Q4 2021 Infosys Ltd Earnings Call
Hello, can you hear me? Yes, I can hear you can go ahead. Yes, please. Go ahead.
Okay, Daddy on my opening statement for the full year. I grew up in constant currency was at 5% off digital business grew by 34% year-on-year and you for representing 51.5% of the overall business a large team wins A call ahead 14 billion for the full year growth of 57% from the previous year Android 2.1 billion for Q4 and let new percentage for Thursday. Was it 66% a helping us set up for strong growth in financial year 22
But these exceptional results we had industry-leading growth and financially or 21. We continue to gain market share and grateful for the trust. Our clients have been informed as we partner with them for the digital transformation programs a growth was broad-based with several of our industry segments showing strong growth here near home and stems from a market-leading capabilities in digital Cloud cyber security and in data analytics. This is what allows us to be the most critical part for a client's digital transformation programs operating margins for fi21 improved by 320 basis point points to reach 54.5% for the full year. It was also a 24.5% for Q4 a free cash flow was close to three billion dollars at 39% off.
Larger than in the previous Financial year a cash and balance sheet was at 5.3 billion at the end of the financial year. I'm extremely proud of our employees and then enormous commitment especially during this past year, but in general across the years, we will launch a second compensation review in the phase Banner starting on July twenty Twenty-One our employees and I entire leadership team work cohesively and for the benefit of our clients this approach of one Infosys as Dead really enabled us unable the company to have a successful Financial via in financially 21
Looking ahead which he continued strong demand from our clients, especially in digital cloud and in data and we have a strong Foundation of a large deal success in financially at wage hens are constant currency fully Revenue guidance from Financial year 22 is growth between 12% and 14% off margin are superior margin performance in financial year 21 was in part because of improvement in our strategic cost leaders and in part because of cost avoid and development with normalcy returning gradually across the world. We anticipate some of the costs to return with that a guidance for operating margin for financial advantage is between 22% and 24% in keeping with a capital allocation policy. We proposed to increase the total dividend per share by 54% off.
Over the previous Financial here for a full year dividend at rupees 27 in addition. We proposed buyback of equity shares up to an amount of rupees 9500 grows, which is approximately 1.2 billion dollars through the open market method with that. Let me pause and thank you and let me pass it on to prevent for how long update serving over to you.
Thank you, Celine.
Hello, everyone.
Hope you and your family are doing good safe and healthy.
Growth accelerated further importer for with Iran are constant currency growth of 9.6%
Good momentum was strong across various business segments with three of them Financial Services high-tech and Life Sciences reporting double-digit growth.
Volume growth was strong despite quarter for additionally being a soft water.
Most of the critical operating parameters continued to improve during the quarter.
the PlayStation increased further to a new all-time high of 87.7%
I'm sure the apartments reduced further a new low of 24.3%
popcorn costs increased by $50 due to growth acceleration and high utilization
31203 Waterford totaling 2.1 billion
Six financial services and Retail three in life sciences and two deals each in communication manufacturing energy utility resources and services that segments.
He didn't like sixteen miles from America six years from Europe and one from rest of the world.
share of noodles in Puerto for was the healthy 52%
for the first twenty one fourteen billion
share of noodles within this fourteen billion was 9.4 billion. I have been tcv of all lot deal size in FY twenty.
Let's Matrix remained robust that hundred million plants increasing 232 and increase of 4 year on here.
The added 1:30 new plants in the last quarter.
NASA employee during the quarter was over $10,300 and share of women employees increased 38.6%
Warren three aspiration for IT services calculated on annualized basis increased to 15.2% as demand for talent increase.
We have implemented salary increase effective January 1st, 2021 and as mentioned by salil all the the next cycle will kick off from July 2021 in the face manner with a start date of July twenty Twenty-One for majority of our employees.
Morning, 2 business segments Financial Services continue to report industry-leading performance with growth momentum including further.
In the last few quarters, we have seen strong demand uptick in areas that bank are had to significantly invest in post for with such a customer experience transformation office sent to back digitization mortgages confirmation call center technology and operations lending Services as well as higher investments in large digital transformation programs in a 521. They have 125 lot deal from this segment including fixing quarter for which provides a salad Sonic base for growth in the coming year.
