fact, this engagement will be done through a specialized global delivery platform. 6:54 6 minutes, 54 seconds We will make these models more accurate, reliable and pace while ensuring they can be deployed and managed at scale. 7:07 7 minutes, 7 seconds In my second example, we have been selected by a leading global semiconductor company to provide 7:14 7 minutes, 14 seconds engineering services that accelerate product development and manufacturing across its complex hardware platform 7:23 7 minutes, 23 seconds at locations distributed globally. 7:28 7 minutes, 28 seconds We will support the entire engineering life cycle from product development to performance testing analysis 7:36 7 minutes, 36 seconds before final shipment is made by our clients to their end clients. 7:43 7 minutes, 43 seconds This will help our client achieve faster resolution management, higher ease and improved governance 7:51 7 minutes, 51 seconds with AIdriven analytics and automation. 7:59 7 minutes, 59 seconds As intelligence becomes internationalized and widely accessible, we are making a deliberate strategic pivot to stay ahead. 8:10 8 minutes, 10 seconds As you might be aware, we have launched a dedicated AI native business and platforms unit to expand beyond a 8:18 8 minutes, 18 seconds servicesonly model to a services as a software approach. 8:25 8 minutes, 25 seconds This unit will operate with dedicated leadership, focused investments and a distinct operating model to accelerate enterprisegrade agentic AI solution. 8:37 8 minutes, 37 seconds This unit will also incubate new AI businesses through an invest build partner approach 8:46 8 minutes, 46 seconds in addition to collaborating with Vipro Ventures and our partner ecosystems. 8:55 8 minutes, 55 seconds Together with core services, this creates a dual engine model driving transformation at scale while building 9:02 9 minutes, 2 seconds AI native platforms that differentiate services, enable repeatable deployments and unlock nonlinear growth. 9:14 9 minutes, 14 seconds With that, let me move on to our guidance for the next quarter. 9:20 9 minutes, 20 seconds In Q1, we are guiding for a sequential growth of minus2% to 0% in constant currency term. 9:29 9 minutes, 29 seconds Thank you. I'll now hand it over to Perna, R, our CFO. 9:37 9 minutes, 37 seconds Good evening everyone. Uh let me share a quick update and then we can open it up for Q&A. Our IT services revenue for Q4 9:45 9 minutes, 45 seconds grew 2% sequentially in constant currency terms and 6% in reported currency. Our revenues declined 2% on a 9:54 9 minutes, 54 seconds year-on-year basis in constant currency terms. For the full year FI26, IT services revenues declined by 1.6% in 10:03 10 minutes, 3 seconds constant currency. Our operating margin for the quarter was at 17.3% a contraction of.3% over Q326 10:13 10 minutes, 13 seconds and uh a2% contraction on a year-on-year basis with this our fullear operating 10:19 10 minutes, 19 seconds margin standard 17.2% 2% an expansion of 15 basis points year on year. We maintain the margins within a narrow 10:28 10 minutes, 28 seconds band even after absorbing two incremental months of DTS harmony increases effective first March. 10:38 10 minutes, 38 seconds As we move into Q1, we will have the headwinds of two months of salary increase and uh a few large deals if you 10:47 10 minutes, 47 seconds won and the volatility could be there in our quarterly performance. However, having said that, our endeavor would be to maintain these margins in a narrow band in the medium term. 10:58 10 minutes, 58 seconds Net income for the quarter was at 35 billion rupees. adjusted for the impact of labor code changes. Our uh net income 11:06 11 minutes, 6 seconds increased 3.7% sequentially for the full year. Our net income increased 2.2% year 11:14 11 minutes, 14 seconds on year. This was up in absorbing the impact of restructuring charges in both 11:21 11 minutes, 21 seconds Q1 and Q3 of last year. EPS for the quarter was at 3.3 rupees and 12.6 rupees for the full year. 11:32 11 minutes, 32 seconds Moving on to our strategic market unit and sector performance. All the growth numbers that I will be sharing uh will be in constant currency. 11:42 11 minutes, 42 seconds America's one grew.3% sequentially and grew 2.9% on a year-on-year basis. 11:49 11 minutes, 49 seconds America's 2 declined 2.6% sequentially and 6.7% on a year-on-year basis. Europe 11:56 11 minutes, 56 seconds grew 2% sequentially and was flat on a year-on-year basis. Apnea grew 3.1% sequentially and 8.8% on a year-on-year basis. 