Full Year 2022 Wipro Ltd Earnings Call
Ladies and gentlemen.
Good day and welcome to the Q4 FY 'twenty two earnings calls I'll stay probably limited.
As a reminder, I thought it's been lines will be in the listen only mode and there will be an opportunity for you to ask questions. After the presentation concludes.
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Please note that this country is being recorded.
I now hand, the conference over to Mr partner, Vice President and corporate Treasurer, Thank you and over to you man.
In Q market warm welcome to our Q4 'twenty two earnings calls we will begin the call them the business highlights and overview by T. 80, then a booth, our chief Executive Officer, and managing director followed by a brief overview on our latest acquisition raising biologic Callie managing partner ideas business line.
And then a financial overview by our sea food up in Minot.
You also have a doctor as a part of the management stuff, you're dropping our chief growth officer, and sort of go real Aussie Chief Human Resources Officer.
After the initial comments from the management the operator will open the bridge for Q&A.
Before he starts let me draw your attention to the fact that during the call. We may make certain forward looking statements within the meaning of the private Securities Litigation Reform Act 1995. These statements are based on management's current expectations and are associated with uncertainties and risks, which may cause the actual results.
To differ materially from those expected the uncertainties and risk factors that explained in our detailed filings with D. C. Metro does not undertake any obligation to update the forward looking statements to reflect events and circumstances. After the date, you'll finally, the conference call will be archived and the transcript will be made available on our lips.
What would be your OTT.
Thank you up on that.
And good evening, everyone. Thank you all for joining us today.
Those of you joining us from the U S. Good.
Good afternoon.
Friday are often known to bring good news. So today is no different at least for us.
In my opening remarks.
And some of the year that has gone by.
Elaborate on the demand environment.
Before I detail some sectors markets.
Service offerings.
And share our business outlook for the quarter.
Let's start by acknowledging that we've had an outstanding year, we delivered revenues of $10 4 billion.
At an industry, leading growth of 27% plus.
In constant currency terms.
Let's say crossing $10 billion revenue is a significant landmark for us and we are now.
I mean higher.
Revenue growth has been our fastest ever.
In absolute terms, we've added one four so follow revenue just this year.
Our order bookings in annual contract value terms grew 30% year on year.
And we are finishing off the year with the highest ever pipeline.
Who do you.
We've made it.
If he can't investments, both organic and inorganic.
Strained and email solutions, so go to market the leadership team.
As long as the broader kind of input.
Yes, I did although 45000, new employees on a net basis.
But she is also the highest demand.
We also continue to invest you know internal transformation.
We know this will bring our agility into our processes.
To help us serve our customers better.
Operationally, we delivered a 17, 7% operating margin switches.
He was head of our stated range.
I know, you're all making company in absolute terms.
It was the highest ever which grew by almost 13% year on year and EPS expanded by 17% year on year.
What else he that's taken a tremendous amount of discipline and determination to remain resolute in our pursuit of growth and execution excellence.
I'm proud of what we've been able to achieve.
Now onto our Q4 performance and demand environment.
Our revenue growth during the quarter was that sweep reach 1% constant currency terms and 28, 5% year on year.
You can teach we've been consistently growing at or almost 3% for six quarters now.
Our growth continues to be broad based across all our key markets service offerings and even most of all sectors.
During the quarter, we had a net addition of 11000 colleagues.
Which sets us up well for future growth.
Business environment itself is still very good demand for it services is strong.
Propelling our business forward.
This is reflected in the state of our pipeline, our order bookings and overall growth rates.
Perfect.
Luca you all didn't move this quarter and has grown 38% year on year in terms of annual contract value.
Continue to close large transformation deals and see rapid expansion in the small and mid size deals as well this represents gross.
You know existing accounts as well as the expansion of our market portfolios.
Paulino table is the vivo to high growth services as we help our clients transform and digitize their businesses.
You bet.
Significant wins that good design at the Central D expands and combined somewhere a cool and I D capabilities too.
Re imagine 92 imagine back office and customer experiences.
Yes.
Continued focus on our hyper scanner partners. This is not on the help us win more in the market to get there, but it's also.
Providing the alignment and investments we need to scale talent assets and industry solutions for the future.
For example.
Hmm.
Our industry alignment with Microsoft.
Has strengthened our partnership dramatically.
Closely with Microsoft to define and take to market solutions that are focused on establishing priorities scenarios. They do line with Microsoft industry Cloud vision.
We've chosen to prioritize be emphasizing.
Retail and energy and utilities, where we will have a sharper focus.
Ultimately delivering faster time to value rapid digital transformation.
Simply find Microsoft customer relationship of course.
A similar approach with service now has led to which will be recognized in the past know about joint index.
Far upper right hand quadrant.