Richard Improvement continued in the retail segment along with Improvement in Deal activity
Bell many of the sub-segments in detail the main challenge we see opportunities in areas like intranets modernization adoption of microservices architecture Cloud Pak and workload migrations and cybersecurity even the pace of recovery since second quarter of April twenty one and met new large buildings in second half of April twenty one month. We remain optimistic about the sector as we look to have been to apply 22
Communications segment we can marginally in the last quarter.
However with the deal wins, we expect the performance to improve in the coming quarters.
Digital transformation consolidation 5G Computing cybersecurity next gen technologies iot will be the disrupting faith in Tempe.
And that's utility resources and services vertical in mind soft for most of the 521 due to constraints friend in the oil and gas travel and hospitality and resources suck. However, we see signs of stability returning to various sub-segments even some of the research and quality new account openings.
DC opportunities in the areas of caustic vendor consolidation cloudless transformation and effect monetization smart grid initiatives and globalization of services.
Yeah, they're strong deal pipeline despite pressure on discretionary but that's in some of the impacted customer Industries.
Manufacturing was one of the most adversely impacted sector because of Curry.
Like automotive and Industrial segments are emerging strongly as the economy is open up Aerospace sector will take a few quarters to get back to previous capacity.
Yeah, seem significant traction and momentum as evidenced by the new with throughout the year including the largest ever deal in Infosys history signed in for the 3. They are very positive on a on the back of strong relationship during the pandemic and continued next move in throughout the year.
Even as the effects of pandemic continue and as companies from crisis our pipeline in the sector is strong and we are confident of gaining market share.
BPM has grown at double-digit rates with plants investing significantly in digital transformation to enhance efficiency Effectiveness and experience in business process along with Enterprise and Global shape Services environment lot of this growth is driven through combined itts VPN Bill's Cafe vendor consolidation Home Services.
Education portfolio contribution to overall Revenue increased further to 51.5% in quarter for robust growth of 34.4% year-on-year in constant currency terms month if I Twenty-One digital revenues have grown by 29.4% in cost and currently terms.
We continue to expand the capabilities, especially with Infosys Cobalt Cloud portfolio in the last quarter. We announced the partnership with live person for conversational AI the health plans manage solid conversation with consumers and employees.
We also launched Infosys contacts. May I first plugged first customer engagement platform and applied a i Cloud build on a hundred systems may be completed a definitive agreement to purchase assets and on board employees of digital one of Australia's leading and award-winning experience design agencies important for Life leader in nine Services related capabilities across digital Pentagon areas, like industry analyst.
With that I hand over to me.
Thanksgiving good evening. Good morning. And thank you everyone for joining the call. We entered at 5:31 with three Focus areas operation eligibility liquid cash management and caustic help you maintain razor sharp focus on each of these areas throughout the year and I f y 21 results are testimony to that we close the year with 5% off growth in constant currency terms and 24.5% operating margins. This was back by largest-ever deal closures of 14.1 billion growth of 57% year-on-year off 29.4% growth in digital revenues improved operating parameters with both utilization and offshore effort mix at all-time highs of 34.7 and 74.2 respectively off operating margin for a 5.1 increased by 3.2% over at 5:20 as mentioned earlier. This was due to combination of factors comprising of strategic cost levers cost every month.
And other costs benefits some of which I expected to normalize ahead record free cash flows for a 521 of approximately 3 billion and increase of 38% over at 5:20 a.m. Driven by strong focus on and Catholics optimization for the year was 71 days. We had a specific focus on Catholic production during the although there was some information technology-related Catholics largely to support remote working. We continue to optimize on Catholics related to physical infrastructure Creations Catholics. Wi-Fi. Twenty-One reduced to 285 million compared to $465 billion last year despite the higher technology enables and consequently FCF conversion as a percentage of net profit 413.4% or 51 compared to 91.8% in at 5:20.
