Q3 2021 Infosys Ltd Earnings Call
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Hi, Jeff.
Good day and the interest.
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Income, but it's only been up into moving through the supposed to see if I can live on easily there's going to be something that took place in buying low.
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Got it because its something off from the performance of the company by some intervene in the London before we open up the call for questions.
Please note that anything that you see specific though because of its instead of the forward looking statement, which must weighted in conjunction with that is that the company says.
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Hi, Stephanie.
Good evening and good bargaining from all the few.
I Trust each of you how is how to bring to the new year and continues to be see attitude.
I'm delighted to share that we have had an exceptionally strong quarter.
Gross margin by mentions Vishal.
This was made possible by Beacon bombers Trustmark Dimes average.
I'd be extreme focus we have been so did you true I'd be almost glad that liquids. That's that's true you did and help support digital and cloud transformation duties for our clients.
Let me share every true some of the highlights.
We achieved the highest large deal wins in our history. This is d. value of $7.1 billion. This includes the largest resigned in our history and walks you believe is the largest in the I'd.
Services industry in India.
This we've continued to expand our strong presence in the continental European markets.
Our overall value for the nine months financial here in school with $12 billion.
The net use knives deep value for nine months I'm, just fine actually out because we're worried billion dollars positioning us every strongly from the quarters ahead.
Revenues in constant currency growth, 6.6% year on year and free.
3% sequentially.
The back of a very strong momentum you.
You saw in H. fun and large deal wins six from earlier.
This ambition on market share gains.
Did you do that revenue grew at 31.3 percentage I don't know in constant currency and vs mouth crossed an important milestone in that did you do that is now over 50% of revenues.
We delivered operating margin of 25.4%, which is expansion of 260 basis points year on year and flat sequentially.
Operating cash flow was robust at $829 million for the quarter.
Our balance sheet remains solid with cash and investments at $4.5 billion, which is stable sequentially.
Could that be out.
Kevin This is Jim.
Recognizing continues that book Feldman Oh, the company as contribution from employees. During these times, we now being out there have you been free for the quarter, 100% hasn't announced yeah initiating salary increases.
Employees, which will be effective January one.
Twentytwenty run.
And we are expanding our promotion cycle across all levels in this quarter.
Do you see we reached a significant milestone in our environmental social and governance journey by becoming carbon neutral.
This is true. He is ahead of the 2050 global target debt and multi lashed agencies.
We further creates very attractive interest.
She was it causes a few years GE by announcing that he is cheap and you could see vision and ambitions.
Looking ahead, we could can you just see momentum in that business strong market share gain and increased speed digital transformation to other clients.
Keeping that in mind, we increased our revenue growth guidance for the full year.
From 2% to 3% through the new guidance at 4.5 per cent for 5% growth in constant currency.
We see the operating margin guidance for the from here.
I'm, 23% to 24% previous can be true.
True friends.
24% the frenzy 4.5 per cent for them from here.
That concludes my update thank you for your time and now let me request ravine.
Gives you enough day on the operations over to profit.
Thank you Felipe.
Hello, everyone.
I wish everybody happy healthy and safe you yet.
Right and then if you think operating expense due to the commencement of coordinating Maxine nation.
Yeah, well Sophie net and you kind of GAAP infection invade if that's something you're right.
And pick monthly Meddata Kephart, then if anything that's operating in BCP mode.
[noise], 97% apart from like nobody continuing to work from home.
Growth acceleration continued its sequential revenue growth of 5.3% in constant currency.
I couldn't do anything from that from good momentum seen in the past pop up the yeah.
You had on you had a growth rate increased to 6.6, but in constant gotta keep up or the free.
Free business segment.
Financing services height.
Hi, Tech and life Sciences reported double digit growth.
We have seen several operating ceramic that degree during the quarter.
Good place they spend a lot of 86.3%.
All time high level.
Until that product mix <unk> Louis airport at 75.2%.
I P. P declined slightly on a sequential basis due to see from the fact that like lower working day.
Except for that.
But increased on a year on year basis.
Subcon coffee that day 40 basis points on a sequential basis.
That's a good or picked up meaningfully.
Let me talk about the log day, when they talk to you highlight that ballpark that people from and.
Now I'd be TPV growth quarter to 11, and Masbate you all time high at <unk> 0.1 3 billion.
Channel from new deals can afford to pay about 73%.
The net new day, we sang in quarter three is more than 1.5. Thanks.
What we find in the inside it's kind of lumpy.
I suddenly said important free explained what is probably the largest deal signed in Indiana, I guess everything from the state.
Apart from that we think another day low 500 million.
Well what else would be 122 lucky in part a free.
18 financing services.
Oh de peak in manufacturing and and net utilities to be filled up and that we could affect that.
But he didn't couldn't communication and one day. It can result in high Tech and other segment.
He didn't like that didn't read from Americas seven.
Seven net from Europe and to read from that stuff Goodbye.
This or whatnot day Lin from nine months.
Total of 12 billion, an increase of 63% over the comparable period in the last yes.
