Q3 2020 Earnings Call
Ladies and gentlemen.
Good day and welcome to the preliminary Q3, if white when people what are the Investor Conference call.
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I would not like to have the conference so what do much opposite.
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I just on food away when they come to acutely if lightweight dealings Cohen.
To begin the call that business highlights in all of you buy, albeit our chief Executive officer, and managing that it does followed by financial overview from I see a full jumped into like.
Afterwards, the operator, we'll open the page book you anyway, the management team.
Before it starts let me draw your attention to the fact that during this call is really meet certain forward looking statements within the meaning of the private Securities Litigation Reform Act 90 95.
These statements are based on management's current expectations not associated with unfortunately de than that which me cost the actual results could differ materially from those expected.
Uncertainties and risks factors I explained in our D. These filings with the SIFI Wipro does not undertake any obligation to update the forward looking statements to reflect events and circumstances. After the date of fighting you conference calls there will be archived on the transcript will be made available on our website.
<unk>.
Thank you a button good evening and good morning, ladies and gentlemen, first of all wish you all the very happy new year.
I'm joined do what are your leadership team My my leadership team and it's sufficient for us to speak to you on I'm sure there's lots of the third quarter.
Let me go deeper waiting a bit on Q3 performance.
I didn't bother me.
So this will know strategy.
We had a strong quarter boots on revenues and margin on revenues grew by 1.8% in constant currency terms.
Moving to fund guidance.
Well the white you'd be business, we grew at 4.3% in constant currency terms.
In financial services, we saw slow down not to go through its due to continued softness is driven by macroeconomic environment.
He.
Oh, it would've been confident on really the new units that we are participating.
And leveraging our strong capabilities indeed.
Good performance in consumer which grew 1.1 person to go to your constant go into this quarter.
And to sustain good.
In the so what do you.
It wouldn't be bits.
You wouldn't communications continue to grow more directly.
We could do you see because it didn't manufacturing and nothing goes with the order book and pipeline.
And so she's really speaking it's yes.
As a Q3 has opened it wouldn't be as.
Why is the the technology business was impacted.
Before most I'm slogan spend the semiconductor where dickens.
No wonder demanded Watson.
Neither <unk>, nor do they did for what they should not <unk>.
But we see.
Same level of uncertainty.
Ladies geopolitical risks ugly.
We delivered on the operating margin of 18.4% in Q3 was 18.1 last quarter you Didnt buy the depreciation of the rupee and some favorable movement on the coast currency.
Now let me.
A quick update on our strategy.
This this transformation the bus corridor customers girls, usually every industry.
Have chosen us.
<unk> transformation within that business.
It is no longer just about enabling new customer experience, it's about fundamentally changing up business and I'm pleased to ship reduce rich true how what customers are turning to us is supposed to business transformation Park.
<unk> other when you group, but do it wasn't you're on your.
No contributes over 40% of went live in use.
For example would be and whatnot. So this is I mean given to define the future resident in this study is the strategic foundation for digital transformation.
Thank you Kathy.
Hi, Good segment called synergy Bank.
Unwarranted musician, we continue to helping to phrases.
To that business was strategy.
It's an industry laced approaching enabling customers to drive business actually they shouldn't customer experience I'm going to insights.
There's been some close to you is continuing to be Oh.
We have actually they Didnt go just before it goes to must be my getting more than 39000 workloads and 4900 applications.
The U.S. bids semiconductor company has chosen to Brooklyn, it's gotten engineering application infrastructure to the cloak.
We will leverage.
Youre, putting to hit the Clayton become more at Jive.
Sure fostered type two market and Lord of the builder coastal photo shoot for look like.
Oh started your collective intelligence, which go was due to our analytics artificial intelligence and engineering.
He is a.
Delivering good results they Judy mixed signal for putting the bad talked a boat.
We continue to invest in it and Ah.
The building blocks in place.
We concluded.
Sure this quarter.
No we shouldn't have both been momentum in industry Flipboard doing the utilities and enable us to have a new set of planes.
To create differentiated value.
You might look like from the North American such a deal for global automobile company. There's over the next Gen. Envy. He can infotainment software that's part of funds into getting mixed proposition.
The fourth area is that don't trust.