If I Twenty-One grew by 12.5% in dollar terms and 17% and 9 are on a year-on-year basis driven by strong top-line and margin expansion return on Equity 4021 improved by 1.6% to 27.4% over the last year coming to court for performance. We saw have the quarter of Revenue acceleration with growth activating to 9.6% year-on-year in constant currency terms, after dropping the effects of salary increase across job level operating margins in Q4 stood at 24.5% versus 21.15% in Q4 FY twenty and expansion of 3.4% This compared to operating margins of 25.4% in quarter three, the sequential module movement is primarily back to a 1.3% impact you do the compensation increases rolled out effective Jan first 0.3% impact you to increase in GNA cost partially offset by loge.
Chief improved operating parameters and cost optimization and other one of our balance sheet continues to remain strong liquid and debt free cash and equivalents increased further to 5.5 billion at the end of FY 21 Elan cash balances continue to decline the email was approximately 5.1% in quarter for compared to 6% in Court Street life. Also Mark the 23rd consecutive quarter of positive symptom despite significant currency volatility across the globe as you know, we have been increasingly emphasizing on dates total shareholder returns and increasingly aligning our executive compensation to TSR creation. I'm happy to share that CSR for investors in a fight 21 was in the top quartile of a peer group and ahead of market indices.
in line with a capital allocation
Team policy of returning 85% of FCF over five years. The board has recommended the following a final dividend or repeat 15 per share which would result in a total dividend of rupees 27-21 vs. Rupee 17.5 per share by 5:20. This is a 54% increase in dividend per share for the buyback of equity shares of up to Thursday is 9200 cross 2 OpenMarket Fruit Port approval of shareholders in the AGM final dividend along with share buyback would lead to cash payouts of $15,600 a month excluding taxes in the coming months another step to demonstrate our commitment of consistent generation for investors. This would be total payout of approximately 83% of 20 and 21 through dividends and BuyBacks compared to the 85% over five years that we announced using the roll out of our Capital allocation policy in July 2018.
19th coming to Guidance with a strong exit momentum and the ramp-up of landmark will win we have built a solid base for double-digit growth in a 522. We expect a 5:22 a.m. To go by twelve to fourteen percent in constant currency operating margin guidance. Wi-Fi 22 is 20 to 24% after considering the impact of compensation reviews transition impact of lodging and partial rebound of caught like travel et cetera with that. We can open up the call for questions.
Thank you very much. We will now begin the question-and-answer session.
Anyone who wishes to all the question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and Tuesday.
Participants are requested to you asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembled.
The first question is from the line of from JPMorgan. Please go ahead and return policy amounts. I just wanted to check off your visibility for the year ahead. Say compared to earlier frico videos 18 and 19. How is it different compared to that? And are you baking in any age level of you know conservatives and perhaps into the range based on Supply pressures you needed to and perhaps normalization of signing momentum gets ugly. Thank you.
Time zone in terms of what we see in the demand environment. I think it's one of the strongest demanding environments that I'm seeing for the while the revenue Rhode Island sequel to 14% gives a very clear indication of the Comfort we have in the grown now so Outlook, I think in terms of Supply pressures. I guess there are always Supply pressures across the market but as off via chat earlier the recruited over twenty thousand people from campus in the financial Twenty-One plan for Financial Credit off about 26,000 today which could increase and we have overall capacity with what we see about uh in college hiring and natural birth.
disa
Overall, it's extremely strong growth Outlook and we feel comfortable at this stage to conclude. This one seems like required for this device.
Thank you. Mr.
Thank you. The next question is from the line of Divya nagarajan from UVS. Go ahead.
Thanks for taking my question and come back for the Goodyear in a very difficult environment to questions from my side one is how should we think about normalized Thursday? It's 4 for you from here on I know the theory of guided very strongly but there are some spikes coming in with some of your large deal specifically our largest-ever deals expect. It. Looks like you are looking at much more subdued sequential growth rates compared to what we saw in September and December. So, how should we think about that that question want to bring in your margin guidance or should we think about progress? We normally have a pattern to margins where you have page hikes impacting and then things pick up. How should we think about the signal bulb margins going into the theater then again specifically Q2 is red light. I believe your larger Steve is also ramping up a new just talked about addiction wage hikes as well. So should we expect a slightly different page?
Nadir in Q2. How should we think about that, please?
Times did you start on the first part and I'm in terms of the pattern or steady-state growth today. Our focus is on this financial and the growth guidance of twelve to fourteen percent for this month this currency see the line in very good shape. It's of course a function of how that demand clears out as you pointed out in the last year. We had 5% growth in an extremely difficult year where we've seen belly within the industry is shrinking. So we need to leave the market share. We believe the industry-leading growth at this stage.