In the joint industry solution space.
I wanted you to explore he owes the combined novel first of its kind solutions we.
Brought industry, leading partner, so coalitions to create innovative impactful petzoldt a great example of D. CS.
The cloud golf that form for software defined vehicles, which we announced earlier this year at the mobile World Congress.
Yeah, we've brought together, we pose for stride cloud services and engineering capabilities.
With more than 40 different partners to deliver an integrated cloud solution.
This is helping automakers innovate faster.
On the West Coast.
While keeping software defined vehicles D. G tell you relevant for years to come but decoupling previously integrated software and <unk>.
Hardware.
Oh for stride cloud services is at an impressive year since its launch in June 2021, all clause ecosystem revenues also grew at an accelerated pace of fulfill so do you want to send into fiscal year 'twenty two.
On the M&A front, we have continued to pursue strategy fits pretty aggressively.
A more recent acquisition bacci Kudo cap cool.
Which we are today between two day you know the first anniversary of the acquisition.
Oh, Yeah, I mean, very well, we're very pleased to report that kept cool.
Is that a very healthy double digit growth. This year, they're ahead of plan.
Together, we have added over 60 seen energy wins across markets.
Most of you will know we have announced also two more acquisitions in the last few days.
First one is convergence acceleration solution, so Cas group.
Yeah R E.
U S based consulting and program management company, focusing on the communication sectors.
Hey.
Specializing driving large scale business and technology transformation cost groups.
Deep client relationships and strong domain expertise combined with we prose execution capabilities will deliver an end to end the professional services solution.
But also an immediate impact on clients we can now.
Provide our clients with services ranging from strategy development and planning to execution and implementation.
So there's an acquisition that we announced just earlier this week is rising.
Our global Asap consulting firm.
One of the leading strategy boss knows in the world for ACP rising will become very critical extension, if we pros, who say P cloud practice, and we broke stride cloud services.
Uncalled he's on the call today, you will share more details on the deal.
Two the operating margins now we did erode profitability of 17% in Q4 adjusted for KEPCO, our largest acquisition.
This would be well above the pre pandemic margin levels.
Hum.
I wouldn't know.
Provide some final details on market service offering some sectors.
Yeah.
All of our markets grew double digit.
But the Amerigas in Europe , our top two markets grew at 28%.
And 36% year on year, respectively in Q4.
And 26% and 39% year on year.
In FY 'twenty two.
Let's look at the different.
Market Uniques in Americans one.
You grew 22% join you in Q4 with all sectors showing strong growth.
For the full year, we grew 21% join your communications media and information services grew 28%.
Consumer goods and life science grew 26%.
I was scared on medical devices grew 17%, while technology products and platform.
Actually grew 34% year on year in the quarter.
In Americas to now.
Grew 74% year on year in Q4, and 30% even if 122.
You always show there was broad based double digit growth across all sectors in the quarter.
The order book.
In terms of annual contract value grew over 56% year on year in Q4.
Now, let's look at Europe .
Our European business, that's delivered an outstanding year on year growth of 36% in Q4.
And so the 9% for the full year.
Germany.
Now south southern Europe have grown over one and a half timing size.
And it looks grew 23% and our U K business.
79% year on year.
Finally, our up market grew at 14% join you in Q4 and 9% in the U F 'twenty two.
Australia, New Zealand and southeast Asia growing in double digits year on year for the quarter as well.
Hotel booking.
Again, an annual contract value terms are looking healthy with 22% year on year gross.
Remember our customer relationships.
It remains a priority.
Oh top five customers grew 35% you all you all top 10 customers grew 34% Joanne yeah.
In the last 12 months, we ever need it eight customers in the more than 100 million bracket and then customers into more than 50 medium bracket.
Oh.
From a service offering standpoint.
Oh I. These global business line grew 13, 9% join you in Q4 and 35% in FY 'twenty two.
Most of the sub practices showed a healthy double digit year on year growth led by domain and consulting which literally tripled in size.
The engineering services business grew 26% year on year in Q4, which is.
The compounded quarterly growth rate of 6% over the last four quarters.
Oh I call Oh, I called Global business line grew by 15% year on year in Q4, and 17% in FY 'twenty two.
Mass most sub practices grew at double digits on a year on year old bases to digital operations and platform led the growth with 18% year on year for the full year.
Oh, the kind of deals we are winning are very promising.
For example.
Global on demand education platform.
<unk> designed it to us its campaign and media strategy both now.
Design it well.
We'll help them with new ways of engaging on digital channels to deepen brand recognition in global markets.
And those are interesting example is with a leading U S based food service distributor they selected Wipro.
Our strategy to drive profitable market share.
Name called on Omni channel initiatives. The next generation service platform and best in class insight and analytics.