Focusing on enhancing our cyber security offerings, we have to do that Didnt get did well be in are you would be security, but just to address the changing landscape do do connected systems.
Recently launched a 15 cyber defense and do it in there but.
As an example, we put has won the strategic on picked from what you didn't you isn't based financial services institutions to design and implement.
A more effective this skin compliance management process for them leveraging artificial intelligence.
The leopard adoption Oh homes continues building significant said recent Bloomington, I'd then services distinct.
Just a little petitions business.
On imports savings in fixed price projects improved from 16.5 person didn't group of 17.8% in Q3.
One of the lunch you get <unk> global provider financial markets due to an infrastructure to slip and.
For the detail, maybe some color like leveraging the contract intelligence.
Super good piece of the Blue hopes.
We could do drive localization and knowing U.S. workforces over 70% locally.
And then think emphasizing deepening employee engagement and making significant investments in drilling and skill development.
All of muskets.
This is also reflected in the attrition rates, which have improved to 15.7 person for the trailing 12 months.
In conclusion.
We remain focused on deepening customer relationships and good working on funding within large deals.
Due to close in discourse.
No that was that due to give the highlights a fun for instance.
Very good evening very good morning to the participants as you know we delivered at the midpoint of guidance at age.
We also delivered sequentially 30 basis points higher operating margin.
We're all.
We delivered people into <unk>.
Yup.
Cashed in London, do you mean very robust <unk>, all bridion guys flow was 124% off net income and free cash flow was founded in one.
I didn't go.
Oh for next year like they shouldn't remain very robust, although the utilization rate for quite a bit that he was 72.09 compared to 71.26.
<unk>.
We already have you guys position on balance sheet. Our go to catch one the balance sheet is 4.9 billion gross and 3.6 million Nick.
Oh, what he did.
Hey, Steve when people listen.
We had is likely to what do you I didn't want to do because of the GE using that takes place all of you out of that.
Oh and guidance football I go forth.
You don't do sequentially in the constant currency that I mentioned enough visibility.
We'd be very happy to be good question certainly.
Thank you very much.
Ladies and gentlemen of even I'll begin the question and answer session.
Anyone who wishes to ask the question Mitch. Please press Star then one that's turned on the phone.
If you will still for movies said from the question Q Human style then do.
But if some sort of question to use onset swing asking a question.
Anyone who wishes to ask questions. Please press Star then one.
Participants who would like to ask questions. Please.
Then one.
First question is from the line of some deeper than one from me device. Please go ahead.
Yeah, Hi.
Happy New year after the management team and so thanks for taking my question I had just a couple of questions I'd be the as you mentioned that you don't know well whatever you can think of the what well that's in U.S. It looks like so which means that you know we have been extremely good job when and if you're not writing or anything that's it didnt <unk>. This summer.
Thank you and ideally it should have given us a lot of about 1 billion, but having a good.
Slide number one.
And then number two the amount of Oh, what makes me have been in Nashville think what does in terms of BT games, and Oh and on that but you don't pay which isn't all that it wasn't a better revenue I would would woman been should have no matter the industry level not at least do you know close your daughter company can but that's just not schemes that in terms of getting into number.
So to do with anyone could one different ones I lose any close to that point demand. It really starts during that time consuming and giving them.
A number.
Yeah, how bad is having on do you decide which as you know.
Picking up all the well I think one quite good growth does that do you does they thanks.
So it wouldn't be.
That's right you mentioned already ability to Oh.
Oh, the order book that has been one.
And execute engagements a into must get especially in U.S. with 70% local workforce a is getting a different you're doing especially in <unk> or did you read a lot of what companies.
Yes, just come themes on say it has been an advantage.
For us.
Clearly you know.
In some segments, especially in the banking segment.
This quarter, we saw a slight oh slow down and it was simply because of a fluid as being the last quarter for the a lot of banks. Some of the judge projects, which are typically also has the you know they sort of you sort of short term shortly.
You will note.
Sometimes to save costs, you know you may not get a those are sort of news renewed in the last month, or so which means that digital revenues, but im just do they see quite good about boats or.
Digital businesses validity.
Thank you segment are coming back into next year and that's right.
I feel good about a pipeline what's a it is especially with digital deals are becoming larger and coming across various word because for us I think the overall business, which you mentioned as long as it is the 60% is also.