Net new large deals even for nine months, having paid by <unk> to 44% year on here.
[noise] like Florida to deciding free had a very strong.
A lot of the value of their state tightening and start contributing to revenue in the second quarter up. The next fix can do that then taken in volume.
Net cash flow you are they shouldn't during the quarter was more than 9001 day and channel Coleman employees increased 8.3%.
Well I think that pretty simple I decided to eat up to 10%.
I'll go lower than that would come from Vandals 14 to 15 Texan.
We will be implementing salary increase across all levels is getting ready, but it wouldn't be one.
But that does mean for calendar when 21 is progressing normally and we expect clients to continue to focus on their digital transformation agenda.
Moving to business segment.
Growth momentum I couldn't say they didn't financing services.
The ramp up of phosphate even.
Focus on accelerating that digital transformation agenda part many of our large clients and opening up new accounts like across various something like because like mark against the net bank well 10 day that makes everything.
We see multiple opportunities in cloud based services and creating new digital banking capabilities.
Since into force to go get.
They never get the nickel continues to grow steadily and has firmly established if in fact, one of the best banking platform from the industry starting to get to and from nation.
He did segments continued to improve with increased volume seemed quite a free despite fees nimsoft snap and yet on the EPS growth turning positive.
The deal pipeline remains healthy and vs seek opportunities I don't like the consolidation and GAAP to monetization.
But from instant communication segment called same book sequentially, Although media entertainment and you're taking and OEM segment. He may not that I can.
Yeah, when three days from the segmenting the last quarter and continue to have strong pipeline update.
Our club and that view TPV, so tough and fabric. It's like they can continue to face a difficult environment.
Due to stress in segments like oil and gas education publishing evolent hospitality et cetera.
Find utilities remains relatively steady.
Based on the recent babies and build pipeline, we expect to see stable performance in the coming quarters.
[noise] manufacturing had a standard quarter, both income sub sea signings and revenue momentum like he did meaningfully despite continued pickups in Sacroc sub segment.
I will be flat organic I mean, what we will see superior revenue momentum from this segment.
We expect affected gross in your area or something that you can take out snowed in security and detection in running the business 80 EPS.
Infosys DPM has grown at double digit fit strong pipeline of flow reach and then they get their day.
That they use them portfolio also saw strong growth of 31.3% year on year in constant currency.
Crossed 50 per cent share up overall revenue.
In the last quarter didn't have non imported smart and they've taken from.
Infosys live into price application management platform.
Book backed up in political board and Infosys up like a <unk>.
He has quickly since completed in the last four day to be sent one of the largest fabry salary like partners in Europe. They were gone Adobe platinum partner in the U.S. and Kaleidoscope innovation.
And for the day, and they sell capabilities and operating from day to get that space.
They also being weighted up later in 17 service delivery capabilities across day, they can spend again, yes.
Industry analysts.
But nobody pandemic has gone from direct opportunity at snacks have gained confidence in that only the ceiling.
Now embraced the opportunity truck from great and all from that it can be United nation up their own businesses.
In force, if it gets and printing capabilities and expanding at alcohol free.
Becoming the preferred talks a lot of cash so much in net Daddy.
With that I will hand over to the London.
Thanks Irene.
Good evening, good morning, everyone I would like to wish you all on your family's if he's just reading the safe and healthy 2021.
We'll see what another quarter marked by continued acceleration in revenue, but the highest you'll see sequential revenue growth in the last day of here.
Our our living execution over the past few years.
Again from navigating your next Saturday climb from live into the call reported by digital operational excellence operating cash management. If there is a driver of this on your own good performance.
Reflecting in our total shareholder return appreciation during the period.
Revenue for the quarter stood at 3.52 billion a growth of 5.3 per consistently in constant currency.
This translates to 6.6% growth year on year, and 3.5% growth from nine months in constant currency.
Operating margin stood at 25.4% were up by 3.5% year on year and stable sequentially.
Rental margin movement, there to see comprised of a 100 basis points improvement due to better operating parameters like utilization and price mix and other cost lever.
80 basis point benefit to the cross currency movements, partially offset by rupee appreciation.
These benefits from negated by 50 basis points impact of transition and Rebadging costs or recently one deal.
30 basis point increase in costs relating to incyte promotions in compensation correction.
And the balance is good but in fact due to a combination of higher satcon one after another.
Operating margin from nine months to that 24.5%, it's a 3.1% higher compared to the 21 from corporate and margin for nine months or the last fiscal as.
As mentioned last quarter, we will see higher cost in Q4, as we implement the salary hike for our employees effective January.
You see the EPS grew by 12.5% in dollar terms and by 16.5% to nine are on a year on year basis nine.
I non PPS grew by 10.6% in dollar terms and 16.9% or nine are on a year over year basis.
Return on equity increased further to 27.4% and improvement up from 30 basis points over the last year.
Dsos measured on a LTM revenue basis remained stable year on year, while increasing for this quarter on quarter connect.
Connection remain strong and helping generating operating cash flow of 829 million.