A more example was sharing but I'd like to now focus on talent and our go to market strategy.
I'm pleased to report that.
In line with what I had shared with you last quarter.
Our quarterly annualized attrition rate, that's moderated by 500 basis points.
I'll build a fresher intake for FY 'twenty, two when compared to the previous year and our plan is to double this.
In FY 'twenty three as well.
Although we have.
Decided to increase the frequency of promotion cycles for 70% of our colleagues in junior bans to now a quarterly basis.
No doubt leadership over societies now deeper the prisons of senior leadership in locations outside India has improved by 16 basis points or percentage points. It's also.
Relevant to note that nearly 50% of our leadership hires I've been at.
In the gross office and in the customer facing global account executive Rose. This means we are strengthening our frontlines and sales teams.
Over the last 21 months, we have improved it.
Hey, Nick diversity and L. Senior leadership by 'twenty, four percentage points and gender diversity in the leadership has nearly doubled.
Out of this and we will.
Continue to build a more inclusive workforce in the coming years.
Well we are always.
And we continue to do business responsibility.
In fact, you could own.
Humanitarian crisis in Europe is that our attention.
We don't have any material exposure in the affected regions. Many of our employees in the neighboring countries, Romania, Poland I personally joined relief at fault, providing food and shelter for thousands of displaced people.
Oh employees in Romania, volunteering to manage a dedicated helpline to support those needs. We've also created an employee donation program and matching it to the daughter doubling the available films.
We have also bought no do we project hope.
Yeah, Hey, Matt Gensia response team and European partners are providing critical medical supplies.
But also assistance to refugees.
I can confirm that we will always stay.
And by the principles of Democrats C G.
Justice and equality.
Before I close a word on our group for the next quarter.
You have guided for revenue growth of 1% to 3%, which would translate to grow off two gross of 16% to 18% on a year on year basis in constant currency.
While we don't provide annual guidance I want to confirm that we expect to grow in double digits for FY 'twenty three as well.
Our margins for.
For the medium term, we hold 17, 17.5% band however for the next two to three quarters, we will see slightly lower margins.
This is because of the investments we have made that I spoke to you about earlier.
Summary.
Yeah, I'm pleased with the current business momentum and very optimistic for the strengthening going into the new financial year.
With all key markets are growing on a year on year basis, and Daddy's due solely to foundation, we are starting in FY 'twenty three of them.
On that note, let me now whether it come Rajan Rajan Kohli, who will provide more details on our latest acquisition surprising.
Hi, gentlemen, thank you Carrie Thank you Terry.
My pleasure to say a few words about that acquisition optimizing.
It is the market leader ERP supply chain management and human capital management.
Is it going to happen due to increased cloud adoption.
And the big economic recovery.
Meanwhile, right.
Comprehensive cloud you have to be awesome.
Gotcha.
Hmm cloud there might be a few there.
The transformation.
Given the deep and broad growth profile.
This is.
Important acquisition for us.
All of them.
One.
Good for the company.
Why is that.
And that's really exciting.
Asset management.
Human capital management.
And it's what people consume on industry.
This was done as a fall.
Why is it a crime complex transformation.
This often cross sell opportunity.
Hotline.
Hmm.
Okay.
Hmm.
Complementary customer indefinitely.
We have strong for them.
Well I won't enhancing our existing physician.
Leadership in the industry such as Colombia.
Utilities.
Manufacturing.
Gotcha Okay.
But the one box with a complementary fortune 2000 customers.
Hmm.
Why is involved with local presence.
So basically the walking dead.
U S, Canada, Australia and Germany.
Well what you do.
Okay.
16 countries.
As you will all take for granted.
Even more important when we did the offering.
Sure.
Right.
Paul.
I think it's pretty well.
Advanced bookings have been.
Why does the same thing.
The broader consulting and digital transformation capability will give advising clients.
The complete portfolio of services.
Yeah.
The blogging about vitamins are difficult because at the time.
Yep.
Market.
Put your energy to support clients in their transformation to become a dime.
Right.
I would now like to hand over to Japan a lot.
Our CFO for financial highlights after quicker.
Well with Egypt.
Thank you Jen and I will quickly go over the financial highlights.
Excellent Yeah. We grew 27, 3% in reported terms 28 in hospice and in constant currency terms.
Do you live at 17, 7% and operating margin.
At 19% ETR to which resulted in our industry, leading EPS growth of 17%.
We delivered.
And what it consistent cash flows.
Our operating cash flow as a percentage of net income was 91%.
Our free cash flow as a percentage of 19 come about 75%.
He had after paying dividend that we declared in March Ann.
$4 $6 million of cash, but also a deck.
And $2 $6 billion of cash.
Cash net of debt as of 31st off much.