The board the night vision, and Oh, I'm, just trying to do that we talk about red we ought to enabling or that's part of the business also so that what all that doesn't become a.
<unk> overall go to it and we've been able to rotate out of business Oh from the ore to the new related W. Baird.
Of course that I'm still parts of the business, which should be good when there's a productivity that happens over that but we feel quite good about it on an overall business.
Okay. Thanks, that's one of my my thanks.
Thank you.
The next question is something lineup.
From Morgan Stanley . Please go ahead.
Hi, Good evening and I wish you all are very happy new year, Oh, just two questions from my side does all that just wanted to understand getting into 2020 or how do you feel about the demand environment relative to waterfalls. When you've got into 2019 are you seeing any sort all four applying pressure elsewhere you conversions are taking time.
Or projects are being broken up into smaller projects and you know just getting before so just wanted to understand that and the second question. As you know you're talking to you seem to be a little bit more comfort in banking.
For the next month, so just wanted to understand what sub segments within banking on making you feel more positive and up you know is there any risk come back do you know these project also get pushed out given the kind of fall pressures are all customers maybe seeing in their own business. So just wanted to get some sense qualitatively on both of these.
Good.
Yes, I'm just asking question on bank in financial services. They have Oh, I'm going go how who heads that business or give you some color and I'm, putting the first part of your question.
Compared to last year, the you know.
I don't see a significant change the demand environment, either positive or negative.
Level of macro uncertainties do continue but from a bit pro perspective, you know we had a very robust order booking in Q3, and we are entering or the calendar together with tough because they blend that we entered last year.
Deal closure this oh, we have not seen any.
Extended time compared to last year. So do you know the time that the beat goes is that thinking it's pretty much the same actually the deals that we have a lot larger component of large so that means that definitely getting now just especially when did you do a the deal sizes ought to be good than last year.
Yeah, I know, but I'll guys. This is on Google. So as you know put up over the last three years.
It'll be able to say has delivered industry leading growth. This quarter, we had a challenge because of our laws or because of certain clients into commentary market space in sourcing.
That is why we saw a little bit of headwind.
But you know I'm confident because our funnel is probably bigger than ever and if he can close some large deals like Hobbit mention next year will be a will be much better.
The confidence comes in from the funded size I did not deal sizes gone up and to publicize it significantly higher.
And what it wasn't that same period last year.
Got it and maybe if I can just ask one more you know I do remember you're talking about though you know digital walk also being discretionary in nature, which prevents you add ons to risk off I door getting pushed out or you know made small no. If that is an issue in the market on the demand environment. So just wanted to understand is that.
Still the case I used to seeing some sort of those conversations happening or do you think though you know energy digital there's a lot more a strategic right now and hand, so is likely to come through even though there may be other challenges faced by your customers.
Yeah, I Didnt who's the president of the poor digital and let him Uh huh.
So some kind of it.
Hi, This is I didn't actually Oh, you when you made on sort of.
It is.
Maybe they extended they did.
You know the client ended but it doesn't enjoy.
There's a long term future.
I would also be bad then Jean good become maybe and maybe also you use that you have more option, but then it all but as a bit they've been doing good garden segment.
How about a big callable I couldn't be better, but you didn't need that's evident shop.
Well, because they do come back and spend the money one thats good for.
<unk>.
<unk>.
<unk>.
Okay, great. Thanks, a lot.
Thank you.
The next question it sounds like you know so these wins from <unk>. Please go ahead.
For the Union dental and thanks for giving me this opportunity.
They didn't becomes you might be you if I may ask what does this subsequent it's driving goes up because I said before tend to strong before could go seems to be at odds with so many three off some of my competitors, especially in the sub segment of let's say anything. So we tend to consume it'd be you. What are the has made you are seeing strong growth and what gives you worried about peak on the specific segment up anything.
Oh, so these oh, let's see me, but.
The precedent for the consumer business, plus some kinda essentially oh <unk> growth in consumer is led by digital and also we are what go with a lot of focus too much of the ecommerce business, which.
Is the part though for consumer which is a growing and we have a fed it makes a and show that business, but we're seeing a growth primarily to a lot of for discretionary spending on project work.