Those with lower Capex of 57 million STFC reported see increased to a record 772 million a growth of 15.1% year on year and a growth of 40% unlikely basis.
Free cash flow conversion remains strong at 109% of net profit and hundred encoding per cent for the nine months.
We continue to maintain a tongue debt free and liquid balance sheet cash and investments at the end of quarter, three or 4.5 billion in line with the previous quarter.
I think the kind of 87 million up half yearly dividend during the period.
Non cash balances continue to decline due to moderating in factory in India. He was approximately 6% in quarter three.
Well, let's see also margin for any second consecutive quarter of positive force income despite significant currency volatility across to the old driven.
Driven by strong day redundant revenue performance in the first nine months, we are again, increasing revenue guidance price by 21% to 4.5% to 5% in constant currency from a two could see then guided earlier, we expect operating margin for the full year to be in the range of 24 to 24.5 per cent compared to the previous guidance of 23 to 24.
And.
I missed the numbers it would be remiss of me not to mention the low end markets even in quarter three of attaining carbon neutrality as a company, but the other side or the Paris accord.
The journey, we embarked in 2010, and we are extremely proud of the commitments from keeping this goal.
Last quarter I sort of mentioned, we also announced our first yes, even going up 2030, a holistic approach of integrating our business model would be extended stay cool does impacting environment and climate communities and societies employees and shareholders.
We believe our robust and measurable targets was below the environment for Silicon Covenant will help us setting new standards in this area that we can open the call for questions.
Thank you very much I mean, I'm not I guess the question and answer session.
Anyway, well wishes to ask a question.
One touched on the telephone.
If you wish getting low fit that from a question.
That's true.
Participants outlets 15 times, that's why I'm asking a question.
Ladies and gentlemen, maybe.
I don't know why the question came from.
Good day.
The first question is from the line of Alcobra accounts from JP Morgan. Please go ahead.
Thank you exceptionally quarter yet again.
Just starting with the question on budgets, perhaps selling a large producer exceptionally strong bead been momentum appears to be capitalized, perhaps it cost takeouts and consolidation you alluded to at the beginning of this year.
And I was wondering if this implies that enterprise state budgets, what actually stinker shrink or or stay flat as opposed to going up and see 21 and also nobody was freed up by these cost accounts, how do you see yourself participating into sort of slow speed up their budgets. Thank you.
Oh, the time, so I'm quoting the [noise].
Have you see it today is.
There is definitely some.
Some element of cost takeout.
If you look at the wins that we have seen this past quarter.
For this financial year, the June quarter and as a.
Well, we see those up boards Costa Rico with all day on show what you. All are described in the second part has.
As large enterprises looking to invest that.
Amount into value.
Digital interest.
Interest structure landscape.
All day growth with their end customers.
So the overall budgets are always difficult to estimate as you know and.
The average number of other agencies be all depend on flow for those sorts of estimates are those are all positive estimates at this stage for calendar year 21.
But the key is one to have the capabilities for digital and cloud and the transformation that these enterprises are driving I should lose investment monies can be and a rich OS and to have the automation capability and the efficiency capability for that.
Cost takeout, which we have I'm sure it's.
It's a dual approach and and we've seen the airplane quite on book both sides of that.
Thank you for that just a follow up on revenue conversion clearly very strong momentum here I was wondering if you've seen an acceleration of the conversion from signing to recognition in the last few quarters.
So how did we do virtual Onboarding and would you expect those trends to go on for the last you do one right.
Yeah, we won't see anything different in the day 'cause.
'cause booking.
The there are some deals, which can work faster somehow or a slower or sort of transition Sabine share.
In his comments that some of the transition from what we see in Q2 of them start to show up or Italy or in Q2 of next year, a true though that back then I was watching some deals I do have a faster conversion and so from a mall.
So nothing changed because of the virtual onboarding.
Okay. Thanks for the color just lastly on margin or should we expect a significant impact perhaps in F. 22, as these large deals come from like you've seen in the current quarter. Thank you.
Oh, no I haven't done the question the legitimacy to step second growth.
Yeah, It's one quarter as you know I mean, do you don't get that portfolio or you know we have large deals. We have small means we have the new deals coming into the pipeline also get maturing lot deals per.
Well, we don't have in the portfolio moving it to actually see our history over the last three years, even as Weve accelerated the large deal pipeline from the revenue or margin.
Margins also have gone up and that's a couple of reasons one net of Scott.
The strategic likelihood we continuously deploy each year and we talked about that in a in a analyst day.
Around the onsite offshore mix the pyramid automation and this is something we relentlessly focus on.
Let me pick up from large deals. We also start seeing the lifecycle of the deals and the Fox initially these have.
I have got a in terms because it would not have enough automation and process improvement they may not be enough in terms of onsite offshore mix.
That's why when we look at the portfolio entirely we also realize that deal that can be maturing and hitting your portfolio margin than you do will enter the portfolio at Wal Mart or margin initially.
And that's the way we manage our overall loan portfolio, Yes every quarter you put out.
Plus or minus and in fact this time we've had this mission in the margin a one off on a very bad debt.