You have three $5 billion of Forex hedges is on 31st of March and we delivered 75 point 91.
The elevation rate in quarter four.
You guided for quarter one.
F, 16% to 18% year on year growth.
Items, which converts in sequential terms the 123%.
I'd be very happy to take your questions from here.
Thank you very much we will now begin the question and answer session.
Anyone who wishes to ask a question you May press.
Telephone.
If you wish to remove yourself from the question queue you May press.
And two.
Participants are requested to use handsets when asking a question.
Ladies and gentlemen, the win rate for a moment, while the question queue.
Louis.
The first question is from the line of Kumar Rakesh from BNP Paribas.
Please go ahead.
Hi, Good evening, everyone and thank you for taking my question. My first question was regarding the recent acquisition of raising that you gave thank you for the detailed explanation that on that.
What they want you to understand that.
A large part of the business a significant part of the business appears to be basically acquisition spend over the last two years.
And you spoke about that this company is in a piece of our growth.
[laughter] cloud implementation.
When I look at good revenue, which we have disclosed over the last two years.
It appears to be about.
Beacon vegetarian logic position right.
So how do you see this company all eating in and there are all those acquisitions already.
Yeah, I mean execution also integration of those acquisitions came later by I think.
Yeah.
I Didnt would you like to take this question. Thank you.
Yes, I can take that then get there and I hope this line is clear.
Yes, it's better thank you.
Oh. So you know it is true that company has had several acquisitions over the last five to seven years, but they have not made so many acquisitions over the last two to three years they've.
They've had.
One really big acquisition of a company called.
Most of that that acquisitions are fully integrated and it is more or less integrated what are the core business and if you don't have a really good recovery post pandemic as you know fashion and retail was the most impacted business during the pandemic, but now as we come out of a pandemic.
Industries I've seen very good recovery. So we are quite confident of book the quality of the asset and the quality of the recovery that we will see this business will operate.
Under the application and data business that we have had just sent to our S&P business.
The idea is that we will drive synergies between rising and there plus existing ICP business and go to market will continue to sell existing clients authorizing and look for cross sell opportunities for our indoor.
In those accounts.
And we'll also look at existing clients with ACP and lead with consulting.
Rising brings to the table.
Oh, thank you for that.
Our outlook.
Okay.
Mr. Hawkins your voices. So it was breaking Ashley I would request you to repeat your question sorry.
Sorry is this better now yes. Thank you.
Thank you.
Second question was about the growth outlook that you have given bankruptcy.
Assuming that we hit about Macquarie.
Windup back to that year, he could add beds to be doing about 10, 11 person all schools industrial year to know how you're going to treat it wouldn't be a double digit but it would be a hard our highest slow down and go tell them I frequently to level compared to where the industry is likely to be so how are you seeing the growth.
Are you expecting the growth to Friday Saturday post the first quarter or that the conclusion, which I am making is broadly correct.
So acacia this is Justin.
Then I'll be Chris Terry to add on T. V. He has to just seeing that the growth is going to be double digit and double digit doesn't end up on a number of it starts on on 10.
What I want to highlight is it'll be outgrown six quarters added three percentage plus.
And that is a track record that we have as we enter this does he have a V O given 1% to 3% guidance.
And you know this is a natural rhythm of the business had no business with will consistently grow it to one but one specific person that would be so it didn't quite does he should be foster certain quarters suite, which was slower and we hope to retain that realization and what could we see the guide.
For quarter one according leads its neither conservative nor any other way that that will change on our guidance.
Yeah, if I can if I can add to what Chad said I would say that you know, yes. We are you know.
Yeah. The reality is that you know it continues to be a solid growth for now seven quarters.
And you know 123 years the level, where we feel we are comfortable for Q1.
The pipeline is to lead a D are based on the quality of fault bookings over the last two.
I should even go you know beyond that.
The last quarter has been really strong as well so that's what gives us the feeling and the confidence as we are starting to you that we will something.
That'd be able to deliver double digit growth as jetting said, you know more to come until you know more to come over the next two quarters for sure, but I think D. C's with confidence that we are starting to you know 23, it's going to be a nose in your home so nice goose for repo.
Thank you Katie tanker joking before that I have more questions, but I'll, let it us Christian I'll fall back in the queue. Thank you.
Yeah.
Thank you. The next question is from the line of Ravi Menon from Macquarie. Please go ahead.
Alright, thank you for the opportunity.
Just a clarification on the guidance so you know.
We hope that well have to fill it.
Q3 to Q4 season, absolutely not quite play out typically Q4 has slightly higher working days and holidays in Q3.
And Q1 shirt, therefore, technically more working days in Q4.
That doesn't seem to be coming through in a buoyant demand environment.