12:09 12 minutes, 9 seconds Moving on to sector performance, BSI declined 1.3% sequentially and.5% yearonear. Health declined 4.4% sequentially and was flat year on year. 12:21 12 minutes, 21 seconds Consumer grew 1.7% sequentially and declined 2.9% year on year. Technology and 12:29 12 minutes, 29 seconds communication grew 5.3% sequentially and 10.4% year on year. EMR grew 1.1% 12:37 12 minutes, 37 seconds sequentially and declined 5.9% year on year. Let me share some other key financial metrics. Our operating 12:47 12 minutes, 47 seconds cash flow continues to be higher than the net income and stood at 112.6% of net income for FI26. Our gross cash 12:56 12 minutes, 56 seconds including investments was at 5.9 billion. Accounting yield on average investments held in India was at 7.3%. 13:04 13 minutes, 4 seconds Our ETR was at 23.5%. 13:08 13 minutes, 8 seconds Um in terms of guidance to reiterate the what she um uh said we expect our 13:16 13 minutes, 16 seconds revenue from IT services business segment to be in the range of $2.597 billion to $2.651 billion which 13:25 13 minutes, 25 seconds translates to a sequential guidance of minus2 to 0 in constant currency terms. Lastly, I'd 13:33 13 minutes, 33 seconds like to share that in our recently concluded board meeting, the board of directors have announced and approved a 13:40 13 minutes, 40 seconds buyback of 15,000 crores at a price of 250 per share. This is the largest buyback that Vipro has announced and we 13:49 13 minutes, 49 seconds expect to buy back 5.7% of the paid up capital. 13:53 13 minutes, 53 seconds The buyback is expected to complete in Q127 subject to shareholder approval. 14:00 14 minutes Our endeavor has always been to return substantial portion of the cash generated in our through our operations 14:08 14 minutes, 8 seconds back to our shareholders. In FI26 alone, we distributed dividends of $1.3 billion. 14:17 14 minutes, 17 seconds taking our total payout ratio for three-year block ending FI26 to about 88% which is significantly higher than 14:25 14 minutes, 25 seconds the minimum threshold of 70% that we have as per our capital allocation policy. 14:31 14 minutes, 31 seconds With that I will hand it over for Q&A. 14:37 14 minutes, 37 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 14:45 14 minutes, 45 seconds star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 14:53 14 minutes, 53 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 15:07 15 minutes, 7 seconds We'll take our first question from the line of Pratik Maheshwari from HSBC securities. Please go ahead. 15:17 15 minutes, 17 seconds I'm sorry his line is disconnected. 15:18 15 minutes, 18 seconds We'll move on to the next question from the line of Sep Sha from Equir Securities. Please go ahead. 15:25 15 minutes, 25 seconds Yeah, hi. Thanks. Thanks for the opportunity. Uh sir the first question is uh there has been a good large deal 15:33 15 minutes, 33 seconds winds which has happened early 1 as well as fourth quarter of last year and we 15:40 15 minutes, 40 seconds kept on telling about delay in these large deals which was expected to come in Q3 then we said Q4 then we said it 15:50 15 minutes, 50 seconds will come in one Q but the guidance does not show that despite the nature of the deal being cost takeout rental 15:57 15 minutes, 57 seconds consolidation why this delay is happening. Thanks. 16:06 16 minutes, 6 seconds Thanks Sep. This is Shini here. Uh thanks for your question. Uh let me just uh you know talk about uh the quarterf 16:14 16 minutes, 14 seconds performance in the context of the four SMUs we had. Uh three out of the four SMUs Americas one, Europe and API have 16:21 16 minutes, 21 seconds grown sequentially. Uh having said that uh specifically America's 2 we saw 16:28 16 minutes, 28 seconds significant softness and uh this is uh specific to the BFS sector there. This 16:35 16 minutes, 35 seconds has been a combination of uh both uh client specific issue and a delay in 16:42 16 minutes, 42 seconds ramp ups that you're talking about. uh the reason for the delay is very client specific uh but we see that opportunity 16:49 16 minutes, 49 seconds uh coming up sooner than later and that will give us uh uh growth in that particular account and that particular sector. 17:01 17 minutes, 1 second Okay. And do you believe uh second quarter onward there could be a ramp up can actually pull up the 17:09 17 minutes, 9 seconds growth or you believe client specific issue because of the geopolitical issue and macro may continue. 