You can elaborate a little bit more by <unk>.
Sure. Thanks, a bit hi, so did Oh. This is this really well.
So there are two parts to the.
Just to the that we see so specifically on the retailers. So obviously you don't seem to news that had a good holiday season in the U.S., but thanks to the consumer confidence.
Just look at all we did last quarter grew 3.4% during the holiday season and of course like I did mention you got most grew almost 19%.
While you called most important <unk> inputs into the world. He did a and oh, although at a brick and mortar actually declined one point it doesn't so Nick.
What youre seeing is a return those investing in technology.
Two kind enough to go different Susan just a book on fixed which is Oh, you called must picking up quite a bit and up what is investing in technology are doing but oh, we also see attraction and.
Well transition and but it's just the transmission, but I cannot be done got talked about all retail market <unk> from my point, though if you will continue to be choppy and while it I'd like.
So we thought customers are into specific you focus on executing to their strategic thought it is.
No the other part though for retail or.
Indeed behavior of consumers right.
And you feel good.
There's a lot of that it makes it on but I guess, specifically on the consumer business. You know just introduced to the transmission or because I'm companies are looking at going.
Due to see if it's just direct to consumer and they're also investing significantly on their supply chain modernization.
So both the adult retail companies I end up CPG company to my point, Oh, but through my mind will continue to invest up to go significantly on technology and if you look at the growth off what some of the CPG companies that you have seen the I'd actually growing in emerging markets and they continue to invest in double.
The next real growth and I presents a an old sort of the U.S. is also helping us to go after that part of the business. So net net or the industry was gonna did you do people at Donlin choppy, albeit stay focused on raise the customers investing especially on the technology transmission I think that's what I get to go in my point of view sort it.
Sure. So that's a of it he has put us and a of questionnaires that seems to be a shopping for a moment in the vertical margins in communications almost what 50 basis points also and this scheme. Despite that I noted many more or less the theme. So any color on the same it'd be helpful.
Yes.
Yeah. So.
I I didn't see too much into the quarterly variation, we had a one time collection beach reach a the voted still provision for doubtful that and that has improved the quarterly Oh, you know that did improve the quarterly operating margin I would look at Oh full blooded train foot a foot oh pardon normalize.
The assisting them in a month.
Oh, Okay. So this quarter, if I had just for that provision what could be the normalized Oh my since it's just talking about this.
Well, they would be difficult to break out, but if you see that train you would you should be able to see that additionally to city.
<unk>. Thank so much on all the best for that's it.
Thank you.
The next question is from the line of Sandeep Shah from C.G.S. <unk>. Please go ahead.
Yeah, Thanks for the opportunity.
Congrats on good execution or just a bit one didnt want to spend if I'm going to somebody like you didn't dorms old or is it fair to say most of the portfolio, especially big issue in the global markets outside of India is largely behind because last what do we called old manufacturing no. You are foreseeing some amount of green shoots in deal wins.
Also coming out of manufacturing so is it fair to say outside India.
Most of those clients, especially because portfolio specific issues are behind for the though.
Yeah, Sundeep Ah I would see including India.
Most of the portfolio issues that we had to be wood working on that the limit on how to behind us of cost Oh state or gotten enterprises, which is a segment outside still has a restructuring work to do and debt on some you're making a lot of probably this.
Having said that obviously, you're not health business. The I couldn't based on some of the our portfolio mix of Hyatt exposure to you see.
Does continue to.
Be an ideal for uncertainty and it wouldn't like volatility, but otherwise a overall if you look at the portfolio I do feel good that things that we had a set out to what's.
Reengineer, our portfolio and it does.
We proposed specific issues as well is it a lot of the investment and capability.
But you have been doing or where do we get the mindjet interaction with customers with a very robust adult devens Oh. It gives me confidence that those issues like.
Okay, all right just to follow up a bit.
People hold us back we said that the <unk> performance in the banking financial services is largely driven to higher penetration or digital offerings into banking I do it because so if you need to that number in terms of penetration are we able to do that pretty good that success, which we haven't done in terms of digital penetration in banking you know there.
Segment, so still back to work in progress.
I think.
From what we did into banking and financial services segment, you see the ever did so simply getting back into consumer segment.