It was something to do with let's say the theater and Hussein Metro work had been should be thinking about when we oh another one of the objectives.
Ravi This is Jerry I hope I will respond to your equation you Youre. Your voice was not Oh, it was clear, but I understand what you're trying to understand to use.
The nature of this guidance are into seasonality you know.
No.
What I would I would recommend is look at the seasonality T quarter. After close to other sequins Shaw Grus off you know five or six so far competitors and us in the last six quarters and you will see that we are probably.
If not the only one one of the only one to have been consistently above 3% every quarter and donate he teased out because of the nature of the contract one day or you know are.
The size of our you know I know Paul G T O U.
You have some quarters a little more some quarters are a little less I don't think that you should read anything much in a yard or kind of a trend between the guidance like the one we've given in the previous quarter and this one I think we are still talking about cruise and I think we keep the same level of confidence that what we had in <unk>.
And civil Quantum's, It cool again.
Thank you Gary I appreciate that clarification.
I can do I don't ask you about the acquisition, we've done cap cold that'd be shop here for five now with rising vehicle retail.
And trying to and become our cyber security do you think we should see that that's pretty much the loss of the large acquisitions or do you think there is a need.
To fill out certain gaps in the service portfolio.
Right. Okay excellent question Ravi frankly the.
If you look at the acquisitions I'll tell you first I reflect on the acquisition you made and then I'll I'll give you a view going forward. If you look at the acquisitions. We have made over the last two years. There of all income then the Strategique nature the deal the deals we've made.
Our strategy, what I'm, what I mean is.
Is that we.
We are not acquiring volume we are not going for the sake of acquiring a sizeable business that he will bring a scale no. We're not doing that we can we are looking at.
Companies that have a strong brand not necessarily large companies, but the company did have a strong brand and bringing a true.
Domain expertise.
Or a true.
DDT too drive transformational deals.
If you look at you know a Jain AR that was it consulting business in security T that ease.
Reinforcing them and then seeing it are you know security practice very very very successfully if you look at capital. It's the Best example that by the way I just want to celebrate here with you Oh first yeah, I'm, sorry of the acquisition of KEPCO exactly a year ago.
Frankly kept cool he's a very strong brand and we've.
How do you put T T to realize is that you know do.
What they ensure in the power and the quality of the talent of this team.
We have been able to deliver to create together between the kept going do we put teams as media 60 seen energy deals over the last one you kept of course performed extremely well under <unk> leadership. The last one you know and you know I must say.
This idea of combining a strong b, if assai business with a.
A large consulting practice like kept cool once the Reits seem to do and I think we are.
Pleased at the time, we are celebrating do you suddenly go soon if you look at the Cas and rising now with the deal we just announced a few days ago Cas.
You could look at it as a small chemical is more or less the same strategy, which is to say you know, adding a consulting practice.
That as a particular strength in the given sector in the case of chaos Gus.
In the communications sector and already now we have Oh, Paul T. Ts Oh, our teams from Casson from we probably if I can say I'm working together on some deals with clients. So it's getting immediate traction.
And then we have a very nice and solid recipe practice.
But we didn't have.
Real consulting capabilities rising brings just that.
So again the game, an example of an acquisition that he's tragedies in nature, because it allows us to have a different kind of discussion.
With our clients and have Lois to go for more transformational deals that what we would typically go for before so those are.
That's what we've done so far and that's what we will continue to do so don't.
We do not have a number to reach we don't have a number to reach we don't have a particular target. It's not like you know we want to close the deal and every now and then.
But we look at what it is what kind of football teams, we see and what kind of deal. If there is a solid case for it.
Tragic move.
In one of our offerings all sectors will continue to look at it you know I cannot.
And so then to your question that like that.
Thank you so much for all the kind of forgetting very.
Alright, great.
Last.
Kind of a bookkeeping question you spoke about engineering services aren't really hospital are pretty sharp walks for Rockwell a proportion of our revenue sharing chose as conquer remastered.
What percent of the revenue coming from engineering services.
Yeah I want to go.
Yeah, Let me let me come back to this question, we have not disclosed it but let me just check I'd come back.
<unk>.
So what I can tell you is engineering all I can say is engineering services is actually a significant practice for us. It's it's it's it's getting real scale I think we are now one of the global player in engineering services.
And I'm very pleased with the growth I've seen in that space over the last two quarters and we continue to accelerate.
Thank you so much gentlemen.
Ill step back in the queue.
I do think we can go with the next question and we'll come back to these question. After this question. Thank you.
The next question is from the line of.
From Morgan Stanley . Please go ahead.
Oh Hi, Thank you for taking my question I have two questions for a theory and one for getting a theory. So while ACB growth was quite strong that D. C V. A large deal win was soft in the quarter on quarter basis.