17:18 17 minutes, 18 seconds So as far as this particular client is concerned uh it will end in quarter one sep and there is no further 17:25 17 minutes, 25 seconds impact for us materially. That's number one. Number two, as far as geopolitics is concerned and you know we have not 17:33 17 minutes, 33 seconds seen a you know any any clients at this point in time uh demonstrating any specific behavior 17:41 17 minutes, 41 seconds and also if you reflect on the pipeline that we have across the markets including countries and across the 17:48 17 minutes, 48 seconds sectors uh a very strong pipeline of course uh uh it's a very competitive uh landscape and the competition is very 17:57 17 minutes, 57 seconds intense and the way we have gone ahead uh with the OLAM deal which is a very transformational deal long-term deal 18:05 18 minutes, 5 seconds also taking uh their entire IT into Vipro you know welcoming them into Vipro family the second one that we announced 18:14 18 minutes, 14 seconds yesterday which was part of the vendor consolidation the kind of deal that are coming off are very different but very 18:22 18 minutes, 22 seconds strategic and we are staying focused on execution for us uh which will help us in the quarters ahead. 18:30 18 minutes, 30 seconds Okay. And just last two uh there has been a notable decline in a top client. 18:35 18 minutes, 35 seconds Uh what is the reason for the same? And second uh can you give us the inorganic group contribution you have factored in the first quarter growth guidance. 18:48 18 minutes, 48 seconds So uh you know these two deals that we've announced in this month are a part of our guidance. uh at the midpoint 18:56 18 minutes, 56 seconds we've assumed uh both these deals to start yielding revenues for one and a half months halfway through the quarter. 19:04 19 minutes, 4 seconds Uh to your point on the top account uh growth it's a sequential decline but from a year on standpoint it continues 19:12 19 minutes, 12 seconds to have grown and uh we are very confident that it will continue to come back uh as we go through the quarters. 19:22 19 minutes, 22 seconds Okay. Okay. Is it possible to quantify inorganic uh growth in the guidance? 19:28 19 minutes, 28 seconds So they are not inorganic. They are actually strategic deal wins. If you look at it uh uh Olam uh is a strategic 19:38 19 minutes, 38 seconds deal win with uh uh it's a relationship that is you know it has committed revenues. So and even the other one that 19:47 19 minutes, 47 seconds we announced was a part of the vendor consolidation strategy for one of our top clients and uh we continue to 19:54 19 minutes, 54 seconds participate in these kind of deals and both will be a part of our uh numbers and our guided range. 20:02 20 minutes, 2 seconds Okay, we'll come in the followup. Thanks all the best. Thank you. 20:06 20 minutes, 6 seconds Thank you. So next question is from the line of Ravi Menan from Access Capital. Please go ahead. 20:14 20 minutes, 14 seconds Hi. Thanks opportunity. It's been beyond the top customer where we've seen a sharp decline. We've also seen top 25 to five customers also decline slightly. 20:23 20 minutes, 23 seconds The top customer decline although you said it's temporary. It's a very sharp decline. Can you talk a bit about what led to this and why what gives you confidence that this will be temporary? 20:37 20 minutes, 37 seconds you know u uh Ravi if you look at it our top client has been uh producing a healthy growth for a for a fairly long 20:45 20 minutes, 45 seconds time right uh this kind of oneoff quarter volatility is not something that we are unduly concerned about the 20:54 20 minutes, 54 seconds relationship remains very strong and you should continue to see it bounce back 21:01 21 minutes, 1 second and you know the un revenue has grown uh you know cotton uh for more than uh 80 million and and then you also feel some 21:08 21 minutes, 8 seconds uh long-term unbuild revenue. Uh could you talk a bit about what's led to this campaign? How should you see that trend? 21:16 21 minutes, 16 seconds No. So I don't think uh see the unbuild revenue that has gone up is a is is more a quarterly aberration. It should 21:24 21 minutes, 24 seconds correct itself. Uh from a quarter on I mean from a yearon-year standpoint actually our DSO has remained flattish. 21:33 21 minutes, 33 seconds Like I said, our operating cash flows is remain 112% of net income. Uh we are not 21:39 21 minutes, 39 seconds seeing um uh any large exposures or pileups of our unbuild in our balance 21:46 21 minutes, 46 seconds sheet. Uh from a long-term uh unbuild standpoint as well, I think it's fairly contained and we've shown consistent 21:55 21 minutes, 55 seconds improvement. Yes, some of the larger deals as they pick up we we are open to you know they will come with some amount 22:03 22 minutes, 3 seconds of uh balance sheet leverage but nothing that's uh unduly um different than uh what we do as business as usual. 