Neil but I think you noted the flow of the.
I mean, I think we are quite comfortable with the overall performance as we are and as we look into next year, plus we will have the quarter for the impact of the the a wage hikes across some other costs that may come back in next year in terms of travel and all that that may be a bit further away.
But like I said again be cost optimization, which we have a you know and as we approach. This we are quite confident.
Thank you and best left for the EPS.
Thank you Nick.
The next question is from the line of James take money from Oklahoma <unk> GAAP.
Hi.
Hi.
Congratulations on the extraordinary results.
Prevailed in your prepared remarks, and I know you have reflected this from the previous response for real.
You're suggesting that a large deal wins.
That we're currently.
I addressed start to build in the Q2 I realize that that can vary but is there any cash.
We think about those boarding linearly or would that be a mistake in terms of our future modeling exercise.
[noise] Oh.
Yeah as I said Oh. This a lot between then no other period up from kitchen and Bath.
And then it starts ticking in one day in the second quarter of next fiscal <unk> again that the debt pay off from when you know until then maybe on the need to have to be in from not being family Ah Ah you should be taking away from writing that so that's that's a good flow and then maybe what it does it up by more than anything.
And from other cases, it could be or they can go up but at the same time I love to laugh I based upon submission. So it's the nature of the games activity from I don't think we can have on the opposite to say a whole lot of any wind farm outs.
And then proving you also mentioned quote a good pipeline of deals I think you were talking about the communications vertical you said despite weak medias you see a good pipeline in that.
[noise] vertical overall.
Could you give us some context for that is the opportunity in that vertical.
Equivalent to the say strength that you're seeing and in manufacturing deals. When you say good pipeline about that vertical what's that about some context would be helpful.
I think that.
A number of pop admitted to the communication segments as I said, there's a fairly good defense.
And it's primarily in the telecom space. So she doesn't need it that communication, it's going to be able to telecom. It from from me again Detainment OEM. So we do see a fine or softness in me, Dan didn't mentioned OEM, but it.
It seems a lot more traction from the telecom segment.
We have already won three being in that segment and just thought that's in the pipeline are subject from seems to be healthy Oh, I mean, given the pandemic payable I've seen a lot of from one you saw it and put them on synthetic <unk> net.
Got so far not really translated into impact on their own revenue, let's see accept this to solve anything going forward at least on the telecom side, we remain optimistic that you're going to be in fulfilling the pipeline.
Great. Thank you so much for the color I'll drop back in the queue.
Thank you.
The next question is from the low.
I know I've asked you follow jump from Cowen. Please.
Please go ahead.
Hey, guys fantastic quarter, a couple of questions from.
Is that a you know there was there was not a very healthy conversion of pipeline into PCB is in this quarter and are actually in the last two quarters and I just conversions after the pipeline a little bit lighter or does it continue to be I'd robust adjunct one idea.
That's the first question.
Thanks, Catherine this is standard.
Yes, the conversion.
That is since the day.
Comes out of the pipeline as you'd actually point out, but the overall health of the pipeline is extremely robust of cost with this level of largely in Q2.
He didnt have that in fact or even just outlook. However.
However, we see across the different industries, a sin a significant opportunities and the pipeline, we're launching that level health and robustness assisting feeling quite good about the price.
Thank you how did that come from.
The thing I had is on net profitability and it's.
So same question I asked in the previous quarter argument engine.
10 yards margin buying back into the Aster every year has changed interest here. It has been a good thing that it has increased from four to real sustainable revenue growth from bank of operating margin taking into consideration the larger deals a possibility of crude on book rate increases and possibly cost normalization as well how should we think about the yard.
A profitability dynamics as it moving dropped by 22 or even beyond that.
[noise] price that we have not when you're going to get a separate outside each bought Ah Ah. So.
On a serious note I think like Revvy after day at 24.5% on a nine month basis and lifetime value for that for anyone find fall you have seen about a 310 basis point improvement.
On a year on year basis from.
Nine months I think this is a combination like we said on some of the discretionary cuts, which we have done which is largely the impact of the compensation hike and that can come back in Q4, Although if you look at the fabric GAAP since we've gotten which some of them go off on travel on the van side et cetera.
That may open up, but that's yet to be seen how fast the course vaccine was normalizes.
I think we are very very confident and you continue to see very strong metrics on our cost optimization right. So you won't be onsite offshore mix improvements you know in the last one here as it compares to two years in the past and these are the overall open up a lot of opportunity that client see and that will tend to more offshoring.
You know, what 98%, 97% or what teams working from almost literally over the last year I think the confidence of clients as well to also willing free then that could be a lever we really a step on.
Our localization and local hiring in the U.S. had a net amid something very unique to infosys, creating the fixed digital hub the true taking from a university of community colleges.
Historically, you know VIP index see it had a very you know keep in mind on site and 75% of employee costs actually is onsite when I when we price if I can never headcounts its day and therefore, if you want to address the onsite determine.
You really have a battle up there and then I think what we've been doing for the without localization Guy.