And which one we seen in the guidance is the environment the way it is and it will be creation that it will give in the broad economic recovery in most of the markets that we serve our clients and we anticipate that this looks ugly good demand library for some time. However guidance is only month for this financial or sorry. So I think we don't really give a color on the you know, the directory of the margin the guardrail for us like we mentioned between 22 to 24. We have factored in the second wave height from first of July. So yes in fortitude, you may see some Marvin pressure there and later on in the year. There is some things like travel et cetera will open up but underlying all this, of course, we continue to work on our strategic costly was you know, which job
You know each water.
In terms of the mix and the pyramid and the the the Automation and that's an underlying cost which we keep on neutralization which one happening. So I think if I said 22 to 24 is a comfortable range which we operating and have factored in the increase of cost of travel and the wage hike
thank you. The next question is from the line, please go ahead.
Hey, thanks for taking my question. I have two. I have two points related to the quarter and maybe one that's more broad-based. So any specific all out on some cute for sequential growth numbers. Obviously. There's a Delta here between volume growth. That was very strong and the actual sequential growth and you mentioned above a hundred a 100 basis-point expansion offshore mix would probably have some sort of a cannibal on the impact, and they also said something about Lex contributions from third-party deals. You can specify on that and then appreciate the fact that quarterly bookings can be lumpy, but for the broad picture perspectives going to be getting some color of pipeline Trend directionally, are we up? I think that could be kind of helpful. Thank you.
Shaul tanks real question questions on the waterfall as you pointed out and we shared life I said in the statement for volume growth was 4.6% where the revenue growth constant-currency was 2% quarter-on-quarter wage. So about one point increase offshore effort make sense actually, uh indicated that with show that would show up in a difference between the volume and the actual revenue or third party with a third-party Hardware software partners and those things. I have a cycle that we've seen across the quarters in the past year in Q4 this somewhat lower than what we can do is log.
Anticipated know so then coming through in q1 and then this typical seasonality that we've seen over the years in Q4 with what we've shared and that came into a little bit. However, the demand outputs with us remains exceptionally strong allows things view life is truly a last year, uh, give us a very strong base for growth for next year. And so twenty 14% is a strong guidance rep for next year on the second one the London you want to go ahead and that time please
What are the Michigan?
Yes, the second question is more about bookings and you know appreciate the fact that these can be lumpy on a quarterly basis, but just to get it grasped a better feel on booking maybe from a pipeline perspective. Maybe we can get some color on that directionally. Have you been able to replenish a lot of the the the pipeline that turn into bookings off our bookings up your your just to get a feel of where we are directionally?
Let me start that sorry on the verge of large in Q4, which is very strong healthy makes over fifty percent and that new so we consider that off course the 7th of June was incredible, but that's not a sort of a sustainable rate in the way. We look at our business. The pipeline is yes. I'm talking to get replenished quite well after an exceptional set of large buildings. So we see the pipeline coming back robustly good divorce and again across different Industries and we are quite good going into this financially. They're both the deals we close with the Revenue code.
Equally, the pipeline will also start to come back and give us good traction will largely wins in financially or 22.
Thank you very much.
Thank you. The next question is from the line of passage from HDFC Securities, please go ahead.
Right. Thanks for taking my question Sally just to talk further on the medium-term Outlook that you spoke earlier. I would imagine, you know, improving visibility on medium-term, you know with a great sense of scope from Enterprises as they are accelerating the digitization Milestone plus vendor consolidation and improving pipeline that you mentioned. So, uh what thoughts Beyond FY twenty-two and and your confidence of you know, keeping on to double-digit table for trajectory and also is if I $22 guidance Revenue guidance off by a higher offshore component, so does it mean back to volume growth compared to the 12 to 14%
So on the the the overall may be strong the line from clients good traction on the cloud good traction on data analytics a very good work on automation a good traction across Iraq. So all of the elements in which we build capabilities, we feel comfortable that clients are moving ahead quite interested in those areas. We don't have that. I have a guidance or even an Outlook at this stage which is multi-layer. As you know, we have the 1-year guidance in terms of everything but everything we see indicates that the buying sometimes is fairly strong. So really it's more a function of the overall macro in terms of GDP if that job
Without multi-year and that will give us a good outlook.