22:16 22 minutes, 16 seconds All right. Thanks a lot. Best of luck. Yeah. Thank you. 22:22 22 minutes, 22 seconds Next question is from the line of Deep Meta from MK Global. Please go ahead. Yeah. Uh thanks for the opportunity. 22:31 22 minutes, 31 seconds Couple of question. First on the clarification part you said DFSI weakness was because of two factor. One is client specific and second is delay 22:39 22 minutes, 39 seconds in ramp up and one of the question answer you indicated about some of the issues likely to be ending by quarter 22:47 22 minutes, 47 seconds one which I which part you are indicating by Q1 it should end 22:56 22 minutes, 56 seconds the client specific issue that we have seen in one of our clients in America too has had an impact in both Q4 and Q1 23:04 23 minutes, 4 seconds on and the there won't be a continuing impact of that going forward. Uh and what about the delay of part? 23:15 23 minutes, 15 seconds Yes. So if I you know have to car characterize see you know we've had several large deal bookings right now uh 23:23 23 minutes, 23 seconds the one that we announced u on Phoenix it was fully ramped up to plan there's no delaying that right. Uh if you look 23:31 23 minutes, 31 seconds at uh the other three mega deals that we spoke of, one of them is on plan and we are continuing to ramp up. We are seeing 23:40 23 minutes, 40 seconds challenging one of those large deals that we spoke about where we are seeing a delayed ramp up which is in particular 23:48 23 minutes, 48 seconds impacting the growth rate of that particular sector in that particular market unit. Outside of that BFSI growth 23:55 23 minutes, 55 seconds rates are pretty good in Europe and um as that climb comes back and you know 24:04 24 minutes, 4 seconds we we start to ramp up you will see those growth rates improving that is our I hope can you help can you give some sense 24:13 24 minutes, 13 seconds about that what factor is leading to delay in rental whether uh so if you can provide some details around it 24:20 24 minutes, 20 seconds qualitatively what is leading to some of the delay. Uh second question which I have is if I look let's say the couple 24:28 24 minutes, 28 seconds of transaction which we close or in the process of closing we included in the guidance if let's say any delay in the 24:37 24 minutes, 37 seconds uh some of those closer do you see risk to that guidance kind of thing 24:45 24 minutes, 45 seconds you know we guide and arrange uh there is uh like I said we guide and arrange and there is a midpoint and we have some 24:52 24 minutes, 52 seconds question both on the downside and on the upside and uh for now we are comfortable within that guidance range. uh on the first point. 25:02 25 minutes, 2 seconds Yeah. So Zeppeshini here on the first point this is a very clientspecific uh issue where they have changed a little 25:10 25 minutes, 10 seconds bit of uh the strategy around uh some of the things as per as part of the business because of which they have delayed it but having said that we have 25:19 25 minutes, 19 seconds the clear visibility going forward. It's about the matter of timing when and how much and that's that should uh help us going forward. 25:28 25 minutes, 28 seconds Understood. And last question from my side. Just want to get some sense about how Capco is playing out. Thank you. 25:38 25 minutes, 38 seconds Yeah. Go ahead. 25:39 25 minutes, 39 seconds So Dep as you know Capco is a tip of the spear uh for the consulting piece on the paper side. uh they are definitely doing 25:47 25 minutes, 47 seconds well and if you look at uh uh sequentially capo is performing very well and also on the yearon year both 25:54 25 minutes, 54 seconds have been very positive and in fact uh capo had one of the highest revenues in the last several quarters. So Capco is 26:02 26 minutes, 2 seconds making a big difference you know in terms of uh the whole AI advisory and consulting and the way uh you know they 26:10 26 minutes, 10 seconds are being proactively shaping the client's thought process in terms of the whole geopolitics and uh in terms of the 26:17 26 minutes, 17 seconds trade and the tariff and the technology transition has been really good. Thank you. 26:26 26 minutes, 26 seconds Thank you. 26:28 26 minutes, 28 seconds Next question is from the line of Vhor Single from Noam. Please go ahead. 