Moving in a hub and hiding cash and helping us negate some of that so.
Giving any numbers into next year I think you have anything from a you know leave us Steve Yes, there may be some impact of compensation, but we'll see as next day from then on right and so we are now.
Thank you from or just a final question.
It's from the largest ever deals that you have fun I mean is it just a a particularly large deals like the ones you have to find great. One guard or maybe you know are there or is there something unique Oh, you know what you want to call out maybe in the form of I ever our posture has advanced or anything of that book any color on the speed it would be very helpful.
And back and from one of my last question.
Yeah, Let me try that covers I do.
In terms of the.
A large deals I think your question wasn't a specific he the way I would characterize mysteries.
Well its a.
Ah you mentioned, it's too close I mean, a really huge isn't a divorce.
Public cloud private cloud or inside the service and bringing together the ecosystem to make all of that happen.
The primary driver for our service is what they've been Infosys School Board.
Which is all of our cloud assets and of course, where they came in strongly this ecosystem of partners or to go there shooting or was this a cloud environment. Okay.
Thank you so much on home video net.
Thank you.
The next question is from the line of Yogesh Aggarwal from HSBC. Please go ahead.
Yeah, Hi, good evening, everyone and happy new year to the team as well and a good quarter just two questions from me firstly on large deal wins, which have been so impressive.
I said it is bad or from a execution, but they are then they execution. There's different then and all my lead or they are almost similar in that context do you need to make any EPS then they are milestones related contingencies that day.
These are lot more complicated b and secondly from.
From a guidance perspective, the fourth quarter day, there is a like a.
Ah veeco compared to what you achieved in the third quarter. So was there some kind of from budget Dyson appellate court or any specific weakness, so because leading to slower growth in fourth quarter I have a follow up after that on margin.
Okay on the first two points I think.
The disease, it's true cycle.
Ross I Laugh force.
Portfolio.
I looked at the last nine months last quarter, it's not any different from the disease is outdoors tyco views in the past.
The larger deals.
This or last few last year or last two years and so with that.
Jeter. However, there is no provisioning or in our books that they got to a specific situation zone is as we stopped out they could be in that sense and this is something that is bid out capabilities.
We are now putting together the approach to deliver on the various last news that we've talked about.
Uh huh.
The second point, sorry, well can you just repeat that.
So I thought it was trying to understand the guidance from fourth quarter low so.
I see yeah.
Yeah, so on the guidance and as you probably know our historically Q2 and Q4 financials here all day softer quarters for the industry are isolating sourcing. So there is nothing that's true.
In fact, this particular Q2 has been extremely robust he had a phenomenal growth in terms of the revenue constant currency growth that the share but.
But there is nothing unusual in that or two points better nucleus interest will however, see the me too soon to from all they're doing a softer growth across the industry and for Infosys over the us.
Okay. Okay. Thanks, and just another question on margin or did anything more.
More stuff, you're operating metrics have improved quite smartly, a as you said utilization offshore makes it sector, but the employee cost is still up around five or 6% sequentially. We have seen with other companies. Despite the v. take it be largely flattish so.
So what is leading to the employee cost increases if I if I mean.
Yeah, So like I mentioned in the margin walk or sequentially. We had this 50 basis point impact of transition and Rebadging offer recently one body.
So that's something clearly you called out and the balance we had talked about a combination of higher stock on one off.
And how does the true.
Our next meeting of 100 basis points off or the cost drag, but because the under basis point improvement in operating metrics that utilization on price mix.
Great. Thank you so much.
Thank you and.
The next question is from the line of Keith back from Bank of Montreal. Please go ahead.
Capex me line from the California adequate just to go ahead and your question.
Yes. Thank you very much I had two questions as well.
First your cash flow was also a very impressive this quarter was there anything that you want to call out that that might have been unusual or onetime in nature and anything that you want to call out on the cash flow that we should be thinking about over the next couple of quarters, but certainly.
Next quarter in particular.
Oh, yeah, thanks, well I think that we've been growing for the entire YOD corporate per quarter. We have had very strong collections because I think that was our fourth concerned when covert or sub you know is are you from the ability of our clients and of course. The reality is that clients are you know.
Fortune 500 clients and you know very very strong balance sheet as well and you know across the three quarters, we have not seen any impact at.
At all in terms of our collection the lithium that's coming from.
One reason for the cash flow is improving as a past the low capex.
As everybody is now working from home I think that automatically has come down and in fact, we reported from about Capex spend for that technology.
So that people can enable lead growth being able to work from home with laptops, rather than a desktop, but nothing really to call out a you know on a cash flow basis, Yes, Yaron day, we have received from a that throws off some indirect taxes, but nothing material really.
I don't.
I mean, I think if the on an underlying basis, we're still about 100% of net profit.
Yes, yes, Okay. From then the second question I wanted to go back to the deal signings again impressive deal signings.
Particularly 73% being net new.
If you if you took out the.
If you took out the one large deal that you said was the largest history, what what any growth rates that you can provide just to give some dimensions and then b.