But at this stage because she could demand good pipeline good traction. So nothing to change anything in the way. We have seen business. Of course, the guidance is only only one yet.
Sure, and just a second part of that. Is there a higher offshore component in built into that guidance for FY 22?
Too bad again. Sorry you got it didn't address that. We doing the volume component in the guidance. We do have off of you. Once you complete the we will have a look at it, but it's not part of overlooking guidance on the volume, which will be split in terms of the revenue for next year.
All right, and just finally how would you expect the code to deliver which is declined almost double-digit this year. So no views on that.
So what we're seeing is large Enterprises are looking at the Escalade and applying tremendous automation to it and looking not efficiency approaches.
To help them achieve that automation that efficiency and that benefit which they are then taking and investing in their digital growth agenda items as long as you continue to see that sort of a movement again, we don't have a specific guidance on the evolution of the call for the full year, but that's the drawback and we've seen in the past few quarters and we continue to see that green.
Thank you.
Thank you. The next question is from the line of pankaj Kapoor from clsa, please go ahead. Yeah. Yeah. Thanks for the opportunity question, Are you seeing some coming back on the longer-term pale kind of deals or project or do client continue to spend more on those costs incurred cost savings Cloud migration kind of a project and second question. Is that how do you see the mix and your pipeline in terms of less than $500 and more than five hundred million tcv kind of dog.
On the first side. I think there's types of work that you have the cost focused work the efficiency Focus work off and also the digital transformation type of work that we get from our client. If you look back in financial Twenty-One, if you look at page the shuttle work, we announced that we're doing with Vanguard. It's digital transformation that starts from the business looks at technology and looks at operations equally wage other programs with other clients which are more focused on cost takeout and some even on uh consolidation. So they're quite quite often represented in what we have seen in the Outlook today.
In terms of the size. We don't.
Specifically comment on the breakup of the pipeline having said that the pipeline the actual win last year were like well distributed and the pipeline in a similar type of distribution. Of course as we mentioned last year, we had one specific thing which was the largest in the history of the company office, uh beans which happened every now and then so those are not really predictable in that type of a horizon.
I just one more question formal engine. Do you see any impact of the tax changes that are proposed in the US impacting your effective tax rate in the coming years. Thank you. Yeah, so as you know in this is this proposal and some papers out this of course have to go to mostly houses Senate and Congress. They do things a lot of people are talking about. What is the first the minimum alternative tax, which is largely for US based corporations who have international subsidiaries. That's a different impact and not impact us. The other of course is the increased Victor proposing on corporate tax itself from the twenty one to twenty eight percent now having said that I'm most of operations are run through a USB. We don't have absolutely between and most of operations and therefore increase in any tax rate there one is of course, you will get a set of in India from a phone number.
Parsley and they can be a minor impact if there's any more to over over and above that but like I said, we run it through a brand structure and therefore the impact is will be less.
Thank you. Thank you. The next question is from the line from the kohana. Go ahead.
Salil in your prepared remarks you had mentioned cost avoidance and deferments as sorry instrumental in 20 21 narrative. I was hoping you could elaborate on that. I wasn't sure if you were referring to the cost within Infosys or on the left hand side is is that what you mean?
No, I'm okay. Yeah, so I think like we've been saying over the last four quarters in the call as well. Right so last year as coveted we were very nice. Yeah, looking at the volatility and uncertainty in the economic environment that we had to do certain costs postponement. So for instance salary hikes, which would you in June of June last last year that was postponed in 2/4 for we just announced that in the beginning of January. So that was one of them even the promotion Cycles were delayed in FY 21. And we started that only in Q3 similarly things like, you know recruitment et cetera. So that was one part of it. And those are the costs which will come back now in in FY twenty-two. So the full impact of the compensation height of 1/4 for will be sent into a fight 22. We've also just announced that we will look at under compensation cycle commencing 1st of July that wage
Back 3/4 of 22. So those are
The cost difference what I call the other cost reductions like travel Etc and part of that will start coming back as the world opens up probably closer in the second half and travel looks better of course four first-half see much of change there. So these are what we calling of Past coming back and some of the Tailwinds and last year becoming head wind and of course underlying that we have a underlying cost optimisation programme and that's pretty clever. As of off-site on site also makes around the pyramid around automation. We can we continue to press on every as well.