26:34 26 minutes, 34 seconds Uh yeah hi uh thanks for the taking my questions. Uh and uh congrats uh Shini and wonderful about the announcement 26:42 26 minutes, 42 seconds finally. I know the market participants have been waiting for this one for quite a while. Uh two questions right one is I'm sorry you're sounding buffer. 26:56 26 minutes, 56 seconds Uh I'm so sorry. Just give me a second. 27:04 27 minutes, 4 seconds Uh can you are you on your handset mode? Can you use your handset mode? Switch to uh the uh handset now. Yes, it is clear now. Please go ahead. 27:11 27 minutes, 11 seconds Yeah. Okay. Sorry about that. Uh yeah. 27:13 27 minutes, 13 seconds So uh uh uh so a couple of questions from my side on the energy and utility vertical. This has been a vertical in which we've been very strong uh for 27:22 27 minutes, 22 seconds quite a while. Just wanted to pick uh as to uh what are the conversations that you're having with the clients at this point of time because of the Gulf War 27:29 27 minutes, 29 seconds that is going around. Uh will the crude prices and the volatility in it impact our business in this vertical either positive or negative? Any conversation 27:38 27 minutes, 38 seconds that already started on that regard or is it too early to uh call out any impact of that on the uh segment? 27:47 27 minutes, 47 seconds So, so VBR you know if from our perspective uh if you look at the quarter four uh you have seen a a sequential growth uh and both 27:57 27 minutes, 57 seconds manufacturing particularly auto and industrial have seen a uh impact otherwise on the reason for tariffs. Now 28:04 28 minutes, 4 seconds coming specifically in the context of geopolitics uh river I think there is a you know some of the clients are waiting and watching but having said that they 28:13 28 minutes, 13 seconds have not dramatically changed their strategy for example what they're trying to do especially in the manufacturing sector if you will uh they're looking at 28:22 28 minutes, 22 seconds how do you secure the supply chain make it more visible and and more dynamic going forward and that's some of the opportunities that we are looking at in 28:30 28 minutes, 30 seconds the context of AI that can actually help so that's That's the trend that we are seeing. Auto industry obviously you know 28:38 28 minutes, 38 seconds uh they are also looking at how the markets are going and it varies from country to country in terms of how the business is going. And the third is in 28:46 28 minutes, 46 seconds terms of overall manufacturing. We have not seen any uh clear uh uh change but you know they have been constantly under 28:54 28 minutes, 54 seconds pressure because of tariff disruptions that they're going through and they're also you know looking at what kind of 29:01 29 minutes, 1 second consumer demand they can have and also they are keeping a close watch on the input costs uh because that will also uh 29:08 29 minutes, 8 seconds you know impact their final product cost. So they are trying to uh sharpen their budgeting and I would say tightening at this point in time. 29:19 29 minutes, 19 seconds Got it. Got it. Good. Uh my second question was basically on uh uh again sorry to have on the Q1 guidance. Once 29:27 29 minutes, 27 seconds again as AA mentioned we are taking around half one and a half months of uh contribution from the new deals that would approximately come to around 7.8% 29:36 29 minutes, 36 seconds of revenue. Uh then another 7.8 from the uh one month incremental of hormone secretion that leaves 29:47 29 minutes, 47 seconds I'm sorry we both you're sounding muffled again can you repeat the last please 29:58 29 minutes, 58 seconds and a half okay now it's fine please go ahead yes oh I'm so sorry for the poor 30:06 30 minutes, 6 seconds connectivity uh yeah so as going to say I think the two deals will contribute uh one and a half months of revenue that's 30:12 30 minutes, 12 seconds around 7.8% of revenue. Uh Herman acquisition one one incremental month in Q1 again that's another maybe 7.8. So 30:20 30 minutes, 20 seconds around 1 and a half% growth is coming from these three factors. So these aside I think the the remaining business seems to be quite a sharp decline uh in Q1. 30:29 30 minutes, 29 seconds You mentioned one of the client specific issues which you will continue to face in Q1. But are there any other uh significant client ramp downs or any 30:36 30 minutes, 36 seconds other delays that we are seeing because of which this Q1 uh growth organic growth or if I can call the growth beyond these three seems to be so weak. 30:48 30 minutes, 48 seconds You know DTS Harmon is fully in our Q4 numbers. So in Q4 that was only two months. So on Q1 Q this will add another month in Q1. 30:59 30 minutes, 59 seconds before was all three months. 