I'm just curious of the.
The distribution is.
Is there any dimensions, you could give around what was in the digital versus legacy or the signings this quarter or or if you want to say over the last few quarters, but I'm just curious at this the signings.
You know the distribution between the legacy and and and the digital side. Thank you.
Let me stop this is selling and then praveen I might be able to drive a bit more color on the distribution.
In terms of what we did in Q3, we don't have a view to give a specific number for one. These are what I would say is or even outside of that either that they had an extremely robust. This overall interest.
In terms of the sort of.
Average is we have had over the last several quarters, our philosophy assignments. So while it was a large system could do that.
That was not the only volume.
There was a study also mentioned and they will continue to do is also referencing the one or another big which was at 500 million just to give some color.
Moving over to you cited cabs.
Yeah.
Well I can do anything element of digital and I really love the buckets lined up the day not the lift from there, but it can go to them that they didn't upsize it says.
But it's also time from an order today about from so that's I'm sorry, it's a combination of ER.
Digital let's make it and we don't really did pick up a set a and the nature of these deals also weighted someone that has some being set on cash from our them like fish and flow.
Howard and ER Infosys emphasize is that from being set 'em up some commission and there are some day failure that they can know what the whole idea and delivering it but I do have to say there's a beach.
He said to me and my day to that the other that providing next gen. Pdm said he says.
He says that which is not from that they are taking off some thought I'd start another maintaining but down from where the market goes from there.
Income from that they probably works EPS then.
Moving on to strong that momentum and then that this might be a flow to be getting from four or five I'm talking about from most of this from the southern knit tops. The students that maybe but that's all day some element of the defending itself.
Nice.
And then as I said earlier, David So all automotive since day, one moment this non live with it.
Okay, well congratulations on the signings so many textures.
Thank you.
Thank you the net.
Question is from the line of maybe I'm not going out from that yes. Please go ahead.
[noise]. Thanks for taking my question quite a feel from my questions have been discussed already but to kind of go back to the slots deals that they talked about could you just kind of explain how this a day like this said this scheme can it's typically structured and anything that you would like to call out in how we should model from northeast.
Jump up to this day is.
Second part to that is that.
[laughter] contact like different I think people just seems from a value shouldn't that came in the ecosystem around mashed exactly did you see a little bit you spoke about the portfolio approach and then you think about this portfolio what kind of a timeline get typically pricing for these things to the chart and then from a margin should stop cash.
Coming up the cuts so to speak.
Let me start with the first fast.
The.
We want like isn't there isn't anything more specific you know what's coming shadowed here in terms of sort of broadly organic laptops or from the Q2 bookings one I can see is the range. This ER. This is being put together where we have.
A lot of the work that relates to.
Datacenters.
Workplace transformation, ER and all of that underlying with from cloud.
Cloud transformation from private cloud.
We see that a virus. This is I brought into service day, it's really the foundation of a net new things that we can do Richard I'm true on the steady basis over a number of years and then the timing of that or you're not doing anything Boston.
You see which.
Which which can give you a sense today.
No specific either revenue beyond the common [laughter] value.
Great.
On Q2.
And let me now pass it could be longer.
The margin profile.
[music].
Well like I mentioned earlier, you know we have a they just kind of large deals some of them come initially with little.
Margin with them buying that portfolio.
I'd been low portfolio from maybe initially one with the required dramatic transformation because they are 100% onsite. There's no automation, which has been done client expect so you know savings from day one for.
For once we go in we have anybody go over the cycle. You know typically these are five seven year deals.
That you know we model as you know literally on a quarterly basis.
What is going to be done in terms of an intervention or even moving work on site offshore operating automation inside.
In the payment side of it and.
And I think need to pair that very very holistically and as part of the big process. So that yeah right. Yeah that you know there is that because it seems that the margin as well. So that's an ongoing process and like I mentioned, you know we've been winning large deals over the last three years accelerating them quite sharply, but yet we have seen an improvement in margins because the way you know we've talked about it is.
These elements.
You know start kicking in and at the same time, you do come in at low margin, whereas the existing deals or stock maturing and you know it came from.
Well your margin.
It doesn't mean that every month every day it wouldn't be exactly in line with you know what they're all pretty much in the company is David the ideas about the value operating until I'm not simple side of the company and the idea was that below that so it's a portfolio that we continuously look for and focus on the cost side.
Got it and you spoke about potential margin leave us they want to fix the steel showed makes absolutely no net alluded to how that sort of the Lewis off from Mexico City seen in a while a wonderful room here that they have for further offshore mix shift a little bit on onsite mix. So so far so what's that.
Then show that and secondly on utilization has anything structurally changed in how we look at utilization as it does not tell from all trucking and better employee a allocation go whether they dislocations and my question. Here is this can live mid Eightys seasonalization structurally move up from where they are.
Yeah. So I think on the onsite also makes yes, there has been some thought to be temporary benefits or because of free no curtail travel.
And therefore people I'm, not being able to travel overseas as well but.