So it's a function of what's the hardest warranty capabilities that Google digital as well as the what beacon capabilities that each one of the business units or.
Indeed to be able to contextualize because it to put that on vertical and the second part of that there's also.
Uptick and.
Spend.
These are companies and what do you could let industry verticals.
Hi in terms of investment on digital so I feel good for example.
We are seeing good deals like didn't help get a piece outside off a its peers.
In a healthy business that healthcare companies that investing in patient experience.
Which essentially is part of digitally and B S bidding a fed shed a lot of business that you and your business in the energy space, There's a lot of.
This meant happening in digital and cloud and we haven't really affects shutterfly business. So you know I can go work because they weren't because it essentially to answer your question, Yes, Oh, we've been neighborhood big that expertise or how does it get probably be banking led.
Because banks, where the flips to invest what ready for Groupon slip those capabilities in each one of the verticals and each vertical I would say that a different a level of readiness as well as the industry uptick I have to be able to big.
Okay, and just last two questions. If I look I'd be coming to you on the fund any looks really bothered to especially on the banking financial service took I knew to something like you didn't until D.C. Encyclopedia iron van restarting and I'm, sorry for the number of call, but it does is it more proactively activity and <unk> last question Justin.
This is the fourth quarter and the EBIT margin on I'd. So this has been closed we didn't listen despite the headwinds on the margins. So do you believe that this is a sustainable level is to look for and that could be a further improvement of the good pickup.
So somebody the funding.
Looks good.
It has a combination of sports Oh, what I would call as a deals a lot size as well is oh I wouldn't say Steve.
See any change in the same it takes two girls that deal, but typically lags. He takes almost six to eight months to close you know a smaller deals obviously close foster up so that a base continues and we see good shed.
Getting our fair share those ideas in terms of Ah, but you're not fun as well is getting into the last.
Two or three when we've done a really have a chance to wouldn't that be.
Okay. Okay.
The question on margin.
Yes, the sundeep jump in here. So as you know we have delivered for this fiscal 18 point food in first quarter 18.1 in second and 18.4 in third quarter.
So that you have demonstrated they simply no FA execution, even as you continue to invest incrementally in our big base or through the course of the.
As you all did meet in our guidance. These two gave a superior growth trajectory for the organization because we believe that is the schools of Ah Ah.
So if a you know my they make fun showing them I was interested in medium dumb.
And therefore, we remain well with the comedic to initiate do then investment that we need to do to get the group that you agree up so far do you have been quite successful at finding those dollars by squeezing the cost there that we believe we can squeeze out and that would be out and do it going forward. We're not guiding on my didn't say they stayed we wouldn't be mean.
Committed on getting the go to a degree of further improved from area.
Okay. Thank you and Elizabeth.
Thank you.
My next question is on the line up.
Centrum Broking. Please go ahead.
Hi, said, so last one year, they've been going slow in acquisitions. So cut in June 20, if that goes into the net cash and balance sheet and we didn't do it almost 10000 prudently technical but again.
So would we start looking to increase the be okay. So most of interim dividends because he was the buyback for the next buyback would be when you post September of this yet.
So we took a high cash component on the balance sheet. We do look for more didn't get them do didn't from you know.
So I do know V., we have had to.
I guess you benzene in the yard and I think that optimal Vito.
Declared and it did him dividend or in this quarter.
The board will continue to evaluate as we move forward on on a you know what would be the V of returning cash to shareholders.
Oh for last two years, if you see via how gone significantly ahead of our commentary off being 45% to 50% off net income in what a block of yours.
And then for Oh, you know our philosophy has been at on what we don't need for our group. The we'll certainly look at returning but even though they did reach that we had spoken about.
Oh, so we've been can do good opportunity and we'll make decisions as it seems fee based on the Arctic Latam into funds.
Oh and one more on the top two planes in the banking I think the topic ones have been weaken leno. If there was a banking nycomed and even within the don't put down to venting their phones. So what does though to conduct where comes for next year.
Well, we cannot talk specifically about reach do because you all do could be different now in this quarter compared to that too that we had in previous quarter, but what I wouldn't worry about the comment specific to customer you know I'd be then I'm gonna have spoken about our loop or what.
Our outlook on on B, if it's a space and I would see that as a as.