How much of that has a red box is back in the near term performance was that one of the factors that kind of drove your guidance to want to treat worse does that cause you kyokuto slowed in the last few quarters.
Hey, Gaurav well you know this is Oh I've always said that you know the you know going after larger east as you know our strategy, it's an important.
A priority for us and we are gearing up to and we are we have a nice pipeline. We have a lot of good opportunities. We have deals that you know we could expect to close in the next few quarters and so we are on it.
And and you know I have zero doubt that it will trigger some some some nice some nice deals I seat as being kind of coming on top of you know this sounds like T V. T that we drive quarter after quarter. If you look at the performance in sales over the last two quarters. It's been strong so it's actually been strong but coming from.
You know smaller or mid sized type of deals. We have also some large names, but you know as you have seen less this quarter than in ozone now.
You know we we also see that some of these deals are coming in chunks. Okay. So sometimes clients are just not comfortable to go for you know link see a commercial discussion and prefer to.
Split the deal seen different chunks and get us to stop.
Phase.
Rather than going through this long process. So that's that's also the fact that we are observing.
But but absolutely you know our our objective is to continue to get in and get some of these launches are in the next quarters.
Okay. Second question is on some of these strategic acquisitions. After they have made a it looks like all of them are some of them are running independently why you have indicated.
Our go to market so.
When do you really think that integration is really fully or how do you bring it all together as one deferral not just in front of times, but also in terms of the organization structure is one consulting organization.
A couple of points on that one that we have integrated a lot of the companies we've acquired and they are and they are in the they are now completely part of the Wipro family.
However, when we talk about integration. He doesn't mean, we are merging them in and completely you know Oh Hum removing the brand and so on it in the case of cap Cool for example, it's a strong brand and we really want to retain these brain that at least for the foreseeable future.
It's highly recognized in the market.
Second capital He's a consulting practice. So you know we have a consulting practice inside weepu and your G. P fees to combine those to consider a consulting practice, but do you ever think if he's not too much. The consulting practice, which is you know it takes energy practice those are different families and we are managing inside.
We are thrilled with different families right I think a Nozari example, designing he's completely integrated now and organization. However.
Because it's also a different family highly creative we are keeping a different brand.
And and they are you know it is a.
The capabilities if you like the talent the people that are in one practice. So again they are the integration. It means integration of systems integration off you know processes legal office seasons on those things are not necessarily.
Those things are absolutely done, but he doesn't mean that there's a need to do brand disappear or that we are merging completely D. Steaming to all teams, we maintain the logic of families because consulting team he's not dissimilar to take an energy team is not the same they do deal.
Digital operations team, there's not the same that's creative teams or engineering teams.
Thank you for that.
Thank you for that elaborate answer one question, Florida team.
What is the flexibility, we are allowing ourselves to invest and manage supply challenges in the near term and how should one think about consolidation of rising but with respect to impact on margins a book with respect to the amortization schedule or any integration related cost and any particular guidance.
Thank you.
Yeah sure I I didn't follow you lastly, and very clearly got out so can you repeat the question.
Yeah. So the question was what is the flexibility, we are allowing ourselves to invest and manage supply challenges in the near term and how should one think about consolidation of the rising in a potential impact on margins due to amortization or they need.
It costs.
Okay.
So they know who we are.
We have stated that our.
We remain concerned about the corridor of margin that we have disclosed before and we've always talked about it in Midtown for next two three quarters that margins would be slightly lower and that is really the flexibility that we are retaining.
The growth is is he is absolutely front and center.
To our to our strategy and I'll throw out execution as we look at FY 'twenty three and therefore, we will have to remain focused on making sure that we're doing everything to do to deliver an excellent growth trajectory. So we will be able to retain that flexibility in the commentary you made on the waiver of planned out.
Yep.
Two to your second question on financial integration.
Our financial consolidation of rising and the related impact on the on the margin it's difficult to call out at this juncture exactly but you know you could take a proxy of our previous amortization our range as a percentage of our of the voyages.
Price, we are paying and I think that would be ballpark and accurate number for you to assess and their profitability is very similar to an onsite consulting from Oh, good onsite consulting firm.
On on a consistent basis.
Thank you so much.
Thank you.
Our next question is from the line of sung.
From CLSA. Please go ahead.
Yeah, Hi, Thanks for the opportunity. My first question is on the outlook that you see for the chemical business specifically.
Given the current macro headwinds that we see in Europe .
So how what kind of hub by plane or what kind of a deal activity do you see for capital.
Is there any risk, especially on the financial services side, which is leading to any elongation in decision making from the claims.
Okay.
Okay Judy here.
Well you know by definition KEPCO has you know being a consulting business has a shorter.