Got it. Thanks for that clarification oranges. Thank you.
Thank you. The next question is from the line from ICICI Securities, please go ahead.
Yeah, good evening. And thanks for giving me this opportunity first question nilanjan between the three options. So OpenMarket by that tender buyback and dividend if I were a shareholder and a phone call subject to our individual taxes understanding is that the transmission loss on OpenMarket direct is higher than in the other two cases given the applicability of CG. So just curious on the process of returning this 9200 Capitol through open market route and instead of public Pretender or different route. And will this be a recurring mechanism?
Yes, I'd be a completely Guided by a capital allocation policy of returning 85% over the five-year period for my flight 2224 and that talks about Progressive policy and supplanted by by by core dividends any special dividend. I think consistently the message back from the market and investors has been wage, you know, one-off special dividends. They would like to see a consistent Progressive dividend policy and the line dividend policy and backed by like I said these one of so the both consider the the the buyback as the best way to return and now versus OpenMarket and tender across the choices are being the reason for them are different. Of course, no entender, you are committed to a maximum price range as well. In fact a premium, which you actually lock onto whereas in OpenMarket, you are committed only to a maximum price and you buy over the next few months subject to the maximum as well. So the opposite
Two people at the question is potentially we have seen growing by the past trade we have done is higher in case of an open market as regards the tax implication. We understand that he has now completed the stock exchanges to indicate even in an open market the benefit in terms of buy back because the company has paid will be buyback tax. So in the hands of fact that I believe has told the stock exchange it to indicate deals like the company is buying back the shares. So that was available in the tender offer previously. I believe said he has now ruled it out across, this is we don't have any notification with this line formula understanding.
So you you make the same engine that you cannot?
Before their capital gains will not be taxed in the hands of shareholders is that that we don't have any that's what we informally understand. We don't have anything in in in writing.
Yeah, thanks for the individual cases. We can't comment on that.
Sure, my number and is that have been very effective by signaling mechanisms in case of you know in process itself and some of our competitors are here on the other hand off defensive connotation. They projected is more price support rather than five signaling in that depends on context actually the maximum by that price of 1750 looks very aggressive offer. So just curious on the process of arriving at this 1750 number should this be read as a management signal like an attendant by that or we are just getting some extra buffer because markets are being very volatile both sides. This is a long-term process of six months. As you know, that this is the maximum price one like in a tender where you actually give a premium and commit to the premium. This is a maximum price and this gives you a headache and since the from the date of announcement. There's a process where it will get approved in the shareholder meeting in sometime in June and then the open buyback will offer the runway over this crisis over the next maybe seven to eight months.
Which is a much more longer so that we had room which we created. And of course the board also looks at at every possible situation et cetera et cetera while deciding this price.
So that's it for my check.
Thank you. The next question is from the line of Sandeep Shah from Acura Securities, please go ahead thanks for the opportunity. My question is what further proof of life too. If you look at the account when you want you guys have set up a large threshold in terms of a mega deal with so do you believe in a 522 looking at the pipeline wage? You are not actually disappointed in terms of the pipeline shaping up as of
Hi, thanks for the question. This is Sally. The pipeline is looking in today as we were discussing earlier from Summer. It's always difficult. When you looking at 1 which is the largest winner in the history of our company, but having said that we see quite comfortable with the overall in good shape and we will continue to create Market changes by willing a large percentage of these digital transformation programs.
Okay, and second question, if you do believe me lunch 5:20 to the large deal of cost would be higher than 21,000 most similar and this may not be an incremental headwind to the margin in FY 22 and just a follow-up on attrition despite giving away like starting from January find it off. This is warranty Improvement in increasing the application looks higher because seasonality in terms of higher education that comes in through and so what has led despite a wait with such a am I using the application?
So I speak to you at the large deal that we mentioned by 22. They will be actually a headwind like I mentioned in my opening comments fee. They will be some marginal initial headwind package deals as well. So that's factored into the mods.