As more as a as an important step forward from outside because he was just danskin always go up or down, but what I'm sure. You're looking at is the pulled fully outcome oh from to be a thing.
And last one on the unit inserting we booked in the new FEMA known so could you elaborate more on until next year, what does it not good growth because that segment actually do some ought to be opening when does it bring into much faster pace.
Yes, we as I mentioned in my opening remarks, we are making significant investments are we just closed an acquisition also what that I looked a lot of meat children, who heads the engineering business.
Im a little more detail or color.
On a how we feel about that in cities.
Hi, This is heard me though.
As you know up even operationalizing, our newstar to do for lost.
Good quarters, including the acquisition of ideas, which.
Do you completed in Q3.
He also rolled out a new engineering NXT offerings.
It's just a truly enable innovation.
For clients across 11 different industries for bought excluding time to market on on sort of living efficiencies.
So based on babysit. This <unk> VR, we believe that we are I didn't says maybe have a complete stock all things you're doing all things really shopping and value creation for customers and.
And that should position us in the industry, leading growth even if you see in quarter three no delivered given to Cook and we believe that momentum to continue going forward.
Of course.
The other data point out like a shared as far as you go pretty smoking started years.
Customers are really engaging us it crossed fiveg across I would be across industry for auto exhaust connected products across softer products, so the breadth and depth, where you're seeing in terms of.
Addressing and you know we are.
Bidding against competition.
I've seen in Q3 years without a significant traction of growth across the geographies North America, Europe and in Japan as well. So I remain bullish my team remains bullish for delivering industry, leading growth going forward.
Thanks.
<unk>.
Thank you.
The next question is from the line of GE from pension funds. Please go ahead.
What do you mean, so thanks for taking my question I just wondered too.
Hi, good Liftings form fours cannot third, though I did you don't need.
Platforms are girls.
Or do anything but does so is there anything even coming from rooms and the second part that is can you give more color, let on that yet how how lucky, but there's others that appears.
So I'm not going.
Yes, that's.
Thanks.
Yes, so, whom so bought a as part of a lot of that one deals that we bid for becomes an essential part Oh fall, but solution and it is a differentiator for us or if you remember a couple of years back a as the engineered who's got picked up.
Some of one notch a accounts and driving engagement in those accounts.
Lot of homes to build use cases to wind or.
Interfaces, so that they can be.
Deployed at an enterprise level.
It was a deployments hezbollah's that I'd be along with the what I'm home see what it can take that's oh been a large number of from deals and deliberate productivity and margin we didnt those students.
As a technology has become available probably let me also from the cloud providers. We've identified the use cases, when we didn't you noted acknowledging from.
Each one of the cloud providers, whether it is as you or whether it is a.
W. as solid.
Oh, Gee CP and we've created you excuses a cross platform. So that we can deploy a homes in the cloud environment a into work that we do put them so I feel pretty good.
Oh, what are the two or let me be customers now have formed homes deployed I want to use cases, Oh, we have about or 17.8% of for work being done in if be willing films or two automation, which is primarily driven by.
The second data yet or do you see attraction with dorms is what we go lives homes for business.
For example that they give oh my opening remarks is an example of hopes up because this was that related to fight about granted or industry use cases, bad applicability of artificial intelligence and cognitive technologies deliver was business transformation and.
Oh, we have.
Like one or more instances of those use cases, we thought it goes to make a lot of those deals that on so proactive.
Yeah, So part of why because this transformation offerings and a including change management, we are able to do those deployments, although the size of those deals that small like no, but we see quite a lot of traction and we're building more to actually does leveraging rooms across different industry verticals.
Yes.
Thank you.
Thank you.
Participants who would like to ask questions. Please press Star then one.
The next question is from the line of each other from in getting these shifts in Securities. Please go ahead [laughter].
Yeah, I think you forget bought candy I just wanted to get a sense you know what is happening on the on top line sales are they new daughter dumb. It down you know at its lowest level more than New York we.
So even some sort of you know collateral doesn't know what is happening or that they ended up being olden that's in that space and that would be helpful. Thank you.
So how should the ER.
Talking about the cross sell and blank might mean across our topped lights for the last a mini quotas and as you saw we saw a double digit growth.