Cycle, if you like in before you did the VZ BTT TPG you would have on a business. Like this is you know not not in quarters right few quarters, how habit, however, I would say.
The business continued to be very strong very strong in fact, I was just trading some somebody say jeez with lamps and you know the.
You owe two continues to be to be really studied I think this this company because of its impact on your ability to help.
You know not only can find should institution insurance to to drive transformation programs. You know they aren't they are really helping those those companies to improve their productivity and address some of their efficiency.
Challenges and I think you know the visibility we have on the pipeline by Chinese strong if I look at the bookings for the quarter of four I think it's been the biggest even though they've done.
So you know.
Based on the way and where we are now it's looking good he's really looking good for KEPCO.
And the military.
Okay, that's helpful and the second.
Yeah, Frank I, just wanted to add one thing because you you you were referring to the European market.
Indeed business you can if you can part of the business and for KEPCO Europe .
Well, we said the mix of.
KEPCO between Europe and America is.
If you can put two one a fleet probably ease as well.
So here I tend to be a little bit careful because you know the situation of a macro situation like the war is something that can evolve feed now and no one knows right with what did you know what what kind of unfold.
Based on what we are seeing today.
Looking at the pipeline or talking to our clients.
No signs of slow down either.
So we stay close to it we took consulting to our clients but to date.
No real sign of slowdown.
What do you.
I understand.
TD then other question is on your large deal wins are just persisting dead. So it's almost full quarters since we announced a major win and I understand that these deals are cyclical and it is very difficult to predict the time length, but fourth quarter is abused and they've been a time.
<unk> to look at the success of our large deals started teams working so just curious to know that E. On the large gianfranco. What is your initial sense is there any kind of a calibration that you'll need to make maybe to make it more effective and the second part is that unfortunately since you only disclose deals which had a picture.
Florida 30 million Ah it clouds.
Our all particularly our sense of what kind of order book that you have but how do I look at your or what all our auto book. If you can shed some quantity. They wrote a qualitative commentary in terms of how that has grown on a P. C. P. B. Thank you.
So let me let me address the second part which is the quality of the pipeline and then I'll hand, it over to Stephanie who is Oh.
Sitting here next to me to talk about the large deals.
The nature of the quality of the auto book one.
About 40% of holiday book today is coming from cloud and these cloud related and that is.
More every quarter.
And we like that because this is really where we get a lot of growth and where it is you know we know that the market is continues to to to expand it. So there is.
You know we know that this is a good quantity of deals the growth we are seeing from a domain and consulting to growth we are seeing from.
Engineering in particular continue to be very strong. So that is that is promising what's equally promising is the fact that.
About 50% of the deals we've closed in the quarter.
In partnership with some of our not jump on those.
Right you see service now.
I do believe yes, Google Microsoft Salesforce and those relations you know.
Clearly changed in nature over the last months.
When I when I hear that you know bill Mcdermott Ts Mainstreeting I'll name them. He needs earnings yesterday is something that you know we didn't have that necessarily several quarters ago same thing with Microsoft we visit he actually too.
So I think it's it's a reflection of the fact that our order book.
He's positioned in the.
To the right.
Hum.
The parts of the portfolio, we feel like we have been working actively on the rotation of our portfolio and the performance in bookings coupons. This rotation.
The largest stephanie over to you.
Siri, we started building our large scale organization last year and I'm pleased to tell you that it's fully in place and operational today and everyone. On the team has a robust pipeline of opportunities and we're very excited about the pipeline that we are working with going into 'twenty 'twenty three we did have some.
Large deals are in 2022 but they didn't they haven't materialized.
The clients as Terry mentioned, either decide to break them up and and stage them or are still in the midst of their decision, making process and determining whether single partners are multi partner is the right solution for them. So I would say overall our strategy is working our teams are.
Disciplined in on the ground and we're putting the full might of one wipro behind them to help them really differentiate and we're very optimistic about what we'll see in 2020 three.
Yeah.
Thank you and just one last question to jet then are getting from our fully up perspective, you would think that the kind of investment that we are planning and the kind of real pressures that you have in the first half.
Do you think that the margins could be significantly at a risk Oh in FY 'twenty three on overall year basis, what does that fight 22. Thank you.
Gotcha difficult to look into the future because we are also dealing with an external environment, but our commentary right. Now are very clearly is this that the margin corridor that we discussed before we will be slightly lower than that for next two three quarters.
Visibility right now and I stick to it and we'll continue to talk more about it as we see how how how do you gotta progresses.
Yeah.
Thank you and wish you all the best.
Thanks, Ron good migrate before we go to the next question I will also address Robbie's question.
We don't break it out all the engineering spend our engineering services revenue off our aggregate but.