But having said that I think the biggest it is exciting opportunity is that with work from warm clients are now seeing over the last year or at least have been delivered on our there's been no impact on you know where the signing deals are delivering and therefore the confidence of a client in terms of you know offshoring has also started to improve.
Moving and in fact, we are also now to listening ourselves. So that we can give a you know near shore facility for Canada.
As a national day for the U.S., Yeah, Mexico, and both have seen dramatic growth in this time, as well and Mexico, Mexico being a low cost location. So it's a combination of a remote working in a up so that we can create a pyramid that one lever then move on to me I show and then finally onto off so I think you have free things, we can't we can continuously a pass on it.
I think I'd be opens up a lot of opportunities of course established comes back they could be from you know a temporary lull, but secondarily I think there's a the Delaware decline just like yeah.
And they are on it.
This makes if in fact that yeah, let me add on be affected if that means yeah I didn't listen as I said is that our current high or do not play to be want to be Ah you didn't ask your part that's a I think that I've come from up in operating between two to three day to day, sometimes and that's an area that we want to be.
So we wouldn't look at my mother's day holiday in Northern Mexico, that's sites or they don't do it may take into money from them.
Hi, Thanks for taking my questions. Congrats on a good quarter and all the best channel for the rest of 2021.
Thank you.
Thank you. The next question is from the line of well she got me from that.
Thank you on a day.
Go ahead.
Hey, Thanks for taking my question and congrats on very strong results I have two follow up questions wanted confirmation regarding margins I'm, hoping I think during the last call you indicated that some of the margin gains that you've seen in fiscal 21 will not be sustainable into fiscal 22.
Given some of the commentary that you made today is that still the case.
Because it seems that you're talking about some margin leverage you're talking about some.
Encouraging signals and accelerating the offshore trends.
And one of your former executives suggested in a call that we hosted.
Last week that he hasn't seen this acceleration into offshoring in about 10 years.
And the second question.
Is more about the sustainability of what we're seeing right now in terms of the demand trends or.
The pipeline et cetera, maybe you can give some color on both of these thank you.
Yeah. So I'll take the first question more simple I like I said, we are right in the first nine months or 24.5%.
And we have the range ice coming up in quarter. Four so that's clearly will have an impact and as we look into next year, there could be some easing off of travel et cetera, which will have some cost cash has now having said that we said, we all thought I really really work on our cost optimization leave us with.
It's something we continuously work on so we are not that this day, saying that there's a margin guidance all day, if our if I 22, but that's the color of what's coming ahead. We will have these cost actions, but we also work on the cost optimization family.
And on the second question regarding you know at this point, what you're saying.
In terms of sustainability, so the trends that you're seeing in terms of pipeline shrank.
And maybe also maybe you can elaborate on what percentage of the mix in terms of the bookings came in from new logos versus renewals. Thank you.
Well, let me share crackers.
And what makes you book.
Okay, Let me start from the sustainability of trends and then on the next study.
Good day.
I think.
Moving to the ice line has been moving out because he is.
We still see a good demand environment across all the industry segments as these weapons at this topic on the day.
Sound that strength is quite exceptional but overall all of the segments are moving in a positive direction.
On the mix I think to.
To your point on the offshore mix are there are you seeing good momentum are moving this year of cash.
Most of it with some of the travelers this section coming off or we will see some more movements.
From offshore to onsite, but our recruitment engine onsite is very strong as well and.
So we wait and watch how that plays out we don't see that it's immediately when a change because fundamentally clients.
Clients I see that's delivering remotely from whichever location in fall seasonal for a broader set of functions. So we feel quite comfortable that over the period of time and that's in growth no benefits in terms of the mix and therefore can don't do much.
Sorry, what.
Yes.
Yeah on the mix a day.
Im not be nominally calc on me I want to make you on that.
What if that EBIT. So in this quarter is that something you could see from from Mexico, and if you look at free fashion for the nine months of the Oh and the total TCV 10 billion or the make believe Uh Huh 9 billion of the Ah Ah.
So from that perspective, your opinion day last nine months they have seen a significant doesn't do that revenues coming from net.
Yeah, Hi interest would come from the growth momentum in the coming true quite that's Oh. That's me that there is uncertainty from five need over time from <unk> as part of this nature problems since last quarter, we hadn't vanguard Dick touched on it a lot they see among tend to prefer using Google, but we still think you're going to go and called apart from the nominee look at one day.
Net you one day.
But having said that he was there from south I the.
We saw on day growth momentum for the S. GAAP forthcoming costs.
Thanks for the color.
Thank you.
The next question is from the line of from scratch proportion Celski LLC. Please go ahead.
[noise] yeah, thanks for the opportunity.
Uh huh.
For your questions.
Non.
[noise] all my true somehow.
Correct.
What I'm going to basically have no standard that oh, the caustic price.
Sounds like you're arguing lots, but yes that's.
Yes, that's true.
GAAP anything else.
Yeah, maybe could you check.
Sure or is it big enough.
Yes. It is thank you. Okay. So my question was from your lunch and so what I was trying to basically understand is the commercial structural these very large transactions.