The last two or three years, which you've seen us a little bit of slow down in the last couple of what does a if you if I give some color on the mix up the top clients are part of it through our top line. So probably went live from banking and financial services industry and technology industry verticals and bought them.
So as we haven't discussed you know a financial services.
And last year because of the as you guys know better than anybody else because of the interest rate.
Or change.
A lot of banks did curtailed.
Yes, Ben we had some challenges at a macro level in the capital market space and that hasn't affected because oh, they form part of our top 10, a plane. Similarly in the technology space of course, Qt Oh vis a is a difficult quarter.
Because of what laws, but apart from that we are seeing or again due to macro issues or challenges in the.
Yes.
Silicon segment, how far out Oh take a business unit, primarily driven by U.S. China trade.
And the slowness of the uptick of fighting she with telecommunication service providers, which has an impact on the network equipment providers, which both of which show in banking and financial services as it doesn't take up do you I see a the mid almost shark dumped and pretty and Oh no.
Instead, we feel that that will it'd be back to growth and they'll be uptick in both of these so.
The relationship with our top flight out a very robust we are getting a lot of can shed, even when sometimes or whatever new goes down as they consolidate that they knew so we feel quite good about overall topline portfolio.
Yeah. That's how you had mentioned like what do they do a lot of 30 days do they didn't look for probably the topline. So and you had mentioned that some digital projects had in mid end the newly stick with it but nothing so is that no have you seen back then continued this quarter also and anything else healing wounds, taking time, maybe before though you know Oh my.
No no, but the new budgets be decided or any other reason.
Yes, so specifically, our Q3, which was the last quarter for a lot of banks Oh, we did see customers hoarding or that's been back sometimes to it does that on internal budget challenges because as you rightly mentioned digital work is also a lot of discretionary spend and they may decide to balls.
And not to use that sort of abuse.
And we did see that coming into January that's starting to see that demand coming back, but it's too early to call like no Oh, so even though we have built a that uncertainty you're not as you look at 2% guidance that we have to it.
Okay and my last question the book keeping question or what the outstanding politics and use that do have again.
<unk>.
Yeah, so below $2.6 billion of Oh, sending hedges as of December .
And then okay. It would that be on an average.
You know as you know, we'll stop shedding those debate, but we typically hedge at any point the same for next a 50% off over the next.
<unk> as they didn't flow and you can you can gauge what treats it would have we'll do that.
Channel button. Thank you very much and best of luck [noise].
Thank you.
The next question is from the line up and it's not been from Investec. Please go ahead.
Yeah, Hi, Thanks for taking my question.
Our bid or are you clearly you highlighted that doesn't improve fund then that's driving confidence of call it sort of improving going forward.
And also a the fact that there's importance is a de selection of headwinds.
From the existing Klein buckets and at some find there would actually start spending so I just wanted your thoughts on two things. One is in terms of the final odd these more cost takeout Ah I know spends are there are these a higher on do you do still cyto spends and second Oh, it's something that's.
Like I had the D. A broader talked about says if you could clarify is that had he brought down in a market. Then vitamin appears to be Oh continues to be we've got good. If you look at banks in data on profitability and so and so forth <unk> what in your mind in sort of changing that they'll actually come back in Delhi.
Yes, Ben and what's the confidence of that are really happening.
So.
The fear is that they would like to touch upon one is a banks and all other industries, but specially banks continue to invest into <unk>. So.
So that gives us optimism because oh that digital spend a happens we are able to participate in.
The second is as you rightly mentioned.
There are challenges as the macro economy slows down and it impacts banks banks are normally lead some of these 80 as of a slowdown in cost efficiency as well if you haven't significant blame the ideal helping or bank deliberate up but Uh huh.
When you do cost issue and we participate in that and those deals that caustic old deals consulate. They shouldn't deals those deals have a component of large deal, but none of them come with older transformation component. So to answer your third question Oh, you know the third part of my answer is that invariably those deals.
ER digital nature in some cases.
Maybe more on the business transformation and ER expedience front in some cases, maybe more of automation and he led to a business transformation. So digital is a essentially part of all of that I would imagine a pipeline, which is not 60, 70% a digital in Ah.
In today's Oh, I disturbances and let me.