Would you like to do believe that could be incremental versus 21 or almost similar to a site?
Well, since it's going to impact my margin for next year right on a year-on-year basis, so in a way, it's instrumental.
Hyundai this here on the attrition that are two factors. Right one is of course growth has come back in a big day after the wash water is updating. The first quarter of last year due to growth was very subject but feels and the growth of picked up not only for us but for competition as well and Thursday, it's the growth also has badly in India, right and offshore on percentage of decreased dramatically products. Our on-site percentage is 23 is 24.3% and it was around 27% four quarters back. So it's it's a combination of both one is growth itself has picked up and on top of it. Most of the growth volumes are happening in India, and so consequently tremendous demand for talent and the resulting in higher education.
all the best
thank you. The next question is from the line of the phone number, please go ahead.
Yes, we can hear you to go ahead. Okay, thanks for taking my question. This one's for my side. I'm showing is dead include significantly over the last year right? Do you think this place is turn over a longer time? Even after and understand the more longer than I do at the margins as a result of this that one is just the setting as an extension of you have your question included in the $21 21% off any impact on the budget are obviously it's a long time away. But any any earlier indication if you can provide, you know that word budget sentiment in general. Thank you.
Thanks. Thanks for question. This is Sally. Let me start I think as you pointed out we've seen the shift in the on-site offshore mix especially the last years I studied in London for sharing. It's a huge shift for the last few quarters. Looking forward in the medium-term. It's difficult. I think that several factors which would support it because it enables uh, really the remote working to be applied in a broader context but there are other factors home where there's a lot of digital transmission work and they'll be engaged from a digital Center somewhere digital Studios and the proximity centers that we built in Europe and the US and those have huge amounts of demand as well. So we don't have a sense today. What will be this output go forward there are both sides off.
What this can look like at this stage for this financial year.
Given where the situation is my senses at least in the first few quarters. We will continue to see what we've seen in the last few quarters.
In terms of the clients and we have not seen any impact at this stage on the client i t spend with respect to the off chance. We will sharing once the concept becomes converted into whatever regulation that is being put forward. We'll see that affects. This page is not see any change from class.
Do you foresee a potential impact or still very difficult to say given the upside from a tech perspective?
We don't we don't have a way of understanding they'll be back from that specific point on. However. The overall is Faith in terms of text. And as we were discussing earlier question response, there's this huge amount of interest from clients on digital transformation Foundry. See that our market share is improving and we are more and more connects with clients that we are dealing uh-oh through mental in in that off on that basis.
Okay. Thank you.
Thank you. The next question is from the line of America from Capitol, please go ahead. I'm sorry to interrupt you Mister Mom hear you very well. Can you can you hear me? All right now? Yes now it is. Thank you, please go ahead. Yeah, just one question. What's the average margin guidance?
Just give overall margin guidance. We don't really say on how we model the currency. So that's something which we started to do.
Okay, so so would it be more on a constant currency basis or compared to the last year or should we think about it?
It is magnetic always on a reported basis so that all that is factored into our margin guidance. Okay? Okay, and the second question was in terms of iteration. So typically we seen wage historically a bump up in terms of attrition. Once the salary hikes are rolled out. So so how should we think about the near-term trends in terms of address? And in that context? How are we looking at utilizations which are running at historical highs?
Is this in here given the high demand situation that station will probably be around this level for the next couple of quarters of wage on the utilization side. We are recruiting aggressively. We are also making Heights from the campus and so on Fridays we start getting in shots of pressures into a job. Like PlayStation will come down. The current utilization of 87.7% is very high and not what we are comfortable with but over the year over the quarters Thursday at 10. That's our plan.
Okay fair enough.
Thanks a lot and all the ways.
Thank you. The next question is from the line of mukul from please. Go ahead.
Thank you. Just wanted to dig in a little bit only margin guidance 422 besides the impact of wage hike how should we see? The potential shift wage in support expense is it's you know in Q4, it was running at a five-year high level despite continuous increase shift to Offshore and build up locally in with us. And you know, will there be a material change in the cost of third-party items for clients in in effect? It was around 3% level in a second one month.