During the day 11.
<unk> cost in such typically true could that be an N.R., we have like because typically in electric arc in some of these be capitalized also so that is one thing, but jumping to understand and my second question is on the next against each division I mean went off your years of which you stop no book Fytwenty could be a net.
Yes.
So articles were expecting that to be tight for next year.
The liquefaction off beginning from ER.
Or or something with you.
These are the two questions I think here.
Yeah. So on the first question I think all these like a and you're going to be mentioned, they're all different from what they may have rebadging elements. Some of them may have a comprehensive infrastructure. So fast that depends on what used to be I think there's no standard you know on from our you know like or again, Rick a way we can.
To answer that question and some of them may have about four and some of them may not so it depends service element or let's say the entire from transformation or element that's quite different across a wide range I don't think there's anything.
Typically we can say more than that at this stage.
So on the second one lets me a day that with the secular greenish range high or we went down the salary increase effective.
January one of this year. These off net any comments with respect to the next day situation or we just can't do that once we conclude this and stop and next year and I'm asking people to share with you what the approaches.
[noise] per Linda I, just wanted to Oh, So Oh, yes, yes, and that's not I.
I wanted to make a connection to my knowledge that from the most setting.
And if that's so true DCB outside not building for nine months looks and billion it's correct.
And the total net you know topic is 8 billion I think I said nine beginning Snapnames and then it seems to be up I guess on that the price I guess.
Understood. Thank you and Vishal so that's for the year.
Thank you.
Question is from the line up the day.
Bobby I see I think the Chinese please go.
Go ahead.
Yeah, Good evening, gentlemen, and that's on a quick question and thanks for giving me the opportunity a sunny day, starting to not be Ah Onez eat off the site vs room, almost all the theater when the index My head I guess any computer or some.
Some of them might be net of European companies some of them might have a margin or getting a base in Europe or in the infrastructure found himself is operating.
So can you help us understand what are the next.
Let's say a people needed as the EPS, even in places that excite to lead to vintage lead over the competition.
Oh I should say you're right. This is an extremely competitive situation.
With that said we do.
Reputed U.S. and when companies competing for this work.
So one of the elements that really stood out that I could see and you could see was what we understood from the client.
The the technical strength of prostitution.
And this is a solution which is their networks all on something we've shared before the cobalt suite in the cloud.
The approach that we've put together, it's true that clients are solution, which supports flexible and nimble and secure Ryan globally said out operations, all day as well and they limit I was really value by then.
We also benefited I think from the way that we may share with them all the different elements of the business objectives.
How they want the from focus on that business and how they want different from the cloud journey.
Operating quite full day.
Do the solution and this is really or excuse me in that sense from the technical capability perspective, and that's why we are extremely delighted because it opened up a new.
Yeah for us or something in which we were previously doing well and now we can do further better as we go ahead.
Trust on it and second question is on the gross claims anything in the quarter or would seem to be significantly higher than it was on moving the net.
This quarter I think that that 100, and you may not like any thoughts on work on that on what has risen from anything moving up the plain simple answer you live in the D and the back from the entry in video sub segments that are Oh, I didn't have spoken about in his opening remarks.
Our net new request driving force to address.
That's it and if there's anything you know as I was gone.
Ah I live and mystical thing I know that they did.
Sure.
Okay anything except the gross blame condition during the quarter it seemed to be significantly higher than the typical run rate from the previous partners.
So my question is if you can throw some more color on what has driven this strong innovation and that the nature of these claims potential scalability and the disaster book with the entry into or.
From your sub segments, you smoke and moving Oh, that's me and in your opening them up.
I think we had seen that strong that new account openings novo openings and profit.
Segment I don't think there's anything she led from Nancy good opening some come from.
From settlements and ER.
I mean, this income for synthetic top off with one cents or so I I don't see any background in this or any specific thing and again, the opposite many Pennsylvania and many of them I've got opening the.
With that said I'm financing opportunities. So some of them out a few of them or not will not be it's a combination of things that are not specific at 10 out of the everything they do with their particular from something.
Yeah, I'd say, that's flat to prevent I think there's also from client additions we've had as you do the new acquisitions, we made.
Sure. Thanks, that's very helpful and all the best for the future.
Thank you.
Ladies and gentlemen that like the last question, but today I now hand, the Boston management moving common.
I didn't get them on to just from delinquencies.
Yeah, Hi, Sandy Ah first thank you everyone for joining us for this session. As you can see we are extremely delighted with the performance for this quarter I stand out the exceptional Larsen who's been phenomenal growth at 6.6% year on year.
And the strong operating margin performance backstopped by extremely robust cash collection and conversion, that's distorted or we feel confident to revise the guidance upward as we shed on both revenue and margin and we have a strong outlook as we go into the next.
Financially, which really starts with us and interest. So overall, we are extremely delighted with this and thank you again, everyone for joining us.
Thank you very much members of the management.
Ladies and gentlemen on behalf of Infosys that come true This conference call. Thank.
Thank you for joining US you may now disconnect your line.