Sure. That's helpful. I, just one follow up there is Oh I do think about looking at the funnel that customers do customers really expect.
Hi, vendors to really invest upfront on Oh pardon Oh for them, considering what they're going through a is that something that sort of that opened the landscape, but that's not really the case.
Okay, and nothing has changed much Oh, you mean, if I look at a large deals we've done in the last it then.
Immediately large deals have a component all oh for skin in the game they have a component of upfront.
Capital investment on transformation, and a the gains coming or what Oh few years and invariably those deals sometimes required a deal structuring depending on the customers cash flow needs as well as you know the ability for us to leverage our balance sheet, if it makes sense.
As you would have been but as part of our strategy. We have shot for now their ability to do again, she ideas or element based pricing beans, Oh, we had we take the this oh for transformation upfront and commit to a certain amount of savings, which does give us Uh huh.
You know you're not manage it gives us the a bigger stuck to the need but do you know I would answer the question I'm a deal making bases I wouldn't tend to like that and.
The large deals that we haven't done in some of those deals we had to do some kind of an upfront investment in that does we did not have to unveil or what have you have to do that upfront investment it is priced in.
The cost of that capital is placed in to the dealer financial if you look at our Unbilled revenues or the past few quarters.
It does show in a.
The de improvements we've maintained a lot of disciplined in how we leverage our balance sheet.
So that our quality of revenues I'm, not going back to it or in the.
<unk>.
Sure that's very helpful.
This one data point, a if I mean, it's what was the contribution from idea this quarter.
Hi, Anthony this is just in a 0.3 people send off or 1.8% sequential growth came from <unk>.
Thank you Jonathan happening I think it.
Thanks.
Thank you.
Participants to ask a question. Please press Star then one.
The next question is from the line of such evolution from access capital. Please go ahead.
Yeah. Thanks for taking my question Oh margin performance. Despite growth volatility has been very stable and we have invested in building localized talent pool.
Despite any major impact on the same.
Zoomed up margin gains through all of them his son or do you know high margin New studies would be seen vested in the business.
Well go going forward and we are confident it will never got into never lost margin profile and not buying for expenses.
Oh Gee you are you know you articulated bankmobile delivered first three quarters off of a this is going bad we have continually invest it, especially now I'd be glad that big begs a two to get a superior growth trajectory and we have been able to.
Fine those dollars from from automation.
Yeah, I N and our traditional operating leave US. However, you know we will remain very focused on grow the priority number one for US is is growth and ER fall that we will continue to invest so we don't want to guide forward, but you know.
Our effort is to not I used to go ahead and invest and also squeeze that dollars out of the other cost me was that we have.
[noise], so very very I suppose on Pensacola.
Thank you.
The next question is from the line of who cheaper from bank of <unk>. Please go ahead.
Thank you sense, what else might shake my question is on the Oh, <unk>, because you might want to cut a you like it just like they do tend to want to can watch.
Now she might you association with it equally.
So what I'm trying to understand hit it on watch this no functional food seasonality strong seasonality I'll take ecommerce scared that oh once the nest art. This is most structure.
Oh go topic that.
Yes that gets a steam in the future.
I live stream here does that.
[noise]. So thanks have a dumb.
If you look at the last few quarters also maybe did with a consumable you I think one of the ER and the point that I made in the previous so a question on swelling.
Retail CPG companies are differently going through October lens transition and transformation of the same time, what's important is a look at those customers or trying to transition and look at those come some customers are trying to transform themselves and be part of the journey and then I know youre.
Of that strategic priorities and that actually is has been helping us. So in the context of for the industry. So yes, it's going to be choppy and want to type, but from our point of you're trying to focus on those and listening to the us and executing to do their priorities. I think is so what will sustain a the growth and momentum in the few quarters ahead as one.
Thank you. Thank you.
Thank you.
Ladies and gentlemen, I saw no further questions from participants I would now like to have the conference over to myself, but not yet for closing comments.
Hi, Thank you all for joining the call in case me could not take your questions. Your time constraints PCT feed to reach out to the minutes relations team have an 80.
Thank you very much.
Ladies and gentlemen on behalf of Wipro limited that's gonna teams. This conference. Thank you for joining US and you may now disconnect your lines.