Specifically for this question you know it is little over 10% of our revenues and it has had a fabulous year. It has grown in heavily twenties I do see it as a growth and as Terry mentioned in his commentary on engineering. It is it is a factor that you did in <unk>.
We remain very bullish we are making the right investment in this space and we're looking forward to another strong year for in FY 'twenty three.
Thank you.
Next question is from the line of.
Please go ahead.
Yeah. Thanks for the opportunity I guess, one krista muhr.
Thank you Matt.
Is it better now.
Thanks.
My question is broadly modem or clarification, you indicated about double digit revenue growth guidance for the year.
Is it organic or is it egregious then close so far how one should look at it.
The the guidance, we gave for the girls seasonal Guinea right. So it's based on the on the situation. We have you know based on depending on as of today right.
Actually yeah.
Based on the Alright with you. Some of you have lost so far there are there is right understanding.
The pace you are accurate in your assessment. It is all day because they shouldn't we just closed as of today, that's what we accounted and therefore, we have not counted rising which is announced but not closed.
Understand thanks, a second Christian he is about the margin.
Slightly medium term rather than near term get your integrated model when we do get cool.
He indicated our organic business will operate at 19% and kept hold because of the amortization and transaction related costs would.
The 100 bps kind of impact.
And or what it Peter Pan dish wondered we've seen big really narrow down.
So and considering that we had one year in their journey and obviously, it's a place that challenges here with somebody like us any near term, but how one should look on a medium term margin trajectory before we probably because it is also part of growth story for us an integral.
Part of revenue growth.
Whether they say one thing to say when did an RFP there a good range to understand from a medium term perspective around how one should look with gross margin trajectory.
So from a medium term standpoint, they basically believe today that 17 to 17 in the house is the trajectory that.
We would like to hit yes. Your assessment is right that the some of the amortization cost related with KEPCO would come down over the years, but not suddenly in one year at least our first few years, we will have that impact that we have spoken about.
And that's how you should see it from a medium term standpoint as you mentioned.
Okay.
Yeah.
Thank you.
The next question is from the line of.
Sandeep Shah from <unk> Securities. Please go ahead.
Sandeep Shah from <unk>.
Yeah. Thanks, Thanks Budd.
Yes. Please go ahead, yeah can you hear me.
Yeah, Thanks for the opportunity.
Yes.
So just six to seven months back we have issued a press release talking about a 1 billion dollar investment for the leading cloud capabilities off of it.
Nick.
Kevin Union.
Yeah, we can hear you go ahead, yes.
Yeah, Yeah. So you have to at least the press release talking about $1 billion.
Yeah $1 billion worth of investment.
The $3 million.
Got it.
I'll get that.
So they've got rising as a part of the 715 million dollar plan.
Okay.
No I don't have a rising easing the right space and certainly it's part of our cloud place our consulting capabilities and that's how you should see.
Oh, Okay. So that means that it's a part of it.
And second question and last question is.
Yeah second question is in terms of margin so even after capital if I look at the Holdco.
My first.
Martin.
That is close to a difference of one basis point.
You bet.
Seven people 80 basis point that level, so and we are talking about a further decline in the next two or three quarters from the lessons of corporate admin. So the question is group is turning around but.
They're just not coming so when do you expect that to come.
Because if I do anything he could be a yard where some of the hits on the model and it's unlikely to be the cohort because of tight.
Walker's carbon cost and all of that so is it fair to assume that the fight when before you at all.
It was unfortunate.
But when they are let me first start by saying that you know, we we mean the shadow of Indian via operated always in that range or in fact, a little higher for previous quarters until quarter, four where we had aimed at each but at the bottom end of the range.
And the second point is that the operating leverage.
He's coming through truly however, you know we are also investing. Additionally, so it is not that we are not being productive in the way we are spending money, but we had actually.
Generating productivity and investing in the areas that we want to invest in and in theory, you spoke about some of those areas he needs in his opening remarks.
And I don't see any different in FY 'twenty three also only so to say extra another idea well for all of us to watch out there not just us as a company, but as an industry is the continued pressure on talent and what we're allowed to do in FY 'twenty three for that for that and we will I mean, we will see how FY 'twenty two.
Therefore pans out, but we are very clear that we b E. We on one hand drive efficiency that we can invest back as investment and that's that's the whole.
The strategy has been in 'twenty, two and will continue to be in 'twenty two.
Okay. Okay.
Thank you.
Ladies and gentlemen that was the last question for today.
The conference over to Ms.
For closing comments.
Thank you all for joining the call today in case, we couldn't take your questions. You can please feel free to reach out to the Investor Relations team.
Have a nice weekend.
Yeah.
Okay.
Thank you on behalf of <unk>.
Concludes this conference. Thank you for joining us and you may now disconnect your lines.