Yeah, so I think the popcorn costs increase is largely coming out of the higher demand environment like 4.6% demand and unlock and also support increase more towards offshore because of this higher demand and requirement and not that much on site. Of course as now our recruitment engine kicks off we get more Christian in 5 into control looking at also the wage hikes as we see pairing that down this hopefully over the next few quarters, we can start moderating that as well the other part regarding the third-party costs. I think they're very very small in the overall mix as well. So really no color on where that is worth. Very small part of our Revenue mix
Sure, and and qualitatively, you know, you have been repeatedly mentioning that the the demand environment remains one of the strongest, you know in a while for them, you know, if the broader macro-environment holes on, you know, again, I'm not asking for a guidance you think the opportunity for growth remains as strong as what you are seeing the you know Beyond near term or do you think scale at some point of time we'll start with having a constraint?
Yeah, again as we discussed earlier the guidance is for this financial demand environment. And the technology package is really a very strong. There's also a lot of large Enterprises as shifting. They text sent to improve connects with the customer including the supply chain include connects with the employees. And so it's becoming in addition to cost on the pml-n and investment as well that gives us a lot of confidence that the text and on digital with large Enterprises is looking very robust and all the capabilities. We have been moved over the past several years position does ready to continue to benefit from it. So overall, this is a good wage.
in that space and the
The connect with science on digital technology stand very good Pace offices.
Sure. Cancel. Thanks for answering my question and best of the 22.
Thank you. Thank you. The next question is from the line of the day from Nissan, India.
And you're not very clear. Can you please speak on the handset move? So can you speak something? Are there any areas of Spain in June and which is yet not come back which can come back in coming years this particular nineteen large vertical.
Sorry, I didn't follow it. You mean a client claims been perspective vertical other areas of Spain got cut in pandemic and which has yet not come back which you think and come back in coming years.
Today we might add industry for example detail very early in life into one last year almost every industry has each quarter improved their positioning the standard wage at this stage. Most of those are back. We have overall more minimal exposure and accents to some of the travel Hospitality area. They call me you don't have exposure film industry exposure have come back through each quarter of last year. I mean if you want to add anything else
I think that's probably that's done that because the only thing is you said that the in Sunset segment we continue to do some business that I even in those cases the ants are looking at some kind of and that's for Mega Million tickets that. And also in terms of coming up with new ways of engaging with the stakeholders track. So so even in both cases the spend this coming back, uh-uh, but some of the like for instance in manufacturing I talked about the sub-segments. It was one of the Thousand megabit impacted but in the last couple of quarters, we have seen some spent come back both in industrial and Automotive segment where our Aerospace segment of the news to be this is it not take several quarters before we see normalcy in Aerospace similarly in in in the service website Thailand after probably take some time off.
multiple waves make
That happening, but even in those cases also, there is some amount of time coming back as compared with what we thought.
Maybe your outlook on pricing particularly within the digital segment given the kind of value addition to the client. If you can give us not not next year but more on a medium-term. Is there a possibility of getting any price better pricing your on your account?
Let me start and I just bought a high-end high-quality and we're working with our clients to ensure that becomes more visible over time demonstrate that value package which can convert to something on the pricing. But as you pointed out this is no, uh a medium to view for us as we start to demonstrate more money from the digital.
anything you want, you know, I think
Okay, thank you. That's fine.
Thank you. Ladies and gentlemen. That was the last question for today. I now have a constant over to the management for closing comments.
Hi, thanks. Thanks for that to thank you everyone for joining us extremely delighted with the performance in financial Twenty-One thousand percent growth which we believe is industry-leading growth in this market, very strong margin performance for the year and all of our parameters including free cash flow dividend that all pointing to extra care and concern for the business or clients employees and shareholders and looking ahead with the shack is a strong year for us twelve to fourteen percent growth really repositioned business focused on Digital Services where in processes recognize wage for these services and a strong outlook on margin twenty two twenty to twenty-five percent should look forward to that being the foundation of birth.
A successful year for clients and employees the company and the shareholders. Thank you everyone for joining and catch up on the next one.
Thanks everyone for joining us on this call without connecting.
Thank you very much members of the management ladies and gentlemen on behalf of emphasis that concludes this conference call. Thank you for joining us and you may now disconnect your line.