31:01 31 minutes, 1 second All three months. Okay. Uh yeah. So that is not an uh that is the only inorganic 31:07 31 minutes, 7 seconds fees and uh our growth for Q1 is uh you know yes there are these two deals that we've spoken about which will be there 31:17 31 minutes, 17 seconds and it'll add to our uh revenues in Q1 and we've assumed that they they will start yielding uh revenues uh midquarter. net cash. Got it. Got it. 31:30 31 minutes, 30 seconds Yeah. 31:34 31 minutes, 34 seconds As a organic growth as the last strategy is taken. 31:40 31 minutes, 40 seconds Um yes, very much very much. Point taken. Just my last question on the margins. I think very strong performance on the margins 31:47 31 minutes, 47 seconds in this quarter uh despite wage hike and hormone integration as well. Uh do we believe these margins are sustainable uh 31:54 31 minutes, 54 seconds next in the coming quarters as well? uh given that we'll have couple of these deals cost deals also that you will be factoring in uh do you think we will be 32:02 32 minutes, 2 seconds able to maintain their margins at around the current levels as we've always maintained as we've always stated that this is our target reach there are there are three yeah there are 32:09 32 minutes, 9 seconds three areas where we are going to be investing in uh you know we've already rolled out the wage hike effective 1st 32:17 32 minutes, 17 seconds March so we will have two months incremental impact which will have to be absorbed right in Q1 two we are winning some of these 32:27 32 minutes, 27 seconds large deals and they are won in a competitive environment. they will come with their share of uh you know u uh 32:37 32 minutes, 37 seconds lower margins especially uh as we start these deals right uh second there is u 32:44 32 minutes, 44 seconds uh uh you know certainly around uh capabilities we've uh acquired the DTA 32:51 32 minutes, 51 seconds connected services piece which will or which is also putting pressure on uh margins and as I look ahead we will 32:59 32 minutes, 59 seconds continue to actually accelerate great investments especially around VRO intelligence the platform unit that we've announced and it will uh need a 33:09 33 minutes, 9 seconds lot of investment uh that we will uh work through and share with you transparently as we go through the 33:16 33 minutes, 16 seconds process uh as we get uh you know uh form our strategy around it that will also be an area of focus for investment. Given 33:25 33 minutes, 25 seconds all this we will have to drive operational improvement that uh is a continuous uh process as you know and uh 33:33 33 minutes, 33 seconds like I said maybe we see some quarteron quarter volatility but our endeavor is going to be that in medium-term we 33:40 33 minutes, 40 seconds continue to drive that productivity and cost takeout and deliver on the promise of you know actually AI helping us to 33:49 33 minutes, 49 seconds deliver our PCI programs better and we continue to optimize all other overheads and as we do that hopefully we are able 33:58 33 minutes, 58 seconds to keep our margins on the medium term in narrow bound. 34:03 34 minutes, 3 seconds Okay. Okay. Great. Thank you so much for taking my questions and I wish you all the best. 34:08 34 minutes, 8 seconds Thank you. We'll take our next question from the line of Pratit Maheshwari from H security. Please go ahead. 34:17 34 minutes, 17 seconds Hello. Uh thank you for the opportunity. 34:20 34 minutes, 20 seconds Uh so I got a couple of questions. So uh I'm sorry for harping again on Americas too. Uh just wanted to understand and I 34:28 34 minutes, 28 seconds understand that there are there's a client speaking issue that you guys have faced in the fourth quarter and facing fourth quarter as well. However, if if I 34:37 34 minutes, 37 seconds look at uh stores over a one year period or a three-ear period, it seems that there's been a consistent um there's 34:45 34 minutes, 45 seconds been multiple client issues that have happened. So just wanted to understand your thoughts on this if it is a mere coincidence or uh how what are your 34:54 34 minutes, 54 seconds thoughts basically on this and um just second question from our side is around 35:00 35 minutes the uh AI partnerships. So we have seen your larger peers have uh uh have along 35:08 35 minutes, 8 seconds their partners probably plenty of models like contrast AI and open air but we haven't heard a lot from you guys. We 35:16 35 minutes, 16 seconds just wanted to understand how you guys are planning uh around this and if you are planning for GM around these model results. Thank you. 35:27 35 minutes, 27 seconds Uh thanks Pratik. U uh you're right AI is a central strategy for VRO. uh two 35:35 35 minutes, 35 seconds quarters back uh we had launched with pro intelligence uh which is a combination of uh industry and uh cross 35:42 35 minutes, 42 seconds industry and functional uh platforms and solutions and this quarter rather last 35:50 35 minutes, 50 seconds quarter we announced the formation of uh AI uh native business and platform unit. 35:58 35 minutes, 58 seconds The reason why we're doing it is in the last two quarters based on our experience both in terms of industry platforms and the delivery platforms 36:07 36 minutes, 7 seconds which is uh wings for run and operate and vega for our uh LTLC life cycle which is more on the 36:15 36 minutes, 15 seconds change and transform side. We have seen a very good traction. The clients feel very comfortable with the way we have put the guardrails. Making sure uh we 36:25 36 minutes, 25 seconds align the technology to what they are actually using. Uh making sure it is secure, reliable and responsible as 36:32 36 minutes, 32 seconds well. Also in terms of the productivity benefits that we can offer to them both on the uh you know existing engagement 36:40 36 minutes, 40 seconds and also the new engagements we plan to do and we will continue to invest in this And I think uh Aperna called out as well 36:49 36 minutes, 49 seconds that you know the pro intelligence and the new uh AI native business and uh platform unit is going to be uh is going 36:57 36 minutes, 57 seconds to pivot us into a services as a software software industry. So while we continue to deliver the services to our 37:04 37 minutes, 4 seconds clients, this should help us to actually create a software as a service through our platform model. We already person 37:13 37 minutes, 13 seconds success with our platforms be it in healthcare uh beat in banking, insurance, uh telecom. So we 37:22 37 minutes, 22 seconds want to see that because the clients are you know act feeling very comfortable with the fact that the whole platform is 37:29 37 minutes, 29 seconds AI native uh which is AI powered and it's able to well integrate into their domains with the kind of agent and agentic operations we're trying to bring 37:38 37 minutes, 38 seconds in so that investment will continue. 37:43 37 minutes, 43 seconds Thanks sir. First question uh if you could uh share also in uh in regards to uh this uh so the question was that uh 37:53 37 minutes, 53 seconds there's been multiple client issues over the years just want to understand and uh what your thoughts on that 38:01 38 minutes, 1 second yeah I think this quarter last quarter it was something that uh that that uh we called out as well very specifically for 38:10 38 minutes, 10 seconds the two reasons like you mentioned in your question itself that one is a specific client ramp up that has not 38:17 38 minutes, 17 seconds happened upon I talk in detail about that but we feel and I also answered that question said we feel fairly confident the client come back because 38:25 38 minutes, 25 seconds there was some directional change and they wanted to pause before they had the clarity around that. The second one was something that you know that uh the 38:33 38 minutes, 33 seconds account specific issue that happened which impacted for us in quarter one and uh uh in addition to quarter 4. Having 38:41 38 minutes, 41 seconds said that, you know, if you look at our top accounts, we they continue to stay focused on our top accounts with a very clear account management strategy. And 38:50 38 minutes, 50 seconds in fact, many of our clients are asking us to come back and help them in terms of AI advisory and consulting in terms 38:57 38 minutes, 57 seconds of how to navigate in this AI world. So what's important for our accounts team is to be very proactive and know 39:04 39 minutes, 4 seconds leverage vro intelligence and platforms and and solutions and kind of help the client through this disruption process. 39:14 39 minutes, 14 seconds Shimmy if if you could allow me to squeeze one more question. I just wanted to ask you said that you have a positive view on BSI in acne and also in Europe. 39:25 39 minutes, 25 seconds So just wanted to ask outside of the client specific issue that you may face in first quarter uh do you have a positive view on the US? 39:39 39 minutes, 39 seconds So I think uh from a overall uh I I think the best way for me to reflect Pratik in your question is uh the the 39:48 39 minutes, 48 seconds kind of pipeline that we have and I talk about uh having a very secular pipeline across industries and across uh markets 39:56 39 minutes, 56 seconds and your question specifically to BFSI if I were to look at Americas and Europe and apnea I know and also the capco the 40:04 40 minutes, 4 seconds question that came up we continue to see very good traction we continue to see very good pipeline And some of this what the the kind of 40:11 40 minutes, 11 seconds work that Capco does is very consulting and advisory. And we also want to you know see how those implementations for 40:20 40 minutes, 20 seconds the clients can happen. uh and for me the clearly from a BFSI perspective 40:27 40 minutes, 27 seconds right uh very clearly the client wants to you know invest in AI around data platforms and uh you know authentic 40:35 40 minutes, 35 seconds workflows and security and you know while they continue to optimize but the spend in this specific area around AI 40:43 40 minutes, 43 seconds data and cloud continues thank you thank Thank you. 40:53 40 minutes, 53 seconds We'll take a next question from the line of Abhishek Chindarka from Inc Research. Please go ahead. 41:03 41 minutes, 3 seconds Hi, thanks for the opportunity. Yeah, can you hear me? Go ahead. Yes. 41:08 41 minutes, 8 seconds Yeah. Hi, thanks for the opportunity. Uh the first question is regarding the cap uh the contribution for Harmon. uh so 41:16 41 minutes, 16 seconds when we gave the guidance last time uh in the third quarter the8% was the contribution and incrementally two month 41:25 41 minutes, 25 seconds was assumed when we gave the fourth quarter guidance uh can you just quantify what would have 41:32 41 minutes, 32 seconds been the contribution uh for this uh quarter or if you can just quantify the 41:39 41 minutes, 39 seconds um uh you know organic growth for us uh that's the first question and I'll just ask the second one 41:49 41 minutes, 49 seconds Uh so your qu question is around how much did uh the Harmon acquisition contribute in Q4. Is that your question? 41:58 41 minutes, 58 seconds Yes. 42:02 42 minutes, 2 seconds So you know uh we actually made a stock exchange filing around the revenues of the organization. You can assume uh you 42:10 42 minutes, 10 seconds know the quarterly run rate around that much. 42:16 42 minutes, 16 seconds Understood. That's helpful. Uh the second thing is on um you know the top client and uh maybe it has been asked 42:25 42 minutes, 25 seconds but not just the top but if I look at the top five um and if I look at the client metric uh 42:34 42 minutes, 34 seconds and the attrition across some of the larger accounts um do you foresee uh 42:41 42 minutes, 41 seconds this kind of uh stopping or halting in the next quarter or we may continue to see some uh challenges in the accounts 42:49 42 minutes, 49 seconds larger accounts uh even in the next quarter. Thank you for taking my question. 42:56 42 minutes, 56 seconds Um you know I think our overall uh growth rate also tend to reflect in our 43:03 43 minutes, 3 seconds top uh client metric uh growth rates as well. Right? That said, if you you know like if you had to look at the 43:12 43 minutes, 12 seconds year-on-year performance of our top client and a uh you know uh it's been 43:19 43 minutes, 19 seconds wildly flattish year-on-year constant currency. Top five actually has grown on a year-on-year constant currency by 2% 43:27 43 minutes, 27 seconds and top 10 has grown a positive 1.5% on year-on-year constant currency. Um 43:37 43 minutes, 37 seconds and therefore, you know, uh are we unduly worried about uh the top relationships that we have? Uh no, we're 43:46 43 minutes, 46 seconds not worried about it. That said, uh you know, uh our constant endeavor is to continue to win with our largest clients 43:57 43 minutes, 57 seconds in the market. and uh some of the wins that we have announced even this uh 44:04 44 minutes, 4 seconds month are towards that. So you will continue to see us growing and expanding 44:11 44 minutes, 11 seconds this because this is this is the way in which our growth will come from. It's our number one strategy priority. We 44:18 44 minutes, 18 seconds will work with large clients and that is the end of Thank you. Super helpful. Thank you for taking my question. 44:28 44 minutes, 28 seconds Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference back to Mr. 44:34 44 minutes, 34 seconds Abhishek Jen for closing comments. Over to you sir. 44:39 44 minutes, 39 seconds Thank thank you all for joining the call. In case we could not take any questions due to time constraint, please feel free to reach out to the industry relations. Have a nice day. Thank you. 44:48 44 minutes, 48 seconds Thank you on behalf of Pro Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.